“Talking with you is a waste of time.” Enrico began, clearly not attempting to put me at ease.
“Excuse me? What do you mean…”
“It’s too late in your career to move to sales.”
“I’ve just sold two deals, Enrico.”
“This job involves relationship building, Dan. What do you know about relationships?”
“Well, eh, I’ve been married for 30 years.”
“The customer wants a single point of contact. Do you know anything about our products? After all, you have been in Services your entire career.”
“Of course I know about our products. Our PCs are commodities – just like everyone else’s. Our servers use Intel™ processors – just like everyone else. Our storage….”
“You can see why the product division doesn’t think highly of you, Dan.”
“Enrico,” I interjected. “we are successful because.” “Hmm, This is going to be a stretch,” I thought. “Because our skilled consultants are able to help our valued customers achieve their critical business objectives through innovative use of our world-class products, superior and comprehensive support delivered consistently, globally and appropriately.”
“You may have a future in Sales.”
Enrico described the measurement system used to compute variable compensation for the Global Sales Managers. I was…
“…baffled, Enrico. This is so complicated. I understand the hurdles, but the variably sloping ramps, the gates, the caps…”
“Don’t forget the caveats, conditions, disclaimers…”
“It seems far too complex. Besides, as far as I know, there is no way to measure the world-wide revenue for a global customer.”
“Correct!” Enrico beamed. “That’s why I’ve created this Excel Spreadsheet.”
A detailed description ensued…
“As you can easily see from the summary in row 3248, column QY…”
“This beautiful spreadsheet…”
“.. it is lovely, isn’t it?” Enrico was beaming.
“It is spectacular! But the focus is on revenue. As I understood the quantum mechanical aspects of the variable compensation metrics, we need to have information about profit.”
“Of course. It is not useful to sell things that aren’t profitable.”
“How do we figure out the profit by product line? Just counting the revenue is difficult enough.”
“We use proxy profit.”
“Proxy profit?”
“Yes, for each sale your make, we compute the proxy profit by using the average margin for the product line.”
“Isn’t the proxy profit totally unrelated to what I would do?”
“What do you mean?”
“If I am able to get the customer to pay a high price for our product, I don’t benefit because we use the average profit.”
“So..”
“And if I give the customer an enormous discount, I’m not penalized since we use the average profit.”
“Yes, that’s right.”
“So, to maximize my income, I should ignore profit entirely.”
“Excuse me? What do you mean…”
“It’s too late in your career to move to sales.”
“I’ve just sold two deals, Enrico.”
“This job involves relationship building, Dan. What do you know about relationships?”
“Well, eh, I’ve been married for 30 years.”
“The customer wants a single point of contact. Do you know anything about our products? After all, you have been in Services your entire career.”
“Of course I know about our products. Our PCs are commodities – just like everyone else’s. Our servers use Intel™ processors – just like everyone else. Our storage….”
“You can see why the product division doesn’t think highly of you, Dan.”
“Enrico,” I interjected. “we are successful because.” “Hmm, This is going to be a stretch,” I thought. “Because our skilled consultants are able to help our valued customers achieve their critical business objectives through innovative use of our world-class products, superior and comprehensive support delivered consistently, globally and appropriately.”
“You may have a future in Sales.”
Enrico described the measurement system used to compute variable compensation for the Global Sales Managers. I was…
“…baffled, Enrico. This is so complicated. I understand the hurdles, but the variably sloping ramps, the gates, the caps…”
“Don’t forget the caveats, conditions, disclaimers…”
“It seems far too complex. Besides, as far as I know, there is no way to measure the world-wide revenue for a global customer.”
“Correct!” Enrico beamed. “That’s why I’ve created this Excel Spreadsheet.”
A detailed description ensued…
“As you can easily see from the summary in row 3248, column QY…”
“This beautiful spreadsheet…”
“.. it is lovely, isn’t it?” Enrico was beaming.
“It is spectacular! But the focus is on revenue. As I understood the quantum mechanical aspects of the variable compensation metrics, we need to have information about profit.”
“Of course. It is not useful to sell things that aren’t profitable.”
“How do we figure out the profit by product line? Just counting the revenue is difficult enough.”
“We use proxy profit.”
“Proxy profit?”
“Yes, for each sale your make, we compute the proxy profit by using the average margin for the product line.”
“Isn’t the proxy profit totally unrelated to what I would do?”
“What do you mean?”
“If I am able to get the customer to pay a high price for our product, I don’t benefit because we use the average profit.”
“So..”
“And if I give the customer an enormous discount, I’m not penalized since we use the average profit.”
“Yes, that’s right.”
“So, to maximize my income, I should ignore profit entirely.”
“Dan,” Enrico enthused, “you have completely justified my hiring decision. You are a natural.”
Note: The picture has nothing to do with this entry, but it is Spring in Zurich.
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