According to Sales Benchmark Index, the average tenure of a new sales leader is 19 months. Just over 1.5 years.
This doesn’t sound so bad on the surface, but if you assume it takes most people 6 months to a year to start making an impact in a new job, then you’re getting—at most—9-10 months of productivity before your sales leader starts to fail/starts thinking about leaving. Not nearly enough time to create and ship a sales strategy that produces meaningful results.
If you’ve struggled with sales tenure at your organization, perhaps it’s time to identify why sales leaders fail in the first place.
There are many ideas about why sales leaders fail. Beyond the usual causes (poor performance, bad attitude, or personal conflicts) Sales Benchmark Index reveals four systemic problems that lead sales leaders to fail in the first year:
According to a recent Sales Benchmark Index survey, 72% of new sales leaders arrive in a company with no defined sales strategy. This means a new VP is often responsible for fixing last year’s problems while creating next year’s plans—all while still coming up to speed with the product, industry, or team. With the ongoing pressure to quickly get results, a new VP may just implement something—anything—even if it’s not the right solution for the situation at hand.
Detachment happens when your sales leader develops strategy before gaining an understanding of the industry, company, or product life cycle. (i.e. focusing on healthcare when the product has been newly redesigned to address security concerns of financial services companies.) Again, this often happens because there is early pressure to perform, but sometimes it can be a leader missing the bigger picture.
The signs of detachment aren’t always as obvious as selling the wrong product to the wrong market. It can be misunderstanding the internal politics or company focus, creating sales goals that don’t acknowledge market realities, or incorporating tools into your plans that you don’t have budget to get. Whatever the disconnect is, if plans don’t align with reality, your sales leader is doomed to fail.
Or another way to say it, sequencing is putting the cart before the horse.
According to Sales Benchmark Index, 2/3rds of sales leaders hired between mid-2009 and mid-2011 attempted to install best practices out of order. Oftentimes, it comes down to purchasing a system to manage something that doesn’t exist. Or thinking a system will substitute for a process.
An example I see a lot is when organizations scale sales numbers without actually scaling sales infrastructure. They have a growth goal, so they hire a lot of good reps and buy them every cool sales tool on the market, but they don’t implement tools that help them manage the growth. As the sales team does its job and the company grows, the product catalog expands and the company moves to multiple geographies and suddenly the gaps in process (like the inability to create quotes, or communicate product knowledge to the sales team) becomes a real problem. In fact, most people who come to Selectica for CPQ are facing challenges with order management (i.e. orders coming in for non-existent products) SKU proliferation, and problems with pricing—particularly when channel partners have different discounts, or products are sold in different bundles across multiple geographies.
When the number isn’t being hit, it’s only natural for your new sales leader to start panicking, and to begin to alienate himself or herself from the organization. But this just makes things worse.
When sales leaders alienate themselves and the team, it’s usually in an effort to create an “us vs. them” to bond the team together, but without collaboration, there is no way to actually implement change initiatives and make sure the new sales strategy is successful.
If your VP of sales can’t fit in with the culture, and can’t bring the larger sales team in line with organizational goals, the A players will leave, and the sales leader will ultimately fail.
If you think your sales leaders are suffering from any of these four leadership challenges, Benchmark Index offers a great toolkit that I encourage you to give to all first-year sales VPs.
And if you already have a successful sales team, but want to go further, Gartner offers a great report which compares how various sales tools impact sales efficiency and effectiveness, and shares some KPIs for taking your team to the next level.