The reasons heads of sales fail (and how to avoid them)
It’s an unfortunate fact that the average tenure of today’s startup head of sales is a mere 19 months. If a company misses its revenue goal, its the head of sales who inevitably takes the fall.
But it doesn’t have to be that way if CEOs and heads of sales are aware of the issues that lead to missed goals. Here are the most common issues I’ve seen and how to avoid them:
1. Accepting unrealistic goals
If you join a company as the head of sales, you’ll likely be told that the revenue goals for the year have already been set, with the phrase “board approved plan” bandied about to imply the goals are set in stone.
As an incoming head of sales you should never accept the existing plan at face value. For a start, if the board and management team are so good at planning, why did they need to hire a new head of sales? And to state the obvious, the moment you accept a plan it becomes the quota you will be measured against.
The first thing you need to do is ask the CEO and CFO to walk you through the model and assumptions they used to come up with the plan. Nine times out of ten you will find the plan was developed to meet the aspirations of investors (aka “tops down”), rather than the needs of customers (aka “bottoms up”)—so the second thing you need to do is build your own model to highlight the gap between dreams and reality and get to a more achievable plan. (Btw if you need advice on how to build your plan, shoot me a note).
As a CEO you can get ahead of this issue by making sure your incoming head of sales has the type of analytical skills needed to build a model and being willing to collaborate with them on coming up with a plan that they think is achievable. If you skip over this or try to cajole them into accepting your board approved plan you are just going to miss your numbers and find yourself looking for a head of sales again in 18 months’ time.
2. Trying to do it all yourself
The most common problem first time heads of sales make is assuming they should lead from the front—by closing deals themselves and getting personally involved in all major deals. After all, you got this far because you are a great salesperson, right? Wrong. Leading from the front doesn’t work in sales management because you need all your reps to hit their goals in order for you to hit yours and you can’t do their jobs for them nor expect them to just copy you.
The best heads of sales actually lead from behind the curtain, by creating processes that guide their salespeople through how to predictably prospect, close and expand customers, and enables new salespeople to join and ramp up. As a head of sales you should be spending more time on process, measurement and metrics than on individual deals.
As a CEO you can get ahead of this issue by making sure your head of sales has the skills to build processes that are clear and easily understood. You do not want to hire someone purely on their ability to close deals, or purely on which customers they know as you will just end up with an overpaid sales rep instead of a strategic head of sales, and a bunch of sales reps who routinely miss their goals. A good way to screen for this is to ask your head of sales candidate to describe the stages of their current sales process, how they would improve the process and what impact it would have. If they can’t at a minimum tell you the goals, in-stage actions and exit criteria of each stage in their current process you should pass on hiring them.
3. Prioritizing the wrong things
This is super common in early stage companies, where there is some product-market fit, but unpredictable growth and limited time to figure things out. The CEO decides to pull out all the stops to recruit a head of sales candidate from a hot, more established company—only for them to fail within a year. The root cause is always the same; people from later stage companies generally struggle to prioritize the set of problems to solve in an early stage company because the problems had already been solved before they joined their later stage company and they never got the chance to experience them. They try to replicate what they were doing in their past role only to find that it breaks in their new role because something foundational is missing.
As a head of sales it’s easy to overlook this, especially if you are being offered the opportunity to trade up from say, director at a bigger company to VP at a smaller company. You need to go into the role with measured expectations for success but a strong desire to learn from the experience.
And as a CEO it’s easy to get caught up “chasing the logo dragon” in the recruiting process instead of figuring out if the candidate has the skills to identify and prioritize the must haves vs nice to haves. A good way to screen for this is to ask a head of sales candidate to describe how much of their success was down to them versus being in the right place at the right time.
4. Overvaluing industry experience
It’s common to think that your head of sales needs to have experience and contacts in your industry, in order to better connect with customers. However, if you are a startup trying to disrupt the status quo its actually better to have someone from outside your industry as they are likely to be more objective and willing to challenge industry norms.
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