1 Mar 2019, 09:45 — 5 min read
Summary: The Peter Principle is a management concept developed by Dr Laurence J Peter. He observed that people who are competent at their job are likely to earn a promotion to more senior positions which requires a different set of skills. However, the best worker is not always the best candidate for the post of manager. Thereby as per this theory, in an organisation with a hierarchical structure, people as they get promoted, tend to become progressively less effective. The Peter Principle has been the subject of much debate since it was first introduced in 1969. GlobalLinker member Alwyn Lasrado shares his views on why promoting your best salesperson to the position of a sales manager might not be the best utilisation of their talents.
Many small businesses face a common problem. There’s a small team of salespersons who do the daily grind. However, when it comes to supervision, accountability, reporting and reviews, it all falls to the CEO, who has multiple responsibilities. In the process of managing so many things, the one thing that needs absolute focus – sales, gets the short straw. Between choosing to hire a new (and expensive) sales manager and searching within the company for a potential leader, the solution chosen most often? Promoting the best performing salesperson, to the position of a sales manager.
You would expect that would solve the problem. Right? Unfortunately, that is not the case. Turns out, most companies fail to solve this problem. Researchers from Yale, MIT and the University of Minnesota studied 214 different U.S. and international companies and found that the skills that contribute towards individual success aren’t useful when it comes to supervising a team. Their research was published in a paper titled ‘Promotions and the Peter Principle’.
We also see this example in various walks of life. Perhaps we can visualise it more clearly in sports. In cricket, there are numerous examples of brilliant individual contributors who have failed when given command of the entire team. Brian Lara, Sachin Tendulkar, Andrew Flintoff to name just a few. And then there is Virat Kohli, who has set a very high standard in motivating and contributing to the team without compromising his individual performance. But unfortunately, the likes of Virat Kohli are quite few.
So, what are some of the key traits that differentiate a successful sales manager from a great salesperson?
The biggest asset that a sales manager brings to the team is that s/he understands the big picture and sets about it methodically. They understand that it’s about the team and not their self. Setting standards and clarity of goals, understanding individual capabilities and coaching effectively, managing time, prioritising tasks with the single-minded goal of bringing out the best in individuals, is what drives them.
A good sales manager understands the value of discipline and its role in building a winning sales team. Such as, putting a sales process in place that provides uniformity in sales activity related decision-making vis-à-vis the customer; structured review and feedback mechanisms to ensure timely actions consistently. All these practices lead to better predictability of outcomes.
Right from the core company values to the sales results that must be achieved, the sales manager is focused and aligned. They are on top of the metrics that drive the business, always ahead of the curve, addressing or working on the pain points before they become a burning problem. Lead generation, demos/proof of concepts, pipeline, new business vs. existing client ramp ups, large deal-small deal mix, closures for the month/quarter, all the things that matter is always under focus for a sales manager.
A good sales manager communicates effectively. They lead by example, motivating the team, inculcating responsibility and accountability for actions and commitments, providing them with the right resources, advice and feedback at the right time. They can switch from mentor to coach to a driver, as the situation demands.
Yes. There are quite a few significant differences between a salesperson and a sales manager and most of these key traits are honed through experience, whether good or bad. Hence, promoting an individual performer to the sales manager position might not always be the best way forward.
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Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views, official policy or position of GlobalLinker.
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