Reprint: R0604A
When Bob Carlton decided to expand OptiMotors, the Alabama engine-parts manufacturer he had founded, he knew he’d have to take on a lot of debt. So he followed a headhunter’s advice and hired Galen McDowell to bring new energy to sales.
No question, Galen knew how to sell. He quickly hooked a big-league outfit, Kinan Motors, as a potential customer. He invited their representatives to come take a tour of the company and, while they were in town, visit the Red Ruby Club.
The Red Ruby? That’s a strip club.
Galen assured Bob it was upscale and full of businesspeople. He said his reps had often made use of the club to woo important accounts away from rivals. As if to prove his point, Kinan quickly signed a multimillion-dollar contract with OptiMotors after the visit.
Then April Hartley, Bob’s first salesperson, quit. She had been trying to build relationships with customers, but the really big accounts, it seemed, were looking for “more exciting stuff” than she could give them. Now Joan Warren—another saleswoman, and one who would happily close a deal anywhere she got the chance—is complaining because Galen won’t let her go to the Red Ruby with him. “I won’t stand by and be disadvantaged simply because I’m a woman,” she says.
When does client entertainment cross the line? Four experts discuss this fictional case study: John Brown, the director of institutional sales and customer relations at Fortis Investments; Katherine Frank, a former dancer who is now an author and postdoctoral fellow at the University of Wisconsin–Madison; Das Narayandas, a professor of business administration at Harvard Business School; and Denise Rousseau, a professor at Carnegie Mellon’s Heinz School of Public Policy and Tepper School of Business.
