Category Archives: – In the News

Football, Sales Management, and The Peter Principle

Big Shoes to Fill 1

“PETER PRINCIPLE!!”

This is what I shouted at the radio and to no one in particular when I first heard about David Moyes’ sacking. As a non-follower of football, the fact that I am aware of the recent drama at the top of Manchester United shows the impact of this story.

Alex Ferguson was always going to be a hard act to follow, but in the main, pundits responded warmly when Moyes’ appointment was announced last year. With a string of notable achievements it seems that Everton had prospered under his twelve years of leadership. For what it’s worth, my own observation is that Moyes was simply promoted beyond his capability. He isn’t the first and he won’t be the last, in any industry – and another example of the Peter Principle.

Having worked for the redoubtable John Madejski I understand that running a football club is not like running a ‘normal’ business, but how confident would you feel about appointing a frontline executive to a business four times larger than anything he’d run before? Putting to one side assets such as players* – this is the approximate ratio of the two clubs I’ve mentioned in terms of their gross turnover. Okay, it’s not a watertight comparison and every team has to have eleven players, but to me, the analogy is stark: the problem with much sales management is that too many sales managers and sales directors have been promoted beyond their ability and/or experience; typical reasons being they were appointed either by default (remember that sales staff turnover often has a grievous record) or because they are ‘good at selling’.

For anyone unfamiliar with the Peter Principle, it’s a concept in management which originates from the eponymous book published in 1969. In it, Laurence Peter and Raymond Hull suggested that employees will be promoted to the point of their own incompetence:

“In a hierarchy every employee tends to rise to his level of incompetence … in time every post tends to be occupied by an employee who is incompetent to carry out its duties … Work is accomplished by those employees who have not yet reached their level of incompetence.”

Deliciously insightful, eh?

The thing I love to remind myself about the book The Peter Principle – Why Things Always go Wrong is that it was never intended as a piece of management theory at all – but as a satire; a mocking observation of the pyramidal structures in private and public organisations which are still so familiar to us today. In the course of duty, I try to keep abreast of the latest sales and management textbooks (so you don’t have to) – the majority of which try to reinvent wheel – and an enjoyable consequence of the book’s parody is that it reads like an actual pompous management textbook – redeemed of course by its astute perception.

But back to poor Moyes. Dismissal is never nice to witness, and is even worse for the employee. However, as a professional football club manager he would have known – and accepted – the rules of engagement. Similarly, career sales managers understand that their team must perform consistently or they could be for the high jump. Of course, in the professional sales arena staff should be supported and trained properly. Promotions need to be given responsibly too – nobody benefits from a manager who’s out of his depth.

In a future blog I plan to look at why so many sales appointments fall into the Peter Principle trap so easily. In the meantime, feel free to contact me with your experiences.

* Source: Forbes-Manchester United ranked 2nd most valuable sports team in the world (March 2014)

 

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Acas Scam

Following a series of reports to them, Acas (Advisory, Conciliation & Arbitration Service) has warned employers to be wary of companies who claim they are part of, or to be acting on behalf of, Acas.

They said:

“We have recently received complaints, mainly from employers, about companies contacting them who say they are part of and/or acting on behalf of Acas. They typically offer initial advice which they don’t charge for but then ask people to sign up to a long-term, often expensive contract for employment and/or health and safety advice.”

Further information and contact details can be found on the Acas website here.

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Employment Law Update: Employment Tribunal Fees to be Charged to Claimants

Until now it’s been relatively easy – and free – for an employee to initiate a claim against their employer. There’s been little demand for them – or their lawyers – to consider whether their claim has any strength or prospect of success.

It’s estimated that employment tribunals cost the taxpayer over £80m per annum. Later this year, a fee system will be introduced to deter ‘vexatious claims’ by employees, or, as the Government puts it, to deal “robustly with cases with little or no prospects of success”.

The new fee system will have two tiers (depending on the complexity of the claim) and work as follows: any claimant (i.e. the employee) will have to pay an initial issue fee of between £160 and £250 to submit their claim, and then a further fee of either £230 or £950 should the case go to a hearing. (Dismissal, discrimination, and equal pay claims will be liable to the higher tier fees of £250 and £950 making the maximum total fee up to £1,200.)

Undoubtedly this is good news for businesses as employees will have to think twice before bringing about any claim. Not surprisingly this change in the law has its critics particularly as the tribunal system (or, to give its proper name, the Employment Appeal Tribunal – aka EAT) was created in 1975 to provide every worker with free access to justice.

The Coalition Government’s justification for the introduction of fees is to reduce the burden on the taxpayer. The Justice Minister Jonathan Djanogly said: “It’s not fair on the taxpayer to foot the entire £84m bill for people to escalate workplace disputes to a tribunal. We want people, where they can, to pay a fair contribution for the system they are using, which will encourage them to look for alternatives.

“It is in everyone’s interest to avoid drawn-out disputes which emotionally damage workers and financially damage businesses. That’s why we are encouraging quicker, simpler and cheaper alternatives like mediation.”

Nevertheless, we may see the cost of settling claims actually rise in practice as employees are likely to demand that the cost of the Tribunal fee they have paid for is added to any settlement payment. Furthermore, the introduction of fees may have the effect of hardening some employees’ views on litigation, causing them to feel that, having paid for their ‘day in court’ they would rather take their chances with the legal process than turn down reasonable settlement offers.

For further information see:

 https://www.gov.uk/government/news/employment-tribunal-fees-set-to-encourage-mediation-and-arbitration

 https://consult.justice.gov.uk/digital-communications/et-fee-charging-regime-cp22-2011

 http://www.acas.org.uk/index.aspx?articleid=4487

Update-29/5/2013: HM Courts & Tribunal Service announced that the date for the implementation of fees into Employment Tribunals (ET) and Employment Appeal Tribunal (EAT) will be Monday 29th July 2013.

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A Sales Pitch too Far

An important aspect of successful selling is confidence. If a buyer can detect any hesitation or doubt in a salesperson’s pitch, he’s unlikely to buy. At the same time if the salesman has no confidence in what he’s selling, he won’t be able to sell it very well. Of course at the other extreme, we have the con-trick which is the attempt to defraud someone after gaining their confidence. Nevertheless, even for something that’s honest and authentic, whatever it is we’re selling, we have to be positive; to really believe in our product or service. But every now and again, when I hear about something unethical, unprincipled or simply just unfit for purpose which is selling supremely well, I’m reminded of the reasons why there’s so much cynicism about salespeople.

At the Old Bailey today, in a little reported story, a dishonest businessman who pocketed millions of pounds over ten years was found guilty of three charges of fraud.

James McCormick, a former police officer, made £55m over a ten year period selling bogus bomb detectors to governments all over the world. Let’s just hope he was paying his taxes. Priced at £27,000 a pop, the hand-held detector was based on a novelty golf ball finder and made out of cheap components in a factory on an industrial estate in the West Country. Preferred marketing channels were glossy brochures and a website. McCormick’s clients included the UN, Saudi Arabia and Niger – he made £37m from sales to Iraq alone. The QC for the prosecution said “The devices did not work and he knew they did not work.”

Devil-Doing Business 1

Although the precise figure can never be known, it’s without doubt the fraud will have been directly responsible for the loss of hundreds if not thousands of lives because explosive devices were not identified.

This case is depressing as it is shocking and sad. As if proof were needed that any bad product can be successful if you sell it aggressively enough.

However, do not assume for a moment that a fantastic service or product with a list of benefits as long as your arm will sell itself; believe me, there’s rarely such a thing. So what’s stopping you? Act now and talk to your sales people. Remind them of the myriad strengths of what they’re selling. Inspire them and invest in their training to get out there and sell with truth, passion and confidence.

Update-2/5/2013: McCormick sentenced to 10 years imprisonment.

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Call me Madam – Part 1

Have a Nice Day

Hot on the heels of a recent piece in which I made passing mention of the annoyance of cold callers, the issue of ‘cold caller chumminess’ was addressed in a poll published this week.

As we have all known for a long time (‘Have-a-nice-day’ Americans excepted), British social behaviour and interaction doesn’t really run smoothest when strangers are over familiar with us.

Cold callers and customer service departments such as those in banks come in for the heaviest criticism, with half of all people questioned preferring to be addressed as Mr/Mrs/Miss.

Even hard-working waiters and waitresses at restaurant chains do not escape reproach with 10% saying they dislike their false chumminess.

The survey of 1,000 people was commissioned by Ask Jeeves. A spokesman said ‘There is nothing wrong with friendliness but it just doesn’t wash when it comes from someone you have never met or even spoken to.

‘Often these are people who are trying to sell you something and who have no other interest in you, yet they treat you like a long-lost pal. Jeeves was a well brought-up butler, he would never have dreamt of saying to Wooster ‘Hiya Bertie, how’s it hanging?

‘Britons are saying “enough is enough” and do not think it is old-fashioned to demand a bit of respect and to be called Mr, Mrs, or Miss by cold callers, sales staff and others.’

As we know, business and social etiquette has become more relaxed in recent decades but school/college leavers still break long held social codes at their peril. For this reason, I always include something about how to address the prospect/decision maker in any sales or customer service induction courses. I get the group to consider the sector they’re selling to (eg conventional versus modern or progressive) as well as the status/rank of the contact they may be dealing with.  Certainly a respectful tone and polite manner never goes amiss, though I do stress that no one ever bought from a salesman because (s)he sounded subservient.

Whether they are expecting a prospect to spend money with them by directly selling or merely representing their company in a customer-facing role, basic rules of business etiquette need to be highlighted to young or inexperienced recruits. Simply because any perceived unprofessional behaviour costs business.

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Cold Callers are Human Too

Call Centre Bod 1

Whenever a quiet evening at home is disturbed by an unexpected phone call I’m as guilty as anyone at my impatient reaction to yet another tele canvasser.

Coming from a sales background, I always try and remind myself that these are ordinary people working the late shift in a difficult job. They are often young and blissfully unaware of how many of us regard their intrusion. In the way that a good call-centre trainer should incorporate some empathy training – in other words, to teach an understanding from the householder’s point of view – so perhaps should we remember that no tele sales operator deserves blatant rudeness, however badly timed their interruption.

I therefore found the following story which caught my eye in today’s news thoroughly heart-warming. It concerns a cold caller, Simon Shepherd who saved a pensioner’s life.

Simon, aged 25, was just two days into the job when he rang an 84 year old woman to sell solar heating panels. After a brief chat, Simon noticed that she seemed to be struggling to breathe.  Suspecting something serious he called an ambulance to her home in the West Midlands.

When paramedics arrived they found the woman face-down in her living room having suffered a potentially fatal stroke. Thanks to Simon’s quick thinking, she is expected to make a full recovery.  The woman said “I am very grateful to the young man. He was very good with me on the phone. He went above and beyond for me.” Simon said “Cold callers get a hard time from people but if I hadn’t called her she’d have probably died.”

I like to think that the majority in Simon’s situation would have done the same; call centre staff are only human, with feelings, insecurities, fears and aspirations just like the rest of us. Let’s also remember that whether they are working here or from abroad, all of them are doing one of the hardest things of all: trying to sell to the Great British Public.

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How Deep is Your Grudge?

Smiley-Bittersweet Reduced

Latest statement today from the OFT regarding petrol and diesel prices: “Competition is working well in the UK road fuel sector.”

Hmm… On hearing the inevitable protests to this, the words ‘grudge purchase’ sprang to mind. Now, I have no idea who first coined this phrase but it’s a powerful tag for something we never feel good about paying for. In straitened times consumers are likely to be sensitive to grudge purchases such as fuel. By the same token, what about the inevitable grudge purchases which are part of running a business?  Certainly overheads such as rent, heating and electricity. Then there’s insurance, health and safety compliance measures, audits for accreditation etc. What about emergency or ‘crisis’ costs for recruitment or legal fees? Does your organisation supply any of the services I’ve listed? If so, how good are you at recognising just how your customers may feel about your invoice? For example, if a cynic were to describe your product as a grudge buy, what do you offer in terms of benefits and service which puts you ahead of your competitors? If you’ve never thought about it in this way before, perhaps it’s time to take a closer look at every step of the customer’s experience.

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Not Working or Networking?

Pressing flesh.  Rubbing shoulders.  Making connections.  Associating.  Working the room. Seeking contacts for professional gain.  Rubbing elbows.  Schmoozing.

However you put it and whatever the extent of your participation (or derision) we all know what these terms mean. But it’s not often we see mainstream media with a story on business networking, still less a connection with the academic, so I was doubly surprised to hear that Cass Business School has just appointed the world’s first ever ‘Visiting Professor of Networking’. A glance at a couple of Julia Hobsbawm’s articles on the subject certainly make her a credible appointment: she seems to have a clear understanding, defining networking as “the hardest of soft skills”. Interviewed this morning, she described networking as having become “an engine of the economy… [be it at] Davos or the Chelsea Flower Show.” She also talked of networking as “transportable”, a form of “knowledge brokering”. And rather than regard networking as frivolous, she appealed to us to become “a nation of networkers”.

I’ve written before that the ancient marketplace where Greeks and Romans gathered to buy and sell were the precursors of today’s trade exhibitions. Whether you are visiting a small regional show or an international blockbuster at Dubai’s WTC, you are in the perfect arena to make new contacts in your industry as well as catching up with existing clients and finding new business.

Networking is a way for you to make the saying "It's not what you know, but who you know" actually work for you

Networking is a way for you to make the saying “It’s not what you know, but who you know” actually work for you

Connecting through social media is now part of everyday life, available at our fingertips wherever we are. This year LinkedIn hit 150m registered users, 9m of them in the UK. Great to be able to look up an old college friend or your fellow delegates from that conference last week, but there is something authentic about physically being present with a person as opposed to their online representation. You get a sense of the real individual, the bigger picture of them as you see them reason, respond and react to you. It calls to mind the C20th greeting of “Nice to put a face to the name, at last!” in the days when there was usually nothing more than a typewritten name on a  database to go by.

I have no doubt that the power of face-to-face connecting hasn’t changed since the Romans used to gather and meet in the forum. Whether you’re a lady who lattés or someone with ambitions to become Grand Master (I know you’re an aspirational bunch), face-to-face business networking is alive and well, and here to stay.

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Never Bluff

Salesman-Bluffing or Lying

This is what my boss said to me when I first started in sales – by way of advice and also as a caution. I must admit, at the time, I thought it a little strange. Naturally I was someone who would never do such thing because I would always make sure I knew and understood 100% what it was I was selling, my innate honesty acting as a check against any wild promises or fraudulent claims.

Of course, it didn’t take long to value the advice. As soon as I was out in the field and engaging with customers, I found they would ask all sorts of questions and make all kinds of demands as part of the buying game. And being real life, I had to come up with some genuine solutions which we could deliver.

As someone who trains in presentation skills as well as in selling, I have found the Leveson Inquiry (full title Inquiry into the Culture Practice and Ethics of the Press) fascinating viewing and I will happily listen to repeated excerpts on the radio having already watched them live. The fascination is in spotting when witnesses are bluffing (or lying) and at which points. It’s always pretty obvious. Repeated viewings and listenings reward me with the chance of a closer study of body language and that subtle change of tone or tightening of the voice people have when they are not entirely comfortable with what they’re saying. The witnesses appearing at Leveson, many of whom are media experts themselves, should understand that it’s never worth bluffing – or lying – unless you are supremely good at it. And even then, they try it at their peril.

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