I had an interesting conversation with the founder of a sales technology company recently. Their technology was designed to provide greater transparency into the inner workings of sales departments, sales managers, and individual salespeople, in order to equip sales directors to provide better leadership for more effective sales execution.
It’s a slick product, easy to use, and effective. Their marketing is top notch. And they’re shutting down this year.
What interested me was the reason behind their product’s failure. It wasn’t the product’s fault. It was just that the assumed what sales directors want. It turns out that sales directors, on the whole, don’t want greater transparency.
Why? Because they have too much to hide. Here are 4 of those things.
1. They’re controlling the narrative
It has always struck me as strange that the sales department is still such a black box compared to every other department. A black box full of mediocrity, at that. In what other departments would CEOs accept a 43% failure rate? Yet only 30% of sales departments have 75% or more of their salespeople hit their quotas, and missed sales forecasts are so common as to be mundane.
Despite this sales directors come to board meetings full of vim and vigor, with optimistic tales about everything they’re doing to turn the department around; and all of the reasons why they continue to miss forecasts, almost none of which are their own fault.
The reality is sales directors like for their departments to be a black box because this means they can control the narrative in board meetings. It also means they can control the narrative they give to their reports and the reps in their departments, all of which is designed to help them maintain their position in the company.
2. They have no idea whether they’ll make forecast
Salespeople and sales directors are by nature an optimistic lot. Your sales director probably thinks they really will make forecast this time, but the reality is that they don’t even know what they don’t know.
Quarter after quarter tells the same story: We’re going to make it until we’re not.
The reality is that the technology and the tools are out there that would make it possible for sales directors to pinpoint with enormous accuracy whether they’re on track to make the forecast, and to make adjustments as necessary… but they’re not investing in them, or they’re not using them to their full extent.
Instead, they continue to rely on what salespeople self-report in the CRM and other tools. This means that most forecasts are guesstimates based on bloated pipelines and overly optimistic quotas.
3. They’re not doing the things they say they’re doing
When you hire a new sales director, the hope is that they will take a good look at your sales department, make adjustments, plan new and more effective strategies, and execute on those strategies in meaningful ways that lead to gains quarter over quarter and for the long haul.
Yet most of the time, this is not what happens. Average sales director longevity hovers around 18 months. Combined with abysmal sales effectiveness data, this indicates how few of them are successful over the long haul.
They want you to think this is due to external factors, such as market conditions or lack of resources. But the reality is that most of them are not doing the basic, hard work required to set a sales department on a solid, effective path.
4. They don’t want transparency
For all of the reasons above, most sales directors simply don’t want transparency into what’s happening in their departments. If they set up systems that provide fact-based forecasts, pipeline transparency, and detailed views into the daily activities of salespeople and managers, that transparency will also reveal just how much the sales directors aren’t doing their jobs.
The truth is, your sales director is more worried about extending their tenure at your company, and accessing their bonuses and options, than in doing what’s best for the company. And by the time you discover this, they’ll be ready to take what they’ve gained and moved on, leaving you with a company whose sales department is losing ground against the competition every quarter.
But before you get mad at your sales director, take a look in the mirror
You might have begun to suspect, from the above, that I’m suggesting it’s time to fire your sales director. In fact, what I want you to do first is take a look in the mirror.
When sales directors behave the way I’ve described, it’s usually because you, the chief executive, have created an environment that rewards them for behaving this way.
Your focus on short-term results, and your inability to understand what is actually wrong in your sales department, combined with a lack of executable sales strategy, feed a vicious downward performance spiral that will never be repaired until you take the time to repair it.
Most CEOs and sales executives began their careers in a vastly different sales landscape from today. And most have failed to keep up with what it takes to succeed in today’s environment.
To fix this problem, executives have to take the time to understand the changing marketplace, and the changing needs of sales departments, and develop strategies that can actually be executed. Then they must create the organizational structure to hold their teams accountable for delivering on that strategy.
Instead of focusing on finding a unicorn sales director to fix all of your problems, it’s time to look inside the black box of sales and uncover what is truly needed at the strategic level to effect a transformational change.
Then, and only then, you can focus on getting the right people and systems in place to execute.
I’d love to talk with you about the unique strategic problems your organization faces. Let’s find a time to get acquainted.