Your new Vice President Sales, Gary Stevens, has served as the company’s top salesman for the past 5 years. He has always turned in great numbers and personally generates $500,000 – $750,000 in gross sales annually. You understand he likes his independence and the freedom to operate his own way (he reminds you of yourself at his age), but he knows your company’s products and services well and his numbers just don’t lie. The sales team he will oversee is working on a 2-year, $2.5 million/year contract. You believe the $250,000/salary and stock options you’re willing to pay him will pay off for you, too.
A month later you check the latest Q1 numbers and you’re surprised at the sudden sales downturn. You’ve also received a few “friendly” phone calls from two of your best customers who’ve asked why their calls are not being returned and so many sales meetings cancelled. You call in Gary and he says that the sales team is not performing the way he thinks they should and he may have to reassign or fire some people. He promises the sales team will do better.
Days later you happen to run into a couple of sales team members in a nearby restaurant and they ask you to join them. They say Gary is “in their face” all the time because they don’t do things “his way.” He plays favorites, too. They tell you he refuses to let half the team speak directly to their client’s upper managers without his prior approval and this action has slowed the sales process down to a standstill. Half the team is demoralized; half believe they’re getting a raise. They tell you the sales team is paralyzed and won’t do anything without a direct order from the VP for fear they’ll be fired. They know the clients are unhappy but what can they do? They tell you productivity is down 25% for Q1 and they estimate 50% the rest of the year unless something is done right away.
You’ve discussed the issue with two of your peers and with a customer who used to be an employee at Magnet. The discussions tried to identify the cause for Gary’s seemingly odd behavior. You speculate that something might be going on at home; that he’s over-whelmed by the new responsibilities; that the transition from peer to “supervisor of peers” is stressful; or, his tendency to micro-manage his previous projects is getting to him. You also know that Gary has complained about his work not being as “technical” as it used to be and that this “people stuff” is keeping him away from more important tasks.
You assess that Gary needs some sort of help as well and the team needs to learn new ways of working together.
You decide to check in with Human Resources (HR), describe the problem, and brainstorm possible solutions. Although your HR Department is capable, they do not have a fully functioning training unit. Most of their training is farmed out, focused on technical issues, and/or re-routed to online resources.
Your HR representative fully admits that “team training” is beyond their scope and capability, although they’d like to expand their services. HR also believes the “off the shelf” courses they’ve utilized have not impacted trainees as expected.
You decide to ask your finance group to explore alternatives and potential losses and gains from working directly with Gary’s team.
|ANTICIPATED SALES/Q1 ($2.5M/4Q)||$ 625,000|
|ACTUAL SALES/Q1 (@75%)||$ 468,750|
|Q1 LOST REVENUE||$ 156,250|
|ANTICIPATED SALES/Q2-4 ($625K x 3)||$ 1,875,000|
|EST. SALES/Q2-4 (@ 50% PRODUCTIVITY)||$ 937,500|
|Q2-4 LOST REVENUE||$ 937,500|
|PROJECTED ANNUAL LOST REVENUE||$ 1,093,750|
Enrolling your entire 7-person sales team and the new VP Sales into the “Quick! I Need to Be a Leader in 30 Days!” course (with a 10% group discount) will enable the team to continue working while receiving foundational leadership training as well as tailored instruction on such topics of interest to The Magnet Corporation as:
In addition to the above-mentioned foundational instruction and topics tailored for the Magnet Corporation’s unique needs, the VP and Sales Team have the option of participating in 2 days of experiential team building activities and exercises designed to build trust, enhance team communication, and increase individual self-confidence.
RETURN ON INVESTMENT
|1||$ 156,250||70%||$ 109,375|
|2-4||$ 937,500||50%||$ 468,750|
*PROBABILTY: A decision will be made to do something with the Sales Team, but the effectiveness of that decision is unknown.
|QTR#||COURSE COST||*PROBABILITY OF
($212,400 x (100-75)/100 = $53,100)
($212,400 + $53,100 = $265,500)
ROI: VP Sales & Sales Team (@10% discount)
$578,090 – $265,500 = 147%
*PROBABILITY OF COURSE SUCCESS: Our clients have estimated that our courses have, at a minimum, been 75% successful in addressing specific organizational issues. Also, ROI percentages will change based on the length of time and the number of people enrolled in our course, we anticipate a positive return on any investment.