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• Friday, August 24th, 2012

This is a guest post from Dev Ittycheria, a partner at Greylock Partners.

One of the most daunting personnel decisions an enterprise software company CEO has to make is hiring a new head of sales. Make a great hire and the company’s ability to scale increases dramatically, accelerating growth and creating value for everyone involved. Make a bad hire and not only does the company go sideways and burn a lot of cash, but the CEO ends up at risk of losing his or her job.

Having had experience with recruiting sales executives and building high-performance sales teams at many companies, here’s my take on the most important factors to consider when assessing candidates to be your new head of sales.

1) Ability to recruit

The quality of any organization is directly correlated to the quality of its people. Sales is no different. The best sales executives know how to recruit “A” players – who by definition are the top people in any sales organization. Recruiting top sales people is not easy because they already have a job where they are well treated and compensated. However, good sales executives not only know how to sell the company and its long-term prospects, but also how to convince sales people that they can be even more successful, make more money and boost their career coming to work for them. A great sales executive who cannot recruit well does not exist.

2) Process orientation

The best sales organizations have a specific and consistent methodology on how they track the progress of an opportunity through to a closed deal. Every deal that gets closed has to go through certain stages – be it identifying the customer’s problem, defining the criteria by which a product will be evaluated, getting someone to “champion” the purchase, identifying the economic buyer who will approve the deal, managing the validation event to prove the product works as advertised, and negotiating the value and terms of the specific deal. With a great sales process, everyone uses the same vocabulary when describing the status of a deal. Great sales executives understand that sales is not an art, but a science.

3) Knowing how to develop sales people

While there is a lot of money spent on recruiting, in most situations there is not sufficient focus on training and developing sales people. Great sales executives understand that to increase the productivity of their sales people they need to continually invest in both product and sales effectiveness training. This means getting sales people trained on how to articulate the value and differentiation of their product offerings and to qualify and close opportunities. It also means training sales managers to develop territory and account plans as well as to recruit, develop and motivate sales people. This is far easier said than done.

4) Ability to forecast

The test of any executive is their ability to accurately forecast their part of the business, whether it’s an engineering executive who has to forecast when the next release will be shipped, or a CFO who has to forecast business financials. Great sales executives have detailed knowledge of two things that enable them to provide accurate forecasts: their people and how conservative and or aggressive they are in predicting when a deal will close; and how to qualify where deals are in the sales process and the associated risks of getting the deals done.

5) Anticipating future needs

There is a tendency of many sales organizations to focus myopically on the current quarter. While there’s no debate that the sales team needs to make their number, it’s also equally important that the sales executive plans ahead to make sure the sales organization is set up to make its future numbers. In enterprise sales where typical sales cycles times and sales productivity ramps average around six months, savvy sales executives understand that to make the number nine months from now, they need to start working on the important stuff right away – be it recruiting new reps, adding more sales management capacity, expanding into new markets, etc. Great sales executives are always thinking 6 to 12 months ahead of where the business is, and are adept at anticipating the needs of the organization.

6) Ego – Patton or Bradley?

General George Patton, the well-known WWII hero, had a lot of success in the field winning important battles as the Allied forces marched towards Germany. While a great general, he was also viewed as an egotist, and much of what motivated him was the need to personally bask in the glory of his troops’ victories. Fellow WWII General Omar Bradley was far less concerned about his own PR – he mostly worried about whether his troops were properly fed, whether the fuel lines were in place, and if his troops had the proper weapons to win the next battle. While Patton may have had a movie made about him, Bradley became his boss and was one of the very few who attained the rank of a five-star general. Many sales executives tend to predominantly focus on themselves and their careers, but the very best sales executives focus first on the success of their own people.

7) Coachability

No matter their track record or experience, it’s important for sales executives to have an attitude that they have much to learn before they can be truly effective. Knowing how to build a successful sales organization is not a cookie-cutter process. There are too many variables – market maturity, product maturity, competition, customer buying behavior, etc. – that change from company to company. Be very worried if the sales executive thinks he or she has all the answers.

8) Creating a culture of discipline

While it may be exciting to set up and paint a compelling vision of what the sales organization can accomplish, the only way to make sure these things actually happen is to do the hard and tedious work of continually following up and reviewing items in gory detail to make certain they are being done properly – for example, ensuring that the new sales process is being followed, that the relevant training is being developed and utilized, or the sales reps are still focused on building a pipeline for the following quarter while trying to close business in the last month of the current quarter. Great sales executives know how to instill a culture of discipline.

9) Integrity

A sales leader sets the cultural tone of the sales organization in terms of how they behave with customers and partners, as well as colleagues inside the company. A strong sales leader will clearly define the lines their people cannot cross, train them appropriately, and ensure there is a spirit of teamwork with the rest of the organization. However, there are many examples of sales people who have gone off the reservation, where they believe they have free rein to do what they want when they want to get a deal done, that everyone else in the company is a bozo, and that the company’s success is all about them. When this happens you have to carefully look at your sales leadership – it is always a reflection of the values they have instilled in the sales force.

10) Motivated for the right reasons

Leading a key functional area like sales for an early stage company is not for the faint of heart. A sales leader has to work very hard to be successful – the key question is do they have the competitive drive to do it consistently for a long period of time. I loved hiring people who had a deep fear of failure, and who felt that no matter what they had accomplished it could be all for naught if they failed at our company. A common trap to avoid is picking people who are solely motivated for financial reasons. They tend to take shortcuts to get to a quick outcome – such as giving away too many concessions to close a big deal, or not investing enough in the sales infrastructure to scale the organization. They also are likely the first to leave if they think it’s going to take too long to get to a good outcome.

11) Domain expertise (or lack thereof)

Many times I see companies getting excited about hiring someone from the competition or a related space. While having a relevant background on the company’s market is always a plus, I would never compromise on trading fundamental sales leadership skills for domain expertise. In fact it’s often very helpful to have someone new come in who will challenge the status quo. Unfortunately, hiring primarily for domain expertise is a common mistake I see CEOs and boards make.

12) Quality of decisions

A sales executive’s ability to succeed is directly correlated to their capacity to make consistently good decisions – decisions on whom to recruit and whom to let go, what sales process to set up, how to qualify a deal, where to focus their time, etc. The best way to assess how good the candidate is at making decisions is to examine the decisions they made about their own career. If they can’t make good decisions about their own career, why would you believe they will make good decisions for your company? The information you can glean from someone’s career choices can be very telling.

Sales is one of those areas in which everyone believes they have an important voice – including your board, advisors, management team and even your existing sales organization. While input from other stakeholders is important, as the CEO, this has to be your decision. Rarely is there a perfect candidate, so you have to trust your own instincts on whom to select as your sales partner, and then hopefully reap the benefits afterwards.

http://www.forbes.com/sites/ciocentral/2012/08/22/12-factors-to-consider-when-hiring-a-head-of-sales/3/

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