For their new book—Sales Growth: Five Proven Strategies From The World’s Sales Leaders—Thomas Baumgartner, Jon Vander Ark, and Homayoun Hatami observed the inner workings of successful companies. Based on interviews of more than 120 of today’s most successful global sales leaders, this book offers real-life examples of how they overcame difficulties and found growth in a challenging market.
Part of finding growth is developing a sales team. While mentoring is a learning process, it shouldn’t feel like going back to a high school lecture hall. In this excerpt from the book, the three partners in McKinsey & Company talk about trainers and coaches who apply the tenets of successful adult education to their programs. Adults retain the most new information by doing—not hearing—and companies that integrate hands-on learning into their mentoring programs can benefit from that built-in bias. The authors also address how to reinforce successes while also giving special attention to those who need it. The excerpt closes with an innovative method of coaching the coach, an investment that for one company yielded an impressive return in close rates.
Coach Rookies Into Rainmakers
Unlocking people’s potential to maximize their performance is about helping them to learn rather than teaching them. This form of coaching is critical in sales because adults learn best through “experiential” learning—that is, by doing. Studies have shown that adults retain 65 percent of experiential learning compared to just 10 percent of material they receive in a lecture setting or in demonstrations.
Turning sales managers into coaches requires a change in behavior. At one company we studied, managers went from spending two to three hours a week coaching, to devoting around ten hours a week. In other top sales organizations, managers spend upwards of 60 percent of their time on coaching. What’s more, coaching objectives and requirements are now a major focus of their annual evaluations.
For example, at an industrial company that we interviewed, the head of sales established an “80/80” rule: sales managers are expected to spend 80 percent of their time with sales reps, and 80 percent of their variable compensation is linked to that. By tying compensation to coaching, the head of sales sent a very strong signal as to the importance he attached to coaching for the success of the sales organization.
Based on our interviews with sales executives, it is clear that a structured coaching program with at least weekly contact between coach and sales rep is critically important. For example, a consumer services company mandates that sales managers conduct daily 15-minute check-in calls with all reps who fail to hit their monthly targets. Reps who make their target get weekly one-on-one sessions, and reps who exceed their target get a 10-minute praise call every week.
To reinforce best practices, the company requires managers to join each rep for a day every month. To make the most of these “ride-alongs”, sales managers are trained to identify the causes of underperformance, feed back their findings, and recommend action plans. The bottom performers also spend a day on the road with a top-performing sales rep so they can really see what makes these stars stand apart.
The company also took a multipronged approach to improving its sales managers’ coaching skills. It provided managers with training on traditional skills, such as handling difficult conversations. It also allocated a “super coach” to each sales manager. These coaches, drawn from its central sales training team, observed real-life coaching interactions between managers and sales reps, and gave specific feedback on their coaching skills. The company saw a very impressive result from its sales program, with a 25 percent improvement in close rates, and attributes its ability to execute and maintain impact to the coaching role of the sales manager.
Adapted with permission of the publisher, John Wiley & Sons, Inc., from SALES GROWTH: Five Proven Strategies from the World’s Sales Leaders by Thomas Baumgartner, Homayoun Hatami, and Jon Vander Ark. Copyright © 2012 by McKinsey & Company. All rights reserved.
ABOUT THE AUTHORS
Thomas Baumgartner is a partner in McKinsey & Company’s Vienna office. He co-leads McKinsey’s work on sales and channels globally. Baumgartner advises clients in industries including high-tech, electronics, transportation, basic materials, telecommunications, and consumer goods—where he helps them outline and drive large-scale, top-line growth programs.
Homayoun Hatami is a partner in McKinsey & Company’s Paris office. He co-leads McKinsey’s work on sales growth. Hatami has a broad range of experience working with high-tech and telecommunications clients in Europe, the United States, and Asia.
Jon Vander Ark is a partner in McKinsey & Company’s Detroit office. He co-leads McKinsey’s work on sales growth. He has deep expertise in sales and channel management across industries including travel, automotive, industrial, and consumer durables.