One of the most common pitfalls of businesses is poor alignment between the sales leader and the CEO. Sales leaders are focused on achieving quotas and driving revenue, while CEOs are tasked with ensuring long-term growth and profitability. Without clear communication and alignment between these two, it can be difficult for a company to reach its full potential. Here's what you can do to fix this.
Here are two prevalent scenarios to explain this misalignment.
In the first scenario, Tom, the CEO of a manufacturing company, explains, "I don't know if Joe is the right person for the sales leader position. I don't see progress in sales. The numbers are always coming next quarter, and there doesn't seem to be a plan. Can you talk to Joe and give me your take on things?"
On the other hand, Joe says that sales are below the goal, but that’s because two big deals slipped into this quarter. He is confident they will close and gives solid evidence to support it. Joe then explains that his team lacks some sales skills, but he has put them through a sales training course and is working with them one-on-one to ensure they are applying it. In addition, all salespeople recently went through a sales planning process that analyzed their business and made plans to address gaps in revenue.
When asked if he explains or talks about his plans or progress with Tom, the CEO, Joe says, "No, sales are all mine, and I can run it how I want. He (Tom) doesn't get sales as I do."
The CEO of a professional services company, Marty, poses a similar question about sales, saying, "Sales are okay, but the sales team seems very reactive, and I don't have confidence in the pipeline they give me. Anne's my Director of Sales always wants to chase the big clients and hit a home run, but the company needs some mid-sized clients to keep the lights on. After that, everything can't be a big deal. I'm not sure Anne is the right person to run the team. Can you talk to her?"
As it turns out, Anne can lay out her complete plan. She explains that they have a mix of mid-sized deals in the pipeline, but she truly believes they can make a big splash with larger clients. Those clients take longer to land, but she knows they can win and will be well worth the wait.
When asked how often she discusses this with Marty, she explains that he sits in on the weekly sales meeting and hears the plan – he should be up to speed.
These are just two examples of something that happens all the time – misalignment and poor communication between the CEO and sales leader. Neither of these sales leaders knew that their respective jobs were in jeopardy. They were both plodding along.
So what's going on?
In the first example, Joe was doing a decent job of addressing gaps, but he was doing it in a vacuum. If he had a plan, Tom certainly didn't know it, nor did he know how much progress was being made. And Tom also has some blame here – if he wants to know what's going on with Joe, why is he not asking about it?
In the second example, there is similar poor communication (sitting in on meetings does not equal communication), and there is an apparent misalignment in what the sales team should be chasing. The longer Anne chases the big deals, the more frustrated Marty gets.
The good news is that these sales leaders could be saved if they sit down and get on the same page with their respective CEOs. But this does not happen nearly enough. Instead, CEOs react similarly to Tom and Marty above and pull the trigger quickly. Then they get another sales leader in place, and they repeat the same pattern. It is a vicious cycle that results in sales leaders turning over every 18 to 24 months.
So what do you do about it if you are the CEO? That's easy – talk to your sales leader regularly. Then, have a formal standing meeting, preferably weekly, where you understand the sales leader's plan and progress. This does not have to be a long, drawn-out meeting, but it does need to cover some basics.
This may seem simple and basic, but this critical meeting is missing in more companies than not. Instead, you’ll often hear something like, "We both have an open-door policy where we can talk to each other if we need to."
The problem is that it never happens in any structured way. It is always focused on the deal of the day or fire of the day. So, be disciplined and make this meeting happen each week. It makes a difference. I can promise you that if Joe and Anne had these weekly meetings, nobody would be questioning their jobs.
Sales leaders may feel pressure to meet unrealistic targets, while CEOs may be unaware of the challenges that sales leaders face. This can lead to frustration and a lack of trust between the two. To avoid this pitfall, businesses must ensure there is open communication between the sales leader and the CEO. Both parties need to be aware of each other's goals and objectives and work together to ensure that the company remains profitable and grows over time.
Reach out to us at info@pivotaladvisors.com to get another top reason why your sales growth may have become stagnant.
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