Patrick Casseday - Schneider Electric: Using 360 surveys to increase sales revenue

Steve

Hi, this is Steve Hunt with People Performance Radio. Today we spoke with Patrick Casseday, who is the Manager of Training and Development for North America for Schneider Electric, which is a company that sells things like power strips, transistors, other things, basic electronic parts that all of us use, and they sell these through a wide group of distributors, they don't actually work for the company, and Patrick shared how Schneider Electric has created a process to help their distributors more effectively manage their own talent to effectively sell Schneider's products, it's sort of in the same way that a company might provide its distributors with marketing materials to help them sell their product, they've provided them with talent management tools and processes to actually increase the effectiveness of the people selling it and diagnosing their training needs, development needs, a really fascinating look at how you can increase the effectiveness of a distributed salesforce that doesn't even report to your company through innovative talent management practices. So let's listen to Patrick Casseday from Schneider Electric.

Hi, this is Steve Hunt with People Performance Radio. This week we're talking with Patrick Casseday, who's the Manager of Training and Development for North America for Schneider Electric. Patrick, welcome to the show.

Patrick

Hi, thanks - great to be here.

Steve

So Patrick, can you tell us a little bit about what Schneider Electric does?

Patrick

Sure, we are a 180 year old company that has been in all kinds of different things, but we are right now the world's specialist in energy management, so we are responsible for how you use your energy from the moment it's created to the moment you plug something in.

Steve

Wow, so like what specific things do you actually sell?

Patrick

Well, we sell anything from transformers down to surge protectors, so circuit breakers in your house, those of us in the United States probably recognize the brand name Square D, or if you don't and you go out in your garage, and you look at your circuit breaker panel board out there, you'll probably see a D inside a square, and that's one of our products.

Steve

So whether we know it or not, we're probably relying on Schneider Electrics for turning our lights on.

Patrick

I can almost guarantee it.

Steve

So we were talking a little bit before the podcast about the nature of the way your business is structured, and the unique issues having to do with the nature of your field distribution - so how do you actually deliver your products to customers, how is that?

Patrick

Sure, we don't employ a huge salesforce, we do have salespeople, but their primary responsibility, or a good chunk of them at least, are responsible for working with our distribution channel, we have a network of distributors all over the country, you can go into the largest cities or the smallest towns and find our folks that sell our products through our distribution network, and they're, in the US at least, responsible for close to 80% of our total sales, and it's truly a symbiotic relationship - we couldn't survive without them, and most of them couldn't survive without us, so we rely upon them very heavily to sell our products. One of the challenges with that is though, because they don't work for us, we can't quite tell them what to do - it would be nice, but we can't.

Steve

Well that's interesting, it's almost like a franchise relationship where you have these people that you rely on them to drive revenue, but they're not employees, so you can't actually manage them, and so how have you addressed that challenge? What are some of the things you've done to address that?

Patrick

Well, we do a number of different things, so we incent them to sell our products. Some of them have exclusive relationships with us, so one of the incentives is that they have an exclusive relationship with us, we provide them with marketing and campaign dollars that they can use for a variety of different things; other ways are that we provide them with training, we provide them with systems, we've provided them with computers back when computers were just hitting the marketplace, so we make sure that they're taken care of as best as we possibly can, in addition to providing good products and high quality service when necessary, but something specific to talent management is, the group that I'm responsible for is not only responsible for internal training, but training of our distribution channel employees as well, so we deliver the training to them, and it's mostly product technical, so what are our products, how do they work, how do you sell against the competition - things along those lines, some of it's softer skills around sales skills and whatnot, but in addition to that we also provide them with competency management and competency assessment.

So we discovered many years ago, as did many companies, that managing competencies and assessing competencies was the new wave and the right way to go about identifying what your employees were good at, maybe what they weren't so strong in, and targeting training and professional development in those areas. We made the decision to do that internally, it kind of made sense naturally then to follow it externally as well, so we implemented a few years ago a competency assessment system that allows us to assign competencies based on a particular job role, allows the employees and managers to self assess, it allows our sales representative to assess that location, and then through SuccessFactors we have a very robust reporting capability that allows us to evaluate not only an individual, or a manager and their employees, but a particular location, a company, or it allows us to take a national view of where our distributors' strengths and weaknesses are.

Steve

So I'm looking at this, and I'm wondering about this question, so if you're one of your distributors, and they're saying, "OK, now you're suddenly asking to come in and evaluate what I know" - how do they react to that? What specifically did you present, and say, "All right, you know - yeah, you've been working for us, but we want you to come in and we're going to evaluate if you know what you're doing".

Patrick

Well, on the one hand it did present some challenges, we were always very close, we partnered with them very closely to do business planning and identify what training needed to take place and what marketing campaigns they might want to participate in or not participate in, so on the one hand coming in and saying, hey, we're going to provide you with a tool that allows you to evaluate what you're good at and what you're not good at, it seemed like a natural extension. To be fair, there was plenty of resistance around whether, what are you going to use these assessments for - are you determine whether or not we can sell a particular product line with it? So we had some fair, we did encounter some resistance around that, we also encountered it around, hey, this all subject - well, yeah it is, an employee rates themselves in a particular competency, it's what they think they're good at. We hope that we've written the competencies well enough to be able to take some of that subjectivity out of it, so if you are able to sell against the competition effectively, that puts you into one proficiency level, whereas if you're not, it puts you at something lower; but at the same time we look at the data, and we let the manager and the employee look at their own assessments, so that they can determine individual training events that they perhaps, or career development that they need to look at, but we look at it much more at an aggregate level, so we roll the data up and look at it nationally, so that we can see where we need to focus our next year's efforts around, do we need to work in automation products versus control products or control versus distribution products, and target training in those areas; we also look at it at a, on a company by company basis where we can work with a particular company and say, "You know - you guys are really really good at selling one product line, but here's another one that we want to help you sell more of, because we think that there's more opportunity here, and with your people, we need to get them some training so that they can be more effective at that.

In fact, we have one partner who's taken it even to the next level, they're a multi-billion dollar company in the United States, and they've taken it to the point where they're actually comparing locations city by city, so they'll look at two different locations, or multiple locations that are in comparable regions or cities, and compare their competency assessment aggregately for those particular cities, and determine, well we may have one location that is really really good, and we have another location that's struggling a little bit - they can compare those competency assessments, identify where the gaps are, and they've done a direct correlation to the business results of those particular branches based on competency gaps.

Steve

What a fascinating - I mean if we take a step back and look at this, so basically you did this - you as a supplier have gone and said, we know what it takes to sell our products effectively, and a lot of suppliers will provide marketing and end caps or what have you to their distributors to help them sell the product, and you said, "Let's take this one step further, and let's say about the actual people selling, that we're going to provide you with the tools, not just the marketing type stuff, but the actual competencies of the people themselves"?

Patrick

Oh absolutely, and because we're also a training organization, we felt that we can deliver all the training in the world, but if we're not training on the right stuff, how do we make them better? Like I said earlier, it's a symbiotic relationship - the better they are, the better we are, and the better we are, the better they are. So the more targeted training that we can provide in those, where they're not as strong as they could be, the better off they'll be in the long run, because they'll then be able to sell those products better, and if they're better able to sell those products, then they're more profitable, more salespeople make bonuses, everybody's happy.

Steve

So what is the incentive, from an employee perspective, to rate themselves low on this?

Patrick

Well they could, but then they'd end up taking training that they'd probably already taken before. We've been in the training business, and training our distributors for 30 or 40 years, and we're not an industry that has a huge amount of turnover, so a lot of these folks have been around for that long. You could rate yourself low and get more training in a particular area, but why? Most of the people that are responsible for training are the ones that are out there selling, they know that they're supposed to be out there selling, and they're incented and compensated to do so, so it kind of doesn't make sense to rate yourself low.

Steve

Unless you want the training?

Patrick

Well, unless you want the training, sure - but if they really do want the training, all they've got to do is call us and we'll provide it to them, so there's no real incentive to rate yourself low.

Steve

So what about in addition to the employees, who else is providing ratings? - you say it's managers who are providing ratings?

Patrick

Sure, the managers are providing the ratings, so the manager'll rate each of the employees at their particular locations, the employees will rate themselves, and that'll facilitate a one on one conversation between the employee and manager about what that individual's strengths and weaknesses are. In addition, our sales rep rates the whole location, and that doesn't mean that they rate each person, they rate the whole location as one entity, so that that helps identify what we as a company, Schneider Electric, think of that particular distributor location. It helps with the business planning, it helps with - you may have an individual who's very strong at a particular product line and he's the go to guy for everybody at that location, but when that guy's not available, who do you turn to? Well, I guarantee you our sales rep has identified that that's going on, and will identify that, while that individual may be very good at that particular product line, the branch location as a whole isn't, and then we can help identify, that in turn helps identify content that we need to deliver to that location.

Steve

Do you get customer input at all into this? - like end customer?

Patrick

We do, each branch location has the right, but they're certainly not required, but each branch location has the right to add, as a minimum, 20 customers, we don't care how many more they do, but we do want to make sure that we get a representative sampling, and we send out customer surveys to those folks. Those surveys then, while they're not the same questions that the competencies are asked about, they are certainly, they're tied to the same things, and it allows us to get a customer view of that particular location as well.

Steve

So if I can sort of summarize: what you've done is you've taken talent management technology and I believe you mentioned this was a 360 survey product specifically that you're using, is that correct?

Patrick

That's correct, we're not using a true competency system, we're actually using a 360.

Steve

So you've used 360 technology as a way to work with your distributors to say, we will help you diagnose if your employees are equipped with both the technical skills, and to a lesser degree the soft skills needed to effectively sell our products?

Patrick

That's correct.

Steve

Wow, and then you're also saying, well aggregate that up to a higher level, to kind of say, is your organization, given its skill set, performing at a level that it should be?

Patrick

Yes.

Steve

What are some of the business results that have come out of creating this process? How's it, both in terms of like increased revenue, but also how it's changed how your company makes business decisions?

Patrick

Well, increased revenue we're starting to see, I mean we've only been doing this for three and a half years now, but we are particularly, that one large partner company that I mentioned, they are starting to see that, as they target training in those areas that had gaps, that they're starting to see increased sales in those areas because we're able to get them the skills and the knowledge they'd need in order to be able to sell those products effectively. The current economy notwithstanding, we are seeing, even if we're not seeing a revenue increase, we are starting to see market share increase.

In addition, we're starting to see an increase, and this is kind of a non-dollars and cents kind of impact, we're starting to see increased satisfaction through our distributors, we do survey on a quarterly basis randomly our distributors and our customers, and we're starting to see increased satisfaction in the training offer, because in addition to being able to target for the distributors the things that they need to work on, it's helped us as a training organization provide the training that is going to be the most effective. Traditionally, when we built the schedule, we looked at enrolment over prior year, we would work with some of our partners, but we certainly couldn't get all to all of them, in identifying the things that they said they wanted training on, and typically those things were the ones where they had their largest revenue, so they wanted to upskill further on those things that they were already good at, they wouldn't necessarily look at the things that were maybe only 10 or 15% of their revenue, because it was only 10 or 15% of their revenue. Now we're able to say that maybe the reason why they only had 10 or 15% of their revenue in that particular product area is because they didn't know enough about those products to be able to sell them effectively. We've identified those gaps in those locations, those areas, those regions, and we're able to target the training that we have available in those areas to where those gaps are, and we've seen an increase both in registration in those courses, but also in, like I said, revenue and market share.

Steve

So I'm guessing that your distributors really vary in size from very small to very very large - is that correct?

Patrick

Yeah, absolutely, we've got companies that are mom and pop shops in the middle of nowhere, all the way up to a Fortune 500 partner.

Steve

So, I'm curious, if those mom and pop shops are probably those companies who have not historically had much in the way of sophisticated talent management tools, and you've sort of provided them one - are you getting feedback from how that's impacting their effectiveness as managers of their small organizations?

Patrick

Yeah, we are to a certain extent, those that are participating, we certainly don't make this mandatory, but I will say that we have had a very wide adoption of it, but those that have participated are using it, even though it's a competency assessment and there's really not too many questions on it, we are getting feedback that they're starting to use it also as a method of a performance appraisal; that in addition do, "Did you meet certain targets around sales", and whatnot, they're able to now take a look at these particular competencies and determine whether this person is an effective performer. So we're seeing it being utilized perhaps in a way that we didn't intend, but if it works for them, we're certainly not going to stop that.

Steve

Yeah, I would say, because for a lot of them, it's a better tool than they have, it allows them to have that conversation where … I look at this, it's you've really put together a process that equips your distributors to get past this sort of tactical, this product isn't selling - what's wrong with the product, what's wrong with the marketing, to a more sort of upstream to, "Are we selling it the right way? Are we managing people in the most appropriate way and providing them with the training that will enable them to sell the product", and shifting some of the focus away from people's tendency to blame the product? - and act to a little inward focus?

Patrick

Absolutely, and given that, with the majority of our distributors, we do provide them with marketing and campaign dollars that they're able to use to take training, it helps them focus on those, not only are we helping them identify gaps of where they should go, content that they should go get, we're also providing them with the resources they need to actually go get that training, whether that would be something that we offer directly and is fully reimbursable, or if it's something that they would have to go get at a local community college, or something along those lines, that's partly reimbursable.

Steve

Wow, and in a much more intelligent fashion, a very focused fashion, so you're not just throwing some training dollars at it.

Patrick

Yeah, absolutely, so rather than just saying, well, let me go take this course because it's in my area, we're now able to say, you really should be taking these three courses over the next calendar year, and while it might require some travel, because we'll help pay for that travel, they're going to get much more bang for the buck, if you will.

Steve

Cool, well if you look back on this, for three years doing this, what are some of the lessons learned that you've got from doing this product, and after that question, what are some of the next steps, where do you see this going?

Patrick

Well, there's three lessons: change management, change management and change management, and what I mean by that is, no matter how much communication you think you're doing about what and why and how, you haven't done enough, so whether you're implementing it or as a new system or process, or it's something that you're changing, whether it's just a system change or even just a wording change in a competency, the more you communicate, the better. We found that while we did a very good job, at least we think, about communicating what was happening, we didn't do a great job of communicating why, so we were very good at saying there's a new system coming out, we're going to be able to provide you with assessments that help you rate your employees and identify what their competencies and gaps are, and target training to those areas, but didn't really tell them what was in it for them. So one of the lessons there is, you make sure that, with them, the "what's in it for me?", is included in whatever messaging you do, and then do it three more times, because you never get enough, no matter how many webinars and conference calls and training sessions I held, I guarantee you I got as many questions from people who never had, or claimed, or at least said, that they never heard of those training sessions taking place, I was answering questions after the fact.

Steve

What was the leading, "What's in it for them"? - when you look at that, because a performance appraisal, it's always a chance, people inherently think, "Ah, you're evaluating me so you can do something evil to me?"

Patrick

Well, ultimately our processes are nefarious - just kidding! I don't know that we could have clearly articulated that when we launched, we knew that it was the right thing for us internally as employees to do, because it would help us target the right training, and it was a logical extension that it would make sense externally. What we weren't able to do is identify a true business impact for them, so the "What's in it for me now" is, if we identify where your gaps are, and we help you become a better salesperson or a better support person in that particular area, you're going to be not only be better at doing your job, you're going to help your location be better at doing its job, which is primarily selling products. If we do that, then everybody benefits, not just us as a company, but those particular locations, and for those people that are on either sales incentive or bonus or something along those lines, their compensation improves. I don't know how it's not a win:win or a win:win:win for the employee, the location, and Schneider Electric.

Steve

Yes, and we're doing this to increase revenue, and we all benefit from increased revenue.

Patrick

Right, exactly right.

Steve

So, you were talking about the change in communication, what about looking at the next step - where do you see this going? Is this continuing to gain momentum, are you looking to take it to some other new directions?

Patrick

Well, it is gaining momentum, so while I mention that we had one of our - our biggest partner, who's really bought into it, and is really enthusiastic about it, and they're using it, they've taken it, what we would consider a next step, maybe not the next step, but they've taken the competency assessments, they're comparing regions, they're comparing locations, and they're actually assigning training to each individual who completed the assessment, of course they actually made it mandatory so every person who sells our product actually took one of these assessments. They're assigning training to each individual around the competency gaps and are requiring that they complete whatever training's been assigned by the end of 2010, so they're expecting a large, and for us as a training organization, it equates to about a $2 million order, which anybody in a training organization, that's no matter how big or small you are, $2 million order isn't small, so over the next 16 to 18 months we're looking at a $2 million dollar increase in the amount of training that we were providing to them.

And secondly also I think we're seeing, it's three years in, those that are taking it and participating in it are starting to see the value, and word is getting out, so each year that we've been doing this we've seen an increase in the number of people that are taking assessments, the increase in the number of branches that are completing the assessment in total, meaning everybody at the branch, and then because we're able to schedule and target training in those particular areas, based on the gaps that have been identified, they're all seeing a return on investment for the time that they're putting in.

The next big steps for us, we're undergoing some organizational changes that are actually going to be bringing in Canadian distributors, so we would expect that, over the next 18 months, that they're going to not only start taking the training that's available in the United States, they're also going to start taking the competency assessments, so we get to start it all over up again up in Canada.

Steve

Wow, but hopefully having learned all the lessons, then you can discover new mistakes you haven't made.

Patrick

Absolutely, I fully expect to, I won't make the same mistakes - well, I probably will, but I'll try not to, but we'll make all kinds of new mistakes.

Steve

Well Patrick, thank you so much for appearing on People Performance Radio, this has been fascinating, and I think it's just another great example of a very innovative and powerful way to leverage talent management technology to make people realize the value of investing in people.

Patrick

Well, I hope it's been helpful, we firmly believe in it, both from an internal employee perspective, and through our distribution channels, so thank you for the opportunity to talk about it.

Steve

Thank you.

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