Enhancing a Flawed Sales Bonus Payout Process for an Adult Nutrition Company
Our process assessment efforts helped identify improvement opportunities and develop a roadmap for immediate and longer term people, process, and technology enhancements.
The Business Need
A prominent adult nutrition company was experiencing numerous challenges that were impacting their overall sales organization.
Their sales bonus payout process was extremely manual and often led to incorrect payouts. Team members were spending a significant amount of time validating their bonus calculations as opposed to focusing on sales and were often expected to reimburse money not owed to them.
Because the current bonus payout process caused defects that directly impacted the sales force of the company, the company felt it was time to address them.
There was an initial feeling that a compensation system would correct many of these problems, but they agreed to first get a better understanding of the current process complexities, including the multiple hand-offs.
Our Process Excellence (PEX) team partnered with the company to document and understand the current state of the process and develop a supporting roadmap to improve the overall process.
We adapted our proven process assessment methodology to the client’s specific business needs. Our team – led by a Lean Six Sigma (LSS) Black Belt – did the following:
- Developed a SIPOC (Suppliers, Inputs, Process, Outputs, Customers) diagram as part of the project kickoff to manage scope and determine interview groups to gather process
- Interviewed individuals in all aspects of the current state process, including suppliers and end customers (the sales force)
- Documented the details of the current state process (which was 85 steps)
- Identified current state pain points and high-level future state business requirements
- Identified improvements to address pain points while leveraging future state business requirements
- Prioritized 8 recommendations and created a roadmap for completion including next steps to accomplish each recommendation
This effort identified that the underlying issue was the data: how it was collected, managed, and reported. The issues stemmed from data manipulation by multiple manual processes and systems, which left a lot of room for error and led to inconsistent reporting.
While there were numerous inputs into the process (including outside vendors), there wasn’t one single owner of the overall process. Every hand-off contributed to potential errors being introduced into the data and reduced the quality of the end results.
The process assessment effort identified numerous improvement opportunities that were included in an overall roadmap consisting of people, process, and technology.
- Improving the sales bonus payout process by reducing the number of cycles and removing estimations
- Enhancing communication and change management processes to support the rollout of the updated processes and technology
- Improving data analytics by utilizing existing technology and building on data mart and governance to manage data throughout process
- Centralizing process ownership and execution within one team to reduce handoffs
- Defining a new process to locate missing sales information more efficiently and effectively
The data itself needed to be addressed to create a solid foundation. Once the payout mechanics were reworked and the analytics tools were applied, the client saw immediate improvement in the quality of the data collected.
Those efforts laid the foundation for the remaining improvement efforts with the ultimate goal to increase trust within the sales organization. All of this was completed without the need for a new compensation system, saving the client a significant investment of time and money while delivering results faster.