Developing Low Performers to Improve Sales Performance

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James Pepitone

James Pepitone

Managing Partner at Designed Work
Dr. James (Jim) Pepitone is Managing Partner at DesignedWORK, consultants and advisors in the design and management of knowledge work. The firm designs and improves the human work systems on which knowledge work depends. Dr. Pepitone is recognized for solving problems and improving the performance and productivity of people-dependent operations (e.g., sales, service, technical, creative and professional). His client results include improved operational and financial performance, greater utilization of human capital, increased employee engagement and retention, reduced or resolved workforce problems, and reduced time and effort required for day-to-day managing. Dr. Pepitone earned his BBA in operations management and MBA degrees from The University of Texas at Austin, and his MS in organization development and Ed.D in change management degrees from Pepperdine University.
James Pepitone
James Pepitone

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“Are you serious?” asked the VP of Sales, following our suggestion that he next assign us to develop the lowest performing 20% of his salesforce. “That group needs career counseling, because they sure weren’t meant to be in sales . Why invest in them?”

“Our interview data suggest these people may not be getting a clear shot at success,” I responded. “We think some special attention could make a big difference.” To this the VP quipped, “I’ll give them some special attention . . . how about a kick in the pants. Maybe they’ll get off their butts and begin to hustle like everyone else.”

These words may characterize the perspective of many executives toward their lowest performing employees. Like many sales organizations, this one ranked its people by their sales performance. Management used this monthly ranking to identify who was contributing most to the organization’s sales objectives. Management also made sure each sales representative knew where he or she ranked and circulated the ranking throughout the organization so others knew the score too.

Many organizations in which performance is not so easily measured use a more subjective process to rank their people into performance categories that connote standing within the organization (e.g., A’s, B’s, and C’s; Exceeds Expectations, Meets Expectations, and so on). Some organizations even place limits on the number of people who can qualify for each rank. This way, management can be sure to identify some employees as “low performers.”

The result is the same, those ranked highly are the most valued and supported, those ranked in the middle are necessary yet less well-supported, and those at the bottom . . . well, management’s hoping that by calling them out they’ll take the hint and either improve their performance or move on without a hassle. What’s widely missed about this management technique is its pernicious impact on many of the people ranked in the middle and bottom categories.

Unintended Effects

I reminded the VP of his first exposure to the new applied science of humaneering  and promised there was much more. The redesign of his new-hire development program unleashed surprising new potential for performance achievement, while accelerating initial development-to-competence from 15 to 5 months. We noted during our field interviews for that initiative that about 30% of the sales representatives were energized by their ranking, whereas more than 60% indicated responding in unconstructive ways (e.g., disregard, despondence, reciprocity). Even prior research had established that institutionally ranking someone at a level below their self-appraisal (however inaccurate) is demotivating and frequently cited as a contributing cause for less-productive behavior.

The negative effect of ranking is generally worse in situations where sales representatives face extenuating challenges, such as when dealing with less favorable markets, less effective managers, lack of support, or other intractable circumstances. Adding insult to injury, managers throughout sales operations routinely accept such rankings as a valid indication of potential, and in turn systematically minimize their time and effort with lower-ranked sales representatives. Overall, the impact of ranking is more insidious than helpful for meeting management’s often stated goal to maximize sales performance.

Now, with the VP’s okay and a limited budget, his dedicated Sales Training and Development staff of 12 set out with me to improve the sales performance of the 200 lowest ranked representatives. The plan was simple – to divide up the 200 sales representatives (we referred to them as “colleagues”) among the Training staff members and develop a one-to-one remote relationship with each colleague. After some quick preparation, the staff members would reach out to their chosen colleagues by phone, introduce themselves and their intention to be helpful, and then improvise from that point forward.

In a word, the plan was to provide “coaching” that followed a humaneering-based protocol. Emphasis would be on reinforcing the colleagues’ self-efficacy (to overcome self-doubt) and on renewal of their hopefulness (to overcome generalized negative regard for the company, management, one’s self, etc.). There was no budget for travel or other significant expenses. Success would be measured solely by sales performance, and the program had six months to show results.

Cultural Remediation

The new development initiative started with a week of instruction, practice, and planning with the Training staff. There were additional humaneering principles to learn and experience firsthand, plus there were logistics to consider as this new responsibility was simply added to the Training staff’s current work load. The staff included a manager, instructional designers, instructors, editor, artist, web specialists and assistant, most of whom had worked for the company for several years in various other functions including product management, distribution, and HR. They were remarkably resourceful in gathering available background information and sales territory data on the 200 colleagues, all of whom had participated in prior training and development initiatives. We were fortunate that at least one Training staff member remembered each colleague.

The first few weeks of calls to colleagues told a story that no one could have anticipated. Initial calls were received cordially, yet subsequent calls to discover ways to be helpful provoked responses ranging from passive anticipation (“Whatever”) to unabashed hostility (“If you call again I’ll . . ..“). The calls were challenging not because of outlandish requests for support, but because of the depressed spirit of the colleagues. Many colleagues felt forsaken by the company and had come to expect the worst in every situation. The staff quickly realized its own challenge to stay positive. The dominant affect conveyed by the colleagues was resignation and despondence. Nonetheless, with persistence and good intentions the staff was able to raise the dialogue with most colleagues to a constructive level within the first month.

Over the next several months, the Training staff found literally hundreds of ways to be helpful. They helped their colleagues develop sales strategies, optimize their schedules, strategize sales calls, roll-play challenging prospects, better understand their own and competitors’ products, and find novel approaches to win over new accounts. Beyond this practical support, the staff asked insight-seeking questions, listened actively and appreciatively, provoked fresh thinking, and otherwise offered whatever emotional support they could to improve each colleague’s performance.

“I don’t understand what you are saying to my people, but it’s working” remarked the VP of Sales as all 13 of us arrived at his office for the six-month project-review meeting. “Knowing we had this meeting coming up, I talked with some of the people you’re helping. I admit I still don’t fully understand what you’re up to, but every one of them said you were helping them, and they were eager to tell me about their sales increases and new accounts to prove it.”

“That’s terrific!” the Training manager replied. “The time lag to create new business was beginning to concern us. Increased sales didn’t start to show up until the third month.” “I know,” the VP inserted, “I’ve had someone track sales for the reps you’re working with. And I like what I see.” The manager responded with a sigh of relief, “So you’re good with us continuing for another six months?” The VP shot back, “Yes, of course, but at some point I want someone to explain to me what you are doing. I think you might be on to something.”

Nothing Sells Like Success

When the project ended, the Training staff reflected on the journey they had just completed with their 200 colleagues. Among the frequent observations was the fact that developing sales performance was not so much about learning new skills and knowledge; it was actually more about being able to use the skills and knowledge we already have, most of which we come by naturally. They noted several things companies do with the intention of improving performance that inadvertently have the opposite effect.

Some tried to summarize the experience from the colleagues’ perspective. How was it that what little the staff had done for the colleagues resulted in so much improvement? They reasoned that being labeled a low performing sales representative was like a curse that continually chips away at you. When the staff was finally able to help a colleague re-develop confidence in their own ability, the colleague had more impact in their market, they gained momentum, and most went on to achieve far more than anyone imagined.

The across the board total increase in sales revenue for the 200 colleagues was $68 million, or a 52% increase above prior year performance. Their projected sales increase for the next year was over $100 million. Possibly even more remarkable, 126 of the 200 colleagues advanced out of the “lowest 20%” category. Unfortunately, this shift dropped to the “lowest 20%” category a different 126 sales representatives whose sales were previously considered acceptable. Think about that.

Takeaways

There have been many field tests of humaneering principles and methods during the past decade. There were five projects like this one, and they were implemented in diverse industries (industrial, pharmaceutical, technology, health care, and defense) and focused on sales people, field operations managers, and engineers. The coaching was provided by an internal training function in this case, by recent retirees in another, and by selected external coaching providers in the remaining three cases.
Given the sufficient differences in the five situations, yet consistency in the results, it is tempting to generalize that about 70% of the underperforming people receiving this kind of individualized development assistance can be expected to respond with remarkable performance improvement.

At a minimum, these field tests demonstrate how coaching can boost the performance of underperforming knowledge workers. They validate the power and potential of coaching, and they clarify an often overlooked source of coaching’s benefit to employees. The performance increases achieved were not the result of new performance strategies or skill development. They were the result of simply satisfying unmet human needs.

If you are interested in learning more about the human response to being ranked, try openly ranking your family members, friends or some other group’s members on their performance. To witness the long-term impact, just continually remind them of their rank.

Knowledge Workers who must individually respond to complex situations can benefit greatly from individualized development support. And what may be most helpful to them is not the development of new behaviors and skill; it is development of the behavior and skill with which they are naturally endowed.

Even more important may be the need to first assure that the management systems in which they work do not detract from their effectiveness and achievement. Many companies continue to operate with work designs and management practices conceived a century ago for work and workers far different from today.

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