Let’s try a thought experiment. You will see some of the assumptions are very simplistic, they will become obvious as we move through the thought experiment. They don’t impact the thought experiment. For the moment, suspend your judgement and bear with me.
The reason I want you to walk through this is to help you think about what I think is the biggest challenge facing sales leaders in maximizing the performance of their organizations: Talent.
By Talent, I mean finding/attracting the right people to our organizations, onboarding them effectively, developing them to both perform and the highest levels possible and to achieve their full potential, growing, and retaining them.
As regular readers know, each sales person we hire is a multimillion dollar investment. Yet because of our lack of focus on talent, we are squandering billions in opportunities. We are underperforming our potential, even if we are achieving our revenue goals.
So let’s get going—-take 10 deep breaths, suspend your judgement.
- Imagine we’ve solved all the problems of sales execution. Sales people know how to prospect and find the right opportunities. They know how to qualify, they know how to move the customer efficiently through their buying cycles, they know how to create value in the buying process. They know what they need to be doing, they know how to do it, and they are executing.
- Let’s imagine we have a vacancy, a position we need to fill.
- Most managers don’t maintain a list of ideal candidates they can immediately hire to back fill the vacancies. On average, it takes 3 months to find, interview, and recruit someone. It takes longer for managerial jobs. The sales person’s territory is open for 3 months. Buyers are still buying, we may have someone trying to cover the territory, but they were already fully occupied in their own territories. [So you can see the start of a problem]
- It takes about 5-10 months to onboard a person. For some complex solutions, we’ve seen it taking much longer (back in the dark ages, my onboarding was 18 months—but I’m a slow learner).
- We’ve got the person onboarded, say after 10 months (you choose numbers you are comfortable with).
- Now our sales person, has to start prospecting and finding opportunities. There may be a few residual opportunities that were being nurtured by someone else, but largely, they have to rebuild their pipelines. But we are imagining an idealized world, let’s imagine, somehow magically, they’ve found and qualified enough opportunities to achieve their goals.
- They start to work the opportunities. And we know the typical buying cycle in complex B2B sales is 9-18 months. So it will be some months until we actually see these opportunities close. Some may move faster, some slower, but let’s say the average selling cycle is 9 months. Which means, after the person has been on board for 19 months, they will have reached full productivity and effectiveness.
- But there’s a problem. Average sales and sales manager tenure is 16.5 months. So these people are leaving before they’ve even completed a sales cycle! They may have closed a couple of deals, but they aren’t running at the fill productivity we expect.
- But what happens to those opportunities that the sales person qualified. The customers don’t stop buying. Maybe we can have other people cover some of them, but they were already fully occupied managing their own territories, so things will slip. But the customers are still buying–but probably from someone else.
- And we start the cycle again….and again…..and again.
So even if we are hiring the right sales people.
Even if we are onboarding them correctly.
Even if they are executing what they should be doing and doing it well.
We fail! We fail because our sales people aren’t sticking around long enough to produce results and reach full productivity.
And this is base on the assumption that everything is working right–we are hiring the right people. We are onboarding them well, and they are executing perfectly!
We are set up for failure even before we begin!
We already know we have failed, even in the idealized scenario. But let’s add a complication.
Average tenure of a sales manager, at all levels, is also 16.5 months.
- These managers have an onboarding time, understanding the business, understanding the people, understanding the customers.
- If they are an experienced front line sales manager, they probably haven’t been coaching their people as effectively as they should have been during their onboarding period. It will take them some time to start identifying the strengths and weaknesses of their people and effectively coach them. And it takes time for people to change and develop, after 3-6 months, they start getting in a groove and having an impact, but in 16.5 months they are gone and a new manager is starting all over again. (And let’s not forget their people are churning at the same time, so they have to be recruiting and so forth….)
- (The clock is ticking away, time is passing).
- If it’s a senior level manager, they may want to make changes, it takes time to figure out what those changes are, it takes time to implement those changes, and start seeing results. They are trying to drive changes despite the revolving door happening beneath them, people coming and going every 16.5 months. By the time they start to see the results from their change initiatives, they are gone. The new executive comes in, starting to think about their change initiatives.
- Yet the customers are still buying…….but probably from someone else.
We know the reality is far more complex than that I’ve outlined in these very simplified scenarios. I know the assumptions I’ve imposed on the thought model create an idealized, unrealistic scenario. You;ve probably seen the biggest error in my logic, we can never fix sales execution if we have a revolving door in talent.
The biggest idealization is the assumption that people are doing what they are supposed to be doing in the way they should be doing them. But we know that’s a laughable fiction!
So reality is actually worse! If we fail in the idealized scenario, we fail more in the real world.
And it’s getting worse. Five years ago, depending on the survey you looked at, average tenure was around 36 months. Today, it’s 16.5, and we continue to see downward pressure.
Now here’s the insanity. Most of our focus, whether it’s sales leadership, sales ops, sales enablement is on execution. The focus is: How do we train our people, how do we provide the systems, tools, content, processes, coaching to make the perform at the highest levels possible.
But we see even if we solve the sales execution problem, we fail!
It’s an executive and sales leadership problem. We can no longer think people are replaceable widgets. We can no longer think “I’ll give her a try, if she doesn’t work out, I can replace her.” We can no longer settle for the people we can get, but make sure we are only hiring the right people to do the job.
We have to create companies and cultures where people want to work. We have to create companies and cultures that attract the right people. We have to commit to developing and growing those people. We have to commit to retaining those people.
The data is stunning, 16.5 months average tenure! The opportunity costs are staggering. Customers are spending money, just not with us.
Sadly, fewer than 10% of the executives I meet with recognize this is their number one challenge! They fail to understand they are, largely , wasting their money on all other sales performance initiatives.
Some say, “Well we are making our numbers!” What they fail to recognize is they are under-performing the opportunity. The top 10 technology companies in the US have average sales tenures of 21 months. They are the darlings of Wall Street/NASDAQ, they are the “high growth” companies. But the math is the same for them as it is for everyone else. They could be doing so much more!
Some say, “It’s a millennial issue, they will naturally move from job to job.” I think it’s an excuse. I talk to hundreds if not thousands of millenials each year. They want to work at places where they are valued, where they can have an impact, where they can contribute and grow. If they can’t get it at their current company, they will go someplace else.
Attrition is a problem, in another sense. Just like millennials, top performers want to work in places where they are valued, respected, have an impact, learn, and grow. They want leaders who can help them achieve this and invest in their development. If they can’t get it where they are working, they know they are highly sought after by other organizations.
And unfortunately, we are left with those who stay. They stay because they aren’t top performers. They aren’t the bottom performers either, they’re mediocre.
People are any organization’s most valuable resources.
Sales people are mulitmillion dollar assets. They ARE our most valuable sales resource.
It is the height of irresponsible management not to have Talent as a, if not the, top priority for every organization. Until we start addressing the talent issue, until we start attracting, onboarding, developing, growing, and retaining the right people; we will continue to fail in achieving our potential.
As leaders, we are accountable for maximizing the performance of everyone on our team. We cannot begin to address that until we address the Talent issues.
Dave Olson says
This would seem to directly affect the buyer’s desire to interact with sales people as well. No wonder they try to wait until almost the end of their buying journey to engage a sales person.