Tuesday, March 15, 2011

The Six Real Reasons Why VPs of Sales are Fired

From the Heavy Hitter Wisdom

It can be well-argued that the vice president of sales is the most important position within a company since their words and actions impact the organization’s most critical issue—generating revenue. However, the average job tenures of vice presidents of sales is now at an all time low of eighteen months to twenty-four months.

Obviously, one of the main reasons VPs of sales are fired is because they miss the revenue target. However, with the economy in the tank this traditional measuring stick doesn’t tell the entire story. In fact, many VP of sales are “let go” at the wrong time and for all the wrong reasons today. Quite often the CEO mistakenly believes the grass will instantly become greener with the addition of a new sales leader. Unfortunately, this tumultuous changing of the executive guard can do far more harm than good in both the short and long term. With this in mind, here are the six real reasons why a vice president of sales should be fired.

Inability to Recruit “A” level Talent. Outside of revenue generation, the most important task for every vice president of sales is to attract, hire, and retain top-level talent. In other words, the VP of sales must present the compelling closing arguments to “A” quality salespeople as to why they should join the company. More importantly, the VP of sales should be able to recruit high quality “A” level managers. Because, “A” level managers hire “A” level salespeople and “B” level managers hire “B” and “C” level salespeople. The cascading effect of diminishing talent kills the competitiveness of the sales organization. This is particularly true for smaller companies that must compete against a gorilla (Oracle, IBM, Cisco, etc.) in their industry.

Wrong Sales Culture. The sales organization’s culture dramatically impacts the ability to achieve revenue. Three of the worst sales cultures are based upon secrecy, dominance, or submission. A secretive sales culture is one where there is a conscious effort to withhold information from the rest of the company. As a result, there is a black hole of customer information and engineering and marketing are always guessing about what they should do next. A dominant sales culture takes bullying to the extreme. They condescendingly steam roll the other departments of the company to get what they want and cut corners wherever possible. At the other end of the spectrum is a culture based upon submission and inferiority. Think about it for a moment, if the sales organization doesn’t have enough backbone to fight internal battles inside their own company how can they be expected to vanquish the competition in the field?

Inaccurate Forecasting. Does the VP of sales have the pulse of the sales organization? Does he look through rose colored glasses over-optimistically at the forecast or with so much pessimism that it is impossible to decipher what business is real? Is he well-versed on the major deals and close enough to the salespeople to discern unachievable pipe dreams from real pipeline? Are there continual surprises and is bad news continually delivered at the last possible moment? Remember what Machiavelli said, bad news should be given all at once and as soon as possible.

Executive Team Combativeness. Since the sales function relies so heavily on the other departments (engineering, marketing, customer support, etc.) to achieve success, it is completely natural that friction develops between members of the executive team. And, the VP of sales who tenaciously fights for his department’s causes should be respected. However, a change is warranted when this turns into a personal vendetta against other executive team members.

Is the VP of Sales a Strategist? Can he or she create a competitive sales strategy based upon marketplace realities (and implement a process to execute it)? Does he aggregate meaningful product feedback and articulately represent the customer’s experience? Does he help advise marketing as to which programs to pursue and how best to spend their precious dollars? Most of all, can he dovetail his sales philosophy to the company’s ever-changing strategic direction?

Does He Add Value in C-Level Executive Customer Meetings? One of the most critical and often overlooked aspects of the VP of Sales job is the ability to participate in C-Level customer meetings and convince company leaders to buy. Does your VP of sales sit in the safe confines of the ivory tower at headquarters or is he able to make a direct impact on the most important deals in the field?

I remember hearing a vice president of sales publicly pronounce that all his problems would be solved if only he could, “Make the monkeys climb higher in the trees.” His tongue-in-cheek criticism was the topic of conversation within his sales force for months. To his salespeople, it was just another example of a management style that they found to be repugnant. Anyone who creates an environment like that should be fired.

Conversely, I have the pleasure to work with many very talented sales VP’s. They are great recruiters, masterful forecasters, and serve as mentors to sales managers and salespeople alike. They are charismatic leaders who measure their success using three criteria; meeting revenue goals, creating an environment where the entire team can succeed, and helping the entire company realize its potential. While they are not perfect, they are well-liked and a unifying force for the entire organization.

As a side note, one thing that can really hurt a VP is fishing off the company Pier. With power can come attention and adoration. I have seen a few VP's in my time fall due to inter office romance.

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