How measuring performance speed can pay off
by Jay Cross
March 28, 2010
The sooner workers are productive, the greater their contribution to the organization. This makes time to performance — the amount of time required to begin performing at target levels — a vital metric.
In the late 1990s, Sun Microsystems was a high flier in the workstation business. Each month, the company was sending 120 new salespeople to a one-week immersion course in Santa Clara, Calif. The new hires went through briefings on equipment, applications, competition and more. Undoubtedly, much of this information went in one ear and out the other. Fifteen months later, the graduates were selling at quota: $5 million a year.
Sun’s most vigorous competitors in the workstation market, Hewlett-Packard and IBM, were training new sales reps for six weeks and eight weeks, respectively. A maverick in Sun’s sales training department asked: “Couldn’t Sun provide at least one more week of sales training?” “No,” replied the managers of the sales force. They needed them in the field or revenue would drop.
The maverick — let’s call him Jerry — promised not to take the new recruits out of the field but asked if he could have the budget it would have taken to keep them in Santa Clara an additional week. The sales managers OKed the request, and Jerry set to work assembling a supplemental, nonresidential sales training experience.
Instead of coming to Santa Clara cold, new hires would henceforth take e-learning courses to get up to speed on hardware and specs. They then would need to pass a test to gain admission to the on-site program at corporate headquarters.
Since they had already mastered the explicit aspects of the job, the week in Santa Clara was refocused on a case study that got the recruits working together with the same people they would need to coordinate with when in the field. More time was set aside for motivational meetings with such enthusiasts as CEO and Founder Scott McNealy and hard-charging President and COO Ed Zander.
The recruits also learned the ins and outs of Sun’s new sales information system and were certified as trainers on the new system. The newbies became the go-to people for experienced salespeople in their branch offices who needed to use the system. Veteran salespeople had little choice but to interact with the new hires.
The program was a success. Nine months were shaved off time to performance. New hires were selling at quota level in six months instead of 15.
The financial impact was astounding:
- 120 new hires a month = 1,440 new hires a year who, on average, were selling at quota nine months (or 0.75 of a year) earlier than before.
- 1,440 salespeople x 0.75 year x $5 million = $3.5 billion in incremental revenue.
Excited, Jerry ran up to Zander in the parking lot to report that the new program was bringing in more that $3 billion in new sales. Zander looked Jerry in the eye and said: “No.” He said Sun’s equipment was the best on the market; Sun was hiring better people than IBM and HP; and besides, Zander himself was getting people charged up.
“Would you credit me with 1 percent of the increase?” Jerry asked. Zander said he’d attribute perhaps 3 percent of the revenue increase to the new program.
Not bad, Jerry thought. That’s still $100 million in new sales.
A few lessons can be learned from this parable:
- The returns on decreasing time to performance can be so huge that even the crudest measure of ROI is often enough to demonstrate merit.
- Time to performance is a metric a business executive can understand and believe in.
- Time to performance provides a better goal for instructional designers than merely attaining competence.
- Performance takes motivation, comfort and sometimes courage as well as knowledge. The time to performance metric takes this into account.
Executives want execution, not learning. They want action, not knowledge. It’s unacceptable for a worker to know something but do nothing. Action is what counts.