When is the time right for Renaissance vs. Coin-operated Sales?
The Wall Street Journal recently reported the news of sales executive Joanne Bradford joining Yahoo after a brief stint at Spot Runner reminded me of Mark Leslie’s commentary in his seminal paper on the Sales Learning Curve published in the Harvard Business Review. In that paper, he described three sales phases — Initiation, Transition & Execution — of a company’s market entry and the accompanying sales talent that fits with the phase. The sales talent needed at the Initiation phase is more akin to a Product Manager function than a pure sales role.
Joanne is one of the top two sales executives I’ve ever worked with. She was certainly what the doctor ordered when she came into Microsoft early this decade after a long tenure at Business Week when Microsoft was in the Execution phase. I have no doubt she’ll make a major impact at Yahoo as well. Not knowing what happened at Spot Runner, I can only speculate that it may have been a similar situation to countless sales reps and executives hired before into startup world with storied sales careers only to find it isn’t a fit at the startup phase of a company.
For a founder that isn’t steeped in Sales & Marketing, it is appealing to hire a Sales leader that fits the profile of someone who has many plaques on their office walls with etchings of “President’s Club” that speak to their sales success. However, these are executives that are accustomed to being surrounded with a well-defined market and product to meet that market. Further, they are used to the full complement of sales collateral, systems engineers, sales support, defined sales compensation model and the like common in the Execution Phase.
Unfortunately, as Leslie states “It’s both unrealistic and potentially dysfunctional to assign large sales quotas in the Initiation phase”. He goes on to say what their priorities ought to be. “The members of the sales team should be encouraged to focus instead on learning as much as they can about how customers will use the product.” The byproduct of hiring the former President’s Club member is frequently great frustration as the sales exec finds he or she can’t earn the money they expected as there are too many issues with the product and go-to-market strategy. He outlines what is needed at this phase as follows:
The types of skills needed during this phase differ from those needed to sell more mature products. They include a facility for communicating with many parts of the organization, a tolerance of ambiguity, a deep interest in the product technology, and a talent for bringing customers together with various functional teams within the company. Salespeople must be resourceful, able to develop their own sales models and collateral materials as needed. We think of this kind of person as the “renaissance rep.”
Later, in the Transition phase, sales management should focus on developing a repeatable sales model, refine market positioning and more. Leslie talks more about the type of sales rep needed at this point.
The original renaissance reps should continue to focus on learning. The people hired at this stage — we call them “enlightened reps” — should be comfortable contributing to a still-evolving sales model but do not need to have the analytical and communication skills of the renaissance reps.
At this point, the executive team should assess whether they are confident that they have sufficient traction and a proven, repeatable sales process. If they are confident, that is the time to rapidly scale the sales organization. Leslie expands on this…
In this phase, when the formula for success has been developed and all of the support requirements for sales reps are in place, the company needs more traditional salespeople — what’s known in the industry as “coin-operated reps” — who require nothing more than a territory, a sales plan, a price book, and marketing materials to bring in orders.
The common mistake of hiring a coin-operated team when a renaissance reps are needed is a costly and time-consuming mistake that delay success. Counter-intuitively, this “go slow” approach is the fastest way to achieve success.
Author: Dave Chase