Why Great Salespeople Make Lousy Sales Managers

It’s been said so many times that (at least I hope) it is a business axiom on the same level as “cash is king.” Promoting your best salesman to sales manager is guaranteed to cost you a great salesman and leave you stuck with a lousy manager. The belief is so widespread that I’m amazed that owners keep doing it, and yet owners keep doing it. Why?

There are several reasons. First, an ambitious salesman (or woman) wants to get ahead. In most organizations, “getting ahead” means promotions and titles. It’s natural, actually inevitable, that they seek recognition as the “lead dog” on the team.

On the owner’s side, he is discussing it not only with a high performer whom he wants to keep happy, but one who can sell. If the salesman is truly gifted, he probably has developed a pretty cogent argument as to why he is the best candidate for the job.

throneThe salesman will argue that he can lead by example. From the owner’s perspective, who could be better to show the other salespeople how to sell than the one who does it best? Even if his message is no more than “watch me” it has to generate some positive effect.

In addition, there are the issues created by promoting someone else, or hiring from the outside. If your top performer is resentful or uncooperative, there could be dramatic consequences.

So the owner makes the move, with the usual stipulations. “Bob, you’ve never been great at paperwork, but you will now be responsible for tracking everyone’s activity. You will be expected to develop plans and procedures, and you have to follow our HR policies when dealing with your direct reports.”

The salesman, knowing that he is a hair’s breadth from closing the deal, of course agrees to everything.

The new sales manager starts off great guns. He has team rallies, and implements a new incentive program to reward high performance. He travels with the other salespeople, showing them how he does it by closing their biggest prospects for them, and upselling their marginal customers on additional lines.

Here is a menu of general variations that may happen next.

  1. The manager will tell his people “I’m not worried about reports, only results.”
  2. The salespeople will complain that the manager is giving special deals to their customers that they can’t duplicate.
  3. The sales manager will start to irritate his management colleagues by showing up late or being unprepared for meetings. (He is always late for his own sales meetings.)
  4. Department turnover will increase as salespeople are being chastised by the manager for “making me look bad.”
  5. The manager will start ignoring direct reports whose performance is mediocre.

Great salespeople are egocentric, adept empathizers, and skilled improvisers. There is nothing wrong with those traits, but they aren’t core competencies for someone who needs to teach, manage and develop others. Often the owner winds up stuck with the managerial tasks of running the sales department, working around the gaps in the manager’s performance.

That doesn’t alleviate the pressure on an owner to satisfy the top salesperson. Compensation isn’t enough, it has to be recognition of his special status in a way that doesn’t undermine the person he reports to. If you can’t navigate that minefield, you will wind up wasting resources circumnavigating the resulting issues.

A title with limited responsibility, participation in higher-level discussions, special status symbols such as a separate credit card where the employee keeps the points, or an automobile may do the trick. But for heaven’s sake, don’t make him a manager.

Posted in Leadership, Management, Marketing and Sales | Tagged , , , , , | 3 Comments

3 Responses to Why Great Salespeople Make Lousy Sales Managers

  1. Interesting article! We as so many other small business’s are always looking for what we believe will make a great sales manager. We usually do not give enough recognition to our top performers, but will seek out rewards for them.

  2. Mark says:

    Unfortunately, you are spot on here…in most cases. A better alternative than promoting top salespeople into management could be creating a mentor program where the top salesperson is more of a “Team Leader” who mentors new salespeople for a slice of their commissions. Doesn’t cost the company a dime, give the top salesperson a promotion and title and disseminates best sales practices throughout the team. As a new salesperson, I would take that deal all day.

  3. MM says:

    This viewpoint may work from a 10k ft view, however; each situation needs to be looked at on an individual basis. For example, I have always been in the top 5% of every sales team I was a member. One of my clients enticed me to take over a struggling sales team due to his promoting the #1 salesperson into managment. While having my own growing pains, I soon discovered the key to success in transitioning to management was to alter my “mindset”. All of a sudden my ego needed arrested and I had to get my “kudos” for watching others grow due to my leadership. All of a sudden I was a member of the support function and whether during “ride along” sales calls I may have done the entire process – when I got back to the office I put the salesperson out front and said “look what they just did”. Most successful salespersons cannot stand the hit to their ego. Here is one that successfully made the switch.

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Happy Ostara: Owner Infallability

The origins of Easter are lost to history. I don’t mean the Christian holiday celebrating the resurrection of Jesus, or even the Jewish holiday of Passover which it matches on the calendar. In fact, the name Easter is a derivative of the Saxon holiday celebrating the goddess Oastare or Eostre, who influenced fertility.

Some mythologists say that the Ancient Greeks’ traditional sacrifice at the Spring Equinox to Artemis, the goddess of hunting and childbirth, included a hare for good hunting and an egg for fertility.  Rabbits and eggs have been associated with fertility since prehistoric times. That tradition survives today in the Easter Bunny.

So much of what we do is grounded in what came before. In running a business, we face the ongoing danger of teaching employees to follow procedures long after we’ve forgotten the reasons for doing something in a particular way. We try something, it is successful, and we make it policy.

There are many versions of the idea that success is a poor teacher. One is epitomized in the conversation between the young entrepreneur and his successful mentor.

“How do you avoid making bad decisions?” the mentor is asked. “Experience” he answers.

“How did you get all that experience?” “Lots of bad decisions.”

Any business owner carries the burden of employee expectations. They expect that we know all the answers, or at least we should. We teach people how we want each job done. In a small business, the owner probably wrote both the job descriptions and the procedures for accomplishing each critical task.

Super Businessman bxp156008hI don’t know any owners who really think that they are infallible, but it is a creeping threat. When employees look to you for all the creativity, for every new idea  and process, it’s easy to fall into the infallibility trap. “I said it, because I KNOW. Because I know, it has to be right. If I am always right, you shouldn’t change it.”

Just because an employee shouldn’t have the ability to change procedures on a whim doesn’t mean that you can’t. It is your job to experiment, to seek constant improvement. Don’t get caught in the trap of letting employees tell you that you aren’t following procedure. Instead, look at why you aren’t complying with your own process. Is it too difficult or complicated? Is the way you are doing it an improvement?

Of course, sometimes we don’t comply with our own procedures because we are confident that we don’t need the controls and checks on quality that we insist on for everyone else. That’s just another version of the infallibility complex.

 

Posted in Leadership, Management | Tagged , , , , , , | 2 Comments

2 Responses to Happy Ostara: Owner Infallability

  1. Jason Myers says:

    I’ve been following your blog for close to a year and this is my favorite post. Glad you decided to re-run it because I missed it the first time around.

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Cutting Out Employee Infection

A client found himself in an unenviable position. The cancer of negativity had spread through his management team. He knew the sources, and was prepared to clean house. Where should he start?

First, some background. The company was a bootstrap start-up founded by an inexperienced young owner that grew rapidly for almost ten years. Without a mentor or much experience, he relied on his intelligence and work ethic to figure out problems as they arose. Most of the original management team, chiefly the owner’s acquaintances from local businesses and personal contacts, had reached their limits of competence about halfway through the expansion curve. With considerable personal angst, he replaced those who couldn’t keep up with new “professionals” experienced in specific areas of operations.

I put professionals in quotes, because although they had experience, their recruitment came with a price. A low price. It was typically a lot more than their predecessors earned, but it still wasn’t near the top of the market. When you are struggling with personnel who have no training for the job, folks who know even a little bit seem like a big step up.

Complaining-EmployeesAs the business continued to grow, these new managers increased staff and lowered expectations. They quoted their own experience as authoritative. Deadlines just “couldn’t” be met. It was never the right time for new initiatives. They began criticizing the owner behind his back, telling coworkers that his lack of business knowledge had led him to set standards that were unrealistic.

Eventually their criticism became a widespread culture around the headquarters of feeling overworked, underpaid, underappreciated and stuck in an organization that offered little future. Despite their attitudes, the owner’s personal drive kept the company growing.

Finally, the owner made a couple of key hires at competitive salaries. His eyes were opened by the ease with which these new players did their jobs. It turned out that his expectations weren’t unrealistic, he just didn’t have the right people on the bus. He knew that reaching the next level required some wholesale changes in his core staff, but where to begin?

If he replaced an underperforming manager, he would saddle the new hire with an unresponsive staff. If he replaced multiple managers (three in total) in a brief time, he risked completely unraveling any coordination (poor as it was) between departments. Piecemeal replacement carried the danger that new hires would be corrupted by the bad culture before he could finish the replacement cycle.

He debated how to begin. Should he start with the most rotten apples; those who seemed to be the center of dissatisfaction? Should he start with the least competent performers? Should he start by changing out a whole department? That way, he could focus his attention on getting one part of the business running correctly, them move on to another.

Sometimes radical change is called for. Let’s not be smug about how he got into the situation. We’ve all kept mediocre performers because it was just to inconvenient to replace them, or at least right now. When you are growing rapidly and fighting fires, it is easy to let two, or three , or even more of those poor performers linger.

In the end, a hybrid approach got him through the change. In one department he replaced the manager, moved two employees to different areas of the company (for which they were better suited), and let the new manager hire a strong assistant. That was complete turnover in the department, but the repositioned employees were still available for some guidance and corporate knowledge.

In a second, he let the manager go and outsourced the function, hiring a lower level person to coordinate with the vendor. In a third,  he hired a strong second in command, outsourced a major labor-intensive function, and then reduced staff, letting the malcontents (including the manager) go.

The planning was extensive, but he managed a complete turnover of almost all staff functions in a month of activity that resulted in happier employees, a much improved culture, and better quality of work.

It wasn’t not easy, but when was running a small business easy?

Posted in Leadership, Management | Tagged , , , , , | 1 Comment

One Response to Cutting Out Employee Infection

  1. Last year our production manager had a verbal blow out as he felt our goals were too difficult to achieve. I gave him three paid days off and he had a vacation after that. He decided to move on (much to my relief and financial relief). I now have two assistant production managers who have easily met our goals. they accomplished their goals because they did not know “it could not be done”. It is amazing what can be accomplished when we do not know what the limits of ingenuity are.

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Employee Investment Takes Time

Despite millions of dollars in revenue and expenses, an NBA team is a small business. A coach gets 15 positions (12 active and three reserve) with which to field a winning organization. As in any small business, every player has an important role. While some players may spend more time on the bench, each still has a specific job when called upon. Substituting a back-up center for an injured guard is unlikely to produce the desired result (winning).

I will admit here to being a fan of the San Antonio Spurs. Don’t worry, I won’t fill this column with the tired sports clichés that are so prevalent in business. This isn’t a fan post. The Spurs are acknowledged in every survey about the business of sports as one of the best managed professional teams in the country. They are regularly singled out for their ability to find and successfully develop the right personnel, on and off the floor. This is about running a small business with just 15 employees to work with.

Last season the team entered the Western Conference finals riding a 20 game consecutive win streak. Then, just two games from the championship, they collapsed and lost 4 straight games to Oklahoma City. In sports parlance, they choked. Under pressure, their players couldn’t step up.

The customary wisdom in such situations is that you need better players. Most teams would look for a trade or a big draft pick to take them to the next level. The Spurs did…nothing. They were widely criticized for what appeared to be their complacency as an also-ran, semi-contender. Every sports analysis publication ranked them at the bottom of the league for off-season improvement. But it wasn’t true.

Danny Green, Tiago Splitter, Manu Ginobili, Kawhi Leonard, Gregg PopovichThe Spurs have three starting players who began with unique situations. Tiago Splitter, a previous high draft pick out of the European leagues, had been injured in training camp of his first year. His second year saw the players strike, eliminating any real preseason camp or coaching. Only in this, his third year was Splitter able to work a full preseason of practice with the coaches.

Danny Green was picked up in mid-year before the strike, and Kawhi Leonard was drafted in the strike year. All three starters, or 60% of the first team players, enjoyed their status because of talent, not training. Teaching moments were literally limited to what OTJ could be delivered during and in between games.

The 2012-2013 season was the first normal training camp available to these three. Not surprisingly, all have improved dramatically. The Spurs are again near the top of the league, although whether this improvement will let them survive the playoffs remains to be seen.

What is clear, however, is that the Spurs organization decided that they had players with the right attitude and skills, but who lacked the training necessary to make them fully productive. Rather than get new pieces, they gambled on investing one more season in the ones they had.

The President of a technology company once gave me his checklist for an owner to analyze  why an employee is failing in a job. It goes like this.

  1. You wrote the job description, and decided the duties of the position
  2. You developed the hiring process, and selected the winning candidate
  3. You provided the resources available for accomplishing those duties
  4. You delivered the training and supervision to teach how the job should be done
  5. You created the incentives to motivate results

If your review of all five points finds no flaw, then the employee should be replaced. In the Spurs’ case, such a review would clearly show that point number four had a glaring problem. They chose to correct it before looking for new employees.

Replacing an employee in a small business is an expensive and time-consuming task. Sometimes, all that is needed is a little bit more development. I hear so many owners say “She is such a hard worker, and her attitude is great. It’s too bad that she just can’t do the job.” In those cases, ask yourself whether some additional investment just might pay off.

 

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Are Entrepreneurs Smarter, or just Gutsier?

The vagaries of my reading habits had me reading two “How I did it” books last week; Ed Whitacre’s “American Turnaround” and Dave Ramsey’s “EntreLeadership.” Both men are justifiably proud of their achievements, but their differing paths to success are striking.

Whitacre  spent 44 years with the same corporation, rising to the Chairmanship of AT&T by climbing the ranks through management. Ramsey, like so many entrepreneurs, first experienced massive failure before building an organization around his own skills and creativity. Is one road to success inherently more admirable, or more challenging, than the other?

As a lifelong small business owner (not counting “side businesses” when I was young and employed), I’ve signed my own paychecks for over 32 years, I tend to be strongly biased in favor of the achievements of other owners. I frequently point out that taking risks is easier when it isn’t your own paycheck on the line. Yet the successful executives I meet seem to suffer no embarrassment about compensation packages that dwarf those of most business owners. I’ve never heard one say “I only do this because I’m just not smart enough to own a small company.”

Just before the last Presidential election, I attended a speech by David Axelrod, President Obama’s political strategist. His message was plain (even though he was speaking to an audience of conservative Texas business people). He said, or at least intimated that the problems in our country were largely due to the fact that the really smart people, the ones who had chosen politics as a profession, didn’t have enough control over the economy.

He had a point. If I look at his job as getting a secure paycheck while controlling vast sums, having corporations and millionaire entrepreneurs curry his favor, and being able to pass laws to enforce what he thinks should be done, perhaps that is where all of the brightest folks would go if given the choice.

Certainly the three obvious types of financially successful people, business owners, business executives, and elected officials; along with professional athletes, artists, and leading scientists, all have to survive a competitive gauntlet in their chosen fields. Reaching the pinnacle of what you do, whether measured by income or accolades, is pretty Darwinian.

Is there really a difference, then? Are we somehow suited for a specific career path, or are we like the Tutsi and Hutu tribes in Rwanda? There is essentially no ethnic difference between the two. Their tribal identity was determined by British colonists, who issued identity cards based on what they saw as differences in facial features. Yet the fact that there was no real racial distinction didn’t stop the two groups from discriminating, and eventually slaughtering some 800,000 of each other in the Rwandan Genocide of 1994.

Like any other human beings, we first become part of a group and then start focusing on why that group is better. Let’s face it. Small business owners are no smarter than anyone else. Most became entrepreneurs by happenstance. The most frequent reasons I hear for starting a business are 1) Wanted to make more money than my employer paid, and 2) Lost my job and needed to eat.

I also talk to lifelong employees who say “I have always had a burning passion to own my own business.” That’s a crock. No one goes through an entire working career with a unfulfilled burning desire. Those people had a choice between the known and the unknown, and they made it.

Risk-Taker-on-Tightrope-285x280That is the single characteristic that defines anyone who has started up a company; a high level of risk tolerance. It may be because the entrepreneur is self-confident, or truthfully because he or she simply doesn’t comprehend the potential downside of leaping into business. Whether it is generated by ignorance, arrogance or merely ebullient optimism, that risk tolerance is the first attribute required of any entrepreneur.Without it, no start-up would ever start up.

Posted in Entrepreneurship, Leadership, Thoughts and Opinions | Tagged , , , | 3 Comments

3 Responses to Are Entrepreneurs Smarter, or just Gutsier?

  1. Joe Zlotkowski says:

    I think you are on track. I know I have toyed with the idea of owning my own business, but realized years ago that I do not have the risk tolerance or the burning need (i.e. I just lost my job and need to eat). Entrepreneurs fulfill a key role, but they often get to a point where they need the skills of “corporate” people. They need each other.

  2. Clint Moar says:

    Thanks John, another good topic…
    Guts, balls, chutzpah, however you say it entrepreneurs and business owners have immensely more than employees…Like you say in the “crock” paragraph, they choose the known “job” because they feel like it’s the easier way…My reason for quitting my job and starting a business was mainly your 1. Wanted to make more money than my employer paid, but it was more about compensation…example, one company I worked for only about 2 years, told me, (after I left, finding a better paying career), “Clint, you were way better at this than the Journeyman, Bill”…Fine time telling me now!..shoulda compensated me and maybe I’d have stayed…I digress…
    Successful entrepreneurs and business owners know how to use risk to their advantage and master it by using it with plenty of practice…Employees go home to watch TV, entrepreneurs go home to work, but fun work.
    Clint.

  3. I think self-employed people realise the world is their oyster, they are no longer sheep…they feel they can achieve whatever they desire…but yes and a big yes, they need to foresight to pick up the pieces when things go wrong or be quick enough to STOP and change what they are doing to make it work.
    Im from a working class background so the only thing we have is our tenacity and will to resolve.

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