When Sales Cultures Get Out of Control

Frustrated Business WomanI think it is fair to say that most companies have something to sell whether it is a product, service, or brand image.  I have noticed a trend in companies that work hard to create a sales culture, then end up with unexpected outcomes.  This is a topic that could be its own complete book, but I am going to throw out an example without naming the company.

A few years back I worked for a company that sold both products and services to their clients.  Every day there was a conference call in the morning to start the day.  On the call, middle and sometimes upper management would discuss the previous days sales and ask for committments for sales that day.  This occurs daily, and is intended to ensure that there is a sense of accountability and focus around key sales objectives.  Then, it went a step further.  Everytime there was a sale made, employees would call into an ongoing celebration line to report their sale and have congratulatory music playing. An email would go out to their regional unit with a congratulatory message and the amount of revenue that was earned.  Next, there were two “sales call nights” per week where everyone was expected to stay until 7:00 pm.  Then, increasingly, there became after hours celebrations for top performers with fine wines, high end food, and fancy surroundings, and these celebrations were strategically planned on call nights so the lower performers would sit in shame and resentment staying late, unable to go home to their families.  Low and middle range performing employees were put on performance improvement plans and it was widely known that upper management intended to “clean house.”  The next step was to rearrange compensation packages that were heavily weighted on a commission basis.  The sky was the limit and management thought the new sales culture was getting the results.

Then, strange things began happening.  Clients began filing complaints in large numbers making claims such as: ” I wasn’t told about this aspect of the product, which would have been a major factor in my decision to purchase.”  “I would like a refund.”  “I will no longer do business with your company.”  Some people were traveling out of the office to meet with clients.  What upper management was not aware of was that these clients they were meeting in their homes were “elderly” and often confused about what they were signing up for and victims of pressure tactics.  Then, a number of related complaints sparked a major audit of the company by a federal agency.  The company was fined over 8 times the revenue they had earned since the new sales culture was rolled out and found a number of negligent business practices.  Well, of course this made headlines with the local and national media.  Other clients began moving their business to the competitors and it was clear that the reputation of the company had been badly tarnished.  Lastly, the number of employees entering leaves of absences increased.  Sick time, disability claims, and health issues were reported to HR in unprecedented numbers.

So, I guess we all know the moral to the story at this point.  The creation of an effective and HEALTHY sales culture is a delicate matter.  How is your company incentivizing employees?  Is there a “whipping the horse into action” mentality or an explicit or implicit message that if you don’t make your sales quota for a few months, you may lose your job and your financial security?  Is it mixed with lavish recognition, commissions, etc.  for top performers?  Is the stick too intense and the carrot too tantalizing?  These sales cultures have a fundamental pieces that are missing:  the satisfied customer and the healthy employee who is incentivized in a balanced manner.  Extreme sales cultures will lead to short cuts, implicit messages that say “get the sale at any cost”, lost revenue, HR nightmares, lost clients, unhealthy workers, and a badly tarnished reputation.  As an HR professional, I knew I should have intervened and challenged management earlier; however, the audit and bad press took care of it for me. What do you think?

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Aaron

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