Interview with Rosalyn Santa Elena

In our Experts on the State of Incentive Compensation Management Q&A series, we’re sitting down with experts across compensation, operations, and GTM (Go-to-Market) functions to dig deeper into the insights from CaptivateIQ’s 2024 State of ICM Report, and hear their perspectives on the biggest challenges and opportunities in incentive compensation today.

A Top Sales Operations Voice on LinkedIn, Rosalyn Santa Elena is a long-time GTM strategy and RevOps leader, and founder of the RevOps Collective. Rosalyn is also an advisor for several high-growth startups, an active leader in several communities, a keynote speaker, and the host of The Revenue Engine Podcast.

What did you find most interesting, surprising, or insightful about the report?

A lot of the findings really resonated with me, and are aligned with what I’ve seen as a practitioner. But there were some things that stood out as a little shocking, especially in regards to how many professionals seem to be settling.

It sounds like a lot of comp professionals today are sort of sticking to the status quo – just trying to get through their to-do lists and make sure they’re reps are getting paid versus really unlocking the power of incentives.

One of the things that really surprised me – and it’s a little disappointing, having run comp for twenty-plus years now within different companies – but there is a statistic that says 46% of respondents are paying commissions in an accurate and timely manner, which tells me that 54% are not paying their reps in an accurate and timely. That to me is very concerning.

[BLOCKQUOTE
| Quote: "46% of respondents are paying commissions in an accurate and timely manner, which tells me that 54% are not paying their reps in an accurate and timely. That to me is very concerning."
| Author: Rosalyn Santa Elena
| Title: Founder, RevOps Collective
]

To that point, the report shows that people seem to be generally satisfied with their programs, even though many are also reporting that they’re spending a lot of time on manual work – and unpacking the problem further, most aren’t even paying commissions out on time.

As someone who’s spent a lot of time talking to different companies, what’s your take on the state of incentive compensation program management today when looking at reported satisfaction levels?

I think it goes back to how teams seem to be sort of settling, and just trying to get through the day-to-day of processing commissions. Unfortunately, that means they’re spending all of their time just trying to keep the lights on and not doing the proactive work that could be done to actually see how well their comp plans are performing, and also what they need to do differently to really drive the right behavior so they can actually hit those goals.

I’m constantly trying to drive home the idea of automating what manual tasks you can so you can strike a better balance and become more strategic, and strive to become more of a thought partner versus just a tactical executioner.

What advice do you have to help compensation professionals become more strategic players versus doers?

It always starts with really understanding what you’re trying to achieve with your comp plans, and making sure those plans are aligned with your organization’s key objectives.

What’s also crucial is how you communicate your comp plans – if your reps don’t understand how and why they’re getting paid, or what their plan is targeting them to go do, that’s a problem.

So I think it’s first understanding what your compensation strategy is – how it aligns to larger goals – and then clearly communicating the plans so that everyone understands not only how the plans work, but also why they’re set up the way they are.

A couple of other stats from the report tell us that only one-third of respondents are running important reports on a consistent basis, including reports on individual and team performance and compensation cost of sales, and only 46% are optimizing their compensation plans based on insights.

What do you think the consequences are of so few admins optimizing their ICM programs based on insights and feedback loops?

As we talk about trying to uplevel from being tactical to strategic, having the right insights is what’s going to enable you to be that thought partner – the person who can actually guide the business.

If you’re not digging into the data, or getting regular visibility by reporting on even the status quo of what’s happening now, then you’re definitely not unlocking some of those insights that are really going to help you guide the business and understand what’s working and what’s not. Where should you lean in, what should you be doing differently, where do you need to pivot? Those are the strategic recommendations that having the right insights will unlock for compensation professionals.

If you want a seat at the table, you’ve got to spend the time digging into the data and telling a story along with a recommendation. The fact that only roughly 30% of folks are even just reporting on a lot of crucial metrics regularly – that should be table stakes, these are the metrics that you should be reporting all the time.

With individual performance and plan performance reporting, you should have real-time visibility. Reps need to be able to see how they’re doing. They don’t want to be surprised. They need to be able to see  Am I tracking the way I’m expecting? Do I need to push harder on these deals to hit those accelerators for the year? Those are the things that will drive the behavior in the right direction. But also from a more strategic level, it’s one thing to effectively provide these reports for your reps – it’s another to be able to unlock what’s working and what’s not.

A lot of times it can be difficult  for people to know where to even start – how can compensation professionals begin to incorporate some analysis, reporting, and optimization best practices?

Be curious and start asking “Why?” more often.

When you see reps who are performing well, or maybe who aren’t performing as well, ask “Why?” – what is different about what they’re doing? Being able to dig into some of that to understand why some reps are performing better and getting paid more gives you an opportunity to get a better understanding of whether they’re doing the right things, if the outcomes or payouts are aligned with what your expectations and assumptions were.

If nothing else, I would encourage everyone who hasn’t already to go back today and look at your plan’s performance in the first half versus what your assumptions were during plan design, and see if those are aligned and tracking how you expected.

We’re beginning to see incentive compensation planning branch out to include more and more roles across revenue-influencing teams. What do you see as the benefits of having a pay-for-performance structure across various job functions beyond sales?

We’ve been talking a lot about aligning revenue – because revenue is not a baton race anymore. It’s not marketing handing off to sales, handing off to post-sales. It’s more of a soccer game where everybody stays involved. And what better way to drive alignment than through pay and incentives, because that way folks share in a common goal, and they’re all working towards the same outcomes and they get rewarded for it. I think people are motivated by incentives and recognition – there’s just that sense of satisfaction – and I think that in the spirit of driving alignment, aligning those incentives just makes a lot of sense.

A question we’ve been hearing a lot is around where compensation should live. Do you think comp should be centralized or should it live separately depending on what teams are being incentivized?

I think it should be centralized. In every organization I’ve worked at, it has been centralized, which comes from me being a champion of revenue operations and centralizing all of ops. I also think comp should be centralized because otherwise you start to see silos, and then you’ll see misalignment. If Customer Success Ops is separate from Sales Ops, there might not be great alignment and engagement between the two teams. And so trickling down to the teams’ comp plans, you’ll end up with those silos where the incentives aren’t aligned, and then you may be incentivizing CS to do something very different from your sales team.

In terms of where it should live, I’ve seen different companies approach it in different ways. I’ll see comp design maybe sitting with HR, or attainment and crediting sitting in Sales Ops, and then maybe the calculations sitting in a commission accounting role. In my prior positions, I’ve typically managed comp end-to-end, but that’s because it’s my area of expertise and one of the areas I feel very passionate about.

But regardless of where it sits, I think – like everything else – the most important thing is about alignment. The teams are working together and everyone is on the same page.

We’d of course be remiss to exclude the hot topic of AI. Where do you personally see the biggest pull for help when it comes to Gen AI in ICM, and where are people seeing the most value?

From an incentive comp perspective, a lot of what we've been talking about revolves around trying to be more strategic and less tactical, and  I think AI plays a huge role.

One, it's useful in automating some of those manual, repetitive tasks that see are seen as less of a value-add from a human perspective to free up some of that time to go and do more of that thinking work and being more proactive.

In addition to that, I think AI is going to be able to provide a lot more of those deeper insights. Going back to the question of, “How do I even start?”, and “What should I be even looking at? “,sometimes you don't even know what questions you should be asking. Leveraging AI to produce some of those deeper insights, sharing the “Why” and seeing some of that pattern recognition so you can leverage that data to be that strategic business partner – there's a lot there to unlock.

The last thing I’d say about AI – I've seen a lot more at play here in terms of putting more power in the hands of the user. For example,  a rep might be able to ask real-time questions in plain English about their plans and AI can give them that information, which in turn helps the comp admin by – again — taking that manual human effort out and freeing up the space to be more strategic.

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If you’re interested in participating in one of the Multiplier Q&A features, or have burning questions to ask today’s ICM leaders, let us know at multiplier@captivateiq.com.