1. Once a month the company publishes a list of leading producers among salespeople and middle sales managers. The results are eagerly anticipated, "because competitiveness is extremely high." But the recognition principle carries only so far, recognizes Golisano, a former disbeliever who acceded to such rankings only after his salespeople asked for them. If you have too many contests then the recognition, he notes, "loses its value. A couple of key competitions maintains their interest."
2. Paychex sponsors a Diamond Club, in which the longer-term salespeople receive a ring cumulatively studded with small diamonds as they ascend the total-clients-sold ladder.
3. Each year the company stages a conference in some semitropical clime, where salespeople confer half the day and play (sans spouses, to foster intracorps bonding) the other half. Attendance is limited to those who sold more than a certain number of payroll packages.
"They're in competition only with themselves," Golisano explains. "Every person has the same quota, so everyone has the opportunity to come. If the whole company got to come, it would make me happy."
The President's Council Meeting One Paychex competition, an adjunct to the annual sales conference, is so useful to Golisano that he'd likely perpetuate it even if it never motivated a soul -- it's the annual President's Council.
Only the year's top 10 sellers are invited, and they get to spend a day thrashing out organizational issues person-to-person with the CEO. "They can say what they want, and it never leaves me," Golisano promises. Because they know they'll be taken seriously, the quality of their input is enhanced. "They don't show up just to bitch about some supervisor."
On the last night of the sales conference, Golisano reviews the President's Council for the entire gathering, often unveiling key policy decisions that have resulted. At the 1986 President's Council in Boca Raton, Fla., for instance, the top 10 drafted compensation levels for everyone on the force. "You'd have to be crazy not to listen to them," Golisano confides. "When it's me against the world, I bet on the world."
QUOTAS
The 40-8-2 Rule
A disciplined, ironclad routine, with numerical expectations to ensure it's stuck to, lies at the heart of Golisano's manifesto for keeping each salesperson productive. Sales quotas -- "logical, practical numbers that are based on the company's history so no one can argue very much" -- are first determined for the entire company, then divided, in negotiations among zone and middle sales managers, territory by territory. Golisano grants that jealousies are apt to be inflamed in the process, but "it gets them to buy into it. If quotas are just dictated, they're less apt to go along."
It's at the individual level that Golisano's penchant for discipline really kicks in. The expectations of each rep are broken down not into quarters or months, but into weeks. Every Monday salespeople electronically relay an account of their previous week's work to headquarters in the form of a WAR report (for weekly activity report). For everybody, the weekly requirement is simple: make a minimum of 40 cold calls, make at least eight presentations, make no fewer than two new sales. Golisano himself reviews WARs.
"It's when you start comparing the reports that you really find out what your sales force is all about," he's discovered. "And the mere fact that they know we collect comparable information establishes its credibility."
'Number one is the quality of the hire. If you hire the right person with the right skills, he'll pick up the rest on his own. But if you don't, no amount of training or managing will help him make it.' -- Golisano
It's "absolutely wrong" to use a finger when pointing something out to a customer. "You don't want him focusing on dirty nails or cuticles that need to be trimmed." Use a pen to make your point.
It's a house rule that there are no house accounts. "I feel strongly that integrity of the sales territory is important. I don't want our salespeople continually looking over their shoulders, worrying about what may be taken away from them."
Unlike similar payroll services, Paychex refuses to discount price, because Golisano feels permission to negotiate would foster laziness in his sales force. "We want our people selling quality of service and level of confidence, not price."
'I don't like to hire [sales managers] from outside, but if you hire right, then resentment from inside ends quickly -- as soon as they see the new manager is a quality person.' -- Golisano
A middle sales manager should observe sales calls even with reps who are meeting quota handily. "A lot of times when they're doing well, it's the manager who gets an education."
Most businesses that Paychex pitches are run by what Golisano calls "driver" personalities. "They're entrepreneurs who don't want long-winded presentations or nitty-gritty details. They want a quick overview. How much does it cost? What are we going to do for each other? Yes, I'll take it, or no, I won't."
Would you hire a guy with a beard? Golisano wouldn't. To sell for Paychex, unless there's a physical condition underlying it (not merely a weak chin), an applicant sporting a beard (mustaches are allowed as long as they don't extend below the corners of the mouth) has to get rid of it as a condition of employment.
'I believe you don't motivate people. What you do is hire motivated people, then make sure you don't demotivate them.' -- Golisano
Discipline versus creativity. Doesn't Paychex's paternalism squelch individualism? Sure, and that's how Golisano likes it. "If you're selling an engineered product, you'd want a creative salesperson; when you're selling a product that is consistent, you give a lot less latitude. Standardization gets the job done better. There's a tendency in sales to keep reinventing the wheel, but you shouldn't do that until you've got one that runs well first. It's important that we give our people a path to run on."
'We don't tolerate bad ethics. We do not allow a salesperson to downgrade the competition. If they're caught, they're terminated.' -- Golisano
No accounting for expenses. Does there exist a traveling rep without an expense account? Yes, under Golisano. "We don't want our salespeople to be preparers of weekly expense reports. It takes too much work on their part and ours, and we don't want to set up a playing field of distrust." Instead, each rep receives a lump sum to help offset expenses. The stipend is treated as ordinary income on the recipient's tax return; he or she must account for it to the IRS, rather than to Paychex. Who wins? "I'd say we're slightly under-reimbursing them," Golisano admits. "But it's part of the compensation package."
-- Robert A. Mamis
