Q: If I have to cut back, how should I do it?
I wrote the original version of this post when Covid hit. For a relatively brief window, everyone was cutting — or at least thinking about it. Times are different now, and yet, looking back, the advice and answers are the same. So I thought it was worth an update.
While there are no easy answers on where to cut if you have to, we do know one thing: When things are less tough — you will need everyone great.
Marc Benioff said one of his top mistakes was not hiring enough salespeople in 2009, during the peak of the worst downturn. But if you do have to cut — where do you start?
- At almost every company, if we’re honest, the “bottom” 10% often doesn’t contribute that much if any value. If you have to cut, start there. Every VP, every manager, and probably even most employees know who isn’t contributing enough. It’s about a 20-minute discussion with your senior team to align on who the bottom 10% is. Beyond that is harder.
- And then, if you have to cut more, at least think about if you can repurpose folks first (for real). Can sales help more with customer success? Can demand gen do more in customer marketing? This doesn’t always work. Not every AE can pitch in as a CSM. Not every SDR can transition overnight to doing support instead. Not every demand gen marketer can transition to a customer marketer. But you may find that when this does work, you have the resources now to focus on your existing customers and prospects in a way you didn’t seem to be able to before.
- What if the deals you have in the pipeline do close — just in say 180 days instead of 30? The deals in your pipeline are prospects that are interested, and likely still will be in a few months. Even if this week isn’t the right time to buy anymore. Building pipeline and doing discovery calls with prospects does matter now, even if sales cycles in some segments have lengthened. Building cr*p pipeline today though is a double waste of limited time and money. But building your brand, your presence, and building qualified opportunities right now is something the best are leaning in on — not walking away from. At the end of the day, if you are going long, what matters most is that you close a customer for life. It doesn’t really matter as much when.
- And finally, if you do have to cut — ask yourself if you’d want them back down the road. If so, that’s a sign to somehow try to keep them if you possibly can. It is always hard to find great people, and just as hard to train people. You really don’t want to lose any strong, scaled, trained resources. This could be a short downturn, or a very long one. V-shaped or swoosh-shaped, we have no idea. But keeping your top folks is always worth it, if there is a way. Finding, hiring, training and scaling great people is just so phenomenally expensive.
- “LIFO” is probably realistic as a default. It may not be fair, but the newest hires may need to be the first to go. Why? You just may not have enough data to know if they are great. If a sales rep has never closed a deal, how will you really know how good he or she is? But you’ll know for sure on anyone that’s been there for 6+ months.
- If you have 24+ months of runway, the very last thing I’d cut is good people. You’ll be selling in force well before then. We know that.