Embracing Challenges, Enhancing Sales Performance

How’s your sales team performing? Have you ever noticed that the better a sales team performs, the more detailed the sales leader’s answer is? Sales professionals often focus on positive details and avoid the negative, a phenomenon known as the ostrich effect. This tendency to avoid negative information can have significant implications for sales professionals. In this article, we explore the reasons behind the ostrich effect and strategies to overcome it, empowering sales professionals to embrace bad news and turn it into an opportunity for growth.

Sales leadership during a market slowdown is an often written-about topic. But putting words into action is the difference between an observer and a sales leader. Even with meticulous business planning and well-thought-out sales strategies, unforeseen market conditions disrupt our sales progress. During disruption, the ostrich effect comes into play, causing delays in using information and leading to adverse sales outcomes. Throughout history, numerous businesses have fallen victim to this phenomenon. Here’s a hypothetical example of how the ostrich effect can negatively impact a sales organization.

Ostrich Systems is a leading technology company known for its innovative products and market-leading sales position. The company recently started facing increased competition from new market entrants offering similar products at lower prices. Instead of acknowledging the changing market dynamics and adapting their sales strategy, leadership ignored the competitive threats.

Despite clear signs of slower sales and diminishing market share, Ostrich Systems’ sales leadership believed the situation was temporary and their sales would rebound. They continued to burn cash, lost a few critical employees, and fell out of touch with customers. However, the sales leadership’s attitude was, “Don’t bring me problems. We are focused on solutions.”

As a result, Ostrich Systems lost key accounts and struggled to attract new ones. The company failed to grow while new entrants gained significant market share. Shareholders started questioning the company’s performance, and the stock price plummeted.

Eventually, Ostrich Systems was forced to change leadership and implement a new sales strategy, but it was too late. The competitors had already established a strong foothold in the market, and Ostrich Systems lost its market dominance. This example illustrates how the ostrich effect can have severe consequences for sales leaders who ignore the bad news.

Get Your Head Out of the Sand

The ostrich effect is a cognitive bias that leads individuals to avoid information they perceive as potentially unpleasant or distressing. This phenomenon can be observed in various scenarios, such as sales reps who completely stop tracking their sales numbers when they fall behind their targets or a Vice President of Sales avoiding meetings due to the stress caused by negative economic news.

Sales professionals are not alone in dealing with the ostrich effect. Other examples include investors “burying their heads in the sand” when the market drops. Similarly, many people avoid doctors for fear of receiving bad news about their health. While avoiding bad news is common, it is widely understood that it is not a productive or effective approach. The question remains: Why do sales professionals engage in the ostrich effect despite its known shortcomings?

We’re an Optimistic Bunch

“Don’t worry. I’ll close the next one,” is the prevailing attitude among high performers. This mindset reflects the power of positive thinking deeply ingrained in the sales profession. However, it is essential to recognize the difference between goal attainment and wishful thinking.

Sales reps and leaders often avoid deeply examining their failures, as doing so may challenge their egos or cause discomfort. It can be uncomfortable to face the accountability mirror. Instead of questioning what we could be doing differently, we say to ourselves, “No big deal. We’ll bounce back next quarter.”

While staying positive is important, balancing it with a willingness to critically examine all sales shortcomings or failures is equally essential. By disregarding the need for self-reflection and accountability, sales professionals miss valuable opportunities to enhance their sales performance and achieve long-term success.

Learning From Sales Failure is Hard Work

Common wisdom says we learn from our mistakes. Contrary to popular opinion, learning from mistakes is rare in sales. While extracting lessons from failures in sales is valuable, the complexity of sales makes it mentally challenging to learn from these experiences.

Sales problem-solving requires high-stakes decision-making. This necessitates gathering and analyzing extensive amounts of data and information. The potential negative consequences of making incorrect decisions can be substantial. Leaders who, by themselves, are meticulously crunching numbers before a crucial decision understand the mental exhaustion associated with this process.

Decision fatigue refers to the mental exhaustion experienced after prolonged cognitive effort. It arises from the brain’s reliance on glucose, a vital energy source that fuels all mental functions. Neuroscientific studies have demonstrated that high-stakes decision-making consumes significant amounts of glucose, depleting the brain’s energy reserves and resulting in decision fatigue.

The danger for some sales leaders is that once they experience decision fatigue, there is a preference for easier options. This can lead to impulsive, irrational, or suboptimal decisions. Think of it like skipping leg day at the gym—although you know it’s important, the memory of the previous discomfort may make you postpone it to the next session.

Finding Sales Solutions with Bad News

Sales leaders can leverage bad news to find effective solutions and drive improved sales outcomes. The first step in leveraging bad news entails acknowledging and confronting unpleasant feelings inherent in the human condition, such as fear, anxiety, and self-doubt.

Confronting uncomfortable feelings involves acknowledging their presence and understanding their underlying causes. Rather than allowing fear to paralyze or hinder decision-making, sales leaders can channel it into motivation and determination. They can proactively identify the root causes of their fears, whether it’s fear of rejection, failure, or uncertainty. They then develop strategies to overcome them. This may involve seeking support from mentors, acquiring new skills, or adopting a growth mindset that embraces learning from setbacks.

The second step for sales leaders to effectively utilize bad news is to set aside personal ego and detach themselves from past accomplishments or accolades. This step is essential to ensure an objective assessment of the current sales reality. Setting aside personal ego means recognizing that past successes do not guarantee future results. By detaching from past accomplishments, sales leaders create space for critical evaluation without being clouded by past triumphs.

The third step is accurate data assessment. Accurate data is the compass for decision-making, allowing sales leaders to make informed choices rather than relying on subjective judgments. It helps them identify patterns, trends, and potential root causes of issues, guiding them toward effective solutions. By basing their assessments on solid evidence, sales leaders can gain the confidence and credibility necessary to drive meaningful change.

The final step is acknowledging the difficulty between recognizing and solving a sales problem. Everyone within the company can recognize when there is a sales slowdown. Identifying the cause and implementing the solution with the available budget is highly complex.

Understanding this complexity means that enabling strategies that mitigate decision fatigue is vital for an organization. This highlights the importance of seeking external sources of information and expertise when necessary. Collaborating with external stakeholders, industry experts, or consultants can provide valuable insights and perspectives, contributing to more informed decision-making and improved business performance.

Conclusion

The ostrich effect creates a significant challenge for sales leaders, hindering their ability to manage bad news and find effective solutions. However, by understanding the psychology behind this phenomenon and adopting strategies to overcome it, sales leaders can better position themselves for success.

By recognizing the negative impacts of avoiding bad news, sales leaders can take proactive steps to overcome this bias. Sales leaders can transform the negative emotions associated with bad news by acknowledging and confronting uncomfortable feelings inherent in the human condition, such as fear, anxiety, and self-doubt. They can identify the root causes of their feelings and develop strategies to overcome them, embracing a growth mindset and learning from setbacks.

Ultimately, by embracing bad news and adopting a culture of continuous learning, sales leaders can break free from the limitations of the ostrich effect and position themselves for long-term success. Encouraging open communication, fostering a mindset that values growth and development, and cultivating a supportive and innovative sales environment are vital for driving sales excellence and overcoming challenges.

Finally, in sales, the most valuable lessons are learned through a combination of experience, adversity, and self-reflection. These are the pillars upon which true growth and development are built. In sales, we can learn from bad news, which can be transformative for those who avoid the temptation to bury their head in the sand.