|By Michael Bushong||
|May 6, 2014 06:00 AM EDT||
There is no doubt that both people and companies are extremely dynamic. It is almost unimaginable that a company or a person would remain static for even relatively small stretches. And yet we have a collective view that roles or functions are somehow more static. This actually creates an unnecessary limitation when building teams: permanence.
To understand how this plays out, consider a company in its very early days that has a prototype of even beta version of a product. You tend to hire one or two sales people early on to start working with customers. This is a critical step in understanding the market, getting specific feedback, and developing repeatable selling motions that will serve you as you grow.
In these early days, the primary objective of sales is less about selling the product and more about developing some sales muscle. When the company is started, you have a hypothesis about what your value is and how you might explain that to people. You have probably developed pitches, but these are aimed primarily at the investment community. And you actually don’t even have a vetted idea of who is likely to want your product.
The first task for your fledgling sales team is to hone the message.
Now think about the kinds of skills required to identify your target market segment and develop a sales message. You need someone who is particularly good at messaging – not delivery of but creation. This starts to look a little bit more like a marketing person than a salesperson. But if you are in a high tech company, your early sales will tend to be technical. So you need to balance that messaging acumen with a solid understanding of the underlying technology. This starts to look like a cross between marketing and product management or strategy.
Of course, to pitch an idea to would-be customers, your salesperson has to also have sales skills. She needs to be able to identify target accounts, make contact, and get the meetings. And unless you are expecting a single-meeting close, she has to be able to manage a relationship over the entire sales cycle.
Basically what I am describing is a mix of sales, strategy, and marketing. And not just a little bit of experience in each. The ideal candidate is actually adept at all three of these. This looks a bit more like a Renaissance man or woman, capable of doing many things.
So imagine for a moment that you find this Renaissance hire. How do you get her to join?
There is the requisite discussion about overall corporate impact. This job is huge, so that is easy. You might talk about the product or the people. Ok. But eventually you get to compensation. How should you compensate this person?
The temptation here is to compensate her as a sales person. You might construct some comp package that is a combination of base salary and commission. To make it attractive, you might even ratchet up the commission plan so that she makes a killing if she sells.
But the objective here is not to sell. The objective is to develop the message, and outline a selling motion that can then be repeated by the next group of sales people who come in. In the early days, sales will be low. In fact, until your company finds the right product-market fit, this is actually the expected outcome. And to make things even tougher, you actually expect this woman to fail more often than not. She will run into countless walls en route to finding the right answer. Failure in this case is not unwanted; every failure helps tune the process that much more.
So if failure is expected, building a compensation plan centered around success means you are likely to have an all-star candidate who is under-compensated and frustrated.
Well, the alternative is to give her a huge base salary and some commission. But the challenge with this is that you end up setting a precedent that is not sustainable as you build the sales organization.
What do you do?
The whole issue here is permanence. As you look for this Renaissance woman, you have this idea that she will be a salesperson for the next 10 years. You end up building assumptions into the role based on the flawed view that this role is forever. But if you take a more pragmatic view, you might draw some different conclusions.
This type of sales role has a lifespan on it. Once you have the selling motions nailed, you want to then hire a bunch of hunters to go execute it over and over. Rather than assuming that the role is forever, you should build into the plan up front the eventual retirement of this position.
It’s hard to do that. When we talk with candidates, we talk about people being lifelong company cohorts. Our interviews assume that the particular job exists over some multi-year horizon that we intuitively know is impossible to predict. How many of our most talented hires remain in the same role for many years? The answer is almost none. We take our best people and we move them around. We might shift them from one project to another, or from one group to another. We promote them. We might even lose them to other companies who put them in bigger positions. Our hiring ought to reflect this reality.
The point is that roles are not forever. When you have a job to be done and you need a new person to do it, then hire someone for that job. And to be clear, I am not talking about hiring people just for 3-month tasks. Developing a selling motion might take a couple of years, especially when you include the training of a new sales team over time. But you don’t need to hire someone who will both develop the selling motion and then hunt accounts for the next 5 years.
Once you remove this long-term burden, then you can be creative with how you attract someone. If you know the job is 2 years, what happens if you change the compensation a bit? Rather than spreading equity out for four years with a one-year cliff, you might consider a two-year vesting period with a two-year cliff. The compensation ought to match the particular job you are trying to get done.
The real punch line here is that once you remove the notion of permanence, you get a lot of freedom to make creative choices about who you hire and how you attract them. By dropping the shackles, you might find that you are more able to create an adaptive team that better fits the dynamic nature of both companies and individuals.
[Todays’ fun fact: Ancient Egyptians slept on pillows made of stone. And I didn’t even know they had Radisson hotels that long ago!]
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