Sales Coaching Blog

The High Cost of Low Coaching Performance

Posted by Kathy Collins

June 12, 2014

 Leadership_Image

How much does poor leadership cost an organization...you might be shocked!  The process of finding the right leader/coach for your company may be the difference between double-digit profits or closing your doors forever.   The connection between leadership/coaching practices is well researched and presents the largest growth opportunity for organizations today.  Factors that impact sales rep performance and productivity are intrinsically linked to training, coaching and mentoring.

In Kouzes and Posner's, "The Leadership Challenge," Exceptional leaders have the following characteristics:

  • Having the ability to clarify personal values
  • Setting an example by aligning actions with shared values
  • Envisioning the future by imagining exciting and ennobling possibilities
  • Enlisting others in common vision by appealing to shared aspirations
  • Searching for opportunities by seeking innovative ways to change, grow, improve and manager sales
  • Experimenting and taking risks by constantly generating small wins and learning from mistakes
  • Fostering collaboration by promoting cooperative goals and building trust
  • Strengthening others by sharing power 
  • Recognizing contributions by showing appreciation for individual excellence
  • Celebrating the values and victories by creating a spirit of community

How do you identify its own cost of poor coaching leadership? There are 4 common traits that tend to increase costs at a very basic level. They are:

Unmet shared goals:  When a monthly/quarterly/yearly sales goal is not completed on time it effects the entire organization. To curb this trend, senior leadership needs to remain connected with sales reps. While, it is not recommended for sales leadership to enter a role of micro-management, it is necessary to understand the performance of each sales rep.  A good coach should provide encouragement, feedback and support to ensure their direct reports are completing their sales on time and at a level of high performance standards.

Decreased efficiency:  When a sales rep is unsure of goals, mission or expectations the department, team or individual is at risk for not reaching their full potential.  The results of a large survey comprised of 1,300 private-sector companies found that an average of 41% of work time was unproductive.  When employees are not fully engaged in their work, not only does it cost the organization, but also future work that could have been generated by the sales rep.

Missed opportunities: Missed opportunity costs are not always visible in the short term, but are very harmful to the bottom line and growth in the long term.  If your sales rep is not working to their highest potential, it is possible that your organization is missing ongoing valuable opportunities.  A good coach will take the time to explain to his sales rep why it’s important to think in terms of short-term goals and long-term goals.  If your managers are not doing this already, your company or department is at-risk for not aligning department goals which affects organizational goals not being met as well.  Making sure to align sales rep goals with the future state of the organization is what leaders should strive for.

Decreased employee morale and increased turnover:  Organizations today face many challenges, but none so impacting as the high cost of a decrease in morale, which most often stems from poor leadership.  It is also the easiest problem to address.  The end result of an decrease in morale, means company culture is at risk as well as the future state of a department and organization

There are 3 significant costs associated with replacing an experienced employee:

  1. The cost of finding a replacement
  2. The cost of getting a new person up to speed
  3. The cost of covering a position while it’s vacant

Employee turnover could potentially run your company into the hundreds of thousands of dollars.  A conservative estimate is 30% annual salary to replace a lower-skilled, entry level employee, to as much as 250% of an annual salary to replace a highly-specialized or difficult-to-replace position.

In any economy, businesses need to make sure that they are taking care of their employees by providing strong, consistent, inspiring leadership.  With every passing day, it is imperative that we continue to create new and innovative solutions and get the most out of every dollar your organization spends.  By evaluating and improving leadership practices, executives can eliminate a constant drain on financial performance that will allow organizations to grow and thrive.

Exclusive Information for Sales Leaders

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 Sources:
Zenger, J., Folkman, J., & Edinger, S.K., How Extraordinary Leaders Double Profits
Proudfoot consulting, Untapped Potential--The Barriers to Optimal Corporate Productivity
Ken Blanchard, The High Cost of Doing Nothing, (2009)
Kouzes and Posner's, "The Leadership Challenge,"

 
 

Topics: coaching effectively, Adaptive Leadership, coaching sales people

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