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8 Ways Management Teams Lead Their Companies and How It Affects
Their Sales Teams Working with ten of thousands of salespeople and hundreds of companies during the last eight years, at Value Forward Group we have identified 8 common types of management styles. These management descriptions are not always reflective of the company size but more on how they manage their firm. Each of the 8 management models, have positive and negative attributes both for the sales team that sells for them and the management team that leads them. Understanding the mode your firm is in and the leadership approach your senior executives are taking helps you as a salesperson understand why certain actions or non-actions take place. Conversely, if you are part of the management team, you need to see how your sales team sees your leadership directions. To help you decide where you are in
the business model, review these organizational descriptions to
determine where you company fits. Often top line revenues are flat or decreasing for three years or more. This leadership model is a family-run business where usually more than one family member (husband/wife; father/daughter; mother/son, etc.) is or has been on the payroll and the company is 10+ years old. Instead of investing in their business assets (sales, marketing, operations, technology), management is milking cash-flow to use the company's revenue stream as a planned retirement program. Often these executives take long vacations, don't come to the office very often, and generally just cruise along. This management style, rightly earned by the principals who took the business risks to start the company, has a negative impact for the sales team members seeking to maximize their income and sales opportunities in a growth-directed firm.
Unlike the maintenance mode model, this management team (although dominated by family members) understands that they must invest in their future either to propitiate future generations of family cash-flow contributions or just the desire to be more successful. It is often a positive work environment for the sales team and compensation plans are competitive or more generous than Global 1000 companies. This leadership style can provide a great place to work, but may limit senior management promotions due to family members' ownership and extended employment opportunities for upcoming generations.
This management team drives their company based on the commitment they have made to their VC's, private investors, or Wall Street. They invest in their employees based on how close the company has hit their financial obligations, or milestones. If they miss their business numbers, they adjust the salesperson head count regardless of how close the reps are to their sales quota. This business model is driven by executives who seek financial confirmation, not an understanding of how those numbers are achieved. This leadership style is emotionally reactive and driven by management's sense of their own employment security, rather than planned business logic.
Most Global 1000 firms use a farmer management style of leadership. Instead of taking calculated risks, their corporate bureaucracy overwhelms them and they just focus on selling more products and services into their existing customer base. It is a short-term leadership model, easy to implement, and cautious in its approach, yet it creates an artificial perception of success controlled by the current customers' ability to buy. For sales team members, it is usually an easy sales model to function under. Usually compensation is not competitive with more aggressive players and compensation is limited in the long-term as customers buy less. Companies in this mode focus more on brand selling than new inbound lead generation.
This is the management model of choice, not common, but definitely on the rise internationally and to some degree domestically here in the U.S. Characteristically, this management style continues to make investments in new business process, new products and services, and company acquisitions that open up new markets and additional offerings. This is a great work environment for salespeople because their compensation plans are usually very aggressive and these companies supply team members with all of the marketing and support services they need to sell more.
The product superiority management model is dominated by a CEO/Founder executive that has a background or education in technical areas and actually believes that superior technical capabilities in today's market is why prospects buy. This is a difficult sales management model to operate under because the senior management team does not understand sales or marketing methodology and just expects salespeople to just sell. Often this leadership focuses on building better technical offerings without studying market demand or market gaps and assumes that if they build it, prospects will buy. Compensation for salespeople in this style of company is usually average or slightly below average as executives spend a disproportionate amount of revenue on R&D.
Like its sister management model, Global 1000 Hunter Model, the entrepreneur growth management model is an aggressive leadership process that actively seeks to grow their companies based on continuous process improvement and alignment of sales, marketing, strategy and R&D. It is often led by a founder who is seeking fast growth, but not interested in an IPO in the short-term. This is a great company to work for because they usually pay their salespeople very well, support their departments with a strong esprit de corps attitude, and provide upward mobility based on achievement.
This model is usually a combination
of Entrepreneur Growth Management and a Growth Mode Management
Model Family-Run or an Investor/Wall Street Management Model.
Either way, it's a positive environment for salespeople seeking
to sell in a dynamic environment and receive compensation based
on their value not some arbitrary calculation. If you are a CEO, review these 8 management models to determine how your leadership style affects your sales team. "Most business failures do not stem
from
www.thecxogroup.com |
 Welcome,
In this issue, we talk about CEO
management styles. I look forward to your
comments.
Sincerely,
Rick Erling, President The CxO Group, LLC rerling@thecxogroup.com Rick Erling is the President of The CxO Group, LLC., a management consulting firm that specializes in integrating sales, marketing, financial metrics and strategic planning to maximize corporate revenue growth. Located at the firms Dallas, Texas headquarters, Rick is a certified executive coach, business strategist and the firm's senior practice executive working with start-ups, privately held companies and Fortune 1000 companies in both the public and private sector. The CxO Group is a managing consulting partner of the Value Forward Network. With consulting partners in four countries, it is one of the world's largest management consulting groups focused on helping companies increase corporate revenue capture.
Using the copyrighted Value Forward method, we integrate financial metrics, marketing methodology, sales process and corporate strategy and operations into one outbound revenue capture program to help companies grow.
We advise CEOs on action steps to take to grow revenues, consultant with management staff on best practices and train sales, sales management and marketing teams on tactics and strategies that work. |
