I had breakfast with a client this morning. He was planning a new training initiative for his sales team.
"How much do the make now?" I asked. "About $30,000 to $35,000 a year." he replied.
"What are you trying to accomplish?"
"I want them all to get up to between $50,000 and $60,000 a year."
"Stop," I said. "You are wasting your time."
Now I expect all those who specialize in sales training and motivation will send me emails telling me that I'm all wet. I'm sorry. I've watched sales people for 40 years, and one thing is plain. A $35,000 guy is not a $60,000 guy.
I know a company that sells heavy equipment. They had several lines, but not the best one in the industry. The owner chased it for years, and finally landed a distribution contract. When I asked him how he was going to change his sales team he said "The only change will be that my salesmen who have been making around $60,000 will now make $120,000 to $150,000."
He lost the line within 2 years.
All employees have comfort zones, and salespeople are no different. Although most will claim to have no limits on their financial ambition, most do. They have a lifestyle with a cost of living attached. Within that lifestyle and cost are the restaurants they like to frequent, the friends they feel comfortable with, the stores they shop, and their role in their family.
Success to most people is measured by a 10% or 20% income increase. They can get accustomed to that after a while, and of course then they want to do better. But if you give them unlimited opportunity, the majority of folks will taper off efforts at about a 20% improvement in their lifestyle. Beyond that and they have to start thinking about leaving their comfort zone. Most won't do it.
That's why owner after owner comes to me in frustration saying "I hired a guy and gave him the opportunity of a lifetime. He could have made $100,000 a year, and he just isn't doing it. He's never had an chance like this before and he is blowing it."
Yup, and maybe next time he'll be more ready to take advantage of it, but not now. He isn't a $100,000 guy.
Friday, November 20, 2009
Friday, November 6, 2009
Attrition Opportunities
A client of mine used a great term in a conversation last week. Someone asked him if he had instituted any reductions in force (layoff, for those on the receiving end) in his company. "No," he replied "but we've had a reduction in force via performance attrition."
Performance attrition. Now that's a GREAT euphemism for "Fired- for not doing the job." It also serves as a reminder of something every business owner knows. Not every employee departure makes us sad. There are a number who we are happy to see move on, and a few to whom we have to give the final push.
One problem I see in smaller companies, however, is the tendency to replace people, rather than recruit to a need. When someone leaves, you have an opportunity to do much more than just "get someone better." You can recast the position and duties to have a greater impact on your business.
In a small business most employees have to wear multiple hats. Over time, each employee winds up wearing the hats that suit him or her best. there are bookkeepers who double in customer service, or inside salesmen that handle the basic day to day computer set up chores. One of the attractions of a small business for many employees is the flexibility of the job description. People have more latitude to stretch. If you want to give something a try, it's usually available.
But when that person leaves, we often have a job description that was custom built to that individual. Our current "receptionist" (I use that term only because she answers most of the phone calls and greets visitors) has a talent for graphics and writing. She has become the publisher of our newsletter. If she leaves, it would be a tremendous temptation to recruit another receptionist who can handle graphics and copy writing.
That would be foolish. We would not only be severely limiting the pool of candidates, but we would probably end up paying too much for the basic skills of the position. In truth, we'd probably either get a great newsletter editor or a lousy receptionist. Soon we would be customizing the job around the new person's skills.
The departure (whether voluntary or involuntary) of an employee in a small company should be cause for examination of the position and its duties. What was assigned to that job because it was necessary, and what was assigned just because the person could do it, or liked it, or because someone else didn't want it?
Start your new job description by peeling away all the duties that should or could be done by someone else. Ask what parts of the job other employees might like to give a try. Think about which tasks might once have been assigned elsewhere, but were picked up because the former employee volunteered when they became available.
Once you've stripped the position of its "optional" elements; you can see how much of a job remains. Is it a skilled position? Is it full time? Does it require a hire at all?
The best small business owners I know restructure their organization with every hire. Doing so spreads the opportunities, resets priorities, and increases profits.
Performance attrition. Now that's a GREAT euphemism for "Fired- for not doing the job." It also serves as a reminder of something every business owner knows. Not every employee departure makes us sad. There are a number who we are happy to see move on, and a few to whom we have to give the final push.
One problem I see in smaller companies, however, is the tendency to replace people, rather than recruit to a need. When someone leaves, you have an opportunity to do much more than just "get someone better." You can recast the position and duties to have a greater impact on your business.
In a small business most employees have to wear multiple hats. Over time, each employee winds up wearing the hats that suit him or her best. there are bookkeepers who double in customer service, or inside salesmen that handle the basic day to day computer set up chores. One of the attractions of a small business for many employees is the flexibility of the job description. People have more latitude to stretch. If you want to give something a try, it's usually available.
But when that person leaves, we often have a job description that was custom built to that individual. Our current "receptionist" (I use that term only because she answers most of the phone calls and greets visitors) has a talent for graphics and writing. She has become the publisher of our newsletter. If she leaves, it would be a tremendous temptation to recruit another receptionist who can handle graphics and copy writing.
That would be foolish. We would not only be severely limiting the pool of candidates, but we would probably end up paying too much for the basic skills of the position. In truth, we'd probably either get a great newsletter editor or a lousy receptionist. Soon we would be customizing the job around the new person's skills.
The departure (whether voluntary or involuntary) of an employee in a small company should be cause for examination of the position and its duties. What was assigned to that job because it was necessary, and what was assigned just because the person could do it, or liked it, or because someone else didn't want it?
Start your new job description by peeling away all the duties that should or could be done by someone else. Ask what parts of the job other employees might like to give a try. Think about which tasks might once have been assigned elsewhere, but were picked up because the former employee volunteered when they became available.
Once you've stripped the position of its "optional" elements; you can see how much of a job remains. Is it a skilled position? Is it full time? Does it require a hire at all?
The best small business owners I know restructure their organization with every hire. Doing so spreads the opportunities, resets priorities, and increases profits.
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