Income Inequality In Sales. Where Is The Justice?

Can you imagine this happening in your sales department?

John (a struggling veteran sales person) walks into Bob’s office (sales manager) and makes this declaration:

“Bob, I don’t think the income distribution in this company is fair. I’ve been here 5 years and yet I make only 70% of what Mary makes. She has a better territory. She has more support from the company. Her customers buy more. And they buy more often. Her customers aren’t nearly as price sensitive as mine are so her profit number is higher. She doesn’t make nearly as many presentations as I do and even though her closing percentage is higher, I feel like I should be compensated on my huge number of quotes. I’ve been hearing lots in the zeitgeist about income equality and it occurred to me that we have a problem in this area.“

“So, I would like you to redistribute the income a little more fairly in our sales team. And if you can’t do it, then I’ll have to leave.”

What do you suppose would happen? 

How long would it take Bob to take action? If he were a strong leader, then it wouldn’t take long.

An Absurd Scenario?

But while this is an absurd scenario (I think), we do hear lots about “income inequality” in our culture, don’t we? It seems to be a bigger and bigger issue each election cycle.

Something about how we talk about income inequality doesn’t sit right with me though. Probably because I work with high achievers, few of which blame anything or anyone when the numbers aren’t there. I needed to research this concept. Is it real? Or is it fake?

So I Bought A Book

Thomas Sowell, an economist, just wrote a book called Wealth, Poverty and Politics (http://www.amazon.com/Wealth-Poverty-Politics-International-Perspective/dp/0465082939). He addresses this very issue. It’s a fascinating read. His emphasis was on the national dialogue about income, but it connects perfectly with our desire for higher pay as sales people and leaders.

You should read it, but I’ll give you the CliffsNotes version.

1. Irrespective of external conditions, the people who earn higher income produce more value (for their companies and their customers). (For sales teams, irrespective of territories, comp plans, other inputs, the people who earn the most, produce the most.) Sowell cites hundreds of examples of cultures who just simply, worked harder.

2.  No one succeeds because of their exploitation of others. Someone else is not succeeding BECAUSE you are failing. They took nothing from you. In fact, if you look closer at what caused them to be more successful, you’ll learn things. No one is keeping you down. Sorry.

3. There is no “justice” other than the fairness of the market. I had a manager who once said, “We’re all equal. It’s just that some are more equal than others.” The “justice” is up to you and me. Losers wait for justice to come from an outside source. Winners say, “Well, I guess if it is to be, it’s up to me.”

4. People rise into and fall out of the middle class over the course of their lives. Similarly, you might rise into and fall out of the top spot on the stack rank. But you have no one to thank or blame but yourself. Produce more. Earn more. (If you’re over 50, then your income is on your way downward….UNLESS…you reinvent yourself and your value. Watch this Gary Vaynercuk video from last week:

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5. If you want to elevate your income, hang around with those that are more successful than you. Embrace what they do differently than you. Ego prevents most of us from doing this. Sowell reveals numerous civilizations that cut themselves off from outside influences. They, and their citizens, paid a huge price. Isolation does not work to improve your income.

So where does that leave me? Well, I’m convinced that “income inequality” IS a problem.

But not a problem that any government or outside source can solve for you. It is your problem (and mine). Make no mistake, that’s a good thing.  For as some groups in our culture are waiting on Uncle Sam to fix things, you and I know that won’t happen for us. So it’s time to take action. Time to produce more. Time to reinvent ourselves in a way that brings more value to the people who can pay you, namely customers. Time to embrace our future and design it ourselves.

What about you? As a business person, are you tiring of the income inequality discussion? What is your input to how we can fix it? Or, can we?