Busting myths of sales leadership
28 May 2020
Posted by: Andrew Hough
Thursday 28 May 2020
In the first of a new series of articles which challenge the myths of sales leadership, Andrew Hough, chief executive of the Association of Professional Sales (APS), explains why we need to solve today’s problems, not yesterday’s, to build a professional sales force.
Myth 1: As a sales leader, I am equipped to make great decisions.
Winston Churchill once joked that the War Office was always preparing for the last war. It’s no laughing matter, however. Leaders often do prepare to face past problems they already know and understand, rather than the real ones facing them in the present. The result is usually a string of costly mistakes.
In March 2020 we were all plunged into something like a war, a period of maximum disruption due to the Covid-19 pandemic. So it is a timely question to ask: are we as sales leaders really meeting the current challenges? Or are we guilty of the syndrome of addictive leadership - staying within the comfort zone of our own past experience, believing the myths of our own leadership, and making mistakes in how we handle the crisis?
I’d like to hold my hands up. Since first discussing the concept with Jeremy Moore of Zoomcow, I have been deliberating about addictive leadership with my colleagues across the APS global family. I have concluded that using yesterday’s solutions on today's problems is a syndrome I have often fallen into myself.
I’ve always assumed that my 25 years of sales experience qualify me to make executive and strategic decisions on behalf of my sales teams. Well, no. I was and I am wrong.
Why? Because my 25 years of experience don’t qualify me to know what works for a 25-year-old salesperson today. I can make great decisions about what would work for a 25-year-old “me”, always assuming the world has not changed in 25 years. But when it comes to understanding the needs and wishes of sellers in their 20s and 30s, who make up most of today’s sales workforce, I have a lot to learn.
And it is vital sales leaders should try to understand these sellers, if they are to have any hope of engaging and empowering them, and inspiring them to stay in their job.
Sales organisations rely on their young salespeople. We need them to stay long enough in the role to acquire knowledge of their company, their market, and their customer’s current and future needs.
There is no shortcut to this expertise, which is necessary if sellers are to engage their customers and give them a great experience. Then everyone wins. Capable salespeople drive revenues for both their customers’ and their own organisations. Individual sellers also benefit, because by being successful they will feel more engaged and fulfilled. Consequently, sales leaders can relax a little, confident that their sellers will stay longer in role, and thus reduce their organisation’s cost of sale.
Of course, increasing engagement and accelerating revenue and reducing cost are exactly what sales leaders are paid to achieve. So if I’m hoping to make great sales leadership decisions, I have to let go of embedded bias, and get to know how the young seller thinks, and understand what they want from an employer. Only then can I develop insight, and understand the better options I have as a decision-maker.
Millennials are different
By 2025, 75% of sales teams are likely to be either millennials (those born 1981 - 1996, according to the Pew Research Centre definition) or Generation Z (born 1997 - 2012). By comparison, very few sales leaders and managers who make critical decisions are below 45.
Several major pieces of research have looked at the changing profile of the workforce, and how the ambitions and motivation of younger people are different from previous generations. Their results have important messages for how we need to change the way we manage. One such study is by the polling and data company Gallup, in its seminal 2016 report How Millennials Want to Work and Live. Its findings, about past and present fulfilment, are summarised in the table below:
|My annual review
||My ongoing conversations
Millennials don’t feel connected
Gallup reports that less than a third of millennials (29%) feel emotionally and behaviourally connected to their jobs, compared to 32% of Gen X-ers, and 33% of the Baby Boomer generation.
This is a terrible waste, as - more than any other generation - millennials thrive on engagement. In their ideal world, work would be more than a mere job; it would be part of their identity, their self-esteem, their life. So when Gallup reports that 55% of millennials feel disengaged, the highest of any generation, and that 16% say they are actively disengaged in the workplace, that is a sad indictment of the way they are being managed.
It’s a costly mistake, too. This is the age group that should be driving the economy. Staff turnover due to millennial lack of engagement costs the US economy around $30.5 billion annually.
Every sales leader wrestles with the problems of churn in their sales teams, and complains of the difficulty of recruiting staff. Other research shows that 50% of sales millennials leave their companies because they are not engaged. When half the sales team are millennials, the current average, then sales leaders are facing the very real prospect that 25% of their staff will leave each year.
It’s a problem that is only going to deepen, if current trends continue, as by 2025 75% of sales teams will be millennials. If half leave, then sales leaders will be facing 37% churn, and recruitment will eclipse every other problem on their desk.
The cost to a company of someone leaving a sales team, in terms of lost revenue, and recruiting and onboarding a replacement, is at least equal to their annual target earnings. The cost should also be measured in damage to the customer relationship, because when a seller departs, the customer’s trust in the company reverts to near zero. This damages revenue, as an estimated 52% of the reason people buy is still trust.
Another thing we need to re-examine urgently is the widespread practice of sales leaders setting unrealistically high individual quotas. From a manager’s point of view, the practice makes sense as it allows the department to continue to hit its number even if some of the frontline sales team quit or fall short. The effects on individual sellers are negative, however. Over-quota-ing demotivates sellers. It cuts their chances of hitting their target and shrinks their earnings. It reduces the feelings of success and belonging that research suggests millennials particularly enjoy, and it disengages them more.
Millennials want personal development
We as sales leaders need to find ways to ensure our millennial employees can feel engaged with their work, and one of things the research throws up is their desire to grow in their careers. They have been brought up to believe there is no such thing as a job for life, and are happy to move on if they don’t feel fulfilled and rewarded. Another major study of millennials by Deloitte in 2019 found that 49% would quit their current job if they had the choice - up from 38% two years earlier.
Millennials don’t necessarily define growth by getting a promotion, or nice car. Growth is defined on a personal level, and what that means for each employee is something that sales leaders need routinely to be addressing in ongoing conversations with their younger sellers.
Growth in their career and recognition of their development are big motivators. So here is a question for every sales leader: how do you recognise a seller's growth, and reward it? And the most straightforward answer is through learning and professional development. Rewards can come through gaining a qualification, which may bring a pay rise or a promotion, but just as importantly will enhance the seller’s personal brand.
Pay is not the only motivator for millennials
“For millennials, work must have meaning,” the Gallup study reports. “They want to work for organisations with a mission and purpose.”
A good salary alone won’t keep millennials in a sales team, and they are more likely to quit if they sense that their company lacks principles.
The opposite is also true. 71% of millennials who strongly agree that they know what their organisation stands for say they plan to stay with their company for at least another year.
While sales leaders may not immediately be able to influence their company’s policy on the environment or on social responsibility, they can help their sellers to feel a sense of shared purpose; and again, learning and development is key. It’s an area that has been neglected in sales, compared to other business disciplines like accounting, procurement, human resources and marketing, which all have formal qualification structures and professional career progression.
Several major multinationals have started to pay attention to the fact that well-qualified graduates are reluctant to go into sales, and seek to move out of sales into other departments that they perceive as offering greater chances of personal growth and long-term success.
This flight from sales can be overcome by aligning to recognised sales qualifications, and developing teams to high ethical and professional standards that are on par with those in marketing and finance.
A change in leadership style
Remote managers who shout and micro-managers who interfere do not appeal to millennials. They are looking for managers who act more like coaches than the authoritarian bosses of 25 years ago. More than most, millennials and Generation Z respond to managers who can recognise their value on a personal level, and help them to develop. Just like customers in the same age group, they demand that businesses approach them differently, and adjust the customer experience to meet their needs.
For the sales leader, this is a wake up call to accelerate plans to switch to a culture of coaching for all staff. Millennials and Generation Z thrive with coaching focused on them, so they can develop their strengths and realise their potential. Sales leaders should have a look at their own management style, and make sure it is an enabling one.
An end to annual assessment
The gap between sales leaders in their late 40s or 50s and the millennials and Gen Zs in their sales teams is nowhere so great as in how they communicate. It’s not just that younger sellers are digital natives, it’s that they are always connected. “The way millennials communicate — texting, tweeting, Skype, etc. — is now real-time and continuous,” warns Gallup. “This dramatically affects the workplace because millennials are accustomed to constant communication and feedback.”
A generation used to immediate interaction needs more than an annual, one-off review that is forgotten as quickly as it is done. Millennials don’t want a boss as a disciplinarian telling them what to do, they want a coach who will help them to be a better version of themselves through regular input. Sales leaders should consider replacing the annual review with regular coaching-style assessments.
All of these issues can be addressed, but before that can happen it does need us as sales leaders to address the addictions that we have.
Often these are unconscious-biases based on learned behaviours, reinforced over years. None of them are born of malice: it's just the way we got used to seeing things done when we were at the bottom of the ladder. As a busy sales leader, it can be very hard to find the time to reflect and understand that the situation has changed.
If we as sales leaders want to make better decisions, we need to understand that the “game” is played differently by different players, with different views on loyalty and reward.
And until we stop and deliberate, we will continue to build strategies based on the world as it used to be, not as it is.
The Association of Professional Sales is the leading community for salespeople. We are a not-for-profit organisation, reinvesting in our profession to build standards, trust and education. The APS works with many global brands who have leaders already on this journey, and we would welcome a conversation on how we support you.
How Millennials Want to Work and Live - Gallup 2016 https://enviableworkplace.com/wp-content/uploads/Gallup-How-Millennials-Want-To-Work.pdf
Top 5 Reasons Why Millennials Are Leaving Their Jobs in Record Numbers Todd M Shannon, Vice President, Sales and Marketing, C.A. Short Company https://www.linkedin.com/pulse/top-5-reasons-why-millennials-leaving-jobs-record-numbers-shannon
Deloitte’s 2019 millennial and gen z surveyhttps://www2.deloitte.com/content/dam/Deloitte/global/Documents/About-Deloitte/deloitte-2019-millennial-survey.pdf