NOT ALL SALES PEOPLE ARE MANAGEMENT MATERIAL…
Your organization’s top priority is hiring a Sales Manager. Should you promote from within or launch an external sales executive search? Most organizations choose to promote their Superstar Salesperson. Hiring a sales manager from within is tempting for the individual because of the financial and professional benefits of a promotion. For the organization, replicating their superstar salesperson’s proven success is attractive. Unfortunately, this is not always the wisest choice when hiring that new sales manager.
Your Superstar Salesperson may possess the drive, skills, and experience needed to close the deal. However, a Sales Manager role is an entirely different animal and requires a vastly different skill set than the individual contributor role. Internal promotion may be the worst decision you could make for both parties. Additionally, your sales force and the company may benefit from the fresh perspective and influx of new ideas from an outside sales Manager (Especially one presented to you by partnering with an exec search firm.)
To make the best decision, understanding the pros and cons of hiring a sales manager is key.
Hiring a Sales Manager from Within
PRO ~ Proven Track Record
Your superstar saleswoman is a proven success. Clearly, she understands your company’s product/service and has mastered how to communicate the value proposition to the client. This knowledge and experience allows her to build a sales team with similar skills, experience, and salesmanship. In addition, “internal candidates have a strong knowledge of our culture, processes [and] methodologies, and have many relationships throughout the organization,” states Larry Nash, the Pittsburgh-based director of experienced and executive recruiting for EY.
PRO ~ Corporate Message
Hiring a Sales Manager from within demonstrates the company’s commitment to rewarding hard work and consistent revenue generation. Additionally, developing a sales management training program shows the company is invested in your success. Ultimately, this benefits the company as well. “Companies that support sales manager development saw a 14% advantage in exceeding sales objectives over companies that did not.”
CON~ Benching Your MVP
Hiring a Sales Manager from within inevitably cuts, and possibly eliminates, her time in the field. As a Sales Manager, she will be removed from her customer-centric role in which she clearly thrived. Unfortunately, she is now a coach rather than a superstar hitter.
CON ~ Unclear Succession
The gap between your #1 and #2 players may be significant. Your MVP is relegated to a sideline manager. Is your #2 ready to take her place and continue driving the company’s incredible growth? If not, who will fill the gap until she’s ready to move up?
UNKNOWN ~ Does successful salesmanship translate to successful leadership?
The ability to sell well does not guarantee she will lead well. Many of the skills that make a successful salesperson are the traits you find in top notch leadership- drive, determination, working with others, listening to and meeting needs. However, the chameleon-like nature of sales can be a big turnoff to a sales team looking for consistent direction from a leader. In addition, Sales leaders are often independent workers. Collaboration may not be in their vocabulary. As we know, engagement and collaboration are key to a manager-employee relationship. Can a top salesperson go from playing an individual golf game to being part of a larger team? Interesting to note, data from Sales Management Association’s Top Sales Managers Report indicated that, although 96% of firms rely on internal promotions to staff sales management positions, less than 50% of firms consider themselves proficient at it.
HIRE a sales manager externally
PRO ~ Fresh Ideas and Perspective
Successful companies grow in sales and complexity. New skill sets and business acumen are required to avoid stagnation. External hires can offer a boost to the internal culture, allowing companies to break out of the risky “groupthink” dynamic plaguing many mature businesses.
PRO ~ Larger Candidate Pool
Ultimately, companies want to hire the best Sales Manager. By casting a wider net and including external candidates, hiring managers will attract a diverse pool of potential hires who bring skills and experiences they might not have considered had they simply promoted from within. Partnering with an exec search firm that specializes in Sales casts an even wider net which includes fish you never knew were in the sea.
CON ~ External Hires Cost More and Score Lower
According to Wharton Professor, Matthew Bidwell, external hires typically have less tenure in the role for which they are hired and receive vastly lower performance ratings than their internal counterparts. This leads to a 16% higher termination rate. Furthermore, external hires cost more. On average, they are paid 18-20% more than an internal employee for the same position. (Bump that number up to as high as 35% in today’s labor market!)
CON ~ The Learning Curve
Hiring a Sales Manager externally often follows an uptick in success. The company is growing, revenue is increasing, and solid leadership can ensure that trajectory. Therefore, external hiring can be dangerous because of the “ramp up” time required for any new employee. In fact, 57% of executives indicated it took up to six months or more to reach full impact of their new role. During this time, your sales team will lose their successful momentum.
UNKNOWN ~ Team Impact
Sales Managers must direct the existing team. This can cause serious disruption to the current environment if he or she ushers in new protocols and procedures or has an opposing leadership style. If the current team is successfully closing deals and works well together, is this a risk you’re willing to take?
Identifying and hiring high-quality leadership to ensure continued growth and take revenue to the next level is a challenge. Good candidates are found anywhere. Success is dependent completely on the merits and ability of the individual to transition to a management role. Ultimately, hiring managers should be looking for the best candidate, internal and external, to meet the unique needs of their company, its goals, and its existing team.