In my previous blog, What a VP of Sales Does in an IT Staffing Firm, I pointed out (in order of importance) the 6 most critical tasks a VP of Sales performs for an IT staffing firm. In this post I want to share with you some thoughts and ideas for IT staffing firms to consider when hiring a Sales VP.
First, the most common question clients ask me when it comes to hiring their sales leader is “Dan, how important is it that they have industry experience?” Or, "what is more important, industry experience or understanding technology?” While I think there are pro’s and con’s to both, what I think is far more important is that you first focus on what type of Sales VP you need to hire. This, in my humble opinion is far more important than the industry they come from and what, if any staffing industry experience they have. In fact, I would say that that when companies are really hemming and hawing over functional background and staffing industry experience, they're really looking for a sales manager-someone to simply manage the daily activities of the sales team-NOT a sales leader. Or perhaps they have never hired a VP of Sales.
Now you may be saying to yourself, what type of Sales VP? Yes, that is not a typo. You see, the current growth stage of your company and your future growth plans is what should dictate the type of Sales VP you need hire. Let's break it down.
Ms. Superstar: Ms. Superstar does it all. she is bright, articulate and passionate about sales, the company, your service offering, and the industry. Regardless of what industry Ms. Superstar comes from, she will figure it out. Ms. Superstar is very customer focused, she will do anything for her customer. She wants to be liked and doesn't need to think twice about going the extra mile. Ms. Superstar may or may not come from the industry, has some sales management or branch management experience and a positive track record of managing small sales and/or recruiting teams in the past. Ms. Superstar can close business, lots of business. Ms. Superstar can immediately go out and get meetings with decision makers. She can talk with the best of them. Customers love Ms. Superstar. If you have never hired a VP of Sales before, Ms. Superstar will make you think you need to hire her as your VP of Sales because she looks exactly like what you need to hire. In fact, you will LOVE Ms. Superstar. Your entire team love her as well.
What's the Catch With Ms. Superstar?
The challenge or problem with Ms. Superstar is she has never actually built or scaled a sales team before. They know how to sell, they can problem solve, they're critical thinkers. Heck, they can bring large groups of people to a consensus and they understand the basics of a P&L statement. But 9 times out of 10 hiring Ms. Superstar as your sales leader is a bad hire. Why? Because you (owner/founder) and your sales reps need to be Ms. Superstar. You should know how to do all of these things. Your sales people should know how to do all of these things and they should be doing these things. Ms. Superstar is what you are looking for in your sales reps, not your sales leader. As you start your business and take it from 0 revenue to $5M+ in revenue you're figuring this stuff out, you are doing the actual work. Your initial sales reps are doing (should be) this as well. You should be looking for these skills and traits in your sales reps, especially early on in the growth and development of your organization. But after that, say once you reach $5M in revenue, you need someone that can scale and really build a team . Let's be clear, the ability to sell is not the same skill as building a sales team.
This is what 80%+ of IT staffing firms need to hire but they just don’t know it. Why? Because many IT staffing firms fail or struggle to take the time to really, truly think through what it is they need their sales leader to accomplish and what skills are involved in accomplishing those goals. Unless you're TekSystems or some other multi-billion-dollar IT consulting firm, you and your IT staffing firm have yet to figure out how to make success-consistently and repeatedly moving leads through the entire sales cycle from top of funnel to close-a repeatable process for ALL reps to follow and execute. This is why the industry is so fragmented, with thousands of IT staffing firms under $20M in revenue. This is why so many staffing firms struggle with opening new offices and going into new markets. They have yet to figure out how to make success repeatable yet they decide to open new offices in new markets every day.
The challenge is the owner or founder falls in love with Ms. Superstar when they really need Mr. Scalability. The other challenge of course is most Sales VP’s from within our industry can’t do this phase. There are lots of good candidates with compelling resumes, but very, very few of them have truly built and scaled a sales organization.
During this phase you have some key customers who carry you. You have some leads and opportunities but not a ton. The top of your sales funnel is not consistently full and your sales win rate is pretty low and inconsistent and you only have 10-20% of your reps hitting quota. You've hired many sales reps, multiple groups of reps who have come and gone with mixed results. Your current sales team is selling 18 different ways to Sunday. They're having some success, but all in their own unique way. So you (the owner/founder) think..."I'm not messing with that." More importantly and the bigger issue at hand is you have no idea nor the acumen on how to scale this and get it to the next level.
Here’s what happens when you hire Mr. Scalability. Within 120 days your revenue per lead goes up and your sales cycle shortens. Not just because he or she knows how to close deals but because Mr. Scalability understands how to implement basic sales processes to get all team members to sell from the same playbook. As a result your sales velocity (# of opportunities X deal size X win rate% divided by length of sales cycle) accelerates. Your win rates increase and overall quota attainment increases. It goes up because he or she knows how to recruit, hire and train sales people. Most important of all, your IT staffing firm is no longer dependent upon one key individual "carrying the sales team." You the owner no longer have to feel "hostage" to your superstar rep because success is now repeatable. And Mr. Scalability knows how to do it again, and again, and again repeatedly over and over. Mr. Scalability knows how to achieve predictable revenue growth. This is what you're looking for.
This person knows how to make all of your reps successful. Think about Alabama football or Duke basketball. They consistently compete for championships year end and year out even though their students graduate every 4 years. Heck most of them leave early (talk about turnover) yet these programs are consistently successful. Why? Their coaches know how to make it repeatable and scalable. It's a system. You or I could be an all American in those systems....maybe that is pushing it:) This is what your looking for.
On the other hand, let's look at the large national and international firms. These firms have the capital to invest in new markets because of the volume of business they do with their large national accounts. They open new offices with the strategy of hiring a really strong Branch Manager to service those national accounts with a local presence and to try to grow the local market. The success of the business model is based largely upon the quality of the Branch Manager. To a certain extent I believe that to be true as well. But my point is the primary purpose of these Branch Managers is they are there to manage a small team while servicing existing, usually national accounts. These firms nor their business models are entrepreneurial. While they certainly would like to see these branch offices grow local market share, it is NOT their business model. They are not committed to growing and scaling the local market presence. How can I make such a bold statement? Because if you look at these large, global staffing firms (with multiple staffing verticals) they have 1-2 sales reps in sitting in $500M markets with 0.03% market share. If they were committed to growing the local market and building and scaling their local sales teams and that were their business model, they would have 20+ reps sitting in those large markets with 50%+ market share.
That brings me back to the type of Sales VP you're looking to hire. Keep in mind that when you're interviewing candidates (Branch Managers/District Managers/Regional Directors or VP's) from these large firms, they most likely do NOT have the hands on experience of building and scaling a sales team. This is not a knock on them (hell, I was one of them earlier in my career) and it doesn't make them bad candidates, just as long as you understand the type of sales leader you need and type of leader you're hiring. But building and scaling a sales organization is no what these people do in these large firms and and it is simply not a part of their internal management training program because it's not their model.
If on the other hand you do come across someone who truly does have the hands on experience of implementing scalable and repeatable sales processes, gobble them up. Offer them whatever it takes. These people are extremely hard to find. Mr. Scalability is the purple squirrel.
Mr. Big Shooter. At this stage you have figured out how to make success scalable and repeatable. You have your sales process down. It's dynamic and you actively monitor and measure it and update it. You know how to recruit and you also know how to on-board and train your new reps. Now it is simply a matter of doing it over and over and over again. Here your Sales VP needs to understand inbound marketing and how to work with your Marketing VP to maximize your lead generation program. They also need to understand how to structure the sales organization including the org. chart and sales territories, write compensation plans that drive the right sales behaviors, provide regular one-on-one coaching meetings and understand how to run an effective sales meeting.
Unfortunately this is often what you get when you hire out of the big companies. Mr. Metrics is all about the numbers and the dashboards. This is the guy that usually struggles to connect with the reps on the ground floor. Why? Because either they have never been a sales rep out on the battle field or it has been so long since they were that they simply no longer have street cred with the sales team. Instead, Mr. Metrics excels at making internal presentations and impressing the "big wigs." Your CEO or board probably love him but the reps on the floor despise him. Why? He spends most of his time looking at and thinking about sales metrics and meeting with his managers. Mr. Metrics is ALWAYS in meetings. Of course, nobody really knows or understands what decisions are being made in those meetings or how those meetings are impacting the bottom line. Mr. Metrics is great at telling sales people "get more of this and do more of that." But when it comes to helping sales people improve sales performance, Mr. Metrics is either in another meeting or back in his cave looking at what else, metrics.
Here is the thing. At some point you may in fact NEED Mr. Metrics. But trust me, you don’t need Mr. Metrics until you’re absolutely dominating your market. At that point you can hire him or her to manage a team of managers and do their thing. But if they were not Ms. Superstar or Mr. Scalability before they became Mr. Metrics, they probably can’t help you.