I knew I’d asked an uncomfortable question. I can always tell by the way the owner and the sales manager get an embarrassed look on their face, and then close the door. The question I’d asked was, pointing to the bottom person on a ten person sales force, “Tell me about Ed. Why are his sales so low?” Ed was at 50% of quota with a downward trend line.
“Uh, Troy, you’ve got to understand,” the owner said. “That’s Ol’ Ed. He’s been with the company for more than twenty years. He’s sort of an institution here, and he used to be our very best salesperson. Maybe the best the company has ever had. He’s just no kid anymore.” “I love veteran salespeople,” I responded. “And I understand about getting older. Does Ed have some physical limitations that prevent him from doing the job to its fullest?” I already knew the answer to that one; I’d seen Ed walking around the office – nearly skipping at times – as he greeted everyone in the building. But from there, the conversation got pretty shocking to the business owner.
“No, of course not,” the owner replied. “But we’re loyal to him and he’s loyal to us.”
“Nonsense,” I told the owner. “You might be loyal to him but he’s not loyal to you,” I continued, seeing the jaws drop on the other side of the table. “If you’ve read my work, you know that I’m a big fan of the principle of job equity.” I saw them nodding along. “Here’s what people don’t understand about job equity. Job Equity is the principle that, over time, a company and an employee become more valuable to each other, as the employee learns more about the job and performs better, and the company continues to be a stable source of income, rewards, and security.”
“The problem you have,” I continued, “is that you have someone – Ol’ Ed – who SHOULD be one of your top performers based on longevity and experience, but is by far your worst. That tells me that Ed just doesn’t put effort into the job. Would you agree?”
Both the owner and the sales manager nodded uncomfortably.
“Moreover, this situation exists because you have let it happen. Ed didn’t just walk in one day and say, ‘hey, I’m going to half-ass it from here on out,’ did he?” No, they both responded. “His performance just declined little by little as he lost customers through attrition or non-attention, and unlike in the past, failed to replace them with new customers, right?” Again, nodding. “And you didn’t have the heart to manage the trend when you saw it start, right?” Now, very uncomfortable nodding.
“The result is that you’ve got your highest-potential territory taken up by someone who will no longer prospect and build his business, and that you’re afraid to manage. How many millions of dollars do you suppose this has cost you?” At this point, the sales manager became indignant.
“What would you have me do?” she asked.
“Your job,” I replied. “Manage Ed. Let him know that his behavior isn’t acceptable, it is costing the company money, it is an obstacle to your personal achievement and compensation, and that it won’t be tolerated anymore.” Nods were replaced by jaws dropping.
“FIRE ED?” they said in unison.
“Not necessarily,” I said. “You have options. I’d start with a Performance Improvement Plan, giving him a certain period to turn things around. He knows how to do the job, he’s just not doing it. You could also consider a reassignment to a less demanding position like Customer Service. But ultimately, you cannot continue to grow your company with your highest-potential territory not being worked. And here’s one more thing – by doing this, you actually give Ed RESPECT. You’re treating him like an accountable human being instead of some weak welfare case. If Ed is half the salesman I think he is, he’ll understand that, and his pride will get his back up.”
“And if not?” the Sales Manager asked.
“Then Ed isn’t earning his keep. Whether you keep him on as a welfare case is up to you, of course. You could reassign him to a very weak territory where his lack of effort won’t matter. Or you could keep the status quo and know that you’re leaving big bucks on the table every year until he decides to officially retire.”
The client decided to put Ed on a Performance Improvement Plan. This was six months ago. Ed is now ranked #4 out of ten salespeople – and climbing. Whether he makes it back to number one or not, I don’t know, but I’m rooting for him.
