Why Newly Promoted Sales Leaders Rise to Their Level of Incompetence

If you’re a successful top performer seeking a senior management position, there is something you should know. It’s been statistically proven that the best sales representatives won’t make the best sales leaders.

We often encounter sales leadership teams yearning for the skills and structure required to elevate their team’s performance. We’re talking about sophisticated, highly educated teams of men and women – the majority of which were top performers in their respective organizations.

The jarring realization is that the skills required to be a high-performing seller are different than those for leading sales teams.

Unfortunately, we see organizations seeking to retain top talent through upward mobility with little regard to skill set. This anomaly is known as The Peter Principle: “If organizations promote the best people at their current jobs, then organizations will inevitably promote people until they’re no longer good at their jobs. In other words, organizations manage careers so that everyone ‘rises to the level of their incompetence’.”

Sales is no different, and here’s the proof.

The Peter Principle: The Research and The Result

Dr. Laurence Peter originally outlined the premise of The Peter Principle in 1969. But Kelly Shue, Professor of Finance at Yale School of Management, recently unpacked the impact it was having within sales organizations.

Kelly, along with her colleagues Alan Benson and Daniel Li, obtained data on 214 sales organizations and analyzed 1500 sellers who were promoted to management positions between 2005-2011. What was most surprising was it statistically proved sellers make WORSE leaders.

Sales declined an average of 7.5% when led by managers who had high sales volumes as individual contributors. But sales thrived under managers who weren’t high sales performers.

The Critical Skills You Need to Succeed in Sales Management

You have either experienced it firsthand or witnessed it from afar – that superstar seller who gets promoted and focuses on what they know while neglecting other aspects of the job. They’re frustrated they can’t control the outcome of each opportunity for the first time.

What are those critical skills you need to succeed in sales management? When we dissect what it means to be a successful leader, we see three distinct roles: Coach, Strategist, and Operator.

1. Coach: Focus on the Individual vs. Duplicating Success
   Coaching is an aspect most can appreciate. However, it isn’t about forcing your team to do exactly what works for you. It’s about understanding the unique needs, preferences, and factors that drive everyone. This isn’t a one-size-fits-all role. It requires leaders to remain relatable, real, and reliable to build trust and elevate performance. 

2. Strategist: Selling Strategically and Solving Problems Proactively
   This is less about playing a heightened strategic role in the sale and more about taking a giant step back and learning how to sell a concept internally. This helps create momentum and motivate action. It’s about navigating the organization, identifying strategic vs. low value activities, and resolving conflicts.

3. Operator: Creating Collaboration through Consistency
   One of the greatest gifts a leader can give their team is consistency. Consistency creates an awareness of expectations from which a team’s cadence can be built. From business planning to opportunity management, a good operator sets expectations around when certain business activities take place and how to prepare for them. This helps create positive momentum.

Becoming an Outlier

Start with the list above. Then determine where your strengths and weaknesses may lie. What we know is that the first 90 days of being a sales leader are the most important.  

The First 90 Days has proven highly effective, catapulting newbie sales manager on a successful track. As you contemplate whether you’ve got the chops to become a Peter Principle outlier, remember will versus skill. You may not have all the skill(s) you need to be successful on the jump. But if you have a desire to think broadly, then you have the capacity as a sales manager.

Use what we’ve outlined here as a springboard for success – your own success and the success of your team. Contact us for more ways to become a sales leader outlier.