MeadWestvaco

425

$6.8 billion

John Luke Jr. CEO of MeadWestvaco Corporation committed to the sales 
organization in September 2006 that the company would develop a world class 
sales compensation program to support a strategic shift from a product-focused 
approach to a customer centric sales methodology.  He participated in setting 
the future vision for the program with a requirement that every plan must 
demonstrate measures and payouts reflecting value to the customer and 
profitability for the company. His support of the initiative, including a 
personal undertaking to review the final plan designs verified the sustained 
commitment of the executive office to the field sales force.   

MeadWestvaco evolved different sales compensation plans in all business units 
and over 15 different lines-of-business without consistency or relationship 
between different sales roles to a common sales compensation program that 
spanned the domestic operations of the corporation. The program was fully 
aligned to the business, had a common framework to ensure salespeople were 
treated fairly and equitably, but was customized for each group, providing 
managers with a “tool” to focus sales representative behavior and communicate 
what the organization valued and would pay them to deliver. This was done for 
over 200 salespeople, in 30+ sales roles, within six months.

Keys to this initiative were:
1.	A reliable process used across all sales groups’ ensured design 
uniformity and role comparability across sales groups. The process utilized 
all stakeholder input (sales, HR. finance, sales operations) including an 
interactive approach to create plan designs.
2.	Active participation of sales management and field personnel in the 
design process. Integrating their feedback/needs as design considerations 
increased field buy-in to plan changes.
3.	Implementation of a strategic initiative measure in ALL plans 
influenced and changed sales behavior. These initiatives measured both 
required quantitative financial (profit) measures and qualitative imperatives 
(solution selling, planning and partnership development).

Lessons learned from the process included:
1.	The importance of quality and format in sales transaction data became 
increasingly evident. Particularly, in organizational restructuring, when 
information is extracted from several legacy systems, accurate and reliable 
measurement is difficult but not insurmountable. 
2.	The value of technology as an enabler for the organization to 
effectively design, produce plan documents, manage plans, calculate incentives 
and report and communicate results.
3.	Clear, open communication and transparency is critical in the program 
so people develop trust in the numbers and understand the actions, changes and 
the rationale for why they are necessary.