In short, the Northeast Sales District is on auto-pilot in terms of sales strategy and needs to be given entirely new and more challenging objectives to shift the focus of the teams to more profitable selling strategies.
Recommendations
James Sprague needs to motivate his sales team to re-align their selling strategies and he has to earn their trust and respect as well. Hank Carver being passed up for a promotion looks like age discrimination to the other Sales Reps and this decision by senior management will have undermined Jim Sprague's ability to gain trust as well. For any sales manager to effectively introduce shared vision and drive accountability into an organization trust must be attained first (McNeilly, Lawson, 1999). Jim Sprague needs to focus on communicating his vision for the sales district and also give each sales representative more autonomy, a chance to master the sales development plan, and a sense of purpose through incentive programs. Combining autonomy, mastery and purpose are the three determinants of increasing ownership for a job and critically important for long-term growth to occur (Kuster, Canales, 2008). Second, the Sales Reps in the Northeast Sales District need to be held more accountable for the distribution of calls they make by account category and report back on a monthly basis how they have allocated their time. This will need to be reported company-wide so that the senior management has visibility into this as well. Jim Sprague's effectiveness as a manager in re-aligning the amount of time spent with each category of account will be tested by this strategy yet it must be done if the profitability of the Northeast Sales District is going to be turned around. Using transformational leadership strategies Jim Sprague needs to motivate the Sales Reps to accomplish this and explain why it's critical. Reporting purely to transactional leadership (Forsyth, 1986) is not going to be as effective as recognition- and cash-based incentives. Third, the company needs...
This would make a very significant difference in how the Northeast Sales District would perform. A revised compensation plan would also be used for redefining the mix of products sold with heavier emphasis on the most profitable including CHX Chromate Dip (CHX) which has a $440 price and contributes $180 margin. Indexing bonuses to profits is commonly done in commodity-based industries to gain greater sales effectiveness on these products. In other industries cash incentives or spiffs would be used yet in the Hanover-Bates Chemical Corporation's case, it needs to be a much more fundamental shift in priority within the overall sales compensation structure to get the sales teams in all regions focused on more profitable products. Finally Hanover-Bates Chemical Corporation needs to concentrate on realigning the sales compensation plans to be more focused on selling the entire mix of products and reoriented away from selling individual products. The solution selling strategy so successful in other process-based industries needs to be an area of focus for the company as well. When this is integrated into the sales compensation plan and accountability for selling to profitability and not just sales, the entire company's profitability will increase. This will also give Jim Sprague an opportunity to get his division focused not on the lowest performing accounts but the most profitable ones.
References
Forsyth, Patrick. (1986). Managing the Sales Office. Journal of Sales Management, 3(2), 3.
Ines Kuster, & Pedro Canales. (2008). Some determinants of salesforce effectiveness. Team Performance Management, 14(7/8), 296-326.
McNeilly, Kevin M, & Lawson, Marian B. (1999). Navigating through rough waters: The importance of trust in managing sales representatives in times of change. Industrial Marketing Management, 28(1), 37-49.
