Sales

When Does Managing Become Stalking?

It’s a commonplace in management that what gets measured gets done, and for the most part I agree with it. But when it’s taken too far it can backfire on you—sapping morale, breeding resentment, and fostering destructive sales behaviors.

I’ve been doing some research into the Wells Fargo scandal for a speech I’m delivering next week about ethical sales cultures. One of the most fascinating documents is a copy of the lawsuit that the City of Los Angeles filed against Wells in May 2016. It details the pressure-cooker management practices that branch managers and above followed to try to fulfill ambitious—some would say unrealistic—goals for cross-selling in connection with the bank’s “Going for Gr-eight” program. There is a lot of fodder in there for anyone studying unhealthy management practices, but what I found the most repellant was the extreme monitoring and measurement that went on.

In many branches, daily sales for each branch and each employee were reported and discussed 4 times a day, at 11, 1, 3 and 5pm! Some branches, doubtless run by high achievers who really wanted to impress their bosses, had hourly calls. The verb discussed is a euphemism, because the report further states that “managers constantly hound, berate, demean and threaten employees to meet unreachable quotas.”

Is it any wonder that employees resorted to cheating? And by cheating, I mean opening accounts for customers without their knowledge or authorization: 1.5 million deposit accounts and 500,000 credit card accounts. While all this measuring paid dividends in the form of a steady rise in the bank’s stock price, it also ended in congressional investigations (and what CEO would not relish the opportunity to be lambasted on national TV by Elizabeth Warren?), resignations, penalties and lasting damage to its reputation.

We all laugh at the stereotype of the helicopter parent, who can’t seem to let go when their kids go to college, constantly hovering over them to monitor what they’re doing and to step in to help them whenever they feel it’s necessary. I wonder how many people who laugh at that behavior in others might be guilty of it themselves when it comes to how they manage their sales teams?

Wells Fargo was an extreme case, but the potential for helicopter managing exists everywhere, particularly under pressure of ambitious sales quotas. When sales slip—or just don’t rise fast enough—it’s human nature for the manager to dig in and figure out what’s going on, or to lend a hand to get a deal done. But if that level of intervention doesn’t work right away, it’s also human nature to redouble your efforts and ratchet up the pressure. As psychologist Edward Deci says, “Control is an easy answer,”[1] but that constant monitoring and pressure comes with a price:

  • The most immediate and obvious price is that eats into selling time, forcing salespeople to constantly attend calls and file reports.
  • It kills trust. How do you get your buyers to trust your account managers when you don’t?
  • It drives short term thinking. I once had a client who hired me to train their enterprise reps to develop account plans meant to cultivate long-term, forward-thinking relationships with clients; but then held their feet to the fire with quarterly quotas.
  • It stifles outside-in thinking. Fear makes us inwardly focused, which makes it difficult to see things from the customer’s perspective. At the same time, you begin to see each customer as a target and not a person.
  • It stifles creativity. Pressure actually does improve performance—for routine tasks that are done the same way every time. But pressure degrades performance in tasks that require creativity and resourcefulness, which pretty much describes high-level B2B complex sales. (In Wells’ case, the pressure did make their people more creative—in finding ways to cheat the system
  • It can lead to a vicious cycle, where too much pressure hampers performance, which leads to more pressure. Like a drug that requires increasing amounts to have the same effect, it can become the monster that must continually be fed.

Keep in mind that the only reason the Wells Fargo scandal came to light is because it was so egregious, which makes one suspicious that this kind of behavior is far more prevalent than we know. Most sales managers are not that extreme, of course, but pressure does funny things to people, including turning managers into stalkers.  Ask yourself: do you hover too much?

[1] Why We Do What We Do, Edward L. Deci and Richard Flaste.

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