Data is a beautiful thing. As the original Moneyball phenomenon of baseball scouting demonstrated, data can invalidate gut-based beliefs and lead to unexpected insights with big payoffs. And while statistical analysis has long been the foundation of various occupations and industries, the rest of the corporate world is rapidly catching up.
Experts have coined this recent development “the industrial revolution of data.” With the advent of big data and readily available measurement tools, companies are racing to adopt a strategy of data-driven decision making. As compellingly argued by Josh Bersin of Bersin by Deloitte, one area where using data can create a huge competitive advantage is in an organization’s hiring practices. In fact, fascinating research by the Wharton School of the University of Pennsylvania demonstrates the advantages of applying a Moneyball approach even when hiring CEOs.
According to The Conference Board’s 2013 CEO Challenge Survey, “human capital” was identified as the most critical challenge for the coming year. It’s no wonder then that data-centric methods of employee selection are considered one of the top workplace trends of 2014. HR and sales leaders understand that “measuring and predicting talent performance” is one of their top opportunities for value creation.
However, predicting sales performance can be extremely challenging. Although performance metrics are usually objective and quantifiable, the qualities of a successful salesperson often appear to be subjective and qualitative. So how can we add the science of data to the (often unsubstantiated) art of sales recruitment?
In order for an organization to hire successful sales employees, they need to know: (1) which knowledge, skills, abilities, and other characteristics (KSAOs) best predict sales performance; (2) how to accurately measure those KSAOs; and (3) how to statistically link this data to actual sales outcomes (Schmitt & Chan, 1998).
One of the best ways to do this is by using a valid and reliable psychometric assessment to scientifically measure job applicants. Research tells us that by doing so, companies can substantially increase their profitability through increased sales as well as lowered costs in hiring and turnover (Farrell & Hakstian, 2001).
When you adopt this type of data-driven strategy, you’re discarding gut instinct theories about what you think makes a successful salesperson and allowing the data to show you what actually makes a successful one.
So what you should be demanding from the metaphorical Jerry Maguire isn’t just, “Show me the money,” but rather, “Show me the money…by showing me the data.”
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