Are you a CEO who is wondering if you should keep your highly qualified sales leaders because the numbers aren't there, and you're not confident that they will be? Or maybe you are a sales leader, and right now, you are wondering if you should be updating your resume because the CEO is always on your back? The problem is usually based on a lack of communication, and often causes the revolving door effect the solution is very straightforward.
When a company has a manufacturing problem, the line gets shut down until the problem is identified and fixed. The same tactic should be applied to sales. CEOs and sales leaders should be sitting down regularly to talk about what is working and what's not.
If that's not happening in your company, it may be time to worry, because poor alignment and lack of transparency between these two functions can derail your sales efforts. According to Workforce, 60% of companies don't have a long-term strategy for their internal communications.
Because of the lack of communication, here is how this situation between a CEO and sales leader typically plays out:
CEO: "We're well into 2020. Our sales are not where they should be, and I'm getting nervous. Our sales leader says I should relax, that the pipeline is building and things will be fine. But I have trouble trusting that optimism. All I can see is that we're not hitting our numbers, even though our sales team is always busy. We can't afford to wait while we gamble on getting one major account."
Sales Leader: "I give the CEO a monthly report, but he doesn't read it. He is only focused on the numbers. Management just needs to be patient. The pipeline is building. They do not like hearing bad news, but I've got the situation covered. The pipeline is just starting to convert, and when it does, it will all be great."
What's really going on? This is not about the sales leader's ability to sell or manage a team. Instead, to paraphrase from the Paul Newman movie called Cool Hand Luke, "What we have here is a failure to communicate."
The CEO may only want to hear results and may not want to play a role in the sales process. He's hired an experienced sales leader who should figure out how to make things happen without his help. The sales leader may tell them about something he is doing to improve revenue, but the CEO wants results now.
Meanwhile, the sales leader might be hesitant to deliver bad news. Perhaps they feel the CEO does not want to hear about another month of lackluster numbers, or the sales leader does not feel supported for being honest. Plus, whenever they tell the CEO to be patient because efforts take time to convert to sales, the CEO does not want to hear it. The sales leader might also be afraid to admit that he needs help finding a solution.
Whether intentionally or subconsciously, the sales leader may start to embellish the situation so that it sounds more optimistic. "If this happens … and this happens … then we'll be okay" to appease and reassure the CEO. However, the sales leader is not giving good information, which only frustrates the CEO.
If this continues, a lack of trust can tear down the relationship between the CEO and the sales leader. It starts to get personal. The CEO may begin to wonder if he has the right sales leader in place. He worries that as the year progresses, something will need to change, or there won't be enough time in the sales cycle to salvage the numbers. According to Harvard Business Review, a Edelman Trust Barometer survey states, “only 37% of global respondents rated CEOs to be sufficiently credible, continuing the pattern of low trust in recent years.”
According to RTC, the "New Times, New Leaders: CEO Communications Report 2019," which examined employees' attitudes towards their CEO or organizational head's communication abilities. Eighty-nine percent of the employees said that regular communication is good for morale and productivity, and 70% said it makes them feel valued.
To fix this communication problem, the CEO and sales leader need to have honest, objective discussions. Together they should devise a plan to move the sales needle in the right direction. If faced with this specific situation, here is how to fix it:
Sit down and have a non-judgmental conversation about the facts. Listen to each other and get everything on the table without trying to fix the problem. Use real data to determine what's working, what's not, and why. The specific goal of this meeting is to understand the current situation – not a forecast or pipeline review.
Sales Leaders should develop options – not wait for the CEO to provide direction. What can you do about it? Invite others into the discussion if warranted. Rank each option based on impact and effort. An easy solution may be to have the sales team call on more customers. A harder solution may be to launch a new product. It might have a more significant impact, but it's not happening right away. So, start by looking for those items that are higher in effect and lower in the effort.
Develop specific goals, initiatives, and activities to support your chosen course of action. A goal might be to increase sales by $500,000. The initiatives help you get there, so one initiative might be to upgrade a percentage of current customers to newer versions of your product. Activities are actions taken by the sales team to support each initiative. The most important part of this step is that you both agree on what you are going to do, and the timeline for which things will be accomplished.
Decide how you will communicate progress against the agreed-upon action plan. This is the biggest "miss" that we see between CEOs and sales leaders. If you want to read more on "misses", check out our blog on, "The Biggest 'Miss' that Sales Leaders Make – Are You Making It?"
Will you get together once a week? What numbers will you track? Will there be a report? CEOs tend to get much more comfortable if they see progress against a plan rather than stories of what will come. Agree on your plan and review progress regularly.
To stop the revolving door effect, communication between a sales leader and the CEO is vital. You need to be able to listen to one another, talk about ways to handle a situation, reinforce, and hold each other accountable. If these steps are taken, the sales leader door will stop spinning, trust and wins will increase.