Picking Good Salespeople

I think it is a good idea every so often to take a practical example of a problem and talk about how it could be solved. This is a double-edged sword, though. On one hand it could look like a simple solution (in fact, nothing could be further from the truth). On the other hand it could look like I am pushing a personal agenda (well, that’s true). I’ll explain. “Simple” Solutions Almost everyone seems to fall into one of two camps: 1) people who think they are test experts, or 2) people who put tests in the same category as nuclear waste. Would you visit a doctor who didn’t attend medical school? Well, you should have the same attitude toward using tests. Look for both practical and academic expertise. This field is deeper than it seems. Anyone with a one-test agenda is an example of walking incompetence. Run away. They cannot help you because they do not know what they are doing (and, unfortunately, do not know it). They also have no personal liability for their test use. Always look for someone who has taken graduate courses in validation, statistics, test design, and job analysis. And keep this in mind: Unless you hire everyone who applies, any system or tool used to divide people into a “qualified” pile and an “unqualified” pile is a test. Yes, I do have a personal agenda. I think you should study each job thoroughly by interviewing job holders, managers, and visionaries; develop realistic, measurable competencies for each job family; choose face, content, and criterion valid tests; do your homework for validating each test; use several methods to measure job skills; measure the whole job, not just part of it; and trash traditional interviews. Make sure equally qualified people get equal opportunity. Go back to school to learn how to do this yourself or hire a competent professional. Don’t think about it. Don’t criticize it. Do it. Practical Example I received an email a week or so ago from a reader. He said he was in the sales recruiting business. Based on his years of experience, he saw that highly successful sales people had the following characteristics:

• High egos
• Highly self disciplined
• Ability to stay focused
• Persistent, perseverant, resilient
• Highly money motivated
• Above-average intelligence
• Creative and able to think on their feet
• Very high self esteem
• Want to be the center of attention; love to be stroked

He concluded with the question, “How do you test for that???” Well, we have several tools that could be used to answer this question, but first we have to look at some of the hidden factors that affect his question. Calculating the Cost of Low Performance Eighty percent of sales are generated by twenty percent of the salespeople. In most cases, a good salesperson will out-produce a poor salesperson by a factor of at least four to one. You do the math to calculate the cost in your organization. Point to ponder: Rank-order your sales people from top to bottom based on overall production. Examine the top 20% and calculate the sales average per person. Do the same for the middle 40% and the bottom 20%. From this point onward, simple math will show what the low producers cost. (If you are gutsy, ask the hiring manager who claims “he knows ’em when he sees ’em” why he or she did not “see ’em” during the interview). What Kind of Sales? If it looks like a duck, quacks like a duck and walks like a duck…it might be a pigeon. Not all sales jobs are alike. There are tangible and intangible products; long-term and short-term sales cycles; one-time and repeat clients; big dollar and small dollar sales; relationship selling and product selling; single and multiple buyer involvement; cold calling and referral selling; and so forth. The skills and motivations change significantly with each sales job ó and so will job success or failure. Point to ponder: Ask sales managers and sales people to describe the kind of selling necessary in your organization. What’s More Important? Not all characteristics have equal value. A highly motivated, yet “un-smart” salesperson could be a recipe for disaster. Too much ego-strength leads to narcissism and the pursuit of self-interest at the expense of the organization (several political examples come to mind). Highly persistent people might not know when to stop wasting time on a lost cause. It’s important to know which factors weigh the most for each job. One size does not fit all, and more is not always better. Point to ponder: Give the above list of sales characteristics to sales managers and salespeople in your organization and ask them to prioritize them. Don’t be surprised if they have wildly different opinions about what is important. As Yogi Berra never said, “There can be no agreement without an agreement”. Who Knows the Most About the Job? Anyone who limits job requirements to manager interviews needs a vacation. Managers usually see job results. Unless they also perform the job, they seldom know much about the day-in, day-out activities. This leads them to over or underestimate job requirements. Job holders, on the other hand, can describe what the job is really like. They know the details, but can seldom describe “peak” performance or manager expectations. Neither group knows much about how the job might change in the future. That requires interviews with senior managers. All three groups are valuable sources of data. Overlook any of them and you will miss important details. Point to ponder: Who knows more about what it takes to do your job: you or your manager? How much do either or you know about job changes within the next two years? How Do You Measure Sales Skills? Okay. Big assumption here. Suppose we agree on all the above conditions and are ready to evaluate candidates. There are only three places we can get information: 1) past performance, 2) present skills, 3) future intentions.

1. Past performance. This is the domain of the interview. Interviews are filled with both strengths and weaknesses. Their strengths include flexibility and familiarity (everyone considers themselves interview “experts”). Interview weaknesses include total dependence on self-reported information and interviewer skills. The only accurate interviews are based on job analysis, structured questions, and either behavioral or situational interviewer techniques. Interviews that do not follow these guidelines tend to hire people who have a major chance of being low producers. Point to ponder: Interviewers who search for “best” questions, lists of “best” competencies, or who want to get to know the applicant usually cost their organizations about 50% of the total base salary of people they hire.
2. Present skills. This is the domain of simulations, case studies, and pencil-and-paper tests. These are all methods of putting an applicant into a job-like situation and seeing how he or she performs. Think of them as flight simulators for business. Simulations are among the most accurate measures of selling, coaching, presentation, customer service, or teamwork skills. (If you are trained in behavioral interviewing techniques, it is because you control the situation, you observe the behavior, and you evaluate the results). Case studies are business-like scenarios where people have to figure out problems and recommend solutions. They do not have clear-cut answers. Pencil and paper tests are usually measures of knowledge or mental ability. Point to ponder: You can fake-good in an interview, but you can’t fake-good in a simulation or test.
3. Future intentions. This is where motivation, attitude, and interest tests fit. They are easy to fake, and give “hints” ó not hard evidence ó of future intentions. There is only about a two to eight percent relationship between scores on this kind of test and actual skills. As a rule of thumb, you can trust “bad” scores more than “good” scores.

Now back to our sponsor: the sales application.

Of course, all these tests (yes, that includes interviews) should either be content or criterion validated. Recruiters can always use easier ways that are less accurate, but they will cost the organization millions. But don’t worry. No one has to know.