CEO ALERT: What You Don’t Know About Your Sales Team Can Put You Out of Business
How do you feel when someone offers you constructive criticism?
Appreciative? Irritated? Or do you ignore it?
When I used to consult on executive compensation issues, I would evaluate pay and benefit programs, then benchmark results against peer companies. If my study showed executives were fairly paid or even overpaid, the client reacted negatively.
When a friend or colleague offers you constructive criticism, the effect is the same.
Often, we allow ourselves to settle into a comfort zone, our safety bubble. If we’re criticized, the bubble bursts and our illusions evaporate forcing us to acknowledge reality.
In my current work, I assist sales leaders and CEOs uncover sustainable strategies to grow revenues. I invest time doing an evaluation process that cuts to the heart of flattened revenues and slow-no company growth.
When I encounter the rare CEO who does not accept my findings, it is usually a sign the CEO is out of touch with the sales force. On the flip side, an involved CEO embraces the input and works to improve their situation. Here are the top five findings which cause CEOs to react poorly
1. An executive sales leader appears weak on the OMG’s Sales Leadership Evaluation. As the company continues to grow, the CEO decides to grow his sales force, so he elects to put his best sales rep to the head of sales. After all, the rep knows the products, customer base and maintains a great rapport with the sales force. In this situation, the CEO gave the rep what he thought was a promotion for helping land a major account so important to the growth of his company.
The CEO does not recognize his mistake until the damage is done. By placing an excellent salesperson in the sales vice president role, he cannot change his DNA. The star salesperson still wants to be a rainmaker and center of the spotlight. Instead of developing, leading and nurturing the sales force, he focuses on his production, making him a weak sales vice president.
2. The entire sales team is weak. Understandably, CEOs react negatively to this statement, especially when the team meets its sales numbers and the company continues to grow. He’s thinking, “and they brought in several key accounts last year. How can you say they’re weak?”
While hard to swallow, the evaluation shows good marketing and unique products contributed more to the company’s success than its sales team, many of whom were not well-suited for sales.
This situation points to mediocrity winning over excellence. In fact, if the company had grown revenues with this sales team, the growth should have been faster and more consistent, the probable outcome of a far stronger sales team.
What’s more, the company’s unique products will not last forever. As Michael Porter of Harvard Business School taught us: Product differentiation is not sustainable as a competitive advantage. The competition will eventually whittle away your uniqueness.
While I haven’t shared evaluation results on competency or selling skills, know that this sales team showed extreme weakness in sales skills. So weak, in fact, it isn’t worth sharing the competency scores on consultative selling, qualifying, presenting, positioning, account management, sales process, relationship building, CRM savvy, social selling and more.
Instead, let’s look at why the team did not improve. In the chart below, you’ll see that “excuse makers” outnumbered those who take responsibility; sales managers were even worse than salespeople, 72 percent versus 60 percent.
Percentage of Excuse Makers
Let me share another interesting finding from this evaluation. Notice the chart below. While this company positions itself as providing value, most of the salespeople are not comfortable with their pricing. The majority believe that they must offer the lowest prices to succeed. The sales force is out of alignment with the company’s value proposition.
These two comparisons alone, out of dozens of instructive findings, enabled the CEO to stop hurtling down the wrong path, compounding the sales team’s general ineffectiveness. Instead, this knowledge gave him the fuel needed to institute course corrections.
3. The salespeople harbor issues around the Will to Sell. Many of the salespeople in our study lack the type of commitment to sales success required to reach the next level. While difficult to uncover, the OMG evaluation succeeds at pinpointing this troublesome condition. All along, the CEO believed his salespeople seem committed to their work.
In short, the company had been hiring the wrong salespeople, focusing on technical skills instead of sales core competencies. In doing so, it created a culture of complacency.
4. With the proper training and coaching, your existing sales force can generate 75% more revenue. But it will take 24 months. While our CEO knew this result would be a tremendous increase in revenue, he didn’t believe our evaluation could define what was needed to accomplish it.
Not big surprise to us. In fact, we pinpoint this growth map in all evaluations. In the example of this CEO, his existing sales force is so weak they allow major sales opportunities to slip through their fingers because they do not possess the ability to capture them. It will take 24 months to teach them because the skills gaps are wide and deep, and the company’s sales cycle is long.
5. Some of the top account managers evaluated as weak salespeople. Our CEO pushed back here because he could not fathom how his top three salespeople in the organization could be weak.
He reasons, those three account managers manage more revenue than anyone else, and they’re extremely important to the company’s success. However, we can prove they aren’t the company’s top three salespeople.
If you took away their existing accounts (probably inherited and not closed by them) and asked them to build a pipeline, close some new accounts, and generate new business, they would fail in dramatic fashion.
Eyes Wide Shut
Our eyes can be wide open yet still fail to see what we do not want to see. When expectations aren’t met, it causes the three Ds: Discomfort. Disappointment. Disaster.
Sometimes you cannot see the true nature of your sales force until you have the actual data in hand. Then, open-mindedly use that data to view your people, systems, processes, and strategies through a different lens.
Companies that fight data do not change.
Companies afraid of data remain clueless.
Companies that embrace data grow by leaps and bounds.
The proper sales force evaluation is the most important and powerful action you can implement at your company.
A high-quality sales force evaluation leads to better decisions, changes based on science, not hunches, and improvements based on necessity, not opportunity.
As Jim Collins, author of the business best-seller “Good To Great” says, “If you want to be a good-to-great company, you have to first put the right people on the bus, get the wrong people off the bus and get the right people into the right seats. Then you can drive the bus anywhere.”
See you on the upside,Bill
For more information, go to www.pleinairestrategies.com
Or call William L. MacDonald in San Diego at PleinAire Strategies LLC at 760.340.4277 or 213.598.4700