The Hawthorne Effect and Your Sales Management Possibilities

Continually resetting sales expectations can turn a short-term gain into long-term performance

By Bob Schultz, Contributing Editor | March 13, 2014
Sales training_mystery shop_Max Pixels_being watched_better sales performance
The Hawthorne Effect refers to the fact that people will modify their behavior just because they're being observed. (Photo: Max Pixels)

Here's an easy-to-implement tactic with short-term benefits that also paves the way to introducing serious training or systems changes into your organization for long-term gain. It’s something that I stumbled upon many years ago when I discovered this interesting phenomenon: Sales would marginally increase after salespeople had been told that they would be mystery shopped. It never failed.

This rise occurred whether or not any training had been conducted. Likewise, I noticed something else whenever I worked with a builder who had the last few inventory homes to sell. When we had a meeting with the salespeople to go over some ideas—even for only an hour or so—voila. Those homes that had been sitting for quite some time began to sell. 

When we engaged salespeople in role-playing exercises, it was not uncommon to see a little spike in sales shortly thereafter. As I continued to experience these out-of-the-ordinary occurrences, I mentioned them to a friend of mine who was very knowledgeable about industrial psychology. He said, “I think what you are describing is the Hawthorne effect.” 
 

Someone's Watching

I had heard of it but never quite knew what it was until I did some research. You may know that the Hawthorne effect is a term referring to the tendency of some people to work harder and perform better when they are participating in an experiment or series of activities in a group environment and are being observed. Its origin is based on a Harvard study during the 1920s of workers at a Western Electric assembly line plant in the Chicago area called the Hawthorne Works. Once I understood the effect, I proactively used it when and where appropriate to produce a quick spike in sales, to create a smoother transition into a serious training program, or to introduce new processes and systems.
 
Let’s look at how you can harness the power of the Hawthorne effect. But first, a warning: The results of the Hawthorne effect have a very short shelf life. It will not have any lasting impact. Why? Because it’s not providing the necessary tools for someone to change behavior for the long term. However, the impact of the short uptick in performance can be used to establish a benchmark by marking improvement before and after the effect took place. Benchmarking the Hawthorne effect can then open doors by showing that with a more long-term program in place, more permanent and greater sales results will occur.
 
Back to the mystery shop reference. I suggested as a hypothetical that you could increase sales without spending any additional money or time. Simply announce that during a specific time period, all salespeople are scheduled to be mystery shopped. The first thing that happens is paranoia begins to set in. All of a sudden salespeople are thinking, “I better do my best.” In the higher learning matrix—first taught by Confucius—this reaction is called the level of conscious competence. Simply stated, this level means that when I have to do something, I probably can do it. However, the measure of excellence that results depends on whatever level of expertise is present at that time.
 
So what causes those additional sales? Whatever it is the person is now consciously trying to do, when they know they are being noticed or evaluated, they will more likely start doing what they should be doing all the time but are not. Consequently, some sales might be generated as a result of that “something they should be doing all the time,” but are not, solely because they are part of a group experience—aka the Hawthorne effect.
 

Break the Routine

In a similar manner, opening minds to be accepting of training or other changes to the norm of operational procedures or policy can be jump-started by another version of this effect: a short duration of some structured training, in which fundamentals are reviewed and expectations going forward are previewed. As a result of this exercise alone, sales almost always increases measurably. When the people involved are asked why the additional sales occurred, they typically will respond with something that was covered or presented in the short program in which they were involved as part of a group, again, being aware they were to be evaluated, i.e., the Hawthorne effect.
 
Here’s a firsthand observation and report on this phenomenon from a very successful real estate broker, Walter Borgen of Re/Max Agency, in Daytona Beach, Fla., whose company represents builders and condominium developers. Walter notes the following:
 
“A classic example of the Hawthorne effect was a recent training session I hosted for my on-site sales teams in August of last year. Within the next 30 days of this intensive new-home sales training session, our sales team had its best sales month ever. With renewed expectations and goals, the sales agents were excited. They critiqued and revamped their presentations. They felt confident, made commitments of their coming successes, and knew that we expected results. However, as Bob cautions, this was only a temporary gain, as within in a few short months that record sales performance went back to what was the previous normal.”
 
One of the biggest challenges in managing an experienced sales team is that they possess the knowledge and the skills needed to produce the desired results. But they fall into routines and mindsets that often limit their performance. As sales managers and mentors, I believe it is imperative that we strategically follow a program to continually reset expectations to maintain peak performance.
President and CEO

Bob Schultz is president and CEO of Bob Schultz & The International New Home Sales Specialists. Write him at bob@i-nhss.com.

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