Is Manager a Tyrant or Are There Deeper Issues?
TEC Worldwide is an international organization of more than 7,000 business owners, company presidents and chief executives. TEC members meet in small peer groups to share their business experiences and help one another solve problems. The following questions and answers are based on discussions at recent TEC meetings in Southern California.
Question: My out-of-state sales manager has done a great job of growing sales and opening new markets, but he can’t keep good people. The few who have left the company on speaking terms said he works his people like dogs and treats them like dirt. Every time I mention the problem, he brushes it off, saying high turnover is standard for our industry. However, it has reached the point where it’s having a real impact on our profitability. I don’t want to lose him, but if he keeps on going this way, I can see our whole out-of-state infrastructure eventually falling apart. How can I get him to change his management style?
Answer: At first glance, this seems like a straightforward issue: How do you deal with a tyrant who produces outstanding results but runs roughshod over those who work for him?
However, upon closer examination, the situation may involve more than his personality or management style.
Your first step, said Tim Toomey, owner of Southern California Graphics in Culver City, involves getting a handle on the real issue. Is the problem his management style, or might there be other factors?
For example, does high turnover run rampant in your industry or is your company the exception to the rule? In many industries, high turnover goes with the territory and you have to accept it as a cost of doing business. Also, do you know that the turnover is hurting your profitability, or could other factors be involved?
Next, consider the sales manager’s job. How much does he have on his plate? How many people report directly to him? Does the way the position is structured match his personal strengths and weaknesses?
“He could be overworked and burned out,” said Patti Regan, president of Regan Group in Los Angeles. “As a result, he takes out his frustrations on his employees. Also, he may be a great salesman, but does he have the skills, aptitude and desire to handle the administrative side of the business?”
Next, look at how his compensation package is structured. Does he get rewarded strictly on sales, or does company profitability enter into the equation? Good salespeople go where the money is. If you pay him only to produce sales, that’s what you’ll get.
Finally, have you honestly and openly expressed your concerns to him? He may be so focused on taking care of customers and getting new sales that he doesn’t see the turnover as a problem. If you have addressed the situation, does he recognize and acknowledge his part in creating the problem or does he blame factors beyond his control?
To start to get a handle on the situation, Seth Krugliak, chief executive of Five Guys Named Moe in North Hollywood, recommended conducting exit interviews with all employees who leave the company.
“Find out why people are leaving,” Krugliak said. “Is it the job or is it your sales manager? Despite the fact that you work in a ‘churn and burn’ industry, he could be verbally abusing people and setting you up for a wrongful-termination lawsuit. Either way, you need to make sure that he isn’t treating people improperly and discarding them with reckless abandon.”
If you determine that your sales manager is the root of the problem, Solomon Aryeh, president of Sun Valley-based SMG Stone, recommended restructuring the position to maximize his strengths while minimizing his weaknesses.
“Top salespeople are hard to come by,” Aryeh said. “So instead of cutting him loose, you could hire [a human resources] person to handle the personnel/administrative side of the business and allow him to focus strictly on the sales end. Explain that you are doing it to make his life easier and free him up to do what he does best. If you position it properly, he should accept the change rather than resist it.”
If the sales manager resists letting go of control, another option would be to create more layers so he doesn’t have so many people reporting directly to him, Toomey said.
“Less direct reports takes him out of the day-to-day management without usurping his control or authority,” Toomey said. “Not only will this take some of the pressure off, it will give the people underneath him a chance to grow and develop.”
Finally, take a look at changing his compensation structure. Consider offering a bonus based on minimizing his turnover and enhancing company profitability. Regardless of how your industry handles it, turnover is costly.
The relatively few dollars you pay in a bonus will come back to you 10 times in cost savings.
Will these strategies cause your Captain Bligh to turn into Mister Rogers? It all depends on the individual and how you present the proposed changes.
If he refuses to budge, you may have to replace him. In that case, it comes down to your judgment as to whether his value as a salesman outweighs the damage he is doing to the organization.
A tough decision? You bet. But that’s why you get paid the big bucks.
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If there is a business issue you would like addressed in this column, contact TEC at (800) 274-2367, Ext. 3177. To learn more about TEC, visit https://www.teconline.com.
