The talking heads on TV news have moved on to other things, but the popular media continues to reverberate with wrong-headed opinions about the Wells Fargo consumer account debacle.
It’s time to weigh in with clear thinking for sales leaders.
In case you were circumnavigating the globe in a Viking ship replica, the US Congress held hearings in September to understand who was responsible for opening millions of Wells Fargo retail banking accounts without the account holders’ knowledge. While its customers were struggling to understand why they were saddled with overdraft fees and credit downgrades, Wells was conjuring a market share surge that, for a time, was hailed as an outstanding achievement.
Congress was unsparing in holding the CEO, John Stumpf, responsible. It has been reported that he fostered a culture of growth at any cost that included employee harassment, intimidation, whistleblower retaliation, sales goals, and cross-selling. Stumpf lost his job and regulators slapped the company with a $185 million fine, and Wells has since repudiated ALL of these practices.
Wait a second—sales goals and cross-selling? Since when are these classic tools of sales leadership so questionable they must be eliminated, cut out like a cancer?
Those who fail to learn from history…
It’s been 100 years since the first World Salesmanship Conference, keynoted by President Woodrow Wilson in Detroit. At the conference, pioneers of “scientific sales management” like John H. Patterson of National Cash Register were celebrated as heroes. According to Walter Friedman in his book Birth of a Salesman: The Transformation of Selling in America, it’s not hyperbole to hail Patterson as the father of modern sales leadership.
If you’ve ever assigned sales territories, monthly quotas, or launched a sales contest, you owe a debt to Patterson. Your annual sales meeting and “top performers club?” His idea. That sales funnel you’ve cleverly incorporated into your CRM? Patterson developed the first sales process to march “prospects” from unmet need to their first purchase.
Brilliantly executed as they were, Patterson’s sales management techniques had a dark side. Setting aside the civil and criminal antitrust lawsuits, NCR salesmen were treated like replaceable cogs in a machine. Friedman notes, “Patterson believed in the need to break men down, treating them cruelly at times, and then to rebuild them…”
Which sounds a lot like Wells Fargo in 2016.
It’s in the genes
We have over a century’s worth of sales leadership lessons from not only NCR and Wells Fargo, but countless other strong sales cultures, both positive and negative. As a fully immersed participant or engaged observer of many sales cultures, I’ve concluded they are the result of three intersecting “genes”—Goalsetting, Incentive Structure, and Leadership Reinforcement.
It’s no wonder Wells Fargo’s genes produced a hideous, disfiguring disease:
- Stumpf’s goalsetting mantra was “Eight is Great,” meaning each retail banker was to sell eight products a day, and each consumer was to be sold eight different products, whether they needed them or not.
- Meanwhile, the (dis)incentive structure was to threaten employees with being blackballed from the industry if they failed to keep up.
- Last, leadership’s reinforcement was corrupt. Whistleblower employees who called the Wells ethics hotline received retaliation in response.
Healthy genes require insights and metrics
The most constructive sales cultures deliver long-term competitive advantage by combining the following genes:
- Goalsetting based on customer-centric metrics.
- Incentives designed with an understanding of what motivates each sales professional.
- Leadership reinforcement that measures the coaching execution of front-line managers.
Setting sales goals grounded in customer-centric metrics is by no means easy work, but the raw material is there--marketing departments have been charged with developing customer insights for a long time.
In contrast, both accurately understanding what motivates each sales professional, and consistently measuring the coaching execution of front-line managers has until recently been too difficult for most sales organizations to tackle.
Fortunately, that challenge has been solved.
At this year’s annual conference of the Sales Management Association I co-presented a case study of an organization whose mission is to “grow the most valuable relationships in business by uncovering truth and meaning from data.” This organization has accomplished both elusive tasks, and in the process, drove revenue from zero growth to +9%.
The organization is Dun & Bradstreet, who, with the help of their implementation partner EcSell Institute, adopted a proprietary sales coaching process across forty frontline sales leaders in the US, impacting over four hundred sales professionals.
In the end, this is an uplifting story. For every Wells Fargo, losing its way with a toxic sales culture, there’s a D&B, successfully reinventing itself by combining the right genes to create a constructive one. It all boils down to leadership.
- Does your sales organization have the right genes?
- If not, are you taking action to develop the insights and metrics they require?
Please share your thoughts below; I look forward to engaging with you.
Everett Hill works with CEOs and CSOs to grow B2B sales. With his help they achieve new levels of sales performance, by connecting their competitive strategy to tactical execution and customer experience. Prior to founding Catalytic Advisors, he was a sales leader and General Manager with significant P&L responsibility in manufacturing and distribution companies. He holds an engineering degree from Princeton University and an MBA from the Harvard Business School.
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