I am usually a bit cynical regarding these types of articles.  My reasoning is this – each individual is unique in their motivations and rewards.  Attempting to place employees into set categories regarding global characterizations is a stretch.  Nonetheless, this article from Inc.com presents some excellent points and advice for employee engagement.

I do not believe you can overstate this one:

5. Employees want flexibility. In addition to deciding how they work, the experts say employees also appreciate having a say over when they work. Gunther has, of course, set up a radically flexible schedule for his employees that might not work for every office. But, he says, it has enabled him to find and retain top talent for Meddius. “We’ve had people who have taken significant pay cuts to work for us, because at their old job they were told to show up and be at the office between 8 a.m. and 5 p.m.,” he says. “Generation Y is looking for a synergy between their personal lives and their professional lives.” Set up a flexible vacation policy or a telecommuting policy that enables employees to work from home. It involves a great deal of trust, but, as Pink says, “If you don’t trust your employees, you’ve got much bigger problems.”

This recession has lowered the drive for some employees on this topic, but it is still prevalent among the younger workers.  I love the last line as it is absolute truth.

I think the older generation has a palpable difficulty with telecommuting.  My discussions with many Boomer-aged managers have included comments basically stating that to be effective in the role, they have to be in the office every day.  My take on that commentary is that the manager is projecting their own approach into the position.  They may struggle in a remote role, but I’m not convinced that is always the case with the younger generations.

There are 9 other interesting points in the article so I recommend you read the entire thing.

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I made that up, Sinking Stock Syndrome, from some interactions I have had recently with a couple of small business owners.  Both owners suffered from this syndrome which had disastrously negative effects on their company, both in revenue and morale.

Here is how I define my newly-minted syndrome – an irrational hope that a grossly underperforming salesperson will miraculously turn things around and become a sales superstar.

It rarely happens.

The problem stems from the business owner who has invested in this failing salesperson.  Notice I used “business owners” – I do believe this syndrome is more prevalent among this group as they are closely tied to the business (i.e. financially, emotionally, historically).  They usually have a relatively accurate count of the resources invested in this salesperson.

The sinking stock analogy will be understandable to anyone who buys and sells stock.  When you purchase a stock, you expect (hope) it increases in value.  When it goes the other way, you encounter a sinking feeling as you have now lost money.  It is at this point that you need to make cold, objective decisions about the stock.  Is it going to rebound in an acceptable time frame or did you make a bad investment?

The temptation is to hang on to the stock with the expectation it will turnaround and at least get back to the buy price you paid so you can break even.  While you wait, the stock drops further and you have now lost more money.

Hope keeps you from dumping the stock.  The desire to earn back what you have lost keeps you from making the tough decision to sell.

Business owners can get caught in this same trap.  They know a salesperson is not performing and that they are losing money by continuing to keep them in the role.  Other employees see that this salesperson is not closing deals and they start to become upset.  This salesperson stays on the payroll even though it is clear that he/she cannot do the job.  At some point, the tough decision has to be made.  It can be to put together a get-well plan for the salesperson.  However, most times it is to part ways…or should I say cut your losses?

It is difficult, almost an admission of failure that hits the owner directly.  But it has to be done.

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I’ve been assessing many existing salespeople over the past couple weeks and have seen many different levels of abilities.  The ones that stick in my mind are the salespeople who are presently struggling with their revenue production.  Sales is one of, if not the most stressful positions within any company.  The overt issue with a lack of sales performance is that everyone in the company can see it.  The numbers are very visible.

One underperforming salesperson I talked to recently has hit a true low point.  He’s not certain where to start.  I thought about that discussion for quite some time afterwards.

The lack of performance becomes a spiraling nose dive like those old WWII videos of planes with one wing shot up.  The salesperson senses the spiral and over adjusts.  This is the pattern I have seen – the salesperson starts attempting to be someone they are not.

Generally, here is what I have seen in these salespeople:

-Less aggressive
-Less empathetic
-More data-driven
-More pessimistic
-More uncertain

These salespeople become unsure to the point where they do not move like they used to when qualifying prospects.  Instead, the salesperson requires larger amounts of data to make decisions.  They become uncertain in areas where they used to be decisive.  They tend to be less empathetic – they switch off their ability to read others as they become more robotic in attempting to close quickly.  They lose the natural aggressiveness that comes from being successful.

The key here is to get the salesperson back to their natural state.  This activity is supported by assessments.  In each of the instances I encountered recently, the salesperson’s assessments revealed a highly stressed state.  None of them were operating in their natural state.  This overshift was causing large amounts of stress and gross underperformance.

Each of the salespeople are operating well outside of their natural style which is neutralizing their abilities.  They are using energy to be someone they are not in an attempt to preserve their job.  Unfortunately, that approach is counterproductive to success in most cases.  My recommendation to each of these salespeople was specific actions to move them back to their natural style.  This has to be the first step in rejuvenating an ailing salesperson.

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I’ve bumped into a common tension point within a company – the battle between Human Resources and Sales.  My observations (and participation) of this feud is that it comes down to a fundamental difference in perspective between the two departments.

Human resources has the strongest internal focus of any department.  Their world exists within the walls of the company and then spend most of their time examining, building, adjusting, etc. that world.  Clearly this is an important aspect of building corporate culture.  A weak HR department has a significant negative impact on the entire company.  I have worked in those environments and they are tortuous at times.

Sales as the strongest external focus of any department.  Sales has to operate in the marketplace, in the prospect’s world, to be successful.  Hence, sales often has the least internal focus or awareness of any department.  My career has been molded in this environment so I am predisposed to this area.

An overly aggressive sales department can become feral towards the internal culture.  This disconnect is a difficult path to navigate in that the sales department slowly realizes that other departments contribute to their success (finance, ops/production, etc.).  A feral sales department can sow dissention throughout an entire company.

Yet, the natural tension that can occur between HR and Sales is often due to the external focus of the sales department.

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Saleshq.com offers up tricks for telecommuters in this article.  There are some solid points like this:

5. Communication

It’s very easy to forget the outside world when you work from home. While you do get to avoid the intricacies of corporate politics, it also means that you have to be your own advocate.

Make sure there are multiple ways for your boss and colleagues to contact you. Check your email frequently, and respond as immediately as you can. Keep your phone at hand, and make sure you call if there’s an office meeting. An instant messaging service works well for open communication if something changes last minute. For more long distance projects, make use of free video conferencing tools like Skype.

This fact is mission-critical.  One of my customers has a remote salesperson who works in the same small town as the office, but she telecommutes.  I’m not sure why, but that is a topic for another post.  Anyway, one of the things she has expertly established is her lack of availability during the work day.  What I mean is that the office can never get her on the phone during the day.  Cell phone, home phone…it doesn’t matter, their calls always end up in voicemail.

I find this fact appalling, but my customer tolerates it.  What I believe this does is free her up to do other activities during goal time for selling.  The office has now become accustomed to not reaching her on the phone so they think nothing of it.

If you manage telecommuters, you must have a communication channel (cell, text, IM, etc.) that always allows access to them.

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Full confession – I despise meetings.  I have spent much of my career sitting through insanely inefficient meetings – I prefer to call them “boil the ocean” meetings.  The topics in these meetings usually lacked clarity and focus so the meeting would drift…badly.  Of course, when your boss is sitting in the meeting (or worse, was the one who called it) it is difficult to exit early.

But alas, I have found an inspiring article with a fantastic idea.  This is from Inc.com (emphasis mine):

“Interaction should be constant, not crammed into meetings once a week. You just turn around in your chair and bounce an idea off one of the other 10 people in your office. Keep the floor plan open so people can talk to each other. As the company gets bigger, keep dividing it into smaller and smaller groups. Follow Jeff Bezos’s two-pizza rule: Project teams should be small enough to feed with two pizzas. At Hunch, we don’t have meetings unless absolutely necessary. When I used to have meetings, though, this is how I would do it: There would be an agenda distributed before the meeting. Everybody would stand. At the beginning of the meeting, everyone would drink 16 ounces of water. We would discuss everything on the agenda, make all the decisions that needed to be made, and the meeting would be over when the first person had to go to the bathroom.”

Caterina Fake is the co-founder of the photo-sharing site Flickr. Her new start-up is Hunch, a website in New York City that takes user input to make recommendations on thousands of subjects.

“When I used to have meetings…” – fantastic.  If I were there, I would drink a pot of coffee myself before heading into that meeting.

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I have had the opportunity to work for many different sales managers over my career.  I’ve seen many styles, but I think this article in SalesHQ.com hits upon the most dangerous style:

The Good Buddy is everyone’s friend. Managing is a popularity contest that he intends to win. He’ll be a great drinking buddy, a top notch shoulder to cry on, a guy you can trust to cover for you. He’ll make sure the office atmosphere is loose, that everyone feels welcome, that the office is a fun place to be.

Discipline? Well, that’s not something you’ll find in his office. An insistence on hitting quota? Something else that isn’t a priority. Coaching? Nope. Lots of back slapping and high fiving, but no coaching. Decisions? Don’t expect The Good Buddy to make the hard decisions because he might hurt someone’s feelings.

The Good Buddy is weak and lets his team members run the office. Ultimately, most everyone in his office ends up unhappy.

The reason this style is so dangerous is that the first order of sales management is holding salespeople accountable.  Accountable to their forecasts, their activities, their communication, their sales, etc.  It is the ultimate coaching position that requires the leader to have earned the respect of his or her team.

The Good Buddy I worked for used to hold court in his office for most of the day.  It was always stories, jokes, happy hour plans, etc.  Lunches were 2 hour investments.  Sales discussions were minimal.  Strategy discussions were non-existent.  We were simply expected to do our job, make our numbers and don’t bother him.  It was completely dysfunctional and ineffective.

The sales manager was eventually fired, but the damage was done to the company.  It eventually folded in the mid-1990’s.

This style is one of the reasons why objective assessments are a critical piece to any successful sales manager hiring process.

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The stresses of this economy are affecting entire sales departments from the leadership down to the trenches.  One piece I have noticed is a distinct aversion towards customer relationship management software.  Interestingly, the resistance is coming from sales managers.

What I believe I am seeing are sales managers with less than solid forecasts…and they know it.  However, one of the oldest games in sales is fudging the forecast.  Sales managers typically inflate the forecast to buy time.  They know certain deals are soft, to say the least, but they are hopeful they can cover those loses with new, undiscovered opportunities.  It is some twisted logic for sure.

I once worked for a sales manager who knew – knew – his forecast was inflated by at least 33%.  However, he also knew that if he reported the real forecast to the overseas headquarters, his department would be slashed within a month.  He figured the remoteness of the corporate headquarters would make it difficult for them to get a clear view of the veracity of his numbers.

The obfuscation approach has a tendency to buy time, but the sales manager has to pay either by not making the number or by creating doubt about their knowledge of the pipeline.  If they make the number, upper management tends to view it as luck, whether right or wrong.

One of the simple, critical steps in managing revenue in this economy is to conduct a scheduled, thorough pipeline analysis.  This analysis must include the salespeople responsible for the opportunities along with the sales manager to whom those salespeople report.  The end of the calendar year is a natural time to analyze every opportunity presently in the pipeline and those on the horizon too.

Failure to look at these opportunities under a microscope will place a certain amount of hazy ambiguity into your 2010 revenue estimates.

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It has been a hectic week of crashed computers, new blogs set up, new video integrations, business deals, etc.  Suffice to say, I have been worn out by the myriad of tasks.

In the middle of this busy week, I talked to a strong salesperson I know who has been quite successful in an industry that normally would suffer during this economy.  Unfortunately, he is starting to fade in his current position.  What I mean is that the company is grinding him down to where he is looking for another opportunity.

The main reason is disgustingly simple – he can successfully close deals in this economy, but his company struggles to deliver the product/solution.  The owner is absent from critical, time-related decisions.  The production department misses deadlines.  Installations fail due to installer error.

I met with this salesperson for coffee to discuss the situation and you could see the light fading in his eyes.  I’ve seen this scenario play out many times.  Companies want to hire strong salespeople, but they do not have the structure to support them.

The key here is to make sure you have the proper structure in place before hiring a strong hunter.  These hunters will stretch your company in new directions.  They will expect fast responses.  They will prefer to pass along the deal to a support person while they track the next deal.  These principles are simple to understand but difficult to put into action.

If you have strong salespeople today, be sure to monitor their internal company tasks.  What areas are slowing them down?  What could be done to be more efficient?  Don’t allow lethargic internal procedures to wear down the drive of a deal-closing hunter.

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I’ve noticed in some companies a casualness regarding sales forecasts from their sales team.  Heck, I’ve worked for some companies that shared that casualness.  Some companies view it as an exercise in Excel gymnastics.  Others view it as a coffee klatch activity.  One customer of ours had multipliers (<1.0) for certain sales reps since they knew those sales reps’ forecasts were inflated…greatly.

Here is a news story about a local company and a significant change to their forecast.  The setup:

Digital River Inc. shares plunged Monday after the e-commerce services provider announced it will lose its largest customer.

Cupertino, Calif.-based Symantec Corp. (NASDAQ: SYMC) notified Digital River on Oct. 9 that it will not extend its e-commerce agreement. That deal, under which Digital River provides a variety of e-commerce-related services to Symantec, expires on June 30, 2010.

Ouch.  Most people know that Symantec owns Norton Anti-Virus so that is a big loss.  How big?

In 2008, sales of products for Symantec accounted for 24.3 percent of Digital River revenue and sales derived from proprietary Digital River services sold to Symantec consumers accounted for 9.4 percent of Digital River revenue.

Over one-third of their revenue gone.  I’ve never been a fan of companies having one customer be so dominant in their revenue stream.  And now that one company won’t be!  Here is a pristine example of when a sales forecast can be a lifesaver for a company.

Here is the CEO’s explanation to the street (emphasis mine):

“Our company is financially strong, our new business pipeline remains healthy, and sales activity in the software, consumer electronics and business-to-business sectors continues to grow,” he said.

As an investor, I would sure like to know what measurements constitute “healthy.”  This scenario, losing a large customer, plays out often in the sales world.  The companies that can absorb such loses are the ones that know how to secure new (i.e. replacement) revenue from new customers.  An accurate sales forecast is the tool that will guide the Chief Revenue Officer to the quickest path for revenue replacement.  If I were in that role, I would be doubling efforts on the best short-term prospects on the forecast.  If my forecast was little more than notes on a napkin, I would be updating my resume.

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