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Sales Management - Understanding Your Role

Updated on March 15, 2016

There are some great philosophies for managing a sales staff that have been developed over the years. Clearly, with or without purpose, you, as a Sales Manager or Broker are using one or more of these philosophical strategies, knowingly or not.

It’s been my experience that every manager has a dominate trait that can be pretty easily identified, based on a simple understanding of how they view the world and their role as a someone who is in a leadership position. Today, there are numerous assessment methods to help determine what management style may be in play and it is not uncommon for larger companies to determine that style before putting a person in a management job.

In most real estate companies, the Broker Owner may have a sales manager or other management roles to fill, so it is important to take some steps to make sure you understand how placement will impact the ability of the company to keep good people. In many cases the Broker Owner is also the sales manager so it is very important to at least know what works and what does not work when you put your sales managers hat on.

Let’s take a look at some of the more common and well know approaches.

Management Theory

Theory Y / Theory X

In 1960 Douglas McGregor wrote a book called The Human Side of Enterprise. McGregor was working at MIT, Sloan School of Management. His theory helps define how managers see and relate to the people they manage.

The easy way to understand this theory of management is to understand that there are two types or ways that managers see the world.

One type of manager believes that people are basically lazy and are not motivated to achieve much on their own. This manager leaves little room for interpretation of what is required to be successful and believes that structure and supervision is required to get the job done. McGregor identified this type as a theory X type.

Theory Y is the other side of the coin. This type of manager tends to see the people they manage as motivated, willing to accept the challenge of “what it takes to get the job done”. Managers who fall into this category believe that the people they manage are ambitious and goal oriented.

M.B.O.

Management by Objective is another philosophy and was made popular by Peter Drucker in his 1954 book The Practice of Management. His theory applies mostly to how organizations need to view the process of setting goals and measuring performance. He believed that every level of the company needed to be involved with this and the organization would succeed if the people felt they were involved. Theory Y managers are often big fans of the MBO theory and will work with their staff and employees to establish goals and objectives that are meaningful to the individual and the company. X types don’t see what all the fuss is about.

Hierarchy of Need

About the same time that Drucker was outlining his approach Abraham Maslow published his book Motivation and Personality, in which he described what we now know as the Hierarchy of Need, which has had a lastly impact on how all of these various management theories work. The implication is clear, managers need to understand where a person needs to focus, in terms to helping them set goals that are meaningful and realistic.


Maslow's Hierarchary of Need
Maslow's Hierarchary of Need | Source

Motivation

Fredrick Herzberg had great influence on how we view the challenge of managing. He introduced his “two factor theory” in 1959 and it probably best known for his discussion on job enrichment, which he detailed in his publication One More Time, How Do You Motivate Employees? In 1968. What Herzberg described was that there are two separate factors at work at most times; one focused on satisfaction and the other on dissatisfaction. He references these as hygiene factors and motivation factors, which can be used in various ways to describe a situation. In most cases an individual can be viewed in one of four combinations, which became a way for other behavior types to describe what they observed.

That concept was captured in by Paul Hersey in what he described as situational leadership. Hersey and Kenneth Blanchard published Management of Organizational Behavior, which identifies what type of leadership is needed, depending on the “readiness level” of the individual. They used the Herzberg vision to provide a description which is fairly easy to understand.

In the table that follows you can see that someone who is at a Readiness Level I (Hersey/Blanchard) is someone who is "unable / unwilling" (Hertzberg), a "unconscience incompetent" (Maslow) who likely is focus on basic safty needs and will respond well to Manager who provides direction and training. (McGreagor, theory X). They may be goal orientated (Drucker) but have no idea how that works at this point. In other words, they are new, don't know much about the job or what it takes to succeed.

At the other end of the table is someone who is at the Readiness Level IV, who Blanchard would discribe as "able and willing". This person is often an "unconsciense competent", who is focused on achieving their goals and responds well to a supportive and helping management style. In other works, they know what the job requires, have integrated the skills to succeed and don't need a whole lot of direction.

Readiness Level I
Readiness Level II
Readiness Level III
Readiness Level IV
Unable & Unwilling
Unable & Willing
Able & Unwilling
Able & Willing
Theory X
Theory X or Y
Theory Y or X
Theory Y
Tell Style
Supportive Style
Selling Style
Helping Style
Selecting the Appropriate Management Style

Quartile Management

What I would suggest is that a combination of each of these theories can help determine what is the best approach for managing a sales team, which is a function of knowing your role, what you need to accomplish, and applying the appropriate management theory or approach to meet that objective.

Every sales team is made up of individuals. A simple way to look at the structure is to divide the whole into four parts, or quarters. The easy way to do that is based on past performance. If you have twenty sales people then you will find that the top five represent the 1st quartile, the next five the 2nd quartile, etc.

  • Your top quartile are very valuable to the company. They likely produce a disproportionate amount of the sales revenue. They are often self motivated and have set goals in all facets of their lives. Your objective is to keep them happy and make sure they feel valued as a member of your team.
  • Second quartile people likely have the capacity to fit into the top quartile, but are not working to their fullest potential. They may have something that is not in balance with their life or have just lost focus. The objective with this group is to find out what you can do to help and get them to re-focus on their goals and objectives.
  • Third quartile are often made up of people who are still learning and need supervision. They want to do well, but need direction in order to accomplish tasks and be successful.
  • The fourth quartile may be made up of new people or those that are just not doing what it takes to be successful. The new people want to do the right thing, but just don’t know what it takes. Those that are not productive and unwilling to do what it takes need to be replaced.

Here is how that type of organization might look with consideration for how these various management theories apply:

Quartile
Readiness Level
Heriaracky of Need
Management Style
Your Role as a Manager
1st
Willing & ABle
Self actualized or self of Belonging
Y - Helping
Helping - acknowleged success
2nd.
Unwilling & Unable
Belonging, May question themselves
Y - Suportive
Encourage & Support. Identify the problem
3ed
Willing & Unable
Uncertain & Need Support
Y or X
Define Goals and Re-hire
4th
Unwilling & Unable
Basic
X
Tell - Provide direction

Managements Role

Using the Quartile system for managing people requires some effort, but the dividends are well worth the investment. Of course not all people will fit neatly into each quartile description, but at least you will have a start point for directing your efforts as a manager.

In simple terms, let your 1st quartile know you love them, help the second quartile with what they need, support and encourage the 3ed to do what you know it takes and hold the 4th quartile to task.

All the theories rolled up into one.

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