"Fred" (not his real name of course) was one of the first hires 20 years ago when the company started. He is a childhood friend of the founder.
Fred is the "golden child". He is untouchable.
Twenty years ago, Fred was a "hero" and today he is destroying more value than he is creating.
There was a time when Fred added value... In the early days, the founder did all of the selling and Fred took care of the accounts. It was a magical combination. Today, Fred makes $250k annually and works 20 hours a week. If Fred comes into the office, it is usually from 10 am until 3 pm and he spends a lot of his time tracking his favorite sports teams. That's IF Fred comes in...
Fred has not made a true sale in over a decade. He has not needed to actually sell until recently. Fred takes orders and collects cash. The only "value" he adds to "his" Customers is by keeping the price lower than everyone else and by giving away service. He protects "his" Customers from price increases. One by one the people he "sold" to are retiring. The replacements are seeking something more than a price discount.
Fred is in serious trouble. He and everyone knows it.
Fred's sales are decreasing because the old days of "relationship selling" as the primary reason to do business are going away. His Customers are increasingly expecting value - not price and Fred cannot deliver.
Fred knows he needs to make changes but his personality, lifestyle, and habits will not allow for it. Fred knows he needs to add value to "his" Customers or they will leave him but he cannot make the shift.
Everyone knows what Fred really is... Fred is a "golden child" - a model of no accountability. The CFO, the other 22 salespeople know, and the service department knows... Everyone knows that Fred is a farmer making the big cash - even the CEO knows. A newly-hired account manager (what Fred really is) makes $50-60k.
The sales manager would like to do something about Fred but cannot because he would like to keep his job as sales manager.
Who is to blame?
- The sales manager? Perhaps.
- Fred? No.
- The CEO is to blame because they allowed this to continue to this point.
Today, the company is in trouble. They must grow their sales and profits.
The CEO brought us in to turn the sales team around. Our recommendations were obvious...
- Know the cost of the problem. Until a dollar figure is attached to what Fred costs the company, it is too easy to allow it to continue.
- Hold Fred Accountable. Fred cannot be allowed to continue at this level and while it is unfortunate for Fred, his compensation must match his contributions and his actions. In most cases, the "golden child" needs to leave the company.
- Reshape The Culture To Reinforce Accountability. No one can be allowed to avoid adhering to the sales systems - regardless of contribution or past heroics.
What do you think happened after we provided our recommendations? If you said, "nothing" - that pretty much sums it up. I would like to say this Client listened to us but unfortunately their commitment to Fred was greater than their commitment to profitability, their Customers, their shareholders, and their employees. With the value Fred was destroying, the company would have been better off doubling Fred's pay and having him stay home.
When you allow a "golden child" to remain on your bus... You are not fooling anyone. You are destroying Customer and shareholder value. You are also teaching every salesperson and every other employee a valuable lesson... It's not what you know - it is who you know.
The best and brightest sales talent want a "level playing field" where they have a real shot of real rewards for adding value, working hard, and modeling the values of the company.
When you create a level playing field... When you show existing and new sale talent that by playing by the rules of adding value, doing the right thing, working hard, and following the company code - you open the door to new potential.
Do you have a Fred or two on your sales team? I would like to tell you this is an extreme situation but it is not. Unfortunately, this story is very, very typical. Most sales teams have a "golden child" or two who are untouchable.
From my experience, when the cost of the status quo are fully-understood, it is much easier to make the required changes. Ultimately, you must remove the "golden child" from your team or the consequences will be severe.
No salesperson should ever be untouchable. Every single salesperson must be accountable to an appropriate activity level and outcomes as well as to how they are living the "code".
If this sounds like your sales team, the most important step is to decide to make a change for the right reasons.
Remember... Interested people do what is convenient. Committed people do whatever it takes.
If you are committed... If you are ready to dramatically grow sales and to create a culture of accountability, give us a call and we will help guide you.
Recently I asked a sales manager, "How much does it cost you to hire someone who does not sell?"
Their response was typical, "I don't know. I am sure a lot."
I then stepped them through less than five minutes of analysis to identify some of their biggest costs.
She was shocked for two reasons. Every time they hire someone who cannot sell, it costs them several hundred thousand dollars. For her it was frightening that with all of the efforts to increase sales, the obvious answer was right there - be choosy when hiring salespeople. Hire "sales wolves" and avoid the "sales lambs".
- A "sales lamb" is someone who is not "wired" to sell.
- A "sales wolf" is someone who is "wired" to sell.
What does it cost your company when you hire and retain sales lambs who cannot sell? What does it cost your career, reputation, and your income?
We go about our respective journey called "life" where we discover things. For some of us, we discover a problem we did not know we had and we resolve to solve it.
Be that person - solve the problem of hiring sales lambs. You absolutely must know the cost of hiring a sales lamb. Knowing the cost of hiring a sales lamb will redefine your career and income. When a good CEO / president / VP / manager knows the cost of a problem, they will commit the appropriate resources toward solving that problem.
Most CEOs and sales managers know intuitively that the cost of hiring a poorly-performing salesperson - a "sales lamb" is very expensive. It seems that most merely view the occasional bad sales hire as a cost of doing business - you "win some and lose some" or "luck of the draw" but you cannot do something about it.
You can do something about hiring sales lambs. Decide to stop doing it. There is a powerful sales personality test that enables you to know if you are hiring a sales lamb or sales wolf.
And if you are even moderately successful as a company while hiring sales lambs and you are thinking about selling, give me a call. I like the idea of buying a company and hiring sales wolves to sell. It is a license to print money.
Your company's budget for hiring sales lambs should not be unlimited. Companies that do not know what a sales lamb costs them and/or do nothing about it have an unlimited budget - a black hole of lost sales opportunity. Do not be that company!
The scary-funny thing is that while a company will allow a sales lamb to destroy tens of or hundreds of thousands of dollars annually, they will penny pinch their recruitment efforts and go cheap on their candidate screening. This blows my mind!
What does it cost you to hire a salesperson who cannot sell? Here are three general costs of hiring sales lambs to be mindful of.
- Cost of recruiting / training / onboarding sales lambs. This is fairly obvious. Companies that actually care about their bottom line often go with a "rule of thumb number" of a bad hire- $25-50,000 per bad hire.
- Cost of lost sales opportunities / non-performance. The cost of non-performance is what silently kills the bottom line of a company. Sales lambs prospect less, ask for the sale less frequently (if at all), and leave the door wide open for your competition. When you hire a sales lamb, you help your competitors.
- Cost of damage to your reputation. Whether you are the CEO, president, or the sales VP / manager, you look like an idiot when you hire sales lambs.
Average CEOs and sales managers focus primarily on the costs of recruiting / training / onboarding. Strategic CEOs and sales managers focus on lost sales opportunities that sales lambs screw up.
Do not think like a typical bean counter. Accountants are usually focused only on accounting costs. An accounting cost is the actual number associated with a given item - say a sales personality test. A sales personality test can cost $20 yet allow sales lambs on your "bus" that can cost you hundreds of thousands and eventually millions in lost sales and referrals. An accountant will likely say, "You have spent $5,000 with your hiring assessment vendor. Keep your costs down!"
Price is what you pay, value is what you get. Always.
Smart accountants care like you do about the lost sales opportunities sales lambs lose.
Know your opportunity cost of hiring a sales lamb... Smart accountants keep hard costs in mind but also focus on "opportunity costs". An opportunity cost is the cost of choosing one thing over another. For example... If you hire a sales wolf and you get the sale, the sale hits the books. Hire a sales lamb and the lost sale does not hit the books. No one knows about it because few organizations are conditioned to think this way.
Imagine if you tracked your lost sales by sales team member and had to reconcile it quarterly...
What is the opportunity cost associated with hiring a sales lambs? The answer is the lost sales your competitors won. The answer is... The lost sales a sales wolf would have won if you had hired a sales wolf instead of the sales lamb.
Track lost sales. Lost sales due to sales lambs losing the deal must haunt you in your sleep.
If you "get it" - you are committed to being successful, you count the lost sales as well as the wins and you track it by salesperson. Sales lambs lose deals much more frequently than sales wolves.
Sales lambs consistenly lose. Sales wolves consistely win. It is a universal truth.
A quick rule of thumb to identify your opportunity cost of hiring sales lambs is to know three numbers.
- What your average salesperson sells.
- What your top 20 percentile salespeople sell (wolves).
- What your bottom 20 percentile salespeople sell (lambs).
Conservatively, I usually start with the average salesperson minus the bottom (lamb) salesperson spread. This is usually an attention-getter if I am talking with someone who "gets it".
Unfortunately, not everyone gets it.
The following is a typical illustration. Let's say that your average salesperson sells $250,000 quarterly, your top 20th percentile salespeople (sales wolf) sells $500,000 quarterly, and your bottom 20th percentile salespeople (sales lamb) sell $50,000 quarterly. Let's assume 25 percent margin.
The cost of hiring a sales lamb is a range of $200,000 to $450,000 per quarter. Your margin loss is between $50,000 and $112,500 per quarter - PER SALES LAMB.
The math follows:
- Your minimum range is average minus bottom or $250,000 - $50,000 or $200,000.
- Your top range is top 20th percentile minus bottom 20th percentile or $500,000 - $50,000 or $450,000 per quarter.
Do not count on the gradual reduction of the base salary to weed out sales lambs. Smart companies compensate their salespeople the way salespeople are supposed to be paid - small base with a large variable compensation based upon sales. The problem is it can take months for a sales lamb to eventually financially starve to death. Never allow a gradual base reduction to weed out your sales lambs.
Hire the best sales talent in the first place. Hire sales wolves and those who have the potential to be above average.
Here are five key takeaways if you are committed to success...
- Know what a sales lamb costs you in terms of recruiting / training / onboarding and the opportunity costs associated with lost sales. Know both numbers. Get them tatooed somewhere - preferably someplace highly visible.
- Stop using recruiters who specialize in recruiting sales lambs. Hold them accountable.
- Use a valid sales personality test to separate the sales lambs from the sales wolves. Leave the sales lambs for your competitors.
- Do not use a gradual reduction in base compensation to weed out your sales lambs.
Your company is either artisan or it is not.
Consider the best product, service, or experience you have had in the last 90 days. Chances are an artisan designed and/or delivered it.
An artisan is a person who is passionate about how something is made or a service is delivered. They do not compromise in their effort to deliver something that is truly exceptional on a consistent basis.
In the last several months, I have sought out experiences delivered by artisans.
We recently experienced Cirque Du Soleil Amaluna in Minneapolis. It was an amazing show. As far as we could tell - the performance was perfect. The artists dripped passion. They clearly love what they do.
We love and use Apple products - iPhones / iPads / iMacs / Mac Air / MacBook Pro - and that is just my family. If there were a fire - chances are the one thing each of would grab other than one another and our dogs is our iPhones. Why do we love Apple? Because their products work and they are beautiful.
I have enjoyed several pizzas from Fire Flour Pizza - a great little pizza place across the street from our offices in downtown Bismarck, ND. Many, many amazing pizzas enjoyed. Fantastic.
My son is being treated by Warford Orthodontics. Dr. John Warford Jr. is an artisan's artisan. He has changed many, many lives and he does not compromise when it comes to quality orthodontic care.
We recently had the main floor of our home redone by Magi-Touch. They sent three gentlemen who are true artisans. I actually enjoyed watching them install it. They cared passionately - even about the things I would never see once the floor was finished.
The details matter to an artisan.
Recently our snowblower needed a tune-up. Joe Dietrich at Precision Small Engine Service distinguished himself by not only how he and his team took care of me, but also by taking the time to educate me on what makes a snowblower truly great. There is a difference between an average snowblower and a great one. Joe is passionate about what that difference is. The result... I just ordered a new Ariens snowblower from him.
What do each of the above products / services / experiences and artisans have in common? Two things...
- They are "category of one" - they are "it" in my world. I choose them and I am unafraid to pay up for the experience.
- They create a legacy. Long after the product / service / experience is delivered the artisan and/or their work is remembered.
There are few true artisans in the world. Most people who make a product or service are interested in excellence but actually committed to quickly getting things done and moving on to other things.
Interested people do what is convenient. Committed people do whatever it takes.
Few people are committed to the effort to do something extremely well - lasting - meaningful. We live in a disposable world. Furthermore, the larger the company - the more likely "free riders" will attempt to ride the coat tails of true artisans by failing to live up to the brand promise.
What sets true artisans apart...
- The story matters... The journey matters as much as the product / service / experience.
- Artisans care passionately... About their craft - the integrity of their reputation - the outcome.
- Artisans do not compromise. They do not cut corners. A true artisan's standards are higher than everyone else's.
A story from the Walter Isaacson's biography of Steve Jobs
illustrates an uncompromising mindset of a true artisan. An engineer once told Jobs, "The only thing that's important is how well it works. Nobody is going to see the PC board."
Jobs' reply was and is beautiful and timeless... "I want it to be as beautiful as possible, even if it's inside the box. A great carpenter isn't going to use lousy wood for the back of a cabinet, even though nobody's going to see it."
Companies have an opportunity to be artisan - but only if they choose to do so consciously and carefully.
Artisan companies hire artisans - no one else.
- Artisan companies hire artisan engineers.
- Artisan companies hire artisan customer service team members.
- Artisan companies hire artisan salespeople.
It begins with you. Be artisan.
Our Clients often tell us that Talent Managment is one of their biggest challenges. A large contributor to this challenge is a lack of accountability created by little to no feedback.
Talent management has many parts and stages, but always begins with proper onboarding. The onboarding starts during the hiring process when you start building expectations of the job. During the interview process you should begin identifying specifically what the job requires and creating a mindset of what they will be expected to do. This is also essential with existing team members - both high and low performers. Team members need to have a baseline to which their performance is measured by them and management.
Here are 3 steps to effective onboarding and coaching:
Create clear expectations: Too often we see managers that basically hand over a rough job description and expect the new team member to interpret it the way that the manager does. Unless your new team member is telepathic – assuming they will understand it like you intend it will not likely work out well for either of you.
Not setting clear expectations for existing team members can lead to frustration and resentment for one or both parties. How can you expect them to perform well if they do not know what it is that they should be performing?
During the onboarding (and also the interview process) you should make crystal clear what is expected of your new team member. I recommend sharing this information via email or written so that you can refer back to it as needed.
Clearly describe the activities. What is the specific action to be taken? How is this to be done? What tools should be used? When is this activity to be completed?
What type of reporting do you require? What should this contain? When should it be sent and to whom?
Create accountability: Provide feedback on the expectations that have been set. Do not wait for a quarterly or annual review. Create fast feedback loops to provide critical observations and advice on a weekly or monthly basis.
We have found the Rainmaker 3-3-1 process to be very effective in creating a safe environment to identify how things are going and how team members feel things are going. Since this is more of an objective approach it is easier to take issue with the problem, rather than attacking the person.
The Rainmaker 3-3-1 is very simple:
- What are 3 things going well?
- What are three things not going well or that can be improved?
- What is one thing that you need help with?
You can also include 1-3 committements that you will make between now and the next 3-3-1. We recommend holding a 3-3-1 dialogue monthly at minimum.
Without the use of fast (not annual) and regular feedback loops, you may only hear about an issue when it is too late. With the Rainmaker 3-3-1 process you will have a better “ear to the ground” on what is really going on and will be able to address issues before they become bad habits.
Create and execute a customized coaching plan: You’ve created clear expectations, you’ve provided feedback about how those expectations are or are not being met, and now its time to make a plan to keep on track.
Developing and executing a coaching plan goes hand-in-hand with creating accountability – so you can use the same 3-3-1 format for this. By having an open dialogue around what is going well, what is not going well, what you need help with, and creating commitments from one 3-3-1 to the next; you can ensure that you and your team members are in alignment.
Review the previous 3-3-1’s to ensure that what was going well is still going well and that what was not going well has improved.
Holding team members accountable should be a norm – as well as team members holding you accountable. If you do not do what you say you will do, you lose credibility.
You should follow these steps to get your new sales team members performing at their best as quickly as possible.
Caution: The Rainmaker 3-3-1 Feedback Process should be a support to your other communication, NOT the only avenue for communication and feedback.
Only star performing salespeople matter - particularly in the long-run.
Sounds cold doesn't it?
Repeat this statement ten times... "Only star performing salespeople matter." Believe it. Live it. Be it.
When I talk with a CEO and/or sales manager, they often "head fake" me. They say they believe in hiring and retaining only star sales performers. Yet few actually live it. Most sales teams have a select few salespeople who out-produce everyone else by a factor of 10 or 20. And most sales teams have a few charity cases - salespeople who produce barely enough revenue to pay their own salary. What "saves" most low performers is some past endeavor - perhaps one time string of strong sales (aka got lucky) or the low performer is related to or grew up with the sales manager or CEO and is therefore untouchable.
Allowing low performers to stay obviously kills the potential of your sales team.
Imagine watching your favorite baseball team and hearing, "Next up to bat is Johnny Wasgood... He is one of the team's charity cases... The last time he actually "hit the ball" was in 1990 when the owner teed up a big deal for him..."
Absurd right? No baseball team that wanted to be competitive would do such a thing!
Then why do this?
Yes, I do believe in charity. I give to my church. I write a check to my favorite causes from time to time. But I absolutely do not believe in charity in my business. My business is an S-Corp, not a 501c3 (nonprofit).
I am committed to growing my business and I can not do so with sales talent that is average or worse. I must have only star performers.
Interestingly, recent high performer research is compelling. I recently read a FastCompany article - "Are Star Performers The Only Employees Who Matter?" And as researchers Herman Aguinis and Ernest O’Boyle Jr. have found, star performers (who account for four-fifths of a company's output) - cut across fields.
Star performers create extreme value.
Following are seven things you must do in order to truly have a star performer sales team.
- Commit. This is the most important. You must decide you are going to lead a world class sales team and company. Decide that average and mediocrity is for the "other guy". Decide to cut loose the driftwood that you are paying charity taxes on.
- Set your expectations high. Chances are you have a star performer or two. Expect two things - an improved top level sales revenue figure and expect to add additional star performers to the team.
- Make sure what you believe star performance to be actually is. Some low performers "pose" as star performers because they have figured out a way to make sales with little effort, ability, and skill.
- Set performance expectations - for activity levels as well as actual sales. While many salespeople put in the time and make sure the right activities are completed, others "pose" as if they are and rely on a big account or the last big sale (got lucky) to carry them. Star performers are naturally hungry for the next sales opportunity.
- Set time limits. Give salespeople a chance to succeed and give them a time limit. Make sure they know how much time they have to make quota so that if they know they are not cutting it, they can seek other opportunities elsewhere. Salespeople who are unable to make quota must leave to work for your competition.
- Always be hiring. Great salespeople are often found. If you develop a reputation of high performance and being fair, great salespeople will find you. If you are serious about having a team of star salespeople, you must always be looking for great sales talent. The best way to do so is to ask your sales team, "Who do you hate coming up against in the marketplace? Who do you hate losing to?"
- Always confirm the talent potential of your sales candidates. The best salespeople have specific Behavior traits and Values that drive them to perform. If you are not using a valid sales personality assessment to identify the performance potential of your sales candidates and current sales team, there is no way you will build a team of star sales performers.
It is up to you. Keep only star sales performers.
Do you allow your sales team to give away service to get the sale?
I learned at a young age the implications of giving away service to get the sale. When I was 16 years old, I had a part time job delivering appliances. Soon after I was hired, I came to realize the tension between service and sales.
I would hear the head salesperson say, "Don't worry sir. We will get that old refrigerator out of your house and we will do it completely free. Don't you worry about a thing!"
There was no "we". The salesperson himself was not worried because his job was done when he made the sale. He was not going to deliver it. The service department was going to make the delivery. He did not care that the oldrefrigerator was an original double door tank from hell - the "brown bastard".
The salesman did not care that the old refrigerator was actually installed and then the house was built around it. He had zero incentive to identify the true cost of delivery. We literally ended up taking it out a second story livingroom window and we risked serious injury to ourselves.
The salesperson gave the service away for FREE. And the service team - my colleague and I paid the price and we were not compensated for the inconvenience nor pain and suffering. And worse yet - the company and shareholders were not properly compensated for the value created by removing the the old refrigerator.
This was to be my first experience with a salesperson saying whatever that was needed to be said to get the sale and then other departments - particularly service paying the price for that promise.
This kind of thing still goes on 25 years later.
One cannot blame the salesperson - they only do what the systems and company allow them to do. Furthermore, most companies create a service department as a reaction to solve Customer problems - not as a proactive strategy to add value to the Customer. For most companies, the service department is the "red headed stepchild".
If this sounds like you, it is time to make a change.
Non strategic CEOs give service away or charge breakeven prices.
Smart CEOs turn the service department into a profit center and they bill everyone - particularly the sales department for services rendered.
Following are six things you can do right now to stop giving away service and recapture the value the sales department used to give away.
- Create separate internal profit and loss statements to create awareness of a "bottom line" responsibility for the service department.
- Incentivize the existing VP of service to pay attention to their profitability.
- Provide the service department the ability to internally charge for their services and then enforce it.
- Require sales to disclose where service is "given away" in invoicing.
- Shape the mindset of your Customer to believe the service you offer has value and charge separately for it.
- Shape the mindset of your service department to believe the service they deliver has value and that value must be fully-compensated.
I have come to realize the service department can be a real driver of profitability for any business. The key is for the CEO and service department to commit to transitioning from a breakeven or loss center to a profit center and then charge both internal and external Customers for that service.
Always remember... All problems start at the head and all problems walk on two feet.
I paid a coach a lot of money to share this wisdom with me and it has served me well. It is burned into my soul.
If you want to fix sales - the C-suite - you, the CEO must take charge and commit to doing so.
Interested people do what is convenient. Committed people do whatever it takes.
Now the important question... Mr. or Miss CEO, are you truly committed to improving your sales? Will you do whatever it takes to hire the best salespeople and put the best sales processes in place? Or will you guard the status quo?
Unfortunately, most CEOs are interested in improving their sales and are committed to the status quo.
I know from experience. It sounds so counterintuitive. When I studied economics in grad school, it was assumed that people are rational. It was assumed that if you provide solid tangible proof, people will take the obvious appropriate action to protect their economic interests.
The sad fact is many people will not. People are often married to the root causes of their problems.
Ten years ago, when I began using personality assessments to help companies hire the best salespeople and predict future sales performance, I naively thought, "All I need to do is present the evidence that we can predict future performance and CEOs will buy our solution in droves."
I did serious research (and continue to do so). I found a personality assessment instrument that was and still is leagues ahead of others in depth, breadth, and accuracy. I created a sales personality assessment algorithm, tested it, and have refined it several times. I have the evidence and it is glaringly obvious yet most CEOs do nothing - they take no action to improve their sales team and sales performance. This is especially the case if the company is enjoying significant profits.
When I look at the job fit of a sales team, what the data screams about their potential says a great deal about the CEO.
CEOs are human beings of course. Following are six reasons why I have found that CEOs do not fix their sales team...
- CEOs are habitually married to their problems.
- CEOs are married to their people - especially their salespeople.
- CEOs do not know what they do not know about the potential of their salespeople.
- CEOs sometimes know they need to do something but are scared to mess with the "secret sauce" of their "sales success".
- CEOs do not know the cost of the problem - the cost of doing nothing - the status quo.
CEOs are habitually married to their problems. Like everyone else, CEOs have habits - patterns of thought that create the same results again and again. Until the pattern is broken, the habits will continue. Habits are difficult to break unless there is a very strong catalyst requiring change.
CEOs are married to their people - especially their salespeople. CEOs have a difficult time parting ways with people they like. Relationships are formed and cemented in the early days of a company. Extraordinary feats are accomplished thorugh the power of pure, intense beleif. As the company grows, and new talent is added, distance is often put between the CEO and early-hire salespeople. The result is sales performance drops.
CEOs do not know what they do not know about the potential of their salespeople. Everyone thinks their baby is cute. Without being open to an objective, third party perspective, CEOs often have a better-then-reality perspective about their salespeople.
CEOs are afraid to start over with new sales talent. It can take six months to over two years to develop a new salesperson to their full "cruising altitude". CEOs naturally are averse to replacing talent and having to invest in training, development, and onboarding compensation.
CEOs sometimes know they need to take action to improve but are scared to mess with the "secret sauce" of their "sales success". When an entrepreneur becomes successful, it is amazing how staunchly they will defend their existing business model. CEOs naturally want to protect their "recipe for success" - afterall, "if it is not broke, why fix it?" So many CEOs fail to make changes until it is often too late and costly - particularly if they lose a Customer or a competitor comes into the market. CEOS should aspire to do what Apple does (or did anyways) - be your own competitor. Furthermore, CEOS should realize that their actual product / service / brand is probably selling a whole lot more than their sales team actually is.
CEOs do not know the cost of the problem - the cost of the status quo. Most CEOs have some degree of "business acumen" or they would not be successful. They can identify "obvious" problems that could hurt their bottom line. The challenge is the problem must be obvious and it must have a cost. Smart CEOs are always analyzing the cost of the status quo and identifying ways to improve before they are forced to.
CEOs must change their mindset in order to fix sales. Afterall, if you want to increase revenue, there is only one way - increase sales.
What can you, the CEO, do right now?
- Know the cost of the status quo - particularly the cost of low-performing sales people and poor sales processes. Most CEOs have some degree of "business acumen" - they can identify impediemnts to taking the business to the next level if they are obvious and believable. If a CEO actually has strong business acumen, when they actually see what low-performing salespeople are doing to their Customers and bottom line, they are much more likely to make real change.
- Be hungry. Stay hungry. Steve Jobs said, "Stay hungry. Stay foolish." at the 2005 Stanford University commencement speech. This is sage advice. The CEO must remain constitutionally dissatisfied with the status quo or it is a matter of time until they and their product / service become irrelevant. The CEO must not be afraid to "burn the boats" - compete with their own products and services - get rid of old strategies - drive their own innovation. By doing so, the CEO takes control of their own destiny and shapes it purposefully rather than allowing market forces to do so for them.
If you are afraid to make the necessary changes to drive sales, it is a matter of time until your company is in trouble - if it is not already.
It is time to end the ill feeling in your gut because you know deep down inside that you stand no chance at meeting your goals this quarter. What can you do? You feel you've tried everything, but, in all honesty, what needs to be done to increase sales numbers is not done because you, someone above you, or sheer stupidity is standing in the way. Significant changes need to be made, but the work and headache that come with that change will not be endured by the mediocre. Only those who are committed and have what Chief Rainmaker Chris Young calls the "Get It Mentality" will do the dirty work to increase sales.
Read these articles or at least some of them. Then, it is up to you to decide if you are willing to tolerate and work with a sales team who is just . . . . mediocre. Decide to be on the right side of the spectrum.
Before you can end the quarter with high sales, you will have to identify how good or bad your sales team really is. Although all sales teams have some level of dysfunction, too much dysfunction can send sales numbers to an all time low. Read more to find out if your sales team sucks.
While the "nice" guy is great in many professions, they will always finish last in outside sales. They may get hired because they are likeable, but when put out in the market, they fail to deliver and ultimately finish last. There are several things you can do to ensure you get the right person in your outside sales role. Read more about it here.
Making a sales transformation is difficult, especially if you have many team members who resist the change. Often times, those who resist change are those who are causing the problems in the first place. You will have to make tuff decisions if you want to make any real change, and it may mean ridding of those protecting the status quo. Find out how one of our Client's faced this challenge in making a sales transformation.
Contrary to popular belief, growing your salesforce does not equate to more sales. Often times, more headache is the result. Why? If your sales team sucks right now, it is probably because you or someone before you did a poor job in hiring. If you hire this way again, you will only get more bad salespeople. Learn how to grow sales without growing in numbers here.
What keeps CEOs up at night? The list is quite long actually, but there is one thing that needs to be addressed because it is the one thing that affects all the other things preventing CEOs from more ZZZ's. Right behind increased competition and a damaged reputation, an inability to attract top talent is the No. 5 thing that keeps CEOs up at night according to Forbes. Ironically, in order to attract top talent, you have to have a good reputation and you also have to fight off the competition for the most talented candidates in your industry.
Although Ambien is likely the best antidote to more sleep, popping a pill, unfortunately, will not improve the level of talent on your team. The reality is - there is no quick fix to attracting top talent. It is an extremely difficult task, and it all starts at the top.
The Law of Attraction
People are attracted to things and people that are like them. This is the law of attraction. My point is if you want to attract top talent, you have to create a culture that is like them. Obviously, the personality of top talent will differ based on industry and niche. If top talent to you is the young, tech-savvy individual, a culture with traditional values and little room for change will not attract them.
Our friends at Hubspot are prodigies when it comes to building a culture that attracts the top talent. From endless vacation to complete autonomy, they create a company that people love, which gets them some of the best minds in inbound marketing.
If your culture sucks, build a better one. Figure out what your company values are and emphasize those things to candidates. Ensure that what you value is consistent with what the top talent values. For example, a company who values time put in vs. results produced may not attract the results-oriented candidate you are seeking.
One last thing . . . Make your culture evident. You have to live, breathe, eat and $*!% your culture. Yes, whether you like it or not - you will create a culture. Sometimes it smells prettier than others. Just remember . . . You are what you eat, which brings me to the next point.
Yes, You Are What You Eat
Considering the last analogy I used - this sounds disgusting. I think so too, but having bad talent on your team is far worse. Low performers suck the lifeblood out of you, your company, and other team members. If you hire crappy, you will create a crappy culture. I know it is not proper English to say "crappy," but it isn't proper anything to hire people who are not fit for the job.
I hate to say it, but you sometimes have to take out the trash to purify your culture. Stop eating fast food, throw out the pizza in your fridge, and start ordering fine cuisine. Your new top talent will appreciate it and so will your checkbook!
Conduct a Smell Test
When you create a strong culture that attracts top talent, you also attract the posers. Candidates who are well-aware of the type of people you want on your team, will make themselves very appealing to you. Do not let them fool you by running every candidate through a validated psychometric assessment.
Although you may think your "gut" is great at telling the good guys from the bad guys, you are not that good. Think you are that good all you want, but the top talent doesn't like to hang with bottom talent. When you hire based on gut instinct, you will hire misfits and your top talent won't hang around to work with misfits.
Keep Them Around
Even if you successfully attract top talent, you still have to keep them. There will always be greener pastures for top talent. The same drive that makes them great at what they do also drives them to find better opportunities. If they don't find opportunities in house, they will find it elsewhere.
In order to retain, you have to keep top talent engaged. Keeping them engaged means you have to first motivate top talent in a way that they want to be motivated. And no, money is not the ultimate motivator. What motivates an individual varies based on what they value. It may be helping others, creativity, and for some, money.
In addition to the variable motivators of an individual, you also have to consider the three fundamental motivators that Dan Pink addresses in his book "Drive." That is, all employees are most engaged when they have autonomy, purpose, and mastery. In other words, employees want to be self-directed, know that what they do has a purpose, and get more competent at what they do. You can read more about Dan Pink's book and employee engagement in Worst Possible Approach to Coaching Employees & What You Should Do.
Attracting top talent is not the job of your hiring managers, it is not the job of the marketing team, and it is not the job of the recruiting team. Attracting top talent starts with the C-Suite because the teams below them do not have the manpower to change the company's DNA. You are the one responsible for making your company culture appealable to top talent. So put your Starbucks down, take the rose colored glasses off your eyes, and see what is/ is not working to attract the wolves to your door. Then, and this is probably most important, decide to do something about it! Your sleep cycle will thank you.
In a recent post on YoungEntreprenuer.com, Andrea Huspeni shares the results of a study by Eckerd College that found 14 variables that measure one’s “entrepreneurial mindset”.
An entrepreneur is an individual who organizes a business taking on financial risk to do so. Generally speaking, entrepreneurs are creative in developing a business plan and putting it into action to create a profitable outcome. Entrepreneurs share some remarkable traits like optimism, persistence, a future-focus, and self-confidence, but an overextension of some strengths can become a weakness. However, an entrepreneur rarely becomes a great leader because they are simply not "wired" that way.
In her article, Andrea also shares that the study found significantly lower scores in interpersonal sensitivity amongst entrepreneurs. Unfortunately, interpersonal sensitivity is essential to effectively connect with team members and lead an effective, successful team.
From previous and current experience I can share that working with an entrepreneur-type leader can be extremely rewarding and extremely challenging. It can be frustrating to pick up the pieces that get overlooked or forgotten, keep up with the quickly changing ideas, and constantly adapt to where you are needed, but you will not find a leader that provides more opportunity - you've just got to hold on tight for the wild ride!
Following are the traits that make a great entrepreneur, but warrant a word of caution when that entrepreneur is in a leadership role:
- Independent. While you cannot disagree that most, if not all, entrepreneurs enjoy and likely demand independence; it is important to remember that entrepreneurs must also lead a team. An entrepreneur's actions, decisions and tasks (or lack of) directly impact their team. Entrepreneurs should be sure that while they work independently, that they also provide their team with what they need to complete their responsibilities. Yes, entrepreneurs are busy... they still need to make time.
- Preference for little structure. Entrepreneurs tend to prefer flexibility in their work environment. While flexibility is necessary to keep their busy minds engaged, the “run-and-gun” personality may forget to complete important tasks because they have already moved on to the next “fire”. Entrepreneurs need to have the right team built around them and provide support wherever and whenever possible to avoid important tasks being overlooked.
- Passionate. As Andrea explained; “passionate entrepreneurs are completely obsessed with the mission of their startup, along with standing behind its values.” Without passion driving them to move their business forward, they would have walked away when the going got rough. Being too passionate can lead to being overly emotional which in turn leads to a very inspirational environment or a very negative, disengaging environment. Entrepreneurs have to be careful to keep the passion but remain objective too.
- Action-oriented. Again, the entrepreneurial style is a fast mover with many big ideas – always looking for the next opportunity. Entrepreneurs need to ensure that while they are constantly moving forward that they also take the time to slow down to make the right hires and manage your team members effectively (or get someone else to).
- Idea generator. Entrepreneurs tend to move quickly from one idea to the next. This is great for finding new and different ways to solve problems, but can cause reduced clarity for other team members. It can be challenging to enroll team members in the newest ideas when there are too many new ideas being shared daily. Being cautious in how many and which ideas they share with the team will help optimize this entrepreneurial trait. Quick tip for entrepreneurs: Write the idea down and sit on it for a few days before presenting it to the team. Make sure you have done your homework and that you feel strongly about moving forward.
- Risk Taker. When the start up only involves one individual – all the risk falls on one person. However, when multiple partners and team members are relying on the success of the business, entrepreneurs should consider taking smaller risks and heavily weigh the potential for success. It is no longer just the entrepreneur's bank account and life that will be affected.
If you are an entrepreneur without leadership responsbilities or desire - keep doing what comes natural to you. But, if you are an entrepreneur-type leader with a desire to become a more effective leader, we suggest you follow the recommendations above.