I read a fascinating post from Chris Orlob, filled with interesting data on sales performance.
The headline is, over the past 7 years, average VP of Sales tenure has shrunk from 26 months (Chris calls that healthy, I think it is unhealthy) to 19 months, which we both agree is tragic.
He couples it to another downward trend, % of reps attaining quota is now roughly 50%.
There’s other research that shows slightly different data, but every survey I see has over all sales performance declining.
We are on this death spiral of continuing bad performance, with no end in sight. The bottom line is this results in billions of wasted spending and 10’s of billions of lost opportunity.
It’s easy to see how we get to a place like this. The scenario goes something like this:
1. Hire a new VP of Sales, presumably because the prior VP of Sales wasn’t getting the results.
2. It takes 60-90 days for the new VP to figure out what’s broken and what actions should be taken.
3. Now we talk about the change management timing. Say it’s simple, I need to put in new systems, or maybe training, or maybe some program. It takes time to make these decisions and get things in place. Let’s say, very optimistically, it’s 3 months. So the VP is 5-6 months into the job.
4. It takes time for the sales people to learn the new skills, new systems, new programs, so there is an “onboarding” or change management time period for the sales person to be fully productive on these new things. Let’s say that’s another 3 months. So the VP is 8-9 months into the job.
5. Unless you have a very short prospecting/sales cycle, we now have to go through several sales cycles to see consistent and sustainable improvement. Let’s say the cycle is 3 months. At the first cycle, we see some improvement, probably need to make some changes and adjustments. The VP is 11-12 months into the job.
6. The second cycle is 3 months, again, some improvement but not enough, also some tuning to get the results we want. The VP is 14-15 months into the job.
Remember, all this is very optimistic timing and assumes everything is working like clockwork.
7. Executive management is getting impatient, “We expected to see results, we, we aren’t seeing it fast enough, what’s been happening the past year!” Behind the scenes, executive management is looking for the replacement, just in case.
8. VP of Sales gets worried, naturally, ups the tempo, may rethink a little bit and redirect. Some time delay, we go through another sales cycle, we’re now in the 18 or so month time frame.
9 VP of Sales has run out of runway, a new VP is brought, we go back to 1, we do not collect $200 and we go through the same death spiral again.
First, this amount of change never happens this fast! Perhaps there is some chance in a very small organization, but then you have the challenge of finding people that have the experience base to do this. The larger the organization, the longer and more difficult it takes.
Second, everyone in the organization is hunkering down. They see managers come and go, they know this one will pass, so they aren’t all in. Which creates a bigger challenge for the VP of Sales.
If the VP of Sales realizes people aren’t all in, they look for people who are. Now we are into the recruiting, hiring, onboading, getting to know the territory—-whoops, time’s up.
So is it any surprise that sales performance figures are declining? Is it any surprise the VP longevity is declining? And I suspect voluntary attrition is increasing, which further aggravates the problem.
We are on a performance death spiral that wastes talent, resources, money, opportunity.
To change this, change has to start at the top!
Executive management and management at all levels need to stop this!
First, we need to recognize and commit to talent trumps everything. Hiring the best person available is wrong, taking the time to know what your Ideal person is and searching for that person is critical. Too often, we have commoditized talent and it is something that cannot be commoditized. If we have the wrong people, if we are unable to retain the right people, we will never succeed. Again, this is not just for top management, but this applies to everyone in the organization.
Second, we have to be realistic about time. The larger, more complex the organization, the more time it will take. We have to understand the leading indicators of success, to recognize we are on the right track, to find errors and correct them early. But we have to commit to the people we bring on board, being realistic about time to success.
Third, we have to have a culture of accountability. We have to have a culture committed to performance and not to excuses.
Fourth, we must execute, execute, execute.
Fifth, we must constantly learn and improve. None of this is trivial or easy. If it were, we wouldn’t be where we are. We will make mistakes along the way
Sixth, we must execute, execute, execute.
There is no magic. There is no “easy” button. There is no technology that will solve our problems. This is tough work and if you sign up for the job–whether CEO, VP of Sales, Sales Manager, Sales Person, you have to commit to the work.