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Key Strategies to Hire the Right Vice President of Sales

by Mar 12, 2009, 5:55 am ET

Years ago, I was interviewing for a Vice President of Sales position with a mid-sized services firm. Everything was going well with my interview with the CEO of the company, and then the question came. It is the favorite question of CEOs everywhere. Yet, it is also the most ridiculous question to ask a Vice President of Sales candidate in an interview.

“So, how much revenue can you drive for us this year?”

I thought it was a joke, but he wasn’t joking. Maybe it was a trick question — no, it wasn’t. So, I said, “Before I answer, may I ask you a few questions?” He acquiesced…

How many salespeople can I hire?
What is the marketing budget?
What is the travel budget?
What is the budget for cost of sales?

To all of these fundamental business questions, the answer was, “I haven’t decided yet.” Very quickly what I initially thought was a joke became an interview nightmare. Red flags were waving in front of my face telling me to run from this opportunity as fast as I could.

After hearing his responses to my questions, I responded, “Revenue is a function of the investment made in both sales and marketing. How can someone give you a number that you can believe in without having answers to those questions?”

He leaned back in his chair and said, “Well, the other candidate gave me a number.” I told him that I could certainly provide him with a revenue number, but not to come looking for it. I attempted to explain further, but the CEO’s thought process was one-dimensional. He was interviewing a Vice President of Sales candidate as if the role was sales representative. (Mind you, I don’t recommend that question for that role either.) Following my instincts, I told him that it was best that he proceed with hiring the other candidate and I wrapped up the interview. He was dumbfounded to say the least.

If you are hiring a Vice President of Sales, there are five critical areas to explore of your candidate, but a revenue growth commitment is not one of them.

Sales force Recruitment. If you have decided to hire a Vice President of Sales, you are expecting them to build a sales team. Hiring salespeople is both risky and costly. The ideal candidate for this role should have a methodology that mitigates the risk and quickly gets the new hire up to speed. Bad hires kill the bottom line, but so do unproductive salespeople. Every day that a new salesperson is on the bench, not yet ready to generate sales, they sit on your books as a liability. Thus, a key skill that the ideal candidate will possess is development of a process to screen and onboard new sales team members.

Sales Process Development. One of the goals of having a sales organization is to establish consistent performance. This can only happen if a defined process has been established for the salespeople to follow.

Many companies hang their hat on the performance of a single rainmaker. One person generating 75% of the revenue means that you have one highly profitable team member and a bunch of unprofitable salespeople on the team. What happens if the rainmaker leaves for greener pastures? Having a well-defined sales process in place reduces the amount of time for new hires to get up to speed, as well as provides continued direction and focus for the tenured salespeople. This translates into another key benefit: scalability. Your company’s ability to experience significant growth resides on this leader’s acumen at building a process that leads the entire team to perform.

Compensation Plan Formulation. In many companies, one of the responsibilities of the Vice President of Sales is the formulation of a sales compensation plan. Sales compensation plans should be designed to reinforce the sales process that has been developed. Salespeople do not need a job description to tell them their job. The compensation plan tells them where to focus their time. The wrong plan can tank the company; the right plan can lead to explosive results. To learn more about developing the right compensation plan, read my article titled, “The Equilateral Triangle Model for Developing Sales Compensation Plans.”

Metric Management. In many sales environments, today’s sale is not necessarily an indication of a salesperson doing the right things now. Thus, you are paying commissions for what they did right one month, three months, or maybe a year ago. This makes it critical that other metrics are measured beyond revenue achievement. There is an old expression: what gets measured, gets done. In essence, the process that they create has multiple measurement points that allows for the creation for a dashboard. The metrics on this dashboard show the performance of the sales team and allow for intervention when performance is not meeting expectations. Thus the key is to understand how the candidate uses metrics to develop, manage, and grow their sales team.

Performance Management. The world would be a wonderful place if every salesperson hired performs like a rock star, but that doesn’t happen. You will have both over-achievers and subpar performers, and each requires a different management approach. Top performers need nurturing, appreciation, and growth opportunities, while subpar performers need support, guidance, and intervention. Handle the top performers wrong and they leave. Handle the subpar performers incorrectly and they can suck the profits from the company. Thus, in the interview process, it is important to understand the candidate’s management approach for different situations.

Not sure what questions to ask of your Vice President of Sales candidate? Send me an email and I’ll send you my favorite 24 questions when interviewing these candidates.

The Vice President of Sales is a key member at the executive table. As a business owner, when screening these candidates, focus on the skills that lead to the creation of your sales architecture® which means you are selecting a candidate that creates a sales organization based that delivers consistency, stability, and profitability.

Going back to the earlier story, that company did hire the other candidate … and fired him six months later after he did not deliver on the expectation he set in the interview for growing the business.

This article is provided for informational purposes only and is not intended to offer specific legal advice. You should consult your legal counsel regarding any threatened or pending litigation.

  • George Bradt

    Can’t resist the bait of the need for a process that “quickly gets the new hire up to speed”. Our new book is called “Onboarding – How To Get Your New Hires Up To Speed In Half The Time” (Wiley, 2009). While it does not come out until the summer, your readers can download a summary by clicking through the links on our site: http://www.primegenesis.com.

    As an added bonus, we’ve just launch an online workstream to help hiring managers do exactly the same thing at http://www.onboardingprogram.com.

    George Bradt
    PrimeGenesis Executive Onboarding and Transition Acceleration
    http://www.primegenesis.com

  • Steve Deighton

    Lee,

    The points you make are all very valid, however, the question you were asked was also valid and should not have been unexpected considering the position. The expectation a CEO should have on the Vice President of Sales is how much revenue will you generate this year. That person should also know which resources they are prepared to invest into generating the expected revenue or be open to hearing recommendations on what resources should be invested. If he/she hadn’t decided yet, it probably would have been a good time to ask them what his/her expectation of revenue would be? What would he/she consider success?

    Far too often Sales VP’s are promoted into or selected without having established the expectation of how much revenue should they generate. Doesn’t it make sense to both parties to communicate often and early the strategy from the board room down through the stockroom? Most business strategies fail due to not having the right people in the right positions to carry out what is expected and needs to be done. Your interview may have gone much better if you first understood what the CEO’s vision was, then ask the follow on questions. You may have been given the ability to formulate what would be needed and help that CEO decide.

    Just adding my two cents.

  • http://www.serenityinfotech.com Marc Nolan

    Lee,

    I generally agree with some of your posts, and the other two as well. BUT, on this occassion, there are some real glaring red flags here.
    Just as a “qualifier” I have been on the front lines of Sales Leadership for more than 20 years, and have ran some fairly large IT Professional Services organizations, and reported into mostly the BOD’s or CEO’s so I have some first hand “knowledge”

    In my humble opinion, the CEO asked what he/she “thought” were valid questions to the candidate- and were probably based on the current situation the CEO (and his/her company was in). The failure of the VP candidate to NOT ask some rebuttal questions- and to answer a question with a question- was a weakness on the part of the candidate- and even more weakness on the CEO for allowing him to get away with this.

    For instance- in the “how much revenue can you drive for us this year” question, a seasoned VP of Sales would have stated “It depends”. It depends on me being able to come in and quickly assess the current offerings you have, meet with the sales (and delivery side) and then establish a 90 plan to execute on this plan- and until I can do that to answer this question, would place both you and me in a very difficult position, and long term without this plan-(which I have done with EVERY CEO I have worked for-and with EVERY salesperson I have hired)I would not be successful here”, adnd by putting togethe this plan, his reponse of “I have not decided yet” goes away-since you are now giving him your valued and seasoned experience.

    From there- the CEO can decide (along with the VP) that this is something to pursue)and takes him to number one on the list of candidates who just threw out a number!

    Secondly- to state that “salespeople should somehow “be on the bench” is unheard of! Salespeople are not on the delivery side and bench personnel are “reserved” for consultants who are driven by utilization.

    Thirdly- as a Sales Leader, you MUST be able to carry a bag- even if it is to provide your salespeople with some leads form previous gigs. If hiring salespeople was an exact “art” there woudl ONLY be one book written on this (My interivew question to sales is always, tell me what Sales book you are currently reading- and have you read “The Greatest Salesman in the World?)

    Fourth- I must state that the problem with NOT having job descriptions for sales is something that when I trained Sales Managers was one of the biggest problems. Salespeople absolutley need job descriptions- abd this job description is DIRECTLT tied to everything else in your Compensation, Sales Process, Metric and Performance Management pieces.

    If not sales people will continue to “flail” and fail. The measurement tools I have used to this day, and are measured each month (to include “get well plans”)are the ones that from the CEO down are needed more today than ever before.

    Just my “four cents”

  • http://cold-caller.blogspot.ca Athar Afzal

    Excellent post – I think most CEOs don’t really know that there needs to be quality ‘input’ to create that valuably sustainable ‘output’. We get too caught up in the revenue figure and not on the kind of it. Unfortunately what happens is the wrong people get selected and at the end we end up with the ‘dysfunctional’ organization that isn’t able to break out of its shell and not grow.

    Takes nerves to say what you said and not a lot of people will say it.