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Small Business Digest



Defining, Keeping Core Values Can Drive Better Sales Performance

Core values. When explicitly defined, they have the ability to shape a company’s culture, brand and business strategies. From a sales point of view, they also play a crucial role—are in fact the most important ingredient—in  achieving predictability and consistency in the actions that drive performance and bring about results.

“There is nothing more important in developing and maintaining powerful businesses than establishing a winning culture base on published core values,” says business-turnaround expert John Treace, author of the new book Nuts & Bolts of Sales Management: How to Build a High-Velocity Sales Organization.  “For any sales team, the primary objective is to predictably and consistently produce sales, within budget and in accordance with our forecasts.”

“As a senior sales officer charged with effecting business turnarounds for bankrupt private and pre-IPO companies, I witnessed firsthand the importance of core values,” Treace says. “A strong set of core values is crucial to driving corporate performance, and without them, companies suffer. Core values define company culture, which is a big part of why they’re so important to driving performance.”

Defining Core Values

Core values are simple action statements that express the business attributes management upholds and believes will lead the company to success. They are not vague proclamations such as “Do the right thing”—these can be interpreted at the whim of management, depending on temporary conditions and motives. “Core values should be specific and measurable. First, management should identify the desired attribute it wants to support; then, the core value can be determined from that starting point.”

If, for example, management wants to emphasize financial responsibility, it would have core values that address how employees operate in regard to the finances of the company.

Treace gives these examples:

“Don’t run out of cash, no matter what.” This core value keeps employees focused on adhering to the expense budget

“Be careful: A little success can create a lot of overhead.” This core value keeps employees focused on not overly expanding their departments in good years when there is excess income, putting the company at risk in slow years. This often results in layoffs, which are to be avoided.

“Throwing money at a problem doesn’t work.” This core value forces managers to think carefully through their plans to ensure a positive outcome within expense-budget guidelines. It reminds them that throwing money at a problem almost never works, since it usually involves giving more funds to the people who created the problem in the first place.

If management believes that execution is a key to success, its core values would emphasize that the company values high performers. These core values might include the following:

“Surround yourself with only high performers.” This core value keeps managers focused on excellence in hiring and managing employees.

“Make it a challenge to get on board and difficult to leave.” This core value defines the way the company hires and manages people. If management hires only high performers, there will be few openings because of terminations for underperformance. And if the employees are managed well, they will not want to leave the company. The net result is a dedicated group of high performers.

If management values fairness—something every employee wants—this core value could apply:

“Always do the right thing for customers, employees, and shareholders, and don’t take a position that favors one over the other.” This sends a strong message that one group will not benefit at the expense of another. For example, the company with this core value will not reduce sales commissions to shift dollars to management with higher bonuses or shareholders with higher dividends. This company will not increase prices to benefit shareholders at the expense of customers. No single action should be taken to benefit one group at the expense of another.

Treace says he once worked as a sales representative for a company that was not organized around core values. As a result, management’s decisions varied from topic to topic and from year to year. Management always said they “did the right thing,” but the right thing mostly seemed to benefit management. For example, late one year, commissions were substantially reduced to the sales force, and company insiders leaked to the sales team that this was done so senior management could receive full bonuses that year. The sales force’s morale plummeted, as did its sales numbers. The malaise continued until the company’s management was replaced. If this company’s management had embraced a value of fairness for all employees in published core values, this situation would not have existed.

Communicating Core Values: Once identified, core values should be published and posted throughout a company. They can be reviewed in state-of-the-business meetings with all employees or in any other suitable venue. When presenting them, it is important to make an emotional connection between each core value and all employees. Simply reading them to the staff or posting them without explanation is not effective. Just reading the core value “Don’t run out of cash no matter what” doesn’t mean much, as most employees cannot envision the company going bankrupt.

Instead, Treace says, follow the presentation of that core value by asking the team, “Have you ever known someone who didn’t receive a paycheck?” Hands will shoot up all through the audience. “If so,” you say, “they worked for a company that didn’t have this core value.”
Presenting the core value this way makes an emotional connection, and employees will remember it and be able to internalize it. When core values are internalized, employees will understand them at a deep level, which in turn promotes the desired culture. Further, to ensure employee commitment, each employee should understand that violation of a core value will result in disciplinary action.

Driving Performance: Companies and departments in companies are guided by mission statements, which should define culture, drive performance, and be supported by the company’s core values. The mission statements of departments can be more specific than those of the whole company and can be used as a blueprint for action. Here is a mission statement Treace used in one sales department: “Our mission is to consistently and predictably support the corporate sales and profit goals through efficient sales and servicing efforts while providing the highest degree of customer satisfaction.”

He says that once its mission had been defined, the department looked to identify the actions that would ensure its accomplishment. It identified three guiding principles:

  • We will obtain for the customers what they want, and we’ll do it better than any other company.
  • We will develop and maintain a sales-management system that allows our representatives to maximize selling time while spending the least amount of time in front of the customer.
  • We will develop and maintain a business environment for all sales-department personnel that will enhance pride in the company, confirm the value of long-term relationships and allow all employees the opportunity to reach their professional goals better with us than they could with any other company.

Taking the guiding principles in reverse order, if the department’s leaders could accomplish item three, they would attract and keep salespeople who were high performers. If they accomplished item two, they would have an efficient sales process. Item one addresses taking great care of the customer. In summary, if the managers could successfully accomplish these three guiding principles of establishing a team of high performers, maintaining an effective sales process and taking great care of the customer, then they would achieve the mission statement.

Treace says is important to note that the mission statement and guiding principles were supported by the published core values of this company. In this regard, the published core values defined the culture and actions needed for success. Culture, defined by core values, drove performance. In this publicly traded company the department achieved or exceeded the sales plan for 18 straight quarters, which brought initial investors a 10-times return on their original investments within three years of the company’s going public.

“People want to work for companies that are governed by established principles and management that supports them. Core values are where powerful businesses begin, and smart management will diligently work to enhance their effectiveness.”

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