Top Sales People Really Don't Make the Best Managers

The conventional wisdom is straightforward - the top individual performers don't always make the best managers.  That old adage holds true especially in the field of sales.  Many people believe that the best sales people don't make the best managers.   Is it true?  New research examines this assumption, drawing upon one of the most extensive databases ever collected to research this topic.  

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.   

Hootsuite's Czar of Bad Systems

Source: Wikipedia

Ryan Holmes, CEO of social media platform Hootsuite, has written a terrific article for Fast Company about the latest management initiative at his firm.   Holmes begins by recounting the story of one employee who became frustrated with the approval process required to send one customer a Hootsuite t-shirt as a gift.   The t-shirt cost $15.  The employee spent hours tracking people down to get the appropriate approvals.  That example may sound a bit crazy, but every organization has cumbersome, bureaucratic procedures that frustrate people who are just trying to get the job done.  These processes may have started out with good intent, but they evolve to the point where they make little sense in many circumstances.  Moreover, these types of processes tend to centralize decision-making authority over time.  They take away autonomy from the people on the front lines trying to get the work done.  Processes never die.  They almost always grow and become more complex.  

Hootsuite set out to change that dynamic.    One individual has taken on the unofficial position of "Czar of Bad Systems."  Holmes writes, "Our employees now have a go-to person who can take an objective look at processes that have outlived their usefulness. If people have a problem they can’t fix, even with help from their manager, they reach out to the Czar. In the past, these processes would’ve fallen through the cracks–they’d be cursed at but ultimately complied with. Now there’s hope that they might actually be corrected."  

Why do bad processes emerge in organizations?  Holmes explains, "Interestingly, most bad processes seem to boil down to a few common failings: needless complexity, unanticipated bottlenecks, or irrational fear of worst-case scenarios."  I would add one significant reason for bad processes: the desire by certain managers and executives to amass power and authority.  Simply put, some managers want the right to approve or reject certain decisions because it gives them power over others, and it helps justify their existence in the organization.  What these managers fail to do is put themselves in the shoes of those trying to do the work.  They don't appreciate the frustrations that they have created.  Moreover, they often do not understand how much they have slowed down the organization.  When approaching these types of processes, managers need to put themselves in the shoes of those on the front lines.  They need to stop thinking about themselves and start thinking about those whom they should be serving.  

Tips for Being a Good Boss: Recognize That You Are Now on Stage

In college, two roommates (Brian Gaspardo and Tony Khazen) and I ran the "Leverett House Grille" - a late-night, student-run pizza and burger joint for fellow students.  We sold pizza, burgers, fries, ice cream, milkshakes, and soda from 9pm-1am each weeknight.  We had a ton of fun, and we learned a great deal about how to manage a small business.  One day, a friend named Joanne Chang approached us with an idea.  An applied math and economics double major, Joanne loved to bake in her free time.  She offered to bake chocolate chip cookies that we could sell at the Leverett House Grille.  We split the profits.  

What happened to Joanne after graduation?  After a stint at Monitor Consulting, Joanne has gone on to become one of Boston's finest bakery chefs and a celebrated cookbook author.   Flour Bakery and Cafe, which she founded and manages, has four locations in greater Boston.  She also co-owns Myers + Chang, an Asian restaurant located in downtown Boston.   Her two cookbooks became national bestsellers, and her third book will be released later this year.  In 2013, Joanne was honored as a prestigious James Beard Award nominee.  Joanne is a terrific chef, but she's also proven to be a highly successful entrepreneur and business leader.  This week, Fortune featured a column about Joanne.  In the article, Joanne offers five tips on being a good boss.  They are all great tips.  I especially loved Tip#4: 

4. Recognize that you are now on stage.

As the boss, it’s no longer all about you—your focus is on everyone around you. Everything you say and do is being watched by the staff and seen as having a stamp of approval. Your role is to tackle every single day with optimism, focus, determination and a dedication to providing your team with whatever they need to succeed at their jobs. When I was first a boss, if I had was having a bad day I would get quiet and withdrawn. Bakers would nervously ask me if I was mad at them, and I realized that I couldn’t be in a bad mood and not have them think they had done something wrong. Don’t be insincere or fake…but keeping a game face on as a boss is crucial to ensuring a stable team.