Episode #19: The Ideal Sales Ecosystem

Before we get into this week’s topic, here is what caught my attention lately.

Japan is going to limit the number of university students studying in Tokyo. In the last ten years the number has increased 18% to 460,000. Consider that number when you think about the total number of 18 year olds in Japan will drop below the 1 million mark by 2031. The government worries that too many of these students from outside Tokyo are staying and not returning to their home regions. By reducing the numbers of those who can study in Tokyo, they are hoping to keep alive the regional universities. In 2016, 43% of Japan’s 604 private universities failed to meet their intake quotas with those in the regions suffering the most. Private universities in Tokyo’s 23 wards won’t be allowed to increase their enrollment quotas, nor will any new tertiary institutions be approved. Of Japan’s 778 universities, 243 or 31.2% were in the red.

This is episode number 19 and we are talking about The ideal Sales Ecosystem.

Soredewa ikimasho, so let's get going.

What are today’s revenue results, how much is in the pipeline, when will we get paid by the client, what is the sales run rate, will we meet our budget - this is the lexicon of sales. Our sales results are the end product of a series of processes.

There is usually ample attention placed on sales processes but sometimes we need to step back from the detail, the mechanics, the techniques and contemplate the overall environment we have created for sales to flourish.

Your Japanese sales manager yelling at the sales team and berating them for under performance is usually not very productive, because the motivation drops. Usually the sales team cannot easily be fired for underperformance. Japan is different in that regard to other countries and this makes the bosses lot all that more complex. We have already entered the jaws of hell as far as hiring more salespeople goes. The declining population demographic makes the recruit and retain strategies for adding and keeping salespeople much trickier than in the past. This means yelling at people will just see them walk out the door to a rival.

Also applying too much pressure on the sales team means a vicious downward spiral kicks in. We have seen this recently with a number of scandals around compliance standards for manufacturers, who were shortchanging clients in order to meet internal sale’s metrics. When the pressure becomes too great, the client’s best interests are out the window immediately and in short order, the brand “flesh wounds” start to accumulate. These flesh wounds are immediately felt in the share price of the company and the resignations of senior executives. We need to redirect the sales team’s performance by moving things forward, rather than constantly combing through the bitter ashes of past defeats.

Here are five ecosystem builders to boost the success of the sales team.

Sales can become very internally focused. The constant review of sales numbers and focus on existing clients draws us into a web of self-absorption. Shifting the world into “us” and “them” can be great for focus and encouragement. Unfortunately, a lot of the “us” and “them” is often internally rather than externally focused.

This is usually centered on the failings of Marketing or IT or Production or just about anybody outside of sales who can be blamed. “Woe is us. If only those other laggards were doing their job properly we would be selling more and doing better”. Salespeople are truly excellent at blame shifting. Better to focus this caustic energy on the competition. Intense rivalry is a motivator and beating the other company’s sales team is a worthy goal that appeals to the competitive nature of sales people, so focus them outward.

Having no limits on sales people’s earnings motivates them. Pretty obvious! Sadly the ego of the President or the Sales Director can get swept up in this commission-based melee, especially when they realize that individual sales people are earning more than they are. Emasculating or ending a successful sales structure, because of ego or greed, is stupid but it still happens anyway.

Rather than reducing commissions, keep the no-ceiling attraction there to drive results and it becomes a win-win for everyone. Japan rarely operates on 100% commission, so there is usually a base/commission trade off. Keeping the unlimited income prospect in everyone’s sights is good business, because the corresponding base pay rates can be kept lower.

If performance takes time to produce or is not being generated, then the actual fixed costs remain low. The more sales people succeed, the more attractive you are to the quality talent you want to attract and retain.

The basics of sales can’t be neglected or truncated. Every high performance athlete or sports team goes back to the basics at the start of every season. Sales people are no different – back to basics on a regular basis eliminates or confines bad habits.

Your own sale’s presentation can become boring. The client usually only ever hears it once, but the sales person could be giving the same basic sale’s presentation 10-20 times a week. Short cuts emerge, best practices are trimmed, inconsistencies pop up, complacency arises when sales people, even the good ones, find themselves immersed in dull routine.

Stimulation to vary the presentation or to inject some fresh ideas into the sales conversation is needed. Training, attending sales rallies, industry related conferences and events, support for reading and on-line courses, are all magic stimuli for sales people.

In the famous movie Glengarry Glen Ross, the sales “leads” are so valuable they are placed in the company safe. Ace sales guy, Ricky Roma, played by Al Pacino, is the only one who is not dependent on the company provided leads. Moral of the story - don’t let sales people become dependent on leads generated by the marketing department or from the web.

The best sale culture is one of accountability for production , independence and a will to achieve. Organised tenacity, creativity, freedom, success orientation - should be the dominant attributes. Make it clear at the hiring point that “this is how we roll here”, because sales is a brutally honest results culture.

It may be thought that self-directed sales people don’t need praise or approbation. True but they want it anyway. Don’t ever underestimate the competitive nature of sales people and their appetite for having their egos stroked! In Japan though it is better done subtly and out of the public eye. Hauling the sales ace up to the front for recognition in front to the team may work a treat in most countries, but in Japan the sale’s ace will dread it because they know they are now a marked man or woman. Jealousy, backbiting, snide comments, bitching are all about to rain down on their heads. So a quiet special lunch is a better route, than effusive praise in front of their workmates.

Successful sales leadership builds people and manages processes. Paying attention to the macro-environment, as well as the gritty detail, will help build a sustainable, high performance culture in your sales organisation. Is what I have outlined here doing a good job in describing your work environment? If not, take some initiative and push hard to change it to a success model, rather than let it continue as a blame model. If you can’t change it, then get out. Good salespeople are welcome everywhere and life is too short to work for idiots.

Action steps

1. Step back and take a good hard look at the sales environment that has been created to date
2. Make the competitive focus outward not inward
3. Provide “no ceilings” commission structures to motivate everyone
4. Invest in the development of sales success
5. Make organised tenacity, creativity, freedom, success orientation the dominant attributes
6. Don’t ever underestimate the competitive nature of salespeople and our appetite for having our egos stroked