Chapter 10 Sales Force Leadership PowerPoint presentation prepared by Dr. Rajiv Mehta New Jersey Institute of Technology

Chapter 10

Sales Force Leadership

PowerPoint presentation prepared byDr. Rajiv Mehta

New Jersey Institute of Technology

Copyright © Houghton Mifflin Harcourt Publishing Company. All rights reserved. 10 | 2

Chapter Outline

• Foundations of Leadership• Supervision, Management, and Leadership• Leadership and Power• Applying Classical Leadership Theories to

Twenty-First Century Sales Management• Applying Contemporary Leadership Theories to

Twenty-First Century Sales Management• Other Emerging Issues in Twenty-First Century

Sales Force Leadership• Communication


Learning Objectives

After reading this chapter, you should be able to do the following:1. Understand the dynamics of leadership.2. Contrast supervision, management, and leadership.3. Identify the sources of power that leaders possess.4. Apply the classic theories of leadership to sales

management.5. Apply the major contemporary theories of leadership

to sales management.6. Communicate effectively with the sales force.7. Overcome barriers to communication with the sales

force.


Foundations of Leadership

• Leadership refers to the interpersonal process of communicating, inspiring, guiding, and influencing the behavior of subordinate salespeople toward the attainment of organizational objectives, goals, and values.

• Important elements in sales force leadership are as follows:

– Leadership is interpersonal.– Leadership relies on influence.– Leaders guide salespeople to attain

individual and organizational goals.– Leaders espouse ethical and moral values

they expect their followers to subscribe to.

– Leadership relies on communication to achieve goals.

Source: © Jack Hollingsworth/Corbis


Leadership in the Face of Uncertainty

• To see videos on leadership and influencing employees in the face of uncertainty, go to– http://www.sellingpower.com/video/index.asp?date=11/30/2006


Supervision, Management, and Leadership

• Supervision, management, and leadership are overlapping functions.

– Supervision is closely monitoring the daily work activities of sales subordinates.

– Management deals with administrative activities that include planning, organizing, staffing, directing, and controlling the operations of a firm toward the attainment of its goals and objectives.

– Leadership is an emotional process of exercising psychological, social, and inspirational influence on the people employed by the firm.

Source: Stockbyte


Sources Sales Manager Power and Influence on the Sales Force

Expert powerExpert powerReferent powerReferent powerCoercive power Coercive power Reward power Legitimate power

Sales manager powerSales manager power

Position power

subordinate compliance that is based upon the sales manager’s skills, knowledge, intelligence, job-related information, and expertise

subordinate compliance that is based upon the sales manager’s skills, knowledge, intelligence, job-related information, and expertise

Refers to the power that accrues to the sales manager based on identification, imitation, loyalty, or charisma

Personal power

the ability of the sales manager to influence sales force compliance based on inspiration, charisma, loyalty, and personal identification with the leader

the ability of the sales manager to influence sales force compliance based on inspiration, charisma, loyalty, and personal identification with the leader

derived from the position occupied on the organizational structure, the sales manager has formally delegated authority to seek salesperson compliance

derived from the position occupied on the organizational structure, the sales manager has formally delegated authority to seek salesperson compliance

the ability of the sales manager to provide subordinate salespeople with various benefits, including money, praise, or promotion and incentives such as commissions and bonuses

the ability of the sales manager to provide subordinate salespeople with various benefits, including money, praise, or promotion and incentives such as commissions and bonuses

the ability of the sales manager to obtain salesperson compliance through fear of punishment, sanctions, or by withholding rewards (includes being fired from the job)

the ability of the sales manager to obtain salesperson compliance through fear of punishment, sanctions, or by withholding rewards (includes being fired from the job)


Applying Classical Leadership Theories to Twenty-First Century Sales Management

3.Contingency theories

of leadership

3.Contingency theories

of leadership

2.Behavioral

styles theory

2.Behavioral

styles theory

1. Trait theory

1. Trait theory

Classical leadership

theories


theories

• Ohio State University studies

• University of Michigan studies

• Ohio State University studies

• University of Michigan studies

Effective leadership style is contingent upon the interaction factors among the leader, followers, and situation-specific conditions.

• Fiedler’s contingency theory of leadership

• the path-goal theory of leadership

• theory H• leader-member exchange model• substitutes for leadership

Effective leadership style is contingent upon the interaction factors among the leader, followers, and situation-specific conditions.

• Fiedler’s contingency theory of leadership

• the path-goal theory of leadership

• theory H• leader-member exchange model• substitutes for leadership


Trait Theory

• Traits theory focuses on identifying characteristics of leaders, such as confidence, honesty, integrity, ambition, initiative, intelligence, extroversion, and drive.

• Traits of effective sales managers– courageous– visionary thinkers– change masters– ethical– persistent and realistic– show a sense of humor– risk takers– positive and optimistic– moral but not judgmental– decision oriented– use power wisely– steadfast

• Read a related article on traits that great sales managers must have at– http://denver.bizjournals.com/denv

er/stories/2007/07/23/smallb3.html



Behavioral Styles Theory: Ohio State University and

University of Michigan Studies

Leadership strives to accomplish the job while maintaining a harmonious work team. Leader provides guidance on how tasks should be completed and is considerate of subordinate needs.

Leader focuses on achieving team harmony and individual need satisfaction. Less emphasis is placed on subordinate tasks.

Leader focuses on getting the job doneby structuring tasks, but exhibits littleconsideration for subordinate needs.

Largely passive, the leader does not provide structure and exhibits little consideration for subordinate needs allowing work and people to be self-managed.

HighHighHighHigh LowLowLowLow

Initiating structure/production (task) orientationInitiating structure/production (task) orientation

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Sales management implications?

Leaders display friendship, mutual trust, respect, support, and warmth. Leaders display friendship, mutual trust, respect, support, and warmth.

Leaders organize, define, and clarify the tasks subordinates must perform. Leaders organize, define, and clarify the tasks subordinates must perform.

Sales management implications?

Sales management implications? Sales management implications?


Behavioral Styles Theory: Ohio State University and

University of Michigan Studies

Leadership strives to accomplish the job while maintaining a harmonious work team. Leader provides guidance on how tasks should be completed and is considerate of subordinate needs.

Leader focuses on achieving team harmony and individual need satisfaction. Less emphasis is placed on subordinate tasks.

Leader focuses on getting the job doneby structuring tasks, but exhibits littleconsideration for subordinate needs.

Largely passive, the leader does not provide structure and exhibits little consideration for subordinate needs allowing work and people to be self-managed.

Initiating structure/production (task) orientationInitiating structure/production (task) orientation

Leaders display friendship, mutual trust, respect, support, and warmth. Leaders display friendship, mutual trust, respect, support, and warmth.

Leaders organize, define, and clarify the tasks subordinates must perform. Leaders organize, define, and clarify the tasks subordinates must perform.

Sales Management Implications:

appropriate in situations with newly hired, inexperienced sales trainees


appropriate to use when experienced, high-performing salespeople tend to be too competitive with one another


appropriate in situations where experienced salespeople are required to do unpleasant, unfamiliar work


appropriate in situations with experienced, high-performing salespeople that know their tasks and enjoy work

HighHighHighHigh LowLowLowLow

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Fiedler’s Contingency Theory

• Fiedler tried to discover whether lenient or highly demanding leaders were effective in high-producing teams.

• His research indicated that a leader’s performance depends on the following: – amount of control and influence– whether the objective is to accomplish tasks or have close relations

• The most effective type of leadership depends upon the following:– Leader-member relations are good if the leader is liked and trusted;

if leaders are disliked, relations are poor.– Task structure is the degree to which the team’s task is described with

specific procedures to attain explicitly identifiable goals.– Position power is the extent to which the leader can use power bases.

If a leader has no authority to evaluate, control, and reward, then position power is weak; if power can be used, position power is strong.


Fiedler’s Contingency Theory of Leadership

Task-motivated leaders perform better when the situation is highly unfavorable.

Task-motivated leaders perform better when the situation is highly unfavorable.

• Leader and group members do not enjoy working together.

• Group members work on vaguely defined tasks.

• Leader lacks formal authority over reward system.

• Leader and group members do not enjoy working together.

• Group members work on vaguely defined tasks.

• Leader lacks formal authority over reward system.

Nature of the situationNature of the situation

Highly unfavorable

Highly unfavorable

Moderately favorable

Moderately favorable

Highly favorableHighly favorable

Relationship-motivated leaders perform better when the situation is moderately favorable.

Relationship-motivated leaders perform better when the situation is moderately favorable.

Task-motivated leaders perform better when the situation is highly favorable.

Task-motivated leaders perform better when the situation is highly favorable.

combination of favorable and unfavorable

combination of favorable and unfavorable

• Leader and group members work well together.

Tasks are clearly defined. Leader has formal authority

over reward system.

• Leader and group members work well together.

Tasks are clearly defined. Leader has formal authority

over reward system.

Rationale: Working from a base of mutual trust and relative certainty among followers about task and rewards, leader can devote time to getting the job done.

Rationale: Working from a base of mutual trust and relative certainty among followers about task and rewards, leader can devote time to getting the job done.

Rationale: Followers need support from a leader to help them cope with uncertainties about trust, task, and/or rewards.

Rationale: Followers need support from a leader to help them cope with uncertainties about trust, task, and/or rewards.

Rationale: In the face of mutual mistrust and high uncertainty among followers about task and rewards, leaders need to devote attention primarily to close supervision.

Rationale: In the face of mutual mistrust and high uncertainty among followers about task and rewards, leaders need to devote attention primarily to close supervision.


The Path-Goal Theory of Leadership

• Recently updated, the path-goal theory identifies eight leadership styles that affect a subordinate’s level of satisfaction, motivation, and performance.

• A leader can display any or all of these leadership styles concurrently.

• Specifically, leaders can do these things:– make rewards contingent upon

attaining goals and objectives– aid team members by clarifying their

paths to goals by removing obstacles to performance

– determine which rewards are important and increase these rewards consistent with followers’ needs and wants Source: Triangle Images


Sales environmentcontingency factors

Sales environmentcontingency factors

participative leadership style

participative leadership style

supportive leadership style

supportive leadership style

directiveleadership style

directiveleadership style

•task structure•team dynamics•formal authority

•task structure•team dynamics•formal authority

achievement-oriented leadership style

achievement-oriented leadership style

Path-goal clarifying leadership style

Path-goal clarifying leadership style

interaction facilitation leadership style

interaction facilitation leadership style

networking leadership style

networking leadership style

value-based leadership style

value-based leadership style

Sales manager leadership style

Salespersoncontingency factors

Salespersoncontingency factors

•task ability•locus of control•need for achievement•work experience•team dynamics

•task ability•locus of control•need for achievement•work experience•team dynamics

Sales managereffectiveness

Sales managereffectiveness

Salesperson displays these:•increase in motivation•increase in job satisfaction •increase in sales revenues •increase in productivity•decrease in turnover

Salesperson displays these:•increase in motivation•increase in job satisfaction •increase in sales revenues •increase in productivity•decrease in turnover

Extending the Path-Goal Theory of Leadership


Leadership Styles Based on Theory H

• Effective leaders match their style—from task oriented to human relations oriented—to the maturity and duties of the sales force.

– An autocratic style sales manager exercises strong pulling power.

– A sales force with a paternalistic style manager is dependent on the sales manager for rewards and punishments.

– The neutral (consultative) style leader exerts little push or pull and allows salespeople to influence management decisions.

– The democratic and laissez faire style leaders function passively as salespeople operate independently.


1.Autocratic

3.Democratic

5.Consultative

(neutral)

2.Paternalistic

4.Laissez faire

Leadership Styles Based on Theory H


Leader-Member Exchange Theory

• Those salespeople whom a sales manager favors, consults, mentors, praises, trusts, and gives preferential treatment to belong to an “in-group” or “cadres.”

• In reciprocal exchange, each in-group subordinate acts in this way:– makes greater effort to increase performance– exhibits greater respect and loyalty to the manager– performs duties that go well beyond job descriptions

• Those assigned to an “out-group” or “hired hands” act in this way:– dispensed less attention and privileges– perform tasks defined in their job description– live up to low expectations


Substitutes for Leadership Theory

• Existing theories didn’t account for situations in which leadership is neutralized.

• Sales managers use “leadership substitutes” in these situations: – Subordinate traits (experience, independence, and

professional orientation) neutralize leadership behavior.– Task characteristics are challenging or intrinsically satisfying. – Leadership may not be needed when company policies are

formal.

• can use management by exception• “Leadership substitutes” include these:

– professional orientation– task-provided feedback– compensation plans, quotas, and expense accounts


Articles on Sales Force Leadership

• To read articles on sales leadership, go to– http://www.inc.com/resources/leadership/articles/20071101/

dao.html– http://www.lsaglobal.com/business_solutions/Sales-

Leadership-Training-Commun-Present.shtm– http://www.eyesonsales.com/search/node/leadership

• To read what leaders are made of in the world of sales go to– http://www.bizjournals.com/denver/stories/2006/03/20/

smallb4.html • Read about the eleven secrets to sales success through

leadership at– http://www.sideroad.com/Sales/sales-leadership.html

• Read an excellent article on integrated sales leadership at– www.wilsonlearning.com/pdf/sales_leadership_en.pdf


Applying Contemporary Leadership Theories To Twenty-First

Century Sales Management

3.Empowerment

3.Empowerment

2.Pygmalion leadership

2.Pygmalion leadership

1. Transformational

leadership

1. Transformational

leadership


theories


theories


Transactional Leaders

• Transactional leaders, according to classical theories, do this:• identify tasks and suggest ways to execute tasks• recognize employees needs and suggest how those needs can

be met through effective performance• communicate how successful execution of tasks will lead to

rewards• provide appropriate rewards and feedback

• Goals include these:– sales volume in dollars or units, customer retention – new accounts, percent of quota achieved

• Rewards include these:– commissions, bonuses, and salary increases– promotions to higher-level positions

• Transactional leadership takes a short-term perspective to generate favorable results from the sales force.


Transformational Leadership (aka Charismatic and Visionary Leadership)

3.Individualized consideration

3.Individualized consideration

2.Intellectual stimulation

2.Intellectual stimulation

1. Inspiration

1. Inspiration

4.Charismatic and

visionary leadership

4.Charismatic and

visionary leadership

Transformational leadership

Transformational leadership

Manager expresses genuine concern for each salesperson: treating them as an individual, supporting their career development and growth by providing mentoring, coaching, and counseling.

Manager expresses genuine concern for each salesperson: treating them as an individual, supporting their career development and growth by providing mentoring, coaching, and counseling.

Charisma is the “fire that ignites followers’ energy and commitment, producing results above and beyond the call of duty.”Manager inspires people to transcend their own interests for the firm and includes visionary leadership by articulating a credible, attractive future, thus appealing to subordinates to be part of something that has a bigger, brighter future. Manager is willing to take risks to achieve the vision, sensitive to follower needs and environment, and exhibits behaviors that are novel.

Charisma is the “fire that ignites followers’ energy and commitment, producing results above and beyond the call of duty.”Manager inspires people to transcend their own interests for the firm and includes visionary leadership by articulating a credible, attractive future, thus appealing to subordinates to be part of something that has a bigger, brighter future. Manager is willing to take risks to achieve the vision, sensitive to follower needs and environment, and exhibits behaviors that are novel.

Manager has an ability to articulate expectations to subordinates, communicate important purposes in simple ways.

Manager has an ability to articulate expectations to subordinates, communicate important purposes in simple ways.

Manager can stimulate salespeople intellectually by encouraging them to find new approaches for solving problems. Salespersons readily offer ideas, think more critically and creatively in problem solving.

Manager can stimulate salespeople intellectually by encouraging them to find new approaches for solving problems. Salespersons readily offer ideas, think more critically and creatively in problem solving.


Transformational Leadership (aka Charismatic and Visionary Leadership)

Read about leadership development and the 5 C's athttp://www.leadershipskilldevelopment.org


Pygmalion Leadership

• Based on the principle that positive thinking begets positive results, sales managers can set high but realistic expectations for their sales force.

• The result is a self-fulfilling prophesy, since sales managers get what they expect, known as the “Pygmalion” effect.

• To enhance their productivity Pygmalion leaders do the following:– set high performance expectations of salespeople – increase their self-confidence


Developing Effective Leaders

• challenge the process

• inspire a shared vision

• enable others to act

• be a role model

• encourage the heart


Sales Force Leadership

• To see videos on various issues related to sales force leadership, go to– http://www.sellingpower.com/video/?

date=2/23/2007– http://www.sellingpower.com/video/index.asp?

date=10/8/2007 – http://www.jimcathcart.com/videos.aspx


Websites for Developing Sales Force Leadership Skills

• Peruse the websites of various leadership training firms at– http://www.pbresults.com/sales-leadership.php – http://www.salesleadershipdevelopment.com/

mw5.asp

– http://www.achieveglobal.com • Take the sales management leadership quiz at

– http://ezinearticles.com/?The-Sales-Management-Leadership-Quiz&id=509334


Through Participative Management

• Empowerment focuses on distributing power to lower-level employees.

– It recognizes that people have knowledge, experience, and internal motivation.

• Empowering employees can help alleviate employee powerlessness.

• The philosophy behind empowerment is participative management, which gives subordinates the following:

– a sense of ownership and responsibility

– a chance to play an integral role in decision making and problem solving

– the responsibility for goal setting and instituting changes


Distributive Power Sharing Through Participative Management

• Take these steps to ensure success of an empowerment program:– Train salespeople to attain job

mastery.– Give salespeople authority

(legitimate power), responsibility, and control to make substantive decisions.

– Assign role models to mentor other salespeople.

– Raise the confidence of salespeople through praise and encouragement.

– Provide emotional support to attenuate job stress and anxiety.

– Give salespeople access to financial and operational performance data.



No sales force involvement in

decision making

No sales force involvement in

decision making

Low Empowerment continuum HighLow Empowerment continuum High

Sales force consultation in

decision making

Sales force consultation in

decision making

Sales force participation in

decision making

Sales force participation in

decision making

Sales force involvement in

decision making

Sales force involvement in

decision making

Sales force self-

management

Sales force self-

management

Sales manager makes all decisions.

Salespersons have no decision-making authority or discretionary power.

Sales manager makes all decisions.

Salespersons have no decision-making authority or discretionary power.

Sales manager makes all decisions, but periodically elicits input and suggestions from salespersons.

Sales manager makes all decisions, but periodically elicits input and suggestions from salespersons.

Sales manager and salespersons jointly provide input and suggestions in decision making. Some power sharing occurs, but sales manager is still superior due to position in firm hierarchy and implements decisions.

Sales manager and salespersons jointly provide input and suggestions in decision making. Some power sharing occurs, but sales manager is still superior due to position in firm hierarchy and implements decisions.

Sales manager delegates power and authority to salespeople for decision making.

Manager and sales force share equal power on decisions, but sales manager implements decisions.

Sales manager delegates power and authority to salespeople for decision making.

Manager and sales force share equal power on decisions, but sales manager implements decisions.

Power and authority are distributed between sales manager and salespersons.

Sales manager and salespersons are equally involved in formulating and implementing strategy.

Power and authority are distributed between sales manager and salespersons.

Sales manager and salespersons are equally involved in formulating and implementing strategy.

Low Sales force skill level High

Low Sales manager-sales force cooperation level High

Low Sales force locus of control High

Low Sales force power High

The Sales Manager-Salesperson Empowerment Continuum: Distributive Power Sharing

Through Participative Management


Salesperson character

development

Salesperson character

development

• technological skills • time and territory

management skills• communication skills• self-management skills• team dynamics skills• statistical analysis of sales

data

• technological skills • time and territory

management skills• communication skills• self-management skills• team dynamics skills• statistical analysis of sales

data

• commitment to firm and team success

• trust, honesty, adaptability, flexibility, and accountability

• desire to grow • ethics, values, and

morals

• commitment to firm and team success

• trust, honesty, adaptability, flexibility, and accountability

• desire to grow • ethics, values, and

moralsSalesperson skill

development

Providing empowermentopportunities

Providing empowermentopportunities

• distributing power• delegating decision-

making authority• participation in decision

making• develop and implement

sales strategies

• distributing power• delegating decision-

making authority• participation in decision

making• develop and implement

sales strategies

Developing an empowerment

culture

Developing an empowerment

culture

• cooperation• collaboration• mutual trust• “win-win” mindset• open communications• access to critical information• holding salespeople

accountable and tying rewards to meeting goals

• cooperation• collaboration• mutual trust• “win-win” mindset• open communications• access to critical information• holding salespeople

accountable and tying rewards to meeting goals

Sales force empowerment program

Sales force empowerment program

Implementing an Empowerment Program for the Sales Force


Emerging Issues in Twenty-First Century Sales Force Leadership: Mentoring

• Mentors help develop subordinates’ abilities through tutoring, personal guidance, and example.

• Mentors use “curbstone coaching” (sales manager accompanies a salesperson during a sales call and provides constructive comments after the call).

• By mentoring, senior members can instill the values of idealism and commitment in salespersons.



Mentoring

• To see a video on mentoring, visit– http://www.sellingpower.com/video/index.asp?

date=11/15/2006


Communication

• Communication is an essential component of leadership, and nearly all sales management functions rely on communication.

• Communication is a two-way process that includes listening and reading as well as speaking and writing.

Source: Stockbyte


Listening

3.Empathic listening

3.Empathic listening

2.Critical

listening

2.Critical

listening

1. Content

listening

1. Content

listening

4.Active

listening

4.Active

listening

Listening Listening

The receiver’s goal is to understand the speaker’s feelings, needs, and wants and gain insights into the speaker’s psyche to solve a problem.

The receiver’s goal is to understand the speaker’s feelings, needs, and wants and gain insights into the speaker’s psyche to solve a problem.

This listening technique attempts to help people resolve their differences with the receiver restating the ideas and feelings behind the comment to the speaker’s satisfaction.

This listening technique attempts to help people resolve their differences with the receiver restating the ideas and feelings behind the comment to the speaker’s satisfaction.

The receiver asks questions and take notes as the information flows primarily in one direction—from speaker to receiver.

The receiver asks questions and take notes as the information flows primarily in one direction—from speaker to receiver.

The receiver’s goal is to critically evaluate the message by looking at the logic of the argument, strength of the evidence, and validity of the conclusions.

The receiver’s goal is to critically evaluate the message by looking at the logic of the argument, strength of the evidence, and validity of the conclusions.


• Studies show that 70 percent of human communications is nonverbal.

• Kinesics describe body gestures and movements with respect to what they communicate to other people.

Understanding Nonverbal Communication: Kinesics or Body Language

Source: Flying Colours Ltd.


• Nonverbal communication takes place largely through body language.

Understanding Nonverbal Communication

1. distance and proximity

2. general appearance and personal hygiene

3. body postures and movements

4. face

5. arms

6. hands

7. legs

8. voice characteristics



The Art of Nonverbal Selling

• To see a video on the art of nonverbal communications, go to– http://www.sellingpower.com/video/index.asp?

date=12/15/2006


How to OvercomeCommunication Barriers

• listening• observing• empathy• direct and simple

language• body language• repetition/summarization


Ethical Situation: What Would You Do?

Discussion Question Empowering employees, especially salespeople, is an important new initiative of your firm’s CEO. He has insisted that each sales manager release more decision-making power to front-line salespeople because he feels that this will better enable them to carry out the customer relationship management (CRM) program to build customer relationships and partnerships. You’ve just been promoted to district sales manager and finally feel that you have some real power, and you’re not happy about giving any of it away to subordinates. Nevertheless, you know that you cannot buck the CEO’s charge to all the sales managers. So, you prepared a new Empowerment Areas List for your salespeople, which you circulated to the salespeople and forwarded up the line to senior management to show them how quickly you’re on board with the CEO’s empowerment mandate. For example, on the Empowerment Area List, you give your salespeople authority to commit up to $5,000 to resolve customer complaints without checking first with the sales manager (you). Your own authority is only $20,000, so you think this point will impress senior management. Other empowerment points allow salespeople to make the decision as to whether to accept product returns for full monetary refunds. Unofficially, however, you’ve told your salespeople that they should still call you for approval before making any decisions. You tell them that they are still the first decision makers, but you’re providing backup approval to keep them out of trouble.

Documents

Chapter 10 Sales Force Leadership PowerPoint presentation prepared by Dr. Rajiv Mehta New Jersey Institute of Technology