Hiring for Growth
Your salespeople are your representatives in the marketplace. It's a smart idea to develop some rules for choosing people who will represent you well
Suppose everyone looks for shortcuts in business. It's only natural, especially when you're starting out. You constantly search for easier ways to make your company grow faster, and sometimes you find them. Unfortunately, they almost always come back to haunt you.
That's a thought worth bearing in mind when you're hiring salespeople. I figure I've hired more than 300 salespeople in the past 30 years--and made just about every mistake in the book. What I've learned is that, for me at least, there are no shortcuts. It takes time to find the right people, time to train them, time to get them acclimated to our culture.
Sure, I used to think I could accelerate the process. All I had to do was hire hotshots who could start producing as soon as they walked through the door. But every time I tried it, I lived to regret it. The best candidates were seldom the ones who could deliver the most sales in the shortest amount of time.
Eventually, I came up with four rules that we now use to guide us in choosing the new salespeople we bring into the company.
The first rule has to do with the candidates' aspirations. There are, I've found, two categories of salespeople in this world. One type will eventually go into business for themselves. The other will always work for somebody else. I like both types, but it's the salespeople in the second category that I want to hire for my company.
Don't get me wrong. I have no problem with employees' leaving to start their own businesses. What I don't like is turnover in my sales force. I want salespeople who will stay with me forever.
Other kinds of employees are different. If they don't keep moving up in the organization, sooner or later they're going to be overpaid. That creates problems for both you and them. But you don't have those problems with salespeople. They get paid for what they produce. The good ones, moreover, can go on producing year after year.
Those who do are invaluable to a business. Once I find them and train them, I never want to lose them. So I try to screen out the candidates who dream of having their own businesses. They may be great salespeople, but I know they won't stick around. I wish them every success--somewhere else.
My second rule grew out of some bad experiences I had with my first start-up. Like many young entrepreneurs, I was in a big hurry, and I thought I could save time and money by hiring my competitors' salespeople. Since they were already familiar with the market and the business, I wouldn't have to train them. They could hit the ground running. They might even bring some customers with them. At the time, they looked like a shortcut to growth. I found out, however, that they were just a shortcut to trouble.
For openers, most of them came with bad habits, which I could never get them to change. They'd learned every trick common to the industry and were constantly going for the quick sale. I wanted them to take a longer view, but they wouldn't listen.
It turned out, moreover, that they weren't such great salespeople. I had consistently better results with the salespeople I'd brought in from outside the industry and trained myself. So I got to thinking: maybe my competitors had good reasons for letting those salespeople go.
Did I wind up taking some market share away from my competitors? Yes, but it wasn't worth the price. Buying market share by hiring your competitors' salespeople does nothing good for your reputation in the industry. Maybe you don't care when you're young and brash, but sooner or later you'll discover that a good reputation is a real business asset, worth much more over the long run than a few extra sales.
So we established a new policy in the company: no hiring of salespeople from our industry.
My third rule will strike some people as narrow-minded, but it's based on years of experience. The rule is that if you want to apply for one of our sales positions, you must have held at least two prior jobs in different companies, and one of those jobs has to have been in sales. In other words, we don't hire salespeople straight out of school.
Why not? Because nobody is satisfied with his or her first job. Well, almost nobody. There are always exceptions. But the vast majority of people find something wrong with the first real job they hold, no matter how good it is. It's human nature. You simply can't appreciate what you've got if you don't have anything to compare it with. So what do you do? You look for greener pastures. Virtually every person I've hired straight out of school has moved on within two years.
There's no point in hiring salespeople I'm going to lose right after they've been trained. Nor is there much point in training salespeople only to discover that they don't like selling or aren't comfortable in our environment.
That's why we insist that candidates have experience in sales and have worked in at least two other corporate cultures. In your first job, you assume every company works the same way. Only in your second job do you learn that different companies have different styles, different benefits, different procedures and rules. By the third job, you realize you're choosing a company as well as a career.
My fourth rule is probably the most controversial one. I have an absolutely firm policy that we will never hire a hotshot. What's a hotshot? A superstar salesperson. If a good salesperson can make 100 sales calls and close 10 accounts, and if a great salesperson can close 20, then a hotshot can close 35. I'm talking about people who are tops at what they do.
And I don't want them in my company. Why? Because they think about only one thing: closing sales. They'll say anything, do anything, promise anything to bag a customer.
I'll give you the example of Bert, a hotshot salesman I had in the early days of my messenger business. He talked fast, thought fast, and produced a tremendous volume of sales, which made me very happy. I didn't have time to check up on him and didn't know I had to. All I cared about were the sales, and he was delivering.
Then the problems began. First, we started having trouble collecting from his customers. Some of them said that the prices we were charging were different from what they'd been promised. Others complained that they weren't getting the level of service we'd told them they'd receive. Then there were the low-volume customers to whom Bert had given high-volume discounts, assuring us that the additional sales would come later. When we checked, we discovered that the future sales were a figment of his imagination.
Unfortunately, Bert was just the first of several hotshots I hired. They all got me into trouble. I couldn't train them or control them. They were always 40 steps ahead of me. Every system I put in place they found a way to beat. I kept telling myself that they would bring in the new accounts, and I'd patch things up afterward. It never happened. The customers felt they'd been misled and held me responsible--as well they should have.
So I learned an important lesson: your salespeople represent you in the marketplace. I decided that I couldn't afford to have hotshots representing me. They operate on a philosophy that's different from mine. They believe in making sales at any cost. I don't want sales at any cost. I want sales that provide me with enough gross profit to grow my business and that will keep coming back, year after year. I want to build long-term relationships with customers, and I want salespeople who will help me do it.
And that's really my point here. I'm not arguing that every company should have the same rules as mine. What's important is to think through those issues as your company grows and to develop your own rules.
Because when you hire salespeople, you're not just choosing employees. You're also choosing customers. Like it or not, your salespeople are going to play a major role in determining the types of customers you have and the kinds of relationships you have with them. It's worth taking the time to make sure you get those relationships right.
Norm Brodsky is a veteran entrepreneur whose six businesses include a former Inc. 100 company and a three-time Inc. 500 company. This column was coauthored by Bo Burlingham.
NORM BRODSKY | Columnist
Street Smarts columnist and senior contributing editor Norm Brodsky is a veteran entrepreneur who has founded and expanded six businesses.