Tuesday, July 14, 2009

Would You Fire Your Top Sales Person?

A good friend (and top sales executive) and I were having an interesting conversation this morning. One of his regional VP's was having great difficulty with one of the organization's top sales people. We were talking about what to do about the sales person.

The issue was that the sales person was refusing to have anything to do with the company's CRM system. Despite constant reminders (accompanied with training, etc.) the sales person would not update the CRM system. The sales person would do some nominal updates, but not provide the information expected of each sales person in managing the CRM system. In conversations with the RVP, the sales person would always say, I'm one of your top producers, why don't you just leave me alone and let me sell. The CRM system is a waste of my time.

My friend and I were discussing how the issue should be handled. While it might sound crazy, I suggested the sales person's manager have a serious discussion, put him on a 90 day plan to get the sales person into compliance, provide coaching and training to help the sales person meet the standards management had set for performance. If at the end of the 90 day period, the sales person was still not meeting expectations, the sales person should be terminated.

Many managers face this issue, it may not be about the CRM system, it can be any other issue, but if your top revenue producers fail to meet performance expectations, they should be terminated --- like any other sales person who does not meet performance expectations.

I'm a bit hard nosed about this, but great performance with sales people is not just revenue production. We have other expectations for performance from sales people: Expense management, team work with others in the organization, customer satisfaction, price/margin management, and, yes, paperwork and administration.

Management should define performance expectations in a way that focus on building the business and has eliminated all non value add elements. These expectations are built on executing the strategies and priorities of the organization. They are based on the culture and expected behaviors of the organization. And, inevitably, Hopefully, these expectations truly define what management expects of performance and behavior of all people in the organization.

If the performance management system/process does not reflect management's expectations of performance and behavior, then they system needs to be fixed. When people don't meet performance expectations, it is the manager's responsibility to identify the performance deficiencies and to coach the person in meeting expectations. However, if the person fails to meet performance expectations, despite all coaching and training, the person needs to be terminated.

If we don't hold our people accountable for meeting performance expectations, then we have no performance management system in place. No one is excepted from this---including the top revenue producers. Great sales performance is never one dimensional, we need to make sure our sales people are performing on all dimensions.

I went further in my discussion with my friend. I suggested if his RVP was not holding his people accountable for meeting performance expectations, then his RVP was failing in his performance. Perhaps it was time to coach the RVP on managing performance.

Am I being too hard nosed in my views?


Kimmo Linkama said...

It's easy to see at least two sides in this argument.

1) The salesperson just doesn't see the value of the CRM system, in which case coaching is definitely in order.

Or, the CRM system is so complicated that it takes unproportional amounts of time to comply with what the person may see as mere hindrance to doing his/her job properly.

(I've had the misfortune of working at a company where most of my time went into reporting instead of doing my job.)

Dave Brock's Blog said...

Kimmo, thanks for your comment. You make good points. In this particular example, for the sake of brevity, I didn't review the CRM implementation. It was a good implementation, the management team and others were using it well, this one individual didn't want to be bothered by it.

The issue of poorly implemented CRM systems, offering no value to the sales person can fill any number of posts---you've given me an idea for some new posts ;-)

Thanks for the comments.

Jeff said...

As a professional seller with 15 years outside technical sales experience, I find a few disappointments in your thoughts regarding CRM implementation:

a) Taking a SUCCESSFUL salesperson away from what he/she does best to focus on admin does not make sense from a business point of view. If it is so critical to have the CRM information entered, isn't it cheaper to have someone in an admin role do the data entry and keep the seller focused on driving revenue?

b) One of the worst faults management can make is trying to shoehorn everyone in to the same size and type of shoe. Perhaps this sellers external focus is what has made him/her successful. Shifting that focus internally could be a fatal flaw to the employer that has the net result of that seller working for the employer's direct competitor-who may be more flexible and realistic in their expectations. We should learn what has made this seller successful and try to take those positives to the others on staff while gently coaching the negatives.

At the end of the day, the company fails by losing key personnel. Putting your top seller on a probationary period for not adapting to something he/she sees no value in will cost the employer in the long (and perhaps short) run.

Happy Selling,

Dave Brock's Blog said...

Jeff: Thanks for your comments, I appreciate you taking the time to give such a thoughtful comment. I think you may have mistaken what I was saying.

The article is not "about CRM." Like you, I have seen too many CRM systems that have been implemented poorly, imposing a terrible burden on sales people and decreasing their productivity.

The article is about performance management. If the example had been that the sales person refused to provide forecasts, or refused to comply with budget/spending standards, or was abusive in their relationships in the office, or only showed up for work 2 out of 5 days; if after coaching the person refused to comply with these standards, that sales person should be fired.

Everyday, we see people exercising tremendous creativity and innovating in their jobs, but still meeting the performance expectations of management.

If we have no performance expectations or do not enforce them, we have no strategy for the business, we have no consistency in execution, we have no consistency in the way we service and support our customers. The business quickly fails.

There are many appropriately aimed barbs on CRM systems. It is true,we see many CRM systems that reduce productivity. At the same time, a well designed and implemented CRM system can have a tremendously positive impact on productivity.

The fault is less that of the tool but on bad management/leadership in implementing the tool, lack of understanding and commitment to what results can be produced.

Jeff said...

Dave, my response was not specifically about CRM, it is more about the fallacy that you can manage everyone the same.

At the end of the day, give the top seller a little less than perfect review, but to consider getting rid of a top seller because they are not fully engaged with a policy (that will probably be changed in a year or two, anyway) is quite short sighted, in my opinion.

I would place forecasting, budgeting, and the others you mention as mission critical in a sales organization. Showing up for work is as well. [However, if that top seller is producing top sales and working only 2/5 of the week, management really needs to find out why the other staff isn't performing while working 100%]

I would argue that a quicker way to for a business to fail is to lose the top sellers and the relationships they carry with them as they walk out the door. A top performer is driven to perform. If you ask them, most will tell you that internal bureaucracy is (including admin tasks) keep them from selling even more. That same person will perform elsewhere to the detriment of your company if you run them off.

My management manages everyone differently and focuses on their strengths, not their weaknesses. Why force someone to be miserable if they will produce results when they are satisfied?

Now, an underperformer not meeting expectations? That is a different story altogether.

Dave Brock's Blog said...

Jeff: Thanks for keeping the discussion going. Your points are very thoughtful.

Everyone is different and needs to be managed, coached, and developed in a manner that is most effective in motivating them to perform to meet or exceed expectations.\

Managers blindly enforcing policies are very dangerous and add no value. Managers enforcing performance expectations, coaching and motivating people to perform to or exceed expectations are doing the right thing.

Focusing on building strengths is important to developing people. Minimizing the impact of weaknesses is also important.

Unfortuantely, there is a certain amount of administrivia that is a part of the sales person's job. Badly designed systems are bureaucratic and a waste of productivity and resource. Well designed administrative processes will minimize the impact on productivity.

I really think we are in violent agreement, but may be talking past each other. Feel free to contact me directly if you would like to explore this issue on the phone. It would be my pleasure to speak. Email me directly at dabrock@excellenc.com.

Jeff, thanks so much for your active participation in this discussion. I really appreciate it and the points you are making.

Regards, Dave

Allan Himmelstein said...

Great and interesting post. Although the salesperson is an employee, they still have to be sold in what's in it for them. The filling out of "paperwork" has been a chronic problem with salespeople for years. The chronic complaint, do you want me to write all this stuff or talk to the customers. Come up with a financial scenario for this particular salesperson, and demonstrate to yourself and to the salesperson whether the business he brings in is profitable. It is worth devising a scenario where all your salespeople are judged like a separate P&L or ROI. It maybe that when you consider all the ops problems that this person is just not worth it. Or you may find the other CRM Salesperson generates more $$$.