The hidden cost of a failed sales manager, a guide for protecting your investment

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Earn the three key attributes that can dramatically impact sales manager effectiveness, and how your organization may be missing the mark.

Published in: Sales, Education, Business

The hidden cost of a failed sales manager, a guide for protecting your investment

  1. 1. Use these buttons to share content from this e-book. A Guide for Protecting Your Investment
  2. 2. TABLE OF CONTENTS The Sales Manager “Double Jump” 3 Ill-Equipped Managers 4 The Cost of a Failed Sales Manager 5 The Impact of a Successful Sales Manager 6 How Organizations Miss the Manager Mark 7 Skills to Develop in Your Sales Managers 8 How to Develop Manager Skills 9 Seizing the Opportunity 10 Next Steps 11 Page Use these buttons to share content from this eBook1 53 72 64 9 108 11
  3. 3. Jump #1: From Seller to Manager In most cases, sales managers are former top performing sellers who have been promoted, leaving them with a large proficiency gap in their new role. These former sellers struggle to make this first jump from seller to manager because they do not have the managerial skills needed to successfully lead and coach their own team of sellers. THE SALES MANAGER “DOUBLE JUMP” Use these buttons to share content from this eBook Jump #2: From Product Focused to Commercial Insight Focused These managers face the added challenge of leading in a sales environment that is moving from selling product to delivering Commercial Insight. Most companies don't invest enough in their managers to address this “double jump.” As a result, first line managers tend to direct or simply do the seller’s job for them using the skills that made these managers successful in the past. First line managers often fail because most organizations promote star sellers to management – a transition that leads to a large proficiency gap in critical managerial skills. Additionally, these managers are tasked with supporting their direct reports in a sales environment that is more complex than the one that they themselves sold in. 1 53 72 64 9 108 11
  4. 4. Source: (2012) SHL Talent Report, (2012) CEB Sales & Service data
  5. 5. Because sales managers have such direct influence over an organization’s revenue generation, the cost of a single failed sales manager can be staggeringly expensive. We have seen the cost of a single failed manager be as high as $4 million, calculating all the direct and indirect costs of: Source: (2012) CEB Sales & Service data 1. LOST PRODUCTIVITY 2. ATTRITION OR POOR TEAM ENGAGEMENT 3. LACKLUSTER CUSTOMER EXPERIENCE 4. RECRUITMENT, SALARY, AND TRAINING COSTS Potential cost…$4 MILLION THE COST OF A FAILED SALES MANAGER Use these buttons to share content from this eBook1 53 72 64 9 108 11
  6. 6. Revenue: The coaching that sales managers provide has a dramatic impact on sales team performance. Managers who provide effective coaching are able to better develop key sales skills in their direct reports and drive them to higher levels of sales success. CEB research found that seller percentage to goal can be as much as 19% greater when they have highly effective coaches. Engagement: A good manager can also positively impact team engagement. Sellers who are more engaged as a result of a strong manager are also more likely to put in incremental effort. These sellers are more productive and more willing to go the extra mile. First line managers effective at people management can improve their teams’ emotional commitment by 52%. Retention: Having strong managers in place can drive seller retention. Sellers reporting to managers with high coaching effectiveness are less likely to leave the company, an important consideration for sales organizations who hope to retain their high performers over the long term. First line managers effective at people management can improve their teams' intent to stay by 40%. Change Management: The success of any change management initiative also hinges on having strong managers in place who can reinforce organizational efforts. For example, combining seller training with coaching yields 4x the return of training alone. However, without on the job reinforcement from manager coaching, sellers lose 87% of training improvements within one month. Source: (2012) CEB & SHL data THE IMPACT OF A SUCCESSFUL SALES MANAGER Use these buttons to share content from this eBook When managers are properly developed, they can have a tremendous impact on the organization. 1 53 72 64 9 108 11 4x
  7. 7. Despite the massive impact that sales managers have on business results, many organizations only focus development efforts on sellers, neglecting to invest in their sales managers’ skills. Currently, new managers only receive roughly one third of the training time that new sellers receive. And, that training is typically focused on products/technical training, process/compliance training, etc. rather than on critical skill development. Source: (2013) CEB Corporate Leadership Council “Succession Strategies for a New Work Environment”. HOW ORGANIZATIONS MISS THE MANAGER MARK Reliance on On-the-Job Coaching Instead of Formal Training Too many organizations rely on on-the-job coaching by second line sales managers as the main mechanism for ensuring first line sales managers’ success. Many managers receive little to no formal training. Sales Management Training is Reserved for Senior Leadership First line managers are often overlooked when it comes to training investments. Many organizations choose to focus on sellers and/or senior leadership and neglect first line managers. Training Neglects the Areas With Greatest Impact Organizations that do see value in training first line sales managers often forego management skills in favor of product/process training, which is unlikely to have the same impact. Development Focuses Solely on Classroom Training Organizations who do invest in manager skills training often simply do a classroom session and then expect true behavior change. In order to truly build lasting skills, managers must be supported with post-training reinforcement activities and other supporting elements of a comprehensive development program. Use these buttons to share content from this eBook1 53 72 64 9 108 11
  8. 8. Source: (2010) CEB Sales Leadership Council “Building Sales Managers for a Return to Growth” SKILLS TO DEVELOP IN YOUR SALES MANAGERS 73% 27% Use these buttons to share content from this eBook1 53 72 64 9 108 11 Sales Management attributes can be taught and can have a dramatic impact on individual manager effectiveness. In fact, they account for 73% of sales manager effectiveness.
  9. 9. A study across 73 companies and more than 14,000 sellers revealed that organizations rate managers as only slightly above “somewhat effective” at selling, coaching, and innovation (lower than on resource allocation and management fundamentals). The good news is that the vast majority of manager effectiveness is driven by skills (selling, coaching, and innovation) that can actually be built through targeted development efforts. This represents a key opportunity and competitive advantage for those companies that choose to invest in building these critical skills in their sales managers. Source: (2013) CEB Corporate Leadership Council “Succession Strategies for a New Work Environment”, HOW TO DEVELOP MANAGER SKILLS How to make it work? A successful program includes:  Advance awareness building  Classroom experience using adult learning methods where skills are taught by a credible facilitator with sales expertise  Opportunities to practice and receive feedback  Tools to support skill application  Post-training reinforcement program Use these buttons to share content from this eBook1 53 72 64 9 108 11
  10. 10. Focus Your Development Efforts: Equip managers with the selling, coaching, and sales innovation skills that have been proven to drive sales manager effectiveness in today’s complex selling environment. Build Skills Via a Comprehensive Development Program: Invest in a comprehensive skill development program for your sales managers that includes a classroom training experience as well as pre-training preparation work and post-training reinforcement and application opportunities to ensure skills are both learned and applied. SEIZING THE OPPORTUNITY Now that you have a better understanding of the critical importance of first line sales managers, you understand the need to invest in their development. Let CEB partner with you to develop the key managerial skills your sales managers must have to drive success in your organization. Use these buttons to share content from this eBook1 53 72 64 9 108 11
  11. 11. FOLLOW UP CONNECTLEARN MORE CONTACT Use these buttons to share content from this e-book1 53 72 64 9 108 11

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