I made that up, Sinking Stock Syndrome, from some interactions I have had recently with a couple of small business owners.\u00a0 Both owners suffered from this syndrome which had disastrously negative effects on their company, both in revenue and morale.<\/p>\n
Here is how I define my newly-minted syndrome \u2013 an irrational hope that a grossly underperforming salesperson will miraculously turn things around and become a sales superstar.<\/p>\n
It rarely happens.<\/p>\n
The problem stems from the business owner who has invested in this failing salesperson.\u00a0 Notice I used \u201cbusiness owners\u201d \u2013 I do believe this syndrome is more prevalent among this group as they are closely tied to the business (i.e. financially, emotionally, historically).\u00a0 They usually have a relatively accurate count of the resources invested in this salesperson.<\/p>\n
The sinking stock analogy will be understandable to anyone who buys and sells stock.\u00a0 When you purchase a stock, you expect (hope) it increases in value.\u00a0 When it goes the other way, you encounter a sinking feeling as you have now lost money.\u00a0 It is at this point that you need to make cold, objective decisions about the stock.\u00a0 Is it going to rebound in an acceptable time frame or did you make a bad investment?<\/p>\n
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.\u00a0 While you wait, the stock drops further and you have now lost more money.<\/p>\n
Hope keeps you from dumping the stock.\u00a0 The desire to earn back what you have lost keeps you from making the tough decision to sell.<\/p>\n
Business owners can get caught in this same trap.\u00a0 They know a salesperson is not performing and that they are losing money by continuing to keep them in the role.\u00a0 Other employees see that this salesperson is not closing deals and they start to become upset.\u00a0 This salesperson stays on the payroll even though it is clear that he\/she cannot do the job.\u00a0 At some point, the tough decision has to be made.\u00a0 It can be to put together a get-well plan for the salesperson.\u00a0 However, most times it is to part ways\u2026or should I say cut your losses?<\/p>\n
It is difficult, almost an admission of failure that hits the owner directly.\u00a0 But it has to be done.<\/p>\n","protected":false},"excerpt":{"rendered":"