Housing is in the dumps. Small and large businesses are failing every day. Blah, blah, blah. With our positively glowing economic outlook, it can be very difficult for a team to stay focused on achieving its goals. As matter of fact, the headlines are a perfect excuse to say, “I can’t hit my targets.” As a business leader or manager, your job is to lead, grow and develop your team during all economic times. Great coaching and stellar leadership is vital in today’s uncontrollable market.
In sports, winning depends on a team’s willingness to play offense—playing to win. The same is true in business. However, when the competition gets tough or the marketplace becomes uncontrollable, we often see companies playing defense by making “safe” decisions such as cutting costs. Business owners on the defense also shift their focus from growing the organization to protecting it. Compare this to a hockey game. If a team only played defense, it wouldn’t score any points. The best this team could hope to achieve is a 0-to-0 tie. In business, there are no ties, just successful teams and struggling teams. Playing not to lose most likely guarantees failure.
Playing not to lose (defense)
This mentality often tolerates bad performance during a hiring freeze due to the belief that a bad body is better than no body. This is even more common when organizations look to lower costs to increase profit rather than working to increase revenue. Removing a low-producing salesperson will leave an open territory that can’t be filled due to the hiring freeze. This causes additional work, stress and a possible decrease in sales for the manager. In theory, 50 percent is better than nothing. However, this process always costs the organization—and top performing salespeople—because it sends a message that low performance is acceptable during the hiring freeze. Some of the top performers eventually lower their performance, or the ones who refuse to lower their performance move to an organization that appreciates and requires high performance. This management style also causes more work for the leader because he or she has to constantly follow up and babysit the staff.
This mentality also usually accepts that because a team has been successful in the past, it doesn’t need to practice or focus on core selling skills. This is very common in many organizations. If the team assumes it does everything right, it starts to seek outside solutions to keep sales up and control profits. The leaders begin asking for additional promotions and discounts, which ultimately cut into profits. The competition starts to lower their prices, then the company lowers, and the battle continues until one company is no longer willing (or able) to lower prices. The next proposed solution is to develop a new product or service that the competition doesn’t have, hoping this will bring profits back to their previous level. When a leader doesn’t believe the profit can be controlled internally by changing the team or strategy, the only option is to rely on outside circumstances, causing profits to lower.
Playing to win (offense)
This mentality usually doesn’t tolerate bad performance and believes no body is always better than a bad body. A leader must never lower his or her standards based on the organization’s financial restrictions. Salespeople aren’t overhead; they’re revenue-generating expenses. With that said, a leader will actually lower the cost per salesperson by removing any bad bodies. In turn, the finance department (or powers that be) will be pleased with the increased profitability and the strong performers, and the leader’s skills will go toward increasing sales. Now, the leader will be able to justify hiring a new, quality person to increase profits beyond the current rate or, worst case scenario, maintain profits until the “control” of market returns. Either way, it’s a win-win. To control profits, a leader must control the team’s environment.
And if a leader cannot control the competition, the economy or the marketplace, what can be controlled? The answer is the team and its activities. The need, and want, for most products and services exists in an uncontrollable market. But the reason for the purchase has changed; a leader’s job is to help his team recognize these circumstances and lead them to grow. A leader is similar to a coach in sports. His job is to coach the team, not manage it. A professional football player has been throwing, running, blocking and catching his entire life—yet he practices five days a week because improvement requires practice. The game changes, the rules change, the opponents change and the plays change. He can never stop learning, adapting and growing. Business is no different. A salesperson who has qualified his customers’ needs and closed sales for 10 years needs to practice just as often to continue winning the game. To control profits in an uncontrollable market is to improve the things you can control so you can outperform the things you can’t.
Controlling profit in an uncontrollable market is simple, but not necessarily easy. Becoming a great leader and controlling your team’s profits requires hard work and play-to-win decisions. It’s not knowledge that makes a leader great; it’s the discipline and willingness to use it.
Nathan Jamail, president of the Jamail Development Group and author of The Sales Leaders Playbook, is a motivational speaker, entrepreneur and corporate coach. As a former executive director for Sprint and owner of several small businesses, Nathan travels the country helping individuals and organizations achieve maximum success. For more information, visit www.NathanJamail.com or contact him at (972) 377-0030.
The thoughts and opinions expressed in this article are that of the author(s), and do not necessarily reflect those of NorthBay biz, its editorial department or its owners.
