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Sales, Self-Evaluation, and the Evolution of Leadership
How closely should entrepreneurs involve themselves with sales? We tend to encounter this question when small businesses experience enough growth to undergo structural changes, like hiring specialized employees and subdividing into departments. Such changes represent a major developmental leap in the small-business life cycle, and they have the best effect when they’re shaped by owners’ self-evaluations.
In their very early stages, many small businesses are one – or two – person shows. Entrepreneurs (and sometimes their partners) sell, service, manage, manufacture, market, innovate, allocate, et cetera. Everything that happens, happens because entrepreneurs do it themselves.
This scenario has some obvious and unavoidable downsides. First, any time entrepreneurs (read: people) are responsible for a wide array of complex functions, they’re going to have trouble putting in their best work. They’ll cut corners or let things slide-not out of laziness or lack of interest, but out of pure necessity.
Second, entrepreneurs are rarely skilled at all aspects of running a business. They have certain strengths and certain weaknesses – who doesn’t? It follows that if they’re forced to do everything, some areas of the business will perform weakly.
Early growth periods provide an opportunity for entrepreneurs to ask themselves which aspects of the business they should start handing off to new hires. Needless to say, this calls for self-evaluation. Some areas of self-evaluation are straightforward: Entrepreneurs who hate dealing with the numbers should engage bookkeepers and extricate themselves from accounting. Entrepreneurs who aren’t tech savvy should engage web developers and extricate themselves from online design.
The question of sales is harder to parse. With sales, the correlations between interest, aptitude, and optimum involvement are not direct. In other words: whether they’re good salespeople or not, entrepreneurs should be visibly involved with the sales process, but sometimes, not too involved.
You can see how offering general advice on this topic is a challenge. Maybe that’s why a large amount of the literature can be divided into two didactic camps. The first camp says, “You are your best salesperson-go get ’em!” The second camp says, “You ought to stay away from sales-delegate it to a specialized team.”
It would be nice if we could adopt either of these certainties, but in our years of working with small-business owners, we’ve found that neither camp gets it right. Some entrepreneurs are gifted salespeople and love the sales process, but need to spend less time on it, because their focus on sales saps value from other areas of the company. Some entrepreneurs are not gifted salespeople, but stay heavily involved with the sales process out of enjoyment or a sense of duty; their focus on sales not only saps value from other areas of the company, but from sales itself. Finally, some entrepreneurs, whether they’re gifted salespeople or not, avoid the sales process as much as they can, which ends up costing them customers.
These are no more than general categories-they don’t provide an exhaustive description of anyone’s sales approach. If you’re an entrepreneur, providing such a description is up to you and your trusted advisors. We can’t claim to be your trusted advisors, but we’ve been trusted advisors to many entrepreneurs in the past, and in this article, we’ll draw on our experience in a way that might complement your self-evaluation, making it more thorough and, thus, more beneficial to your business.
Hiring a sales force: An argument for delegation
Unlike huge corporations, small businesses can’t rely on their sheer visibility or their industry clout to build revenues. Instead, small businesses must rely on the quality of their relationships with clients and customers. These relationships need to offer something special. Small businesses are only attractive as partners, vendors, and service providers if they can offer a high level of ongoing treatment.
People don’t expect a small business to be distant or faceless: they expect a small business to take an active interest in making them happy.
When a small business only has a handful of customers, the owner alone can provide that active interest. But most small-business owners don’t want their firms to stay that small. Not forever. Either (1) the company will grow to the point at which there are too many customers for one person to attend, or (2) the company will need to spur growth by seeking out and acquiring new sources of revenue.
Both cases entail a sales force. The purpose of the sales force is to put in the hours and effort required to build and maintain customer relationships: the sales force takes phone calls, responds to inquiries and, depending on the industry, implements basic promotional strategies. It doesn’t need to be huge or, at first, full time. It just needs to be focused.
A sales force can be instrumental in keeping small-business owners operating at a high level. Even small-business owners who are excellent salespeople can’t spend every minute of the workday building and maintaining customer relationships. They have other duties. Hence, when they try to handle large sales volumes all by themselves, they actually increase the likelihood of losing customers. They get overwhelmed and make simple mistakes that entry-level sales employees might have avoided. The stress of juggling various customers’ demands in addition to the myriad other tasks of running a business is simply too great.
Some people thrive under stress, but in our experience, everyone has a threshold beyond which he or she starts turning in less-than-stellar work. For small businesses, individual customer relationships are too important to entrust to someone who’s tremendously overcommitted, even if that person is the owner. A sales force-even a two-person, part-time sales force-distributes the work and relieves the owner of some responsibilities.
Moreover, a sales force can act as a kind of buffer. It can soften the impact of errors. When an owner makes a mistake on a large order, is a bit brusque during a phone conference, or mispronounces a long-time customer’s last name, the ramifications can be severe. Such mistakes can cast a pall on the business as a whole. Fortunately, the same mistakes are usually less dire if they’re made by salespeople at lower levels of the hierarchy. It’s not that they don’t count: they do. They’re not good. But mistakes made by salespeople are more reparable. When a salesperson errs, an irked customer can be placated with a personal call from an apologetic owner. When the owner errs, an apologetic phone call is less mollifying. Instead of feeling like special treatment, it feels like what the customer is due.
Our point here is that if you’re a small-business owner, hiring a sales force doesn’t hinge on how good a salesperson you are. If you know you’re terrible at sales, then yes: hiring salespeople is certainly a good idea. But the question of your skills is only as important as the question of your availability-that is, the question of how much time you’re able to set aside for sales. It’s your availability that determines whether your customers see the best side of you during meetings.
The busier you are in general, the less attention you can spare for every customer you have. You may end up hampering growth and diminishing loyalty at the same time, even if you’re typically considered an incredible salesperson.
Part of your self-evaluation is ascertaining the real effect you’re having on sales. Are you able to put in the time necessary to acquire new customers? When you do put in the time, are you seeing positive, sufficient results? Are your relationships with customers stronger after you meet with them? Are they the same? Are they slightly weaker?
Establishing sales protocols
When the time comes to establish a sales force, many small-business owners act as sales managers. This makes sense. Owners know their customers. They know what’s worked so far and what hasn’t. They’re highly qualified.
Unfortunately, they often forget to codify all the knowledge that makes them highly qualified. They don’t write it down, they don’t turn it into formal documents, and they don’t compile it in a handbook. They rely on verbal instruction and continuous oversight, because, after all, they’re around all the time.
This method can be gratifying for owners and helpful for novice salespeople, but it runs contrary to the very purpose of a sales force, which exists to help free up owners’ schedules. If small-business owners neglect to establish written protocols for developing sales relationships (think of making inquiries or delivering quotes), then salespeople will not be able to operate effectively on their own. For the small-business owner, sales will remain a major time commitment.
Salespeople need clear rules for talking about price structures and incentives. They need standard input forms, a set filing procedure, and explicit responsibilities for communicating new sales arrangements to the relevant departments. This isn’t because they’re incompetent, but because they don’t have the authority that comes with ownership. They need to be able to refer to documentation to know they’re doing the right thing during, for instance, high-stakes phone calls.
Some small-business owners elect to hire a dedicated sales manager to assist with developing and implementing protocols. We’ve seen it work out well, so long as the new sales manager is given rein to actually run the department. Of all aspects of a small business, the sales department is one of the hardest for some owners to let go. It’s a continuation of their personal relationships with customers, and has an effect on how the business is perceived by the community at large. Owners are inclined to monitor it closely, but if they stay too involved in the department’s day-to-day goings on, they undermine the new manager and diminish efficiency.
The unique efficacy of owners as salespeople
So far, we’ve emphasized the importance of delegation. Of stepping away. But as we said earlier, the importance of delegation isn’t the only side of the story. It should be understood only as a corrective to taking on too much. An owner who delegates sales too eagerly or too strictly can be just as detrimental to a business as an owner who refuses to delegate anything at all.
There’s a reason a large portion of the business literature considers owners to be the best salespeople: owners inspire confidence. Or, we should say, they have the potential to inspire confidence in a way regular salespeople don’t.
For the most part, small-business owners are highly skilled in their fields. They know the industry and the market, are passionate about their work, and have creative ideas. That’s why they become entrepreneurs in the first place. This combination of knowledge, passion, and creativity is compelling in conversation. Even small-business owners who don’t think of themselves as charismatic can persuade listeners based on being (1) good at what they do and (2) in charge.
Expertise and authority are powerful selling points. Customers respond to them. When customers can associate the heart of a business with someone who cares about doing things right, they feel more inclined to buy from that business.
In fact, we shouldn’t limit the owner’s audience to customers. Stakeholders and the community at large need to be convinced that a small business is viable and reliable. Thus, you might say that for owners, selling is not entirely about sales. It’s not entirely about moving merchandise or acquiring new contracts. It’s about building credibility within an industry, or community of practice. It’s about getting people to correlate the business with competence and high value.
Owners don’t just convey information about their businesses: they represent their businesses. They lend a human face, a human intelligence, and a human drive to their operations. That can draw people in, get people interested, better than the shrewdest marketing campaign or smoothest set of talking points.
This is why we can’t wholeheartedly champion delegation. Owners-even owners who dislike sales or aren’t especially good at sales-have the potential to be great salespeople, so long as they’re not overwhelmed with the day-to-day responsibilities of taking orders, making inquiries, and what have you. Owners have this potential because they can sell the idea of their businesses, rather than particular products or services.
Delegation is important, but keeping in touch with customers, stakeholders, and the community is equally important. It’s a balancing act.
Small-business owners typically start by doing it all. Their firms can’t run without them; their firms wouldn’t exist without them. At some point, things have to change. Owners have to empower employees to perform certain critical tasks.
For our present purposes, this usually means hiring a dedicated sales force and giving it the procedural tools to work without constant oversight. It doesn’t mean forsaking sales, even for the owners who’d love to do so. Rather, delegating the details of the sales process helps owners build stronger relationships with clients, customers, stakeholders, and the community.
The issue of owners’ involvement in sales reflects a larger issue in the evolution of any small business-namely; entrepreneurs must be honest about their own strengths, weaknesses, and effects on the company. They must then use their honest self-evaluations to decide what kind of employees they need. It’s the only way for small-business owners to cultivate steady, sustainable growth.
Engaging dedicated salespeople while maintaining the right level of involvement with customers is one part of a crucial process for small-business owners: the transition from entrepreneurship to leadership. Self-evaluation and delegation are what make this transition possible.
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#Sales #SelfEvaluation #Evolution #Leadership