The Old Way: My way or the highway

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2 2 As the sales leader of your organization or the manager of a sales team your ultimate goal is increasing sales and profitability. The sales force is your company s most valuable promotional resource, yet many sales forces fail to operate at full potential. This white paper examines various sales management approaches/styles and the impact of these approaches on the performance of the sales organization. It looks at what is working and what is not working and how the new paradigm coaching for development can transform your team into a high performance organization. It goes without saying that the leadership and culture of a sales organization have a direct impact on sales performance. Your front-line sales managers are the individuals closest to the salespeople and as a result are the most important group of managers in terms of impacting sales revenue. The Old Way: My way or the highway Sales leaders are finding that the old way of doing business fails to deliver the results they wish to achieve. The traditional sales management approach of My Way or the Highway relies on the sales manager using rewards and punishments, an approach that falls short in today s economy. Some companies that have used this approach for many years are finding that turnover is out of control.

3 3 The Existing Way: Let s make a deal I call one of the most popular sales management styles Let s Make a Deal. This approach basically involves exchanging rewards with salespeople for their time, talent, energy and results. Parameters of the exchange are set based on compensation packages tied to results. Many sales managers are quite comfortable with the Deal approach because they understand it and think it is fair; there is a clear link between rewards and results. Management develops dashboards and spends time managing by results. This approach does encourage sales people to improve their performance and productivity. The major drawback is that the backbone of the approach is a kind of bribery. Bonuses, incentive programs and contests are utilized to keep salespeople motivated. Management gets locked into a vicious cycle of upping the ante to get performance. At some point we reach a limit on the cost of incentives and it creates an environment of increased rules and policies to ensure that the fairness is maintained. Sales reps begin to get a sense of entitlement and feel that they should be given more and more perks. What happens when times get tough and quotas are difficult to achieve? What do your managers do to motivate the sales force? What happens when your top performers decide to leave for better rewards with your competitor? To build a high-performance sales organization, sales leaders need to look at new approaches that help develop their sales force.

4 4 The New Paradigm: Coaching for Development Sales leaders who realise that the My Way or Let s Make a Deal approaches are not working are looking at ways of creating a partnership between sales rep and manager. In this model the role of the sales managers evolves into selecting, developing and retaining top sales performers. The new paradigm is a shift to a partnership between sales manager and sales rep in which both manager and salesperson have shared objectives. There is a shift in decisionmaking and accountability from the manager to the sales rep. Sales reps are encouraged to develop their own plan to achieve their objectives, generating their own initiatives, energy and programs. Allowing salespeople the latitude to build their own plans creates far better buy-in and commitment to implement them. The role of the manager/coach transforms from telling to asking mode. The assumption is that the sales rep/employee has the answers and it is the manager s role to help the salesperson think through and generate creative solutions. The benefit of this approach is getting better buy-in and commitment, generating better solutions and allowing salespeople to develop to their full potential. The self-limiting nature of My Way Or and the Let s Make a Deal approach where salespeople do only what they are told or only what they are incented to do does not exist in a true partnership. The goal of empowering and coaching the sales rep creates a commitment to achieve or exceed shared objectives based on the premise that it will increase productivity and effectiveness. There is a shift in decisionmaking and accountability from the manager to the sales rep. The coaching approach requires considerably more management skill. Coaching is one of the most challenging skills and mangers tend to under perform in this critical skill. So conceptually this approach yields far better execution, retention and rep development. If you are still reading this then you want to know how you can transform sales managers into great sales coaches.

5 5 Here are the 5 Organizational Paradigm Shifts that need to happen to evolve to a Coaching Culture 1. Coaching starts at the top it is imperative that senior sales management buy into the coaching approach and model coaching behaviours with their direct reports. The need to demonstrate that development of their direct reports is their priority. 2. The role of the front line sales manager becomes one hiring, developing and retaining top perform ring sales representatives. See my article Pursuing Sales Results vs. Developing your Team Front line sales managers take a coaching approach of asking as opposed to telling. They partner with their reps to achieve joint goals. Development and self improvement becomes the focus of their activities. 4. Sales reps are held accountable for their own development and performance. Sales reps are expected to develop their own plans and once commitments are agreed to they are held accountable by their sales managers to follow through on their commitments. 5. Staying focused is the key to success of this approach. Short term demands for results or flavour of the month approach will destroy any momentum built in achieving a coaching/high performance culture. Transforming your sales organization into a coaching/high performance culture is not an easy task. Companies who can successfully transform their culture can unlock the potential of their sales force and increase performance. For more information on how to effectively transform your organization into a coaching culture contact Steven Rosen at Star Results. Please call or steven.rosen@.