Article for the week of July 10, 2008
8 Ways Management Teams
Lead Their Companies
by Paul DiModica
Working with ten of thousands of salespeople and hundreds of companies during
the last eight years, at Value Forward Group we have identified 8 common types of
management styles. These management descriptions are not always reflective
of the company size but more on how they manage their firm.
Each of the 8 management models, have positive and negative attributes both
for the sales team that sells for them and the management team that leads them.
Understanding the mode your firm is in and the leadership approach your senior
executives are taking helps you as a salesperson understand why certain actions
or non-actions take place. Conversely, if you are part of the management team,
you need to see how your sales team sees your leadership directions.
To help you decide where you are in the business model, review these organizational
descriptions to determine where you company fits.
- Maintenance Management Model, Family-Run
Often top line revenues are flat or decreasing for three years or more. This
leadership model is a family-run business where usually more than one family
member (husband/wife; father/daughter; mother/son, etc.) is or has been on
the payroll and the company is 10+ years old. Instead of investing in their
business assets (sales, marketing, operations, technology), management is
milking cash-flow to use the company's revenue stream as a planned retirement
program. Often these executives take long vacations, don't come to the office
very often, and generally just cruise along. This management style, rightly
earned by the principals who took the business risks to start the company,
has a negative impact for the sales team members seeking to maximize their
income and sales opportunities in a growth-directed firm.
- Growth Mode Management Model, Family-Run
Unlike the maintenance mode model, this management team (although dominated
by family members) understands that they must invest in their future either
to propitiate future generations of family cash-flow contributions or just
the desire to be more successful. It is often a positive work environment
for the sales team and compensation plans are competitive or more generous
than Global 1000 companies. This leadership style can provide a great place
to work, but may limit senior management promotions due to family members'
ownership and extended employment opportunities for upcoming generations.
- Investor/Wall Street Management Model
This management team drives their company based on the commitment they have
made to their VC's, private investors, or Wall Street. They invest in their
employees based on how close the company has hit their financial obligations,
or milestones. If they miss their business numbers, they adjust the salesperson
head count regardless of how close the reps are to their sales quota. This
business model is driven by executives who seek financial confirmation, not
an understanding of how those numbers are achieved. This leadership style
is emotionally reactive and driven by management's sense of their own employment
security, rather than planned business logic.
- Global 1000 Farmer Management Model
Most Global 1000 firms use a farmer management style of leadership. Instead
of taking calculated risks, their corporate bureaucracy overwhelms them and
they just focus on selling more products and services into their existing
customer base. It is a short-term leadership model, easy to implement, and
cautious in its approach, yet it creates an artificial perception of success
controlled by the current customers' ability to buy. For sales team members,
it is usually an easy sales model to function under. Usually compensation
is not competitive with more aggressive players and compensation is limited
in the long-term as customers buy less. Companies in this mode focus more
on brand selling than new inbound lead generation.
- Global 1000 Hunter Management Model
This is the management model of choice, not common, but definitely
on the rise internationally and to some degree domestically here in the U.S.
Characteristically, this management style continues to make investments in
new business process, new products and services, and company acquisitions
that open up new markets and additional offerings. This is a great work environment
for salespeople because their compensation plans are usually very aggressive
and these companies supply team members with all of the marketing and support
services they need to sell more.
- Product Superiority Management Model
The product superiority management model is dominated by a CEO/Founder
executive that has a background or education in technical areas and actually believes
that superior technical capabilities in today's market is why prospects buy. This is
a difficult sales management model to operate under because the senior management
team does not understand sales or marketing methodology and just expects
salespeople to just sell. Often this leadership focuses on building better
technical offerings without studying market demand or market gaps and assumes that
if they build it, prospects will buy. Compensation for salespeople in this
style of company is usually average or slightly below average as executives
spend a disproportionate amount of revenue on R&D.
- Entrepreneur Growth Management Model
Like its sister management model, Global 1000 Hunter Model, the entrepreneur
growth management model is an aggressive leadership process that actively
seeks to grow their companies based on continuous process improvement and
alignment of sales, marketing, strategy and R&D. It is often led by a
founder who is seeking fast growth, but not interested in an IPO in the short-term.
This is a great company to work for because they usually pay their salespeople
very well, support their departments with a strong esprit de corps attitude,
and provide upward mobility based on achievement.
- Hybrid Management Model
This model is usually a combination of Entrepreneur Growth Management and
a Growth Mode Management Model Family-Run or an Investor/Wall Street Management
Model. Either way, it's a positive environment for salespeople seeking to
sell in a dynamic environment and receive compensation based on their value
not some arbitrary calculation.
If you are a sales team member, review these 8 management models to determine if your company's leadership meets your needs.
If you are a CEO, review these 8 management models to determine how your leadership style affects your sales team.
"Most business failures do not
stem from
bad times. They come from poor management,
and bad times just precipitate the crisis."
Thomas P. Murphy
Paul R. DiModica
President
Value Forward Group
(770) 632-7647
www.valueforward.com
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