Three Considerations When Hiring Your First Sales Leader

office_105Every entrepreneur-led company comes to the point where it’s time to hire that first sales leader. Typically, the founder of the business has been handling most, if not all, of the sales and sales management responsibilities; as a result, the business has grown nicely and there’s confidence in the future.  The astute entrepreneur will understand why taking themselves out of the “sales leader” seat is an imperative if the company is serious about long-term growth.

I’m often asked, “how do I hire my first sales manager/leader/VP?” In addition to being a tough hire to make in any circumstance, in most cases this first sales leader’s base salary consumes such a high percentage of a growing company’s available cash flow that the stakes are elevated. The cost of being wrong is massive.

As you think through hiring your first sales hire, keep these three important considerations in mind:

Player-Coaches Rarely Become Great Players or Coaches.  Many entrepreneurs make the mistake of trying to get production out of their first sales leader. When you’re hiring for this role, you’re looking for someone whose skill set is delivering production through the actions and activities of others. Top-performing salespeople, on the other hand, are great at generating results through their own activities.  When you expect a sales leader to be both a manager of people and an individual contributor, you’re setting them up for failure and you’re setting yourself up for frustration.

A mentor of mine once likened the “player-coach” sales leader role to trying to sit on two toilets at once: it’s possible to hit your targets, but it’s a lot more difficult and takes a lot more work. If you want a sales leader, hire the leader. If you want a producer, hire the producer.  But pick one.

Your sales compensation plan is more important than you realize.  Max Lowenbaum, Hireology’s VP of Sales, knows through experience that your sales compensation plan can do more to drive results than just about anything else.  “When the rep’s variable comp incentives are aligned with the company’s growth goals, great things happen,” says Lowenbaum. “On the other hand, when reps can game their plan to make the money they need to make, you end up with a suboptimal result, and a tough management situation.”

Before you bring that sales leader into your business, make sure you have your rep compensation plan figured out. If you aren’t sure how to create a sales comp structure that’s optimized for your business, then you had better recruit a sales leader who knows how to do just that.  In Hireology’s case, we knew that Max had either participated in or led the creation of ten different permutations of Groupon’s sales incentive plan, which governed the pay and activity of thousands of Groupon sales reps.  Even more importantly, he knew why certain elements worked and why other elements did not.  As an example – Max has learned that putting in a quota system with a production floor is a must-do. Meaning, commissions don’t kick in until the rep has achieved a minimum percentage-to-plan target in the period (60%, etc).

Hire the right person, then get the heck out of their way.  This business is your baby. I get it.  You love to sell, and you love to win deals.  I get it.  If you step all over your new sales leader’s management of the team because you’re unable to let go of something you like to do, then your new sales leader is going to quit.

Superstar managers don’t want to work in an environment where they’re second-guessed all the time.  They don’t want to work for someone who doesn’t trust them to do what they’ve been hired to do.  So don’t make the investment in a sales leader and then tell them how to do their job.  They might do things differently than you’d do them, but guess what?  You’re paying them to make things happen and to build the organization.  Let them do their job!