Will Replacing your Sales Manager Solve your Sales Performance Problems?
This is the question faced by CEOs when the sales organisation is underperforming. They may have had faith in the current incumbent originally, but the numbers are just not coming in so that faith is diminishing quickly as the pressure builds to deliver results. As CEO, you must take action as your responsibility is to deliver profit to owners/shareholders, and executive bonuses will also suffer if the results do not hit the bank account.
Most people struggle with the decision to terminate a sales leader. Before reaching that point, you will have exhausted many options. The company has worked through the usual team training, products, territories, and marketing. The results are still not in the bank.
The reasons given for the numbers not coming in are extensive, and all sound plausible both individually and as a group, but people cannot bank excuses and reasons. From a CEOs perspective:
A reason without a solution is just an excuse.
A decision must be made about replacing the sales manager, but what is the right decision?
There are several ways of looking at this issue. Firstly, most good sales managers will leave a company where they believe the product has issues, as will their salespeople. So the product is not the problem if they are still arriving to work at the company and putting out proposals.
The market may well have shifted, and you are now operating in a price-based environment. That is an immediate sign of a lack of a revised strategy to meet a new market. That can be a lack of connection with the market, or selling capability, all of which is about the sales manager missing the market and is now dragging down on the business. But to be fair, many sales managers are seen as mere customer and team member custodians more than having the business skills and ability to design and execute a successful strategy. Consideration needs to be given to that disconnect.
Companies making the decision to swap out their incumbent sales manager may not be the solution.
In fact, 72% of new sales managers fail in under eighteen months of moving to a new company, according to research by Sales Focus Advisory. Even more concerning, 85% of top sellers promoted to sales manager fail in the first twelve months. Those statistics could make any new hire a greater risk than what you already are experiencing. The bottom line is that you need the results delivered, but which way forward now?
We have seen companies rotate through three and four sales managers in a two-three year period, each time ending up at the same point of no results being delivered.
So what is the real issue you need to resolve?
For many companies, their sales manager is an individual who has experience working in a specific industry for a number of years, be that within your company or your competitors. A good seller in their own right and still contributing sales revenue. Their skillset is based on product and industry knowledge, and these are seen as transferrable skills.
Recruiters see them as ‘safe options’ when presenting candidates as companies will immediately be drawn to a candidate that speaks their language and will fit in easily.
They are a comfortable hire as you feel you know the individual, and they also meet that criteria.
Therein lies one of the problems. Those two skills of product knowledge and industry knowledge are reliant on a company having the right strategy and providing the team with breakthrough tools. A failing sales manager is often more a reflection of a failing sales organisation than it is about just the individuals themselves. They have been set up to fail by the company as the sales organisation lacks sufficient systems, processes, and sales methodology and all the required tools that are unique to your company. Those items are all the points that provide your company with a competitive advantage in the market. Compounding this is the endorsement of the dated principle of the autonomous sales organisation culture. People are praised for being individuals going their own way. Often you have only one or two top sellers in the team providing cover for the lesser performers. The problem with that principle is:
No business can grow without a repeatable and scalable process;
and sales are not excluded from that requirement.
Replacing your sales manager with the same problem
For many companies, sales managers pride themselves on operating a team autonomously and hire people with the same intent of conduct. Everyone in the company has their own way of delivering results, and the organisation is reliant on their individual talents. Selling ability is perceived due to their longevity in the industry but typically the lowest invested skill until the company is faced with poor results. Furthermore, if your company operates within that culture, it is more affected by the rise and fall in the market than those with structure and systems. Companies with autonomy are reliant on people’s individual skills to combat what is actually required by all members to achieve a breakthrough in changing markets. It is trial and error on mass across the team as they each work out how to break through.
The sales manager’s performance may be the result of these cultures being allowed to develop within the company, or it’s their attitude and preference of management. Either way, they will not succeed for you.
But to be truthful, the company is the cause of the problem, and the sales manager took the easy road. The company has failed to demand business practices being applied to the sales organisation that would be mandatory in any other part of the company.
This certainly comes to light in many of the reviews we conduct on sales organisations. The company is efficient and effective in its non-sales areas, with solid business practices being applied, but the sales organisation is the last frontier. Consistently I find where companies are experiencing challenges in delivering the number, there are insufficient systems and processes, methodologies, and transparency in place to actually drive growth. Sales managers are reluctant to install what will most likely expose their performance if they are not sufficiently skilled. As noted earlier, that will be some 70%+ of the sales management fraternity. They are flying blind in the market, responding to perceived challenges and often addressing the effects rather than the root causes. The company suffers by not being competitive both internally and externally. If the company is not set right internally with the right structure, tools, processes, and disciplines, then you cannot expect results in the market.
Can you expect the sales manager to install the right business systems, reporting and transparency?
Unfortunately, that would be the 15-20% of sales managers left out there who are successful, and those people typically demand salary packages exceeding $350,000+ per annum and work with large-scale sales forces. They are out of the reach of many companies. Certainly, those promoting autonomies have no reference structure of the requirements, and their beliefs are polar opposites of the requirements.
However, once those business practices are installed, with the right priority and quality, the company moves forward easily, and numbers are delivered. The only question then becomes, ‘Will the sales manager adapt to the new environment, or do you need to hire someone who will?’ That question is answered by the sales manager in their conduct. This elevates the pressure on the CEOs to make the decision. Once a business has a set working plan for sales organisation improvement, the only decision regarding the sales manager is how long will they allow for the improvement to be delivered.
Following the sales analysis and business reviews, a plan can be laid out with clear steps of what is required to be remedied in a business. The sales managers who adopt the plan drive successful careers and results for their company. They shift into the top percentile of sales managers. They gain value in best practice and are highly competitive, attracting high-quality candidates who seek a professional sales organisation. They have more performers within their team and can scale the team to take more market share and regions if required.
If your company is not making the number, then you need an external sales analysis and business review conducted to identify specifically what is required to improve results from both an internal and external perspective. That will answer two questions. One is your sales organisation sufficiently geared to deliver results, and two is the sales manager willing to adopt best practice and drive growth.
Please contact our office to discuss your specific situation.
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You may also be interested in reading these articles:
- Hiring a High Performance Sales Leader
- He Says We Have Our Own Way of Doing Things
- How to Diagnose a Sales Problem
- Ascertaining the Real Value of an Effective Sales Manager
- CEOs Ask – What are the 10 Things I Should Know Before Hiring a Sales Manager
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