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The Ten Laws of Successful Sales Management

Paul Pease - Tuesday, July 17, 2012

Bench-marking some of the best practices of the 2,500 plus sales executives we have worked with in the past fifteen years (not to mention the ones we worked for an accumulated forty years prior to that), some patterns develop when observing the executives that stand out as excellent in terms of their performance. This stellar performance is not only shown in out-performing their industry counter-parts, but with their low turnover rates. They all have clear vision, a deeply principled management style, and inherent strategic thinking. These best practices have been summarized in the Ten Laws listed below.

The First Law: Hire Right

While many sales execs inherit their charges, hiring right is without question the core with which to build a successful sales organization. Great sales managers know what to look for in a salesperson and know how to vet that during the hiring process. While there is a more detailed article regarding this topic (Hire Right), the right behaviors in a salesperson are: integrity, ambition, accountability, adaptability, and self-discipline.

Many managers fail to get this critical law (Hire Right) right, and it’s no coincidence this is the first law. Without getting this one right, everything else fails. The problem many sales execs have with the hiring process is they think about filling the position instead of getting the right fit. The former approach treats hiring like a task, while the latter uses hiring as a part of their strategy. Hiring right requires active patience on the part of the executive- actively pursuing the right fit, but being patient until they find the right fit.

For sales executives who inherit their team- hopefully they have some salespeople who have the right behaviors and can then add new people  to inject desired behavioral elements and create the right cultural shift within the department. Then the fix if a longer-term process of

  1. Elevating those that have the right behaviors (which might be a low performer numbers-wise, but had been previously been poorly managed).
  2. Bringing the right behaviors
  3. Moving out the wrong behaviors

All of which will take several years to accomplish.

The Second Law: Train Well

Training seems to be an after- thought, a cost-center, or non-existent in many organizations. However, it should be part of every sales culture. The challenge with most training initiatives is they are often implemented with the belief that a one-time training event  in a Power Point format will work. Not true- but the failure to recognize you can’t “fix” sales with a one-time event is a failure on the part of management to understand what it really takes to change behavior, which is a sustained training effort with observation and feedback over time.

Furthermore, typical training programs are more often on product or market knowledge, not critical sales skills and behavior.

When training is part of the culture of sales organizations, the best sales organizations make sure they devote at least half of their training to sales skills best practices sharing and sales skills development.
Without any type of training, sales skill development evolves- or regresses- by rote, creating an unwieldy management challenge and an under-performing sales team.

The Third Law: Stay Strategically Three Steps Ahead of the Sales Force

Salespeople by nature are in the reactive world of prospects and customers. Market shifts, customer objections, and competition can trap salespeople in the tyranny of the momentary crisis. The best sales management teams can triage the current crisis and re-focus the sales team on the forward objectives.

Effective sales managers can do this because they know the next set of objectives and don’t lose sight of them. This does not mean they ignore the current situation at hand. It means they don’t let the current crisis paralyze their forward movement. They know how to advance their team under fire. Once the current crisis is resolved, triaged, or mitigated, they re-focus the sales team (or individual) forward to the next strategic objective.

The Fourth Law: Communicate Effectively

Strategy communicated by osmosis isn’t good leadership- but it is an unfortunate operational style for many businesses. Without exception, the better sales executives know how to tie together their writing, comments, and actions to both individuals and the sales team into a cohesive, consistent strategic message.

The best sales executives take that one step further: they have an acute awareness of new information because they comprehend what they read; understand what they hear (listen); and see what is really going on in the field (observe). They take this new information, tie it back to their strategy, make any necessary adjustments, and then feed it back to their people.

The last piece- feedback- is what clearly separates excellent sales executives from the rest. The excellent sales executives don’t manage passive- aggressively. They don’t hide behind email and voicemail. they don't ask for input and do nothing about it. They respond with a commitment going forward, providing clear guidance to their people. And when salespeople offer information from the field, the great sales executives act on it and respond, resulting in continuous information flow from the field. They don’t have to ask for information- it just keeps coming in because they do something with it- they reward the right behavior.

The Fifth Law: Get Engaged- Mutual Action Planning™

Mutual Action Planning™ as a means to grow a market is a great sales executive tool. As the name implies, there is mutual skin in the game from the field salesperson and the home office to make commitments on behalf of territory growth and then to be held accountable in achieving those commitments. This is a departure from management-by-directive through coerced plans (forecasts or “budgets”) that become whipping posts for the next quarter or year.

We’ve noticed that great sales executives tailor Mutual Action Planning™ to the specific market and salesperson serving that market, and that Mutual Action Planning™ is not an annual event, or management-by-directive. It is a proactive strategy to achieve agreed-upon goals that require commitments by both the salesperson and management to take actions to achieve the objectives. It is a teamwork proposition to achieve a common goal: growth.

The Sixth Law: The Numbers DO Lie- Read Between the Lines

“Numbers don’t lie.” “It’s a numbers game”. Both of these comments are false regarding effective sales management. Taking them one at a time: “Numbers don’t lie.” Numbers lie and they lie quite often when someone wants to use numbers to hold sway in an argument, fudge the data to be better or worse than it actually is, or pump up the books to look better for the boss. Finally- numbers only indicate a momentary accumulation of data, they don’t indicate a trend and seldom paint the real picture of what is going on.

Great sales executives compare numbers to what they subjectively observe is going on in the field. This gives them a “read” on whether or not the numbers are in line with what they observe. If there is a difference, then the executive can investigate whether the numbers are hiding the behavior or the behavior is hiding the numbers.  When an effective sales executive sees the numbers come in, there are no surprises. If there are surprises, then they really have a cause to investigate further to see what is really going on. But these surprises are anomalies for the excellent sales exec.

The other quote- “It’s a numbers game”- is equally false. This is based on the false premise that there is value in gluttony. Getting revenue numbers at the expense of profits is not good. Getting deals at the expense of customer relationships is not good. Throwing stuff at the wall in the hope something sticks just makes the wall dirty. Sustainable, profitable growth has nothing to do with engaging in the arbitrary business strategy of "it's a numbers game".

The Seventh Law: Discover Each Salesperson’s Talent and Strategically Turn It Loose

What is each person’s talent? Great sales executives have very acute vision when it comes to understanding the talent their people possess. They look for the hidden talent and make sure this talent is utilized to the maximum effectiveness strategically both for the company and the individual.

What does the salesperson do well? Dig up leads? Develop local brand name recognition through effective marketing and networking? Do they rise to the occasion when objections are thrown their way, or competitive challenges, or when the opportunity is seemingly lost? Are they tenacious, persistent, or actively patient with follow-up and follow-through? Do they move laterally in an organization once they are inside the door?

Engaged sales executives are constantly looking for the talent each person has to maximize sales productivity.  Then, they work with each salesperson to utilize that talent strategically to the mutual advantage of the salesperson and the corporate strategy.

The Eighth Law: Firm but Fair: Enforce Accountability Reward Excellence.

What applies to the bottom applies to the top. Top sales executives have the nerve to fire the top performer when the top performer crosses the line of insubordination, ethics, or integrity. No sales manager can be effective if they turn the other way when a top performer crosses the line whereas anyone else would be reprimanded or terminated.

Rewarding excellence means understanding what excellence is- and it isn’t just the numbers. It’s effort in the face of insurmountable odds. It’s doing the little things that matter much for the customer and the business reputation. Knowing this, seeing this, and rewarding these things are what excellent sales executives do.

The Ninth Law: Cherish Complaints

This is an interesting subject, because most managers are not too keen on the constant complaints they get from the usual suspects in field sales. The better managers know that there are complainers in every sales force and accept that as a fact of managing sales. The best sales managers not only don’t let the complaining bother them, they are able to ignore the tone (emotion) of the complaint to understand the core message of what is really being said.

Take the  salesperson who leaves eight panic voicemails with eight different people to help solve a customer service problem. Many sales managers will look at the issue and think, “What is this idiot salesperson doing wasting eight people’s time?!”

The excellent sales executive will think, “I have to find out if the problem is that we don’t have a trusted, established go-to person for the field salesperson, if the field salesperson isn’t aware of how to handle this with the go-to person, or a combination of the two. Then, we have to get it fixed either by process or training.” The effective executive looks at the problem, not the person.

As one excellent sales manager commented to us, “When your chronic complainer stops complaining, they’ve quit. You not only have lost a salesperson, you have lost a field information resource.”

Furthermore, the complainer is often saying things the others won't say out of fear they will be reprimanded. This does not mean the insubordinate jerk needs to be accommodated- there is a huge difference between a legitimate complaint and the insubordinate jerk. The former actually cares about the business, the latter is on a power trip.

The Tenth Law: Get Out of the Way

Some sales executives think they have to always be posturing for power to “control” their sales force. Whether it be taking over a sales call, taking over every meeting, or taking over the dinner conversation.  Excellent sales executives look at each engagement with their team as a learning experience for the executive, not the salesperson.

What is the payoff of an effective sales executive/ manager? What do they contribute to the “bottom line”? The best measure we have for this is when a bad manager is removed. We have observed five companies who had managers that were tyrants, managed by directive, or were passive aggressive- all bad traits for sales management. When the bad manager was finally removed, overall sales jumped 20-30 % in each case. The conclusion is that if a bad manager affects the numbers negatively this way, then a good manager should be able to produce numbers equally positive. The numbers people will conclude that while a good sales exec has a net performance advantage of 20-30% over a middle-performing exec, they enjoy a performance advantage of 40-60% over a bad sales exec.

Regardless of how we play with the numbers, fundamentally, a sales executive is doing a great job when the sales team does the right things when nobody is watching.


Postings from The Pease Group

How Do You Get the Point to "Stick"?

Paul Pease - Tuesday, July 24, 2012

In Malcolm Gladwell’s The Tipping Point (Back Bay Books, 2002), he relates about the “stickiness” of Sesame Street. This stickiness applies equally to adults- especially when communicating in the B2B environment. How does someone “get” the memo? Read more

Compliant Reporting Doesn't Improve Performance

Paul Pease - Wednesday, April 18, 2012

With every downturn in economic activity, there is a correlating upturn in required reporting. CEO's need to report more- and more often- to their boards. Consequently, senior executives are required to report more to the CEO- and so on down the line until we get to the field sales team. Typically if the numbers aren't looking good, the reporting really falls on the sales team to see where the revenues are and what the trend is. So lots of detail about opportunities, new markets, short-term, long-term, anyone that can give us an order now- is required in sales reporting. Since the job market is also thin, the sales team- motivated by fear- complies with the reporting.  Read more

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