1. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Chapter 11 Leadership of a Sales Force BA 3750 Chew The first thing that you have to do to turn around a team is to envision the process. Bill Parcells NFL coach

2. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. TM 12-1 (Fig. 11-1) Leadership Effectiveness Personal characteristics Managerial skills Leadership effectiveness Leadership style (the leader behaviors) S I T U A T I O N

3. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Leadership Characteristics and Skills Personal Characteristics Self-Confidence Initiative Energy Creativity Maturity Managerial Skills Problem-solving skills Interpersonal skills Communication skills Persuasive skills

4. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Two Leadership Styles Transactional Leadership Those supervisory activities regarding the day-to-day operation and control of the sales force. Clarifying rules Providing verbal feedback Transformational Leadership Transforms the basic values, beliefs, and attitudes of followers such that they are willing to perform at levels above and beyond expectations. Articulating a vision Fostering group goals Role modeling Providing individualized support

5. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Figure 11-2 Critical Leader Behaviors for Different Situations Transactional Leader Behaviors Transformational Leader Behaviors Informing Basic Rules Verbal Feeback Articulat- ing a Vision Fostering Group Goals Providing a Role Model Individual- ized Support Newly hired, inexperienced rep  Veteran rep; low performance due to burnout  Unstable situation; crisis environment  High-performing rep; like autonomy 

6. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Tools and Techniques of Leadership Personal contact Sales reports Telecommunications Better customer and industry information Selling assistance Sales support Reporting responsibilities Communication Printed aids Meetings Indirect supervisory aids Compensation plans Territories Quotas Expense accounts Sales analysis procedures

7. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Coaching Sales Reps Three elements of leadership most often used to describe coaching Verbal feedback Praising salespeople when they do well. Leading by example Coaches are role models; salespeople will emulate them. Mutual trust and respect Created through two-way communication

8. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Outcomes of Effective Leadership TM 13-3 Well-Trained Salespeople Trust among Salespeople Citizenship Behaviors Voluntary behaviors important to the success of the firm (e.g., when one rep gives encouragement to a fellow, struggling rep) Better Performance Sales Force Morale A sense of common purpose and a belief among members that group goals can be attained.

9. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. (Fig. 13-2) Job Satisfaction Sometimes called individual morale An individual salesperson’s emotional and evaluative feelings toward various dimensions of the job, including feelings toward… Pay Promotions Job Security Benefits Co-workers The Sales Manager (or Leader) Individual salespeople must first each be satisfied with his or her job in order for high group morale to emerge.

10. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Problems Encountered in Leadership Poor performance Substance abuse Cheating on expense accounts Engaging in unethical behavior Third-party sexual harassment

11. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. CHAPTER-END DISCUSSIONS QUESTIONS What are the personal characteristics necessary for an effective leader? Will possessing these characteristics alone insure success as a manager? If not, what other elements need to be considered?

12. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. CHAPTER-END DISCUSSIONS QUESTIONS Personal characteristics which may contribute to an individual's ability to lead are self-confidence, initiative, energy, creativity, and maturity. However, these do not ensure good leadership; they must be combined with managerial skills and as well as specific leader behaviors.

13. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. What specific leader behaviors (from the two leadership styles) would you use in the following situations? Why?

14. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. a. Terry is one of your best sales representatives. She has eight years of experience and has proven her abilities many times. b.Diane graduated with a marketing degree within the past year, but she has limited sales experience.

15. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. a.Terry doesn’t need a lot of guidance; and thus, transactional leader behaviors are not necessary. She should be reminded/updated on the company’s overall goals, and thus articulating a vision is important. Depending on her personality, she may or may not appreciate individualized support (some reps like the autonomy, and want to be left alone).

16. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. a.Diane is in need of a lot of varied attention by her sales manager. Transactional leadership is essential, as she is new and does not understand much about the job. She will also look to others and emulate their behavior; thus, sales managers should take special care to lead by example in this scenario – for whether they like it or not, they are role models.

17. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. c.John is a veteran employee. In recent months, however, you notice his performance stagnating.

18. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. cThe description of John is of the typical plateaued sales rep. Individualized support is key as John still needs to know that the company cares about him. Further, the sales manager needs to make John excited again about working toward a common goal with his fellow salespeople.

19. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. How has the revolution in technology (high-speed computers, e-mail, the Internet, etc.) affected the way sales managers lead their salespeople?

20. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. First of all, technology has resulted in salespeople being even more remote than they were before. Increasingly, companies have replaced salespeople’s actual office at company headquarters with a virtual office centered around the reps’ laptops. At the same time, technology has created a number of new high-tech ways to lead salespeople with whom the manager has very little in-person (face-to-face) interaction. These ways include cell phones, teleconferences, Web conferences, groupware, e-mail, voice mail, and chat. This answer refers to the chapters “Virtual Leadership” box, the source of which is a Sales & Marketing Management (Mary Boone, “The E- vangelist: Face Time,” S&MM, June 2001, p. 29).

21. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Bill Jolton, a salesperson for a large national soap company, informs his immediate supervisor that he is quitting at the end of the month. The supervisor is surprised to learn this, since she thought that Jolton was doing a good job and was happy with his work.

22. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. The supervisor would like to keep Jolton with the firm, for she thinks Jolton shows exceptional promise. How should the supervisor handle the situation?

23. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. This is an actual case in which the company attempted just about every device known to management in order to keep the individual who had in his short time with the company turned in a sales performance far above the best sales reps with the division. First, the direct supervisor attempted to talk the rep out of his idea. This did not work.

24. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Next, he attempted to insult him by claiming the rep just didn't have "the guts" for the job. This did not work. Next, the company flew in a psychologist from the home office who proceeded to pull just about every psychological trick in the book to make the rep want to stay on the job. This did not work. The rep claims that basically none of them really tried to understand his problem and why he really was quitting..

25. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. They simply would not believe him when he said he hated the work. Although he was doing an exceptional job selling, Bill felt that this work was beneath his dignity and he simply was not happy with the job. Basically, the supervisor must sit down with the rep and let him talk. Until the supervisor really knows what is bothering the sales rep, he has no chance to meet the objections. Once the objection is brought into the open, then the supervisor has a chance of answering it; but until then he has none.

26. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. In this case, the objection is very difficult to answer, but it could have been handled much better. The company had this man calling on very small "papa and mama" grocery stores. Since he had proven his ability, the company might have been able to utilize his superior talents elsewhere in the company, thereby giving the rep the prestige he desired. For example, while the rep did not like calling on small grocery stores, he might have been perfectly content to call on larger supermarket operators and chain store buyers. In addition, there were many other places in the company where this individual could have been profitably employed.

27. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. In actuality, all the supervisor and psychologist succeeded in doing was make the sales rep angry and more determined to quit. Today this rep is a highly successful sales rep in another line of endeavor, and he takes great pride in his work.

28. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. 5.As a sales manager for ABC Company, Rocky Farlow oversees 15 sales reps. Farlow is an outstanding transactional leader, but he is hopelessly ineffective as a transformational leader. Is this a problem? Why or why not?

29. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. 5.To be a good transactional leader is to be an effective manager. Consequently, Farlow reacts well to what has just happened, provides appropriate feedback, tackles short- term problems, and uses one-way communication to clearly explain policies and procedures. This leadership style, however, does present potential problems.

30. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. 5.Transactional leadership is important, necessary, but not sufficient to be an all-around excellent sales manager. Perhaps Farlow’s skill set is less of a problem if he works closely with a direct supervisor that is an excellent transformational leader. In this case, the two would complement each other nicely.

31. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. 6.A sales manager of a large metropolitan automobile dealership required his sales force of eight people to meet each morning at 9:00 a.m. for about 30 minutes to plan their activities for the day.

32. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. 6.During this meeting, he asked each rep to tell what he or she intended to accomplish that day. Were these meetings sound? What was the manager's goal in setting up such meetings?

33. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. 6While in theory this policy has many good things to say for it, in practice the sales force can become very antagonistic toward these meetings. Each rep would say practically the same thing each morning -- i.e., that he intended to make so many demonstrations, call on so many customers, etc. Since each rep stood up and said approximately the same thing, very little was accomplished in these meetings.

34. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Actually, the manager's main reason for holding them was to get his sales force out of bed in the morning and on the street by 9:30. Also, he just wanted them to think specifically about what they hoped to accomplish that day. The sales manager transformed his sales meetings into sales training sessions and also reduced their frequency to three a week.

35. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. 7.What are some specific ways in which sales managers can be role models to their salespeople? List several distinct ways.

36. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Sales can be role models by… Sales can be role models by… - personally demonstrating proper selling technique to their salespeople. -never being late to meetings and appointments. -conducting themselves in an honest, moral manner. -presenting a professional image through appropriate dress and grooming. -listening to their salespeople (so their salespeople will hopefully listen to their customers. -making an effort to be team players. -never asking their salespeople to do things that the managers would not do themselves.

37. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. 8.What is the difference between job satisfaction and morale? Is it possible to have high job satisfaction but low morale?

38. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. 8. 8. Job satisfaction is an individual-level phenomenon that relates to how well a single person likes his or her job. Morale is typically discussed as a group-level phenomenon that relates to how well the entire group of workers are committed to accomplishing the same set of goals. Consequently, a salesperson might be highly satisfied with his job because he gets paid a lot of money and only has to work 30 hours a week. This salesperson may hardly interact with his colleagues. Thus, there is no team spirit among this sales force, and morale does not exist. So, yes it is possible to have high job satisfaction with low morale.

39. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. 9.You notice that Mike, one of your sales representatives, has been consistently unproductive for the past two months. You have heard rumors indicating Mike may be abusing alcohol or drugs; however, no proof is available. What actions should you take? Why?

40. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. 9.You should first discuss Mike's performance deficiency with Mike. He should be told that he must rectify the situation or be subject to termination. Then you can try to explore the reasons for the deficiency with the rep. If he admits to a problem of substance abuse, then you can recommend that Mike seek assistance from a professional substance abuse program.

41. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. 10.One of your sales reps, Nancy, claims that one of your other reps, Bill, has been sexually harassing her and she has asked you to do something about it. You have talked to Bill and he denies it. What should you do now?

42. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. 10. It is important that sales managers take proactive steps to prevent sexual harassment, recognize it when it does take place, and put a stop to the harassment when it occurs. In order to create an environment which discourages sexual harassment, companies should develop comprehensive policies against sexual harassment. These policies should include statements about the behaviors which are prohibited; the penalties for misconduct; the procedures for making, investigating, and resolving complaints; and procedures for education and training.

43. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Sales managers should be knowledgeable of these policies and ensure that they are followed. In this case, such policies would move the sales manager in the appropriate direction.

44. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. CASE DISCUSSIONS MAJESTIC PLASTICS COMPANY – A Sales Rep Objects to Harassment

45. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. MAJESTIC PLASTICS MAJESTIC PLASTICS Companies are not only responsible for creating an environment which does not condone sexual harassment by its employees, they are also responsible for third-party harassment, that is, harassment by clients and customers. If managers or supervisors are aware of the harassment by customers or even if they should have been aware of it, they have a responsibility to take actions to protect the employee from further harassment. These actions may include reassigning employees, requesting that customers stop the inappropriate behaviors, and/or advising them that the company can no longer serve them without a commitment to refrain from such behaviors.

46. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. MAJESTIC PLASTICS MAJESTIC PLASTICS Clyde needs to either assign only male reps to the AP account, discuss the allegations with Spencer, or refuse to do business with AP. He can't allow his reps to be subject to abuse. He must show to Lisa and the entire organization that sexual harassment will not be tolerated by Majestic.

47. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. MAJESTIC PLASTICS-ETHICAL DILEMA MAJESTIC PLASTICS-ETHICAL DILEMA We have a situation where a sales manager must deal with a veteran rep who may be plateauing, or disengaging early, from the job. Although the rep has had many successful years with the company, recent performance has not been up to par. The sales manager must put aside both the historical performance and a long-time friendship in determining what to do next.

48. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. MAJESTIC PLASTICS-ETHICAL DILEMA MAJESTIC PLASTICS-ETHICAL DILEMA 1.Can the rep regain his motivation? If not, is "letting the rep go" the only solution? 2.How should the sales manger get the rep to agree on what's expected (even from long-time veterans)? 3.Are there short-term special assignments which might help the rep regain momentum and enthusiasm? (Perhaps a mentoring program or putting the rep in charge of a special meeting would help.).

49. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Companies are not only responsible for creating an environment which does not condone sexual harassment by its employees, they are also responsible for third-party harassment, that is, harassment by clients and customers. If managers or supervisors are aware of the harassment by customers or even if they should have been aware of it, they have a responsibility to take actions to protect the employee from further harassment. These actions may include reassigning employees, requesting that customers stop the inappropriate behaviors, and/or advising them that the company can no longer serve them without a commitment to refrain from such behaviors.

50. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Clyde needs to either assign only male reps to the AP account, discuss the allegations with Spencer, or refuse to do business with AP. He can't allow his reps to be subject to abuse. He must show to Lisa and the entire organization that sexual harassment will not be tolerated by Majestic.