Category Archives: Sales leadership

Should Companies Stop Worshiping Sales Rock Stars?

“Can you find us a sales rep? And not just any rep. We want a rock star!” An ordinary request for something truly extraordinary. I hear it often. Lately, I began to wonder, what does this honorific mean?

I searched online for sales rock star, and received a deluge of results. 23,800 of them, if you’re into numbers.

How to Find Your Next Sales Rockstar

Be an Inside Sales Rockstar

How to Be a Sales Call Rockstar

And, From Sales Rookie to Enterprise Sales Rockstar.

I found a YouTube video, How to be a phone sales Rockstar. It’s over 90 minutes long, with 1,276 views. Oddly, just one Like.

I dove further into the results by clicking on random links. Many were for job opportunities like this:

“Business Development Sales Rockstar Jobs in Connecticut.” The position stipulates “Other Must Have’s: Ability to sit for extended periods of time at a desk, in meetings, etc. . .” Oh, baby! How many candidates applied?

There’s a definitive book on the topic, Sales ROCKSTAR: How Top Producers Perform by Jeff Krantz. You can find it on Amazon, which offers an expectedly salesy blurb:

“This book was written for those who want to become ultra Top Producers in the profession of selling. It has been developed for those who desire the lifestyle that only a successful sales career can afford.”

Questions for the copywriter: Is it necessary to modify top producers with ultra? And which lifestyle are you referring to? The retirement you’re planning while burning out as a micro-managed, bag-carrying road warrior, shackled by a thin thread of job security?

I even discovered yet another usurpation of the Keep Calm mantra: Keep Calm and be a Sales Rockstar.

This was getting weird. The last straw was an article, The Seven Absolute Must Have’s to Become a B2B Sales Rockstar. The title leaves no room for dissent. Had the writer been interested, I would have questioned why honesty, ethical integrity, humility, and empathy don’t appear on his list of essentials.

About 45 minutes into my rock star investigation, my head hit the keyboard. I was appalled by what I read, and felt no closer to an answer. The most consistent idea I gleaned about sales rock stars was that they achieve high ratios of revenue compared to goal. Lots of unanswered questions remained. How difficult were the goals? Were they impossibly high, or ridiculously low? Are rock stars better at exploiting serendipity? Are they more immune to black swan calamities? How long do rock stars remain rock stars? Forever? Or like many professionals, is their performance subject to ups and downs?

For rock stars, there’s lots of admiration for their revenue outcomes, but what about their customer outcomes? Do rock stars have happier, more loyal customers than non-rock stars? Do rock stars nurture more profitable customers than others? No answers.

Finally, there’s the question of fairness. For sales reps, does a rock star label mean landing a peachier territory than reps whose abilities have not been similarly anointed? Does it gain them more opportunities for professional development? More autonomy and independence? A speaker slot at Achiever’s Club? Does being considered a rock star become a self-fulfilling prophesy – or an unwieldy career burden, causing the bearer failure and disappointment? Hard to say.

“It’s tough to juggle the mountain of details about everyone we meet, and we need an easy way to think about them, wrote Peter Cappelli, professor at the University of Pennsylvania’s Wharton School, in a Wall Street Journal article, Why Managers Should Stop Thinking of A, B and C Players (February 21, 2017). “Managers routinely put employees into one of three boxes: people who perform well (A Players), those who perform poorly (C players), and those who are stuck in the middle (B players). Rock Star persists in sales parlance, reflecting our adoration for all things ostentatious. Rock stars belong in Sales! A-Player banality belongs in Accounting.

“The problem is that there is precious little evidence to support the A-Player model and the basic idea beneath it. The evidence from objective measures of actual job performance for individuals shows that it varies a great deal over time, even within the same year,” Cappelli writes. Could his research explain why I have witnessed so many high-flying sales achievers who tanked at their next gig, or suffered revenue craters when territories realigned, products changed, or competition stiffened?

Before rock stars produce even one dollar of revenue, hiring managers proclaim their stratospheric hopes. “We just hired Stefan away from [competitor X]. He crushed his goal in their East region last year, and he’s a fantastic closer. Welcome aboard, Stefan. We know you’re going to just kill it!” Bro hugs from proud management follow as Stefan joins the team.

Cappelli writes that more than half of US corporations routinely segregate individuals based on such expectations. “In this system, people are singled out as A players, often after only two years’ performance, and groomed to rise higher and higher in the company. Yet the evidence shows that people are kept in those programs no matter what their actual performance is – and only 12% of companies report that their employees see the process as impartial.”

That creates a morale problem, though some sales managers argue that it shouldn’t because all reps are evaluated the same way – on revenue achievement. That sounds egalitarian, but it doesn’t guarantee a level playing field. Could rock stars, by dint of their near-deity status, be granted better opportunities? Or are they allowed slack if their performances don’t match expectations? After all, what manager wants to admit a hiring mistake? “It is easier to play along with the A-player model and assume that job performance is hard-wired. It has the drawback of being wrong and bad for business,” Cappelli says.

Requests for sales rock stars say more about a company’s position than most senior managers realize. It’s tacit admission of a hornet’s nest of marketing problems. A neon sign on a job post that tells candidates “Our products are weak. We don’t know how to deal with our competitors, and we can’t a produce a quality sales lead to save our life.” Hence, Rock Star as salvation for a smorgasbord of management inadequacies. The problem is, high-achieving sales professionals are attracted to high-potential opportunities. When those opportunities don’t materialize, their appetites for sticking it out are no stronger than an employer’s resolve to keep a struggling rep on the team.

The sales profession needs to look at itself in the mirror. Using crass terms like rock star trivializes the difficult challenges that salespeople encounter every day. It ignores a reality in every profession that performance rarely remains consistently high or consistently low. And it perpetuates a dumbed-down culture. A hypocrisy that sales managers bemoan when sales reps face the cold, cruel world of the C-Suite. “Our reps just don’t know how to talk to senior executives . . .” Ahem . . . you can help them by first expunging sophomoric language like “rock stars” and “crushing it!” from your sales communications.

In his book, The Art of the Sale, Philip Broughton wrote, “A positive view of sales and selling “holds that . . . no matter the condition of your birth, if you can sell, you can slice through any obstacles of class, status, or upbringing in a way inconceivable in more hidebound societies. Great sales[people] need no other prop to succeed. Selling well, in this view, is also a reflection of a healthy character. It means you are the sort of person people are drawn to – hardworking, clean living, and trustworthy – and you are likely to succeed at whatever you choose to do.”

I’m under no delusions that sales success means possessing saintly virtues. But characteristics that distinguish outstanding sales professionals defy assigning labels. It’s time for companies to quit worshiping meaningless, flamboyant nicknames like rock star, and instead, seek the combinations of skills, behaviors and actions that produce the right outcomes for their companies and customers.

Risk Committees: An Antidote for Fraud

I have a writing problem that’s giving me fits. I’m knee-deep into fraud – that is, describing how to prevent it. Unfortunately, the subject doesn’t involve using fun, energetic words like transformative change and market domination.

Instead, I must become jazzed about ideas that are antithetical in our caffeinated, exponential growth-obsessed business culture: constancy and stability. I must double down on the Zen we supposedly derive from mom-and-apple pie values like honesty, transparency, and trustworthiness. What – no market disruption? I’d rather watch reruns of regular-season baseball games.

Please don’t take this as whining. I’m game for a new expository challenge. Fraud prevention . . . let’s see . . . I know! What’s the ROI of thwarting a nascent scam before it obliterates a company, its leaders, or both? What’s the value of slaying a scandal before it causes customers injury, death, or financial ruin? Now this gets me going! I can write about corporate managers and auditors as champions, armed with sharp ears and ready eyes. Finely-tuned algorithms able to detect the subtlest transactional anomalies. Deceit – headed off at the pass! Energy, baby!

Lead gen, content creation, and predictive analytics might nudge the revenue needle northward, but they won’t save a company from cataclysmic self-destruction. That’s a primary purpose of fraud prevention. There are cases to prove it. Oh, have I got your attention now?

Expect wretched outcomes when these are present in a company:

1. Ethical hypocrisy: senior managers model poor ethical behavior; e.g. The “Code of Conduct” or “Values Statement” – if they exist – are regularly violated or ignored by staff

2. Lame internal governance, oversight, and audit controls: revenue-generation processes that are disconnected from other departments; prevalent attitude that ‘what happens in Sales, stays in Sales’

3. Weak channels for staff to report unethical or illegal activity: no documentation provided to sales force regarding how to report problems; no formal process for mediation

4. Penalties for whistleblowing: sales personnel describe being harassed or intimidated after reporting issues to supervisors, or being castigated as ‘not a team player’

5. Dissonant strategic and tactical goals: corporate strategy champions growing long-term value of customers, while tactical goals are centered on achieving high monthly revenue targets

6. Sales incentives and compensation substantially skewed toward revenue attainment: low base salary, and commissions based exclusively on percentage of sales

7. Sales culture that glorifies achieving objectives unrelated to customer success: prominent recognition for quantity of new customer accounts opened, or number of appointments held

8. Unrealistic or supremely difficult sales performance goals, accompanied by stringent penalties for non-achievement: termination of employment for underachieving “stretch” targets

9. Arrogance: believing “fraud could never happen here . . .”; accepting the delusion that the company hires only “honest” sales candidates and managers

10. Lackadaisical or perfunctory mediation and redress for customer complaints: unabated customer difficulties with selling tactics and allegations of product misrepresentations

Preventing systemic bad behavior begins with the company’s board, whose members must recognize that executing strategy inevitably carries the possibility of doing harm to customers, employees, suppliers, and shareholders. “. . . the full board is ultimately responsible for taking ownership of risk oversight and making sure strategic risks to the business are regularly discussed,” writes Maureen Bujno, Managing Director for Deloitte’s Center for Board Effectiveness.

Soul-searching questions for boards to answer:

1. How might the activities of this company cause harm to its stakeholders?

2. Could our executive and sales pay plans / incentives create conditions that compromise or damage trust or safety for customers, employees, vendors, or contractors?

3. How confident are we that the senior management of this company will become aware of unethical or illegal activity when it occurs?

4. Does this company have adequate mechanisms to communicate and enforce its legal and ethical standards?

5. Has this company taken sufficient steps to reduce the possibility that its stakeholders will be harmed?

When it comes to preventing fraud and ethical abuses, boards should avoid becoming enmeshed in tactical details and operating minutia. One prominent exception: board members must be open to holding direct conversations with employees who want to report fraud. The risks to a company are simply too great for board members not to know when risky behavior or activity takes place. And as the Wells Fargo case has demonstrated, there is no certainty that the established channels for reporting problems will work, or that employees will feel safe using them.

Board-sanctioned risk committees as an elixir. Day-to-day operating risks can be addressed by a cross-departmental risk committee. Openness and transparency are useful antidotes for fraud risk, and companies can develop these capabilities in-house through a team dedicated to monitoring, identifying, and reporting conditions that might be unethical and illegal. The good news: establishing a risk committee doesn’t demand staffing it with specialized talent. And now the bad: risk committees succeed only when boards care about risk prevention, and management responses to the issues the committee exposes are both timely and adequately considered.

Some recommendations for getting started:

Step 1: If the name Risk Committee doesn’t sound catchy, or fails to entice people to join, give the committee a different name.

Step 2: Decide how to recruit and appoint members. Sales and Marketing must be represented, but make sure other departments are, too.

Step 3: Select a capable leader – or ensure that one can be chosen.

Step 4: Write a committee charter to establish the purpose, objectives, goals, and authority. For example, “The purpose of the Committee is to provide oversight to ensure that marketing and sales strategies, tactics, policies, and procedures do not conflict with laws and regulations, and that they comply with the ethical guidelines of the company. The committee is entrusted with identifying and communicating all matters of concern to senior management, and when necessary, to members of the corporate board.”

Step 5: Establish the scope of what the committee will be able to do, examine, review, and report, along with expectations and guidelines for preserving confidentiality.

Step 6: Determine how often the committee will meet, the role and obligations for committee members, and the duration they will be asked to serve.

Step 7: Create a template for how the Committee’s findings will be communicated. At a minimum, that includes how to document or record incidents, determining who should be told, describing how they should be told, and guidelines for assessing and reporting the magnitude of the threat.

Step 8: Plan a kick-off event, and make sure senior managers are involved.

Step 9: Document the Committee’s activities and the actions taken in response to situations it has identified and shared with senior management.

What signals should Risk Committee members listen for? What conditions should trigger concern? For starters, any artifacts of the ten fraud-risk elements I described. In addition, whenever opacity, process silos, limited access to customer-facing personnel, reluctance to answer questions or provide information about customer complaints or regulatory compliance occur, risk indicator lights glow red. These situations should be considered for committee oversight.

Boards must recognize that companies face new risks when executives assume fraud and abuse problems can’t be controlled, when they claim that mitigation is too expensive, or when they dismiss oversight as a distraction for the business.

Foiled business scams rarely make it into news feeds. The activities that lead to their demise hardly seem remarkable. Often, an employee – or employees – shares information with a manager or board member who cares enough to act. Then, established prevention mechanisms kick in, and perform as designed. Routine – as it should be. No matter the size, industry, or leadership, an organization is never immune from causing harm through unethical behavior, misguided strategy, and sketchy tactics. Risk committees perform a vital role that no company can afford to overlook: oversight that reduces the probability a company will cause financial and physical harm through systemic bad behavior.

Anatomy of a Scam: Wells Fargo’s Treachery Can Happen Anywhere

If you knew your customers were being deceived, why didn’t you stop it?

If you didn’t know, why?

As Wells Fargo CEO John Stumpf knows, it’s a bad day at the office when any answer you give is wrong. His company got slapped with a $185 million fine from the US government, and is now the subject of a Federal fraud inquiry. As of this writing, Wells Fargo has neither admitted nor denied the allegations.

But Stumpf’s responses to Senator Elizabeth Warren’s questions during a congressional hearing today didn’t go well. In an exchange that will be studied in B-school leadership and ethics courses for many years, Senator Warren eviscerated him. “It’s gutless leadership,” she said. “You should resign.” Stumpf had no response.

“How probable is it that you would have a firm-wide, multi-year scheme involving thousands and thousands of people that senior leaders weren’t aware of,” Jordan Thomas, a former Justice Department trial lawyer, asked last week. Answer: not very. As financial journalist Roger Lowenstein quipped, “[5,300] people don’t just wake up in the morning with the same bad idea.”

Stumpf said he “feels accountable” for the fraud that Wells Fargo allegedly committed, but added that employees didn’t honor the bank’s values. Mr. Stumpf, I have a suggestion: The best response is “I am accountable. Period.” Not, “I am kind of accountable, but here’s how my underlings screwed up . . .” A leadership coach would charge a large fee for that advice. I offer it for free.

It’s hard to know what’s more odious – Stumpf’s mealy “feels accountable” lamentation, the deceit that Wells Fargo committed underneath its imperious-sounding Vision and Values Statement, or the fact that 5,300 Wells Fargo staff lost their jobs for engaging in practices that overwhelmingly enriched its senior executives. Who, by the way, are all still employed.

Regardless, it’s disgusting to see Stumpf’s smiling face on the Vision and Values web page, next to his mendacious quote, “Everything we do is built on trust. It doesn’t happen with one transaction, in one day on the job or in one quarter. It’s earned relationship by relationship.” Odd that his picture doesn’t show him wearing a loud plaid sport jacket, open collar shirt, and a cheap gold necklace.

Wells Fargo’s Vision and Values Statement includes a section on ethics:

“Honesty, trust, and integrity are essential for meeting the highest standards of corporate governance. They’re not just the responsibility of our senior leaders and our board of directors. We’re all responsible. Our ethics are the sum of all the decisions each of us makes every day. If you want to find out how strong a company’s ethics are, don’t listen to what its people say. Watch what they do.”

We now know this paragraph is just well-crafted marketing horse poop. While Wells Fargo proudly displayed it to the world, its senior managers put employees under their boots, pressuring them to sell, sell, sell! We’re just starting to learn how they did that, and it ain’t pretty.

Under its Vision and Values, the company lists six priorities. Numero Uno: Putting Customers First:

“We put our customers at the center of everything we do and give them such outstanding service and guidance that they’ll give us more of their business, honor us with repeat purchases, and rave about us to their family, friends, and business associates. We want to be the first provider our customers think of when they need their next financial product.”

Immediately below the Customers-first priority lurks the second priority, Growing revenue. The smoking gun that destroyed the first:

“Wells Fargo is a growth company that believes the key to the bottom line is the top line. “We see opportunities to continue increasing revenue across all of our businesses and serve more of our customers’ financial needs. For example, we want more of our retail bank customers to consider us for their brokerage and retirement needs. And we want to continue expanding the number of customers who have a mortgage or credit card with us. We also want to be the bank of choice for our business, commercial, and global customers.”

No joke. Forget soft-sounding platitudes like consider and be the bank of choice. Wells Fargo means every word about their strategic intentions. “Cross selling and aggressive sales tactics are core to company’s business model . . . Sales goals were huge,” according to Wall Street Journal reporter Emily Glazer, who has covered this story. Whereas most banks average three accounts per customer, Wells Fargo established a sales target of eight. Why? “Eight rhymes with great.” A catchy jingle that Wells Fargo included in their 2010 annual report, which Senator Warren used to lambaste a speechless Stumpf.

This is a sales scam that happened at a bank – not a banking scandal. A scam that could happen anywhere. All you need are the right ingredients: 1) manic focus on growing revenue 2) substantial bonuses tied to stock price, 3) misaligned sales incentives, and 4) weak internal governance. Voila! A putrid, fecund environment for a sales scam. It doesn’t matter whether you’re hawking financial services, precision electronics, IT outsourcing, or anything else.

Show me salespeople repeatedly engaging in bad sales practices, and I’ll show you a manager responsible for it. For investigators, the spotlight shines on Stumpf and Carrie Tolstedt, the bank’s former head of retail operations, who announced her resignation in July. Ms. Tolstedt, 56 years old, plans to retire this December. In her role as head of retail operations she had responsibility for Wells Fargo’s business with 40 million retail banking customers, and “led the bank’s efforts to cross-sell products to individual customers. Sales goals connected with cross-selling also fell under Ms. Tolstedt’s remit. More than three dozen current and former Wells Fargo employees told The Wall Street Journal that those goals defined the retail bank’s culture and led many staff to engage in practices that are now under question,” according to a September 20 Wall Street Journal article, Wells Fargo Official in Eye of Storm. Ms. Tolstedt’s compensation in 2015 was $9.05 million, according to the bank’s 2015 proxy statement. When she retires from the company, “she will collect a pay package valued at $112.9 million.” Enough to pay for a decent lawyer.

Known internally as ‘the watchmaker’ for her attention to detail, Tolstedt earned high praise from Stumpf, who called her “a standard-bearer of our culture, a champion for our customers, and a role model for responsible, principled, and inclusive leadership.” I understand why. Until early 2015, Wells Fargo posted 18 consecutive quarters of year-over-year profit growth. But given the bank’s current ignominy, Stumpf’s laudatory words for might be a bitter pill for those who were summarily fired for “underperformance.” As Senator Warren pointed out, a teller who steals a handful of $20 bills from the cash drawer would go to prison. In her view, Wells Fargo Executives perpetrated a more heinous crime, and have so far escaped prosecution.

A trick for driving revenue: manipulation and deceit. A revenue scam such as Wells Fargo’s always involves exploitation of trust. There are typically two categories of victims: sales staff and customers.

Exploiting staff. A district sales manager once told me, “I look for salespeople who have a mortgage, a stay-at-home wife, a baby, and another on the way.” Translation: “I need people I can control like a marionette puppet.” Wells Fargo pulled the motivation strings with a vengeance. “[Wells Fargo management] are putting pressure on employees, and it’s sad. People need their jobs,” said Mita Bhowmick, a former Wells Fargo teller in Pennsylvania, who took early retirement in 2014.

In the coming weeks, we’ll hear painful testimony from many current and former employees. People with limited job mobility. Single mothers and fathers struggling to pay rent and household bills. Adults supporting an elderly parent. Those living in communities where few job alternatives exist. They will share stories about onerous quotas, “stretch goals,” and living under the constant threat of demotion and firing. They are the among the people that Wells Fargo ruthlessly took advantage of to achieve their aggressive performance metrics.

“The bankers churned the accounts. They didn’t produce profits. They did it because of a misaligned incentive system. The [sales staff] made a minimum wage and could only make more if they duped customers,” Ed Mierzwinski of the US Public Interest Research Group said in an NPR interview with Jane Clayson (Scandal, Sham Accounts at Wells Fargo).

With sales commissions, you get what you pay for, and more. “Wells Fargo built an incentive-compensation program that made it possible for its employees to pursue underhanded sales practices, and it appears that the bank did not monitor the program carefully,” said Richard Cordray of the US Consumer Financial Protection Bureau.

Exploiting customers. Putting customers – especially the naïve or vulnerable – under the influence of a salesperson with devious intentions creates a sickening business relationship, and constitutes a serious abrogation of trust. Regulators have accused Wells Fargo of collecting millions of dollars in fees from customers for accounts they never authorized, a practice alleged to have started as early as 2011. “This widespread practice gave the employees credit for opening the new accounts, allowing them to earn additional compensation and to meet the bank’s sales goals . . . consumers, in turn, were sometimes harmed because the bank charged them for insufficient funds or overdraft fees because the money was not in their original accounts,” the Consumer Financial Protection Bureau said in a statement.

According to a former Wells Fargo employee, “The customers were told in phone calls that Wells Fargo planned to send them a new credit card as a ‘thank you’ for their business. If a customer didn’t want the card, he was told to cut the card when it arrived in the mail.”

Damaged credit scores, inability to qualify for loans, missed opportunities for a college education, unfulfilled dreams. None of these devastating customer outcomes mattered to Wells Fargo executives, as long as the company’s stock price was on a positive trajectory.

Finally, in addition to the other conditions, a successful sales scam requires another crucial cultural element: fear. Above all, management must crush dissent and opposition. There are proven ways. “If somebody said, ‘This doesn’t make sense. Where are you getting these sales goals?’ then [the response] was, ‘No, you can do it’ or ‘You’re negative’ or ‘Oh, you’re not a team player,’” said Ruth Landaverde, a former Wells Fargo credit manager.

There’s a difference between telling people you’re responsible, and acting responsibly.

During today’s congressional hearing, Senator Warren netted CEO Stumpf’s action – or inaction – in the wake of his company’s scam. Stumpf

1. has not resigned from his position as CEO,
2. has not returned “one nickel” of bonus or stock gains he received while the scam was taking place (Sen. Warren calculated his personal gain to be $200 million),
3. has not fired a single senior manager or C-Level executive.

So much for “feeling accountable.” Meanwhile, Stumpf has already impugned the bank’s staff for not upholding Wells Fargo’s values, and under his watch, 5,300 employees were fired for “inappropriate sales practices.”

If there was ever a time for a board to can a CEO, claw back his bonus money, and tell him never to return, now would be it. I hope Wells Fargo’s board does the right thing. But that’s doubtful. The board knew about the cross-selling problems as early as 2013. Some people believe the board should have recognized the risks that that the bank’s pay and bonus plans would bring.

Just as important, I hope the governance reforms that ensue from this case will permeate into industries outside banking. The “perfect storm” for a scam can corrupt any business.

Author’s note: I first wrote about Wells Fargo’s sales tactics in May, 2015, for an article, Teach Your Sales Force Well: Learning from Pay-for-performance. The article contains a link to a 2013 LA Times article by Scott Reckard, Wells Fargo’s Pressure Cooker Sales Culture Comes at a Cost.

In November 2015, I inducted Wells Fargo into my Sales Ethics Hall of Shame. The company has lived up to this dubious honor.

Three Things You DON’T Need to Know for Sales Success

In Virginia, the day after Labor Day means back-to-school. A tradition that reminds us that summer has entered its final fade, taking with it the sweet scent of suntan lotion, long days, warm nights, and fireflies. The day means boxy yellow school buses filling the roadways, and thousands of kids heading from home in the still-bright morning with oversized backpacks, new haircuts, and – one hopes – aspirations for learning.

But this season, something feels odd. Presidential candidate Donald Trump recently told the country, “Sometimes it’s better to know too little than too much.” He was talking about NATO, or more specifically, excusing his lack of understanding about it. Did young students receive his message?

“Gee, Mrs. Gimmelfarb, World History seems like a TOTAL waste of time. Why do we need to study it?” For Mrs. Gimmelfarb and other teachers confronting this question, my sympathies. You deserve more pay. Or, at least a public discussion that doesn’t glorify willful ignorance.

Yet, after thinking about Trump’s Declaration of Ignorance, I began to wonder if he’s right. Could people be required to learn things they don’t need to know or understand, or asked to spend time with subjects that have little value later on? Should We Stop Teaching Calculus in High School? Point taken. There are only so many hours in a school day.

As I pondered these questions, I got pinged with an email notification: “Please check out this article, What Neuroscientists Can Teach You About the Brain-To-Brain Process of Selling. Lead sentence: “A good salesperson knows how to use the brain to her or his advantage.” Thanks – helpful to know.

But that vacuous teaser, and the highfalutin sound of Brain-to-Brain Process confirmed my skepticism, and catapulted me into assembling this list of questionable knowledge that’s pushed at salespeople:

1. Neuroplasticity, and other “brain science.” Sales writers often reference brain science because doing so adds gravitas and sagacity.  The assertions can get comical:

When the brain overloads, it produces cortisol, a stress hormone, which reduces the tendency to buy.

Or,

The brain typically does not retain information in the hippocampus, which is where memory lives, until it hears something three times. Savvy salespeople create a repetitive loop by telling the customer a key piece of information, looping back a little later to remind them again and then looping back a third time to seal the deal. What’s weird about this system is that telling a customer four, five, six or seven times doesn’t enhance that memory, says Robb Best, author of an article, Minding your Sales. “Three is the magic number,” he says.

Fair enough. Three it is! Then, a different finding that upends three: The Rule of 7. This article informs us that “a prospect needs to see or hear your marketing message at least seven times before they take action and buy from you.” Then, the writer backpedals, sharing that the number seven isn’t “cast in stone,” but that “you can’t just engage in a marketing activity and then be done.” Here, I’ll call a foul: you can’t proclaim something a rule and weaken it at the same time.

Does learning such numbers, or the “science” behind them, matter? And what about the cortisol-producing stress hormone purported to reduce the tendency to buy? Does this factoid contradict the widely-held belief creating buying urgency can be useful for marketing and sales? Imagine a salesperson who says, “. . . Sure, if it means less cortisol travelling to your brain, please – take as long as you need to decide . . .”

“There’s no such thing” as a magic number, Chip Heath and Dan Heath wrote in their book about persuasion, Made to Stick. So, to me, packaging stuff as brain science amounts to pseudo-intellectual silliness. Better not learned, or at least, not learned this way.

What to learn instead: Empathy. Harder to teach, and for some, harder to learn. Start by not obsessing over numbers. Three? Seven? 148.7 Gazillion? The number of times a customer should see a marketing message before succumbing can’t be generalized. And if the message stinks to begin with, well . . . then let’s agree the magic number should be zero.  Next,  question the conclusions others make about cognitive research, especially those made by non-scientists, or people whose top listed attributes are “internationally-known speaker” and “sought-after seminar leader.” Self-credentialed, of course. Those gratuitous accolades should make any person’s BS antennae glow brightly.

When salespeople educate themselves about how to see and feel the experiences of others, they can also learn how their own actions are perceived. That insight produces powerful competitive advantages in any sales situation.

2. ‘Success traits’ for salespeople that other salespeople report. They’re all over the map: Work ethic, effort, coachability, sales intelligence, problem solving, and driven, confident, outgoing, assertive, funny, structured, relational,and focused – to name just a few.

Those conclusions are tenuous because they often infected with hindsight bias – the tendency to see a particular outcome as being predictable, even when there’s little basis for predicting it. Mostly, success trait assertions are little more than mom-and-apple-pie platitudes. (Who can dispute that problem-solving skills are crucial for every occupation or profession?) Yet, there’s a constant appetite for such lists. Maybe because they’re paragons of behavioral perfection. No mortal can achieve all of the characteristics, but few want to throw in the towel while pursuing them.

Sometimes, success traits can be deceptive when they are based on narrow circumstances, or drawn from situations others rarely encounter. I hold no doubts that being funny could be helpful for a salesperson calling on an executive at the Comedy Central Network. But I’ve known some decidedly un-funny sales reps who clobbered competitors while producing impressive revenue.

For the recent article I wrote on this topic, Lazy, Un-Coachable Sales Rep Produces Record Revenue, I examined success-trait lists ranging from three elements to eighteen, and discovered a curious pattern: honesty and integrity were absent from every one. A curious scarcity for a profession that pridefully promotes the power of being perceived as a Trusted Advisor.

What to learn instead: traits, habits, and characteristics that customers want in salespeople, or discovering What Customers Value .

3. How to forecast accurately. A common preoccupation in selling, but one that’s unproductive. People have written gobs of articles on this topic, and presenters have devoted countless Powerpoint slides to making a case for its importance. But I’ll consolidate a Forecast Accuracy How-to into three easy-to-follow steps, simple to remember:

Step #1: Select a sales opportunity that you’re really, really, really, really sure will close.

Step #2: Close the opportunity.

Step #3: Forecast the revenue just before submitting the order.

Congratulations! You have produced an accurate forecast. Just as important, you have avoided being wrong. Best of all, management will actually reward you for this feat! The problem is, an accurate forecast isn’t necessarily a valuable one. For example, if I close a contract with Customer X to provide 10,000 widgets per month for the next 12 months, I will, accurately, forecast sales of 120,000 widgets in monthly releases of 10,000 each – assuming that X doesn’t terminate the contract. But my accurate forecast provides little value to Production and Finance. They already know, so what I provided has no impact on planning.

Learning how to create accurate forecasts is more an exercise in manipulating sales information than in developing quality predictors, situational awareness, and useful insight. It’s an educational pathway that’s counter-productive for forecast quality.

What to learn instead: How to create a quality forecast. The point of the above exaggeration is to underscore the fallacy of pursuing forecast accuracy as a goal. The process of developing a quality forecast focuses on making the best assessments possible using logic, under conditions of uncertainty and limited information. That means selecting the right measurements and other input information, discarding what’s not meaningful, and constantly refining the inputs based on experience. It also means not just relying on past events to predict outcomes, but monitoring new, developing forces, and including them in the forecast model when appropriate. The goal of a quality forecast is to approach accuracy, but the forecast will never be accurate. In the forecasting world, accuracy means actual results = predicted results. And we came close is not the same.

Forecasts that involve human decision making will almost always be wrong. Judgement is always embedded in a decision forecast, and with judgement comes the possibility of error. So insisting on accuracy represents a fool’s errand. Forecasts are subject to mistakes, new conditions, unanticipated events, and the likelihood that some variables that could be meaningful will be omitted. Developing quality forecasts requires not fearing inaccuracy.

Human learning and machine learning are often compared, and there are many parallels: make a model, develop parameters, make adjustments to bring actual results closer to those that are planned or desired. But with human learning, we’ve become careless and sloppy. In marketing and sales, we too frequently squander time and resources on learning things that are unimportant or distracting, and sometimes encourage others to follow suit.

And thanks to Trump, ignorance has been anointed a new halo of acceptability. How ironic that if he were talking about robotic automation, we’d be screaming about compromised quality and defective products spewing off assembly lines. We’d vow never to buy ever again until software has been corrected, and processes improve.

How much better off could our economy be if we maintained similarly rigorous expectations for human learning, too?

Do Corporate Values Matter?

Visit the website of a great company, and you’re certain to find a values speil.

UnderArmour dedicates an entire web page to explain its Mission and Values. Whole Foods describes its Core Values, offering a subtitle, What’s truly important to us as an organization, to drive home the point. IBM outlines Our Values in a nearly-tweetable 153 characters: “Dedication to every client’s success; Innovation that matters, for our company and for the world; Trust and personal responsibility in all relationships.” Brevity you’d expect from a company that sells productivity solutions.

But value statements alone don’t make companies wholesome. Right now, UnderArmour is piggybacking off the brand appeal of the Rio Olympics, without shelling out a penny for sponsorship. A term has been coined for this, with an appropriate tint of bellicosity: ambush marketing. “Technically speaking, that’s not against the law . . .” a radio commentator said yesterday.

The disclaimer, technically speaking, should trip a circuit in the company’s Department of Competitive Ethics – assuming one exists. Danger Will Robinson! Fortunately, UnderArmour has a superb excuse: its admirable Core Values are silent about the morality of siphoning revenue from the investments of others – a tactic that’s existed since the birth of sponsorships.

Whole Foods strayed from one of its core values, healthy eating. “We sell a bunch of junk,” said CEO John Mackey in a 2009 interview, adding that the company had “veered off-course” by selling junk food and products that are unhealthy for consumers, according to a case study from the University of New Mexico.

IBM, too, has been muddied by ethics issues. And this April 20, 2012 post from exIBMandenjoyingit represents how the most aspirational corporate values can have the rug ripped right out from underneath:

IBM is thoroughly corrupted inside and my former colleagues are playing the game. As US employees we accepted the internal corruption ourselves. We saw organizations providing bogus sales numbers yet we look the other way because we too may have been paid on those numbers.

The IBM help desk in India participates in the corruption by closing older tickets and informing their internal customer to open a new ticket so that their time to resolution is not badly affected. This fish stinks through and though from decades of internal brain washing reducing employees [sic] integrity a little bit at a time.

Glad to be gone but I wonder if my soul is intact.

For these companies, public values statements did not inoculate them from ethical problems. If anything, they manufactured embarrassing hypocrisies. Despite producing stern values proclamations, unethical [stuff] happens at these companies and many others, seemingly unabated. Do corporate Core Values Matter? Or, are companies better off not defining them?

One researcher has examined these questions. Edward J. Conlon, faculty director of the Notre Dame Deloitte Center for Ethical Leadership within the Mendoza College of Business at the University of Notre Dame, studied corporate values by surveying at random the stated values of 150 multinational corporations.

The top ten values Conlon and his colleagues discovered, along with the number of surveyed companies that included the word or phrase:

1. Integrity (111)
2. Concern for customers (62)
3. Respect for all (58)
4. Teamwork (49)
5. Respect for employees (45)
6. Innovation (37)
7. Ownership of actions (31)
8. Excellence (30)
9. Safety (24)
10. Quality (23)

Curious that integrity was so dominant. I wonder what, if anything, companies do to establish and perpetuate that value.

In a follow-on exploratory survey of alumni from Notre Dame’s MBA program, “70% of respondents reported that their employer had a formal values statement, although 27% couldn’t recall any of the values it actually contained. Still, all of the respondents to the survey believed that the company had clear values. And for those reporting a value statement, most felt there was a strong correspondence between the statement and what was truly important to the firm’s managers and owners.

“The survey also included an experiment on the impact of values statements on employee judgments, assessing the extent to which a stated company value affected judgment when that value could be served by favoring some options over others. Overall, the simple inclusion of a value in a value statement didn’t affect decisions respondents made in the experiment. But when a value was frequently discussed with one’s boss, or when it was included in formal performance evaluations, it tended to have a greater effect. Discussions with peers and subordinates, or more casual discussions of values, didn’t have the same impact,” according to a Notre Dame column, Do Corporate Values Make a Difference? (emphasis, mine.)

Values are not a checkbox. “Corporate values and Guidelines for Ethical Conduct? – sure! We’ve got them. Let’s move on to the next topic . . .” Many executives feel safer by having these documents in the inventory of corporate communications and marketing collateral. But too often, they collect dust. What’s key is how they are used, as the Notre Dame follow-on survey uncovered. That goes well beyond including it in marketing fluff for wowing prospective customers and employees.

“When you lead an organization – big or small – you are inevitably going to cross decisions where it’s not obvious what the right thing to do is,” said Tom Linebarger, Chairman and CEO of Cummins. “In other words, there are consequences on both sides. When those things come up, you have to apply good judgment and ethical frameworks to think through the thing.”

His advice: “not to use a financial framework first, and use my ethics to rationalize my decision later . . . instead, think about what you should do and then figure out what the financial consequences are, and then figure out how to mitigate those. The post-rationalization is a slippery slope.”

Linebarger should teach a course on marketing and sales ethics, because he has aptly described the conundrum biz-dev professionals face every day: make goal, but in accordance with corporate values. And you thought Marketing and Sales were mis-aligned? Look higher, my son!

In The Vision and Values of Wells Fargo , five primary values are given “that are based on our vision and provide the foundation for everything we do:”

• People as a competitive advantage
• Ethics
• What’s right for customers
• Diversity and inclusion
• Leadership

Odd that Wells Fargo cited ethics – but didn’t indicate whether they meant ones that are good, or bad. In fact, the value mentioned just below ethics, What’s right for customers, is open for debate. In November, 2015, The Wall Street Journal published an article, At Wells Fargo, How Far Did Bank’s Sales Culture Go? Regulators examine whether San Francisco-based lender pushed employees too hard to meet quotas. Here, in the interest of transparency, what’s right for customers should carry an asterisk, followed by the explanation, “provided we meet our audacious revenue targets.”

“Some of the worst transgressions start out by a very simple decision to maybe choose the more expedient way or the more financially attractive way with some post-rationalization for the next one and the next one, and before you know it, you’re down in a place thinking ‘how did I ever get here?’ and wishing you weren’t there,” Linebarger said.

He’s right. Perhaps the greatest benefit of having a statement of Corporate Values is that it lets people know when they’ve deviated from what’s ideal, and possibly how far they’ve gone.

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