When it comes to the sales leader’s performance, the best CEOs are holding them accountable for more than just the number; they expect them to grow their people, too.
As the revenue producers, it’s not surprising that the sales function is always on the mind of the CEO. But it’s not just because the sales organization is out there closing deals. The CEO knows salespeople are the ones on the front lines, talking to customers and prospects, gaining insights about the competitive landscape and picking up on market shifts and trends. And in many industries, because salespeople are the face of the company to their individual customers, they have a huge influence on brand perceptions, the customer experience and, ultimately, customer loyalty.
As a result, CEOs continually have an eye on what the sales organization is doing and, more specifically, what it could be doing better. It’s telling that a recent four-part series for Chief Executive about operationalizing the sales function is entitled, What’s Wrong With The Sales Machine? CEOs on the whole are frustrated by the inconsistent and unpredictable results they’re getting out of the sales organization. They’re struggling to figure out what levers they can pull to consistently drive more accurate forecasting, higher performance and achieve growth objectives while minimizing risk. And they’re amping up the pressure on sales leaders to solve this problem.
Part of the challenge for sales leaders, says Gerhard Gschwandtner, founder and CEO of Selling Power, is that the sales function is very dynamic and perceptions and assumptions by CEOs can be driven not only by rapid changes in the marketplace but whatever the latest sales data is showing them (creating ‘recency bias’). There are always new competitors popping up, threatening market share and, in some cases, changing the game entirely.
At the same time, technology has become a major driver of change and disruption, which means the old ways of doing things no longer apply. Sales leaders are having to anticipate and respond to this heightened state of disruption while keeping the team motivated, engaged and focused. They also know that the team is only as good as its last big win — and it’s often the “misses” that get the most attention.
“Good CEOs are talking to customers and other executives all the time,” Training Industry President Ken Taylor told us. “So it tends to bubble up to them when the sales team misses an opportunity or should have uncovered something but didn’t.”
And these stories are only fueling their frustrations with the sales organization.
What CEOs Want Sales Leaders to Know
We asked Gschwandtner and Taylor what advice they’d give sales leaders to ease tensions with the CEO and improve sales performance over the long term. Here are some takeaways from those conversations:
- Be transparent about the good and the bad: Taylor points out that because many CEOs don’t have a full understanding of the sales process, they tend to oversimplify or overreact to the anecdotal comments they hear about missed sales opportunities or trends that catch them off guard.
Meanwhile, sales leaders tend to talk about the successes with their CEOs more than they do the struggles, challenges and lost deals. But when the company isn’t even invited for an RFP, there needs to be a frank discussion to understand what’s going on and more importantly, what the root issue is.
“Transparent sales leaders are the ones CEOs become less frustrated with,” Taylor says. “They may not be happy with the outcome, but at least they know why something happened.”
- Focus on the learnings and insights: CEOs get plenty of feedback about what’s wrong with the products; they’re not looking for more griping. Instead, they’re looking for insight and ideas that can create value. They want stories to share and test.
Here again, Taylor emphasizes that the best-in-class sales organization spend a lot of time talking about why they lost, not just why they won, because of the critical insights they gain from that discussion. It may lead to a shift in strategy, or it may reveal that it wasn’t a good client fit and that pursuing more of those opportunities would be a waste of time. “All of those learnings are critical,” he says. “And they tell the story the CEO needs to hear.”
- Don’t count on technology to replace the fundamentals: CEOs want salespeople to deepen their customer relationships and mine more value from each customer. And that requires more than what you can get from even the most cutting-edge technology. It requires emotionally intelligent salespeople. Sales leaders understandably want to make sure their teams are trained in the new tools they’ve invested in, but they can’t do it at the expense of developing the fundamentals and the ability to have real, human conversations.
“Sales is a combination of art and science,” says Gschwandtner. “If you don’t find the balance that matches what the customer expects and values, then you’re mis-training your salespeople and misusing the technology.”
- Redirect the conversation when necessary: Sales leaders often end up talking with the CEO about numbers because that’s where the CEO goes — how can we sell more, faster and better than the last period. What gets lost is the discussion about how to preserve or replicate what’s already being done.
“Sales have life cycles,” says Taylor. “And that’s often oversimplified by leadership when they say, ‘We have to do 10% more this year than last year.’ That means you have to do everything you did and more.” Sales leaders need the confidence and communication skills to move the discussion in a more strategic direction.
- Mind what you’re measuring: Business models, customers and markets are changing faster than ever, but the metrics don’t always keep up. Gschwandtner stresses that metrics should be guided by operational data and that all stakeholders need to be involved in coming up with them.
When it comes to the sales leader’s performance, the best CEOs are holding them accountable for more than just the number; they expect them to grow and engage their people, too. These CEOs are paying attention to the cadence and approach to coaching and performance discussions in addition to things like having a good forecasting model and sales process.
CEOs know that businesses have become more perishable in recent years. Especially as the markets experience more disruption and uncertainty, they’re relying on their sales leaders to keep the lines of communication open about the good, the bad and the ugly. Truly great sales leaders will be a critical source of information to the CEO, getting them the data they need to make smart decisions now so they can put the company in the best position down the road.