The Rustling of Autumn Spreadsheets

Chill winds and the last rustling of leaves come even to Silicon Valley, eventually, along with the usual waves of nostalgia—for old friends, that first car, your first spreadsheet-managed compensation plan. No, I’m not losing it. The deal with nostalgia is that you can only get nostalgic over something once its time is past. And there’s nothing that fits that bill better than managing sales performance via spreadsheets. Like my first car, that particular paradigm is well past its prime and better remembered than relied on.

Today of course there’s another chill wind coursing around the globe: that of recession. And many companies of all sizes are finding themselves nostalgic for yesterday’s revenues, profits and forecasts. How long they’ll be forced to remain nostalgic depends on many factors, but one that stands out is sales performance. Happily, this is something companies can work on to improve, and an improvement here goes a long way.

It’s axiomatic that when performance measures align directly to business goals, sales reps on variable compensation are motivated not only to sell more, but also to sell more profitably. But companies are particularly challenged to achieve this alignment because of their traditional reliance on spreadsheets coupled with email and paper-based methods to manage sales compensation.

Companies that have moved off of manual methods will gleefully recite a whole litany of spreadsheet shortcomings, starting with how difficult, tedious and costly it is to create and administer effective comp plans in Excel. And they’ll tell you that these shortcomings extend to the error-prone nature of the beast; the lack of meaningful reporting, analysis and auditing capabilities; and how hard it is to collaborate and share with spreadsheets, yet how easy it is to confuse, confound and demoralize those you so desperately need to motivate.

The vast majority of companies that still use spreadsheets for compensation management know all or part of this in their hearts, but are likely asking themselves how they can justify the expense of an automated solution, especially given the uncertainty of the global economic climate.

My response is: how can you not? Especially now that inexpensive SaaS solutions for compensation management have taken the wind out of the sails of far more costly on-premise software solutions.

The net is, it’s time that companies tossed their sheaves of sales compensation spreadsheets to the winds. Be nostalgic about them if you want, but just get rid of them and automate. It will go a long way towards keeping you from having to be nostalgic about healthy top- and bottom-line growth.