Myths of Sales Management: The Entrepreneurial Salesperson
by: Dave Kahle
I just had a phone conversation with a client who had a familiar story to tell. He had built his business on the model of an entrepreneurial sales force. Give them a territory, pay them straight commission, and tell them they are in business for themselves, free to develop the customers they chose with the products they wanted.
And for a couple decades it had worked well. The business grew and expanded. More entrepreneurial sales people were added, and the model was duplicated over and over again.
So far so good. But then the growth in sales began to slow down. Three flat or declining years in a row has caused this company president to question the status quo. Not only is business flat, but he's unable to get his sales force to promote the lines that he wants to promote, he's unable to get them to use some of the new technology that the company wants them to use, and he's unable to get them to prospect for new customers. Now he's faced with an experienced sales force, who for the most part, are unmanageable.
The culprit? A sales model that was built on the concept of the entrepreneurial salesperson. There was a time when this model was effective, but in today's competitive economy, there are serious difficulties with the entrepreneurial model.
This model works best when the market is growing. As long as there is more and more business out there to be had, the focus of most companies is to grab as much as they can, without caring a whole lot as to which customers and which products make up the business. Employing a group of entrepreneurial salespeople reduces the demands on sales management so that the company's executives can focus on building the infrastructure necessary to keep up with the consistent growth.
As we all know, this was the case for most of the previous decade. By shifting the responsibility for sales management unto the salespeople, however, you give up much of your management influence. In effect, you cede management of the sales force to the salespeople. And they generally make decisions that are in their own self interest, not yours. The very concept of an entrepreneurial salesperson is that he/she will manage himself. By definition, you abdicate your managerial role and cede management to the salesperson.
Is it any wonder that you can't direct the salesperson?
As long as business was consistently growing, this wasn't an issue. But now it is a concern. Most distributors have experienced a reduction in sales volume over the last few years. Many have come to the conclusion that they have to initiate significant changes in their sales organizations if they are going to be profitable and growing.
Now, instead of just more business, progressive distributors want to expand the business in target accounts, emphasize key product lines, and acquire new accounts. In other words, they want to direct the sales force more precisely, to focus them on the behaviors that further the company's strategic objectives.
At just the time that they want to more precisely focus the sales force, they are faced with a group of experienced salespeople who have become satisfied and content.
These sales people would rather not move out of their comfort zones of established customers and established products. They have no desire to do the hard work of prospecting for new accounts. And many are content with the diminished incomes of the past few years.
The culprit in this difficult situation is the entrepreneurial model. This is not to say that there are no entrepreneurial salespeople. Certainly a certain percentage of every large group of sales people will turn out to be highly motivated, constantly improving, driven to succeed and willing to accept your direction. From my experience, this is about one of 20 sales people. The chances of your entire group fitting this mold are slight. The issue is not the occasional exception to the rule; the issue is the model that no longer supports your strategic interests.
What to do?
The company president on the phone was looking for solutions. How could he change the established routines, attitudes and practices of his experienced sales force? How could he revive the slumbering entrepreneurial drive? How could he gain some degree of directability?
Unfortunately, the answers are larger and more challenging than that which could be discussed in a half hour phone call. Decades of a certain way of doing business have resulted in attitudes cast in granite. Half-way measures can't be counted on to work.
The solution is going to require strenuous work.
Wipe the slate clean and start over. Begin with the definition of what you would like the salespeople to do. What do you really want your sales force to do? Noodle your ideas onto a blank sheet of paper, and review it for a couple of days. When you have a well-articulated full page of detail, you will have taken a major step forward.
Once you have a clear and specific idea of what you want them to do, then start dealing with implications of that. For example, does you compensation plan support the behavior you want? If not, then change that.
Does you training and development program equip the sales people with the skills that support your vision? If not, it's time to revise that.
Does you infrastructure support your idea of what the sales people should be doing? In other words, does customer service, purchasing, delivery, operations, sales management, etc., all support the revised job description? If not, make some refinements.
Finally, do you have the kind of people who will whole-heartedly embrace your new vision? If not, then it's time to begin the process of recruiting new sales people.
Each of these is difficult and challenging issues that speak to the heart of how you have your sales force structured. Designing and implementing these changes can take the better part of a year or two. Each of these initiatives will be met with resistance from some. It won't be easy. Before you rush into the fray, however, make sure you count the cost. You may decide that you are not up for the task and that it is easier to continue to cede management to your sales people.
Should you decide to revise your sales force, you can anticipate arriving at a focused and directable sales force - an enormously powerful asset for any distributor.
About The Author:
Dave Kahle, The Growth Coach(r), is a consultant and trainer who helps his clients increase their sales and improve their sales productivity. His latest book for sales managers is Transforming Your Sales Force for the 21st Century (http://www.davekahle.com/smtransforming.htm). You can also sign up for his sales ezine called "Thinking About Sales" at http://www.davekahle.com/smmailinglist.htm. You can reach Dave personally at 800-331-1287 or by emailing him at info@davekahle.com.
March 2006
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