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Posts Tagged “Simon Sinek”

Simon Sinek says the following: “Offer someone the opportunity to rebuild a company or reinvent an industry as the primary incentive, and it will attract those drawn to the challenge first and the money second.”

I believe much of what is expressed about incentivizing the salesman emanates from underestimation, condescension, and even contempt for that person and her profession.

I don’t read sales books. They make me mad. From my own experience as an executive salesman, I believe most sales managers approach the whole subject of sales incentivization ass-backwards.

In my case, this judgment comes from being an unexpected, untrained, and accidental success as an entrepreneur in elite sales outsourcing. My intent as a company founder was to build a happy life and create a community of peers who shared my values. While I wanted to make a comfortable living, money was not my business raison d’etre. And over the years I have managed to assemble a coterie of sales executives who, to one extent or another and in their variegated ways, were compadres in the realm of service, morals, humor, and fierce independence.

After 20 years of sales success emanating from my personal sales intuition and longing to be part of an ethical sales and service community, I began to discover I was not as odd or alone in my approach as I had always assumed. And even more, there is an increasing body of scholarly research that supports the instincts of my life experience.

This is particularly true in the realm of sales incentivization. My core assumption has always been that good salespersons don’t fundamentally work just for money. Rather, they work for satisfaction, service, happiness, a free life and other non-quantifiables as much as for money. Research has shown that, after reaching a threshold of $75,000 or so, money has limited ability to incentivize. (Note, Conscious Capitalism and the Small Giants community).

Dr. Edward Deci, Director of the University of Rochester’s Human Motivation Program says:

“When people say that money motivates, what they really mean is that money controls. And when It does, people become alienated–they give up some of their authenticity–and they push themselves to do what they think they must do.” (Why We Do What We Do: Understanding Self-Motivation).

I have always felt that salesmen are particularly misunderstood. I’m told that sales hires fail 75 percentĀ of the time within the first year. That is a phenomenal statistic. While the reasons for this are complex, I believe the overemphasis on monetary reward is a large part of it.

People want to be part of an organization that imbues quality and meaning to their lives. Yes, they need to make money, but I don’t believe it ever activates their ardor and deep commitment. It does not inspire full use of their internal resources, their full being, their passion.

When I ran my executive sales outsourcing firm Corporate Rain International, I genuinely tried to start with the assumption that every person I hired should be better than me, that every person I hired could teach me something, that each person I hired could comfortably grow the extant values of my company as a corporate companion.

To quote Edward Deci again, “[In speaking about motivation] the proper question is not, ‘How can people motivate others?’ but rather, ‘How can people create the conditions within which others will motivate themselves.'”

I agree. Thank you, Edward Deci.

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Simon_sinekSimon Sinek, author of Start with Why and Leaders Eat Last says the following: “The single best machine to measure trust is a human being. We haven’t figured out a metric that works better than our own sorta, like, ‘There’s something fishy about you.'”

I am personally untrained in traditional techniques of command-and-control management (or any other traditional management techniques for that matter.) But from what I glean of them, I find traditional management techniques to be quite old-fashioned. They are certainly not for me. My bias is for maximum creativity and through-branded freedom in accomplishment of corporate goals. (My firm, Corporate Rain International, is designed as horizontally possible for this reason.)

From what I can see, much of what present day corporate leadership is based on is metrics-driven. As they say, “You can’t manage what you can’t measure.” I find this adage increasingly wrong-headed. There are a huge number of important things that can’t be measured. 20th century American management guru, statistician, and author, W. Edwards Deming says simply, “It is wrong to suppose that if you can’t measure it, you can’t manage it — A costly myth.”

In an interesting Forbes online column in January, Lisa Earle McLeod, the author of Selling With Noble Purpose, says the following. “When you try to manage by the numbers, be they test scores, sales activity, or productivity measures, you drive towards mediocrity. 3aba5974f98d793f0e8b1b2930b64a37_400x400Quantitative (numerical) measurements alone will never make an organization great, because it is the qualitative (non-numerical) elements of performance that achieve greatness.” She goes on to state, “We default to the easy to understand quantitative elements, while completely ignoring the more nuanced qualitative elements, yet it’s qualitative elements like emotional engagement, passion, and purpose that are critical drivers of success and satisfaction.” I would say this is especially true for the entrepreneur and the small business person.

In a blog titled “The Folly of Stretch Goals” in the Harvard Business Review, Daniel Markovitz, author of Factory of One, quotes famed psychologists Edwin Locke and Gary Latham describing large metric goal setting as “the most effective managerial tool available.” Stretch goals are the tactic of giving your employees metric goals that are just beyond reach, pushing them to greater and greater achievement. Markovitz does not agree with that approach and neither do I. For Markovitz stretch goals are not useful and are even dangerous for three reasons.

  1. Stretch goal metrics can be terribly demotivating. To the extent stretch goals seem overwhelming and unattainable they suck dry intrinsic motivation. They are innately manipulative, cynical, and condescending to the employee/colleague. Money motivators crowd out intrinsic motivators like learning, growth, and service. He cites psychologist Karl Weick, who argues, in an article titled “Small Wins,” that steady, slow, organic progress creates more complete solutions, conditions, and accomplishment.
  2. Stretch goal metrics have a dangerous tendency to foster unethical behavior. For example, Markovitz offers the illustration of Sears in the early 1990s. “Sears gave a sales quota of $147/hour to its auto repair staff. Faced with this target, the staff overcharged for work and performed unnecessary repairs. Sears Chairman at the time, Ed Brennan, acknowledged that the stretch goal gave employees a powerful incentive to deceive customers.”
  3. Stretch goal metrics can lead to excessive risk-taking. A couple of years ago J. P. Morgan took an eight billion dollar loss (and counting) inspired by the stretch profitability goals of their London subsidiary and its leader, “The London Whale.” This echos Enron’s incentivization of its executives to meet specific revenue goals, irrespective of the profitability or the riskiness of the moves. _JrjVr6K_400x400Enron was ultimately and totally destroyed in 2001 by this strategy. Or note the recent ethical breaches utilized by Volkswagen engineers to simulate environmentally acceptable emissions for their cars.

I’m not saying metrics (the numbers) don’t matter. They do. You have to make payroll every week. That’s a cold, hard fact. But things that create long term entrepreneurial greatness, like culture, purpose, values, and corporate vision, are seldom metrically quantifiable.

Nassim Taleb, author of The Black Swan and Fooled by Randomness, says the following: “Success is about honour, feeling morally calibrated, absence of shame, not what some newspaper defines from an external metric.” I agree.

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