Monthly Archives: April 2016

“I Want to Hire My Competitor’s Top Sales Person …”

When a client who doesn’t know us asks us to help them find a sales person, we’ll ask the client what they think they’re looking for.

Hiring, Sales, Competitor, Competition,

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A typical first response is “I Want to Hire My Competitor’s Top Sales Person.” And it’s often accompanied by, “And I want them to bring me their book of business with them.”

On the surface, this sounds like a perfect formula for creating an outstanding sales team. Find the best available people and bring them on board. Their loyal customers will follow them and revenue will skyrocket. Plus you will have weakened your competitor by taking away a key asset.

However, here is the reality.

If you have really good people working for you, you’ll do anything you can to have them stay with you. Having an employment contract or agreement is one way to document the responsibilities of both employer and employee.

In the case of sales personnel, you want to prevent them from leaving your company and harming your business.

One option is a non-compete clause. This basically says that, when an employee leaves your company, they cannot work for a company that is a competitor of yours. It sounds good in principle but the courts are not upholding these non-compete clauses because they can limit an employee’s ability to find alternate employment.

The preferred option is called a non-solicit clause. This type of clause does not prevent an employee from going to work for one of your competitors but, if he/she does go to a competitor, he/she cannot call on companies that are clients or customers of your company. This type of clause IS enforceable.

To get back to the original response to our question about what a client might be looking for in a sales rep, it IS possible to hire such a person.  However, if they have a non-solicit clause in their employment agreement, you cannot have them call on customers they had at their previous employer, let alone bring along a book of business.

Were you to attempt this, one possible outcome is that your competitor could sue your company. Another possibility is that they could sue your new sales rep and restrict his or her ability to approach customers through an injunction. This could render your new hire essentially ineffective while they’re tied up with lawyers.

Another reality is that customers tend to be loyal to reliable vendors, not the vendor’s sales person.  Companies have moved from having a single person making buying decisions to having procurement teams to reduce the personal influence a sales person can have on a buyer. Unless a vendor puts a totally inept person in charge of an account, the account will stay with the vendor as long as product quality and service are kept at consistently high levels and pricing is competitive. It actually costs companies money to change vendors – to put the business up for bid, to assess bids, to qualify a new vendor, among other factors – so companies avoid making changes unless it makes economic sense to do so.

Here are three things you should be doing.

1. Protect your sales team. Review your employment agreements with all your sales staff and add in a non-solicit clause to each one. This can make your top performers less attractive to your competitors to hire away.

2. Hire strategically. Hiring a top performer from a competitor can and does make a lot of sense in some instances. But you need to bear in mind that you will have to focus them on markets where they won’t have to call on customers from their previous employer – perhaps in a business development role. Or, if they are senior enough, you might consider assigning them to key accounts who are not customers of the competitor you hired them away from.

3. Consider New Talent Pools. While hiring from within your industry can save on training and capitalize on existing contacts, it may not be your best strategy for improving the overall caliber of your sales team. Industry studies suggest that only about 25% of ALL sales people are rated very good to excellent so, is your industry likely to yield the best quality candidates? Often what happens is that marginal performers make the circuit of employers within an industry, never really contributing much to any given employer.

Excellent sales people are excellent sales people because they have the discipline to consistently follow a process.  The process is independent of industry, product or company. Excellent sales people can be taught the technical attributes of a product and the benefits that make each product different from a rival product. Excellent sales people know how to research an industry to find the right companies and contacts.  They don’t rely on a Rolodex alone.

Bringing in an excellent sales person from outside the industry has other benefits. They bring fresh thinking, which could lead to new applications for an existing product, better ways of selling the product.  They’ll ask insightful questions that could help you become aware of attributes that resonate with customers that perhaps your staff had consistently overlooked or undervalued.

So, hiring from a competitor can be a good move.  But don’t expect sales people to have their customers follow them to you.

Relating Employee Engagement to Company Performance

This is the final post in our series on employee engagement.  We hope you’ve found the posts helpful and insightful.

We know Employee Engagement is a hot topic in the business community, and we think it’s more than just a passing fad.  There are some fundamental things in the concept of employee engagement that can help you save money and make more of it.

If you’ve been following this series, then you’ll know we posted articles about each of the 12 questions in Gallup’s Q12 employee engagement assessment.  That can be overwhelming.

To help make it easier to understand, we created an infographic to help illustrate the relationship between the 12 elements of employee engagement and four key dimensions of business performance.

The vertical axis is composed of the 12 Gallup questions. Gallup organized these into groupings.

Employee Engagement, Productivity, Customer Satisfaction, Turnover, Employee Turnover, Profitability, Performance

The bold colors indicate Gallup determined there was a high degree of correlation between dimensions of employee engagement and measures of company performance. We added lighter-shaded colors where we felt there were other intersections between engagement and performance that merited consideration. Click on the infographic to see a larger version that’s easier to read.

Base Camp represented the very basics of employee engagement – providing employees the information and tools to do their jobs.

Camp One was grouped around questions that reflected what employees could give back to their employers.

Camp 2 deals with questions about employees having a sense of belonging.

The Summit is comparable to the peak of Maslov’s hierarchy of needs: self-actualization. In fact, the whole Gallup Q12 has many parallels with Maslov’s model in that it is essentially a spectrum from basic needs (to do the job right) to more emotional or intellectual needs that make the job resonate with the employee.

The horizontal axis is composed of four dimensions that measure success in an organization: Productivity, Profitability, Customer Satisfaction and Employee Turnover.

According to Gallup’s research, Employee turnover is really driven by the first six questions.  If you don’t do the basics, you will lose employees.  We included question 12 as well, because we feel employees will leave when they no longer see opportunities to grow in an organization. It may be a bit of a gray area, because it may be something beyond the control of the company.

Productivity is influenced by all but 2 of the 12 factors. What seems to be important is having the right tools/technology, recognition, feedback and having a sense of belonging.

Profitability appears to be impacted by management style. When employees have clear direction and feel they have support, perhaps they’re more willing to take calculated risks that positively impact the bottom line.  Also, when they have opportunities to grow and develop, they can bring new skills to the organization that can help improve processes and grow profitability.  We added in “right tools” because we felt, intuitively, that technology contributes immediately to productivity, but ultimately to productivity.

When employees perceive themselves as treated fairly, Customer Satisfaction is positively affected. Sometimes employees have to go outside procedures to ensure customers are looked after and, when they do so, and feel they will be supported for doing what’s right for the customer, they’ll continue to take those risks. We added “opinions” because we feel it’s an indicator the company is paying more than lip service to employee ideas. This could include input that some company procedures do not support customer satisfaction.

What You Can Do

If you really want to assess the level of engagement among your employees, the Gallup Q12 is a very simple tool to administer.  You might want to consider bringing in a consultant to oversee the project and to act as a buffer between employees and management to help ensure employees open up.

What is your management team saying are the main issues in the organization?

Use the dimensions from the Q12 to explore where you might be lacking and where you can implement some changes.

Make a point of regularly getting out of your office to connect with employees and listen to their views.  They’ll be more likely to come to you when they see problems and you may find they have some valuable suggestions to offer. Face-to-Face interaction is so much more effective than the traditional suggestion box.

 

As we said last week, we’ll be compiling all the posts in this series into a White Paper so you can have the entire series in a single document.  Watch your email to find out when it will be available.  Like all our White Papers, they’re complimentary.