In a previous article in Top Sales Magazine (February 2019), I discussed why you cannot just excel at sales to be a good sales manager. The message was that moving from doer to manager is a crucial transition, and developing the required capabilities is a joint responsibility of the individual and the organization. Market changes are making this a more expensive and complicated issue. Here, I’ll focus on three factors and some of the implications.
Acquiring Talent. Hiring in sales has become more complex. The time to fill open sales positions has increased steadily in the second decade of the 21st century. Depending upon the position, according to CSO Insights, it takes on average from 3-4 months and, once hired, the time to full productivity is now, across industries, more than 9 months. That’s more than a year without a fully productive salesperson in many companies.
Most sales managers still try to deal with this challenge by dividing people into “Hunters” and “Farmers.” But reality is far more nuanced because sales roles are now more diverse than this dichotomy. Consider the difference in relevant hiring profiles between salespeople who sell direct to customers versus those who sell thru channel partners. Or those who work in highly-automated inside sales models focused on SMB prospects versus those who call on enterprise accounts. Or those who sell individual products versus a bundled product/service solution. Or consider how pricing affects hiring needs: the difference, for example, between selling multi-year software license agreements versus monthly subscription-as-a-service contracts. The Hunter/Farmer dichotomy is of little use in clarifying hiring criteria between these roles. In fact, in my experience, hunters and farmers are usually used by managers as post-hoc rationalizations for their hiring choices, not ex-ante criteria.
Allocating Resources. Across functions, research indicates that allocating talent among strategic priorities is the biggest driver of the effectiveness of HR practices. It’s now generally assumed by CFOs that financial capital should skew to the priorities with the highest Net Present Value potential. The same should be true for human capital.
Return on talent doesn’t happen with a job offer’s acceptance. It’s about building and allocating talent. A key responsibility of most sales managers is to do that by allocating prospects, territory assignments, and quotas. This has a temporal dimension in any changing company or market. In early-stage companies, selling is typically about customer discovery as well as closing deals. The successful rep at the established company with a known brand and selling process is often a bad choice for the start-up without a known brand and where getting early adopters requires discovering product-market fit, not only that sales person’s fit with your culture and values.
Similarly, talent allocation depends upon growth plans. When a company seeks to grow by selling new products to new customers, for example, expertise in customer selection, qualification, and coordination between sales and product managers for applications development are usually important. When you sell new products to current customers, by contrast, growth means expanding share-of-wallet at those accounts, the ability to leverage existing relationships, and perhaps an altered comp plan so that a “value-added bundle” is not just your sales force’s euphemism for a deep discount.
You must build and allocate the talent portfolio relevant to your business, and that requires proactive attention to developing and keeping talent aligned with strategy. If not, then sales managers in today’s faster-changing markets will soon throw good money after bad in allocating people, time, and money. Others now notice how sales managers allocate those resources. The data revolution enables firms to track more activities, and in the majority of firms (according to a McKinsey study) data analytics report to the CFO. “Sales Operations” groups—charged with applying analytics to sales processes and selling expenses—are often staffed by people with finance backgrounds. These people ask questions and sales is expected to have answers. Yet many sales managers have a shaky grasp of the financial components of selling beyond top-line sales volume. “Knowing the numbers” and the business acumen required to interpret the numbers are becoming essential for survival and success as a sales manager.
Managing Yourself. Core to the transition from sales person to manager is a change in professional identity. Successful sales people learn about their customers, products, tasks, and how to take care of themselves. Good managers learn to take care of others and assume responsibility for collective behaviors and business results. They spend time on hiring, development, and relevant analytics because the only way to keep increasing performance as a manager is to find and develop people to whom the manager can allocate more responsibility. That, in turn, enables managers to move on to additional opportunities and increase their impact.
The best sales managers develop a reputation in their firms as driving enterprise value, not just being an adept bargainer for their group. As a great sales leader once told me, “I’m not the smartest person in this company, but I have a clear perspective on the relationship between our assets and opportunities. My job is to be utterly realistic about any difference between where we are and where we want to go in the market, and the required changes to get there.”