Is It Time for a Drastic Change in Sales Management? Lessons From Zappos.

Last year, Zappos shocked the business world when it decided to adopt Holacracy, an organizational philosophy that removes power from management. In an email to the rest of his company, Zappos CEO Tony Hsieh outlined the precepts of Holacracy, detailed the ways its adoption would change the company’s operation, and finally offered an ultimatum for employees: embrace Holacracy or leave Zappos.

Learn About HubSpot’s Bold Approach to Sales Meetings »

“This is a new, exciting, and bold move for Zappos,” Hsieh said toward the end of his now-famous company-wide email. “Like all the bold steps we’ve done in the past, it seems a little scary, but it also feels like exactly the type of thing that only a company such as Zappos would dare to attempt at this scale.”

Unsurprisingly, the news of Zappos’ bold move was met by strong responses from all sides. Some saw the fact that 15% of Zappos employees immediately left the company as a sign that the move was a bust before the ink even dried. Other outlets viewed the company’s audacity (and Hsieh’s brazenness) as an indicator that the company would be continue to be a successfully disruptive force in the industry.

Still others took a, well, more ambivalent stance on the news.

But wherever you come down on the issue, one thing is clear: Zappos’ bold move is a crucial case study in the evolution of business management. And now that the dust has settled on the big gamble, it’s the perfect time to talk about the lessons from it.

The lessons from Zappos’ adoption of Holacracy are applicable for many business functions, but especially for sales. More than most departments, sales is particularly hierarchical and settled in its ways. Regardless of industry or business size, most sales teams are structured identically: sales reps report to managers who report to directors who report to VPs who report to CEOs.

Even the meeting cadences of drastically different sales organizations are surprisingly uniform: Daily opportunity check-ins, weekly 1:1s, quarterly business reviews ‒ these are all longstanding parts of the sales process.

The question is: Are these structures and meeting cadences relics of a bygone era? Can they be improved by a more modern and nimble approach to business management? Or more broadly: Is sales management overdue for a drastic, Zappos-like change?

The Changing Sales Team

Time to Fill-Strategy Meeting

One reason that sales management in general, and sales meetings in particular, may be ripe for reinvention is that the field of sales is itself in the midst of a sea change. Inside Sales is quickly replacing the traditional Field Sales model, and the role of sales rep is morphing.

What does this mean for the way sales teams are run? Well, for one, it means that sales is no longer nearly as insular or siloed as it once was. Field reps are returning to the office and working more closely with the marketing and customer service departments, which means that the old model of sales existing as a company within a company is rapidly aging. The sales department of most modern businesses is now deeply enmeshed with the rest of the company.

Jamie Domenici, Marketing VP at Salesforce, believes that these department lines will blur even more. She recently told Inc. that the successful businesses of the near future will feature sales reps who are incredibly involved in both the pre-sales and post-sales parts of the process.

Learn How to Build a Modern Inside Sales Team »

“For example, if somebody is on your website you need to know in real time so a sales rep can actually pick up a phone and call that person and say “Are you interested?” because the longer you wait the colder the lead becomes. You don’t want to know a day later,” she told the Inc. “I think it’s a transition every company has to make or they’ll get disrupted.”

This fluidity between all parts of the sales process has led many organizations to rethink how they manage and structure their sales teams. This is closely related to the fact that young, growth-stage companies (like Zappos) have an urgent need to make sure their management structure facilitates growth, instead of stifling it.

“As Zappos Grew, Innovation Slowed”

One of the major reasons Hsieh and Zappos adopted the Holacratic model was because they wanted to retain the innovation that set the company apart from the very beginning. Zappos has long been heralded for its unique (and famously happy) workforce. But as the company grew, some of the shine wore off.

“We had gone from being a fast speedboat to a cruise ship,” a longtime employee recently told The New York Times.

Even Hsieh slowly started to feel hemmed in by the burgeoning bureaucracy. “A lot of people in the organization, including myself, felt like there were more and more layers of bureaucracy,” Hsieh told the news source.

The move to Holacracy was seen as a way to cut back some of this unwelcome growth to make way for the original spirit of excitement and ownership.

Anyone who has worked in the sales department of a quickly growing company can probably relate. As the sales team grows, new policies, procedures, and tools are added to keep everything from spiraling out of control. Sometimes these additions serve the greater good by keeping reps and managers on the same page. In other cases, these “layers of bureaucracy” simply add hours of standing meetings and procedural red tape that get between salespeople and selling.

Recently, HubSpot ‒ perhaps the platonic ideal of a fast-growing company with a need to keep sales performance nimble and scalable ‒ examined the way it ran sales meetings.

HubSpot’s Efforts to Improve Sales Meetings

Instead of scrapping their entire system for a revolutionary (and still-unproven) tactic, HubSpot opted to tweak their existing system to make it more flexible, personalized and scalable. The marketing automation company grew incredibly quickly, increasing its sales team from one person to more than 200 in a matter of years. Clearly, the structure and processes of such a high-growth team were bound to change.

And change they did. When we interviewed Mark Roberge, Chief Revenue Officer at HubSpot, he talked about the importance of clearly defining and separating meetings, and of ensuring that the sales department worked closely with much of the rest of the company. No more combining pipeline and forecast meetings. No more using team-wide meetings as coaching sessions. Instead, Roberge and his cohort of managers made an effort to schedule meetings as far in advance as possible and keep them as small as possible.

Learn More About HubSpot’s Sales Meeting Strategy »

“Small” doesn’t only apply to the number of people in attendance, but also the scope. The bigger a sales team gets, the easier it is for meetings to become overly complicated and general. Sales leaders need to fight this tendency by having meetings with fewer reps at once, and by focusing on a small number of topics and skills.

hubspot sprocket

“The biggest mistake new sales managers make is trying to work on too much at once,” Roberge said in the interview. Sales managers should be responsible for the development and training of a small number of reps, and should have tailored plans for each of these reps, based on their strengths and weaknesses.

Indeed, Roberge advocates going even further. Junior sales reps should have more frequent and lengthier meetings than their more seasoned counterparts. And all reps should routinely meet with leaders from other departments.

“The frequency for [sales coaching] meetings is different for seasoned reps than for your new, inexperienced reps,” Roberge added. As sales teams scale, it becomes even more important for managers to create tailored plans for all of their reps instead of a one-size-fits-all approach that leaves young reps hungry for more training and experienced reps just wanting to be left alone.

It’s worth noting that Roberge and HubSpot’s approach to changing their management evolution is decidedly un-Holacratic.

The Comfort of the Old

Many experienced sales professionals contend that there’s a reason established hierarchies exist: They work. Management positions exist to free up the time of the general workforce, not control it. Sales VPs and managers often exist to shield reps from criticism, unnecessary meetings and distracting organizational decisions. Indeed, many sales reps have become so used to being managed that they can’t (and don’t particularly want to) imagine a world where all business decisions are made by groups on equal footing.

Even one of the leading lights of the Holacratic movement, serial entrepreneur Brian Robertson, understands the appeal of traditional management structures.

“There’s something almost safe and comforting, even when we don’t like it, about being in a system where there’s somebody else whose job it is to protect us, take care of us, nurture us,” Robertson told NPR recently.

A world in which most sales teams adopt a Holacratic model (or even something much less extreme) is still a long way off. Instead, most modern sales teams are more likely to follow HubSpot’s approach: tweak an existing system in an effort to make it more nimble, scalable and democratic.

Improving the System, Not Replacing It

For most sales teams, adopting a Holacratic management system is not an option. Few businesses are as willing to upend their entire structure as Zappos, and few sales teams can afford to take a month or quarter off as they learn the intricate vocabulary and byzantine meeting procedures of Holacracy.

But this doesn’t mean that these sales teams are currently operating optimally. In our our study of more than 100 inside sales teams, we found that inefficiencies and incorrect assumptions can easily derail otherwise successful sales teams.

So what are these sales teams to do? When neither Holacracy nor complacency is a viable option, how can sales teams continuously improve execution?

The answer is to use data and creativity to design a sales process that encourages ownership, hardwork, and individualism without sacrificing the fundamentals of a system that has been proven to work over decades of use.

Check out our FREE guide on building an Inside Sales team to learn more about:

  • The right meeting cadence for sale reps
  • The best structure for your company’s stage and industry
  • The keys to promotions and incentives

 

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Mike Baker
Mike Baker
Mike Baker is the Content Strategy Manager at InsightSquared, where he helps distribute original eBooks, articles and guides about data-driven sales and marketing. He has a BA in English and Journalism from Oberlin College.
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