Executive Leadership Style & Its Impact on Sales Team Performance

Chip Royce, Flywheel Advisors – August 9, 2022

Executive Summary:
Like a top athlete, a great salesperson requires a positive frame of mind, assurances that the rest of the organization will support them with the best product, customer support, and willingness to help deals cross the line. Leaders and managers who don’t understand sales organizations’ processes and motivations often contribute to poor organizational dynamics by not realizing the impact of their executive leadership style and its impact on sales team performance, often resulting in business risk.

As a current or future leader of your company, do you understand the process and motivations of the sales organization at your company?

Poor Sales Leader

Let’s examine the role of a salesperson:

  1. Sales is a process. A salesperson has a mindset to work within, or possibly improvise around, a process provided to them to sell a given product or service. They are offered various resources that assist them in achieving a set of goals. The process entails identifying, qualifying, and interacting with prospects (potential customers) to lead to a completed sale.
  1. A salesperson is not a magician or possesses mind control skills.  Forget what you see in the movies or what you think happens at the car dealership. Unscrupulous salespeople who take advantage of the goodwill of others don’t last long in commercial sales. In these situations, other stakeholders and business controls ensure that the sales process happens correctly, a purchase is made with full knowledge of what is being purchased, and protections exist for the customer in case issues arise.
  1. A Sales job has no guarantees. In most organizations, the sales process has a high variable compensation component. While a sales job usually pays a base or minimum draw. Still, failure to generate results usually means substandard earnings, losing one’s job, or leaving for another opportunity for better prospects sooner.
  1. A great salesperson is always taking on outsized risk. Each day the salesperson shows up for work, they’re betting on the company, product, industry (if industry-specific), macro economy, fellow employees, and management team to support them. They can be a top earner for the past five years and continue to perform no differently as they had in the past. If the company cannot support them with the right product or if the circumstances change and customers no longer can afford or need the product, that salesperson’s performance can plummet, and earnings dwindle.

Let me be more direct… your sales organization takes on a substantial amount of risk, betting on the performance of the rest of the company and your leadership. Their bets may be riskier than investors and executives whose incentives may be time-based or have clawbacks or preferences. Your salespeople must be recognized for this and defended against unreasonable critics.

OK, so why did I bring this up?

The person who tells you that a salesperson’s job is easy is someone who has never had a sales job before.

Some of the most egregious culprits of this behavior are company executives from other teams or newly installed sales leaders who arrive from outside the organization.

How often do you hear (or feel) from managerial or executive ranks when sales teams are performing well:

“I can’t believe they are paid so much money, yet we do all the work to deliver the product / provide customer support / (insert other activity here).”

“I could do their job with my eyes closed with how great our product/service is”

And yet, when times are tough, perhaps the product is old or stale, perhaps buggy, or customer support isn’t focused on the customer, leading to missing sales targets.

“What is up with those guys, why can’t they hit their targets?”

“We’re going to have to make changes in the sales organization, someone has to be accountable for these poor results!”

OK, so is the lesson, keep those kinds of comments to yourself? Yes. Let me exaggerate to make the point. 

You’re the coach of a professional sports team, in the championship game, football, baseball, basketball, soccer, whatever. You have a timeout, and you’re talking to your players (as a proxy for your sales team).

“We’ve had a tough time this season (fiscal quarter or year). The owner is breathing down my neck (instead of investors or board) and needs a championship (profitable quarter). Don’t mess this up (or saltier language), or I’ll be looking to cut (fire) you before I get the ax”. 

Think this approach has a low probability of achieving results? Absolutely. 

However, I’ve heard softer versions of that message from execs to sales leaders and teams. It only sped up the departure of key performers and ensured subpar performance on the way out.

You see the people who are willing to:

  • Join sales organizations
  • Be a part of a process they don’t fully control
  • Give up guaranteed pay for significant upside

…understand that there’s a risk each quarter to miss their target, and must be able to trust the organization and its leadership to back them up.

Like a top athlete, a great salesperson requires a positive frame of mind and assurances that the rest of the organization will support them with the best product, customer support, and willingness to help deals cross the line.