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Module Seven
Sales Management
Leadership and Supervision
The Importance of Leadership
An Expert’s Viewpoint:
Regan Lancaster, vice president of global sales at i2
Technologies uses conventional and unconventional
tactics to lead his salespeople. He offers substantial
incentive-based pay and promotion opportunities. In
addition, he has dressed as a superhero and staged a
mock battle against competitors, motorcycled through a
brick wall, and repelled down a four story building to
inspire his salespeople.
Action
The Importance of Leadership
An Expert’s Viewpoint:
Result
Lancaster’s leadership is paying dividends. During his
first seven years at i2, revenues have increased more
than 750 percent. In 2000, i2 had a record-breaking
year for e-business with revenues of $1.1 billion.
What is the Difference Between
Leadership and Supervision?
Leadership:
The use of influence with other people through
communications processes to attain specific goals
and objectives
Supervision:
The day-to-day control of the salesforce under
routine operating conditions
Sales Force Socialization (Revisited)
Task-Specific Self-Esteem:
The extent to which an individual believes s/he can
perform a task competently
Organizational Commitment:
The extent to which an individual feels a bond to the
organization
Formalization:
The extent to which work activity is directed by rules,
regulations, and commitment
Sales Force Socialization (Revisited)
Work Alienation:
An individual's psychological separation from the
activities of the job
Job Involvement:
– An individual's psychological attachment to the
job itself
Contemporary Views of
Sales Leadership
• Leader-Member Exchange (LMX) Model
– trust (salesperson and customer)
• Transformational Leadership
– change agents, charismatic
• Behavioral Self-Management (BSM)
– self-control, self-discipline by the salesperson
Key thoughts on sales leadership
• Build a strong, trust-based relationship with
individual salespeople
• Be an active stimulus for change, and work with
sales people and others to accomplish the
mission
• Expect salespeople to take an active role in
managing themselves
Leadership Model for Sales Management
Goals &
Objectives
Individual
Organizational
Power
Sales Manager
Situation
Time Constraints
Nature of Tasks
History and Norms
Sales
Manager’s
Leadership
Effectiveness
Power
Salespeople
Other People
Needs
Salespeople
Other People
Leadership
Skills
Anticipation
Diagnostic
Selection
Communication
- Influence Strategy
- Communications
Mechanisms
Power and Leadership
Five types of power which may be present
in interpersonal relationships:
Expert Power
Referent Power
Legitimate Power
Reward Power
Coercive Power
George
Bush has
which
types of
power ?
What makes an effective leader?
• Trait Approach (not very useful)
• Behavior Approach (not very useful)
• Contingency Approach (situational)
Needs and Wants of Salespeople
• Important when coercive power is not being
utilized
• Realize all needs and wants cannot be met
• Not all leadership directives need to be based
on needs and wants
• Consider each salesperson as a unique
individual (requires a lot of the manager)
Goals and Objectives
• Leadership is easier when personal goals and
objectives of the salespeople are consistent
with those of the organization
• Sales managers strive to seek balance and
consistency between organizational goals and
their salespeople’s goals.
Either hire people with consistent
goals or educate and train them
to have consistent goals
Leadership Skills
• The ability to anticipate problems
• The ability to seek and obtain substantive
feedback
• The ability to diagnose problems and
opportunities
Leadership Skills
• The ability to select an appropriate
leadership behavior and match it to the
situation
• The ability to communicate effectively
Communication Skills:
Influence Strategies
•
•
•
•
•
Threats (coercive power)
Promises (reward power)
Persuasion (expert or referent power)
Relationships (referent or legitimate power)
Manipulation
Coaching
The continuous development of salespeople through
supervisory feedback and role modeling. Suggestions for
affective coaching include:
•
•
•
•
•
•
•
•
•
•
Take a we approach
Address only one or two problems at a time
Don’t focus on criticizing poor performance, reinforce good performance
Foster involvement
Recognize differences in salespeople and coach accordingly
Coordinate coaching with more formal sales training
Encourage continual growth and improvement
Insist salespeople evaluate themselves
Obtain agreement with respect to punishments and rewards
Keep good records
Planning and Conducting
Integrative Meetings
• Keep technical presentations
succinct
• Use visual aids and breakout
discussion groups
• Keep salespeople informed of
corporate strategy and their role in it
• Minimize operations review
Planning and Conducting
Integrative Meetings
• Set a humane schedule . . . allow
time for sharing and adequate
breaks
• Set and communicate the agenda
(when?)
• Ask for input from the salespeople
• Generate excitement with contests
and other rewards
Approaches to Management Ethics
Immoral Management
– Intentional and consistent management activity
conflicting with what is moral (ethical).
– Exploits opportunities for corporate gain. Cut corners
when it appears useful. ENRON
– Seeks profitability and organizational success at any
price. ENRON
– Selfish. Management cares only about its or the
company’s gain. ENRON
Dell's Higher Standard
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
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
stakeholders. And we owe it to ourselves because success without integrity is
essentially meaningless.
Our higher standard is at the heart of what we know as the "Soul of Dell" - the statement of
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
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
Dell and provide the foundation for our Code of Conduct:
• Trust - Our word is good. We keep our commitments to each other and to our
stakeholders.
• Integrity - We do the right thing without compromise. We avoid even the appearance of
impropriety.
• Honesty - 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
performance.
• Judgment - We think before we act and consider the consequences of our actions.
• Respect -We treat people with dignity and value their contributions. We maintain
fairness in all relationships.
• Courage - We speak up for what is right. We report wrongdoing when we see it.
• Responsibility - 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
or policy.
Approaches to Management Ethics
Amoral Management
– Management activity that is neither consistently moral
or immoral . . . Decisions lie outside the sphere to
which moral judgments apply.
– Give managers free rein. Personal ethics may apply
but only if managers choose. Respond to legal
mandates if caught and required to do so.
– Seeks profitability. Other goals are not considered.
– Well-Intentioned but selfish in the sense that impact
on others is not considered.
Approaches to Management Ethics
Moral Management
– Management activity conforms to a standard of
ethical or moral behavior.
– Live by sound ethical standards. Assume leadership
position when ethical dilemmas arise. Enlightened
self-interest.
– Seeks profitability within the confines of legal
obedience and ethical standards
– Management wants to succeed but only within the
confines of sound ethical precepts.
Meeting Ethical and
Moral Responsibilities
Sales managers should be aware of three
particularly relevant types of unethical acts:
1. Nonrole
2. Role Failure
3. Role Distortion.
Meeting Ethical and
Moral Responsibilities
Type
Direct Effect
Examples
Nonrole
Against the firm
• Expense account cheating
• Embezzlement
• Stealing supplies
Role
Failure
Against the firm
• Superficial performance
appraisal
• Not confronting expense
account cheating
• Palming off a poor performer
with inflated praise
Meeting Ethical and
Moral Responsibilities
Type
Direct Effect
Role
For the firm
Distortion
Examples
• Bribery
• Price fixing
• Manipulation of suppliers
Problems in Leadership
• Conflicts of Interest (NYSE specialists)
• Chemical Abuse and Dependency
• Problem Salespeople: A Disruptive Influence
–
–
–
–
Lone Wolf (high sales)
Corporate Citizens (low sales)
Institutional Stars (the best)
Apathetics (fire them)
• Termination of Employment
• Sexual Harassment
Sexual harassment
• Zero tolerance means…?…..a good policy?
• California law sets a zero tolerance policy,
holding employers automatically responsible for
any supervisor who sexually harasses an
employee – regardless of whether the company
knew about the offensive conduct. [2003]
• California Supreme Court ruled in Nov. 2003 that
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.