Great coaches know how to make room for more experienced players to diversify a team and provide game changing leadership to less experienced players. Great Commanders have historically relied on battle tested warriors to lead platoons into combat. Great business leaders understand the added value that experienced sales performers deliver.
Some companies have paid a very high price to arrive at this realization.
Does anyone remember Circuit City’s now infamous cost cutting move to slash payroll expenses by firing the majority of their better compensated more experienced salespeople and managers?
At the time the Washington Post reported:
Circuit City fired 3,400 employees in stores across the country yesterday, saying they were making too much money and would be replaced by new hires willing to work for less.
The company said the dismissals had nothing to do with performance but were part of a larger effort to improve the bottom line. The firings represent about 9 percent of the company’s in-store workforce of 40,000.
Here is the entire story from March 29, 2007:
By January of 2009 the impact of this folly on their downward slide was irreversible – the company announced they were going out of business. By March of 2009 they closed their doors forever; 40,000 people lost their jobs, among them were a few short sighted executives who thought having less experienced, cheaper salespeople was the answer to their problems.
Note: While some might consider this post self-serving (I’ve made my living in sales and I believe experienced sales people who know their stuff can be game changers in an organization). I did not however, make this story up. I first heard about the Circuit City story through the wonderful NPR program “This American Life”. If you’ve never heard Ira Glass breakdown a story, it’s worth checking your local listings to catch his program. You can here podcasts of the show here: http://www.thisamericanlife.org