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.
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.