Your company has been growing – and quickly. You now have a core group of customers, a defined ideal customer profile, and a handful of sales reps. Everything is moving in the right direction, but there is one major problem: sales is consuming a disproportionate amount of your time as the founder.
How can you alleviate this problem? You need to hire an experienced sales leader. But this is much easier said than done. Most business leaders are not hiring experts, and many founders are not sales experts. This can be a recipe for a potential poor hire.
Hiring the right sales leader is essential to accelerating your growth and transitioning from Startup to ScaleUp. Picking poorly might delay this transition, or worse, even doom your company to never achieving ScaleUp status.
In this series, we will explore steps you should take to find and recruit a top-notch sales leader for your company.
The first step: identifying and avoiding potential hiring pitfalls. Here are the five most common issues we see given the hundreds of CRO/SVP/VP Sales interviews that we engage with:
Pitfall #1: The Battlefield Promotion
The problem: It is common for founders to want to reward salespeople who have been with them for a while and are performing well with a promotion to leadership. This helps retain your top talent, and it fills an immediate leadership gap.
Why this hurts your business: The skillset needed to build a sales organization is radically different than the skillset needed to be a good sales rep. And while a good sales rep might have previous sales leadership experience or might be capable of learning sales leadership skills while on the job, it is far more common that this sales rep will face a steep learning curve as they transition into a leadership role. Rarely will your best sales rep make a good sales leader. This is true at every stage of a company – StartUp, ScaleUp, and even public companies.
A ScaleUp company’s sales program must start to build out the following as it scales the organization:
- Strong hiring practices and ability to coach and develop sales reps
- Standardized sales processes and playbooks
- Consistent pipeline management and forecasting calls
- Stable and developing enablement programs
- The appropriate infrastructure not only for today but also for the next 2-3 years
All of this must be developed by a sales leader in the early stages of the Scaleup, which is why hiring a sales leader with the right skillset is vital to your company’s continued growth.
The solution: The easiest approach is hiring an external, proven sales leader. That sales leader also needs to fit into your current and future GTM plans. If you are focused on SMB and mid-market, ensure you hire someone who has sold in that space. If you are looking to go upmarket or are already selling to large Enterprise companies, then ensure your sales leader can sell and effectively build a team to go upmarket.
However, if you do choose to promote one of your salespeople, make sure they sign up for sales management training, so they are set up for success. It will not only benefit their own career growth, but it will also be critical to your business as they take an expanded role in building your go-to-market (GTM) engine.
Pitfall #2: Focusing on industry experience rather than sales management experience
The problem: It has come down to two candidates. One is excellent but has broad experience in sales leadership across various industries; the other has minimal leadership experience but has significant sales experience within your industry. The question is, which do you hire? The answer here may vary and depends on your specific situation.
Why this hurts the company: Similar to the battlefield promotion, industry experience without strong management experience may result in issues when building a team, such as scaling the appropriate processes and systems needed to grow your business. An experienced leader with no industry experience, however, can struggle to be taken seriously in the market if the product is highly technical and may not gain the buy-in of your sales teams.
The solution: If you have an existing sales team with industry knowledge, then you do not always need your sales leader to have industry experience. You need them to know how to build out a team, develop that team, build out processes and programs, and work with product and marketing on messaging, etc.
If, however, you do not have any sales reps or your reps lack industry experience, then you will likely have to build a training program to educate them on the industry or you will need a manager with experience in the space. This is especially important if the sales leader will need to act in a dual capacity (i.e., act as a sales leader while also carrying their own individual contributor quota) in a highly specialized space. Often, companies that go down this path find that in 18-24 months they will need to add a more-experienced sales leader to take the team to the next level.
Pitfall #3: Hiring for 3+ years out rather than today
The problem: You know where you are taking your company and that an IPO is on the horizon. Can’t you help expedite this process by hiring someone who had taken a sales team from $20M to $50 million or better yet, $50M to $100M? The answer is often no.
Many companies make the mistake of hiring a late-stage CRO/SVP Sales for an early-stage company. Sometimes this hire will help propel the company forward. But there are many cases where 6 months down the road, the company is looking for a replacement CRO/SVP Sales who is better equipped to deal with the issues facing the company today.
Why this hurts the company: While the fundamental sales activities remain the same regardless of company stage, the prioritization of activities and access to resources vary dramatically based on the stage of growth of a company.
A late-stage CRO is often used to working with sizeable marketing and sales operations teams, established tools, and processes, and is expected to help scale those to new heights. But early- stage CROs are the ones who build from the ground up and must establish the processes, and in many cases, build the tools because none yet exist. They need to be resourceful, scrappy, and innovative – someone who can not only craft a sales process over the weekend but can also develop their own training and materials while simultaneously helping their sales teams to close deals.
If you have hired the wrong person, sooner or later one of you will realize it is not the right fit. On top of that, you will have likely delayed your organization’s development by months.
The solution: If you have identified a candidate with later-stage experience, make certain they know what they are getting into and are willing to step back and put in the work themselves. Be sure to test both their skills and resilience when faced with obstacles. If you do not, there is a risk that both of you will end up unhappy.
During the interview process, you can focus on asking them questions like, “Walk me through how you would train your next 5 hires.” If they get tactical and talk about how THEY are going to execute, then that is a good sign. If they start talking about leveraging various teams and solutions, then that is a red flag that they may not be able to roll up their sleeves and get the job done.
Pitfall #4: Not seeing the warning signs on a résumé
The problem: Let’s face it: We have all been blinded by a great résumé. Maybe you get excited by a candidate because the person attended incredible universities, or the person worked at several high-profile companies. Conversely, you might avoid a candidate who has the requisite experience but perhaps has worked at companies that are not on your top 10 list. Judging candidates solely based on a résumé or failing to catch warning signs within a résumé are issues that companies of all sizes face.
Why this hurts companies: While the items on a résumé may be indicative of intellect or experience, they only offer a high-level glimpse of the candidate’s capabilities. Companies that rely largely on the résumé without doing backchannel reference checks or a structured, scorecard-based interview process may end up hiring someone without the appropriate skills. In addition, we find that people often over-index on the company or school brands, which can limit meeting candidates who are great for the job.
Over the past decade, we have become more accustomed to people switching jobs every few years and sales leaders are no exception. They sometimes have a shelf life of 18-24 months. At Insight, however, we look for sales leaders who have a multi-year history of successful growth. This can be challenging for sales leaders at ScaleUps, since these companies are constantly shifting. When it comes to jumpiness, the concerns are:
- The candidate was not successful in the role (low performance)
- The candidate left when things got difficult (low resilience)
- The candidate was too unfocused (jumping to the next shiny job)
It takes years for a leader to live with the consequences of their decisions, whether that be the team that they hired, the system decisions they made, or the processes they put into place, etc. We like to look for leaders who have had to make these tough decisions and who will be around long enough to see those decisions through. The one exception we allow is job change due to an exit like an IPO or company acquisition.
The solution: There are three key elements that lead to a successful executive-hiring process: scorecards, multiple interviews, and reference checks. At Insight, we have developed a robust program to hire top-level executives that includes all three elements.
We work closely with our portfolio companies to build a scorecard based on the skillsets that are needed to successfully perform the role and then use those scorecards during the interview process to assess the candidate’s relative strength of each skill.
We then have experts from Insight interview candidates, in addition to the portfolio company leadership team. The Insight team comprises operators who previously helped build and run powerful software businesses, so they have direct insights into what success looks like for a specific role. All candidates’ scorecard ratings are then compared to better understand how the candidates stack up against one another.
These steps, in combination with other proven hiring practices like engaging the CEO in selling the role or leveraging an executive assessment, allow us to maximize the success of the executive hiring process overall.
Pitfall #5: Falling in love with a candidate’s personality or style
The problem: You’ve found someone who is the perfect fit culturally for your organization, even though they may not have the right experience or sales background. Your first thought is, “Wow, I can see them working well with our Marketing and Product teams, and the company will love them.”
Why this hurts the company: As Peter Drucker once said, “Culture eats strategy for breakfast.” While we won’t argue with the late, great Peter Drucker, we would say that culture alone can’t fill gaps in skillsets.
Hiring someone who has a background in enterprise selling when your company has an inbound high-velocity sales process is a recipe for disaster regardless of whether they fit with your executive team. If the leader can talk the talk with marketing and product but then cannot formulate a sales strategy to grow their own team, that is a recipe for disaster.
The solution: While culture is an important consideration for any key hire, indexing in this area too heavily also leads to biased hiring and a monoculture that could be an issue down the road.
The use of a scorecard in the interviewing process can help ensure that we do not overlook gaps in skills. Culture can be a component of the scorecard, but be specific about what cultural elements you include. For example, we specifically list “grit” and “tenacity” as traits on almost every scorecard, so there is consistency when vetting candidates. The scorecard also ensures you align on how much importance you put on cultural elements versus skillset items.
While these are by no means the only pitfalls when hiring a sales leader, they represent the most common issues. Being aware of these areas can help ensure that you make a good hiring decision. Hiring the right sales leader not only unlocks significant growth potential but helps you take your company to the next level.
Over the past year, Insight Partners has helped hire over 20 Chief Revenue Officers (CROs) and has interviewed more than 120 candidates. If you are a portfolio company that would like to leverage our experience, please contact the Talent and the Sales & Customer Success Center of Excellence.