What Percentage of Your Sales Executives Are Good Managers?

What percentage of your sales executives are good managers? The answer to this simple question can have a dramatic impact on a sales organization’s results. In my consulting practice, I ask senior managers this question and the answers I receive are surprising.

While it would be reasonable to expect that 50 to 60 % of a company’s managers would be rated as good by senior management, the typical answer is only 10 percent. In other words, corporate leadership is admitting that 90% of their managers are bad or poor managers. Of course, we can debate what it means to be good, but clearly when only 10 % of a managing staff is considered good in the eyes of corporate management, there is a high likelihood that companies are not getting the best from their employees.

When conducting sales audits for companies, I see these hallmarks of poor sales management:

  1. High turnover rates. Poor managers churn through their sales staff.
  2. Hiring “C” players. Bad managers do not attract “A” producers.
  3. A culture of finger-pointing. When employee engagement is poor and volume goals are not met, bad managers have an endless string of excuses for lackluster performance. These include not having the right loan products; pricing is not competitive; or operations is holding them back from closing more volume.

It is amazing to me how many companies admit to having poor quality managers and yet they base their growth strategies on hiring more of the same in hopes that the individuals will somehow become better managers because they are joining a new firm. The reality is that good managers have the 10 competencies that are needed to be successful and the others do not.

Why is it critical for a company to have good managers? The simple fact is that good managers have a huge impact on a company’s performance. In a Harvard Business Review article, “How Damaging Is a Bad Boss, Exactly?” by Jack Zenger and Joseph Folkman, the authors note that there is a strong correlation between employee engagement, customer satisfaction, and revenue.

Zenger and Folkman cited a study of  “the employee-customer-profit chain” at Sears: “This was a straightforward dynamic in which employee behavior affected customer behavior, which in turn affected company financial performance. Specifically, in Sears’ case, when employee satisfaction improved by 5%, customer satisfaction improved by 1.3%, which led to a .05% improvement in revenue. That might not sound significant, but for $50 billion Sears, that came to an extra $250 million in sales revenue.”

The authors further commented that “This study has since been replicated by J.C. Penny, Best Buy, and Marriott. And for all of them the results held true — effective leaders led to satisfied employees, which led to satisfied customers, which led to a direct and measurable increase in sales revenue.”

The numbers are overwhelming in pointing to the importance of having good managers. The same is true in sports, armed services and other disciplines that require individuals to perform at their best. Employees want and need a good manager who can develop their skills and help reinforce what matters in today’s marketplace to win.

According to a Stratmor study, 40 to 60% of mortgage banking originators are unproductive. This is no surprise if only 10% of managers are making the grade. Solid sales performance begins with the quality of the direct manager.

Are mortgage companies screening for the right managers and developing those that could be good managers? It is an investment that must be made because it pays big dividends.