In this series of articles on economic philosophy applicable for the sales force and sales management, we’ve been stressing certain entrepreneurial principles and their importance in sales and commerce. We have seen how empowering it can be to understand some of the root economic principles that guide sales and commerce, and how that understanding can carry us much further in achieving corporate and sales goals.
In this, our final article in the series, we’re going to move a bit out of the microcosm and into the macrocosm, and talk about why it’s so vital for all of us to help maintain a free market.
Freedom of Action
The important principles of entrepreneurship that we have touched upon—sunk cost, opportunity cost, subjective value, comparative value and sustainable value—can only be achieved in an economic environment in which both entrepreneurs and their potential customers are free to act. From one of the founding fathers of the Austrian School of economic thought, Friedrich von Hayek, comes the concept of “the spontaneous order.” The essence of this concept is that human beings will act as they see fit; their actions, for better or worse, shape an economy and make it the dynamic activity that it is.
Free Market Economy
The above description applies to a free market economy. A free market economy is one in which entrepreneurs are minimally restrained by taxation, over-regulation and other burdens which make innovation and entrepreneurship difficult. It also means that the public is free to buy from whomever they choose, motivated solely by choice of product or service based on sustainable value—not being constrained by government intervention and other factors in their choices. That doesn’t mean that laws and restrictions shouldn’t exist to counter criminality—but the majority of business people and consumers are not criminals and shouldn’t be “assumed guilty until proven innocent” either.
Of course, with freedom must come responsibility. A free market with no morals or ethics in the end will only self-destruct. To quote management guru and professor Fredmund Malik:
“The market does not bring about economic performance, it does not even prevent mistakes, it only punishes them. Also, it does not correct mistakes in the usual sense of the word, it merely brings in the undertaker after the patient has died.”
We have certainly seen disastrous examples of “the patient dying” in the last few years which have cost the economy dearly. At the core of such actions is, in actuality, irresponsibility. If, for example, anyone directly involved in the toxic mortgage debacle had taken responsibility—had taken a good look at what such actions would mean down the line—it likely would never have happened. In that case certain individuals and institutions were only taking short-term profit into account, and not applying the vital principle of sustainable value, which we discussed earlier.
Such responsibility begins with management. To again quote Mr. Malik,
“Right and good management is required not only to manage organizations well, but also to compensate for the inherent systemic shortcomings of the market.”
In other words, “freedom” does not equal “irresponsibility.” A free market cannot thrive as an irresponsible one.
What It Means for You and for Sales Force
What does this all mean for the entrepreneur, sales management and salespeople (entrepreneurs within the enterprise)? The only way we will achieve the goals we have set for ourselves is if we are able to help create, maintain and expand the economic environment in which we do business. We cannot simply be the “victims” of legislation, taxation or, on the opposite side, passive beneficiaries of freedoms—these are things that we must take a hand in controlling and changing while safeguarding the freedoms. In all but the most oppressive of regimes we have rights as citizens: to vote, to campaign, to speak out, to take part in the political process which shapes our lives and businesses. No matter what party you subscribe to, you have an interest in a free market. Why else would you be selling, or be in business?
Remember that for that freedom to actually work, there must be responsibility. In the case of the sales force, sales management must take the responsibility for creating truly sustainable value, and guide sales reps in making the right decisions.
Throughout history, freedom has always had to be won. In pursuing your business; in being part of the sales force, in being part of sales management and acting as the entrepreneurs you surely are; make sure you continue to win yours.
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