We’ve seen this before.
Some company has raised a decent size series A or B round ($5 to $15 million) and are now going to scale growth by driving sales revenues.
This time they’re serious. There is a press release about a new dedicated sales office in their key market (usually New York or London) and are hiring a new sales team starting with a Rockstar VP of Sales (who may or may not have been recommended by one of their investors).
Now this Rockstar, is a top producer at another company that’s operating at scale and achieving exponential or hypergrowth, and the thinking is that since he or she has been along for the rocket ride since the early beginnings, they probably know a thing or two about scaling for growth.
So your Rockstar is a sure hire, right? Maybe not.
Why your Rockstar will work out
Hopefully, in addition to being a top performer in a company that’s running at scale, they’ll have learned some hard won lessons. In this crucial role (Sales Leader) you need an individual that can conceive, develop and execute processes that fit your market, product and culture.
If they’ve been in a sales organization for a while, then it’s likely that they’ve held multiple Revenue Operations roles such as Business Analyst, Sales Development Rep, Demand Generator, or Account Executive. If they have held multiple positions then they appreciate and understand what it takes to fill each of these roles and how they fit into the ability to generate revenues.
If they’ve not held multiple roles, but have been in an organization where the primary processes relating to hand offs between groups, cadence matching and planning has occurred then they’re like to transfer some of this knowledge to their current role. If they’ve been part of these process discussions then they’re even more likely to transfer these ideas to your organization.
If they’ve worked in multiple channels such as SMB, Enterprise of Private Label, then they’ll have a good understanding of which of the 6 paths to revenue (see my previous post) will provide the company the quickest path to long term sustainable revenue growth.
Of course, if you’ve nailed the product-market fit and your industry is white hot, then none of this really matters. But you need a different kind of sales leader, one who can navigate the blue ocean as best as possible and extend your run until you’re competitors notice and start to capture your market share. In this case, you’ll need someone who can manage the pace as well as iterate the processes so as to defend your territory.
If your Rockstar has held multiple sales, marketing and revenue operations roles in a variety of geographic and target markets and you’ve got decent product-market fit, get ready to ride the rocket.
If your Rockstar has been in any of these situations or experiences, then you’re likely well positioned.
Why your Rockstar won’t work out
Most top producers are just that, top producers. They understand how to excel in the processes and systems provided by their managers and market. They follow best practices and processes that they’ve learned from previous workplaces and will implement those that worked for them in the past. This sounds great, but might not work for your personnel, market or culture.
Your new hire likely hasn’t learned to be a sales manager, let alone a Sales Leader, and as such has no idea how to manage other sales team members and their needs (and there are plenty). And despite them wanting to be team players and part of the executive decision making team, they’ll quickly become demotivated when the find themselves in a series of endless inter-company meetings without doing much to drive the revenue needle (which is why you hired them in the first place). They want to be a team player, but in their heart, they can’t be, so they’ll slowly start to rebel by focusing on those tasks they know and love (i.e. interacting with prospects, customers and team members) and act apathetically for all the others.
In addition, it’s likely that the founders (especially if this is their first time) and Board will have compressed expectations as to when material revenues from their new “sales efforts” will bear fruit. An unrealistic quota that hangs over the head of this Sales Leader makes it even harder to focus on the short and medium term tasks that need to be executed so as to realize long term sustainable revenue growth.
It’s also entirely likely that this new Rockstar doesn’t have the same level of support at your operation that they had in their old place. Maybe Rockstar qualified and closed deals from leads provided by demand generation, then sales operations handled the order paperwork and sales enablement executed the customer onboarding. Maybe you intend to build these teams or functions in the near future, but without them, it’s possible that your Rockstar has no idea how to build sustainable pipeline and revenues.
Expectations Matter: If you expect too much from your Rockstar and provide too little support, you’re setting them up for failure
This is akin to sending a sniper out to battle with no logistics and field support. If your Rockstar doesn’t know how to build these teams, processes and systems, you’ve only got a great sales person, not got an RO professional or Sales Leader. They’ll need time and coaching to learn these processes and systems and really inculcate them into your culture. If you’re not providing this support then you’ll find out quickly (within a year) that the Rockstar’s not a good fit for your culture or that you’re not really ready for an true Rockstar of Revenue.
How can you make this work?
In North American Football, most pundits agree that the Quarterback is the most important position on the team. He’s the leader and in most cases, the playmaker. You’ve just hired what you think is your new Quarterback, but you’re concerned about his or her ability to execute, so now what?
Like all good managers, build the team together with your new Quarterback. Let him or her have a material say in who gets hired for what role and when. Let them own, not just the RO processes, bu the recruitment, hiring and onboarding of the team.
Prepare the sequence of teams you need and know what plays need to be run at what time. So build demand generation before customer success, content before outbound or combine sales development and sales together. Do a deep dive on the business and market analysis and plan out your initial and subsequent tactics and figure it out together.
You’ll need training and enablement tools and processes to ensure that these learned behaviors stick with your team and are part of your culture. You’ll need constant reinforcement through compensation and incentive plans. You’ll need a “tone from the top” that’s aligned with your strategy.
You’ll also need to provide the tools and weapons necessary to build the game plan to win in the market. This doesn’t mean that you need to be a spendthrift as it’s important to mind the pennies when you’re a scrappy startup and thereafter (in most cases you’re playing with OPM), but when you’re really trying to scale, sometimes simplicity and speed win out over cost. I have plenty of examples of companies that could have improved their productivity dramatically for a modest increase in cash cost reaping multiples of revenues.
Give your Quarterback all that they need in order to be successful. If they’re the right hire, they’ll tell you the tools and processes they need and they’ll also tell you what’s bunk. Set them up for success don’t stand in their way.
Ok, So we’ve already done this and it’s going the wrong way.. now what?
What’s going badly? As Peter Drucker has famously stated, “What gets Measured gets Managed” so make sure that what you’re measuring is something that you can manage.
Revenues not on plan? Well you can’t manage revenues, but you can manage the number of outbound calls or contacts made to prospects or the volume and quality of your demand generation leads.
Customer Acquisition Cost too high? Well, you can’t manage this number, but you can manage the amount you spend on advertising, prospect incentives or affiliate commissions.
Start with a root cause analysis. One of my favourite root cause analysis methods is the “5 Whys”. Ask Why 5 times until you get to what you think is the real underlying cause of your problem. And if you’re still not happy, ask Why until you get to where you think you need to be.
Does your Revenue Operations team have the processes and systems in place to be successful? Has the market shifted in the last few months and so your message needs to be retooled? Do you need to change something amongst your leadership or team? Examine all of it.
If you’re not happy with the results of the activities you can manage then complete your root cause analysis, admit your mistakes, fix them and rebuild. This can be painful, but just like ripping the band-aid off, it’s only temporary and you can move on. The optimization process is plan, execute, review, rebuild and then plan again.
Blair Carey is passionate about using data to help companies meet their mission and purpose. He is the creator of insidecro.com where CROs can collaborate on anything they’re thinking about. You can follow him here or find him on his LinkedIn profile here.