Category Archives: Sales leadership

Abusive Coaching: It Happens in Sales, Too

“Rutgers coach Mike Rice’s fiery style has been on public display before . . .”

As comedian Jon Stewart used to say, “OK, let me stop you right there . . . .” We’ve seen the video of the Rutgers basketball practice. Fiery style doesn’t justify Rice’s behavior. Some columnists have attributed Rice’s actions to what occurs when you combine testosterone, adrenaline, and hyper-competition in college sports. No doubt, it’s a volatile mix, but physical abuse and anti-gay slurs don’t belong in the picture.

Hyper-competition isn’t unique to sports. Nor is abusive coaching. They happen in sales organizations, too. Watching Rice’s behavior reminded me how the pursuit of winning can make immature people inhumane. I’ve seen it up close and personal.

In the days before the Internet, tele-work, and every-day casual dress, “Paul,” a Sales VP at an IT company I worked for, instituted a weekly face-to-face sales meeting to review accounts and to share product updates. 7:30 am. On time. Every Monday. In the boss’s office. Suit and tie. Those Monday Morning Sales Meetings became synonymous with de-motivation – with good reason.

I’ll set the scene: Paul’s office was drab and windowless. His large desk was positioned somewhat in the middle, leaving a wide space behind him, and a narrow corridor in front. The desk faced four thinly-cushioned wooden chairs, their rigidly-straight backs pressed tightly against the wall. The office had a raised floor that Paul made from some knotty pine he recovered from an old farmhouse. I mention this because aesthetically, nothing was right about his office. The chairs weren’t comfortable, either.

So every Monday morning at 7:30, Paul sat behind his expansive desk, and my colleagues and I sat lined up in these chairs, ready to begin our sales week. But in almost every meeting, Paul became abusive. His tirades were so infamous that after our meetings, which usually lasted about one hour, others in the company would ask, “who was the Rep of the Week?” That was not an accolade. It was code-speak for “which one of you got reamed?” There was always somebody. Always.

Usually it was “Barry,” an otherwise nice guy with an annoying flaw. Barry could not answer a question to save his life. If Paul asked him “When will the ABC Company deal close?” Barry would ramble three or four minutes in meandering, incoherent run-on sentences. Much as we tried to listen for a specific date or time-frame in Barry’s answers, he never provided one. Paul’s face became tight and his eyes narrowed before he mercilessly berated Barry in front of us. The more he pressed Barry for straightforward answers, the more befuddled Barry got. Barry stammered. His body language telegraphed his fear. Barry often crossed his legs so tightly that we winced just watching him. But he had no choice. His back was against the wall, literally.

After we experienced a couple of bad quarters, the company faced the possibility of reducing staff. “Management had to come up with some people to let go, and you, Barry, were on the list,” our boss emphatically told him during one of our weekly meetings, with everyone present in the room. Nobody had yet been fired. Barry quit about a week later.

Maybe Barry didn’t belong in Sales. After all, Sales isn’t for sissies. But neither should it be a haven for jerks. In one particularly contentious meeting, Paul told “Shawna,” another salesperson, that her revenue numbers were low and he asked her point-blank, “what are you doing to justify your existence?” Emoticons hadn’t yet been invented, but if they had, I assure you that the one at the end of this transcribed sentence wasn’t winking.

Shawna, who was as thick-skinned as anyone I’ve worked with, told me over beer one day after work how damaging Paul’s statement was. “I almost resigned right there,” she said, tearfully. I still wonder why she didn’t. In his lust for revenue, Paul forgot that Shawna was also somebody’s sister, daughter, and friend. There’s more—much more, actually. But I’ll save you the time. You can always watch Alec Baldwin in Glengarry on YouTube. There’s great truth in fiction. The boss’s mannerisms are a dead ringer for Paul.

Eventually Shawna left the company, along with me and “Mark,” the person who sat in the fourth chair. Over several years, many others joined the exodus. People throw the reasons salespeople leave companies into a single bucket of slop, conveniently labeled, “Sales force churn.” Even the euphemisms sound ugly. Afterward, Paul continued to recruit and hire new salespeople. Hopefully, he gained some maturity along the way.

When I became a manager many years ago, the COO of my company told me, “Andy, there are two things you can do to unite your staff. You can either be a common friend to them, or a common enemy. It’s your choice.”

Failure – Breakfast of Sales Champions?

“Disney is working on an RFID wristband system it plans to launch this year at its theme parks. Called MagicBands, it will let guests pay for goods, check in at rides to map their day’s activity and even send data to characters in the park—so that Snow White or Mickey Mouse can address a child personally.”

By a show of hands, how many think Disney’s innovation will move beyond pilot, and provide positive financial returns?

Some of you say yes, but I have doubts. The programming task alone seems so daunting. I see a global team of software engineers trying to make Mickey’s elocution flawless, so he can pronounce names like Aaradh and Emilija without mangling the sounds. Someone has to sweat the details. Imagine hundreds of toddlers just inside Disney’s welcoming gates, inconsolable because Mickey or Snow White got digitally tongue-tied. “It’s OK, Sweetie. They’re just using buggy software.” Oh, the humanity!

Hitting revenue targets depends on the success of some pretty risky endeavors. I can hear the RFID salesperson right now. “An IT-enabled Mickey who never forgets a name? Sure, we can do that. How many wristbands do you expect to use in the first year?” Best not to put this one in the win column, at least not just yet. Eighty percent of new innovation projects fail. Sixty-eight percent of IT projects fail. Seventy-five percent of consumer packaged goods and retail products fail to earn even $7.5 million during their first year. Let’s face it: every day, sales professionals sell into an abyss that’s wide and deep.

And likely to become deeper. According to a recent article in The Wall Street Journal, “Companies large and small are trying to coax staff into taking more chances in hopes that they’ll generate ideas and breakthroughs that lead to new business. Some, like Extended Stay America, are giving workers permission to make mistakes while others are playing down talk of profits or proclaiming the virtues of failure” (Memo to Staff: Take More Risks, March 13, 2013).

Employees have become loathe to accept the risk of failure—a byproduct of a difficult economy. Their employers recognize this, but they also know that without innovation and change business strategies cannot succeed. Change of any type brings new possibilities for failure. To ensure that when employees are faced with the choice “innovate or die” they don’t select the latter, companies are prodding staff to take more risks by not penalizing them for failing.

Makes sense. But, hang in there with me, because here’s where things become weird. The very part of a company tasked with facilitating change—the sales organization—whose “change agents” face great risk and uncertainty every day, can’t tolerate failure. “If a rep doesn’t make quota, we don’t keep him around,” one District Sales Manager recently told me. “One would ideally see the median quota attainment at or slightly above 100 percent,” J. Mark Davis wrote in an article, Managing Sales Compensation in an Uncertain Economy.

The incongruities portend even more rancor between customers and salespeople. Customers are adopting a more nuanced and accepting view of failure, while sales executives are steadfast in remaining largely, if not completely, failure-intolerant. Salespeople will go nuts when projects don’t go into full production, or when they fall into the stasis of no decision. Who can blame them? Their very jobs could hinge on an opportunity coming to fruition, which means not only closing, but delivering fully on the anticipated revenue. That gravity extends to their district and regional quotas, and beyond. When a key opportunity or two tanks, the ripples are felt all the way to the CFO’s office. Meanwhile, customers will become ever more blasé. “Sorry about your quota, but, well, this is the reason we maintain a portfolio of projects.”

Increased buyer acceptance of project failure will have an inevitable impact on sales results, and revenue will become more inconsistent. Companies can manage that risk in other ways, for example, by building larger opportunity pipelines. But simply pummeling the sales force won’t create immunity to anything, except happiness. The job of selling includes failing—much as we might want to prevent its occurrence. That alone will bring buyers and sellers into closer alignment.

Sales Mentorship: You Can’t Survive on a One-Way Street

We know what we are, but we know not what we may be.—William Shakespeare

“You better take that last spot in the overhead bin,” implored my seatmate on a recent flight, as I contorted my bag so that the door would latch. “If you don’t, somebody behind you will grab it.”

“Assertiveness and opportunism co-mingled . . . that seems awfully familiar . . . ,” I thought. “I’ll bet she’s in sales.”

In fact, she was—for a global advisory services company. But as I learned during our conversation that continued for the duration of the five-hour flight, she had a specialty that makes mere mortal salespeople quake and tremble. Her job was to resuscitate her company’s former customers. Not just any former customer, though. Angry former customers. Customers who had said in a thousand different, unpleasant ways, “I’ll never buy from your company again . . . or the horse you rode in on!” No need for manual gestures to embellish the sentiment.

“I like taking on the challenging ones,” she said, adding, “I’ve gotten pretty good at it.” She told me she was heading to a sales meeting for her DC-based company, and I could tell from our conversation that she was making a solid living in this unique sales niche.

Whatever you think it takes to excel in sales—motivation, tenacity, focus, empathy—it was abundantly clear that she had the right stuff. No need to waste time checking a list of top-producer attributes. “Some salespeople want to get to ‘no’ quickly, but I simply don’t accept ‘no’ at all.” Put herself through college. Paid off her loans in six years. Highly confident, and not shy about dictating terms to management. “I tell them, ‘this is what I expect for commission. If I don’t make my number, six months from now, you’re either going to fire me, or I will have already quit because I’m not making the money I want to make. So neither of us has to worry if this isn’t working out.'” All is fair in love and war.

She explained how other salespeople learn in her organization. “Our knowledge sharing is not one-way. When new salespeople come on board, we require them to learn a specific area of the industries we serve, and then to teach that to others. It’s the best way to gain understanding, and management insists on it.”

She told me that others outside of her division frequently call on her to mentor them. “I listen in on a lot of phone calls, and they listen in on mine,” she said. “But I require two things right up front: they have to tell me one thing that they learned from me, and they must give me feedback on two things that I could improve. I’m prepared to hear whatever they tell me, and I let them know that. And if they don’t give me feedback within a day or two, I don’t help them again.”

No surprise she’s a top producer. With mentorship, you can’t survive on a one-way street.

Revenue Risk: Why Managing It Beats Crushing It

In 2011, the New England Patriots offered Aaron Hernandez, a promising young tight end who played just two seasons, a contract extension worth $40 million.

Hernandez was arrested on a murder charge two years later, in June, 2013. His employer released him the same day. The Patriots, “a team long considered a model of fiscal prudence and solid character, were the unlikely conduit for one of the most ill-advised contract offers in NFL history,” The Wall Street Journal reported (How the Patriots Lost Their Way, July 12, 2013).

“Interviews with NFL executives, agents and former players suggest the Hernandez contract was the result of a decision the Patriots made to embrace more risk . . . they also suggest the NFL’s current economic climate played a role in encouraging that decision, and that all teams may be more inclined to make serious commitments to a riskier pool of players.”

Whether you’re selling sports entertainment, IT services, or industrial pumps, risks swirl around like poltergeists. In business development, we give a tacit nod to their presence when we talk about funnels, pipelines, and forecasts. But as we know from the Patriots, executives who ignore risks or downplay their significance often pay a large penalty. The dangers are especially acute when marketers assign attributes like surefire and guaranteed to business development strategies and tactics. If only such claims were true.

Mostly, risks are misunderstood. If you set aside the negative connotations for a moment, risk simply means uncertainty toward reaching a goal. Not every prospect will buy from us – a hard fact we must deal with, or find another job. Dictator, maybe. Or warlord. Though lately, even these occupations face a risk or two.

The right question isn’t “how do we avoid risks?” but “how should we manage them?” And that requires identifying them, then assessing their likelihood and impact. Regarding Hernandez, had the Patriots performed even a perfunctory analysis, his coaches would have discovered before he first signed that a scouting report gave him a one out of a possible ten in “social maturity,” and it stated that “he enjoys living on the edge of acceptable behavior.” I can hear the discussion in the Patriots front office now. “Downside? There isn’t one!”

Schadenfreude, for those of us who aren’t Patriots fans. But I can’t get smug. After all, I live in Washington DC, home to a football team whose name is so reviled, I won’t even use it. And their record . . . well, let’s just move on.

Risks can smack anyone in the head, even when you’re aware of them. For business developers, here are some different strategies for coping with risk:

  • Add risk. New market development, new product launches, expansion of market boundaries. All of these diminish some risk, but introduce plenty of new risk at the same time. As Bob Thompson wrote on CustomerThink, “Unfortunately, many companies look at risk as something to be avoided. Which means they limit future opportunities as well.”
  • Accept risk. Not every prospective customer will buy. It’s surprising how few companies adequately plan for this ubiquitous risk. But it’s table stakes for any company that intends to compete in a market.
  • Reduce risk. Shorten sales cycles! Increase lead flow! Improve selling skills! Make the right sales hiring decisions! Monitor, measure and reward! There are many ways to reduce selling risks—or at least to create the perception they are being reduced.
  • Eliminate risk. Some business risks, such as ethical impropriety or felonious behavior, can be so catastrophic that they must be eliminated.
  • Transfer risk. Outsourced IT development. Outsourced sales. Consignment retailing. Third-party receivables collection. Many companies have been created for the purpose of absorbing risks others don’t want or can’t handle.
  • Share risk. The idea that sustains product co-development between supply chain partners, and channel sales strategies.

Which risk management strategies are best for your sales organization? Likely, a combination of these. The ones you use depend in part on your company’s capacity to carry risk, or RBC (Risk Bearing Capacity)—a strategic differentiator that can’t be seen, felt, or touched. The reason that some companies can develop technologies to launch commercial rockets, engineer driverless cars, and compete for long-term government contracts, when others can’t.

While RBC is calculated in different ways, the common basis for the calculation is “how much risk the organization can bear before [it becomes] insolvent,” according to Carol Fox, the director of the strategic and enterprise risk practice at the Risk Management Society. Most companies don’t want to test that limit, preferring to keep it theoretical.

Whether the NFL can control the increasingly risky environment in which their teams operate has been the subject of much debate. But the Aaron Hernandez saga painfully demonstrates what happens when risks aren’t well understood and aren’t properly managed.

Build a Corporate Wall, and People Won’t Beat a Path to Your Door

The late Charles Schultz, creator of Peanuts, warned us many years ago about an emerging technological danger. With characteristic brevity, he drew Charlie Brown’s sister Sally plopped into a beanbag chair opposite a nearby TV, as she shouts to her brother, “You should watch this. They’re showing pictures of huge snowflakes falling gently on this beautiful snow covered meadow . . .”

“You can see the same thing right now if you go outside. . .” he replies, blandly.

In the last panel, Sally shrieks incredulously, “OUTSIDE?!”

Imagine Sally today as VP of Marketing for a Fortune 500 company, and consider how her worldview might play out. With her company experiencing falling market share, high customer churn, and low marketing and sales productivity, a consultant from McKinsey recommends that she leave the confines of her corner office on the 10th floor to gain a different perspective.

She ambles far away so she can see her company the way her customers do. Turning in the direction of her office, she makes an astonishing discovery: there’s a huge wall surrounding headquarters. “OMG!” she gasps. “We’re not customer-centric!” As she peers in disbelief through a pair of binoculars, she has another revelation—the wall is growing out of control, threatening to suffocate her turnaround strategy. Panic ensues when she sees familiar objects embedded into the wall. “Oh, for the love of . . .” She drops the binoculars and whips an iPad from her briefcase, hurriedly documenting every identifiable item in the partition between her and her customers.

1. Terabytes of customer data, mislabeled as insight. Swirling digital exhaust, untapped by useful, meaningful questions from management.

2. Spreadsheet cells filled with aggregated numbers—providing airbrushed representations of customers. “Buyer personas? Who needs them? We manage by spreadsheet.”

3. Fuzzwords. Referring to people as market targets. Or using phrases like “Our typical customer wants . . . an ideal prospect has . . . . the average user for our system likes . . .” in internal meetings and emails.

4. Needlessly complex legalese on websites and customer documents.

5. Lead generation workflows, engineered without context, and lacking empathy for how people buy.

6. Tone deafness. “But we offer chat and email for inbound communication. That seems to work fine for us.”

7. Relentless profit pursuit. “Cut costs!” “Raise revenue!” –and no customer value in sight.

8. Self-satisfaction. Gratuitous internal product accolades. Lists of long-faded corporate accomplishments, bloated biographies of top executives complete with fancy job titles and academic credentials-but little else.

9. Channel insulation. “VAR’s, VAD’s, and ISV’s. They’re the primary points of contact for our customers.”

10. Product infatuation. “I can’t imagine anyone not wanting what we sell!”

11. Layers of organizational fat. Territories reporting to districts reporting to regions reporting to divisions.

“Build a corporate wall, and people won’t find a pathway to your door,” to borrow from a more familiar adage. The biggest danger of all is not recognizing when the wall is under construction, and that you’re the one building it.

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