This is the 12th in a number of articles serializing The Sales Force — Working With Reps by Charles Cohon, MANA’s president and CEO. The entire book may be found in the member area of MANA’s website.

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With the economy strong, Troothe and Bigglie continued to jockey for position in the flange market. Troothe’s sales force continued to improve at Bigglie’s expense, but so slowly that Harold and Jim sometimes needed to remind each other of the strengths of their management system. As it turned out, it was at a meeting called by Joe Troothe during a slump in the economy that the salaried sales force concept’s underlying strength began to reveal itself.

Joe Troothe scheduled a management meeting for first thing one Monday morning. Harold and Jim arrived early, and Joe Troothe closed the door behind them. “We need to talk about what we are going to do with our salaried sales force,” said Joe Troothe. “Here’s the problem as I see it. I am aware that our sales force carries tremendous Troothe-specific product and customer knowledge, and that many of our customers like the idea of dealing with the same salesperson year after year. I also know there is a great dynamic in the group — our salespeople sincerely seem to like helping each other. I truly value these things, but the bottom line is that we’ve already cut back hours in the plant and office as much as possible, and I still don’t have enough money coming in to continue to pay our salespeople what they have been getting.”

Jim knew enough about the company sales and profits to have prepared a possible solution. “Joe, the sales force knows we’re in financial trouble, and every day we fail to face up to it leaves a cloud hanging over the department. We don’t want our salespeople guessing about our plans because the rumors that float around in a company during bad times are always are worse than the facts. But we have put too much time and money into building this team to let them slip through our fingers without a fight.

“Back at Bigglie, a tough manager was somebody who was willing to drop the ax on salespeople any time sales fell, regardless of the cause. You’ve probably heard me say it before, but if the willingness to inflict pain in others qualifies somebody as tough, then the ultimate role model for ‘tough’ would be Jeffrey Dahmer. Firing people whose knowledge is vital to the company’s long-term success isn’t tough — it’s just short‑sighted.

“We’ve all agreed in the past that a tough manager is someone who is willing to take responsibility, suck it up and take the most pain himself to inspire others to follow,” Jim continued. “The time has come for us to put our money where our mouths are. I am willing to put my own pay on the line if others will join me. I make no guarantees, but I don’t think money is the only reason our sales force is here. The sense I get from the salespeople is that they have never before worked at a company like Troothe and they’d do almost anything to keep the team and the company intact. I believe they would be willing to share the company’s pain if they felt their share of any sacrifice was a fair one. We have been drilling it into the sales force that management is responsible for the system, and the natural extension of that point is that the higher up we go on the organization chart, the greater the responsibility and the greater the cuts. So let me ask you: How much do you want to keep the sales force together?”

“Well, what do you think it would take?” Joe asked.

“I’ll lay all my cards on the table,” said Jim. “My wife has a good job, and I’m not hurting financially. I guess I would be willing to take a major cut if it would demonstrate to the sales force that our crisis is genuine and that cuts in the salespeople’s salaries are the only way to avoid laying off some salespeople.

“There’s more to this plan than just hanging on through a tough economy, of course,” Jim continued. “Holding the sales department together through this dry spell means that once the economy starts to pick up, Troothe will have experienced salespeople ready to pounce on the opportunities that come during a turnaround. Joe, if we assume that the economy will rebound eventually, that is when you will see the real benefits of this plan.”

Joe took a minute to think before speaking. “Jim, based on what you are telling me, it sounds like our best bet to keep the sales force intact would be for me to stop taking a paycheck. In one sense, it would be like throwing myself on a grenade for my platoon, but I guess I would be protecting the long-term viability of my company by taking a leadership position right now. I see your point about what makes a tough manager. The managers who go through a department with a meat cleaver, cutting the fat, the meat and the bone are not really tough. If anything, they lack the courage to put themselves at risk for a business in which they believe. So let’s assume that I don’t take any pay at all — no, wait a minute, I’d lose my medical insurance if I wasn’t a paid employee. OK, assume I’m working for minimum wage and medical insurance only. How much of a cut would the rest of management take, and where do we go from there?”

“I was hoping you’d go in that direction, Joe,” Jim said. “If you do that, I’ll take a 50 percent pay cut.”

“That sounds fair to me too, at least for a while,” Harold said, “but with the erratic way orders are coming in, how do we calculate what we can offer the salespeople?” No one had a quick answer to that question, so the men sat quietly for a while.

Finally, Joe spoke. “Harold, I guess the answer is that although I am willing to work pretty much for free for a while, I have to draw the line at reaching into my pocket and paying for the privilege of working here. So the most we can put into the sales force payroll is whatever comes in above expenses in a given month.”

Jim nodded. “I think the sales force understands our business enough to respect the sacrifice the management team is making, and I believe they will be willing to let their pay float based on what comes in. It sounds a little like a commission plan, but we’re on a war footing here, and if we can keep them earning 70 percent to 80 percent of their old salaries while we’re at 50 percent or a lot less, I don’t think anyone will bolt. Some of it will be loyalty, some of it will be respect for our taking bigger cuts than they are taking and some of it will be the fact that the job market is terrible and they are not going to be deluged with offers from other companies.”

Harold had a question. “Do we tell people that the money they are giving up is just gone, or are we offering some sort of payback in the future?”

“Interesting question, Harold,” Joe said. “I see what you are saying, but where would we get the money for a payback? Right now, our sales are a disaster. When the economy improves, we gradually will be able to move people back toward the salaries they had in the past, but all along the way, we’ll be paying out everything that comes in. If we use all the company’s income to try to keep salaries close to where they were, we can’t expect a suitcase of money is going to fall from the sky so we can pay back to the salespeople the income they are foregoing. If we had a real windfall, I’d be happy to share it, but what we are talking about is letting the employees split up what comes in for as long as this emergency lasts — assuming the economy does not get dramatically worse. So we need to make it clear to the salespeople that just as I’m not going to get back the difference between my normal salary and the minimum wage, and that you and Jim are waving goodbye forever to the 50 percent you’ve agreed to forego, then whatever the sales force gives up is their contribution to keeping the team together.”

Joe presented the situation and his solution to the sales force on Thursday of that same week, allowing ample time for questions during the meeting and for private conversations afterward. He was a little surprised, and maybe even a little disappointed, when no one quit. If anyone had left, it would have taken pressure off the company’s finances. June came around later to ask about time off to compensate for lost wages, but backed away from that request when she realized that her coworkers were grateful just to have avoided layoffs and hadn’t even considered working less. After all, Joe Troothe had taken a huge pay cut and he was working more hours than ever — and they all knew having the sales force work fewer hours would not fix their problems. The solution was more sales.

Even while the economy was at its lowest ebb, Troothe’s sales force kept busy. Although customers were not purchasing much, engineers and buyers had ample time to discuss Troothe’s products’ advantages over Bigglie’s, and there were no Bigglie salespeople around to offer rebuttal. When the economy rebounded, Troothe’s sales force had taken away most of Bigglie’s customers, leaving Bigglie flatfooted because no Bigglie salespeople had visited the accounts for as much as a year.

Jim and Harold’s greatest reward came the following year, when they sat in on the meeting finalizing Bigglie’s sale to Troothe, and watching Joe Troothe send Buchanan packing. “If Deming could have seen this day,” thought Jim, “I think he would have smiled.”

To be continued next month.

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