Companies without a Chief Sales Officer could be missing out on the opportunity to gain a financial boost, strategic advancements and an edge over their competitors.
By Chuck Reaves
Is your company a sales-driven organization? When asked this question, most Chief Executive Officers (CEOs) answer yes. When asked if they have a Chief Sales Officer (CSO), almost all of them admit that they do not.
To answer the CSO question for yourself, look at your organizational chart. Is there a representative of the Sales Department at the C-Level? On par with the Chief Financial Officer (CFO), Chief Operating Officer (COO) and others at the strategic level, the sales team deserves to be involved in making decisions for the future.
While some organizations have found the CSO position to be a critical role, most still do not have one. Here are the most common reasons:
- We never had one before. Other C-level positions, like Chief Technology Officer (CTO), did not exist in the past, but rapid and rampant changes in technology—including the impact of technological innovations in decision-making—necessitated this role.
- Salespeople are required to achieve the corporate objectives. “We decide; you implement.” In too many companies the salespeople are considered to be “different” in the way they are compensated but similar in that they are to achieve top-down driven objectives regardless of what customers want.
- There is no training for the CSO. Libraries are being built now to give the CSO the information needed to execute their responsibilities.
- There are no tools for measuring the effectiveness of the CSO. In fact, Extreme Sales Analytics and Sales Resource Planner programs, similar to enterprise resource planning software, are emerging. ROI, TCO and other calculators are giving way to sophisticated dashboards that are morphing into sales analytic cockpits (multiple, integrated dashboards).
- Your customers do not need for you have a CSO, so why bother? You need to have the CSO in order for your customer relationships to grow. Customer relationships are dynamic, not static. Either you will drive the changes in the relationship or someone else—your customer or your competitor—will. After all, if your competitor has a strategically focused CSO and you do not, are they more likely to introduce the next new thing to your customers?
C-Level vs. VP
Is it enough to have a vice president (VP) of sales? Why clutter the C-Suite and add to the leadership budget with yet another position? The title is not as important as the function. C-level folks are strategists; VPs are tactical. The difference between how time and talents are deployed at these two levels can vary greatly.
The C-level plans for the long term; the VP thinks in shorter timeframes. For instance, if the CEO, the corporate visionary, is thinking three years out (as most are), the C-levels reporting to the CEO need to be thinking two years out. In that scenario, the VP needs to be thinking one year out, the sales management team thinking one quarter out and salespeople thinking one month out.
The C-level invests their time in learning and evaluating new processes and technologies that will impact their business. VPs focus on current capabilities that are viable for making more immediate improvements in sales activities and management.
C-levels rarely are involved in day-to-day activities, and the VP occasionally is brought in to address pressing customer and market issues. The VP of Sales is likely to know the details of significant pending sales, while the CSO is uninvolved with them.
Relationship selling is a redundant term, as all selling is relationship selling. Companies don’t do business with companies, rather people do business with people.
An example of this occurred when a CSO found a new tablet-based technology that reduced a portion of the company’s sales cycle from three weeks to three minutes. Think about that: three weeks to three minutes. Forty percent of their sales were in disaster recovery. When they approached a prospect that had lost, say, 20 percent of its capacity and offered to have that prospect up and running again three weeks earlier than any other vendor, who did the prospect choose? Did the prospect make a buying decision based on price? Of course not. In just over a year, many of the competitors of this CSO’s company went out of business because of the new capability.
Why was a CSO needed to make this decision?
- The VP of Sales did not have the time to thoroughly investigate the new technology.
- A six-figure investment would be required—a decision that would have gone to the C-level anyway.
- Agreements needed to be negotiated with the software vendor for market exclusivity.
- These activities were time-consuming, and the VP could not have managed this quickly enough, if at all.
Hiring Your CSO
How does the typical CSO spend his or her day? Evaluating.
- Evaluating new processes, including Lean/Kaizen/Six Sigma for sales and discussing them with the other C-levels, beginning with the COO.
- Evaluating new technologies for planning and executing sales activities and discussing them with the other C-levels, beginning with the CTO.
- Evaluating the applicability of new compensation concepts and discussing them with fellow C-levels, beginning with the CFO.
Why not simply change the title VP of Sales to CSO? Whether or not you have a CSO, you have the CSO function in your organization, just as you have the CFO function in your organization even if you do not have a full-time CFO. If you choose to elevate your VP of Sales to the CSO position, be prepared to backfill the VP position because both are important.
So, what are the criteria the CEO needs to consider when bringing a CSO on board?
- Hire for tomorrow, not today. Find someone who is comfortable with the changes that are happening in your market, industry, technology and management processes.
- Look for a strategic mindset. Rather than someone who knows how to get things done, look for someone who can determine alternatives for moving the organization forward.
- Look for a creative thinker who knows how to find and solicit new ideas. CSOs think about “who else?” and “what else?”
The role of CSO is here, and someone in your organization is fulfilling that function. Are they doing it intentionally or by default?
Chuck Reaves, CSP, CPAE, CSO, helps companies raise their prices and volumes simultaneously through innovative processes, tools and training. With his innovative presentations on sales and motivation, he has inspired hundreds of people to pursue and achieve their impossible dreams. Along with pioneering advanced sales tools and processes, his achievements include Vistage’s Impact Speaker of the Year honors and being named the top salesperson for AT&T. For more information, visit www.chuckreaves.com.