John R. Treace has over 30 years experience as a sales executive in the medical products industry. He spent over 10 years specializing in the restructuring of sales departments of companies that were either bankrupt or failing. Investor groups and venture capital firms hired him to manage turnarounds of pre-IPO companies. In 2010, he founded JR Treace & Associates, a sales management consulting business. Treace is the author of Nuts & Bolts of Sales Management: How to Build a High-Velocity Sales Organization.
I have been part of many business turnarounds in my career, and in all situations I have noted the errors consistently made by sales management, all of which negatively impact team morale and sales. Here are seven of the deadly sins of sales management.
1. Conflicts with Marketing
We have all heard of the traditional conflict between sales and marketing. The sales team says the product is priced too high or not what the customer wants, or that the marketing programs are ineffective. Marketing may say the sales force is not well trained, too small, ineffective, or a myriad of other complaints. Sometimes these are valid complaints, and good management will identify and address them. But if they are not valid, or if they are merely excuses for poor performance, it is imperative that management recognize this situation. There is nothing worse than having the sales and marketing departments at each other's throats. This is a formula for business failure, and powerful management will work to create collaboration and understanding between the two groups.
2. Poor People Management
Powerful investment groups don't invest in companies; they invest in people. People are the most important ingredient in any organization. At the heart of high-performance organizations is management that obtains the willing cooperation of others to achieve its goals. To gain the willing cooperation of others, employees must see that management genuinely cares about them, that they can trust management's word, and that management focuses on distinction in all aspect of the business. Another common mistake is not acting on low performers fast enough. In every failed business I have worked with, I have found a number of salespeople who should have been moved to another position. You do no favors by keeping a failing employee around; unless you are confident a correction can be effected. One word of caution, though: most failing businesses do not have metrics that effectively judge individual sales performance, so care should be taken when identifying low and high performers. Another error—the reverse of too few terminations—is aggressive termination. To avoid both extremes, remember that it isn’t who you fire that counts but who you hire. The proper hire will not need to be terminated. Always look for a track record of success in candidates. Hiring the proper people and creating a culture of mutual trust is a vital component of good people management.
3. Not Holding People Accountable
Holding people accountable for their performance is a cornerstone of powerful organizations, but you would be surprised at the number of companies that do not consistently do this. This is especially true during trying times, when management is inclined to lighten up on performance standards. During a downturn, it is better to reduce quota requirements than look the other way on non-performance. When we do not consistently hold people accountable for their performance shortfalls, it sends a message that management is weak and not confident in the goals it sets. This will erode morale as well as confidence in management.
4. Poor Award Programs
Award programs need to be seen as achievable and fair. Reps need to see that the playing field is level and that everyone has a shot at winning recognition. It is amazing how many companies have award programs that are slanted in favor of a few preferred individuals. This sends a morale-damaging message to all reps, including the favored ones: that some are valued over others.
5. Changes to the Sales Process
The sales process includes all the steps and procedures a company puts in place on its way to having the product delivered and invoiced. When the sales process is changed or modified, expect the sales force to need time to adjust. For example, the sales team might be required to fill out new reports or obtain price quotes from the corporate office, even if they previously had the freedom to do it themselves. During a period of adjustment to a new process, expect sales to be impacted. When the sales process is changed, all of management should expect sales as well as sales forecasting to be affected and in a direct proportion to the degree and type of change, at least for the short term.
Additionally, sales reps generally dislike change. They do not want to spend time learning a new process; they realize that learning the new system will detract from their current efforts. If they see the change as inhibiting their sales, this will impact morale—especially if the change is a non-sales requirement. If you are faced with needing to modify the sale process, quantify the amount of time the average rep will need to spend on the new non-sales activity, calibrate this lost selling time to lost sales, and advise senior management on the anticipated impact. All management needs to be aware that changing the sales process will affect sales.
6. Poor Metrics
Metrics are the numbers that tell us where we have been and where we are headed. They should act as the radar that lets us know well in advance of impending problems. A large number of sales management teams get into trouble due to ineffective metrics—or in extreme cases I've seen, no metrics at all. Usually, when we find poor metrics, it is because sales management doesn’t appreciate their value or does not know the business well enough to develop them. Good metrics should allow sales management to confidently predict the quarter's sales, identify high- and low-performing reps, and develop solutions to problems. In today's high-velocity markets, it is imperative to have a solid dashboard of metrics to guide the sales ship and keep it out of trouble.
7. Lack of Deep Understanding of the Business
Failing to know the business at a deep level is one of the surest paths to failure. This has been a prime issue in every struggling business I have worked with. Management that does not know the business at the customer, product, or service level will have difficulty identifying solutions to problems and will lack confidence in the directions they take. At one company where I worked as a sales rep, our regional sales managers were unable to make any presentations to customers, and they did not bring any value to the sales process. At another, they were able to present products to customers better than most of the reps. The Company with management that had a better understanding of the customer and products, was much more powerful. The sales force could not use excuses for poor sales, and conversely, management understood the valid problems the sales force faced and worked to correct them without blame. The sales force was confident with this management group, but not the other. When sales are going well, the lack of deep business understanding usually does not appear as a problem, but when business is challenged by sagging sales, it is. These are the times when a thorough understanding of the company's customers, products and services, and sales process is critical. Without it, sales reps cannot be confident in the course taken by management.