Sales Culture Versus Business Culture

Can an agency built by a true salesperson transform into a firm with a business culture? Not with a salesperson still at the helm.

Here’s some pop psychology based on knowing a thousand executives who began as salespeople. A salesperson is a salesperson is a salesperson. A rose by any other name is a rose. Sew a title, whatever title you want to choose, onto a salesperson and they are still a salesperson.

Their eyes glaze over whenever business issues outside of generating revenue are discussed. Discuss accounting issues with them? In a pipedream. Discuss procedures with them? Unless they’re being sued, they won’t sit still long enough for a full paragraph to be covered. Needing to discuss staff efficiency? More sales will fix that.

In fact, their base foundational comfort zone involves two points: Sales solve everything and if there is a problem, if I talk long enough, everyone will eventually agree with me.

When a person is just starting out, whether when building a business or building their income as a salesperson, the effort required is Herculean. The effort required to succeed is so hard that if they were not already hardwired to think sales solve everything, their experience in those initial years will cause them to think sales will solve everything.

To test my pop psychology theory, a proxy test might be to do a web search to identify how many consultants, programs, training classes, books, seminars, etc. promise increased sales versus any of the business points I made earlier or choose your own business points. Generating revenue is a far more popular topic than managing an agency or company. For example, a Google search of “sales classes” yields 4.35 billion results; a Google search of “accounting classes” yields 1.79 billion.

Business Culture

More sales, more sales, and more sales is not a business culture. A business culture must include managing costs, managing people, managing balance sheets, managing vendor relationships, managing everything! If a person is bored or simply not interested in these functions, they are not going to perform them at all, or at least not well.

A true salesperson can only transform an organization into a viable business culture by hiring other people to take charge, not only manage, but to lead in running the business. And these people must have authority or else they cannot change the culture.

The culture must be one of accountability toward making the business more valuable. More sales, in and of themselves, do not make a business more valuable except in a seller’s market, preferably a bubble seller’s market where rational acquisition decisions are lacking.

The hard truth is, all sales are not profitable.

More value also means a better balance sheet. I’ve completed extensive analytics of the balance sheets of carriers and agencies, and the market values of firms with better balance sheets are higher, all else being equal. This may be a key reason many of the private equity (PE) buyers of agencies have no hope of going public because their balance sheets are shambles. PE firms are much like salespeople, more and more acquisitions will solve everything. I have met few salespeople that have any appreciation of the importance of managing balance sheets well. Most don’t even look at their balance sheet.

More value also means more employee development and accountability. I’ve found that exceptional salespeople are usually either quite personally disciplined or have limited self-discipline, and either way, almost none want accountability for themselves. A good leader is going to develop employees and hold them accountable. In today’s age, some people view accountability as some kind of evil discriminatory practice and therefore development is often a wishy-washy process.

I am not being cynical. Employee development must simply involve methodically training an employee while providing them with the required tools for their success, providing a supportive environment, and then measuring their success. An environment which enables their errors, incompetency, laziness and otherwise poor performance is not a supportive environment.

I find that people enjoy working in these kinds of supportive environments in which poor performers are weeded out in a constructive manner. Salespeople are generally superb at a lot of things, but they are rarely any good whatsoever in developing a methodical and accountable work environment. The thought of such an environment will make many run for the exits!

Leadership also does not mean getting all the employees to agree to whatever direction the leader chooses. Salespeople have an aversion to conflict, so they often agree with whomever is the last to leave their office. When a direction change is required, they want everyone to agree. This works well for sales, but not so much for leadership.

I recently witnessed a large organization ready to spend considerable treasure on getting all their employees to value their new direction and their new goals. Their effort is like herding cats and their leader is conflict averse. Needless to say, the effort is not going well.

Set the goals, explain and educate, and do it succinctly. Identify the new skill sets required at each position and then analyze whether the existing employees possess the required skills. If they don’t, give them a training program and your expectations. There is no point in waiting for them to come around. You owe this to them. Then see if they are up to the task. If not, find new employees. A salesperson cannot often handle this kind of stress.

To answer the original question more completely: A sales organization can be transformed into an organization with a business culture, but not likely transformed by the founding salesperson.