Applepeels: Lessons that Apple might learn from its past

If you are a long-time reader of Applepeels, you might know that I have said many times over the years the experience of being an Apple employee depends a lot on what you are doing and the management team in charge of your division.

Today I came across a presentation from RSA (Royal Society for the encouragement of Arts, Manufactures and Commerce) that talks about what really motivates people.?

Paying attention to some of the thoughts in the presentation would really help Apple fix a hidden weak spot in their culture and management philosophy.?

You might argue that Apple doesn't need any help with anything, but I actually know some very good people who have left Apple.?? In the long run even for a great product company, losing very good people could lead to problems down the road.

Apple actually had some great results in the past from the techniques discussed by RSA, but I suspect that years of wet-behind-the-ear MBAs have erased the memories.

It is likely not a surprise to some readers that Steve Jobs was not a fan of the Apple sales force.? At best he believed them to be a necessary evil.? I did get to hear him in essence say that.? Unfortunately, I never got to have a personal talk to Steve about his views on sales.?

However, I did work for some of his Apple managers who really did not understand sales.

Understanding the potential for success by having good sales leadership as opposed to having nit-picking sales management might not matter today in this world where Apple has become the darling of just about everyone.? However, it did once and might again some day.

In the mid-nineties until early in the next decade when customers, especially enterprise ones, were fleeing Apple, it was important to have a sales force which kept customers in the fold so Apple could survive.? I suspect it will be important in the future even if Apple doesn't slip.

There was a time when it was hard to get good people to work at Apple.? There were a lot of reasons for that, but one of the most interesting ones was that Apple sales people didn't make as much money as other technology sales people.? On top of that selling Apple was much more difficult than selling a generic computer box based on price.

That was especially true when you were selling to the enterprise. You had to convince your enterprise customer who was sometimes betting his job on making a large Apple purchase that Apple actually cared about his business.? That was tough to do when Steve spent most of his stage time telling people that Apple was a consumer company that didn't care about large businesses.

Fortunately Apple had people like Fred Anderson and Tim Cook around who were good at talking to enterprise customers.? However, Apple was like many technology companies in one respect.? It believed in a highly leveraged compensation plan that in theory rewarded the top performers the most.

Most of you have likely never been in sales, but those of you who have had some experience in sales would not be surprised if I told you that there is a lot of room for error in setting quotas and measuring performance against them.? All of this boils down to how much money sales people make.

Much of my first experience with Apple was in higher education sales where in the early days it was pretty easy to measure what customers were buying.? Higher education customers bought everything directly from Apple.? You had years of data to help structure quota.? If you had a decent manager and a reasonable divisional goal, you could feel pretty good about having a chance at making money.

In the mid-nineties during one of Apple's countless reorganizations, I got moved over to the business division.? The team I headed was responsible for resellers and large accounts.? It didn't take me long to be appalled at how bad the historical data was and how flawed the quota setting process was in the business division.?

The first year I was there, my team was given quota for a couple of "reseller locations" that turned out to be bank accounts in Delaware.? They ended up being not used the year after we picked up the quota for them.? It was literally millions of revenue which was in our goal and which turned to vapor the year when we were supposed to grow their business.

Still I had a great manager at Apple, and once we got control of the numbers, the next year my team went on to be very successful.? In the fall of 2001, my very good manager fell victim to being blamed for the failure of a hair-brained scheme from upper management to win the enterprise by selling interactive iMac kiosks.

New management was brought in, and my manager who had been in charge of business sales for the US ended up with only one person directly reporting to him.? That person was me, and I had been given the unenviable challenge of turning Apple's tanking federal business around.?

While competitors often had hundreds of reps covering the federal government.? I was given two reps, one on the east coast and one on the west coast.? My area associate came with me and one system engineer along with a person to work with resellers.

It was a daunting challenge, but one thing I did negotiate was a team goal.? In other words I convinced management and the finance people that it was more work to figure out individual numbers for customers than it was just paying everyone on one number. Our small team worked towards one quota number.? If we hit it, we would all be successful.

Doing that made all of our lives much simpler, we focused on the customer and didn't really worry about who was getting paid for what business or even through which channel.? We were wildly successful.? We grew our business a phenomenal amount, and I ended up being manager of the year.

Now the compensation plan obviously was not the only reason for our being successful.? I had run a stealth federal sales organization for over three years.? With help from a number of operating system folks in Cupertino and support from upper management, we removed a lot of barriers facing our customers.? We made Macs attractive as an alternative in the federal market to virus plagued Windows machines.

Still I firmly believe that it you look at the historical records, the team goal was a big part of the reason that a relatively small team of committed individuals were able to turn around Apple's federal business.

We managed to keep our team goal for three years even as the number of people working for me grew to over twenty.? Though we didn't make a lot of money after the first year, we more than tripled Apple's federal revenue in less than four years at time when no other enterprise team was nearly as successful.? The reason we didn't make much money was that each year after the first our goal was set so high that it was almost impossible to make.? That a whole different story.

Still I had a very motivated team that was growing Apple's federal business by leaps and bounds while making less and less money each year.? In the final year that I was at Apple, the team goal was abandoned until six months into the year when Apple had to admit they couldn't figure out individual revenue performance.

It is interesting that most executives get paid on the total performance of the company, yet they almost all believe that paying sales people on just the business they "personally touch" is the only way to effectively compensate them.? I would argue that what is good for motivating executives might work even better for sales people.? It certainly did for the ones who worked for me.

My experience at Apple and the research presented by RSA seems to indicate that a leveraged monetary reward for the top performers isn't necessarily to way to get the best performance out of anyone.? Fixing that might make a huge difference in the Apple sales force over time.

At least that is the view from NC's Crystal Coast where the winds are still blowing this spring, but the ocean water has warmed enough for wading and the air temperature is to the point that a quick dip in the pool is possible.? We still haven't found a new owner for our home in Roanoke, but I have started a new career selling cloud-based network asset management tools.

I will be focusing on that new opportunity in spite of living in a spot where there is a special place around every corner and the beach is always calling me.

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