I have been asked this question numerous times. CEO's may feel as if they are being manipulated or can't trust the Sales leader. So, how does a CEO manage this dilemma?
At the heart of every company is revenue and the sales leaders responsibility is the most transparent component to revenue attainment. The sales leader is an obvious target after 1 or 2 bad quarters. This is a difficult question with many moving parts and considerations. Replacing sales leaders becomes disruptive and the decision shouldn't be without strategic consideration.
To help you navigate this decision, I have listed the below thought provoking questions to help you and your HR leader quantify and frame your decision.
Are sales growing and is the company hitting the sales target? Numbers only make up 1 metric.
Maybe you're growing but not to market growth? Maybe growing at the expense of long term objectives? Top line sales can be quantified a number of different ways, however you need to determine if you're moving in the right direction given your company circumstances.
Revenue is the result of the inter-dependency of multiple business units effectively contributing to both top and bottom line results. Be fair and honest in your assessment.
Have you properly assessed your corporate strategy and the sales leader's capacity to execute upon that strategy? You are questioning at this point if the sales leader has the right skill set and does it align with what you need at this particular moment in time?
This can happen when a company grows beyond the ability of a leader or grows in a different direction or the leader was hired from the outside and you determine they didn't quite have the skill set you thought.
Is the competency (singular or multiple) gap a correctable situation within a reasonable time frame?
Have you counseled the sales leader?
Have you established trust and open dialog between the board? CEO? and sales leader? If the openness and trust is only on one side you can't be part of the solution to make it work. Part of the trust is creating a knowledge and belief that regardless of what happens you're going to be fair with the sales leader. When you're open and fair with the current situation and treat the sales leader and process with respect they will be open and honest and tell you they either can do this or can't do this and collectively figure out how to move this forward.
Everyone must realize that you're all on the same team. The TEAM is the key concept. You are all contributors and if anyone of the team members fails then you all fail. There is inter-dependency upon each other for ultimate success so there has to be trust that you are all helping each other.
Define trust? Sometimes the issue isn't trust! Do you have the right leader in the role? I have heard from CEO's which stated they can't trust the sales leader? One example I've heard more than once is before the quarter closes the sales leader expresses confidence in hitting the number and the CEO shares this confidence with other stake holder groups only to be disappointed. In this scenario I don't believe the sales leader was deliberately trying to deceive the CEO. Oftentimes in B to B sales organizations it is common to secure a larger portion of the goal at the end of the period. If the sale was pushed back is that the fault of the sales leader?
What happened? The sales leader needs to be in touch with the business and if this level of disconnect from sales is a regular event there is an issue.
The sales leader needs to know the likelihood or probability the order will come in. What are the risks? Roadblocks to closing the sale? What's our Strategic position within the sale?
You're all working towards the same goals relative to the product, inventory, expense structure, revenue structure...etc. So if there was a surprise... what happened?
Are you prepared to give an honest accounting as to what happened so it doesn't happen again? Need to have an honest, non judgmental team environment to get to the bottom or root cause of what happened.
Ensure you maintain an environment of risk taking which encourages innovation, have transparency of decision making...but within that there needs to be honesty within the executive leaders to work through issues together.
Are you clear as to all options to move forward most effectively?
You've determined you can't fix the competency and you need to make a change.
Need multiple views of the various candidates and options.
Cast a wide net of candidates from internal succession planning as well as from the outside.
Examine what did and didn't work from prior candidates.
What has changed in the marketplace which requires different skills? Change the skill set weighing requirements for the position.
Do you need a search firm? Which type?
Once you get our pool of applicants get as many perspectives or alternative opinions from as possible. Ask members to be part of the process. Board members, CEO, Executive team peers, direct reports...
Resolution summary:
If you're a CEO with this problem my recommendation is that you partner with your HR leader to find a solution.
If you're the head of HR and have been approached with this scenario our firm is potentially a source of education for you.
Creating trust not only with the CEO but across the entire executive team is so important so everyone is aligned and moving toward the same objective and doing so in concert.
Ensure trust is developed between the CEO, sales leader and the executive team to be able to work through situations like this.
Identify the Sales leader's accountabilities and they need to be understood by all parties and they need to be reasonable.