If your initial thought is that you hope he is in the field then watch your caller ID for “It’s the 80’s.” I agree managers need to spend time with their sales professionals in the field, and I’ll get to that, but “being in the field” is not a proxy for being a good manager. When a manager tells me their top priority is spending time in the field my first thought is that they don’t have a good management education and don’t know the activities required to successfully manage people. Do you frequently see the coach of your favorite team running on the court/field with their players?
Let’s start with my belief that a manager’s number one responsibility is to develop each individual on their team, and through that development achieve business results. Notice that business results follow developing their team. Telling your sales professionals to get out of the office or your sales manager to get in the field would be like a coach in the NFL telling their players on the first day of practice, then every day after that first day, just get on the field and run around; and heck, I’ll join some of you and run around with you.
How do you know if your manager is doing their job? Team tenure, rep productivity as well as revenue growth and the ability to successfully sell new products/services are my indicators.
Tenure doesn’t equate to you have five team members with more than five years and one with less than one. My guess is that in the five year tenure gap the manager has burned through 8 – 12 reps that didn’t make it on his team. When I engage with a company to help them improve their sales this is a very common scenario. Of the sales professionals you’ve added to your team in the last three years how many are still with your company? If the GM of your favorite sports team had that low of retention with his/her drafts/trades would you be calling for his head (figuratively of course).
The next thing I look at is rep productivity, or average revenue per sales professional. In the scenario above—if I exclude all of the hires that didn’t survive—I’d expect the rep productivity to be high; high would have productivity in the $550K – $600K range, or $50,000 per rep per month. That isn’t always the case but that would be my expectation. When I talk about exclusions the accurate way to measure productivity is to divide revenue by your average quantity of sales professionals. Therefore, I’d take the six I currently have on the team and assuming I averaged two more each month of the year, but they come and go, I’d actually divide revenue by eight. The six I have plus the average two rookies I normally have.
If productivity is below $400,000 per year per rep I look at sales expense as I don’t know how you retain sales professionals that sell less than $400,000 other than by paying them too much for what they bring to the company. If equipment gross margin is 36 percent, then sales expense should be in the 26 percent range, with 15 percent of that attributed directly to sales rep expense. With productivity below $400K you either have 100 percent plus turnover or your sales rep expense is in the 20 percent plus range. Neither are good scenarios
The last two areas of manager assessment on how your growth in revenue on their team and ability to launch new products. Both of these measurements demonstrate that the team is well developed. Growth is measured over three year periods; I don’t care if a manager grows their team revenue by 15 percent one year and the next year they shrink by 10 percent. That is usually caused by a single takedown and not through a set of management processes that drive consistent results. Those same processes provide support for new initiatives, hence the measurement of ability to launch new products.
How did your management team do on this assessment?
- Solid tenure that demonstrates the ability to add new sales professionals to the team
- Productivity above $550,000 per rep per year
- Consistent revenue growth across the team
- Ability to launch new products
If you are missing one item there is opportunity to improve. More than one and I’d go out on a limb and state, in my opinion, you’re failing as a manager. Keep in mind that I believe a manager’s primary responsibility is to develop their team members.
Now that you’ve identified you have a management problem how do you fix it? You can start by reading part two of this article in next week’s ENX/The Week in Imaging.
