#026 A Journey from Commission to Collaboration with Michael Burn

Steven Morell: Welcome to our new episode of Speak Revenue. Remember, revenue is not a goal. It's a result! But a result of what exactly? In this show, we turn our eyes from the input towards the output. We talk to sales and revenue leaders about their root causes of success. Let's uncover what worked for them. And what didn't. Today in my show, I have a guest and it's Michael Burn, and I'm super happy to have you here. Welcome, Michael!

Michael Burn: Thank you, Steven. I appreciate being on the show with you.

Steven Morell: It's my pleasure. Michael, real quick for our audience. We know each other a little bit, but not everybody in the audience might know you and that they're missing out a lot. But real quick, who are you? What do you do, and why are you so successful?

Michael Burn: Thank you. My name is Michael Burn. I am a principal and founder of Michael Burn Consulting, and I serve the market with sales transformation expertise and guidance.

Steven Morell: Sales transformation expertise. So you're transforming sales teams. Is that right?

Michael Burn: We are. Essentially, we are brought in when the in-house team is struggling with a new product launch or post acquisition integration. And what our team does is enable the client companies to undergo, in some cases, a very radical transformation.

Steven Morell: If I hear transformation, As a process thinker, I think: Hold on, input output. What are you transforming, from what to what?

Michael Burn: It's a great question and the point is there. Honestly, we start with the culture. As a main component before we get into the blueprints and the nuts and bolts of the team. So oftentimes we see antiquated notions of selling motivation, compensation, and we help the client organization to look at topics like accountability and psychological safety.

Steven Morell: I love the focus on psychological safety or mental wellbeing, because I think sales is a super rewarding profession, but also runs the risk of being a super toxic workplace where a lot of toxic behavior and toxic structures are still being accepted as normal. The old school guys, and I'm old enough to remember the old school guys and, chain smoking on, on the phone but you're removing this old school boiler room style of sales. Talk to me a little bit about what are the fundamentals of mental wellbeing and mental safety, and I know that you are using the analogy of building a bridge between the mission and the results. Explain to me what that is.

Michael Burn: Absolutely. The first part of that bridge analogy is helping the client to understand the benefit of that psychologically safe environment. No one seeks to be a failure.

Steven Morell: Yes.

Michael Burn: Everyone believes that they have, and they have been accepted into an organization by virtue of an interview to be a part of a team and even the most successful individual benefits the team by sharing what is helping them to be successful. So the bridge is simply accountability, and that bridge is built with a number of key components such as transparency, the ability to have psychological safety, but it does take from the decades old sales process of clear expectations and data.

Steven Morell: It sounds like you're building pillars for that bridge. Accountability, transparency. What else is a part of this?

Michael Burn: So I think the most important part from a messaging perspective is clear expectations and from the clear expectations at the outset, it is a mission orientation instead of a commission orientation.

Steven Morell: That resonates a lot with me and my experience. I try to keep the conversations here, always very tactical so that our listeners and viewers can start implementing what they learned in this show today. As a VP Sales, as a Head of Sales, as a Leader of a sales team, what are the symptoms? How do I know I should think about building a bridge from mission to result that I have a mental wellbeing issue or might have one? How do I even recognize this?

Michael Burn: I think a calendar's a great scorecard if there are multiple forecast meetings in a week or it's deal reviews in a week, that's usually a sign of a lack of trust, and that lack of trust manifests itself in frustration with the sellers themselves, right? I believe, an established cadence where, and to serve the organization, but an established cadence where there are, once again, clear expectations of when the team will review deals. When those deal reviews will be rolled up into a forecast, and then tracking once again with the data, the changes in that forecast so that we can diagnose what's happening either in the market or in this case, what we're talking about with the team.

Steven Morell: So, lack of trust. Does the lack of trust start earlier with I would say a vague feeling of: "What the heck are they doing?" And how is working remote ever since Covid this is the new normal. I used to have a manager who would go through, like all day long. He would just go through the office and kind of try to get a glimpse of what is on our screen, what are they doing, what are my sales people doing? And there are the type, there are still this type of managers, but they can't do that anymore because everybody's at home. So how do they compensate for this and what is the typical symptom that I am? I have this vague feeling that I don't know what they're doing.

Michael Burn: Yeah, in my opinion, a lot of that starts with, again, an antiquated view of leadership, which is command and control. And from that command position, you must control everything around you. And particularly with remote work out of sight, fear is out of mind. We often bring the idea of servant leadership into organizations and demonstrate that with a measure of trust, clear expectations, and accountability, I'm gonna repeat this accountability over and over again. The underperformers will be more than obvious and enable the organization. Either through enablement or through additional support to either help those under performers to improve or to acknowledge that there may not be a fit between the professional and the organization, the client organization.

Steven Morell: Help me and our listeners to get a better grip on the term accountability in a command and control structure. The perception of accountability is I give a command and it's your accountability to comply with it, and then I will control it. So there might be a different understanding of what is accountability from the manager and the sales rep.

Michael Burn: Yep.

Steven Morell: How do I practically, how do I get out of this command and control constellation? How do I make clear this is not a command, you are now accountable for this.

Michael Burn: I think it starts with language instead of a conversation that speaks to my team. Which Steven, I've gotta tell you, makes my ears bleed. Every time I hear the phrase "my team", and even with colleagues or peers, I will help them by saying, it's not your team. It is a collective. It's always our team. And so the takeaway is in, once again, it's in the trust. And in the trust comes the team's accountability. And rather than orient towards the doctrine or the law of a commission plan, we are very focused on establishing the team mission, the team values, and the team expectations, because our peers are going to be a very strong advocate and critic. If not everyone is participating at the same level. The accountability is a reflection of living to that mission and those values as everyone else on the team.

Steven Morell: Now you mentioned something very important ,and I in our preparational chat before the recording I learned the term coin operated. You just said commission. If you pay commission because you tell your salespeople, I pay commission for bringing me pebbles. You will have a huge pile of pebbles tomorrow. If you tell them you pay commission only for red pebbles, then you will have a smaller pile, but it's gonna be only red. What I'm trying to say is commissions are the cornerstone in steering the incentive to take over accountability and ownership and deliver performance. Talk to me about your ideas of individual commission versus operating as a team.

Michael Burn: Sure. Individual commissions, I believe, have a history alongside time motion studies. And what that breaks down or doesn't honor is the fact that the process is imperfect. The sales process, while we have sales stages and steps, is never linear. And so the individual commission at times, while it rewards the outcome, the result, it does not respect the market, it does not respect the individual's contribution, and it most certainly builds in our experience in helping clients, it builds at times animosity or enemies from the other parts of the organization. For example, marketing or a success organization or even a product or a technical organization who feel like they are the reason for the outcome, and the only one rewarded is the seller, the individual seller.

Steven Morell: So how do you approach this challenge? Do you give commission to everyone?

Michael Burn: We believe that alignment is key, and so it starts with the alignment at the organizational level that everyone is involved in the result. Everyone is involved in the sale. The existence of a business is to win more business. And so from a compensation perspective it can vary based upon the size, the scale, the nature of the value proposition. But fundamentally, yes, it's a share of the wealth approach and the team commission, particularly when it's aligned to specific contributions. All of which are aligned to the components of the process, right? Everything is oriented in the direction of creating impact or creating value. Now, the dollars, the cents, the percentages, much of that is custom and specific to the value proposition, but the concepts are universal.

Steven Morell: Let me understand. Are you arguing that it's advisable to have something like a team commission for every go-to-market team, including the product team. And I think by the way, we are not often understanding that a product is a go-to-market team. But are you arguing that product, customer success, sales, marketing, should all be under the same team commission structure?

Michael Burn: I don't know that structure is an even split, and I'll explain why. The importance of a base compensation plus a result outcome, a commission, it is designed to reward the fundamental behaviors that must be accomplished, right? So for a seller, this would be keeping up entries in a CRM activity, vis-a-vis productivity. And then the reward for the sale being made is a percentage of commission. For the product team or the marketing team, or the success organization. Much of the base compensation is to do an aligned set of tasks or contributions to the sale. So what I'm suggesting is: it's not an even split, but I do maintain that it is far more productive to demonstrate that when the team wins, everyone wins.

Steven Morell: I have a personal reflection on this because I happened to have transitioned a team, I would say successfully from individual commission to team commission. But it was not an easy trip. It was a challenging journey, I would say. And you said in our preparational chat that team commission creates an incentive for the weak performer to hide behind the strong performer. Shine some light on what you exactly meant with this.

Michael Burn: I do believe human nature, again, it's oriented to succeed. And so there's really two types of underperformers or weaker performers to consider. So there is a brand new seller. With all the enthusiasm and passion in the world that simply doesn't have the experience or the skill set to match up with a very successful, seasoned experience seller. We would treat that entirely differently than a seller that is looking to coast may not want to work as hard as the extraordinary seller. And so, the risk or the danger is that with a system, a team commission that is uniformly applied, there is a risk of enabling a perverse incentive. An incentive to say as long as I'm connected with Mary, everything's gonna be just fine, because I can continue along under the radar.

Steven Morell: But that demands that Mary is okay with that. If Mary has a way to go: Yeah, not with Steven, he's a sucker. He's just hiding behind me and his one opportunity that he never closes. I don't want him to be in my commission pool. That kind of... and this is in line with my experience. I ended up having a grace period for every new salesperson between three and six months, and the team had to decide between month number four and month number seven, they had to decide, do we take that person and bring it into the inner circle, and now they, we share our commission with them. Or we don't. If we don't, then we have to fire them. And I told them, you have to fire them. You have to have that conversation. Or you don't wanna have that conversation, then you're automatically accepting that person into your inner circle. You can kick them out after month three. But if you don't kick them out till month seven, they're in, and now you have to share. So, I'm transitioning the hiring decision effectively on the sales team. Is that what you would advise?

Michael Burn: I believe philosophically, yes. Practically, however, there are situations, and not to get into the hypothetical where a member of the team might be going through a traumatic family situation. They're going through a divorce and they are seeking the kindness and the grace of their teammates. This is where I think leadership and particularly servant leadership becomes important to moderate the conversation between the team and the under performer. And really everything serves the mission. One of my favorite expressions is: "We play for the logo, not the name." So we play for the organization, not ourselves.

Steven Morell: Yeah. I love that. Just wrote it down. Gonna steal it. Use it. Say somebody is going through a loan, I'm of the conviction, and I think science is settled here. People who are under anxiety, people who worry about can I pay rent? Will underperform, they will make mistakes. They will be distracted. They will underperform. So providing a certain level of safety and security. And... You see that I'm going towards the split between fixed variable compensation. Where would you draw the line between how much should be compensated in commissions, and how much should be fixed. 

Michael Burn: Again, poking fun at the consulting industry in general. It depends, Steven, and it depends on the value proposition, right? And it does depend on the amount of input meaning effort that the team is putting into the sale, right? So for example the need of a plumber when there is water spilling out of a sink doesn't give a lot of time for consideration. Right? Let's just get it sealed huff and put away the need of a design service for a custom kitchen that has a lot more variability and time for selection. So again, no silver bullet, but I believe the takeaway is with a mission orientation, which again, I'd like to spend a minute to talk about, if we may, the mission orientation instead of the commission orientation is that together we can accomplish much more than the collection of individuals.

Steven Morell: Yes. Yes, because. A team is more than just the sum of its members.

Michael Burn: It is, and particularly with candor or transparency, trust the psychological safety and the clear expectations of why we're all gathered here. Is why with the help of data, the mandate of data, we build that bridge of accountability between what we're trying to accomplish and our results.

Steven Morell: Hands-on advice. If I am leading a sales team and I'm thinking: Q4 starts tomorrow, we are all making plans for the next year. If I'm in the situation that I'm revisiting my compensation plans. What's your advice? How should I structure fixed salary versus variable compensation? And how should I even start thinking about team compensation versus individual? What is the first conversation that I have and with whom?

Michael Burn: I love analogies. You can tell this already. I would never climb aboard an aircraft where I knew the pilot and ground crew hadn't inspected it, I just wouldn't get on the plane. So I believe that we need to, in this analogy, inspect the plane. What worked well this year? We should be monitoring not only from our dashboards, our pipeline creation, our deal velocity, but we should be able to determine how we got from January 1st to September 30th, and that should give us valuable insight data, hard evidence of where we struggle, where there is tough travel that slows us down and that guides us towards the go forward in terms of saying: we really struggled this year. Because deals got to a proposal stage and we lost. And the failing would seem to be the alignment between the product organization and notes from the marketing organization. And so there are pieces there that would guide me to consider raising the level of expectation. On the seller to orchestrate more. Okay? And because those contributions are outside their span of control, that would lead me towards more fixed. In a situation where the absolute effort of closing a deal was the seller's tenacity and willingness to shepherd the deal through legal, through the finance organization and really push the deal through. That might lead me, believe it or not, into more variables. Because rather than giving up on the process and saying: Ugh, we can't do it. You're giving an incentive to the seller to remain tenacious. I know that's a layered example, but I think it's critical in the difference of thinking between fixed and variable based upon the data of how the deals arrive throughout the year.

Steven Morell: I think this is very hands-on advice. Especially inspecting the plane. I think this is an analogy that is sticky. And very helpful. Let me ask you, speaking of helpful, if I would have a time machine and I could send a postcard to the five years younger Michael Burn with a warning, what to do, what not to do. What to do differently. What would you write on that postcard?

Michael Burn: Everyone's postcard should start with "Eat more salads!". That aside...

Steven Morell: "Use sunscreen!" 

Michael Burn: Yes, more sunscreen. Fair. It would really be to trust your foundation. Right? I've seen in a lot of areas trust the process, so things that we've talked about, the nature of psychological safety, it's easy to micromanage, and by virtue of that, have comfort as a leader that you've done everything that you can, but you're eroding the ground underneath the sellers.

Steven Morell: Yeah.

Michael Burn: The idea of having integrity in the process and really investing in the process and sharing that with the entire organization. This is our process. Again, the building block of transparency and then making sure people see an abundant world. A world full of opportunity as opposed to scarcity. You mentioned a little earlier, we are on the last day of the quarter. The level of scarcity of: oh my gosh. If we don't get this in today, the world is going to collapse. It's still true, but if we've gone into the quarter with an abundance mentality we have backups. Even on the last day, we have been working beyond our target, our quota. We've been working in service to a mission, which is a successful outcome.

Steven Morell: That's probably the most moving answer that I had to this question. Thank you so much, Michael. All right, everyone. This brings us to the end of this episode of Speak Revenue. I want to thank our guest, Michael Burn for joining us today and sharing his insights and thoughts on this. A huge shout out to our listeners. Your support means the world to us. Please visit us on our website: speakrevenue.com. There's a full transcript and additional resources. Also, visit us on Apple Podcast, Spotify, Google Podcast, or wherever you go for your listening needs. And if you like the show, please leave us a good review. It really helps to get the word out and that means the world to us. Also follow us on LinkedIn, on YouTube and on Instagram. We are not on Twitter anymore. Wherever you can find us, follow us, engage with us. We are super approachable. We'll be back soon with another great guest. Until then, stay curious. Keep listening, keep learning, keep growing and stay safe. Thanks.