Has the above scenario ever happened to you with a deal?
Chances are it has and with Q4 pressures mounting, you’ll be hoping it doesn’t happen again. But that’s the issue…hope. Hope is not a strategy. So why are so many sales pipelines stuffed full of Hopium? And who is dealing this forecast wrecking drug?
Well, the Hopium drug mule in most cases is the sales person. There is a valid reason for this called the Optimistic Bias, which leads us to believe we are more likely to experience good rather than bad outcomes. For example, we underrate our chances of being ill with cancer and overestimate our likelihood of being wealthy.
Now, optimism isn’t a bad thing. According to research, optimists outlive and outsell pessimists. However, what is important is how we manage the Optimist Bias to minimise the effects of Hopium.
In my 1-2-1 coaching work with sales leaders and sales people I use an Emotional Intelligence self-assessment. One of the 16 scales measured is something called Balanced Outlook; how well an individual manages to balance optimism with realism. This is a bi-polar scale, meaning one can have too little, too much or just about the right amount of the area being measured.
The theory says the ideal profile for a bi-polar scale is as shown below, scoring low on the red scales (Pessimistic and Overly Optimistic) and high on the green scale (Realistically Optimistic).
However, with top performing sellers (consistently over achieving against target) my experience is their profile tends to be reversed, meaning they scored high on the red and low on the green. Doing some basic analysis on a small sample size of 30 top performers, the average profile looks like this:
Through discussions in coaching sessions, top performers explain they are deliberately ‘bi-polar’. They use their Optimistic Bias to keep going in the face of adversity, especially in the crucial activity of pipeline building. Once they have found an opportunity they use their pessimism to look at reasons why the customer won’t buy and what could go wrong with a deal.
If this bi-polar way of thinking isn’t your natural disposition, here are some recommendations on how you can manage your own Optimistic Bias:
Yellow Hat, Black Hat: Borrowing and morphing from Edward De Bono’s Six Thinking Hats, spend time looking at your deals through two lenses. First, put on the optimistic Yellow Hat. Go through all the reasons why the deal will happen. Then, metaphorically, take off the Yellow Hat and put on the pessimistic Black Hat. Find all the things that could go wrong and be really thorough with your thinking. When you have your list, create strategies and actions to combat the risks and make sure you execute them.
Use A Qualification Tool: Gener8’s proprietary qualification tool is CO-IMPACT and there are lots of other effective ones out there. A good qualification tool should ask you searching questions focused on the mechanics of what is needed to win business. CO-IMPACT has 50 questions (which is more relevant for larger, more complex opportunities; a lighter version is used for smaller ones) and uses a simple Yes, No or Don’t Know answering system.
Where a lot of red (for No) and/or amber (for Don’t Know) is showing, the sales person should focus on these areas during their interactions with the customer. If there is too much red, they may even need to consider qualifying out.
Typically when running a CO-IMPACT workshop, applied to live deals, the pipeline reduces by a third. This is to say, the Hopium deals (also known as White Vans to those who have attended) are chopped out.
Here is a CO-IMPACT review example for deal reviews I conducted with one of my customer’s sales teams (one deal per person) for Q4 deals last year. These were completed before the end of the quarter to help understand where each sales engagement needed attention to maximise the potential to sign business.
The red boxes show overall areas of weakness and helped to pinpoint where additional training, development and coaching were needed. They ended up hitting their number.
However, regardless of what tool you use, its imperative to be brutally honest with yourself. LSD (Lazy Self Deception), where you allow yourself to believe a situation is true, creates a disastrously potent cocktail when mixed with Hopium.
Unemotional Thinking: To keep you honest, get someone else involved who isn’t as emotionally invested in the deal (your own emotion and personal thinking will most likely cloud your judgment). Chances are, for the big ones, your sales leader will be all over it anyway, just make sure they are not also too emotionally involved.
Your peers can also act as a good unemotional sounding board for your thinking. For this to work effectively, you will need to leave your ego at the door and be open to the feedback and dissection of your deal.
Manage Your Customer’s Optimistic Bias: Sometimes the Hopium dealer is your customer. They too can get overly optimistic because it’s their reputation on the line and so their desire for success skews their thinking. Challenge what they are saying and ask for justification for why they believe it’s going to happen. In essence, be their Black Hat.
Deal Loss Analysis On The Controllables: Although an ‘after the event’ activity, deal loss analysis is very powerful for understanding what needs to be improved. Providing you employ a growth mindset and don’t blame eternal factors i.e. review the things you could have controlled, it will highlight why you typically lose deals and allow you to double check yourself in this area moving forwards.
Hopium is the number one killer of pipelines. Weed it out through consciously managing your Optimistic Bias and you’ll have a much more realistic view of your forecast and ultimately a better chance of hitting your number.
And finally, for a bit of fun, writing about this topic gives me a great excuse to point you towards this from 21 Jump Street https://www.youtube.com/watch?v=nLDBiQ3L4oQ (please don’t click if you are easily offended)!