Manage Your Sales Team: Critical Candor

“Acme Vehicles” is primarily in the business of renting vehicles to companies that use mobile advertising as a way to create corporate identity. Acme provides this service and two other unrelated services to approximately 800,000 businesses throughout the US and Canada. It was founded in 1928 and currently employs more than 32,000 people. Acme has approximately 8,300 local delivery routes, 410 operations centers, 9 distribution centers, and 18 direct-sales offices.

Acme went public in 1984 and has experienced 41 consecutive years of growth and profitability despite many fluctuations in the economy. While Acme has obviously experienced its share of success, the company had developed a traditional command-and-control environment that was stifling innovation and lowering morale.

In the sales group, the problem manifested itself in an organizational philosophy which dictated that the only way to advance to a higher compensation plan was to “climb the ladder” and become a sales manager. As a result, many of Acme’s top salespeople were being promoted out of sales positions in which they were happy and successful and thrown into management roles that they did not enjoy. Many either failed to thrive in the new roles or left the company because they were discontented with their new position.

Turnover at the sales rep level was too high, resulting in territories not being covered adequately or being covered by inexperienced sales reps and weak sales leadership. Pay and incentive plans were very competitive and goals were achievable; however, sales reps were quitting.

The company’s traditional command-and-control environment was a tough place to work. Asking people how they were feeling wasn’t a part of the culture. Opinions were not sought out, causing further morale problems. As might be expected, dealing with the departure of disgruntled and dissatisfied employees had an adverse financial impact. A recent study indicated that the cost of replacing a sales representative and training a new one is as much as 150 percent of the former employee’s yearly compensation. This extra expense increased the company’s cost of sales by several million dollars a year, making it less profitable.

Acme’s management decided that, while there were clearly some organizational and policy issues that needed to be addressed, the primary problem was the communication that took place between individuals throughout the company. Because every communication was channeled through the command-and-control structure, much of it was ritualized and disingenuous. Several newly promoted sales managers left the company without ever having communicated that they were unhappy.

Acme wanted to improve communication and help the company better retain members of the sales force. Acme’s VP of sales for the Northwest Central Pacific region happened to pick up the book Fierce Conversations: Achieving Success at Work & in Life, One Conversation at a Time (Penguin Group/Viking Studio, 2002) by Susan Scott, which defines specific tools that an organization can use to increase the emotional content and candor of business communications.

The book describes a methodology to move meaningful conversation from the watercoolers, where it usually takes place, into the conversations between managers and employees. It also describes how ritualistic business conversations decrease productivity by impeding the flow of meaningful information. The idea behind the book is that each relationship is a long-term commitment, and the relationship only consists of the conversations that take place between the people inside the relationship.

This theory of relationships is intended to lead to more effective management of employee strengths and weakness. Employees and managers alike become more effective when they recognize that whatever they leave out of their conversations, they leave out of their relationships, and whatever they include in their conversations, they include in their relationships. And those relationships are the basis for corporate culture and a corporation’s ability to execute a strategy.

The Acme VP subsequently attended a Fierce workshop and began implementing the tools among his direct reports. He brought in a facilitator to conduct workshops with more than 100 salespeople, as well as several hundred people in various positions throughout his region. In particular, the VP called out the Coaching and Confrontational Conversation models as providing immediate advantages, and he recognized firsthand the impact that building relationships and better communicating with employees started to have on his team’s morale, performance, and retention.

The Fierce training was incorporated into Acme’s regular training program, with workshops provided to employees throughout the corporation several times a year. The training is now rolled out to a larger number of employees and driving a gradual change of Acme’s culture, moving away from the traditional command-and-control model and toward a more inclusive management style. The result is a higher retention rate and less expense allocated to recruiting new hires.