The Importance of Management Style and its Effect on Sales
The four most common styles of management are authoritarian, laissez-faire, democratic, and authoritative. These styles all impact how your team will act, sell and perform. The style you choose determines the culture of your organization. It strongly influences the revenue you’re able to generate, as well as the overall stability of your team.
When it comes to sales, managers and their sales teams can sometimes feel like they’re on opposing sides. Leadership needs to manage, and the sales team needs to sell. There’s some truth to this dichotomy, but you both have the same goal: to sell and bring in revenue.
A management style that fosters positive performance is an important factor in determining the quality of a sales team. As a sales manager, it’s critical you understand the best ways to motivate and effectively manage your team. This article provides an overview of the most common management styles, how they work, and how they affect your sales team.
Sales Management Styles Defined
You may have heard these terms before, but knowing their definitions could help you use them more effectively in your own business. There are four main styles of management. Each has strengths and weaknesses and can be used effectively in different circumstances.
Authoritarian Management Style
Authoritarian management style describes a leadership approach where managers expect and demand unquestioning obedience from their team. By its nature, it creates a power disparity between the manager and the employee, and sometimes it causes a significant imbalance of power.
It may involve controlling what people do, when and how they do it, and what tools they use to perform their job. Often, this sales leadership style is associated with micromanaging and is not a favorite management style for most employees. Additionally, there is a tendency with this leadership style to control people through fear and intimidation.
For this reason, authoritarian management is usually a counterproductive leadership style.
Often, it isn’t conducive to innovation. It leads to high turnover rates, which in a sales department can be a critical mistake with an outsized impact.
Working in an environment with an authoritarian leadership style also reduces employee morale. Frequently employees dealing with a manager like this report feeling overworked, unfulfilled, and underappreciated. This management style creates an unhealthy and unproductive work environment and should be avoided in most cases.
Laissez-faire Management Style
This sales management method is all about not managing at all! Basically, with this leadership style, you take a “hands-off” approach and instead delegate tasks to your sales team. You trust they’ll do their job independently and with great results.
With the right team in place, this can be a semi-effective sales leadership style, but it can also result in poor sales performance and employee turnover…most people actually don’t want to work in a completely autonomous environment and would like at least a bit of guidance and support.
For salespeople on a straight commission, this may be the sales leadership approach you’re forced into by default. But as a sales manager you should still offer support, encouragement, and training where necessary to ensure your team stays happy, makes their numbers, and you all continue to thrive.
Authoritative Management Style
Authoritative management style focuses on helping others get better results through a firm but supportive relationship. With this leadership style, the sales team knows they’ll receive the encouragement, training, and guidance they need to do their best work…and they also know their sales manager has reasonable expectations that must be met.
Authoritative leaders are often great at motivating people. They recognize the value of creating a framework that defines what success means, and help their team achieve it.
Often, they’re able to set a positive tone for their teams and create an environment where expectations are clearly laid out. They are involved in a way and at a level that allows their employees to have some flexibility within the confines of the predetermined success framework.
Democratic Management Style
Empowerment is the key characteristic of the democratic management style. This leadership style, like the Laissez-faire style, involves delegating responsibility. However, in a democratic management style, it’s done in such a way that the sales team knows what is expected, and they feel like they can succeed within the expected frameworks because they’ve been mutually defined and worked out beforehand.
With this sales management style, sales teams expect to work without constant guidance or supervision from their manager. Leadership understands mistakes will happen, and are okay with collaboratively solving those problems as they arise.
In fact, employees are empowered to make mistakes in the name of innovation! They’re allowed to take risks, experiment with new ideas and processes, and learn from their mistakes (with guidance and support from management).
Sales staff are also empowered to learn under the democratic leadership style…how will they innovate if they aren’t discovering new concepts and creating new ideas? Sales leaders who use this management style will need to provide the resources, tools, and time for their teams to level up their skill sets.
How Management Styles Affect the Sales Team
Several of the management styles we’ve covered can have significant negative effects on a sales team. The sales leadership sets the tone for the department. Depending on which management style they typically use, that can have either a positive or negative impact.
To create a culture of collaboration within the sales team, a leader must be at least semi-democratic. For the best group cohesiveness, leaders need to share authority with their teams when it comes to solving problems. Collaboration is often key to getting buy-in and creating a strong sales team.
A key factor in effectively managing a sales team is to understand the personality traits of those on your team…this is one of the reasons we recommend our clients use a personality test, like DISC, in addition to the sales assessment tool we use early in the hiring process. Knowing what motivates your employees and what they need to be successful will help you offer the types of encouragement and support they find most helpful, even if it isn’t your natural leadership style.
This brings us to one of the biggest issues we often see when assessing a sales team and sales leadership fit: extrinsic vs. intrinsic motivation…
Extrinsic vs. Intrinsic Motivation & Rewards
Extrinsic motivation comes to us externally. They’re things we receive outside of ourselves. It’s usually attached to money and the things you can do with money. They could include a sales bonus, commission, spiff, etc.
Intrinsic motivation, on the other hand, comes from the inside. Examples include a thank you, general or specific praise, respect, status, or a promotion.
It’s important to know what motivates your unique team so that as their sales leader, you’re equipped to best support and reward them.
What management style motivates you?
That may be your default setting, and it’s worth noting it may not help your team be effective.
You need to look at your employees as individuals. Treat them the way they need to be treated in order to succeed.
Many leaders think they should use one type of management style to motivate their employees. But in reality, they’ll need to pick and choose different styles for different employees, on different days!
Yes, you’ll have your preferred sales leadership style, but if it isn’t working for your employees, is it really working for you?
What management style is most effective?
That’ll depend on your team, your goals, and your natural sales management style.
The best leaders can effectively motivate and encourage everyone on their team.
While willing to help with areas of concern, effective managers are more focussed on making suggestions and helping to motivate their team to get the job done. They inspire their team to work towards achieving their mutual goals together.
There’s no one right way to lead a team. You need to rely on a mixture of skills, experience, personality, and awareness of the unique members of your team. The best management style is the one that helps you effectively manage your unique sales team…be willing to know the different styles, your team’s motivators, and adapt as necessary.
How Improve Growth can help you establish a sales leadership and management process that works.
We recently met with a new client who was unhappy with their current salesperson’s attitude and performance. We did what we always do in these situations…we met with the salesperson, ran our sales-assessment tool, then had a one-to-one conversation.
After our meeting, I was confused…this guy was doing all the right things! He routinely got himself and my client’s business in front of big companies. He was able to get appointments, have conversations, and take them through the process of hiring my client.
It didn’t always work out, but he was out there making moves and making sales. So, where was the disconnect? Management clearly was not happy with him – so much so that they hired us (probably assuming we’d tell them to fire him).
We discovered the real problem: Leadership wasn’t managing him appropriately.
They were unimpressed with his close rate (which, if you’re going after whale clients, may be a bit lower than average). Instead of appreciating his efforts at growing their business, they were simply disappointed he wasn’t doing more of what they wanted – closing more frequent, smaller deals – and regularly shared that disappointment with him.
Leadership never acknowledged what the salesperson was doing well.
Our assessment tool revealed this salesperson has a high need to be rewarded for his successes. He was willing to do the work and put in the effort…but never getting acknowledged for what he was doing well combined with his manager’s leadership style of instilling fear that he wasn’t doing enough was the exact opposite of the motivator he needed to do his best work.
Basically, they were giving him the stick, not the carrot.
We helped our client change their perspective. By showing them the leadership style this Sales Superstar needed to succeed, they were able to switch tactics and management style to meet his needs.
Now not only is their salesperson doing well, but revenue is up. Our client avoided the need to find and onboard a new sales team member, and this “big client” minded salesperson is now realistically growing their business in ways everyone is pleased with.
In closing…
People want their leaders to support and encourage them. They want guidance and boundaries to work within. Clear, reasonable, well-communicated expectations are a must!
A good sales leader knows how to motivate the unique members of their team. This includes understanding their team member’s unique motivation styles and creating the necessary conditions for them to succeed. The most successful sales managers lead by example and encourage everyone on their team to reach the team’s clearly defined goals.
And the best type of sales leadership is the one that works for your unique team!
To discover how our approach to sales hiring and leadership selection can help your team thrive, contact us today!