Sales Targets that Kill

Death by salesA young Indian salesman jumped in front of a train because he couldn’t make his company’s aggressive sales targets and couldn’t stand the pressure anymore. He leaves behind a wife and two young children. This report comes from today’s New York Times, in an unsettling article titled “Driven to Suicide by an ‘Inhuman and Unnatural’ Pressure to Sell“ based on a six-month investigation of marketing practices by pharmaceutical  companies in India. The events leading up to this personal tragedy and the systemic nature of the unethical sales practices are detailed in the NYT article, which is well worth reading.

In our soon-to-be-released book, Business Ethics for Executives, we argue that setting unrealistically high sales targets is an unethical management decision in itself. In Chapter 6, “Temptations of a Salesperson,” we open our discussion on problematic sales targets as follows:

“Executive management is fond of setting “stretch” targets—targets above realistic levels—to encourage everyone to think positively and pursue sales aggressively. But can stretch targets be set so high that they encourage the wrong type of behavior? For instance, can an insistence on maintaining growth in a maturing or saturating market lead desperate managers and employees to use dubious sales tactics? In such a case, the senior executives who set the unreasonable targets must share guilt. They cannot simply wash their hands and attribute what went wrong to some bad apples in their sales organization. Setting growth targets that cannot reasonably be reached is a conscious act by corporate executives, and they must bear responsibility for the consequences.”

From the highest levels of corporate management, down to the level of sales manager, everyone needs to accept responsibility for the targets they set, and the behavior that results. There is nothing wrong with being growth-focused, but setting targets that are clearly unrealistic will cause human suffering, and even death, as we saw in this tragic case.

Posted by Peet van Biljon

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When Children Aren’t Better Off Than Their Parents

Sunset - Copyright PvBIf you want to understand the real economic anxiety that drives voters in developed economies to reject politics as usual, from the rise of Donald Trump to Brexit, you’ve got to know this:

Between 25 percent and 50 percent of people in the developed world are no longer advancing economically. Part of this is indeed due to the slow recovery after the 2007-2008 recession. If low productivity growth persists for the next decade, an even higher share, 70 percent to 80 percent of households, will not advance. But even under the most optimistic assumption – that productivity growth recovers to historic highs – 10 to 20 percent of households in developed economies will still not advance.

These startling findings come from a new research report released by the McKinsey Global Institute, “Poorer than their parents? A new perspective on income inequality“. This is about the US and European countries, not the developing world. Much of the developing world is still trying to rise out of poverty, though significant advances have been made in the last decades.

All parents want their children to be better off than they are. For many families in developed countries, that is clearly not happening anymore. The researchers point out that this is a drag on total consumption spending and therefore GDP growth. But even more unsettling is the rise of social tensions. As more and more people do not advance, many will withdraw their support for the things that have driven economic growth in the past: free trade, technology and migration. While trade and technology have been more responsible for declining or stagnant household incomes than worker migration, immigration is a more emotional issue because it is more visible.

Prior to 2004 only 2 percent of people in the developed world were not advancing. It wasn’t a big issue for governments who focused more on improving total growth and reducing total unemployment. So this problem is new and politicians are struggling to deal with it. We need a constructive and reasoned debate in the body politic about policy solutions; neither platitudes nor demagoguery will help. But as business people we cannot just leave it to government and the politicians.

In a podcast discussing the findings, Richard Dobbs, the senior partner at McKinsey who led the research, says that business has an important role to play in addressing this problem: First, business can help drive productivity and economic growth. Second, businesses can help retrain mid-career people when their jobs are displaced by technology. Third, businesses can proactively help schools provide the next cohort of workers with the most relevant education for the future needs of the economy.

There are some good examples of businesses doing these things but it is not enough. We need the business community to get a lot more systematic in fulfilling this responsibility to society, constantly trying new things, learning from their experiments and quickly scaling up what works so it benefits as many workers as possible. It’s only through such a collective effort that we can address this very real challenge to the well-being of our societies.

In our book we go further by pointing out the moral obligations that business leaders have to their dislocated workers. In Chapter 9, “Between Automation and Globalization”, we show how age-old Judaeo-Christian teachings can be applied to this very modern issue. While no one can be guaranteed employment for life, employers cannot simply discard their workers. They need to give them ample provisions for the next part of their journey. These fall into three categories: 1. skills that workers can take with them, 2. adequate monetary compensation to help them through the transition, and 3. sufficient time to prepare and adjust.

While the pace of change has sped up considerably, the well-being of our fellow human beings is still what matters most. We are all on a grand journey called life, and we have a duty to our fellow travelers who share parts of our journey. Let’s do everything in our power to help one another!

Posted by Peet van Biljon