The Safest Way to Hit Your Number Is to Ask for a Smaller One
Inc. looks at how Bayer dropped fixed regional sales targets in favor of 90-day, cross-functional outcomes — and why negotiated targets tend to reward good negotiators instead of good performance.
Prompted by “Bayer Stopped Chasing Sales Targets. Accountability Did Not Disappear”, Inc. (Scott Hutcheson).
Most sales targets don't measure performance. They measure how good someone was at negotiating a number they knew they could beat months before the year started.
Bayer ran into this at scale and did something most companies won't: it killed fixed regional sales targets for its country teams entirely, keeping overall financial goals but replacing the negotiated-quota system with what it calls Dynamic Shared Ownership — cross-functional teams built around 90-day outcomes instead of annual numbers. When Bayer launched Nubeqa, its prostate cancer treatment, it stood up a dedicated contract sales force to drive the launch, then disbanded it once the job was done. No target to protect, no headcount to justify after the fact — just the outcome, then the next one. Economist Michael Jensen's research backs up why this matters: tie compensation to a negotiated budget number and you don't get better performance, you get better negotiators — people who get good at lowballing forecasts and hiding information, not at running the business.
Why does this cut deeper at a smaller company?
For a privately held company, this cuts deeper than it looks. A big enterprise has a board and investors forcing an outside view on its numbers whether it wants one or not. Your budget gets set once, probably in Q4, and then everyone spends the year managing to it — or around it — with nobody in the room asking whether that number is still the right one to be chasing.
Test it out: pick one number your team is currently protecting — a quota, a budget line, a headcount plan — and ask out loud in your next leadership meeting whether hitting it exactly as negotiated is actually the best outcome for the business right now. If the honest answer is no, that's the number to renegotiate, not defend.
Having someone in the room who asks whether the number is still the right one is a big part of what an OCTET peer board is for.
Originally posted on LinkedIn ↗