Sales Jail: The Golden Handcuff Syndrome

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Posted: August 13, 2009
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They are top producers and rainmakers. They are also carriers of Golden Handcuff Syndrome. Golden Handcuff Syndrome (GHS) occurs when a top sales producer handcuffs the sales manager and holds the company hostage. Hostage situations vary. The Golden Handcuff salesperson may not honor company mission statements, follow process, complete reports or participate in meetings. All of that is for other members of the sales team, not them. They might also dump work on other departments.

So why do companies keep GHS salespeople? There are many reasons. Here are a couple:

It's lonely at the top.

The vice president of sales and/or CEO is the driving force behind the vision of a sales organization. They are charged with looking to the future and making the changes needed to keep the company competitive, viable and healthy. Sometimes the problem is that no one else sees or shares the vision. There is pushback, the leader is alone in their conviction and self-doubt sets in. This is when sales leaders are tested to hold firm to their vision and convictions.

I can think of two examples of great leaders holding firm to their convictions.

The first is Jack Welch. In his book, "Straight From The Gut," he tells the story of changing the GE culture to a boundaryless environment, in which the team is placed ahead of individual ego, and leaders are encouraged to share the credit for ideas with their teams rather than take full credit themselves.

Welch was convinced this type of culture was necessary for success in a global economy. He started the initiative in 1990. Expectations were set, education provided and compensation plans rewarded managers who grew boundaryless environments. Welch let go of five corporate officers in 1992. One was removed for numbers. The other four were asked to go because they didn't practice GE values of a boundaryless environment.

I'm sure it was tempting for Welch to keep these top executives because they were hitting their numbers. Instead, he honored his convictions, and the rest is history. GE revenues went from $70 billion in 1995 to $130 billion in 2000.

The second example is football coach Lou Holtz. While at Notre Dame, he benched two top players before a crucial game with the University of Southern California. The reason: They were consistently late for practice, which disrupted the rest of the team. After numerous warnings, reprimands and lectures, Holtz honored his conviction of not making short-term decisions that can jeopardize long-term gains. Holtz knew he was building a team and a culture.

Again, the rest is history. Holtz led the Fighting Irish to a national championship.

Measuring top line, not bottom line.

Here is an example from the world of manufacturing and distribution. The Golden Handcuff (GH) producer dumps work and responsibility onto other departments in the company. Orders are missing information. (They manage so much volume they can't possibly pay attention to detail.) Customer service is charged with following up with the client to get missing information, complete the order, touch base with the GH rep to inform him of changes and work overtime to catch up on work not completed because they were playing executive assistant to the GH rep.

The problem with this scenario is two-fold.

The first is profit. While the GH rep may be hitting top-line dollars, the dumping of their work and responsibility affects the bottom line. Customer orders are delayed because of missing information. The warehouse is expediting the order overnight because of delays caused by the front end. A discount is given to the customer to keep them happy after the delay. Is the GH rep helping or hurting the bottom line?

The second problem is a morale issue. Each salesperson is paid to perform a role, which carries accountabilities and responsibilities. How does a sales manager justify the customer service representative being the executive assistant for one rep (initials: GH) and not other top-producing reps? How does the sales manager justify paying the same compensation plan when the GH rep is not fulfilling his responsibilities while other top producers are doing so?

Reward and consequence programs are one of the most effective ways to cure Golden Handcuff Syndrome. Such programs are easy to discuss but often hard to implement. Many sales organizations have a reward program, but few have put in a consequence one.

Here's a simple formula for setting up such a program. (Remember, your personal conviction may be the biggest obstacle to implementing this program.)

Define high performance for your sales team (type of customer, margin, activity, values, process). Reward high performance through compensation, recognition, incentives and perks. Deter poor performance through decreased compensation, recognition, incentives and perks. Call a peer for encouragement when your conviction starts wavering because the GH rep is threatening to leave and take away business.

Sales team realizes you are serious. Top producers not suffering from Golden Handcuff Syndrome enjoy being rewarded for their efforts, thank you and start producing more. Enjoy your new sales culture -- one that ensures a profitable future for your company. Pat yourself on the back and congratulate yourself for breaking out of sales jail.

PS. Stay tuned for SalesLeadership's new EI Sales Management Program launching in January 2010!