The Tenure Crisis……

Preface:  My apologies, this is very long.  But it needs to be.  The tenure crisis is not a simple issue.  The impact of the tenure crisis robs all of us of opportunity.  There is so much potential–both revenue growth, organizational and individual growth.  We need to pay attention to, not adopt “work arounds.”

We have a tenure crisis. It’s devastating to company growth and performance, it’s devastating to our individual growth, development and performance. Yet I’m stunned by the number of people, when confronted with it, shrug their shoulders, saying, “Get over it, that’s the way of work these days……”

I’m stunned by the “acceptance” of this problem, particularly by leaders. Just because that’s the way things are, doesn’t mean it’s right or that we shouldn’t do everything possible to change it. (The same can be said about so many other things we see happening in business and society.)

Most data I see puts the average tenure of sellers and managers (at all levels), at somewhere between 11-17 months. It’s been plummeting for years. Along with that we see data mirroring this around employee engagement, % of people and organizations achieving goal, and other areas.

I’ll get into the reasons and fixes for plummeting tenure, let me examine the impact this has on performance. The net of this discussion is that “we,” individually and organizationally get into a performance death spiral. This is irresponsible and has to be viewed as absolutely unacceptable!

Case 1, Individual contributors: For all but the most transactional selling processes, it takes time to ramp, build a pipeline, and achieving success. In complex B2B, it can take 3-9 months to ramp up to where you can take on the job and start producing. Then we have to start building pipeline. Customers don’t want to talk, we struggle to find enough qualified prospects to build healthy pipelines. I don’t have data on this, but let’s imagine it takes 1-3 months (and based on what I see, I suspect I’m understating this.) Then, we have the buying/selling cycle. In complex B2B, we’ve traditionally seen, 9-18 months selling cycles. We see data where these are getting longer. About 80% of our clients have selling cycles that go from 18-30 months (though the deal sizes on these are millions to 10’s of millions).

Add all this together, and we see 13-30 months. I suspect you are beginning to see part of the problem. But to gain mastery, to become an A or even B player, it takes several cycles to get really good, maximizing your win rate and productivity.

Yet, the data shows, 11-17 months average tenure. This means, as people are onboarded, they are probably leveraging the deals initiated by their predecessor’s predecessor. And if the seller didn’t have a predecessor, they are developing their territory from scratch.

We can see how devastating this revolving door approach to driving revenue and business growth is. It’s unsustainable!

Case 2, leadership churn: Now let’s move to the leadership side of this problem. Let’s focus on top sales executives. Presumably, they’ve had some track record of success, so they come into an organization with some experience. Let’s also assume, in the interview process, they are informed about performance issues they have to fix. Coming on board, they have their own onboarding process: getting to know the organizations, products, markets, people, customers. Seeing how work gets done. Then there’s time spent in identifying the specific performance issues. In all but the smallest and simplest of organizations, that takes a minimum of 90 days. I work with very talented leaders that have been struggling to define the problems for a year or more. Part of this isn’t lack of talent on the part of the executives, it’s just the sheer rate of change and disruption that make it very difficult to define the problem. Oh, and they still have to be driving as much revenue as possible.

Then there’s the process of defining the solution. If we sell sales and marketing tools, we can use customer buying cycles as an indicator of how long it takes to agree on and define the solution. And while not every problem definition process involves buying something, it’s a good surrogate for us to use. So, I’ll leverage the selling cycles I cited above to help illustrate this challenge. Based on this, we can expect 9-18 months to define the solution. Then there’s the change management process, the time it takes to put the solution in place and start producing results. Let’s say that take 3-9 months. I’m just pulling numbers out of the air, but they are informed estimates based on what we see in working with our clients–and ours tend to be the elite/high performing organizations. Then there are the inevitable tuning and refining cycles organizations often go through.

Add all these together and we see 15-30 months.    Again, when we look at leadership tenures of 11-17 months, we scratch our heads, thinking, “How does this work?”  It doesn’t!

Case 3, putting a band aid on leadership churn.  We are seeing an emerging trend, leaders specialized in fixing a single problem.  “I focus on building pipeline……  I will drive retention/expansions…..   I focus on cost of selling/productivity……”  They have formulaic approaches that probably work.  They know how to solve that problem, but struggle outside this.  So they come in, immediately drive a change process, putting it in place, start to see the results…..  But then the improvement stops.  It’s always difficult to sustain change efforts over time, while we get initial bumps in performance, over time we struggle to sustain it.  Or a different set of challenges arise, a different problem.  And we know how to address this, we find a new leader who knows how to solve that problem.  Over time, we see the revolving door for this approach of leadership change at somewhere around 15-24 months.

While this provides performance bumps, it’s difficult to sustain.  But there’s a bigger challenge.  Sellers see a revolving door of leaders, each driving their own programs to fix problems, then moving on.  It’s exhausting, I’ve often heard sellers describe it as the “Problem du jour” approach.  They tend to keep their heads down, do their jobs the best way they can, “knowing that this too will pass.”

Let me be clear on this approach.  Sometimes we need to bring in people with specialized skills to help us make a transformation (as consultants that tends to be our job).  There can be great value in doing this.  The critical issue is sustaining this over time.  If we have a revolving door of leaders, constantly shifting priorities we fail.

Now you start overlaying these three cases over the organization.  Our sellers are churning in 11-17 months.  Our leaders are churning in 11-17 months.  And we have constant shifts in priorities and focus over 11-17 months.  The dynamics of this will drive higher levels of churn, sustaining the revolving door/temp job mindset.  But think of the performance impact of this!  We can’t build and sustain performance, we can’t grow at the rate we should expect to grow.

And then look at this from a customer or partner point of view, or within the company.  The people they deal with are constantly changing, they have to explain things all over again, the changes may slow them down.

As we look at consistently high performing organizations, one thing stands out.  They have longer tenures.  There isn’t the constant churn of people.  These organizations build deep experience and capability, and keep growing that capability.  So the longer a person is in the role, they become more productive.  Again, I have to be clear, it’s not just longevity that makes a difference, but it’s a mindset of constantly building skills, driving higher levels of performance and refusing to accept poor performance.  Looking at it a different way, when we churn people we are starting from the beginning each time.  When we build on the experience of people that have been in place, we keep growing their capabilities.  We still have our “normal curves,” but we keep moving those to the right.

I’ll pause here.  I’ve spent about 1250 words to help you understand this challenge and the adverse impact it has on our performance.  We could do so much more if we had more stability (not complacency) in tenure in the organization.  But what causes this?

There are some that say, “This is the way Gen Z is, they want constant change, they won’t commit to things for the long term…..”  Others say, “Dave you grew up in a world where people worked for one or two companies, things are different…..”   There is some truth to these–though I would not limit that desire to change to Gen Z.  People can become complacent, organizations become complacent, they fail to change when everything around them is changing.  But at the same time we look at other consistently high performing organizations, in every sector, we see longer tenures, but ambitious growth oriented organizations constantly looking at how they innovate, improve.  And they are building on deep experience.

But what drives this tenure crisis.

This is simple.  This is strictly a leadership problem!  We see it in all sorts of ways, not just in tenure.  We see it in employee engagement, we see it in performance, we see it in employee satisfaction, we see it in customer experience/satisfaction.

People don’t feel valued, heard, cared for.  They don’t feel included.

Leaders have adopted a mechanistic view of the organization.  Everything has become a replaceable commodity.  Even themselves (though they wouldn’t admit this, but the behaviors of the people/boards they report to believe this.).  The concept of loyalty to a mission, a common sense of purpose, a common value system, loyalty to the people that make it happen is totally foreign.

Leaders have adopted a very short term view around results.  This week, month, quarter is far more important than sustained growth and performance over years.  And it’s understandable, if they plan to be in a role for 11-17 months.  They need to produce results in that period, so they can present that “success” to their next employer.  The concept of built to last has become foreign, displaced by a mindset around built to exit.

There are, at least, decades of thoughtful writing on organizational performance, leadership supporting the mindset around people focused leadership.  There are volumes of research supporting the ideas around the importance of culture, values, purpose, and leadership.

Of course, we can find examples of “great success,” with the churn and burn mindset.  But they are in the minority and they are seldom sustainable over time.

And even with these, there’s the question, “Are they performing to their full potential?”

So many report achieving great results or hitting their goals, but the issue is they could be doing so much more.

People are developing strategies  and “work arounds”to cope with this dilemma.  They would be insane not to!  They have purely short term goals with each job.  When they are hired into a new role, they immediately start looking for the next role.  Others get “side gigs” to provide some stability.  “Open to a new job” has become a permanent fixture on too many people’s LinkedIn profiles.

And while these  strategies are understandable, they are devastating in driving the top levels of performance.

My pleas to those reading this post:

1.  I’m primarily directing this to leaders, recognize this is a leadership issue.  Focus on retention, look at tenure, look at investing in and developing your people.  Don’t do this because it’s the “right” thing to do, do this because it drives much higher levels of performance.  Refuse to settle for what you get–even if it’s meeting your goals.  Look at the potential you should achieve.
2. Again, for leaders, change your own behaviors in longevity and tenure.  Build your own experience and capability to perform.  Look for organizations that are consistent high performers, that have data around longer tenures.  Join those companies, you will develop your capabilities far better than becoming a one trick pony.
3. For individual contributors, look for opportunities where people are valued and companies invest in your development.  As part of your criteria, look at tenure and longevity.  While some with the churn and burn mentalities might offer high comp, look at how many people are actually achieving that comp and how many are achieving it with them year over year.

There is so much underserved potential in business.  There is so much underserved potential in our people.

We can and should be doing so much better.