Getting to Initial Scale

How to Successfully Manage Your First VP of Sales (Guest Post)

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Jason Lemkin

I was catching up recently with one of my favorite sales leaders, Matt Cameron, and asked him what he thought was the #1 thing he’d love to see on SaaStr.  And I asked him to write it 🙂

He put together a great piece below on how CEOs/founders can learn to manage their first VP of Sales hire.  It’s a terrific list of flags to look for, and also, ways to manage a functional role you likely have never had to manage before, once you have a initial sales team to manage and build (6-8+ reps, going up).  Before that, you won’t be quite ready for this amount of structure.

Matt was previously the WW Head of Corporate Sales at Yammer, VP of Sales at Kahuna, and a Director of Enterprise Sales for Salesforce.com. He enjoys building sales engines for high growth companies, which continues to be his passion.

Jason — ed.

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Screen Shot 2016-04-18 at 10.38.04 AMScreen Shot 2015-08-08 at 9.50.14 AMManaging a sales leader for the first time can be quite a challenge for any CEO – This article is intended as a basic guide for ensuring that your sales dragon doesn’t use their powers of persuasion to obfuscate your reality.  Whether your head of sales is a seasoned veteran or a first-time manager, you should expect more than, “Weaving the blanket of revenue that keeps you warm at night.”, in response to a question about what sales is doing.  As CEO you must set the agenda for executive inspection and the following will give you a big head-start.

For the sake of brevity I have listed a cadence of inspection points in the table below and pointed out the things to be wary of at the bottom of each.  As an overarching theme I would encourage you to augment this list with business specific metrics and implement a standard, period-over-period reporting cadence that will allow a clear understanding of sales performance.  It is worth saying that it is never too early to have the following data, so if you can’t get your hands on it, you should look at enabling resources (A sales operations headcount + reporting tools) and make it happen ASAP.

The list of inspection items is not exhaustive in terms of what a new business sales manager should be looking at, but rather, what should be passed up in summary form to the CEO.

Weekly 1:1s with every rep
  • Pipeline coverage and quality
  • Attainment and plan to close gap
  • Downgrades, Slips, Neglected deals
  • Obstacles to success
  • Focus deals
  • Forecast Commit/Best Case (done either group or 1:1)
Why and what you should inspect: You should be asking what has changed week on week and why.  Your sales leader should be able to name the items that have changed and why.  Importantly, she should be able to articulate an action plan.

 

 

Problem signs:

– Your leader can’t name the deals that matter within this period {or can’t give you a direct update on them, he has to ask someone on his team – Jason/ed.}

– Excuses are made for deal slippage

– Execs outside the sales org are not being leveraged to close deals (Esp. enterprise)

Monthly Ops Review
  • ‘Lead to close’ pipeline stage conversion metrics

       Find where the funnel is leaking

  • ‘Deals by lead source’ review

       Ensure demand gen $ are being well spent

  • Pipeline velocity

       Are we getting more or less efficient?

  • Attainment by rep (Month on month comparative)

       Learn ramp patterns and catch failing reps early.

  • Productivity per rep (MRR/Headcount)

       Are you meeting the board plan?

  • Loss reason reviews

       React quickly to patterns

  • SDR production

       Watch for attainment against # of opportunities but falling short on $ targets

  • Forecast and forecast accuracy

       Look at 90/60/30 forecast accuracy snapshots

Why and what you should inspect:  The operations review is mission control for understanding the key dynamics in your business – Marketing spend efficacy; Sales efficiency; Predictability.  You should be checking that marketing is feeding sales per the plan, that reps are being enabled and ramped to plan and that your sales leader’s forecast can be trusted.  It is also an opportunity to get product/GTM feedback from losses.
Problem signs:

– Your sales leader can’t pinpoint root cause of funnel issues

Your sales leader can’t explain sales velocity changes.

‘Forecast to actual’ accuracy varies widely

No sensible plan to close attainment gap (especially deflecting responsibility)

Quarterly review
  • Review all ops items above for quarter over quarter
  • Review progress against territory coverage plan
  • Hiring plan to actuals
  • Review development/enablement plans
Why and what you should inspect:  The QBR is a checkpoint for ensuring that the plan is working and that you have the right resources in place to execute it.
Problem signs:

– [As above from operations review]

– Hiring is behind plan

Accounts are sitting idle

Reps are not involved in a structured development/enablement plan

Published on April 19, 2016
  • James Moss

    This is really good stuff for more mature companies, but I would like to add a couple of things.

    The metrics pointed out should be available from the CRM in dashboard form. If not, make that happen if you have any intention of scaling. The CEO should be familiar enough with the metrics to ask, “WHY?” The metrics themselves, positive or negative, are of little consequence if the human reasons behind them can’t be discussed.

    Speaking of humans, the Sales Leader in a start-up won’t typically have a large enough data set for some metrics to be meaningful. That means that the leader’s job is primarily as a coach in the truest sense of the word. Hiring, teaching, correcting, encouraging, enabling culture, creating a team, culling, etc. The conversations with the start-up CEO should be around establishing benchmarks, team culture, leadership and resources. If you focus on lead conversion metrics without having established a benchmark, you are shooting rubber-bands at the sun. The same holds true with lead churn, ramp, velocity and most of the other metrics.

    In a new company the team comes first, then the benchmarks, and finally performance against those benchmarks. Far too many start-ups do this backwards and end up destroying team culture and performance based on a lack of self-generated benchmarks. The problem is that the right way is often counter-intuitive to your investors. Rightfully, they want insight into future performance in a way that they can easily understand (charts and graphs). The right sales leader will not only be able to help you sell the vision to your money, but they will also be able to build the core team that will execute to scale.

  • Brendon Cassidy

    I’d agree with James. Almost all of these are big company sales metrics. Some are important in a startup. Most aren’t. Forecast to accuracy review in a startup? Cmon. thats just going down the rathole to go down the rathole.

    • Matt Cameron

      Perhaps there is a misunderstanding of who this article is for: ‘VP Sales’ is in the title of the article, which to me implies that
      you have a manager of managers, ergo a minimum revenue level
      (Inflated Silicon Valley titles notwithstanding). I have used these core metrics in several early stage companies to great appreciation by the board – Most recently in companies that were building from $1M ARR. In my view, operational discipline from $1M is critical if you have any chance of scaling with conscious competence and knowing where the constraints to growth are.

      WRT forecast accuracy – If you are at a stage that you are giving people fixed quotas, then a rep has to be able to forecast, otherwise you are running blind. For startups with less than $1M ARR, then I would agree with the observation.

      • Brendon Cassidy

        I agree with most of it. I think some of these require data you do t have at 1 mill ARR or even 10mil.

        Otherwise, good article Matt 🙂

        • jlemkin

          Yes, or at least, a team of reps (so few million in ARR) for some of the points. I added a few notes to update that.

      • James Moss

        I fully agree with everything you stated. There are a lot of entrepreneur CEOs out there that will hamstring their building sales team by jamming metrics down their throats without regard to building a stable foundation. I just wanted to make sure that your audience knew what you were aiming at. My guess is that you have had experiences with CEOs that need a lifeline and will grasp on to concepts that are meant for companies that are farther along in their journey to scale.

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