A sales manager’s guide on how to turn a struggling sales team around

by Steli Efti

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It’s 8.30. You walk down the corridor, coffee in hand. You can already hear the chattering. You enter the room and look around. Phones are ringing and fingertips are dancing across the keyboards. You can hear the excitement in the voice of your team members. The energy is electrifying.

Slam. Someone hangs up the phone, spins around in their chair, winks and says, “That’s $5,000 before noon, folks.” The cheering is equal to that of a crowd at Madison Square Garden.

You smile. This is going to be a good day.

*Beep beep beep*

Then comes your rude awakening.

The sound of your alarm every morning is brutal. You hit snooze. For a while now, your morning routine has consisted of staring at the ceiling for 8 minutes before you manage to pull yourself out of bed.

You dream of a sales team that’s crushing their quotas on a daily basis and a team culture that’s both supportive and competitive.

But that’s not the case. They’re struggling every day. They’re not closing deals. They don’t even seem to know how to qualify leads anymore. Revenue is down and quite frankly—you’re in trouble.

It’s your job to fix it. The good news? Your dream is not far off. Here’s how to turn an underperforming sales team around.

Start from the beginning: Where did things go wrong?

You contemplate setting higher sales targets, shifting your performance KPIs, and maybe even firing some of your team.

In theory, these might seem like good ideas, but they can also make things worse. At best, they’re quick fixes.

Many sales managers tend to have the kind of reflexive thinking that ends up making the problem worse. Why? They never figured out what caused all these issues in the first place.

Let’s take a look at how you can get there.

Getting to the root cause of the problem

Often when things go wrong, we seek to blame rather than to solve. Have you ever had a conversation with a child and they kept asking you “Why?” Regardless of your response, their next question was always “Why?” It’s very likely that you ended the conversation with a firm, and for the child very unsatisfying, “because.”

Well, guess what? While this is an excellent way for a child to drive their parents crazy, it’s also the same approach that turned Toyota into a $500 billion company. The company pioneered a problem-solving methodology known as the 5 whys model.

Let’s take a look.

The 5 whys model

The 5 whys model has been praised by the startup community as the quickest way to identify the root cause of a problem. We’re going to take a look at how it works, the limitations to the model and what you can do to improve it.

So how does it work? You simply begin with a statement of the problem, i.e. “My team is underperforming.” Next, you ask “Why?” and you continue to ask “Why?” in response to each statement until you’ve arrived at what’s actually causing the problem.

Here’s what the conversation could look like.

Sales manager: My sales team is underperforming.

You: Why is your team underperforming?

Sales manager: Nobody seems to be giving their best effort.

You: Why are they not giving it their best effort?

Sales manager: They're not personally invested in their success. They just come in, do the day-to-day work, and leave at 5 p.m. sharp.

You: Why are they not personally invested?

Sales manager: I think it’s because we only reward the top sales rep, and everyone sees the top position as out of their reach.

You: Why do they think the top position is out of their reach?

Sales manager: Because Jeff has been the top rep ever since he started and they’ve pretty much given up on trying to even compete with him.

You: Why have they given up on trying to compete with him?

Sales manager: Well, he’s better than everyone by a long shot.

Aha!

In this situation, you’ve discovered—in less than two minutes—that your reps aren't motivated to perform as well as your top performer. Voila.

Limitations to the 5 whys

While the 5 whys approach can be a powerful problem-solving technique, it comes with limitations.

  1. Single cause issue. It assumes that there’s only one cause behind the effect.
  2. Deductive thinking. Often, problem solving doesn’t take place where the problem occurred. This leads to the discussion not being grounded in what actually happened.
  3. Confirmation bias. The person asking the questions will jump to conclusions because they’ve “seen this happen before.”

Here are four simple ways to improve your use of the 5 whys model:

  • Use a timeline. Identify the events that detail how the problem occurred.
  • “Go and See.” Observe what is actually happening, rather than make assumptions as to what might be happening.
  • Gather data. Demonstrate that the answer to any of the whys is plausible.
  • Ask again. For each of the causes your sales reps come up with, ask them another five whys.

A starting point

Despite its limitations, using the 5 whys model offers you a great way to explore the potential issue at hand and open up the lines of communication. It will assist you in challenging your assumptions and identify the areas in which the issue lies. And once you’ve done this, you can start looking at solutions to the problem.

Next, let's take a look at the three most common causes of an underperforming sales team and how you and your sales team can get out of a rut.

1. Did you hire the right salespeople?

Good sales managers ask themselves this question constantly. But it's not just about deals closed or leads qualified—it's about your team working together. It’s about your sales culture.

To illustrate this, let’s look at an example.

The LA SWAT team used to be a volunteer task force within the LAPD that took on the most dangerous missions. These volunteers were skilled at combat, and many of them had unique experiences, such as the Vietnam War. But because they weren't a cohesive team, the early SWAT teams suffered from sky-high mortality rates.

Members of the SWAT team face life and death situations every day. For them, having the right people isn't just important. It's the difference between waking up the next day—and knowing that your teammates will too.

Today, the SWAT team no longer consists of volunteers. Each candidate has to go through a six-day selection process during which they need to meet mental as well as physical criteria.

One of the most challenging tests is called “Hogan’s Alley.” This is a mock street scene where candidates are confronted with surprise situations in which they need to make life or death decisions. This includes whether or not to shoot a suspect or deciding whether a person is a friend or an enemy.

During these tests, candidates need to demonstrate that they can think clearly and make a decision while they’re exhausted, and even physically hurt.

While this is an extreme example, it’s an approach to hiring that can be applied to any team. In order to not just survive, but to thrive as a business, you need to make sure you have the right people onboard.

You don't want just good sales reps, you want sales reps who are cultural fits to work for your company. Map out your desired skill sets and personality traits and use them as a guide in your hiring process.

You'll find that your existing employees fall into three camps.

Great sales reps, great fits

They aren't just your money makers—they're the future of your company. Incentivize them to stick around. Put them in leadership positions, get them in front of your most important prospects and help them reach their career goals.

Great sales reps, bad fits

These are people who are great sales reps, but they're in the wrong place. Maybe they don't believe in your product, or they're better suited selling to a different type of customer. You need to get rid of them before their toxic attitude destroys your team.

Bad sales reps

The killer instinct doesn't come naturally to the majority of people. This is something that can’t be taught. No amount of intellect or positive attitude can make up for it.

Cut your losses quickly by letting go of sales reps that are either in the wrong business or the wrong career as soon as possible.

While firing people is never easy, you’re doing both them and yourself a disservice by keeping them around.

Join our upcoming webinar, “How to hire the right salespeople (and keep them)”, on Tuesday, September 20, 2016 9 a.m. (Pacific Time)/12 noon (Eastern Time).

2. Is there a strong team culture?

The tech community loves to say that culture is something that happens “organically.” As XPLANE founder Dave Gray points out, this doesn't mean we should just sit back and wait for it to happen. It won't.

As a sales manager, it's your job to keep a finger on the pulse of the culture and provide support. Create a roadmap for your sales culture using Gray's culture mapping technique.

Below are the key elements to focus on.

  • Outcomes. These are the objectives that you want your culture to achieve. It can be that your staff loves coming into work or that all your employees perform at their best.
  • Behaviors. Look at how individual behaviors influence the team and their ability to achieve your desired outcome. Reward encouragement and teamwork, but reprimand behaviors that bring down morale. If there's a toxic person on the team, get rid of him or her ASAP.
  • Enablers and blockers. Check to see whether you have tools and people who make the job easier and more efficient, or if you have tools and people who inhibit people from doing their jobs well.

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Download Gray’s culture map here (PDF) and start moving your sales team in the right direction.

Great reps bring in the revenue, but your sales culture will determine whether those reps will stick around.

3. Are your salespeople motivated?

Hustle. That’s what great salespeople are all about. And no salesperson is going to hustle when the compensation isn’t worth the work they put in.

But compensation isn't just about the money. It's about how you value a rep's hard work, and incentivize them to do better.

One of the most common causes of an unmotivated sales team is a complex compensation plan. Harvard Business School's Dr. Doug J. Chung spent half a lifetime researching motivation and sales compensation plans.

The result? Well, it doesn’t take a Harvard degree to grasp where things can go wrong. Chung found that there were three main factors to consider when designing your compensation plan.

  1. Salary vs. compensation. This depends on the reliability of your industry's sales cycle. If you're in a seasonal sales business, you can't reward reps for blind luck. If sales don't fluctuate based on these outside factors, compensation should be directly tied to performance.
  2. Timing. The influence timing has on reps directly correlates to how naturally motivated they are. Similar to great students, great reps just need a year-end bonus to motivate them, but middle-road and low performers need more frequent benchmarks (like quizzes) to keep them on track.
  3. Ratcheting. Many companies increase sales quotas of top performers year-to-year to get them to strive higher and higher. Chung's studies indicated that this is actually detrimental to morale. This means that top performers are penalized for succeeding rather than rewarded. An alternative is to give over-achievement bonuses, where yearly benchmarks stay the same, but hitting an even loftier goal is rewarded with more.

It’s simple: When salespeople don’t know what they're getting for the work they put in, they're going to be less motivated.

Structure your compensation plan in a way so that it incentivizes each type of sales rep on your team to improve and get better—one plan does not fit all.

Drive your sales team to continuously improve

Sales teams don't become great overnight. They become great because they work at it continuously. This is why your role as the sales manager is crucial. It's your job to help your sales team succeed. It begins and ends with you.

Accept responsibility

Swedish economist Tobias Fredberg found a fascinating pattern by examining how dozens of CEOs spoke in interview transcripts. CEOs who had successfully turned a company around shared the same way of speaking.

They personally took the blame for problems—using the words “I” and “me”—and passed the credit to the team for successes—using the words “us” and “we.”

As the sales manager, you're responsible for your team. When stuff goes wrong, it's up to you to step up to the plate and be accountable for your own actions. That's what being a good leader means—and that's what will inspire autonomy and leadership from within your team.

The benefits are huge.

  • Ownership over problems. If you assume that every problem is yours to either fix or delegate, then nothing will ever fall through the cracks. Establishing clear ownership over responsibilities and starting from the ground up is how you empower your team to succeed.
  • No cost to morale. Blaming members of the team and taking credit for successes will make team members feel under-appreciated. They'll feel like you're picking on them and taking their hard-earned glory.
  • Transparency. If you take it upon yourself to know the going-ons of the team, your sales reps will feel more comfortable telling you about potential stumbling blocks they're encountering. Otherwise, you'll be unaware of an issue until it spirals out of control and blows up in your face.

When your team is doing well in the day-to-day, you can step back and watch everyone succeed. But at pivotal times, you need to personally bring on change and see your vision through.

Lead by example

Most people are natural skeptics. If you claim that something will work, they'll need to see it to believe it. Instead of telling them, show them. Get into the weeds and start making cold calls, drafting emails, and closing deals right in front of your team. Inspire them and set an example.

  • Show concrete expectations. Instead of telling them how to close deals, give your team an example that they can actually learn from. Don't be the boss who sets impossible expectations without lifting a finger.
  • Mentor your reps. Give your sales reps someone to look up to. If your employees enter into a mentor-mentee relationship, they'll be eager to learn and improve. They're also more likely to stick around, as they’ll see their position as a learning opportunity.
  • Diagnose flaws in your systems. You might find a problem with a sales script, or an issue with how the team is finding leads. You’re not always this close to the action—take advantage of it.

You can set all the expectations in the world, but the only way to facilitate success is to give your team an example to follow.

Create a culture of motivation

A few years back I went to visit a company that has an international sales group. The group was divided into teams by country, so all reps that were selling to the same country sat together. When one country's team was underperforming, the sales reps were quick to assume that there wasn't a market for them.

But the CEO knew better. His solution was to take some of the star sellers from other teams and place them next to the under-performers. The stars were still making the calls to their respective countries, they just were doing it in the struggling team's cubicle. Within a few days, one rep started closing deals, and within a few weeks, the whole team started outperforming.

All your sales reps are going to have a slightly different secret to success, so you'll want to create an environment where they can learn from one another. Here's how to keep the motivation going, even when you step out of the room.

  • Acknowledge the strongest players on the team. If your sales reps know who's best, they know who to look to for answers.
  • Have sales reps workshop their pitches together. Sales rooms often feel like a hostile dog-eat-dog environment. But you want success to inspire your reps, not weigh them down. Have them work out kinks in their workflow together.
  • Facilitate some friendly competition. Many sales groups shy away from leaderboards because they feel that it only encourages the top few reps to duke it out for #1. Try creating tiered leaderboards, or even a tiered commission structure to encourage your reps to shoot for the higher tier.

At the end of the day, you can't always hover over your sales reps' shoulders. A business like that isn't scalable, and will collapse. Your people are the building blocks of your company—not how many deals you close, or your MRR. Building a culture where people motivate and inspire each other means knowing when to get out of the way.

Getting on the track to success

Often, as soon as an entire team agrees that there’s an issue, you’ll see a shift in focus. Your salespeople will start questioning roles, processes and the direction.

If it seems chaotic for a while—let it happen. This is a good thing.

It’s always challenging to face a problem when you don’t know exactly what the problem is. It will take work both from you and your sales reps to align and bring your team back on a good path.

Remember to be patient. Things won’t change overnight. The very first thing you try to turn things around is likely to fail, and that’s okay. Keep trying until you have the culture, the goals and the vision that will help your salespeople crush it.

Soon enough, you’ll be walking down that hallway and enter a room full of energy and excitement. Your salespeople will be closing deals again and there will be no alarm to wake you up.

Except for the sound of a sale, of course.

Recommended reading:

Toxic sales culture? Here’s what happened and what to do about it
If your sales team is struggling with a toxic culture, there are likely two culprits behind this: bad hires and bad incentives. Here's how to remove negativity.

Spot bad fits early: 20 red flags for sales hiring
I've been hiring (and firing) sales reps for years now. Here are the top 20 red flags you should look for during sales hiring.

Startups: This is how you design a winning sales commission structure
If you're faced with the challenge of developing a commission or compensation structure for your salespeople, here are two ways you can go about it.

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