The best in Sports and Finance

Micromanagement = Lost Sales

 

I’m hearing more and more frustration from both salespeople and sales leaders as the slow economy increases the panic on the part of senior management.  Sales are slowing dramatically, profits are down or have completely evaporated, and the pressure is increasing on all levels to produce, produce, produce.

Along with the pressure to produce comes the micro managing of the sales team and its leadership.  Managers are having daily pipeline meetings with the members of their team. Increasingly these meetings are getting uglier and uglier with increased threats if sales don’t increase.  Middle managers are having daily calls–in some instances two or more calls per day–with the managers under them as they want an accounting for each team member’s activities, including reviewing the sales status of each and every prospect.  Management is demanding detailed reports for each prospect.  If a salesperson deems a contact to be a non-prospect, managers are demanding the salesperson continue to pursue the contact in hopes of turning them into a prospect.

Each minute of the day must be accounted for. Management is accepting no excuses for not closing a sale–bad credit, not a reason, get them pay cash; no need, not a reason, create a need for them; want to wait to see what the market will do, not a reason, convince them that now’s the time to buy; cash flow issues, not a reason, get them to factor their receivables to get the cash to make the purchase. 

As salespeople get bombarded with threats and each second of their day is micro managed, they resort to discounting and trying to include as many incentives to purchase as they can in an effort to get sales to get management off their back.  They quickly discover that even if that creates a sale, it creates a new set of problems as they get a lecture about how the company doesn’t discount and their job is to maintain gross and if they can’t, the company will find someone who will. Many managers resort to writing all proposals for their sales team to insure that they control every aspect of the sale.

As morale declines and sales lag even further, senior management gives more and more directives, demanding greater control and more ‘accountability’ on each employee’s part.  When today’s demands don’t create the desired result, they’re added to or changed tomorrow, spiraling in a seemingly never-ending series of demands and threats, each more ominous than the last.

And sales plunge even faster than before.

Once management panics it seems impossible to stop the downhill flow of negative consequences. The more pressure management feels, the more they try to spread the pressure downward, believing they can demand production via force. 

The process inevitably produces nothing other than a bigger hole from which the company must emerge.

If micro managing is such a negative force, why do managers resort to it? The root cause may be panic, but the belief they need to micro manage their team is based squarely in a distrust of their employees–a belief that their salespeople and managers aren’t working hard enough, that the sales team doesn’t care enough, that their team is intrinsically lazy and is only looking for the low hanging fruit, not willing to get dirty and dig for the hard to find business.

If sheer force and threats don’t work, what can the management team do to stabilize–or maybe even increase–sales during this time of economic stress?

1.    Don’t panic. Of course, this is easier said than done.  But panic leads to overreacting and bad decisions.  We need look no further than the US government over the past 6 months to see the consequences of panic–squandered opportunities, a diarrhea of ineffective spending in an effort to ‘do something now’ with little regard to the future, and a massive list of decisions that upon reflection many–even those involved in the initial decision making process–wish had never been made.

2.    Make an honest evaluation of the situation and communicate it to the entire team.
Employees are not stupid.  They are aware of the economic situation and they not only wonder what impact it has on the company, they speculate–and most often their speculation is far worse than the truth of the actual situation. 

Employees–and in particular the sales team–perform best when they know and understand the company’s goals and objectives and the obstacles standing in the way of reaching those goals and objectives. 

The more clearly each sales team member understands the company’s needs and concerns, the more clearly they can not only understand where they fit in, but what they can–what they must –do to help address those needs and concerns.    If team members sense that the company isn’t communicating honestly with them, they begin to retreat into themselves, resisting the company’s entreaties and even the most dire threat falls on deaf ears.

3.    Formulate a comprehensive and workable plan that includes participation by all parties to address market conditions. History is replete with examples of monarchs and generals who when faced with tough opposition retreat into a bunker mentality.  They become increasingly overwhelmed with circumstances, they become delusional, they begin to distrust even their closest friends and companions.  In short order they are totally isolated.  Their plans and orders have little to do with reality.

This same phenomenon happens in the executive suite. When faced with potential crisis, senior management will often retreat to their own mental concrete bunker.  Rather than seeking the wisdom and cooperation of their employees, they barricade themselves in, shouting orders through the barred door.

In our current economy where quality prospects are difficult to find and sales must be fought for, gaining the cooperation and commitment from staff is critical.  Senior management cannot survive on their own. 

If they and the company are to survive, it will take the active participation of all the work force.  Consequently, the more ownership in the solution to overcoming the company’s obstacles each member of the team feels, the more committed to the solution–and to their individual contributions to the solution–each will be. 

Is your sales team struggling to close deals?

4.    Commit the company to giving the needed support to accomplish the goals and overcome the obstacles. When panic sets in, the cost cutting butcher knife comes out.  Management looks at every expense as a waste.  Can we use a shorter, less expensive screw here; can we make that piece of metal a little thinner?  Do we really need that much money in our marketing budget?  Slash sales training, it’s never done any good anyway. 

As the butcher of the executive office is in the midst of a budget-cutting orgy, critical resources for sales stability–much less sales growth–are apt to be gutted also.  While belt tightening is necessary when business slows, a finely honed scalpel is necessary, not a meat clever. 

Creating sales takes money.  Salespeople need the same resources in slow times to create sales as they do during hot markets.  Certainly gratuitous expenses such as client dinners and games of golf may be legitimate areas for trimming, but training, travel, clerical support, and other expenses that lead directly to or support the closing of business are not to be cut indiscriminately.  In fact, when it comes to training, prospecting, lead generation, and client retention expenses, the slower the economy, the more funds should be directed to those areas.

Times are tough.  That doesn’t mean that it is time for a management meltdown. 

There are solutions to slowing sales. 

Resorting to micro management and threats won’t produce anything other than disgruntled employees and slower sales.  However, gaining the trust, cooperation, and commitment of your team to address the issues facing the company–and by extension, themselves–can give your company the coordinated effort by all to weather this economic downturn.

Have you run into a micromanager in your career? If so, how did you handle it? Did you just plug away? Did you look for another job? Did you try to change the manager’s behavior?

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s