Imagine a business owner who needs to be told he is making some sales department management mistakes, but no one is in a position — or feels they are in a position — to tell him about it.
This is such an important problem because it is so intractable. If there is no one to confront the owner about important issues, they can remain unchecked and wreak havoc within an organization.
The main result of immature leadership is what I call a “hollowed out” sales organization. This means that the best people leave and the ones that remain do so for the money and simply work to the minimum required expectations. Their intrinsic motivation is completely obliterated by the over-the-top aggressive, sometimes overt and sometimes passive, management style of the owner.
Immature leaders are not bad people. They just don’t have the experience, training or knowledge to deal with the complexities of building a sales team and a collaborative organization. Instead of seeking the new knowledge they need to be successful, they tend to respond with frustration, anger, micro-management and other petty tyrant behaviors.
Here are several signs of immature leadership:
- “Petty tyrant” behaviors: This may be characterized by yelling, vented frustrations, threats to the employee’s jobs, rude and otherwise unprofessional behavior.
- Inadequate compensation: There are a lot of compensation models out there, but if you are not going to pay people fairly, you will not get experienced, professional people. You may be lucky with sales newcomers, but hiring this way is, in the long-term, unsustainable. A meaningful comparison is a national sales compensation survey across all industries that indicates the following total compensation:
1. Entry Level $68K
2. Experienced $96K
3. Star $125K
- Moving the goalposts: This often happens once a salesperson has experienced some degree of success and is generating substantial commissions. At this point, the owner wants to renegotiate the compensation agreement because “I’ve never paid a salesperson that much.” Not only is this unethical, unfair and unprofessional (unless there are clear mitigating factors), it is the fastest way to lose top performers.
- Shutting down legitimate inquiries: Many owners become highly offended when salespeople want to know where their commissions are, what the status of a particular job is, want to know why they weren’t assigned as the rep on a job, etc. If you don’t want questions like this, pay a salary only. It is totally reasonable for commissioned salespeople to respectfully inquire about these topics at the right time.
- Maintaining the wall between sales and production: When this happens, the owner actively discourages feedback from the sales team about job problems. Salespeople quickly learn not to bring such problems forward. This has the unfortunate effect of not getting the issues addressed successfully and rotting out morale in the sales department.
Owners should expect salespeople to focus on close rates, problem files, unhappy customers, unhappy referral sources and other problems. When embraced, this can become another layer of quality control and motivation to deal with systems and processes that are allowing an unacceptable level of problems to occur.
Or, conversely, if salespeople are shining a spotlight on a small percentage of problems, they need to recalibrate their expectations and understand and communicate that job problems in restoration are part of the deal and that the mark of a great restorer is not that they never have problems, but how they deal with them.
So, why do some owners sometimes engage in these self-defeating behaviors? In my experience, owners are sometimes threatened by high-powered salespeople.
After all, they are often relying on them to be the main, and sometimes only, driver of growth for the company. Even worse, they usually can’t do the job the salesperson does, whereas they can always step into production and run jobs successfully.
To make matters worse, they feel that they are paying them “a lot” of money, they don’t know how to manage them, they don’t know how to hold them accountable and they are really relying on them to drive the growth of the company.
Therefore, it is not surprising that they can feel out of control, something that is anathema to entrepreneurs in the first place. If this is left unchecked it can look like animosity, hostility and even hatred of salespeople. This is typically not overt, but believe me, they will get the message.
Faced with a lack of control, owners often seek to gain control. In its unhealthiest form, this looks like getting the sales team back under the owner’s thumb. This can be accomplished, but the net result is extremely demotivating and typically generates the exact opposite of the goals of having a sales team in the first place.
Instead, inexperienced owners and sales managers must commit to learning the necessary new skills, processes and systems to successfully manage such a critical component of their company’s marketing operation. Managing people is not easy, and managing salespeople is different from managing everyone else, but it can be learned.
The owner simply has to be up for the challenge. But there is no room for immature leadership.
Tim Miller is the president and chief executive officer (CEO) of Business Development Associates Inc. Miller is a highly regarded sales and marketing expert in the industry, and brings 30 years of experience and a unique perspective to help businesses solve their problems and grow to the next level. He is also a published author in several trade magazines and speaks at multiple industry events and conferences throughout the year, where he leverages his business experience in both the restoration industry and his other entrepreneurial ventures, including his own construction company in New Mexico. You can reach Miller at (847) 386-6556 or [email protected]. You can also visit www.GoBDA.com for more information.