Excerpt

Introduction

When IBM ran into financial trouble the early 1990s, the

company brought in a new president, Lou Gerstner. He

immediately called in his friends from McKinsey & Company,

one of the largest and most respected management consul-

tancies in the world. He asked them to use their investigative

skills to determine why IBM sales, market share, and profits

were falling. They immediately went to work.

In less than six months, the consultants were back. They

assembled the senior executives and told them, “We have

found your problem.”

They asked, “What is it?”

The McKinsey consultants replied, “Low sales.”

The executives agreed that this was the problem and

then asked, “What is the solution?”

The McKinsey consultants said simply, “High sales.”

Again, the senior IBM executives pointed out that these

two answers were obvious. But how would these high sales

be achieved?

The 75 Percent Rule

The answer became known as the “75 percent rule.” In their

research, they found that as the result of certain company

policies, salespeople and sales managers were spending too

much time in the office filling out forms and too little time

in the field face-to-face with customers.

They recommended that this situation be reversed immediately.

The 75 percent rule simply said that from now on, the

salespeople should spend 75 percent of their time in the field

with customers talking about IBM products and services. In

addition, the sales managers, who had been stuck in their offices

most of the day processing the paperwork that the salespeople

were generating, were to spend 75 percent of their

time in the field with salespeople calling on key customers.

Within a year, IBM’s sales reversed completely. Huge

losses turned into huge profits. The company turned around

and again became a giant of American industry.

The Pivotal Skill

At the end of this study, the McKinsey people explained their

most important finding: In a sales-driven organization, the

sales manager is the pivotal skill. Nothing will bring about

faster and more predictable increases in sales performance

and sales results than training sales managers to do their job

more effectively.

As a sales manager, you are the most important person in

the sales-driven organization. You have more influence on

the level of sales and, ultimately, the level of profitability of

the company than almost any other person. You are vital to

the success of the company.

The sales manager is one of the most valuable and often

one of the least appreciated executives in the company. It is

the sales manager who sets the standards and quotas for the

salespeople and sees that they achieve them. The development

of excellent sales managers is an essential requirement

for all successful business enterprises.