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Sales Managers: Are You Shutting Down Your Internal Voices of Risk?
Blog / Sales Management / Jun 3, 2017 / Posted by Andy Rudin / 6302

Sales Managers: Are You Shutting Down Your Internal Voices of Risk?

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“If only HP knew how much HP knows, we would be three times more productive,” Hewlett-Packard CEO Lew Platt said.

Had Mr. Platt been referring to his sales organization, he would have increased the multiple. Sales teams possess immense knowledge – from finance, marketing, strategy, product engineering and customer support to street smarts about customer behavior. Within a sales force, there’s formidable brainpower.

That’s great for customers, but it’s a mixed bag for managers. Knowledge and risk awareness go hand-in-hand. A reality that threatens sales bosses, especially when they assign individual quotas and sales targets. Less knowledge makes team members compliant. Naivete helps management’s fuzzy planning numerology and “stretch goals” become easier to swallow. “Team! Get out there and bust your quotas!” Woe to the salesperson who tells her boss, “I have a 73% chance of making my number.” In sales culture, determinism is revered, while probabilistic thinking gets savaged. “We need achievers, not naysayers!”

More! Faster! Better! In this make-your-number-no-matter-what environment, the voices of risk get stifled. Problems don’t get voiced. Issues remain under wraps. Objections aren’t discussed. “We need to use our time efficiently,” senior sales executives tell me. “Why bother discussing stuff we can’t change?” Yes . . . But . . . There are significant costs when management cannot assess vulnerabilities, let alone, even know what they are.

More than ever, organizations need to get smart about uncertainty and risk. Something that former Wells Fargo CEO John Stumpf didn’t appreciate before he landed in a hot seat in front of Senator Elizabeth Warren. Stumpf got so flummoxed, he could hardly speak, while Warren eviscerated him with questions about his company’s widespread abuses.

Stumpf had it coming, because for years, he purposely kept his head in the sand. Wells Fargo’s management team brutally crushed the voices of risk. Using a cudgel called U5, management silenced internal dissent, enabling Wells to implement practices that exploited its customers and employees. U5, a federal form, was intended to prevent financial services employees who commit fraud and other violations from hopping from firm to firm and repeating their transgressions. But Wells Fargo’s management redirected U5 to facilitate employee intimidation. U5 became management’s go-to method for getting employees to submit to their heinous demands.

When slapped onto an employment record, U5 carries serious consequences. To hiring managers, it means “don’t hire this candidate.” To employees, it means “Move to a Caribbean island and open a sunglasses stand because you’re not working in financial services. Not now. Not later. Not ever.” U5 made it possible for Wells Fargo’s Management to deliver a terrible message to its staff: if you have the temerity to speak out, blow the whistle, complain, resist, or express unhappiness or unwillingness, we will ruin you. And they meant every word.

We will never know with certainty which statements got silenced, but here are a few possibilities:

“These goals are impossible.”

“My customers don’t like the bank’s practices.”

“I’m uncomfortable doing this. It seems dishonest.”

“The stress here is literally making me sick.”

“No. This is wrong.”

The voice of risk, U5’d. A well-known verb in the bank’s HR Department, I am sure. With U5 and the repressive sales culture at Wells Fargo, untold millions of similar comments got expressed, and never made it outside the company. Only a tiny few seeped out. Just not enough to awaken regulators and Wells Fargo’s board of directors from their slumber. It took an outsider’s report – an investigative article in the LA Times – to goad anyone into action. If you want to crush the voice of risk, here’s a proven model!

Voicing risk, pushing back, calling out red flags, blowing the whistle – use any terms you want. Wells Fargo used the threat of severe punishment to systematically turn off every communication management didn’t want to hear. An extreme case, for sure, but far from isolated. Where there’s disdain for hearing truth, a company’s sales culture will reveal it:

“Sell what we’ve got!”

“I don’t want to hear how you aren’t going to make your number, I want to hear how you are!”

“Don’t give me problems. Give me solutions!”

“Stop making excuses!”

“Quit whining!”

One of the most effective ways to shut down the voice of risk is to brand an employee “not a team player,” or “doesn’t believe in the company’s potential.” It’s not U5, but punitively, it might be the next best thing. Try getting promoted or landing a better sales territory with those tidbits embellishing your personnel record. Management’s message: “if you want to stay here, do as we say, and don’t rock the boat.”

“But . . . nobody wants a department full of Chicken Littles, either!” Fair point. There are clear strategic advantages to being selective about information. Managers must be granted the flexibility to determine what’s useful and valuable, and what to eschew. After all, in sales and selling, there are no universally recognized standards for framing the truth. Look at any B2B sales organization, and you’ll see different managers using different dashboards, and no two turning the same dials and knobs. Vive la difference!

Yet, there’s a distinction between healthy selectivity and willful ignorance. Sales culture should never be an accomplice to the latter, yet the problem is epidemic. The annals of corporate failures are littered with companies that swept the voices of risk under the rug, and created horribly skewed versions of reality.

Make sure the voices of risk are not silenced at your company. That begins with the board. In an article, Culture: The One Element Most Critical for the Board’s Management of Risk , Jay Taylor, CEO of EagleNext Advisors, recommends six questions to ask:

  • Is the CEO active in creating the culture for the organization? Is he or she modeling the right behaviors?
  • Is there appropriate tone at the top, both during and outside of board meetings?
  • During strategy, product, and investment discussions, is there transparency around business assumptions, openness to respectful but challenging views, and identification of emerging risks to the business model beyond the immediate planning horizon?
  • Is there a willingness to bring forward bad news? Is there an understanding that failure may occur, but the business cannot grow and prosper without taking smart risks?
  • Has the board established clear expectations for timely identification and handling of risk, particularly those around business goals and objectives? Is there clear risk ownership?
  • Not everything should be filtered through the CEO. Are other executives and risk owners present at board meetings and allowed to take questions directly?

The answers to these questions directly influence the culture within the sales force. They influence the strategy, tactics, compensation, and measurements under which business development teams operate. When salespeople believe that the board views risk management, governance and compliance as a crucial responsibility, an ethical environment can be established within the sales organization. The converse is also true: when it’s evident the board doesn’t want to be bothered with protecting the company’s stakeholders, [stuff] will happen. We saw how that works at Wells Fargo.

In addition,

  1. It’s understandable that not every anecdote from the sales force constitutes an “action item,” but make sure it’s clear that salespeople will not be penalized for voicing issues to management.
  2. Don’t limit account reviews to “wins.” In meetings and internal communication, allow frank discussion about what impedes selling, and make sure no person or department is held sacrosanct in the conversation.
  3. Don’t condemn people for probabilistic thinking. Instead, embrace the approach! That won’t make anyone less determined, resolute, or rabidly goal-focused. In fact, the sales team and its managers will become more risk-aware.
  4. Appoint at least one board member to serve as a direct point-of-contact for salespeople who want to elevate concerns about illegal or unethical practices, or any other activity that endangers the company, its employees or its customers.

Give the knowledge that exists in your sales organization the opportunity to come out. Help others learn. Giving risk a voice, and a safe way to express it, provides immeasurable value. And in the case of Wells Fargo, it would have even saved the company from itself.

About Author

Andrew (Andy) Rudin serves as Managing Principal of Contrary Domino, Inc., and helps B2B companies identify, assess, and manage a broad spectrum of revenue risks. He has a successful background as a technology sales strategist, marketer, account executive, and product manager.

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