Extreme Ownership: How U.S. Navy SEALs Lead and Win

don’t understand why the plan is being implemented. They don’t believe
in it. They think this plan will drive away good salespeople, who will
look for and possibly find better compensation plans at your
competitors,” I explained.
The CEO now got a little defensive. “Then they clearly don’t
understand what I am doing with the business,” she stated. “When we cut
compensation, especially on the low-producing salespeople, that savings
reduces cost. When I reduce cost for salespeople, it reduces our
overhead. With overhead reduced, I can lower the price of our products.
That will allow our bigger producers to bring in even more business.
Sure, the new compensation plan is punitive toward our bottom people,
but those bottom people really don’t move the needle in our business. If
some of them leave, it won’t impact our business. In fact, it will allow
some of our better producers to expand into those accounts and increase
sales. So there is opportunity for our sales force to do even better.”
“That makes a lot of sense,” I replied.
“It absolutely does,” said the CEO. She explained how she had made
this move before in a tough market. “It almost always helps. It might
reduce the overall size of our sales force, but it will increase our volume
in the long run. A smaller, more effective sales force also reduces
overhead: lower health care costs, fewer desks, fewer computers to buy,
greater efficiency. It is a win-win.”
“That sounds brilliant. There is only one problem with it,” I said.
“What’s that?” the CEO asked, incredulous.
“Your midlevel managers don’t understand those points—they don’t
understand why—and so they don’t believe in the strategy. If they don’t
believe, neither will your sales force. If this plan rolls out and those
executing it don’t believe in it, your plan is far more likely to fail.”