Sandbagging is played in two forms: by managers who have a P&L responsibility and by managers who have cost center responsibility. In the first case, managers purposely lowball sales forecasts as a negotiating ploy. Headquarters, knowing that this is a common practice (as they themselves were managers before and used to play this game), engage in a sequence of negotiations, losing trust in their managers’ real judgment and often coercing the managers to accept a topdown number at the end of negotiations. In the second form, managers purposely present a higher budget than actually required, to start negotiations.
This game creates “victimized” managers who don’t feel totally accountable for the budget and may even try to demonstrate that they were right in the fi rst place. Example: Paolo, a very experienced leader, now the country manager of a global generics company in Russia, realized that the country generics market was booming and that he could easily grow sales by more than 70 percent the following year. Of course, it was still an unstable business environment, and any new government regulation could cause an abrupt slowdown in marketplace growth. He had also seen what happened to a colleague who delivered sales growth that was “below expectations” (despite all his efforts). Paolo presented a modest forecast including 25 percent growth, much above the average 15 percent company growth, but below his real potential. After some back-and-forth with his boss, the head of emerging markets, they agreed to a forecast of 35 percent growth, which Paolo exceeded by 5 percent. His achievement guaranteed a fat bonus for him and his team, but it was much below the 70 percent he could have gone for.