Sales Operations: Applying the “Necessary and Sufficient” Test

Economists often use the terms “necessary and sufficient” when considering a proposed course of action. For example, is it necessary for the Federal Reserve to keep interest rates low? If so, is that step sufficient to stimulate economic growth, or are additional actions required?

Sales operations leaders can use a variation of the “necessary and sufficient” concept to evaluate proposed activities, projects or investments. The test consists of two fundamental questions: Is it necessary to take corrective action (i.e. what will happen if nothing is done)? And, if the proposed action is deemed necessary, is it sufficient to correct or address the root cause of the problem?

Sales operations leaders should ask the following questions:

This test can be applied to potential changes to the sales compensation plan. Begin the discussion by defining the desired behavior changes, the specific problem to be solved, or the goal(s) to achieve.

Or, consider the case of a company considering adding a software-as-a-service (SaaS) offering, in addition to its traditional on-premise software. The current state is a minimal pipeline of qualified opportunities and no SaaS product revenue. The desired state is a robust pipeline of qualified opportunities, current-year revenue from the SaaS product, and signed multi-year contracts that establish a run rate for the product in future years – all of which require a change in sales rep behavior.

Is it necessary to include the new product in the sales compensation plan to incent sales? Yes. Is that sufficient? No. The organization also needs to assess sales reps’ ability to sell the product and then interlock sales with product and marketing on launch activities such as target market identification, demand creation programs and tactics, and sales communications.

It also needs to execute sales enablement activities, such as sales training and certification, and update the sales playbook and content. Sales operations needs to update the salesforce automation system and related tools to enable sales reps to enter opportunities and configure, price, quote and order the new product. Considering all of these factors can help the organization decide whether to add the SaaS offering.

As you can see, “necessary and sufficient” is a useful litmus test to help sales operations leaders define and understand goals, resources and requirements when evaluating projects and initiatives that impact sales productivity.