Revenue or Margins are Slipping

3 Biggest Sales Leadership Mistakes CEO’s Make

Many founders and CEO’s of high growth businesses ask me, “Do we have the right sales leader for this stage of our business?”  It is an important question, since getting it wrong stunts growth and usually results in a costly executive replacement.  Recently, we convened a panel of four high performing business leaders — from HubSpot, Ceros, WITHIN, and Morningstar – all who have led sales and revenue functions at high-growth businesses in various stages of commercial maturity.  We had a far-ranging and thought-provoking conversation that you can watch on-demand here.  In this short article, we will zoom in on one aspect of that discussion by looking at three of the most common mistakes growth businesses make when selecting a sales leader.

Pardon my geeking out, but a maturity model showing the stages of commercial development is helpful to this discussion.  As indicated in the graphic below, the most common mistakes in selecting sales leaders tend to occur in Stages 3 and 4.

The first mistake founders and CEO’s make is waiting too long to appoint a sales leader as the company transitions into the Early Growth stage.  Often at this point, there are a handful of scrappy salespeople, and when none appear ready to step into the sales leadership role, the founder/CEO decides to continue managing that team themself.

The second common mistake also happens in Early Growth (Stage 3).  When they do finally make that first sales leadership hire, many companies move in one of two unhelpful directions.  Either they promote a high performing salesperson who doesn’t really want to lead people, or they hire an experienced sales executive who is going to “come in and build the sales team.”  The folly of the first direction is obvious, though painfully common.  The trouble with the second direction is more subtle.  The appeal of a senior leader who has built out several successful sales organizations is understandable.  They want to run their playbook and build an organization similar to the one they came from.  Yet most Early Growth businesses need a leader who can sell and is willing to get their hands dirty, because there is still considerable experimentation necessary with the value proposition, customer types, and sales process.  You want someone who will stay close to the action, and yet is able to build and lead a team.

The third common mistake occurs during Expansion (Stage 4).  These businesses need a strong sales leader who can build and manage a complex revenue engine.  This is a critical – and multifactored – decision.  Most businesses do well at selecting a leader with an appropriate amount of seniority and industry experience.  The oft overlooked factor is matching the leader to the growth strategy (i.e. go-to-market strategy).  Shouldn’t a good sales leader be able to select the appropriate growth strategy?  Yes, in theory.  But I find it to be a common gap, and in the absence of having a broad repertoire of growth strategies to pull from, most new sales leaders default to the one they know best.  This is a big topic, so let’s look at just one specific aspect of growth strategy to illustrate: the complexity and level of consideration of the sale.  A sales leader who comes from a high-consideration sales environment (high contract values, long sales cycle, selling to the c-suite) may have difficulty adjusting to a low-consideration sale that has lower contract values, a shorter sales cycle, and much higher lead volume.  Those two sales environments require vastly different sales structures and selling motions, and it is the rare sales leader who can adjust their sales playbook quickly and effectively enough.  Complicating matters, each business has numerous aspects of growth strategy that must be carefully matched to the experience and capabilities of a Stage 4 sales leader.

No one said scaling the “front office” of your growth business would be easy (here’s why it is so difficult), but getting the right revenue leader for your particular stage of development is a huge step in the right direction.

 

What are the biggest or most common sales leadership mistakes you’ve seen?  Please share a comment below!

 

Our recorded webinar builds on this topic.  Click the button below to watch the recording as we discuss Structuring the Sales Function for Maximum Growth with special guest Channing Ferrer, VP Sales Operations & Strategy at HubSpot.

CLICK HERE TO WATCH VIDEO!

Gain access to all the webinars in this series.

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