TEAM BUILDING

By Hank Trisler

Gresham's Law (GRESH-ums law) noun: The theory that bad money drives good money out of circulation. [Coined by economist Henry Dunning Macleod in 1858 after Sir Thomas Gresham (1519-1579), financier and founder of the Royal Exchange in London. Gresham, a financial adviser to Queen Elizabeth I, wrote to her “good and bad coin cannot circulate together.”]

Gresham's Law says that when both are required to be accepted as legal tender, inferior money remains in circulation while the good money tends to be hoarded or exported.

Examples of bad money could be counterfeit notes, coins that have their edges scraped off to siphon precious metal, or two legal tenders where one is intrinsically superior (e.g. a gold coin vs. a paper note of the same face value). In general, the law applies to situations outside the financial world as well: for example, bad politicians drive out good ones.

“But the main blame for the debasement lies with the Tories, who have conclusively confirmed that there is a Gresham's Law of politics: the most squalid party drags the others down towards its level.” Roy Hattersley; Exploitation Dressed Up As Compassion; The Guardian (London, UK); May 2, 2005.

“So what does that have to do with team building?” You might well ask. “Isn’t that about climbing ropes and paddling canoes and like that?”

I reply, Nah, that’s just programs to justify having a party at company expense. Team building is something you do every single day with your every word and action.

Gresham’s Law explains why we see good, intelligent, compassionate managers build squabbling, avaricious and lazy sales forces. We managers can’t get the people we want, so we settle for those we can get and then cry about our lot in life. Your best recruiting tool is your existing sales force. You will not be able to hire sales stars if they have to run in the same harness with slugs. The very best method of increasing the production of a sales force is to increase the minimum acceptable production.

Enforce it diligently. Every month look at each person in your sales force and determine whether they are a profit center or a loss center.

If a person is below your minimum acceptable sales production, you must help them increase their sales, or find a position with another company, and do so within ninety days.

Allowing them to hang around longer does no favor to them and will be the destruction of your sales team. You spend most of your time trying to make good wine out of bad grapes, when you should be lavishing your attention on your top producers.

I recall a real estate broker once telling me that if she dehired all her low producers, she’d be alone. GOOD! I told her she’d be better off alone, as she was likely taking some of her personal production just to keep the turkeys afloat. It took guts, but she made a clean sweep of the office and said she had never felt better. She had more time for her personal business and was very selective in allowing new people to join her. When she had one really good person, that person brought a friend in for an interview.

And so it grows. If you have a really great success sales atmosphere in your store, you’ll attract the sort of salesperson you want. Conversely, you’ll never get the people you want if you ignore Gresham’s Law.