Peter Drucker, the eminent management theorist of the 20th century, was noted for saying, “The bottleneck is always at the top of the bottle.” This is never truer than it is with sales success.
At October’s LBM Strategies Conference, the topic of my keynote presentation was be based on two realizations over a 40-year career. One is that we have a high degree of transactional dependability in our industry and therefore a high propensity for mutual complacency.
Transactional dependability is a term introduced in my book, “Sales Economics” (2019), and seeks to illustrate the different levels of transactional consistency enjoyed at various levels of the supply chain.
For example, a sales representative working for the Toyota corporation enjoys nearly 100% transactional dependability given that dealers are, after all, contractually obligated to meet sales quotas, service level standards, promotional outlays, and other commitments that guarantee transactional dependability. A salesperson selling the identical product for a Toyota dealer, however, faces a very different degree of pressure and must close each new deal with every walk-in customer. Same product, but a very different level of transactional dependability.
Obviously, manufacturer representatives enjoy a high degree of transactional dependability, but so do the salespeople at the LBM dealer (which my studies have calculated at about 85%). Therefore, sales trends move with the ebb and flow of economic fluctuations, with some salespeople significantly impacting the results while others merely ride the tides.
This leads to the second term I have shared during lectures over the past few years—mutual complacency. Mutual complacency is the (usually unrecognized) relationship that evolves when the sales manager avoids holding salespeople accountable to performance-based metrics.
In other words, if the transactions continue to flow when the economy is robust, why rock the boat? If the salesperson isn’t accountable to defined performance, then the sales manager is also off the hook to hold the salesperson accountable to any performance standards. Signs of problems eventually emerge during downturns, leading to solutions that are nothing more than urgently applied Band-Aids. At this stage, an organization realizes it has passed through a zone of mutual complacency too late when sales results become leading indicators; prospecting energy becomes an urgent matter; and finger-pointing begins.
In a sales-driven organization, sales results are not leading indicators, but instead lagging indicators based on prospecting data, closing ratios, and appropriate measurement of prospect opportunities. In the absence of proactive performance measurement, during downturns results become leading indicators that “predict” it’s time to start prospecting.
In sales-driven organizations, however, prospecting is not a sudden initiative, but instead always the primary skill of sales performance. The moment prospecting becomes a matter of urgency, it’s already too late. Ultimately, the panic of the market ebb reveals and breaks down mutual complacency. Suddenly the manager asserts that the salesperson “has lost their hunger and drive.”
More likely, the manager failed to see the lack of motivation that existed all along, finally manifested by the ebbing tides. Usually, the salespeople don’t “lose” their drive; they were mistakenly hired without it.
Numerous studies have proved that the most important factor of successful performance (by the employee) is the role of leadership. It’s the manager who must hire the right talent, set the right expectations for performance; coach it; measure it; and monitor the link between performance data and results. In other words, the manager is never complacent and puts prospecting and new business development at the forefront of all sales initiatives.
My preferred motto for clients faced with a sales challenge is to fix the problem, fire it, or ignore it; but for Pete’s sake, stop whining. Better stated, of course, by Peter Drucker and revealed by the various behavioral studies, the bottle-
neck really is at the top of the bottle. If the leadership doesn’t get the job done, the finger-pointing should stop there.