For many companies, they are suffocating their growth potential unknowingly. In the last twelve months, I have reviewed more businesses that were suffocating than I would have in the five years prior. Companies that were successful and now struggling to meet the demands of today’s market. The CEOs have developed excellent strategies for their businesses, and those businesses are strong operationally. So what is going wrong?
A suffocating company is described as one that has its growth stifled and is slowly going backward. First the profits diminish and then market share declines; the result a troubled company.
The common trait that appears from the reviews is their propensity to promote sales managers from within, most common, or seek the comfort of hiring from the direct competitors. They have a degree of comfort in the hiring process with people that have conversations on topics related their knowledge of the products and industry. They fail to look beyond those comfort points and therein lies the problem.
These sales managers are industry experts and often lack any education of markets, new practices, non-industry business strategies and contemporary information that will leverage a competitive advantage. They operate in a sheltered environment and under pressure rely heavily on their friendships with long term customers in hope that will carry the company through tougher times. Unfortunately, it does not as the market is now greater than old friendships.
As a CEO, you need to consider how you hire sales managers. If you consider other areas of the business do you hire a production manager because he knows your equipment or because he can increase production? The same applies to sales management.
With the challenge to sustain a competitive advantage and the need for a high-performance sales team, companies are now opening their minds to looking outside their traditional industry for sales managers. This movement is also being driven by the lack of quality of many sales managers within some industries. In fact, some 57% were considered to be unsuitable for the role of sales manager by research conducted in 2012 by Sales Focus International.
The question that should be considered by CEOs is “if recruited from outside companies as new sales managers, are industry specialists or broad-based generalists more likely to be successful?” Of course, there are no universal answers to that question. Each company has its unique circumstances. There are some points that must be considered before hiring your next sales manager.
Companies now need to consider outside candidates for the sales management role, even if there are strong internal contenders. However, how far outside should you go? Is someone from another industry going to deliver results? A new sales manager with industry-specific knowledge would presumably have better-informed judgment, but someone from another sector could offer fresh ideas.
Another consideration before you look outside the industry is “what do you want your sales manager to do”. For smaller companies, the sales manager often has a function of selling as part of their role. Wearing two hats, a seller and a manager. For larger teams, the sales manager function is that of people management and strategy implementation. Their selling is limited to major accounts where business acumen far exceeds the need for product knowledge. The functional requirements of your sales manager will determine whether you will look inside or outside your industry.
What we are seeing is this increasing trend of companies hiring someone outside their industry. They do not have the product knowledge, but they do have go-to-market expertise through your sales channels. These outsiders are delivering greater returns and growth than their industry counterparts through their fresh thinking.
A competitive advantage for many companies can be as simple as contemporary and fresh thinking in sales management leadership.
If you are experiencing a slowing or plateau in your company’s performance, reach out and have a conversation with us today about investigating the real causes and finding solutions to the challenge.
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