What does Nairobi Women’s Hospital (NWH) have in common with Wells Fargo and Microsoft in the United States? Proof that when you run a business like an unregulated sales team, you are brewing a recipe for disaster. The ongoing serialisation in the Sunday Nation about the scandal at NWH, says that the institution focused more on meeting the set revenue targets by incentivising clinical officers (through paying commissions for prescribing unwarranted admissions and delayed discharges), than addressing patient healthcare needs.
And the revenue, commissions, admissions and discharge numbers were (admirably, from a sales perspective) being actively monitored hourly, every day, day and night by none other than the chief executive officer (CEO) himself!
This is reminiscent of the Wells Fargo scandal. For five years until 2016, the American 160-plus year old bank fraudulently opened two million accounts through ‘cross-selling’ to its existing customers. And why? To meet impossible sales targets, intended to purposely inflate the bank’s share value and therefore executive bonuses. And all this happened with the blessings of the board and executive. Those who didn’t ‘shape up’ were ‘shipped out’.
In November 2016, we wrote here about it saying, “Because all the greedy bank wanted was accounts, irrespective of where they came from, the salespeople went into survival mode. Forging customer signatures, they proceeded to open two million accounts and put them down as ‘cross-sells’.”
In February of 2014, we wrote right here that, turning sales people into CEO’s might not help firms. This was after Steve Ballmer was replaced by Satya Nadella as Microsoft’s CEO. Business analysts and the several media have described Ballmer as: “The worst CEO of all time for a Fortune 500 company. During his time, Microsoft’s share value dropped by half.It went up by eight percent on news of his retirement. And yet, that Ballmer was a successful salesperson is not in question.(As Executive Vice President Sales and Support) Ballmer’s aggressive salesmanship during the boom days of the personal-computer industry exemplified how Microsoft became the world’s most valuable company.
He also built one of the world’s most profitable and efficient sales and channel organisations.” So what was the problem? “Steve Ballmer was regarded more as a salesman and cheerleader than a visionary. Microsoft’s employee base never really bought into Ballmer and whatever vision he had for the business; like many salespeople, he was seen as a bit too short-sighted.”
Clearly running a business as a sales team is a recipe for disaster. And yet paradoxically, the success of both is measured by sales made. Alas! Sales may be the lifeline of a business, but it is not the business. Businesses, even those being fattened for sale like Nairobi Women’s Hospital cannot focus purely on sales to grow. Selling a product calls for a narrow, short-term, specialist view. Leading a business calls for a broader, long-term, ‘generalist’ view. As enticing as it may seem, no company can survive on unfettered selling.