The Opposite of What You Believe Is Also True

SiversOld school sales executives reflexively dismiss the idea of a compensation mechanism besides commissions for the sales department. It’s certainly true that plenty of people who’ve worked in sales for years—even decades—have never worked under such a system. The idea ignores a tradition and culture in the world of selling that dates back over a century. And it would be just about impossible to find a sales training methodology that wasn’t based on the assumption that salespeople are working to earn more money through commissions. (Heck, it would be impossible to even find a single book that’s not based on that assumption.)

And yet, my perspective after decades of experience as a salesperson, sales executive, and sales management consultant brings me to a radically different conclusion. I’ve come to believe that in today’s business environment sales commissions are holding our sales organizations back and creating unnecessary barriers between our companies and our customers. They’re no longer serving us well.

Leading an  audience of skeptical sales execs to such a dramatic conceptual shift won’t be easy. Over time on this blog, you’ll read about the issue of sales compensation in a much larger context than you might be used to. It’s part of a top to bottom rethinking of how we run out sales organizations. (If you haven’t read it yet, the Teamwork Selling Manifesto is a concise overview of my ideas on the subject.)

I understand that making this case—the case for radically reimagining the way we run our sales organizations—is going to take some time. And I’m quite content with that. Asking business professionals to rethink some of their most deeply ingrained assumptions requires a shift in perspective that demands a meticulously laying of the groundwork. That’s what this blog is all about.

What I’d like to do in this post, however, is to simply plow a little bit of intellectual ground. I want to nurture the beginning of a different way of seeing what’s right in front of us. For that, I’ll turn to Derek Sivers: a musician, entrepreneur, and business theorist extraordinaire.

Take two minutes (literally) and listen to this mini-lecture Sivers posted on YouTube. Unless I’m mistaken, I think you’ll find the grip of your unconscious assumptions about life and business will begin to loosen perceptibly.

Leave your thoughts in in the comments section below.

What Really Motivates Salespeople?

There are some ideas that are so obviously true that we’re willing to accept them without question. We see them as self-evident and axiomatic, conceptual building blocks that provide a solid foundation for the systems and structures we construct in our culture and our institutions. And in the world of selling, there’s no principle that’s more fundamental than the idea that salespeople are motivated solely by the prospect of making more money. For over a century, we’ve built our sales organization on this premise and have scarcely bothered to question it since John Henry Patterson established the world’s first sales training school at the National Cash Register Company in the late nineteenth century.

Man's hand holding cash
A fistful of motivation?

But what if that idea is wrong? What if salespeople can be managed and motivated by something other than pure selfishness? Actually, there’s a growing body of research that suggests a radically different approach might turn out to be far more effective. Recent research suggests that cooperation in achieving collective goals might be a far more powerful motivator than simple self-interest.

Business theorist and consultant Mike Lehr has dealt extensively with the question of cooperation versus self-interest in his always excellent blog. It was Mike’s writing that introduced me to a fascinating article by Harvard Law School professor Yochai Benkler that appeared in the Harvard Business Review in 2011.

The article is well worth reading in its entirety but here’s a crucial bit of data, referencing the latest research on the subject:

In experiments about cooperative behavior, a large minority of people—about 30%—behave as though they are selfish, as we commonly assume. However, 50% systematically and predictably behave cooperatively. Some of them cooperate conditionally; they treat kindness with kindness and meanness with meanness. Others cooperate unconditionally, even when it comes at a personal cost. (The remaining 20% are unpredictable, sometimes choosing to cooperate and other times refusing to do so.) In no society examined under controlled conditions have the majority of people consistently behaved selfishly.

The implications of this research for our sales organizations is dramatic. It suggests that our sales compensation system (i.e. sales commissions) is designed to motivate a relatively small segment of the sales force even though it likely undermines the motivation of a much larger segment.

If employee motivation was the only issue on the table, it might be possible to argue that the damage inflicted on our sales organizations by compensating salespeople with commissions is tolerable. However, when we take into account all the other problems that commission-based compensation causes (and I’ll be examining these other problems in depth in future posts), it seems pretty clear that a top to bottom rethinking of sales compensation might be long overdue.

Will Rogers once famously said, “It isn’t what we don’t know that gives us trouble, it’s what we know that ain’t so.” As we finally begin to question the way we structure our sales organizations, we just might find that what we think we know about the benefits of commission-based isn’t as true as we once believed.