We’ve talked a lot on SaaStr about not screwing up that VP of Sales hire.  Done right, it will accelerate your company to the next level.  Done wrong — you can lose the better part of a year, and half of your last round of capital.

And we’ve talked a lot about the trade-offs in the hire, including how to think about Stretch VPs … the ones that haven’t quite done it yet, but working for you is their shot.

The reality is, most of you are going to hire a Stretch VP for your first VP of Sales, or at least, your first VP of Sales that works out.  More on that here and here.  Otherwise, you’ll probably be stuck with a Failed VP, or someone from Too Big a Company that never did it, etc. etc.

Once you’ve made the hire, then you have to make sure you’ve got it right.

I’m going to suggest two gates, two quiet check-in points:

First, revenue per lead has to go up within one sales cycle.  It just has to.  We talked a lot about this here.  If a VP of Sales can’t take the leads you already have, and at least, get more money out of them than you did … he has failed.

When we first wrote about this here, it was controversial, a lot of people said, “You have to give a VP of Sales more time”.  But I think once everyone that’s done it thinks about it, they agree.  Any decent VP of Sales drives revenue up at least within a number of months equal to your average sales cycle.

OK, if she passes this test, if she increases revenue within one sales cycle — then good news!  She can sell, and sell with spirit, authority, and chutzpah.  She can take over for you as the interim head of Sales.  Which is great.  She can close deals, and take a lot off your plate.  That is a big deal.

But next up is a second test, and one that ultimately is just as important for a VP of Sales:

The second test is if, within a second sales cycle, by say, month 5 or 6 at the very latest … has your first-time stretch VP of Sales scaled up any other new sales reps that have truly hit quota?  

Because there’s a pattern I see with maybe 30-40% of Stretch VPs.  They are great individual contributors (or you never would have hired her).  They are aggressive, so they can bring in the first batch of hires for her team.

But sometimes, the management and training skills aren’t there.  At least, not yet.  They don’t yet, at this stage of their career, have the ability to get folks they hire to hit quota repeatably.

And this will be super frustrating all around, because in this scenario, the player-coach VP of Sales will often still be hitting quota herself … either literally, by carrying their own quota as VP of Sales, or by so backfilling the team that they essentially close all the big deals for them.

This is when, often sadly, you have to make a change.  You have to.  When, by the second full sales cycle, your Stretch VP of Sales hasn’t been able to truly grow the team into multiple quota-achievers.

OK, so that’s the problem.  Don’t let it drag on any further.  They’ll never hire and scale a good enough team under her to hit the plan.  They never will if they haven’t gotten 1-2 AEs to hit full quota by, say, month 6.  It’s not even their fault in this case.  They just need to still report to a great real VP of Sales.  Which isn’t you.

So, my suggestion is to sit down with your stretch VP of Sales hire at this point and be honest and appreciative.  Because if you are both, there’s still a chance you can make this all work and not lose your best closer.  You can tell them we need a VP of Sales that can truly build a team, and that’s not them — yet.  But you want them to stay.  As a Director of Enterprise Sales.  As a Senior Sales Lead.  As something.  And that you aren’t going to cut their OTE comp (ideally).

After all, in this case, it’s not their fault.  It was just a stretch too far.  After another few years reporting to a great VP, they may well be ready.  And if you can keep your top closer in an IC role, or team lead role for a while, your revenue won’t take the hit it would if you lose them.

A related post here:

The Double-Stretch Hire Rarely Works Out


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