Archive

Archive for the ‘Building great startups’ Category

Essential skills for first line sales managers and the key success metric

December 6, 2013 Leave a comment

sales managerIf you are a bit too slow in stepping backward, or you have a burning desire to reduce your over-achievement compensation, then you may find a sales leadership position in your future. This post addresses the must-have skills/competencies that you need to have in order to succeed as a first-line sales manager.  Before we get into it, I would like to posit that success as a first-line sales manager should be defined in terms of the financial outcomes and development progression of your team, discounted by the time it took you to deliver it.

When thinking about your intentions for your fiscal year, you should be thinking only about how you can accelerate increased capability and attainment of your team – From this standpoint all other goodness flows.  With this in mind, I would offer the following skills that you should acquire, many of which you need to gain through mentoring and observation, rather than through courses:

Coaching and Mentoring
I have been deliberate in this distinction because these are separate skills to be used in different contexts:

Daily coaching and 1:1’s:  Successful leaders know the behaviors and skills needed to excel in a sales role – Conversations are around well defined tasks (like prospecting) with a clear focus and specific outcomes in mind.  A great leader will have developed conversation frameworks for delivering corrective coaching that leaves team members feeling energized and enthusiastic, as opposed to deflation and feelings of inadequacy.

It is key that you have a 1:1 format that is truly effective – If you want to know how, read this: How to conduct 1:1 meetings

Mentoring during development reviews:  Mentoring is about the individual and broader work life topics.  The focus here should be on career and personal development, rather then the specifics of task performance or skills.  I think the quickest path to learning mentorship is experiencing  it as a recipient – If you don’t have a mentor, you should get one.

Territory management
The biggest bane of a first line manager is the annual territory review – A good sales leader balances the portfolio and has a defensible, consistent process for allocation.  That being said, ALWAYS give the best opportunities to the best reps, regardless of politics or egos.  You are not operating an egalitarian society, but rather a meritocracy.

Territory forecasting
Learning the art and science of forecast aggregation and discounting is key – Find a coach.  If you don’t know the difference between a pipeline and a weighted probability forecast, then put this at the top of your list.  Every time a sales manager describes their open pipeline to me as a forecast I lose another clump of hair.

Sales enablement
The new sales manager needs a diagnostic framework for determining the development/training/collateral/systems needs of the team.

Internal influence and organizational politics
If you come from an enterprise sales background, this will come naturally – Key to success of a sales leader is accepting a quota that is reasonable and can be attained with reasonable certainty.  No one respects a pushover that gets excessive quota laid upon them.  Having strong internal influence and negotiating power is essential to sales leadership survival.

The key success metric
Aside from hitting quota, the catch-all metric can be delivered as the following question:

“How many of your team would want to work with you again if given the opportunity?”  That’s it….  It likely means you provided the environment for success, were a strong advocate, respected, enjoyable to be around and a great coach.

Advertisements

SaaS leaders – The key to protecting your hard-won ACV through renewal

4-key-areas-of-account-managementI was prompted to share some experience with respect to revenue retention on the back of Ben Sesser’s recent post that references a Pacific Crest study, clearly showing the impact of even small changes in renewal rates.  The big question is, “How do we best structure our sales organization and practices in order to ensure renewal?

I have 3 strongly held beliefs based on my experience with renewing contracts that apply to not only SaaS, but have origins in my early career when I was concerned with renewing field services maintenance contracts – The principals are universal:

1) Always be recording value

No matter what you are delivering to your customer, the initial investment was predicated upon a business case and related ROI.  Whomever is responsible for customer success and ultimately renewal, should be checking in to ensure that this ROI expectation is being met and then course correcting along the way.  Importantly, mutually recognized successes and ROI impact moments should be documented, ready to be presented to the customer at renewal time.  Remember, every year your customer is competing for budget and they need to demonstrate that return on your service beats the investment hurdle.

The key to success here is a business process management system that ensures that an Account Management or Customer Success program doesn’t rely on memory or sticky notes (It can be built into your CRM as a standard set of timed activities).

2) Account/Customer Success Managers (AM/CSM) should be accountable for renewals, but not negotiating the order

This point usually starts a rigorous debate, but my perspective is this:  The ultimate measure of success for an AM/CSM is the renewal value.  If this were not the case, then we would not invest in the role – Having an ecstatically happy customer that doesn’t renew is no good to anyone (Unless you are early stage and they serve as powerful references).

So, my contention in a nutshell is that the AM/CSM should:

  • Use customer sat metrics to guide their interactions and allocation of time
  • Be incented (annually) on renewal rates (Not pure satisfaction metrics)*
  • Work with a salesperson to ensure that the quarterly reviews are on plan and line up a successful renewal
  • Not engage in any commercial discussions with the customer at all because this reduces the trust in the relationship.  The act of renewing or expanding the relationship should be done by a salesperson (There is no one-size fits all here – It may be the original salesperson or a renewals focused team, depending on the maturity of your business).

3) Account Managers/Customer Success Managers should be industry or domain experts

Given my assertion that the primary goal for AM/CSM is renewal, their core value to a customer is ensuring that they get the highest ROI from the service/product.  Implicit in this is the need for the AM/CSM to have sufficient knowledge of the domain or industry to provide real insight.  The common mistake I see here is an Account Manager with a revenue focus being put in charge of an account where they have no real value to contribute to the customer in terms of best practices or industry insights.

*A renewals based incentive will ensure that a CSM/AM appropriately allocates their time across their territory.  It means that the time-sink, low value (but often demanding) accounts don’t distract from where the real value is.  I have seen pure satisfaction based plans and they simply don’t work from the standpoint of good commercial outcomes.

Delegating your sales effort to a prospect – How to succeed when you don’t have exec access

teachingThe situation: You have an enthusiastic supporter who needs to present your offer to an approving panel of executives or the CEO and for whatever reason, you can’t present to this group/person.  What now?

A caveat: This post isn’t designed as a cure for not getting executive access during a sales cycle – If you don’t have a sponsor that resides within the political inner circle, then you are behind the 8 ball..  However, it is a common scenario where there are approvers (finance comittee etc) where vendors don’t get access and here is where good deals go bad because an IT team member or operations person flounders due to their inexperience with influencing outcomes and articulating investment rationale to executives.
 

Don’t send a messenger without giving them the message

When your sponsor tells you that they need to present to the approver(s) next week, don’t be like most people and thank them for the insight and cower in death valley until you hear what happened.  Get on the front foot and help your sponsor to deliver an impactful message that will inspire action and deliver the approval that you need.

We know that sales is a profession that takes years of development and experience to become skilled – Don’t let a prospect flounder and fail because you haven’t afforded them the benefit of your sales skills in order to secure the signature (Pro golfers don’t drive to the green and then leave it to the caddy to putt it in).  You need to arm your sponsor with a compelling, executive agenda focused business case that can be delivered by anyone.

Conspiring with your sponsor and arming them for battle

When you are told about the meeting, the key is to ensure that you and your contact are psychologically sitting on the same side of the table and can work together to get the right outcome.  Follow these steps to get your deals across the line:

1) Express your excitement that as a team you are at the final hurdle and that you would love to help.
2) Ask whether there is a standard format for business case submission or a proposal template that the exec like to see.  If they do, jump to (3).

If not, then offer to provide one based on your experience of having done many executive presentations previously.  A short format presentation would have the following broad headlines:

Opening slide – Outline of the executive agenda.  What are the key strategic drivers/factors that the exec care about, which will be impacted if action is not taken?

Middle slide(s) – Outline the situation and the specific impact it has on the previously stated strategic factors.

Middle/End slides – Solution and how this rectifies the situation

End – Investment requirement and specific next steps.

Almost without exception, a non-salesperson will do a Problem-Solution proposal that has weak approval potential because it doesn’t focus on the impact to strategic factors that executives care about.

3) Offer to review their first draft as a second pair of eyes and provide additional reinforcing proof points or commentary to assist.

The key here is to ensure that your collaborator feels that you are working to assist them, not being self serving.

In closing, you don’t want your sponsor going off half-cocked, so give them the benefit of your sales experience to get the outcome you both want.

Birds of a feather flock together: How to get hired to the next start-up rocket-ship

rocket manEnough has been written about being in the bay area for tech entrepreneurs, so what about those of you who are not founders, but want to be part of the next Salesforce.com, Box, Yammer or Marketo?  For many of us, the time to join a firm is during the exciting ‘Build and scale’ phase, when an organization has found product market fit and cracked the $1m-$2m revenue.  It is also true that you see the same names turning up time and again at a consecutive series of blow-out start-ups – How does this happen?

A-players like to keep the team together

The first way to get access to the best opportunities is to work with A-Players in the ‘start-up club’.    My lucky break was at Salesforce.com when I was in enterprise sales for Australia/NZ and was invited to the 20 person ‘Global Sales Council’ in New York, when I was able to meet the very best and brightest sales minds in the company.

A person I will never forget is ‘Dave’.  He is an executive that went from Oracle, to Netscape, to Ariba and then Salesforce.com – An absolutely stunning run that places him in the very top fraction of a percentile of high achievers.

A key to Dave’s success is that he had worked with people that trusted him to execute, therefore his name was at the top of the list for every new opportunity.  He repeated this practice himself, by bringing his star sales performer from Ariba to Salesforce.com, a gentleman who cleared a multiple seven figure W2 during my tenure at Salesforce.  Dave had the following hiring policy for A-players:

1) Hire the best people you have worked with before
2) He has to be able to background you through an independent contact, and if he can’t, then he won’t hire you
3) He always asks a sales executive for his prior year’s W2 and if it is less than stellar, they don’t get the job.

Action:  Join a start-up with a young, but proven executive team that has at least one more follow-on start-up ahead of them, so that you can be part of the executive vacuum when it is time to move on.

Do you need to be in the valley?  No, but you need to find a role that gives you a close working relationship with the executive team in the U.S., otherwise you will not get the benefit of being in the inner-circle, ready for the next leap.  This was acute for me when I was based in Sydney, so I made a point of being known to a variety of Salesforce executives beyond my immediate reporting lines.

The valley affords you the opportunity to build much stronger relationships with the ‘start-up club’, so if you can spend a few years here, then you will be in a far stronger position.

Be known to the ecosystem

There are three key groups that are sources of talent for start-up CEOs looking to round out their team:
1) Venture Capitalists – The people that have invested in the start-up
2) VC focused search firms – There is a niche of recruiters that primarily serve venture backed start-ups
3) Start-up founders – As a founder myself, I found that most introductions come from other founders

If you wish to take this route, then you just have to be where the ecosystem is, and arguably today that means the Bay Area, LA or New York.

Case in point:  This week I had the pleasure of attending a SaaS Sales Leaders Summit, hosted at Emergence Capital – The room was filled with a stellar line-up of sales executives from early stage, to more developed such as: Box, Yammer, Intacct, EchoSign, Zenpayroll, InsideView and Marketo.  This just can’t happen outside of the valley and I take my hat off to Emergence and Sean Jacobsohn for bringing together such heavy hitters.

Action:  If you can, get yourself to San Francisco or another hub so that you can get connected to the ecosystem.

Key take-aways

– Always independently background check your boss and the team you are joining.  If they are not considered A-Players, then don’t join.  Perception of you in the market will automatically fall to their level.
– Joining like-minded winning teams is a great way to keep winning – It is the beginning of a virtuous cycle.
– Woody Allen’s “80 percent of success is showing up” couldn’t be more true for landing the best roles.  Venture Capitalists and executive search firms have to get to know you in order for you to get early access to the best roles.  Just living in San Francisco isn’t enough – You have to get out and meet the people that are making it happen.

8 characteristics of parents that new sales leaders should emulate

First time sales managers all face the same dilemma – How do I relate to a group of salespeople that I am used to calling peers?  This is magnified when an account executive is promoted from his/her peer group to be the new leader.

The fastest path to success is to refer to your good parenting guide and just change the language.  Great parents are by definition great leaders and we can apply specific practices to sales management.  Here is what people hope for in a parent and a sales leader:

–          They are a guide that I have confidence will show me the way

–          I can lean on them for emotional support

–          I feel safe to make mistakes around them

–          I know they will defend my interests

–          When I am unsure how to proceed, I know they will have the answer

–          They set clear and reasonable boundaries

–          They are helping me improve every day

–          Our relationship is “Do as I do” – Leading by example

A core tenant is that there must be a high degree of respect and trust – I advise all new managers that you can be friendly, but doubts or insecurities should be shared with YOUR manager, not your team.  Any dependent, be it a child or subordinate must be able to have confidence in their leader, so over sharing is never a best practice.

You may not be a parent, but you have certainly met good ones, so take a leaf from their book.

The 6 step process for securing the right product/service for your organization at the best price

April 27, 2013 Leave a comment

Deal doneThis article is to help business budget holders extract the very best value from suppliers and to avoid using the commonly accepted procurement practices that are actually destroying value for you.  The approach below is generic and makes assumptions about the size and complexity of the purchase, so please allow for the fact that you may have a consultant doing this work for you and it is not a one-size fits-all approach.  Notwithstanding, if the principles below are followed for every major purchase, you will experience a far greater degree of delight with the outcomes you receive:

Buyer process

1) Summary document: Provide comprehensive explanations of the business objective you are trying to reach with this purchase.

A recurring theme of this post is information sharing and transparency.  The biggest issue I have seen in a procurement process is  a buying group/buyer who presents the vendors with a laundry list of feature requirements or problems to solve, without explaining the context of this need.   The first step in a best practice procurement process is to have a clearly documented and broadly agreed situation assessment and the challenge/opportunity that the purchase is to address.

2) Solution discovery: Share your assessment with potential vendors to determine the best possible solution approaches.

Too often buyers assume the burden of trying to diagnose their own problems, when they can work with specialist vendors who will freely give of their expertise to craft a solution direction/overview that can form the basis of a requirements document and business case.

3) Document requirements: Use the expertise of vendors to determine what it is you actually need.

Here is a nugget for you – Vendors will willingly give you access to the brightest and best at this stage because they want to influence your buying criteria toward their solution.  This is actually a very good thing for you if you invite 2 or 3 vendors to do exactly the same thing.  In this fashion you don’t have to somehow become the expert in the solution area, rather an arbiter of expert opinion.  Why pay a consultant thousands of dollars when you can leverage the best minds in the business for free?

Pro-tip: Craft your evaluation criteria in collaboration with the vendors.  They will help you figure out what is important and why.  The risk of you being misled is mitigated by doing the exercise with multiple vendors.

4) Multi-party proposals: Never, ever accept a vendor’s suggestion that you sole source

At this stage you should issue your well crafted requirements document to multiple parties, ensuring that it is introduced with the original ‘Summary Document’ content so that competing vendors understand what you are aiming to do.  It is important that your evaluation criteria is included (with weighting) so that vendors know how best to present their offering (If you don’t they may not highlight something that is very important to you, thereby increasing the chance you select the wrong vendor).

Pro-tip:  Tell every vendor who you have issued the document to.  Why?  Because it ensures that they will highlight all the weaknesses in competing products that you may not draw out during your assessment.  Contrary to popular belief, you get far better outcomes by informing all competitors who is in the game because they will help you uncover skeletons.

5) Coach short-listed vendors: Make sure your vendors put their best foot forward

When you have cut the list to 2 or 3, you should have a proposal debrief where you clearly articulate concerns you have or clarifications required.  In addition, you should explain to them where you think they are weak compared to the competition.  This is important because the vendor may be able to offer more or present an alternative to the weak offer.  You should also use this time to set psychological anchors around price/contract terms.

6) Negotiate with 3 parties: Keep everyone guessing until the very end

At this point you should not normally negotiate the actual language in contracts (keep the lawyers out of it for now), and instead be negotiating the principles that can later be translated into legalese.  EG Service level agreements, warranties, etc.  After this exercise is concluded you can down-select your preferred vendor, to whom you will award the business subject to successful contract negotiations.

Happy buying!

Getting the most from your startup advisors

March 12, 2012 Leave a comment

You know that you need to get advisors to fill the gaps and you have a vague idea that the more prestigious the names you have, then the more impressed your funding partners will be.  Two things to get straight here:

1) Sophisticated investors know that entrepreneurs have started collecting ‘advisors’ like baseball cards in an attempt to get credibility from having the highest value assortment.  They are also not stupid – Listing someone as an advisor because they agreed to take a call from you occasionally does not provide value in either social proof or contribution.

2) If you want to get some validation from the social proof of a valuable advisor, then you must demonstrate their engagement and how they are helping you chart your course.

3) You actually DO need real advisors, so engage  them and  take their counsel in a structured fashion.

If you are happy with the above assertions, then read on and I will tell you how.

Advisory Boards with a capital ‘B’

You should form and operate an advisory board with a discipline and process of a normal board of directors.  This means that as CEO you play the role of company secretary and schedule monthly board meetings and distribute a formal agenda in advance (at least 2 days).  There has been enough written on the topic of board agendas so you can google them, but it is worth repeating the role of the board.

Job #1 of a normal board is to hire and fire the CEO… The good news for you is that this doesn’t apply for advisory boards 🙂

Job#2 is to challenge, improve and approve strategy.  You should look for advisors that deeply understand your business model and market and most certainly your stage of company (in particualr for first time entrepreneurs).

The informal role of the board includes CEO counseling, introductions (biz dev, funding, key hires).  All of which you should look for in an advisory board also.

One big departure from the standard board is that you should have a constant stream of feedback from your advisors in between meetings.  The best way I have found to achieve this is to use a tool like http://www.leanlaunchlab.com othat allows you to track your customer development process and to provide advisors with operational metrics in real-time.  This encourages adhoc feedback and advice every week.

Getting them engaged

If you are thinking that I expect a lot from my advisors, then you are correct.  The reason I receive it is because all my advisors have equity in the business through direct investment or vested grants.  The mistake I see made often is that people either don’t give meaningful slices of equity, or they dole it out haphazardly and don’t get the value back.

My firm opinion is that if someone is going to be a committed advisor, then they must believe in your vision and therefore should be prepared to invest (even a token amount) to be a part of the team.

The characteristics of a good advisory team

You know that you have got it right when the following is true:

  • You can get the advice you need from you board (directly or through an introduction)
  • Advisors risk their social capital by providing introductions to high value connections
  • Your advisors proactively suggest introductions due to gaps they see you have’
  • Your advisors are asking informed questions because they are staying across your business

A final note – Remember that this is a two way street.  You should seek to help your advisors with their personal and professional objectives at every turn.  These are key relationships and deserve nourishment.

I wish you luck in finding your consigliere’s – I feel very fortunate to be working with mine.

%d bloggers like this: