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The Bottom Line About Sales Leadership Performance

When CEOs look at their sales leaders, what responsibilities do they see they have? Do they see them as customer guardians? Or maybe customer relationship managers? How many CEOs see them as business managers? How many CEOs manage their sales leaders as business managers?From our experience, very few CEOs manage their sales leaders as business managers and often give way to the pressures often applied upwardly by them. Sales leaders have for many years been very good at diverting the attention of CEOs to non-critical tasks, taking actions that seemingly will deliver results but fail to do so. CEOs lose confidence in their sales leaders through the lack of timely actions being taken with deliverable and measurable outcomes. There is a disconnect in the timing with CEOs now talking in months and sales leaders continuing to talk in years.A sales leader can be one of the most important people for company’s growth. Their responsibility is to ensure the sales success of your company. They can try to pass the buck to salespeople but the bottom line is they need to step up and deliver the results with a clear understanding of their impact across the broader company.Sales leader’s decisions immediately impact company operations by the sales results they deliver, the product lines sold, the accuracy of orders taken, pricing decisions. The conduct of their sales force personnel can make or break a company culture and performance.They are responsible for:
The execution of the strategy of what direction your company is headed,
What your company sells and why they sell it,
Which markets to pursue and where the company is positioned in those markets,
The competitive capability against the competition and why you are better or different,
The delivery of the strategy at the customer interface, and
The bottom line of results in revenue and profitability.

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A sales leader who cannot develop effective strategies and execute them to full completion, is of no value to any company. The sales leader must enable systems and processes, administer training that is relevant to the strategy and market, correctly manage productivity and ensure a high level of efficiencies across the sales organization.A sales leader that does not acknowledge their limitation in delivering these fundamental business requirements must accept the consequence of their limitation when results are not delivered. For CEOs they must do the right thing by their company and be honest about where to place blame for struggles and failure to grow sales. The sales people are at all times a product of the sales leader and the blame must therefore fall squarely on their shoulders.The role of the sales leader has matured to such a point now that it is no longer just the narrow narrative of customers and relationships with a management style that allows the business to just flow with the market stream with little guidance. Those clinging to that are certainly not doing the right thing by their company. Sales leaders need to be able to create, implement, monitor, and revise their sales organization consistently, in order to deliver reliable growth. They must have well-defined strategies, processes, and management structure that rolls out through to well defined strategies and execution plans across the sales force. They must have deep measurement of performance of the sales business, not just the salespeople to deliver results.For CEOs that is the ideal person to be leading their sales organization. The reality is that sales excellence requires a multitude of skills and capacities to function effectively and efficiently. Few people in the profession are true management professionals; most individuals employed in management are ill equipped to provide a professional-as opposed to amateurish-level of performance in response to the demands of their positions.”CEOs that employ unqualified individuals will suffer their ignorance and incompetence unless they take drastic action to remedy the problem.”With very few professional sales leaders available or professionally trained for today’s market challenges, the focus for CEOs has shifted to sales leadership development rather than sales leadership acquisition. CEOs need to make hard decisions about their sales organization as this critical role can directly impact their future.They must consider who they are hiring or who they retaining in this critical role. In the absence of quality proven talent, they must to start with raw talent that can be developed and coached to excel. A person with tested core skills and not just rely on ‘gut feel’. A person that is open to being coached and capable of leaving their ego at the door and focus on their own personal development that directly impacts the sales organization.

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The sales leaders must be taught how to drive growth in an organization. Many sales leaders today are only capable of maintaining business and this is reflected in businesses that have stagnated or are achieving on minimal growth. Very few are capable of driving growth through changing markets.Sales leaders need to learn correct timing of decisions, understand how to deliver actions, changes and improvements in a timely manner. They need to change their decision-making from being emotive decisions to being based on hard evidence and facts that can be easily demonstrated to their peers. The facts must be based on consistent information over a period of time and not snap shots based on reactions to sudden (but long simmering) market or internal challenges.CEOs need to change how they manage sales leaders. They need to be critical of reporting and information presented ensuring that the right decisions are being made with consideration to the full impact of those decisions both within the sales organization and across the business.Only then can a CEO be confident their sales organization is being managed effectively.

Creating Effective Employee Relationships – All About the Bottom Line

The purpose of relationship building in the workplace is pretty simple really. There is value for all sides of the equation and within that, it’s important to acknowledge that there is a bottom line.As employees; indeed as business owners, managers and team leaders, we are all in it for something, because the most of us need the work we do.When we attend work, we do so for some pretty basic reasons. We want shelter to keep us from the elements. We want to be fed and kept healthy. In modern societies we are very fortunate that these are pretty much covered off for most of us.So we need more. The basics – the core rewards that work provides us with – are sufficient to provide the minimum we need. If that was all we went to work for, well then, that’s pretty much sorted!

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The more we need is the cerebral value that work provides for us. The stimulation of the work we do provides a healthiness that is not measured by outward disease. Our mental well-being is provided for by finding stimulating challenges that we enjoy and get personal satisfaction from.Work is not about material reward alone.When we manage others, we take that on as a stimulating challenge that gets our juices flowing, so we too are satisfied from the fulfillment that we get from the achievements we make.Both sides achieving successes in their own personal challenges, are leveraged by organizations to ensure that results from the whole, go to meet and exceed the results that need to drop out for the financial bottom line.If managers and their employees have personal goals they want to achieve and these are aligned with the needs of the bigger organization, then we are all in business pulling together.The glue that binds us is the way we communicate together. And we communicate most effectively by having close working relationships that enable us to make the best outcomes possible, where everyone is a winner.

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That bottom line for the relationships we build is the pleasure – the joy even – we get from achieving what we want from the work we do.It isn’t just about financial reward. It isn’t about getting a company car that’s a bit bigger. It’s not about the pension pot we build.Relationships enable us to work together towards a common goal. The purpose of the relationships we co-create, is the bottom line for all of us, which is very personal, yet always contributes to the outcome our employers expect of us too.So we are all winners together.

Coffee: Friend Or Foe

The Questions
There may be no flashing neon lights reminding you about the side effects of drinking coffee, but we all know they exist. Because coffee comes from the seeds of Coffea plant’s berries, and how could something that comes from berries be harmful? After all, coffee is what kick-starts every morning and gets us working. But can you sip on your coffee with absolutely no concern about its side effects? Do you ever wonder which is better, regular systematic consumption of coffee or avoiding habituation completely? Finally, does coffee really improve athletic performance? If these questions have been burning in the back of your mind, then you should read on.

What is Caffeine Withdrawal?
Against popular belief, scientific literature tells us that there is no physical harm in drinking coffee. In fact, moderate consumption can benefit your body. There’s one catch: this positive effect is not caffeine’s work, but rather the coffee itself. Caffeine can be bad for you, and it all depends on your own physiology. Some people experience headaches, increased heart rate, tremors, or even performance impairment. On top of that, coffee has addictive characteristics and caffeine intoxication that comes from excessive intake can cause withdrawal symptoms, such as fatigue, headache, and difficulty focusing. The American Psychiatric Association’s Diagnostic and Statistical Manual of Mental Disorders (DSM-5) now categorizes caffeine withdrawal as a mental disorder, noting that many people are addicted to the process of coffee consumption.

The Benefits
Yet, there is plenty of scientific evidence that caffeine ups the endurance of the athlete via a type of fatigue resistance or an altered perception of effort. Recent studies recommend that consumption be kept modest, at a range of 1-3mg/kg BM or 70 to 150 milligrams caffeine before or during exercise. More is not necessarily better in the case of caffeine, and everyone’s body reacts differently to caffeine. So, it’s best to stay within the recommended range and keep track of your own consumption and your body’s reaction.

Should You Keep Drinking?
Finally, can someone adapt to caffeine consumption, dulling the positive effects of caffeine on athletic performance? There still needs to be research done on caffeine, athletics, and their relationship. However, it seems that the most recent studies are recommending coffee drinkers to continue their usage schedules rather than risk withdrawal symptoms. Some even state that the positive effects of caffeine on athletic performance increases with habituation, with less risk of the negative effects such as heart rate increase, tremors, and irritability. From this, we can conclude that a moderate caffeine schedule as part of a balanced diet is ideal.

As you can see, coffee consumption is perfectly fine for most people. The complexity comes from individual differences and the habit-forming nature of caffeine. What is definite is that recognizing that coffee is not a substitute for good-quality sleep and being aware of potential side effects of caffeine withdrawal is vital for any user.

5 Tips for Improving Margins and the Bottom Line

There are really only 4 ways to increase profits – sell more, improve margins, cut costs or do all three. Costs always have a habit of creeping upwards over time. So, periodically, it pays to take a hard look at them and then eliminate the things we can live without. But there’s a limit to the extent to which we can cut costs before we hurt our company’s long term growth potential. To get steady, incremental increases in profit we have to sell more and improve margins.There are only 2 ways to sell more – add new customers or increase sales to existing customers. In my experience, when we talk about selling more we tend to put the focus on adding new customers. But we know that it costs at least 6 times more to sell to a new customer than to an existing client. That’s not hard to understand when we consider the “acquisition” costs – e.g. advertising, telemarketing, etc.So, the first tip is to avoid losing your least expensive prospects – existing customers. They must be convinced that we do a great job; otherwise they wouldn’t buy from us. Every business loses some customers over time, but when customers leak away, replacing them with new ones cuts into profits. The key is to focus on our “retention rate”. We need to have a process that alerts us when a customer stops purchasing from us. And we must find out why exactly they’re leaving – not simply make assumptions. Keeping customers satisfied is better for your bottom line than replacing them.The second tip is to remember that all customers are not created equal when it comes to profitability. Pareto’s rule tells us that 80% of our profits will come from 20% of our customers. But, how many of us slip into the situation, over time, of treating all customers as equally important? That actually hurts our profits because we waste money using the same marketing and selling techniques on everyone and treat them the same way when they contact us.

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So, how do we recognize the 20% of customers who give us 80% of our profits? They are the companies who buy from us regularly and understand the value of what we do for their business. They focus on quality and reliability rather than price and they pay on time. Because they are successful in their field, they have the potential to grow, allowing us to grow with them. They may even refer potential clients to us. These are our “A” customers. Can you identify yours?Tip number 3 – it makes good business sense to treat “A” customers differently than the others. Everyone in the organization should know who they are. So, when they talk to them on the phone or face-to-face, answer their email, make product for them or pick their orders, these “A” clients get the most prompt, attentive, efficient service we can give. We should market differently to them too. Stay closely in touch personally and via email, e.g. send them our newsletters, and develop the relationship by figuring out how we can help them respond to the changes in their industry.Next tip – watch the customers who offer some, but not all, of the benefits of our “A’s” very closely. They still focus on quality and reliability but may not have been around as long as “A’s” and so may not buy as regularly and/or as much. These are our “B” customers, and apart from what they do for our bottom line today, they have the potential to be the “A’s” of the future. Identify them and build a strong relationship with them. They may get fewer face-to-face visits than the “A’s” but they do get regular calls from our internal sales staff – a very effective but much less costly method of maintaining contact. They are also on our email database.Then there are customers who buy smaller amounts consistently but who have very little potential for further development. These customers – our “C’s” – are solid contributors to the remaining 20% of our profits but the ones who may be most likely to drift away. Our sales and marketing strategies are designed to maintain these relationships in a cost effective way. Primary contact is via regular (but less frequent than for “B” clients) calls from internal sales and email contact about the products or services they buy.The final group is easy to recognize – they complain most and buy small quantities of our products irregularly. That’s because they are focused on price and discounts. They buy from us only when we’re cheaper than our competitors – they have no loyalty. When they do buy from us, they are abrupt, demanding, they always need delivery immediately and people hate dealing with them. Processing their orders requires our staff to drop everything else and get them to the front of the line. They are our “D” accounts. Dealing with “D’s” can be so disruptive that occasionally they even cause us to make mistakes with the orders for the profitable customers.

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So, the fifth and final tip is to “fire” your “D” accounts. That’s correct, if orders from “D” customers are profitable they’re at the bottom end of the margin scale and the amount of resource required to get them out the door wipes out anything we were going to make. Yet we all have “D” accounts – why don’t we just get rid of them? We don’t have to be rude, simply play them at their own game – quote high prices or long lead times. They’ll make the decision not to deal with us. Do it often enough and they’ll stop calling.Focus on your “A” and “B” customers and you’ll improve your margins. Match your sales and marketing resources to customer type and get rid of your “D’s” and you’ll improve the bottom line. Make retaining “C'” customers a priority; work hard at turning your “B” accounts into “A’s” and get your sales staff focused on understanding your “A” accounts’ business – then you’ll not only sell more but you’ll make more profitable sales.To share your experiences, to take issue with anything I’ve said or to get some insight in how to execute send me an email jimstewart@profitpath.com or call me at 416-258-9610.© Copyright ProfitPATH, a division of JDS & Associates Inc., 2007

How Following Directions Translates to the Bottom Line For Management

In business, following directions is very important. When directions are followed correctly, there is an implied understanding that the person was engaged in actively listening or reading and the end results are successfully achieved meaning on time and budget. However, if directions are not followed this may cause significant problems for management.Effective decision making requires higher order thinking skills that are vanishing in the business world as rapidly as the Dodo bird. The consequences of this situation is higher costs because of re-do’s, more stress within the organizational culture causing health costs to increase and productivity to decrease.Here are four examples of not following directions that I have observed during the last couple of weeks:The first example was an email I sent to my U.S. elected representative asking him for a simple yes or no response. He did return the email, but did not follow my directions and wrote several paragraphs without answering the question.

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Example number two was in the social media site, LinkedIn. A discussion was started with the directions to “list one word” regarding the primary expectation or quality of a leader. Yet many of those responding could not follow this simple direction. For those who used more than one word, some had to write an entire paragraph explaining their choice or further elaborating on someone else’s word choice.A visit to one of the full service local grocery stores revealed that employees do not follow directions in their employees’ handbooks or within the union contract. Handbooks and contracts are really direction documents indicating what you need to do or not do as you perform your work-related tasks. In this case, the direction was “Do not chew gum.”The fourth example involved not following up on sales leads. Sales research suggests that almost 50% of all leads are left to whither on the vine. Through my experience as a sales manager and with my sales coaching and small business training coaching clients to my speaking engagements, I can confirm this statistic and it really probably much higher. Many sales professionals be them inside or outside receive leads, are asked to follow up (direction) and then either do not or make one small effort and then go find another lead.When analyzing each of these examples, there are two major obstacles beyond the critical thinking skills. The first obstacle is one of values or what some call ethics. In all cases, the value of respect was being ignored or diminished.

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Obstacle number two was the inability to change. Alan Deutschman in his book Change or Die revealed that only one out of ten people would change even when confronted with facts, fear or force. Conditioned behavior is very strong in all individuals. It is much easier to do what I as the individual have always done such as not follow directions than to follow directions.By not following directions, the behaviors negatively affected the bottom line because a lot more time was spent on not doing it right. If management wishes to grow the business, everyone may need to assess how well the organization is following directions because this is a very real problem and can be directly tied to behaviors. Remember behaviors or actions create results. To change results begins by looking at the beliefs (foundational thoughts and experiences) because they drive the actions.

Six Sigma Certification – The Bottom Line

Six Sigma Training and Certification will teach you that everything to do with your business revolves around the processes that you have and how effective they are in operations. The ultimate goal of Six Sigma is to provide a defect ratio of 3.4 defects per million, which is a very high standard for any business, and especially for one that is facing problems with customer dissatisfaction or loss of sales because of ineffective processes. However, when you are properly trained in the principles and policies of Six Sigma, you will be much better able to understand how the process works, how it can benefit your business and how it affects your bottom line every single time.

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With Six Sigma Methodology, the bottom line is that the bottom line is all that matters. When you focus on anything other than customer satisfaction and achieving profit goals, you will lose sight of what your business is designed to do. No matter how much you enjoy owning a business you have to look at the leger side of things every once in awhile to make sure that your business is serving its intended purpose, and meeting the goals that it needs to be meeting. It’s a lot of fun to be a business owner, and it is always important and interesting to learn new ways to appeal to your customers.Customers are the focus? I thought the bottom line was the focus.In order to achieve successful results in your profitability, you have to have satisfied customers that are committed to shopping with your company or paying for your services. That’s all there is to it. You cannot have an effective business or a solid bottom line if you don’t have a stable and constantly growing customer base to work with. Keep all of this in mind and your business will be much more successful in the end.

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When it comes to having an efficient business and a profitable bottom line, there are many different choices that you can make as to how to handle the situation. However, if you take the time to embrace Six Sigma Methodology and use it to your best advantage, you can often make the process improvement projects that you embark on much easier to manage. By using factual data you will get more relevant and actualized results than with any other method of problem solving that you work with.