Why Newly Promoted Sales Leaders Rise to Their Level of Incompetence

By Kelsey Peusch on Aug 10, 2018

3 Minute Estimated Read Time
Whether you are a successful top performer seeking a senior management position or you’re already a senior Sales Leader looking to hand pick your next protégé, there is something you should know. It’s been statistically proven that the best sales representatives won’t make the best sales leaders.

All too often we encounter sales leadership teams yearning for the skills and structure required to elevate their team’s performance. We are talking about sophisticated, highly educated, teams of men and women, the majority of which were top performers in their respective organizations.

The jarring realization, one we must often share with our clients, is that the skills required to be a high performing seller are different than the skills required to lead high performing sales teams. Seems obvious, no? Unfortunately, we see organizations seeking to retain top talent by rewarding them with upward mobility with little regard to skill set.

This anomaly is known as The Peter Principle which presupposes this fact: “If organizations promote the best people at their current jobs, then organizations will inevitably promote people until they’re no longer good at their jobs. In other words, organizations manage careers so that everyone ‘rises to the level of their incompetence’. ”

Sales is no different and here is the proof.

The Peter Principle: The Research and The Result

Dr. Laurence Peter outlined the premise of The Peter Principle in 1969 but it wasn’t until recently that Kelly Shue, Professor of Finance at Yale School of Management, saw an opportunity to unpack this principle and the specific impact it was having within sales organizations. sales promotion quote2

Kelly, along with her colleagues Alan Benson and Daniel Li, obtained data on 214 sales organizations and analyzed 1500 sellers who were promoted to management positions between 2005-2011. What was most surprising about the research wasn’t that it stated the obvious fact that great sellers don’t make great sales leaders but that it statistically proved they make WORSE leaders. Kelly, and her colleagues, identified that sales declined an average of 7.5% when led by managers who had high sales volumes when they were employees. Meanwhile, sales thrived under managers who may not have been high performers1.

The Critical Skills You Need to Succeed in Sales Management
You have either experienced it firsthand or witnessed it from afar – that superstar seller who gets promoted and for 12 months remains focused on what they know, desperately trying to figure out how to duplicate their own efforts and losing site of other important aspects of the job. They are frustrated that they can’t control the outcome of each opportunity and for the first time they are required to dance the political polka with other leaders across the organization.

So, what are those critical skills you need to succeed in sales management? When we dissect what it means to be a successful leader we see three distinct roles: Coach, Strategist, and Operator:

  • Coach: Focus on the Individual vs. Duplicating Success
    Coaching is an aspect most can appreciate and is a very a big part of the job, but it isn’t about forcing your team to do exactly what worked for you. It’s about understanding the unique needs, preferences, and motivating factors that drive each individual. This isn’t a one-size-fits-all job and it requires leaders to remain relatable, real, and reliable in order to build trust and elevate performance.
    Supporting Resource: Sales Coaching: To Bear Fruit, Build on the Fundamentals

  • Strategist: Selling Strategically and Solving Problems Proactively
    This is less about playing a heightened strategic role in the sale and more about taking a giant step back and learning how to sell a concept internally in order to create momentum and motivate action. It’s about navigating the organization, identifying strategic vs. low value activities, and resolving conflicts on behalf of your team (vs. your client).
    Supporting Resource: The 4 Most Effective Ways Leaders Solve Problems.

  • Operator: Creating Collaboration through Consistency
    One of the greatest gifts a leader can give their team is consistency. Consistency creates an awareness of expectations from which a team’s cadence can be built. From business planning to opportunity management, a good operator sets expectations around when certain business activities are to take place and how best to prepare for each engagement in order to create positive momentum.
    Supporting Resource: Interested to see how you stack up? Give yourself an honest grade on how you operate your sales team with this 7-point checklist

Becoming an Outlier
Apart from contemplating the list above, and determining where your strengths and weaknesses may lie, here’s an eBook we created for those new to sales leadership. The First 90 Days has proven highly effective, catapulting many a newbie sales manager on a successful track.

As you contemplate whether you’ve got the chops to become a Peter Principle outlier, remember that we are talking about will versus skill. You may not have all the skill(s) you need to be successful right out of the gate, but if you have a desire to think more broadly then you have the capacity to make it in sales management. Use what we’ve outlined here as a springboard for success – your own success and the success of your team.

Harvard Business Review: Research: Do People Really Get Promoted to Their Level of Incompetence? Alan Benson, Danielle Li, Kelly Shue – March 8, 2018

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Kelsey Peusch

Written by Kelsey Peusch

Kelsey Peusch has spent her entire career enabling high performing sales teams across a variety of industries. With expertise in Sales Effectiveness, Marketing and Corporate Strategy, Kelsey has developed a respected ability to assess and address the challenges currently facing many sales-oriented organizations. Clients appreciate Kelsey’s ability to synthesize content and create effective communications across a wide range of mediums, from training materials and communication campaigns to comprehensive value proposition manuals. In her latest endeavor, Kelsey is exploring how companies effectively manage multiple generations, each with unique characteristics, in a way that increases productivity internally (between colleagues) and minimizes conflicts externally (between buyer and seller).

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