Kevin Micalizzi: Thank you for joining the Quotable Podcast. Today we’ll be discussing the current state of sales manager development with Steven Rosen, Founder and President of Star Results. Welcome Steven.
Steven Rosen: Thank you, Kevin. Great to be here.
Micalizzi: Steven, for those who aren’t familiar with you, Star Results, and the work you’ve been doing, would you share a little bit about it?
Rosen: I’d be glad to. Just to give you maybe the Coles Notes on this, back in 2003 I started Star Results. After 13 years of a career in sales, I’ve had the luxury of carrying the bag for a couple of years and then moving up through the sales organization from a sales manager to a national sales manager to business unit head and then to a VP of sales and marketing. Thirteen years ago I found Star Results and we’ve only focused on sales leadership development.
Really my goal when I work with companies is to help clients crush their sales numbers. And the way we do it is working with both the people and the process side, and of course technology is a key driver, and we leave that to experts like Salesforce.com.
Really over the past 25 years, I’ve developed two core beliefs that the business is built on. And one is that frontline sales managers are really the key in sales organizations to driving performance. The frontline folks really are a foundational piece. If you want to build a high performance organization, it really starts with them. And, of course, the key activity they do to drive performance is coaching. In many cases, and you’ll see when we talk about the frontline sales manager, they’re the unsung hero of the sales organization.
Our second belief is that execution is probably the most limiting factor to companies crushing their numbers, that success in the business is based on having effective strategy and great execution. Most companies that bring me in have really great marketing planning processes, but have no process to turn that strategy into sales, and we help in that area as well — evelop very innovative solutions both for sales managers where we don’t just train sales managers, we coach them, we develop them, we assess them, and then we continue to support them over a six-month period. And in the area of execution, we’re busy with companies right now in November and December helping them with our five-step process to executing with excellence, which we call strategic business execution. And those are really the areas that we focus on. I’m passionate about sales leadership and feel that that is the key ingredient to make organizations tick.
Micalizzi: Sounds great. So for those joining us, I’m Kevin Micalizzi, Product Marketing Manager at Salesforce, filling in for Tim Clarke, and I’m joined today by our guest host Lynne Zaledonis, VP of Product Marketing at Salesforce. Welcome Lynne.
Lynne Zaledonis: Thank you so much, Kevin, Steven, I’m looking forward to having this conversation with you. You may not know but I’m a former account executive turned sales manager myself. So I think we have a lot in common to talk about.
Rosen: That’s great. And I love the fact that you’re a VP of Marketing because we can talk about the difference between the strategy and the execution side if we have an opportunity to get to that, because that’s certainly an interesting component this time of year.
Micalizzi: Sounds great. So Steven, we’re excited to talk to you today about your 2016 sales management development survey report. As I went through it, there were some pretty eye-opening findings I found in there, one of the biggest ones was a strong disconnect between the importance of sales management skills versus the importance that organizations are placing on them. And you identified there’s a lower level of investment in training for sales managers. Would you give us a high level view of your findings?
Rosen: For sure. We look and want to validate that the core skills that we look at, which are coaching skills, ability to manage performance, hiring, business planning and leadership, which I feel are the five core skills. We want to make sure, hey, are these truly important? So we asked our respondents do they agree or highly agree with the fact that these are important skills. Mostly they’ve ranged in the 90-plus percent.
Then we go back and ask them, “How does your organization feel?” And what we’re seeing is almost a 30% gap, for example, coaching, where 94% of respondents agreed or highly agreed, the same level of agreement on the organizational importance was 61%. That’s a 30-point gap. So as much as sales leaders realize that it’s important to develop their sales managers, the organization doesn’t put their money where their mouth is.
Micalizzi: A 30% gap is huge, and it must be having an impact on the business. What are you seeing?
Rosen: As I shared my two core beliefs, one being that frontline sales managers are the foundation of performance. We know sales organizations are struggling. In this economy it’s always a challenge to make your sales numbers. But without a foundational piece in place, being strong frontline sales managers, sales organizations don’t stand a chance.
If we looked at it from a development perspective against the five core skills that we surveyed on, what was shocking was that around 50% of companies are doing something for their sales managers in terms of ongoing training, and 50% are not. And we look at that 50% and think, “Oh my God, you guys have a real disconnect between trying to drive performance and really developing your people who can be the drivers of performance.”
Zaledonis: We all can relate to the pressure of doing more with less, but it’s extremely painful when you’re in a sales role. You’re increasing your quota, you’re expected to do more, but you’re not necessarily given more resources. So let’s dig a little bit more into that 50% that you talked about that don’t have the well-defined or understood processes.
Rosen: On the process part, we know that processes make us more, many times [more] efficient, especially on the sales management side where there’s some really key processes that we cover off which relate to important activities for the sales managers. There’s been studies out that show that companies who have well-defined coaching processes do far better than those that don’t.
In term of hiring, if you have a strong hiring process, what you’re doing is you’re making sure you’re being systematic, which is a way to ensure you’re going to do better hires. I love to look at marketing because in most companies, and I’m sure Salesforce is not different, there’s a well-defined brand planning process in place. Large companies are able to put new marketers in place and get them up to speed because the process is so strong.
So the impact from a sales end, companies are spending a lot of dollars and a large percentage of their marketing budget on the sales force and they’re spending lots of money on training their sales reps. But if there’s no processes for the sales managers to follow through, follow up, and really make the organization tick, it’s suboptimal at best.
Zaledonis: You brought up something that made me think about some organizations I’ve worked in where we focus a lot on new hires. We send them to boot camp. We go through all the trainings. But what happens about the really successful 10-year vet who maybe has their own style and has strayed a little bit away from the processes? Have you see that?
Rosen: Sure, in terms of salespeople?
Rosen: Yes, 100%. A good manager is able to realize that, hey, process is good. I was never a process guy until I became a consultant, but process is good. Some people have some natural ways of doing things. So we don’t want to make people robotic because of processes. And the 10-year vet who may be a great salesperson, certainly you don’t want to take away any of their great skill sets.
But it is proven, and as a technology company you know this, that the best sales training is a process that’s followed. Because if we follow a process we get far better results. Sometimes these veterans, they’re hard to change because they’ve seen four sales models in the last 10 years. And they think, “OK, I’ll just wait for the next one to come and the new manager to come.” But there is a documented approach that if you follow a process you’re going to get better results. And they may have already developed their own processes.
Plus we’ve seen that selling itself has changed greatly with the Internet, with buyers being much more on top of things. Our salespeople do have to evolve. I think it’s a great question because some of the tenured reps are great. I do think there’s a need for them to adopt new approaches, but I wouldn’t want to take away what makes them great.
Micalizzi: Steven, a lot of the conversations we’ve been having recently are about how the buying process has changed, the selling process has changed. Tell us more about the changes you’ve been seeing in selling.
Rosen: With the Internet, the fact is, buyers, according to studies I’ve seen, do two-thirds of their research before the sales rep even shows up. We have the advent of social media, which is different ways to communicate, to build relationships that 10 years ago we’re just scratching the surface on. So the approach to selling, whether it’s social selling, whether it’s relationship, which we’ve seen from the folks at the corporate executive board, is good. But the end of the day is salespeople need to bring value, and value is a way to differentiate themselves from their competitors.
So to show up and have a good relationship doesn’t help you close the deal. It helps get you in the door. But really the value you add to solving the many issues that your buyers have becomes a critical point of difference. And we all know anyone who’s got a senior job, whether you’re in procurement, whether you’re a VP of sales and looking to add technology or training to your sales group, everyone is really busy. So as a sales rep, to come there and schmooze, the days of schmoozing are gone. It’s really about bringing value to the table.
Zaledonis: Let’s dig a little bit deeper into that. When I read your survey, you talked about how 50% of the sales managers are not receiving any training or development in what you have identified as five core areas: coaching, performance management, hiring top performers, business planning, and acumen and leadership. How do you relate selling values, Steven, in these five areas?
Rosen: OK, that’s a great question. First time I’ve been asked that. Part of when I look at these five skill sets, some of them are actually similar in terms of the skills you use. But when you’re coaching a sales rep, [it] really comes down to coaching. For example, if the company’s approach is one selling on value and bringing value to the table, when the sales manager is riding alongside of the rep, they want to be asking, “What’s your objective? How are you bringing value to the call?”
So by asking really good questions when you’re working with your sale rep, you’re reinforcing how they should be selling. If they don’t have a good answer, then maybe you got to pull them off the road and do a little role-playing. Within the skill set of coaching and coaching selling skills, which is probably one of the areas we’ve coached the most, when we are coaching it’s really critical to reinforce what are we trying to achieve, how are we going about selling, if it’s a value proposition.
I would ask the sales rep before we go into a call, “OK, what’s your value proposition here? Where can you add value to this call?” And then when you finish the call, a very simple question, “Did you have success? Where did you bring value?” From a skill set, coaching is that one that helps develop soft skills. And if selling skills are probably one of the areas, the selling process the company implements, if the sales managers are not reinforcing that through coaching, then reps are left to their own druthers in terms of how they approach the customer.
Zaledonis: Great, thanks. I love how you bring that in. I think that that’s really important for people to focus on value and get away from the feature function war. It sounds like those five areas you’ve identified are key for that.
Rosen: In terms of really improving how reps sell, the coaching component is important. If you look at performance management, sometimes that comes down to dealing with different people, different issues, looking at data, being able to analyze things and figure out where the challenges are — f course, if there’s people challenges. But when it comes to selling, coaching, and probably business planning as well, business acumen that the rep really understands the client — and the manager can help the rep become much better from an acumen perspective when they go in to see clients.
Zaledonis: Another challenge you identified is, and then let’s see if I get the statistic right, 32% of the organizations have not done any kind of training to support that transition, like I talked about, from sales rep to sales manager. Right?
Zaledonis: Sometimes people are really good at their job and we promote them right away, but were lacking that foundation or that training of what it means to be a manager, the manager part of the sales manager. So talk to me a little bit about what you saw in that transition and any kind of tips that you’re offering there.
Rosen: OK. One of the interesting statistics that I just learned is 71% of new sales managers come from the sales force. So in most cases, as you’ve experienced, they’re probably going to handpick their best sales rep and then say, “OK, you know what, you’ve done a great job. You’re sales rep of the year. We’re going to move you into a sales management role. There’s one that just opened.”
The skill sets are different because as a sales rep you’re an individual contributor. As a sales manager/sales leader, your job is to lead people, develop them, and really help them succeed. So you’re moving from a position of individual contributor to running a team.
Unless you’re a natural and understand that, hey, you’re not there to be a super rep, otherwise you’re not going to be a super manager, there really is a need for a process and some training to support that transition. In most cases, another statistic I just saw, 60% of new sales managers fail within 18 months. So we’re getting lots of turnover in that area. Of course if you have turnover, you’ve lost twice. You’ve lost a great salesperson and now you have a management vacancy.
So we looked at over the last two years, because we conducted the study in 2015, and really asked two questions when it comes to understanding how well companies support that transition.
One we asked was, is there a formal process to evaluate the transition? How is the sales manager doing, so you cannot just throw them out there but actually see if they’re having troubles or not? In 2015, roughly 30 % of companies had some type of process to evaluate the transition. What we saw in 2016 was a drop to 23%. So less companies are focusing on that. There may be a margin of error.
The other thing we looked at was, do you provide training to support the transition? Not every company has the resources to support sales management training. We went in 2015 from 40% of companies or 40% of respondents saying, “Hey, our company does,” down to 32%. So just on a quick extrapolation, that means two-thirds of sales managers are being thrown out there in a sink-or-swim situation.
And we know the next level of management, whether they’re reporting into a regional sales manager, a VP of sales, national sales manager, they’re very busy people. They’re being pulled in 22 different directions, and their ability to support that transition is probably not there.
So what we’re doing is, we’re taking a top salesperson, throwing them into a role and saying, “OK, buddy, sink or swim.” And in some cases, and we’re seeing the turnover in sales management, they’re not able to cope. What they’ve done, not only by promoting the best rep, is, they’ve disenfranchised the whole team because this person may be wreaking havoc on the team. So it’s a very tricky situation and a very important stopgap to have when you promote someone.
And the reality is not all companies have resources. Not that I’m promoting my own services, but the fact is there are people out there who you can bring in and outsource if you’ve got only one new sales manager a year. At least provide them the support. And if you’re a new sales manager or someone thinking of transitioning, one of my tips are to ask what support you’re going to have in that transition to make you successful.
Micalizzi: Sixty percent is such a high number. If 60%t of sales managers are failing in the first 18 months, I guess part of me is wondering, is it a training issue or — and I don’t know if your data gives you any insight onto this — is it that we’re taking the best sales reps and we’re taking them essentially off the beat? And managing and leading a team is such a different set of skills than I would use if I was out crushing my quota quarter after quarter.
Is it we’re grabbing the wrong folks and making them managers, or is it we’ve got the right people, we’re just not giving them the backup they need?
Rosen: I can talk anecdotally from my experience. It’s a great question. I think it’s a combination of both. I think one, there are ways to develop people in the sales force to be ready for sales management positions by giving them certain assignments or projects to work on, which they get to work with other salespeople and see if they like that. But clearly if you’re sending two-thirds of folks out there without really training on core skills, and I’m not talking about sophisticated skills…
I can’t remember if it was you or Lynne that mentioned companies do a great job with sales training boot camp for salespeople where we teach them the product knowledge, we teach them their selling skills, we teach them how to work through the organization. Companies may spend two or three weeks doing that. Then you look at the sales manager where it’s, “OK, you’ve now been promoted,” and a large percentage are going without any support. And I see tons of mistakes they make when they go out there. And there are some very simple things to do to help them be successful.
The first one is, you can’t be a leader until you build trust. Unless that foundation for trust and being able to coach people is in place, then you’re not going to succeed. There’s very few people who actually will their sales manager, “Don’t go out and talk business right away. Understand your people, get to know them, and actually build a foundation of trust which can then move forward on the business.” Within three months sometimes it’s such a disaster that you see a performance of the team drop dramatically.
Zaledonis: Sometimes people like to compare sales to war analogies. You’re leading your troops to battle.
Zaledonis: [You just] really rung true with me. That’s what somebody who’s a foot soldier has in their leader when they go into battle. You gave a tip of making sure that you’re spending time with them. What other tips do you have for building trust?
Rosen: I have a nice quote that I use. I didn’t come up with it, but people don’t care what you know until they know you care. I can reflect on my own experience. Back in the day when I was promoted to sales manager, the year before I was sales rep of the year and I went out there thinking I know it all and I’m going to show them how I sold. And of course we know that whether it be Millennials or anybody, no one wants to be told what to do.
Tips for building trust, my first tip is don’t worry about the business up front. Get to know your people as people. Let them get to know you as an individual and who you are and what you’re about. Really be very open, vulnerable, share failures. Set that up initially one-on-one, know who their spouse is, know their children’s names.
I know it sounds hokey, but until they really trust you they’re not going to open up their kimono and share where their biggest fears and challenges are. So it’s go slow and get to know your people before you try to assert yourself as a manager.
Micalizzi: Love your tips for building relationships and developing trust. In the research you’ve been doing, these challenges you’ve identified, are they trending up or down from previous years?
Rosen: We have two years that we’ve looked at and they’re not getting better. There’s a drop-off on support for new sales managers, and we saw a drop-off as well as support for training for existing sales managers. It’s a situation that I think, as a company — companies are really missing the boat. They invest a lot in their sales force. They invest a lot in technology to make their sales force more efficient. But if you recall, my core belief is: These people are the foundation of performance.
If you have great sales managers in place, they’ll hire the right people, they’ll develop people to be top salespeople. So this to me is probably one of the number one reasons why companies fail to hit their sales numbers. They just don’t have the right frontline sales management team in place or they haven’t invested in these people. If you ask most CEOs, they’ll tell you the quality of sales manager is the key driver of sales rep performance.
Really what we’re trying to highlight with this, or what’s come out of our study on sales management and sales managers, is there’s a major disconnect between what people know and how companies are investing and supporting those key drivers. Lynne talked about a military example. You send your foot soldiers out, you better damn well have a good … I’m not sure who’s the next level, but sergeant in the battlefield that knows what to do. You don’t send your sergeants out without having the skills and knowledge of what to do in the battlefield.
Micalizzi: So is the outlook completely bleak or have any areas improved?
Rosen: That’s a great question. I don’t want to sound bleak because I see it as opportunities for improvement and trying to get the word out. I’ve also noticed that many of my colleagues have moved from focus on salespeople to greater focus on the sales management team or doing both. We focus solely on leadership. But it’s insightful that once you get out there and work with companies and realize, “Hey, there’s a problem here,” and really try to identify the root source of the problem, in many cases it’s management that’s holding the sales force back.
So is it bleak? No. I assume some companies are doing extremely well. Some companies have figured out that the investment in top people, building the processes, they don’t have to be complex processes, and having the right technology in place is critical. And there’s some companies who we know. You guys are trying to help companies become more efficient and effective through use of technology. I’m doing the same on the people on process side. So there are folks to help.
And I guess what we need probably is some paradigm shift from sales leadership to really say, “Hey, you know what, we need to focus on this group of people.” And for a bang for your buck, if you look at one sales manager having 10 salespeople, the investment in that one sales manager has incredible ROI. So it’s not dire, but really the message to sales leaders, sales executives, “You’re going into a new year. Really look at do you have processes in place?”
And simplistically if you’ve got three-plus managers, if you bring them together they can actually design a process that they all agree to, whether it be a coaching process, a hiring process, how we manage performance. So all these things are doable. I think it’s really the awareness and this is really, to me, a prime time of the year to set yourself up for success in the next year and look at your processes, what are you doing for your sales managers, how can you help them improve and develop. If you build that into your plan and do it early, I think you’re going to get much better results.
The opportunity is there. In terms of your audience, let’s get the message out there. I know there’s many others who are pounding the same drum and hopefully we’ll see some movement towards that.
Zaledonis: I think everything you’ve just said is probably ringing true with everybody listening today, and hopefully they’ll get out and share the word so that we can start to see that trend differently in the future years for you when you do your research.
So we’re almost at time, Steven. It’s been really fun to connect with you on this topic. What one thing would you leave to our sales practitioners and leaders who are listening today? What do you want them to take away from our conversation?
Rosen: That’s a great question. To me, at the end of the day, leadership is key. If you have the right leadership and the right environment, you can drive performance. [At] the end of the day, when we’re in sales we’re there to drive performance, to bring in company’s revenue and hit their targets.
And really the key is leadership, leadership being making sure you’re training your right people, that as a leader you’re leading them and coaching them to be more successful. To me, leadership in sales organizations is key and it’s at all levels. My main message is that those frontline sales managers are so critical that if you have a star in that region, that region is going to shine.
Micalizzi: Awesome. Absolutely love it. Lynne, thank you again for joining me today to host this episode.
Zaledonis: My pleasure.
Micalizzi: And Steven, thank you for sharing your research on sales management development with us. Unfortunately not a fantastic, rosy view of the state at this point in time, but definitely something incredibly important for our listeners to know, so thank you.
Rosen: Kevin, it’s been a pleasure, and Lynne, it’s been a pleasure. I appreciate the insightful questions and the insights that you’ve provided in the course of our conversation.
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