Alan Benson, Danielle Li, and Kelly Shue examined data on salespeople at more than 200 firms. These scholars analyzed how individual performers did prior to promotion. Then, after these individuals were promoted to managers, they examined how the performance of their new subordinates was impacted. The richness of the data enabled the scholars to compare salesperson performance under this new boss vs. other previous supervisors. What did they find? Chicago Booth Review reports:
The best salespeople did not make the best managers: demonstrated sales skill, as evidenced by managers whose sales doubled before their promotion, corresponded to a 10 percent drop each in the sales performance of new subordinates. The typical newly minted manager is in charge of five people. Therefore, the doubling of a manager’s sales predicts a total team sales drop equivalent to half the sales of one worker.
Thus, the conventional wisdom is true. Moreover, the negative impact of promoting the wrong people is substantial. Companies need to understand the skills and qualities required to become good sales managers, and based on that analysis, they must change their promotion criteria. Meanwhile, they must find other ways to reward top individual performers, rather than using promotion as a key incentive.
Thus, the conventional wisdom is true. Moreover, the negative impact of promoting the wrong people is substantial. Companies need to understand the skills and qualities required to become good sales managers, and based on that analysis, they must change their promotion criteria. Meanwhile, they must find other ways to reward top individual performers, rather than using promotion as a key incentive.
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