In the late 1970’s, the company I worked for experienced an internal political shift in power. Politics are found in all organizations it seems. A new President was selected by the Board, and heads began to roll shortly thereafter. “New Blood” was needed in management, a new direction was charted and the ambitious new President had high expectations of increased market share.
The old and balding Senior Vice President of Sales was sacked. A new, young ex-car salesman from East Texas was selected to lead and command the troops towards a rolling conquest of the state, the goal of which was to increase market share from 23% to 25% within the year.
How to accomplish this? Easy, pay the sales force huge sales bonus based on net-gain in each territory, and “buy business.” That is when I realized I was sitting on a gold mine. I read the new sales incentive bonus program and realized right away that I did not have to even write a new group to get the bonuses; all I had to do was gerrymander my existing book of business. But, what really made my day was the new business rates we were getting from underwriting. We were buying business, no one could compete with our rates. We were giving the insurance away for pennies on the dollar. I became an order taker, a well paid order taker. My income rose to over six figures, and I was “made.” Customers were happy too, at least in the onset.
Eventually this strategy could not sustain itself and all hell broke loose. Member hospitals, all on an annuity contract with my company, began having cash flow problems due to slow (and incorrect) claim payment. Members were having difficulty getting their claims paid. No one was happy, and those of us in the sales division took the brunt of our customers anger every day. Instead of devoting time to selling new business, I was spending all my time as a roving customer service rep. Competition woke up and began making significant in-roads in the market. It was not fun.
Management decided that the sales force was paid too much money and the compensation formula was changed. A quick study showed that my six figure income would now drop down to where I was in the early 70’s. My customers were not happy, I was not happy. It was time to move on.
Editor’s Note: This is a fictional character and is not intended to represent any one individual.