Sales leader (VP, SVP) tenure is at an all time low of just 17 months. Not long ago, the average tenure of a VP of sales was sitting at a healthy 26 months.
For founder-led organizations or CEOs leading their firm through a go-to-market (#GTM) transformation, it's imperative to have clear eyes on what the company needs the new sales leader to actually do.
Sales leaders are obviously responsible for driving revenue, but how will they achieve the revenue. Does the new sales leader need to build the sales system/team or scale the team? For organizations who have never had a sales leader, or companies working through a transformational event (change in GTM strategy, M&A, etc), these orgs need to build the sales machine. Building includes:
Establishing Foundations: In the building phase, the focus is on establishing the foundational elements of the sales team, such as defining the sales process, creating sales collateral, setting up CRM systems, and establishing key performance indicators (KPIs).
Recruitment and Onboarding: Building a sales team involves recruiting the initial members who will play crucial roles in shaping the team culture and performance. Onboarding processes are critical to ensure new hires understand the company, its products, and the sales processes.
Market Validation: During the building phase, the sales team often focuses on validating the market and the product-market fit. This involves targeting early adopters and gathering feedback to refine the sales approach and messaging.
Limited Resources: Resources may be limited during the building phase, requiring the team to be lean and efficient in their operations.
For more established companies, replacing a head of sales with a new sales leader is about scaling growth. The turnover is most frequently due to a lack of revenue performance. Replacing an unsuccessful sales leader requires scaling through:
Expansion: Scaling a sales team involves expanding the team size and operations to capitalize on validated market opportunities. This could mean hiring more sales representatives, adding specialized roles (e.g., sales engineers, account managers), and expanding into new territories or market segments.
Optimization and Efficiency: As the team grows, there's a focus on optimizing processes, improving efficiency, and implementing sales enablement tools and technologies to support the larger team.
Training and Development: With the influx of new hires, there's an increased emphasis on training and development programs to ensure consistency in sales performance and alignment with the company's objectives.
Management and Leadership: Scaling a sales team requires strong sales leadership to manage larger teams effectively, provide guidance, and maintain motivation and morale.
Performance Management: There's a greater need for robust performance management systems to track individual and team performance against targets and goals.
Several years back a CEO asked us to assess a new senior sales leader candidate. We had a good understanding of the company's maturity, current revenue challenges and GTM needs. All answers pointed to rebuilding. Following the discussion with the candidate, the CEO was informed that we would pass on this candidate sighting the following reason. The need was a leader to rebuild the sales organization and the candidate had no experience in building from the ground up, nor had any interest in building a new sales system. We uncovered this information within 2 questions. When we reported back to the CEO he was stunned by our recommendation and reasons to pass on this candidate. Days later we were not surprised to hear the ELT team voted unanimously to move forward with an offer. The candidate accepted, lasted just under 1 year, and was fired.
Building a sales team requires laser-like focusing on establishing the foundational sales engine building blocks and validating the market. Scaling a sales team involves expanding operations, optimizing processes, and managing larger teams to capitalize on growth opportunities. Scaling a sales team often revolve around maintaining culture and cohesion as the team expands, managing increased complexity, and ensuring scalability without sacrificing quality.
Both phases require careful planning, execution, and adaptation to the evolving needs of the business, and both phases require a significantly different candidate. With all of the complexities with building a modern sales machine designed with data-driven decision making, CEOs must have clarity on hiring the right sales leader for the job to be done.
This is hard. We can help.
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