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A Place Where All Wholesalers Are Above Average

by Mike McLaughlin

NetFlix and sports bars with NFL Sunday Ticket. Without cable, that's what my wife and I rely on when we want to watch TV. Actually, she doesn't care about the Sunday Ticket part.

Anyway, having watched hundreds of movies over the last few years, there are times when our NetFlix queue gets a little barren. Now is one of those times, which is how A Prairie Home Companion ended up in the top slot and on its way to our mailbox.

I knew nothing about Garrison Keillor and his radio show that inspired the movie, so I spent a minute on the show's Web site. Critical research, for sure. A central element of the show is the fictional Minnesota town of Lake Wobegon, a place where "the women are strong, the men are good-looking, and all the children are above average."

It is the last part that is intriguing to me. After all, most of us are aware of how human beings tend to overrate themselves, whether we're talking about looks, intelligence, or social skills. What I didn't realize is that this natural human tendency to overestimate ourselves has a name: the Lake Wobegon effect.

As the link illustrates, this effect has been formally identified among all kinds of groups, including CEOs, drivers, and college students. Interestingly enough, our latest research effort is showing that it may exist within the Sales teams of asset management firms as well.

We have been conducting numerous interviews recently with Sales leaders about the way they evaluate their wholesaling talent. These interviews raise interesting questions, as we have seen that:

• The mechanisms used to evaluate wholesalers are remarkably consistent across the industry
• Sales managers almost universally believe their wholesalers are among the industry's best
• Sales managers also feel that they have a good handle on just how good their wholesalers are, both in absolute (inter-firm) and relative (intra-firm) terms

Of course, statistics tell us otherwise. After all, by definition, 50% of wholesalers have to be below average. Resolving this apparent contradiction is something we are talking about with our clients today, and will be part of the conversation at our upcoming Sales Roundtable.

We will have a more comprehensive review of the opportunities we see for firms to update their evaluation schemes upon completion of our research. In the meantime, I need to get ready for the undefeated Chicago Bears' appearance on Monday Night Football. And by the way, take a pass on A Prairie Home Companion. I can pass along about 500 better recommendations if you need a good movie to watch.