The New V.P. of Sales
Louise, Vice President of Sales
Louise has just been hired as the new Vice President of Sales for OK Works. She was appalled by the commission plan that she found in place upon her arrival. Louise is planning to announce a new commission structure for her 15 person sales staff.
Here are the problems she faces:
1) OK Works has the highest paid salespeople in the industry despite being fourth in sales.
2) OK Works has not shown a profit in four years.
3) Commission is currently based on gross sales rather than gross profits.
4) Salespeople make the same commission on old products and old business—despite higher profit margins on new products and a need for new business.
Louise was hired away from the industry leader where she was one of their top performers. She thinks her old company had an excellent commission structure with all of the incentives in the right places and believes it to be one of the key reasons for her former company’s success.
We have been discussing the advantage of planning influence opportunities beforehand. Considering the tools of influence, can you give Louise any advice on how she might go about springing the new commission plan on her staff?
The Delivery Vehicles
Junior, Sales Representative
Junior is an account manager for OK Motors, a company that builds a delivery vehicle called the Urban Assault Vehicle, UAV. When Junior’s company entered the market nine years ago, Giant Motor Company, GMC, had 85% of the delivery vehicle market with their Vanmeister. Since then, the UAV has been very successful and captured 30% of the market. The UAV originally sold for the same price as the Vanmeister, but a year ago Junior’s company had a 6% price increase. Junior has just been notified that there will be another 6% price increase effective in 90 days.
The UAV is technologically well ahead of the Vanmeister. It has a much better maintenance record and gets substantially better fuel economy. When gas prices exceed $2.20, operating costs really start to favor the UAV, even when you factor in the new price increase.
Headquarters has given the following rationale for the price increase.
1) Fund a new computerized inventory management system for spare parts production and distribution.
2) Fund a formal training program for customer service personnel.
3) Increase R&D funding for alternative fuel systems.
4) Increase profits. “We make the best vehicles; we should make a sufficient profit,” the CEO said. Profits have been averaging only 3% over the past four years.
Junior’s account is Fred’s Express Delivery, known as FredEx. FredEx started buying about 300 UAVs per year from him three years ago. FredEx’s purchasing manager, Shirley, did not appear to be happy about the last price increase. She has also not been happy with some recent problems in obtaining spare parts. In fact, there have been quite a few cases of errors in the parts shipped, and many delays by the delivery company OK Motors uses. FredEx has not purchased anything but UAVs since they purchased their first one; however their huge fleet of over 4,000 vehicles is still 85% Vanmeisters.
We have been discussing the advantage of planning influence opportunities beforehand. Considering all of our tools of influence, what advice would you give Junior as he prepares to meet with Shirley to tell her about the price increase?
Getting It Done
Taylor, General Manager
Taylor works for you. Taylor can always be counted on to deliver the numbers—even under extremely challenging circumstances. Taylor works hard and puts in a lot of hours on the job. You received feedback both internally and externally that some subordinates have reported feeling “barked at,” subtly intimidated and unappreciated. Taylor’s division’s performance is excellent and in the 81st percentile and its employee satisfaction/turnover is in the 35th percentile. Taylor has made the following statements to you in the past.
1) “The key to successful numbers is to be very firm with my people regarding policies and procedures.”
2) “Most people are lazy at heart. If you don’t keep a close eye on them they will diddle around whenever they can.”
3) “Leaders are born—and I’ll tell you there aren’t as many leaders being born as there used to be.”
You know that you need to modify Taylor’s behavior. But Taylor’s division has the highest performance in your region—and based on this employee’s experience and expertise you cannot afford to lose this person. How do you influence Taylor’s behavior?
The Maker of Trouble
Carl, The Critic
Carl, one of the inspectors on your team, never seemed to like you from the beginning. But don’t worry, the vast majority of human beings appear to be not liked by Carl. It is rather obvious that he resents your recent rise to team leader after only six years on the job. Carl has been an inspector for 22 years, which is 10 years longer than the second most senior person in your group.
Carl thinks he’s an amazing inspector—but, in fact, his skill level is better described as being better than four out of five of his colleagues. To his credit, Carl does have the technical experience and willingness to handle tasks that others find difficult and/or undesirable. However, Carl’s defining characteristic is his unwavering commitment to persistently correct his teammates’ behavior. Carl appears unable to let the behavior of others go by without verbalizing every one of his critical observations. Carl is a big tough guy and most of the people in your group deal with him by caving-in during confrontations. Lately, he’s been referring to you as “General” and you’ve heard (shock of shocks) that he has been critiquing your instructions in front of team members.
We have been discussing the advantage of planning influence opportunities beforehand. Considering the tools of influence, how can you influence Carl to improve his behavior?