Episode #80: Why 84% of Companies Have the Wrong Person in Sales | Josh Long
In this episode of U.S. Manufacturing Today (powered by Veryable), host Matt Horine speaks with Josh Long, founder of Bottleneck Breakthrough, about why sales is often the growth constraint in fulfillment-driven manufacturers. Long argues roughly 84% of companies place the wrong person in sales seats and that most failed sales hires stem from behavioral fit rather than a lack of sales skills, limiting the impact of sales training. He contrasts sales-driven versus fulfillment-driven firms, explains why operations-minded owners struggle to manage sales personalities, and outlines a sales hierarchy of customer support plus (order takers), farmers, hunters, and closers, noting many teams were built for the easier 2013–2022 bull market and have struggled since late 2022. He shares a radiator manufacturer case where replacing a hesitant rep dramatically increased revenue, discusses pairing hunters with support staff and incentive-heavy comp plans, and describes using Innermetrix-based assessments and a “sales team MRI” to evaluate fit, seat value, and revenue drag.
Links
- Josh Long on LinkedIn
- Bottleneck Breakthrough
- Matt Horine on LinkedIn
- Veryable Is Revitalizing U.S. Manufacturing
- Sign Up on the Veryable Platform
Timestamps
- 00:00 Welcome and Sponsor Intro
- 00:41 Sales Hiring Problem
- 01:53 Josh Long Origin Story
- 03:34 Sales vs Fulfillment Companies
- 05:41 Ops vs Sales Tension
- 08:48 Sales Rep Hierarchy
- 12:42 Why Miscasts Persist
- 14:49 Entropy Radiator Case Study
- 17:39 Post 2022 Slowdown Shift
- 20:26 Hunters Support and Comp
- 24:27 Interviewing and Assessments
- 27:59 Sales Team MRI Insights
- 29:54 Scaling to Bigger Teams
- 30:57 30 Day Evaluation Plan
- 33:24 Resources and Wrap Up
- 34:04 Final Outro and Subscribe
Episode Transcript
Matt Horine: [00:00:00] Welcome back to U.S. Manufacturing Today, the podcast powered by Veryable, where we talk with the leaders, innovators, and change makers shaping the future of American industry.
Welcome to US Manufacturing Today, the podcast powered by Veryable, where we talk with the leaders, innovators, and change makers shaping the future of American industry, along with providing regular updates on the state of manufacturing, the changing policy landscape, and more. Here's a number that should bother anyone who signs a paycheck for a salesperson.
By my guest's count today, roughly 84% of companies have put the wrong person in a sales seat, and only about 11% of those failures come down to skill. The other 89% are behavioral, which no interview catches and no amount of training fixes. Now, think about how we [00:01:00] run the rest of the plant. We will spend weeks making sure the right person is on the right machine, qualified, trained, and set up to win, and then a lot of us put a friendly order taker in a sales seat, wonder why revenue flatlines, and buy another round of sales training.
My guest today is Josh Long, founder of Bottleneck Breakthrough and author of the book by the same name, and the creator of what he calls Sales Roster Engineering. Over 18 years, he's assessed more than 10,000 sales candidates, and he works with owners of $2 to $20 million companies to find the real constraint on growth.
More often than not, it's sitting in a sales seat. And with a lot of you building 2027 budgets and comp plans right now, the timing on this one is pretty good. So Josh, welcome to US Manufacturing Today.
Josh: Thanks, Matt. Happy to be here
Matt: We are very excited to have you here because this is a recurring conversation that we have with manufacturing organizations of all sizes.
I put a number on it there earlier, but certainly something that affects every organization in a lot of different ways. But before we get into, the sales seats of this, I want listeners to understand how you think, because you told me you were thinking in [00:02:00] bottlenecks before you ever had really a name for it.
So if you could take us back, how did you end up spending your career finding the constraint in the business, and how did that land you on a s- on sales teams specifically?
Josh: Yeah. So right out of grad school, I was like half of California and started a mortgage brokerage before the recession, and I just noticed there was a lot of piles on my desk. And as we were trying to serve clients, getting loans underwritten, a- as any rookie started out, it took us like 30 days to get a loan approved.
And then we just kept working on how do we make this better? How do we keep improving the workflow? And we finally got it down to three days of, an approval, and then everything ran so much more smoothly. So it was like clearly getting loans approved was the first main bottleneck 'cause I had clients coming out of my ears.
And from there I was like, "Oh there, there's something to fix, finding and fixing bottlenecks." And I hadn't come across the theory of constraints yet. I knew I didn't invent anything. It was just the way my brain worked. And then I ended up teaching university at University of Fresno State teaching business plan writing and feasibility analysis, and one of my students handed me "The [00:03:00] Goal" as a thank you gift at the end of the semester.
And I read it, and I'm like, "Yep, I, I know I didn't invent this, but this is how my brain thinks." And so went on from there and worked for some of the famous marketing guys in the small business world, Dan Kennedy and Jay Abraham, and ended up with a guy named Chet Holmes, who was a marketer, but focused a lot on sales.
And so we really dug into sales processes, and I was his marketing director for a couple years and then went out on my own ever since.
Matt: Yeah, it's a great thing to go out on your own and something that there's certainly a big enough challenge to, to address all day every day. The academic background there is interesting as well on the constraints theory. So the... let's jump straight into the commercial side of the business because we have a lot of manufacturers who listen to this show.
Operations is our kind of bread and butter of talking about, but the commercial side of it is so important. You split companies into two camps, sales driven and fulfillment driven. A lot of manufacturers, fulfillment driven, by the way. And most of those manufacturers are in that camp.
Why do you like working with them, and where do they get stuck?
Josh: Yeah. So the distinction between sales driven and fulfillment [00:04:00] driven, there, there's sales driven organizations out there that put a lot of pressure on sales and marketing. They go out, they make a lot of promises, they get a lot of deals in the door, and then they try to figure out how to fulfill on them.
The fulfillment sided side of the camp, they perfect what they deliver to clients. They have all of their processes down. All of their clients love them. Problem is they're mostly unknown. And so that's the downside of being fulfillment driven because you're not thinking about how do I get in front of more prospects all the time.
You're not always pushing on that front. And so I like working with the fulfillment sided of the crowd because they deliver amazing outcomes. Their customers love them. They're hidden secret gems, right? And so when we add sales and better marketing to those organizations, growth happens sustainably, happens faster, and there's not as much thrash because when you're working with a sales driven organization that doesn't have fulfillment figured out, you're having to fix a lot of errors, apologize for a lot of mistakes, deal with all sorts of chargebacks, refunds, all those headaches.
And I just find that side of the world doesn't align with my philosophy [00:05:00] around business of the goal of a business is to create a customer, as Peter Drucker says, and our job is to fulfill those customers and make sure that they get exactly what they need so we get repeat business and great testimonials and great case studies and improve everything that we touch because of the, the quality that we deliver
Matt: Yeah, that's, as, as you were talking about that and when we first met, my mind was racing through, different organizations I've been a part of, and a lot of it is that type A sales-driven personality that is getting, to a deal close versus, a distribution or a fulfillment business that a lot of times you gotta egg things on maybe to get more scope or to get, more product throughput.
But they really are the hidden gems because they are creating those happy customers. So I have a few things that we could have a whole nother podcast on about some of the observations in that camp. But you, you-- I remember you called when we first talked, you called salespeople kind of finicky thoroughbreds compared to the head down, punch the clock crowd that may be more operations focused, and I mean that in the most, complimentary way of having an, very set agenda of a goal that has to be accomplished.
Why is managing them [00:06:00] uncomfortable for operations-minded owners?
Josh: Yeah, so it's, it really is a different personality type. And so when you think about operations I use an assessment. We'll talk a little bit, in a little bit about it, but one of the components measures how people think. And so many assessments, there's four quadrants, and the people that are in operations like routine, they like structure, they like detail, they follow through, right?
They're... They check every box. They make sure everything's perfect. That's the exact opposite of the behavior of salespeople. Salespeople are impulsive. They're decisive. They are fine making decisions without all the details, right? They'll adapt. They change. They face rejection all day, every day, and are fine with it.
And they're extroverted usually. They like people. They get energy from being around people, not being in their head and doing processes. And so when you see that salespeople, the best salespeople are naturally wired exactly opposite the best operators, you're gonna run into problems. And so the operators that are in charge of fulfillment companies, fulfillment-driven companies, and so many of your [00:07:00] listeners, they don't understand how different salespeople are.
They just get irritated by them, and they think they're full of it or they're lying or they're... 'Cause they don't, they're not as detailed, and so they come at each other at odds ofttimes. And I do find that sales and operations are always at odds because sales should be pushing, and should be getting more clients, and should be getting more demand.
And operations, people in that department like structure, they like predictability, they like routine, and when they've got a big like a snake eating an elephant, they've got a big order coming through, right? And it disrupts their process. They get really stressed out by it, and so it creates this tension.
And so what I find is the best salespeople often get accused of being a prima donna. And a pri- all a prima donna is that they don't wanna follow the rules. They want something custom, some, some exception for themselves. And so my goal is, can we figure out what the culture of the company is and what exceptions and behaviors of a prima donna c- can you tolerate?
Because there are definitely some toxic prima donnas, but there's also prima donnas who deliver great results, and y- if you could just tolerate some of their [00:08:00] quirks. Like maybe they don't wanna roll into the office at 8:00 AM every day. Maybe they don't wanna submit a PO every time they send out a quote.
Whatever the quirkiness is, can you tolerate it? Can you support them because they're gonna bring so much more business for you?
Matt: So I, again, we're, as we talk through it, there's like flashbacks throughout the career of that type of persona and that natural tension between operations and commercial. I think the commercial side, there's this image that they maybe overpromise, or write
Josh: much percent?
Matt: write a check they can't cash kind of thing.
And then, the operations guys are the ones who deliver it, and sometimes the gratitude may not be there. So you can go through a thousand examples like that. But I think it's important for our listeners to understand and give them the vocabulary behind it, because a lot of owners listening have never broken their sales team down by what each person is actually wired to do.
And, you mentioned that framework. If you could walk us through the four kinds of people you find in sales seats, and I believe it's closers, hunters, farmers, and what you call support plus.
Josh: Yeah. So I call it my sales rep hierarchy. And if we think of a pyramid from the bottom up, right? [00:09:00] The bottom is what I call customer support plus. These are people who say that they're sales reps, say that they're in sales, and I say they fill about 60% of sales seats out there in any organization, any industry.
But I call them customer support plus because like customer support, they like handling tickets, they're friendly, they really like people, they like helping. But the plus means they can take an order, and that's truly all they are is order takers. They don't persuade, they don't follow up, they don't get into the implications or the pain of the prospect.
They don't connect the dots of how your products can help them or what the next r- size of a engagement could look like. And so they really just are friendly order takers. And a- again, I see that fills about 60% of seats out there. And they are happy making 65 to 80,000 a year, and for most business owners, they're fine keeping those kind of people on board because they're easy to manage, they're friendly.
They're more like the operations-minded staff, but they're willing to interact with people and be friendly and take those orders. Next up on the hierarchy, we've got farmers. And so from [00:10:00] 2013 to 2022, we were in a pretty big bull market, and there was a lot of business coming in for a lot of companies.
And a lot of owners I deal with found that they had so much business they needed to hand off account management, and so they created what I call farmers. They get these reps in and they unfortunately overpaid a lot of them for the value that they brought to the organization. But when a bull market's running I say profit covers a multitude of sins.
And so they-- there's a lot of companies with a lot of farmers that are maintaining books of business, maintaining routes, but they're not expanding them. And as at the end of 2022, whenever we hit whatever this recession is that nobody will admit to when FTX went under, those farmers are less and less valuable, and they're not maintaining their books of business.
And so next up in the hierarchy are what I call hunters, and these are exactly what y- what they are defined as. They go out and they find new business. They get new logos, they're prospecting, they're opening doors. And so in most of the engagements I work with, we're just replacing farmers with hunters because that's what businesses need right now, is somebody that can go and develop new business.
And it's a lot harder. [00:11:00] I-- for those of you listening, you probably figured out that your sales and marketing, your commercial side isn't as running as smooth as it used to, and getting business is harder than it used to, and that's the nature of whatever recession we're in. And so it's not that you have to do more of the same, it's you have to get better at every stage.
And so then at the top of the pyramid are what I call closers, and these are people that transfer confidence, that have the ability to convert those prospects on the fence. They understand the prospect's situation really well. And it's not just to lie and mislead and try to get any deal done. It's they close with s- I guess, a confidence that nobody else closes with.
And these guys work best in environments where there's good lead flow, where marketing's working well. I've got a handful of manufacturing clients that have this where they sell more direct to consumer, and those closers do wonders. And what they can do is they can come in and maximize your return on ad spend, maximize all of your marketing budget.
One of my clients we replaced a guy that was generating a half a million a year in revenue with a guy that came into the same seat and closed a million and a half a year in [00:12:00] rev. So it's a no-brainer when you have the system behind it run- So what I find is looking at sales teams, we just gotta understand who's on the team, what's their capacity for the role they're in, what does the role need now as the market's changing, as the business is growing, and then is, are they capable of transitioning up or do they need to transition out?
Matt: Yeah, there's a lot there to unpack kind of the up or out mentality, which people are shy about. It happens a lot in more, I don't know if cutthroat is the right word, but more aggressive environments and services type things where, you look at consulting or law firms or things like that where there's this up and out mentality.
But progression's pretty critical. I think it also highlights something first of all that, that support role, kinda makes the world go round, to be honest. But why does a person survive in a sales seat for years without anybody noticing that they're really miscast? Are they just filling a need?
Are they, just pleasant to be around? What's the, the number one common denominator there?
Josh: Yeah, I think the, the biggest factor is that the management doesn't understand what is possible in this role. It's been [00:13:00] this way forever, and they've not ever revisited what, what needs to change. And so there's a lot of really good employees out there that are friendly, show up on time, everybody likes being around, they're loyal.
There's a lot of great traits about wonderful employees that s- but they may not s- move the needle. And so as a business grows, being in business is like being a frog in a pot, right? The market changes, you don't quite realize it. It takes, maybe take quarters or years for, for the markets to turn.
The business grows to different revenue plateaus, right? So at each revenue plateau, and for the businesses I deal with, it's usually one million, three million, 10 million, 30 million, things like that, 100 million. And so when you hit these revenue plateaus, the business needs a drastically different form of talent at each plateau.
And so you may have had somebody that was on your team at 10 million, but now you're at 30 million, and they're just not able to cut it. They're not able to have the more sophisticated conversations. They're not able to move up the food chain. They're not able to handle larger proposals. And so it becomes really hard as a business owner to face that reality of, [00:14:00] gosh, this person's been with me for a number of years.
I love them. They're talented, or they're loyal, but they're just not capable of moving the needle at the level that we're at. And so then that becomes a really hard discussion of are we really gonna fire people we like because we think we can find somebody better? And then that becomes the, the Achilles heel of all of this is most business owners don't even have any idea of how to find better talent, so they keep who they've got 'cause they, they like them and know them, but they don't know what they're leaving on the table.
Matt: Yeah, that's a, it's a tough dynamic because, it puts the, the business owner at maybe the friendly small business owner where everybody's in the safe space to "Hey, we're a high growth organization. We're moving towards something different." Which is the opposite of use that frogs in the pot kind of analogy.
Most sales or commercial conversations I have is more like the crab bucket. Are they gonna, pull each other down? And it's a different thing to think about as, as you have that slow boil. But you told me a story on our, in our introduction that I think captures this whole thing, very much within your framework.
A small manufacturer, a founder who came out of engineering and a veteran salesman [00:15:00] who could flat out... he could sell and a second rep who looked fine on paper. Tell that story. What did you see that the owner didn't in that situation?
Josh: Yeah. So this owner Entropy Radiator, they make hot rod radiators out of Chicago. Tony, the founder, was an engineer at Modine and started making his own radiators for his high horsepower custom hot rods. And he found a guy that had been a top, a Chevy Cadillac sales rep for years in the state of Florida, became sales manager, and he really was just looking for a fun job pre-retirement.
And he did a fantastic job. He closed about a million and a quarter a year year over year. And Tony came to me and said, "Hey, I'm not sure what to do." I said is he at capacity? Does he, is he not getting to leads or are there not enough leads?" He says, "Oh, no he's at capacity. He's not getting to all the leads."
I said, "Then just add another rep." And so Tony added a guy and after about two years, Tony came back to me and said, "Hey guy number two is doing about a half a million. I'm not sure if he can be improved. Can you assess him?" And so I did. I went in and had some calls, looked at his call volume, look- listened to some of his [00:16:00] calls, listened to how he interacted with prospects.
And he was just a hesitant guy. He was afraid of returns. He was afraid 'cause in custom radiators, you gotta get all the measurements perfect. It takes four to six weeks for them to get something out. Then if it's wrong by a half an inch, it's getting returned and it's a big pain. And so this guy was just very hesitant.
He was always afraid of something going wrong, and so he would take way too long to get close. And so after a while, after about a month of helping him and not seeing any change in result, I said, "Yeah, we just need to replace him." And so we recruited, found somebody through my process who checked all the boxes, came in, and in his first year, he did a million and a half in sales.
And so that's-- and the new guy came in and he instantly started asking like why aren't we doing this? Why aren't we trying that? Why aren't we upselling?" And so they have a really high-end overflow container, $400 aluminum overflow container. And he's like why can't we sell those with every radiator?"
And Tony was like, "We can." And so now they do, and that just increased the average order volume significantly, right? And so that's the difference of having a better [00:17:00] performer in the same seat, is he came in and added a million dollars to the bottom line instantly. Or not to the bottom line, top line instantly, and was able to add more value across the board.
He got more strategic partners, he got endorsements. He's just a hungry guy, and that, that was the difference in talent in that role.
Matt: Yeah, that's sometimes you don't know until you make the move
Josh: And it's so scary. It's
Matt: Yeah. Yeah it's really hard and, if you're a, a s- an owner listening right now you may be thinking about something in your organization. It's a, there's a big personal dynamic to it that has to shift into a little bit more of a business mindset.
So definitely something to consider as, as part of, if you're evaluating your organization. But I wanna stay on something you said that I don't hear anybody really say out loud. You described the stretch from about 2013 to 2022 as the bull market where businesses more or less walked in the door and a lot of owners, you know, built their sales teams for that world.
And also I caught earlier, you benchmarked, the start of the recession around FTX. That's a whole nother podcast again. [00:18:00] Interesting timeframe. I haven't any- heard anybody say it that way. But you said something I, I agree with, and we've been calling out on this show for a while, that we've been in a slowdown since the end of 2022 that nobody wants to call it by its name 'cause everybody's terrified of it.
And the headlines told one story, and a lot of the people running plants and sales teams were living in a different world. So k- unpack that for us. What happened to the sales teams that were built for easy years a- and then they just ended, and it's been very quiet since?
Josh: Yeah. Yeah. And so I'll give a little bit of context on what I saw. So I had a client that was selling to the Fortune 500 at the end of 2022, and I was going in to help their sales rep recover these accounts that were just not responsive. And I got all of them to respond. I got all of them to engage with us, and one of them was Amazon Web Services, and they were-- They had 1,200 people in a sales department.
They wanted the training, and they came back at the end of October of 2022 and said, "Hey, we gotta stop. We got a company-wide budget freeze." And I said, "Oh my gosh, if Amazon is freezing budgets, like something's really going on." And then Facebook was another prospect. Silicon Valley Bank was another prospect.
We were talking to all these great [00:19:00] companies. And so things ground to a screeching halt in that space by the end of 2022. And in January of '23, I told the client, I said, "You guys need to go for some more stable large companies like 3M, Corning." I ended up getting them connected with Nestle later that year.
But I said, "These tech-focused high growth companies, something's changing and they're unstable." And the next day, Silicon Valley Bank went under. And they came to me, they said, "How did you know?" I said, "There was no way I could-- Silicon Valley Bank was-" But I could tell there was a big shift. And so that gave me the tip of hey, let's pay attention to what's going on as the market processes this, right?
Microsoft was laying off thousands. All these big tech companies did all these layoffs, and it took all of '23 and '24 to really ripple through the economy. And so that's what I saw, and the situation of the sales teams of how they were built before that was they were built on advertising was cheaper and easier.
You get a lot more leads. You could get accounts quicker and easier. There was just an an eagerness to buy when capital was cheap. And so you've got a lot of [00:20:00] entitled I don't-- I wouldn't call them lazy, but comfortable sales reps that then when that changes, trying to change behavior is really hard.
And it's almost impossible to get them to take a different comp plan to change their activities, to turn them from farmers into hunters. And so I just find it's a lot easier to go find the right talent that's hungry and eager to step into a new environment than it is to try to get old dogs to do new tricks, so to speak.
Matt: Yeah, shakeup's always good. The, the bloated middle of kind of what we, what you talked about here your fix for it was cutting and pairing hunters with that support. How does that team work, and how should an owner think about, paying a hunter more specifically? Because it sounds like, you go get these outsized results just by taking a new, fresh look at things.
Your story about that, that team member that came in and went from half million to 1.5, how do you pair that with maybe an existing support structure or one that they've rebuilt as well?
Josh: Yeah. So the, what I find is hunters, typically the most valuable hunters, the guys that can go out, get the [00:21:00] new logos, close the deals, ca- sign the contracts, they're not typically available for most sm- small to mid-size companies. Those guys are making a million bucks a year working for large capital e-equipment ki- type companies, CapEx type companies.
And so what I find is the hunters that I look for for SMBs is they're the ones that can do 85% of it. They're able to go out, get the deals, get them to the table, and then they need the technical expertise or the sophistication to come alongside them to get those deals closed. And so in those cases, I find that pairing them with a customer support plus person and you could get one customer support plus person could hi- handle about three hunters to provide that support, that logistical detail that they may not have, but then be able to bring in those deals that nobody else is getting, nobody else is able to talk to because these hunters aren't on the team.
And so in the comp plan, you may say, "Oh our farmers, our account managers, they may have had a, I don't know, $75,000 base, and then they get another 25 to $50,000 for their [00:22:00] volume that they sell. But that's been dwindling because they're not maintaining their base, their book, and so now their comp plan is costing us more because we assumed that they would keep 90, 95% of their annual sales, but it's dropped off a cliff, and so now we're losing money keeping these people on board."
And so then you turn into, "Okay what do I need to pay to incentivize a hunter? And how do we do it so that hunter doesn't turn it into an annuity," right? 'Cause that's always a problem with getting business, right? We look at the insurance sales world, the life insurance and the financial planning guys, their whole goal is just to keep building a book of business so that it keeps paying over and over, and then they don't have to work anymore.
We don't want that in our sales, especially in hunters, because we want them to be eager to keep going out and getting business. Now, the most extreme c- comp plan I ever saw was with Paychex back in the day. My rep, she was the number eight in the nation, and she only got paid a c- a small bonus for every new account.
That was it. So she was, she woke up unemployed every day kind of thing, right? 'Cause she had to go hunt and close just to [00:23:00] keep getting the same pay. And so that's extreme. I don't think that's useful. But I think something where you say "We'll pay you," for easy conversation, "We'll pay you 6% of the first year's revenue that we get from this client, and then we'll pay you 2% for the next two years so that re- we reward you for bringing on clients that keep buying from us."
But then it phases out, and that way they keep going out and hunting. And so it may be something where you've got them on a 75, $80,000 base. And then I like for hunters and I like for closers having their base be anywhere from a half to a third of their total comp. And so you wanna incentivize them, and those people that like those roles love the incentive.
They love the pressure. They love being able to create their own reality. And so if you're paying them 75 base, you maybe end up paying them 150 to 225. But the math All works for you and it's a no-brainer for that comp plan once they're performing. And so then maybe that customer support plus person, they're at 55.60 and they're handling three of those, and now you change the comp plan of you've been paying maybe [00:24:00] 500 a year to three farmers that are not doing what you need.
Now you bring in replace them with two or three hunters. So the base is the same, but then you provide a little support person, and then the upside covers, covers all of it. So I know that's some quick numbers, but I'm happy to go through i- in detail with anybody that's listening if it's useful.
Matt: No, it's, yeah, we'll definitely point, because the game theory on that a little bit is very interesting in terms of structure. A lot of times it can be down to the very personal level. You can get a read on it. But that's the really important part of this conversation and one that I think, if you are an owner like perking up to, this, this next scenario because you've identified the problem you're looking at your structure, and here's a trap I think a lot of people fall into.
They know the team isn't right. They'd rather deal with the devil they know than gamble on a hire they can't really evaluate. And interviewing a great salesperson is really hard, or any type of commercial prile- profile is really hard because selling you is literally the skill.
Josh: Their job.
Matt: it's
Josh: not good at it, you're never gonna hire them anyway.
Matt: It's the first thing you're thinking, but then at some point you've gotta be like, "Am [00:25:00] I getting sold here on, on a bill of goods?" Why is interviewing the hunter or closer so dangerous for an owner who doesn't do it often?
Josh: Yeah. It-- for that exact reason that they get buffaloed they get charmed they get, and so it causes a lot of the fulfillment-focused owners to be hesitant because they know they're not wired like them, so how can they understand them? And so it becomes a very defensive posture, I find, a lot of times for owners hiring in, on the commercial side.
And so the f- the thing we have to do is we have to get under the hood. We have to be able to see, how does this person think? What's their capacity? And so I use a tool called Intermetrics. It's three assessment components in one. It covers the DiSC which is a very common quadrant-based behavioral profile.
Says how people think, and that's what I was talking about earlier. The fulfillment guys are more systems-minded. They're, they have high S and C. They, they like stability and they like the cautious. I call it the C completer, but they follow through more, whereas sales reps are more on the D and I, the decisive and inter- interpersonal, interactive.
And so we figure out how they think, but then we go to the motivators [00:26:00] and what drives them. What gets them out of bed? What saps their energy? Where are they at on that? Because there's really clear data that says if they aren't competitive, if they don't wanna be rewarded for their effort, they're very unlikely to go close business.
And if they like, if they have high altruism, if they put others' needs before their own, they're gonna constantly listen to the prospect's excuses and inter- and objections and things like that. So that gives us some good clarity. And then the final piece is based on the Hartman Values Profile, and it says, "What's our capacity for doing good?"
And it measures our ability to interact with the world through empathy. How well do we read people? How much data do we gather from practical thinking, which is how quickly can we learn things? How book smart are we? How quickly can we pick things up? And then systems judgment, which says, how strategic can I be?
How much can I connect the dots? How pri- how well can I prioritize things, and how well can I connect with our prospects to understand what's valuable for them, get into a consultative sales approach? And then we look at the internal side of that, which is, what's their self-esteem? How much do they believe in themselves?
How much rejection can they [00:27:00] handle, or how worried are they that they're saying the wrong thing all the time, driving down the road with one foot on the brake if they've got low self-esteem? And then we get into role awareness, which is more for the long-term management. Do we know that... Does this person know what they're supposed to be doing in the role, and are they winning?
And then self-direction, which is, do they feel there's a future here, and do they feel optimistic about where their life is headed? And so by doing that, and I've done over 10,000 of those assessments, you start seeing those numbers and you start seeing patterns really clearly. Now, people may say but you may miss people who might be successful who don't have the numbers," and 100% right, there may be exceptions to the rule who can be successful sales reps but don't have the exact profiles that, that I see over and over that, that lead to winning.
But we just reduce the risk significantly by seeing what patterns are there. And I guarantee when we look at your current team and they take these assessments, we'll see clear patterns, and then we overlay their performance numbers, and I can tell you who whose performance and rank order them about 90% accuracy on the, the sales numbers before I ever see them
Matt: Yeah, that's pretty s- pretty solid. [00:28:00] I, y- you used something or the... I think you gave me the number. Your data said somewhere around 11% of sales, of failed sales hires fail on actual skill. So it's very neatly in those other columns and motivators. So when you do the sales team MRI, what does it actually show the owner that the gut feel?
Do you think that a lot of owners miss that gut feel that your MRI kinda dives into a little bit more?
Josh: And I think two things. I think it confirms their gut feel. It gives them the data to say, "Oh, yeah I had this right. I just didn't know that I needed to move forward." That's probably the most res- common response. And the 11% is like the s- the hard skills of sales, right? Do they handle objections?
How do they qualify? Things like that. And I, and that's why I find the, all the data around sales training says that sales training improves performance about 6%. And so you go from, say, a 10% close rate to 10.6% close rate, and it's okay, but how much time and effort and energy did we put into that?
Whereas you bring in a better performer, and they may go to 20, 30% close rate because they have more [00:29:00] talent. And so I, a- and there are certain cases where the sales process needs to be revised, and I've seen I've gone into companies and changed the sales process because the market's changed, the offer changes, however they engage with the prospects.
And salespeople can a- good salespeople can adapt to that. But I find that the the review with the owners and the management is more confirming what their hunches are and then giving them clarity around what to do next. Can this person benefit from some training, or do we need to replace them?
And it's a catch-22 because replacing people I've said it earlier in the call, is really hard to do if you're not confident at recruiting yourself
Matt: Yeah, really good point. It's I d- I stay away from this word of some type of confirmation bias or something like that, but having some data to back up a gut feel, 'cause most leaders at, certain phases of their careers, they've seen it all, and so they, they do have a good sense of this thing.
They just can't probably put structure around it to actually make, the compelling case that needs to be made. A lot of our listeners run bigger operations, multi- multi-site operations, [00:30:00] larger commercial organizations. How does this approach change as the team gets bigger?
Josh: Just you're digging into each territory, each department, and looking at the performance of each cell. I say a lot of times with smaller businesses that you gotta build a brick to build a city, right? You gotta get the system working. It's the exact reverse with bigger companies. Yes, they may have this huge operation, but at the front lines, there's a process going on with each salesperson, each commercial department, each manager, each territory.
And so it's just a matter of who's not performing and how do we understand why they're not performing. Because if you've got multiple locations, you've got multiple departments, you can s- it's even easier to manage because you can see the performance across departments, and you can understand this one's outperforming everybody else by three to one, or this one's dropping behind everybody else by 60%, what's going on?
And so you have a little bit more certainty because of the comparison. That's really the hardest part of small businesses is there's nothing to compare to.
Matt: Yeah, there's it's, that's the tough part, right? Is just, is getting started, which leads us into the [00:31:00] part of the episode that I call the free advice column. You've given a ton of great, useful information, so we don't, expect to take away too much more free advice from you on this. But for an owner who's listening and suspects something is off but isn't ready to make a move, how do they start evaluating their team honestly?
And if, in the next 30 days what's an action plan for the next 30 days for something like that? And you had napkin numbers that you had mentioned that shows how a sales team is really producing, so I wanted to point our listeners that direction.
Josh: Yeah. Yeah. So really, it's basic numbers. I call the first one the seat value. Like every person in sales is filling a seat, and what's that value of that seat? What's the opportunity for revenue in that seat? And so you've gotta figure out what's, what is this seat supposed to be producing?
And everybody usually calls that quota, but to me quota is like to keep your job. What, but what i- what is the upside potential of that seat? And I'm not saying one in a million shots but what would be-- what would that seat produce if you had a better... And then we look at revenue drag, which is the opportunity cost of what that seat isn't producing.[00:32:00]
And so you have to look at where they're at versus what they should be doing, and that's really your unrealized alpha I call it. 'Cause in, in, in return, in investments, we're always seeking alpha, right? We're always looking for outsized returns, outsized gain, and it's no different in commercial, right?
The more you can get a return on your investment, the greater growth, the greater capital velocity you have with everything that you do. And so you gotta just start with looking at what are they producing? What should they be producing? What's this costing us by them not producing it? And then you can start saying look, Johnny over here is getting us three to one return, whereas Tommy's only getting us two to one return.
What's Johnny doing different?" And that becomes that inspection. And so you may say but we're, we've got 85 sale- sales reps. We've got 85 distributor reps and stuff like that." Somebody has to do the work. Somebody has to inspect. You can't just wave a magic wand and look at it from a 30,000-foot elevation.
Matt: Yeah. Where the, the real world meets up with the, the kind of expected reality there. Lands at a familiar place for me. On this show, we've argued that labor shortage was never really about head count, it's about putting the [00:33:00] right capacity in the right place at the right time. So seems to be a universal truth, is the, is seeking that capacity and finding ways to grow through it.
This is, yeah, b- this has been a great conversation with a, a ton of insights because I think manufacturing companies have a lot of questions about how the commercial world should operate. They get comfortable, they know their market, they know, what they expect to make, but the idea for growth is something that we're always pushing for too, and that's a very commercial question.
If our listeners wanted to find out more about the book, your work your podcast, where could they go to find out more about all that?
Josh: Yeah, so my website bottleneckbreakthrough.com, and I've got a resource page for you guys. You can just go bottleneckbreakthrough.com/podcast and you can take an assessment, you can do a sales team MRI if you'd like, schedule a call with me, all of it free for listeners here. There's no pressure, no surprises, no gotchas.
It's just friendly conversation to see where I can help and how I might help you
Matt: Josh, this has been a great one. Questions that are top of mind for all manufacturers who are selling something, and we appreciate it. We'll be sure to link all of those notes in the show. [00:34:00] But thank you very much for joining us today.
Josh: You bet, Matt. It was a lot of fun.
Matt: To ahead of the curve and to help plan your strategy, please check out our website at veryableops.com and under the resources section titled Trump 2.0, where you can see the framework around upcoming policies from the administration and how they will impact you as a manufacturer. If you're on socials, give us a follow on LinkedIn, X, or Instagram. And if you are enjoying the podcast, please feel free to follow the show on Apple Podcasts, Spotify, or YouTube and leave us a rating, and don't forget to subscribe. Thank you again for joining us [00:42:00] and learning more about how you can make your way.