Saturday, September 16, 2006

Revenue numbers, project development and the entrepreneurial mindset

It is budgeting time in many companies. The thousands or millions are thrown all around us. There are the good and the bad salespeople. The ones that met their target and those that still glamour to meet the numbers to secure their bonus.

Forecasting is also in the air. Again, numbers, heavier than before (is it true that every year, you get kind of punished when you achieved your goals? Your numbers to achieve get higher?).

Anyway, this is also the time I always start to wonder.

There are those that are good in their business, and they sell a lot. So let's assume (and the numbers are made up, as are the names) that there is a business developer called Mr. X, who is able to secure 12 million Ringgit in 2006. Great number, he beat all the goals that he set out for last year. And now, Mr. X plans for may be 15 million.

Mr. X is happy. He gets a salary increment and a bonus of may be one month or two months salary. Let the story continue and assume that his salary is very, very high, for Malaysian standards - let's assume that Mr. X gets a salary of RM240,000. (I put in this number because it is easily dividable by 12 moths, lor!). So, he generates RM12 million - speak: RM 1 million per month - and is awarded with RM20,000. The ratio is 0.02%. Or, to put it differently, for every one dollar he earns, he generates RM50 dollar.

Now, Mr. X is also very much favoured by his clients. They love him and they would go with him, if he changes company. If he changes, he might get a little salary increment.

What I don't really get is the following:

Why is Mr. X, so successful, staying with this company? Why is he not jumping and opens up his own business? If he is able to take along just 50% or even 10% of the value that he originally generated, wouldn't he feel better?

Is this loyalty? Someone stays because he loves a company so much that he earns to the ratio of 1:50? Is this the plain old fear, that holds someone back? The fear of what? Because clearly, if Mr. X doesn't deliver anymore, he will get fired, right?

Or do I just have a wrong point of view?

I am interested - so help me out, dear reader, because I am lost!

(NLP in Asia)









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