Sales ManagementSales ManagementLeadership and SupervisionLeadership and Supervision

Module SevenModule Seven

The Importance of LeadershipThe Importance of LeadershipAn Expert’s Viewpoint:An Expert’s Viewpoint:

Regan Lancaster, vice president of global sales at Regan Lancaster, vice president of global sales at i2i2 Technologies uses conventional and unconventional Technologies uses conventional and unconventional tactics to lead his salespeople. He offers substantial tactics to lead his salespeople. He offers substantial incentive-based pay and promotion opportunities. In incentive-based pay and promotion opportunities. In addition, he has dressed as a superhero and staged a addition, he has dressed as a superhero and staged a mock battle against competitors, motorcycled through a mock battle against competitors, motorcycled through a brick wall, and repelled down a four story building to brick wall, and repelled down a four story building to inspire his salespeople.inspire his salespeople.

ActionAction

The Importance of LeadershipThe Importance of LeadershipAn Expert’s Viewpoint:An Expert’s Viewpoint:

Lancaster’s leadership is paying dividends. During his Lancaster’s leadership is paying dividends. During his first seven years at i2, revenues have increased more first seven years at i2, revenues have increased more than 750 percent. In 2000, i2 had a record-breaking than 750 percent. In 2000, i2 had a record-breaking year for e-business with revenues of $1.1 billion.year for e-business with revenues of $1.1 billion.

ResultResult

What is the Difference Between What is the Difference Between Leadership and Supervision?Leadership and Supervision?

Leadership:Leadership:The use of influence with other people through The use of influence with other people through communications processes to attain specific goals communications processes to attain specific goals and objectivesand objectives

Supervision:Supervision:The day-to-day control of the salesforce under The day-to-day control of the salesforce under routine operating conditionsroutine operating conditions

Sales Force Socialization (Revisited)Sales Force Socialization (Revisited)

Task-Specific Self-Esteem:Task-Specific Self-Esteem:The extent to which an individual believes s/he can The extent to which an individual believes s/he can perform a task competentlyperform a task competently

Organizational Commitment:Organizational Commitment:The extent to which an individual feels a bond to the The extent to which an individual feels a bond to the organizationorganization

Formalization:Formalization:The extent to which work activity is directed by rules, The extent to which work activity is directed by rules, regulations, and commitmentregulations, and commitment

Sales Force Socialization (Revisited)Sales Force Socialization (Revisited)

Work Alienation:Work Alienation:An individual's psychological separation from the An individual's psychological separation from the activities of the jobactivities of the job

Job Involvement:Job Involvement:– An individual's psychological attachment to the An individual's psychological attachment to the

job itselfjob itself

Contemporary Views ofContemporary Views ofSales LeadershipSales Leadership

• Leader-Member Exchange (LMX) ModelLeader-Member Exchange (LMX) Model– trust (salesperson and customer)trust (salesperson and customer)

• Transformational LeadershipTransformational Leadership– change agents, charismaticchange agents, charismatic

• Behavioral Self-Management (BSM)Behavioral Self-Management (BSM)– self-control, self-discipline by the salespersonself-control, self-discipline by the salesperson

Key thoughts on sales leadershipKey thoughts on sales leadership

• Build a strong, trust-based relationship with Build a strong, trust-based relationship with individual salespeopleindividual salespeople

• Be an active stimulus for change, and work with Be an active stimulus for change, and work with sales people and others to accomplish the sales people and others to accomplish the missionmission

• Expect salespeople to take an active role in Expect salespeople to take an active role in managing themselvesmanaging themselves

Leadership Model for Sales ManagementLeadership Model for Sales Management

SituationTime ConstraintsNature of TasksHistory and Norms

NeedsSalespeopleOther People

LeadershipSkillsAnticipationDiagnosticSelectionCommunication- Influence Strategy- Communications Mechanisms

PowerSalespeopleOther People

PowerSales Manager

Goals &ObjectivesIndividualOrganizational

SalesManager’sLeadership

Effectiveness

Power and Leadership Power and Leadership

Five types of power which may be present Five types of power which may be present in interpersonal relationships:in interpersonal relationships:

Referent PowerReferent Power

Legitimate PowerLegitimate Power

Reward PowerReward Power

Coercive PowerCoercive Power

Expert PowerExpert PowerGeorge Bush has which types of power ?

• Trait Approach Trait Approach (not very useful)(not very useful)• Behavior Approach Behavior Approach (not very useful)(not very useful)• Contingency Approach Contingency Approach (situational)(situational)

What makes an effective leader?What makes an effective leader?

• Important when Important when coercive powercoercive power is not being is not being utilizedutilized

• Realize all needs and wants cannot be metRealize all needs and wants cannot be met• Not all leadership directives need to be based Not all leadership directives need to be based

on needs and wantson needs and wants• Consider each salesperson as a unique Consider each salesperson as a unique

individual individual (requires a lot of the manager)(requires a lot of the manager)

Needs and Wants of SalespeopleNeeds and Wants of Salespeople

• Leadership is easier when personal goals and Leadership is easier when personal goals and objectives of the salespeople are consistent objectives of the salespeople are consistent with those of the organizationwith those of the organization

• Sales managers strive to seek balance and Sales managers strive to seek balance and consistency between organizational goals and consistency between organizational goals and their salespeople’s goals.their salespeople’s goals.

Goals and ObjectivesGoals and Objectives

Either hire people with consistent goals or educate and train them to have consistent goals

• The ability to anticipate problemsThe ability to anticipate problems

• The ability to seek and obtain substantive The ability to seek and obtain substantive feedbackfeedback

• The ability to diagnose problems and The ability to diagnose problems and opportunitiesopportunities

Leadership SkillsLeadership Skills

• The ability to select an appropriate The ability to select an appropriate leadership behavior and match it to the leadership behavior and match it to the situationsituation

• The ability to communicate effectivelyThe ability to communicate effectively

Leadership SkillsLeadership Skills

Communication Skills:Communication Skills:Influence StrategiesInfluence Strategies

• Threats Threats (coercive power)(coercive power)

• Promises Promises (reward power)(reward power)

• Persuasion Persuasion (expert or referent power)(expert or referent power)

• Relationships Relationships (referent or legitimate power)(referent or legitimate power)

• ManipulationManipulation

• Take a we approachTake a we approach

• Address only one or two problems at a timeAddress only one or two problems at a time

• Don’t focus on criticizing poor performance, reinforce good performanceDon’t focus on criticizing poor performance, reinforce good performance

• Foster involvementFoster involvement

• Recognize differences in salespeople and coach accordinglyRecognize differences in salespeople and coach accordingly

• Coordinate coaching with more formal sales trainingCoordinate coaching with more formal sales training

• Encourage continual growth and improvementEncourage continual growth and improvement

• Insist salespeople evaluate themselvesInsist salespeople evaluate themselves

• Obtain agreement with respect to punishments and rewardsObtain agreement with respect to punishments and rewards

• Keep good recordsKeep good records

CoachingCoaching

The continuous development of salespeople through The continuous development of salespeople through supervisory feedback and role modeling. Suggestions for supervisory feedback and role modeling. Suggestions for affective coaching include:affective coaching include:

Planning and ConductingPlanning and ConductingIntegrative MeetingsIntegrative Meetings

• Keep technical presentations Keep technical presentations succinctsuccinct

• Use visual aids and breakout Use visual aids and breakout discussion groupsdiscussion groups

• Keep salespeople informed of Keep salespeople informed of corporate strategy and their role in itcorporate strategy and their role in it

• Minimize operations reviewMinimize operations review

Planning and ConductingPlanning and ConductingIntegrative MeetingsIntegrative Meetings

• Set a humane schedule . . . allow Set a humane schedule . . . allow time for sharing and adequate time for sharing and adequate breaksbreaks

• Set and communicate the agenda Set and communicate the agenda (when?)(when?)

• Ask for input from the salespeopleAsk for input from the salespeople• Generate excitement with contests Generate excitement with contests

and other rewardsand other rewards

Approaches to Management EthicsApproaches to Management Ethics

ImmoralImmoral Management Management– Intentional and consistent management activity Intentional and consistent management activity

conflicting with what is moral (ethical).conflicting with what is moral (ethical).– Exploits opportunities for corporate gain. Cut corners Exploits opportunities for corporate gain. Cut corners

when it appears useful. when it appears useful. ENRONENRON– Seeks profitability and organizational success at any Seeks profitability and organizational success at any

price. price. ENRONENRON– Selfish. Management cares only about its or the Selfish. Management cares only about its or the

company’s gain. company’s gain. ENRONENRON

Dell's Higher StandardDell's Higher StandardDell's success is built on a foundation of personal and professional integrity. We hold Dell's success is built on a foundation of personal and professional integrity. We hold

ourselves to standards of ethical behavior that go well beyond legal minimums. We ourselves to standards of ethical behavior that go well beyond legal minimums. We never compromise these standards and we will never ask any member of the Dell team never compromise these standards and we will never ask any member of the Dell team to do so either. We owe this to our customers, suppliers, shareholders and other to do so either. We owe this to our customers, suppliers, shareholders and other stakeholders. And we owe it to ourselves because success without integrity is stakeholders. And we owe it to ourselves because success without integrity is essentially meaningless.essentially meaningless.

Our higher standard is at the heart of what we know as the Our higher standard is at the heart of what we know as the "Soul of Dell""Soul of Dell" - the statement of - the statement of the values and beliefs which define our shared global culture. ………..we want all the values and beliefs which define our shared global culture. ………..we want all members of our team, along with our shareholders, customers, suppliers and other members of our team, along with our shareholders, customers, suppliers and other stakeholders, to understand that they can believe what we say and trust what we do. stakeholders, to understand that they can believe what we say and trust what we do. Our higher standard includes several key characteristics that both underpin the Soul of Our higher standard includes several key characteristics that both underpin the Soul of Dell and provide the foundation for our Code of Conduct:Dell and provide the foundation for our Code of Conduct:

• TrustTrust  - Our word is good. We keep our commitments to each other and to our   - Our word is good. We keep our commitments to each other and to our stakeholders.stakeholders.

• IntegrityIntegrity  - We do the right thing without compromise. We avoid even the appearance of   - We do the right thing without compromise. We avoid even the appearance of impropriety.impropriety.

• HonestyHonesty  - What we say is true and forthcoming - not just technically correct. We are   - What we say is true and forthcoming - not just technically correct. We are open and transparent in our communications with each other and about business open and transparent in our communications with each other and about business performance.performance.

• JudgmentJudgment  - We think before we act and consider the consequences of our actions.  - We think before we act and consider the consequences of our actions.• RespectRespect  -We treat people with dignity and value their contributions. We maintain   -We treat people with dignity and value their contributions. We maintain

fairness in all relationships.fairness in all relationships.• CourageCourage  - We speak up for what is right. We report wrongdoing when we see it.  - We speak up for what is right. We report wrongdoing when we see it.• ResponsibilityResponsibility  - We accept the consequences of our actions. We admit our mistakes   - We accept the consequences of our actions. We admit our mistakes

and quickly correct them. We do not retaliate against those who report violations of law and quickly correct them. We do not retaliate against those who report violations of law or policy.or policy.

Approaches to Management EthicsApproaches to Management Ethics

AmoralAmoral Management Management– Management activity that is neither consistently moral Management activity that is neither consistently moral

or immoral . . . Decisions lie outside the sphere to or immoral . . . Decisions lie outside the sphere to which moral judgments apply.which moral judgments apply.

– Give managers free rein. Personal ethics may apply Give managers free rein. Personal ethics may apply but only if managers choose. Respond to legal but only if managers choose. Respond to legal mandates if caught and required to do so.mandates if caught and required to do so.

– Seeks profitability. Other goals are not considered.Seeks profitability. Other goals are not considered.– Well-Intentioned but selfish in the sense that impact on Well-Intentioned but selfish in the sense that impact on

others is not considered.others is not considered.

Approaches to Management EthicsApproaches to Management Ethics

MoralMoral Management Management– Management activity conforms to a standard of ethical Management activity conforms to a standard of ethical

or moral behavior.or moral behavior.– Live by sound ethical standards. Assume leadership Live by sound ethical standards. Assume leadership

position when ethical dilemmas arise. Enlightened self-position when ethical dilemmas arise. Enlightened self-interest.interest.

– Seeks profitability within the confines of legal Seeks profitability within the confines of legal obedience and ethical standardsobedience and ethical standards

– Management wants to succeed but only within the Management wants to succeed but only within the confines of sound ethical precepts.confines of sound ethical precepts.

Meeting Ethical andMeeting Ethical andMoral ResponsibilitiesMoral Responsibilities

Sales managers should be aware of three particularly relevant types of unethical acts:

1.Nonrole

2.Role Failure

3.Role Distortion.

Meeting Ethical andMeeting Ethical andMoral ResponsibilitiesMoral Responsibilities

Nonrole Against the firm • Expense account cheating• Embezzlement• Stealing supplies

Type Direct Effect Examples

RoleFailure

Against the firm • Superficial performance appraisal

• Not confronting expense account cheating

• Palming off a poor performer with inflated praise

Meeting Ethical andMeeting Ethical andMoral ResponsibilitiesMoral Responsibilities

Type Direct Effect Examples

Role Distortion

For the firm • Bribery• Price fixing• Manipulation of suppliers

Problems in LeadershipProblems in Leadership

• Conflicts of Interest (Conflicts of Interest (NYSE specialistsNYSE specialists))• Chemical Abuse and DependencyChemical Abuse and Dependency• Problem Salespeople: A Disruptive InfluenceProblem Salespeople: A Disruptive Influence

– Lone Wolf Lone Wolf (high sales)(high sales)– Corporate Citizens Corporate Citizens (low sales)(low sales)– Institutional Stars Institutional Stars (the best)(the best)– Apathetics Apathetics (fire them)(fire them)

• Termination of EmploymentTermination of Employment• Sexual HarassmentSexual Harassment

Sexual harassmentSexual harassment

• Zero tolerance means…?…..a Zero tolerance means…?…..a good policy?good policy?• California law sets a zero tolerance policy, California law sets a zero tolerance policy,

holding employers automatically responsible for holding employers automatically responsible for any supervisor who sexually harasses an any supervisor who sexually harasses an employee – regardless of whether the company employee – regardless of whether the company knew about the offensive conduct. knew about the offensive conduct. [2003][2003]

• California Supreme Court ruled in Nov. 2003 that California Supreme Court ruled in Nov. 2003 that the employee must complain promptly….the employee must complain promptly….

the employer is strictly liable for all acts of sexual harassment by a supervisor.

However, the Court announced that an employer can raise the defense of "avoidable consequences," which will not eliminate liability, but can be used to reduce a plaintiff's damages. The defense will apply if the employer can prove three elements:

(1) the employer took reasonable steps to prevent and correct workplace sexual harassment;

(2) the employee unreasonably failed to use the preventive and corrective measures that the employer provided; and

(3) reasonable use of the employer's procedures would have prevented at least some of the harm that the employee suffered.