Rebooting Leadership Selection in Software Sales

8/6/2019 Rebooting Leadership Selection in Software Sales

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Rebooting leadershipselection in software salesby Gren Millard, David Beuerlein, Patrick Delhougne, and David KnappMay 2011

Software companies shouldfundamentally alter how they

select sales executives. Analysisof Korn/Ferry executive assessmentsshows that the requiredleadership skills shift significantlywith each promotion. The upshot?Top sales managers are notnaturally good sales leaders.Software companies would bewise to use a more rigorous,assessment-based approach torecruiting, development, andpromotion.

The head of global sales at one of the worlds largestenterprise software companies recently outlinedeverything he was looking for in a sales executiveaposition hed been struggling to fill. He sighed infrustration and then acknowledged, I guess werelooking for a purple squirrel.

His colorful metaphor drives home the current difficulty of recruiting andhiring effective software sales executives. Similar frustration crops up inalmost every discussion we hold with CEOs and senior vice presidentsregarding the executive talent needed to lead software sales. Getting overthis hurdle requires:

> a clear understanding of the sectors new demands on sales leaders;

> a candid assessment of the flaws inherent in current recruiting and

development practices; and

> knowledge of the skills, behaviors, and leadership characteristics

that define success at each successive level of the evolutionary path

from sales representative to global sales leader.

Research into how social and cognitive psychology intersect with leadershiptalent sheds light on why software organizations are facing this dilemma,and provides insight into how to handle hiring and promotion in the sector.Our analysis of the leadership profiles within Korn/Ferry Internationalssubstantial database of executive assessments indicates that sales executivesmust change their leadership style significantly to thrive as they move upthe ranks.

Purple squirrels exist. But theyre not born that way. They evolve.


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2Software sector after hard timesThe business software sector is in the throes of a structural break, a termeconomists use to denote an unexpected macroeconomic shift thatgenerates confusion and uncertainty. This stems from a number ofinterrelated drivers and conditions, including but not limited to the impact

of the global economic crisis of 2008 and 2009. Now, as was the case in thewake of the dot-com bubble, customers demand rapid and clearly definedreturns on their investment. After both those recessions, consultativesellingbetter understanding customers and the exact nature of theirproblemsre-emerged as a preferred approach. Although many of thosedemands may feel familiar, it is prudent to recognize that todays sectorchanges are less cyclical and more fundamental.Consider the mushrooming growth of cloud computing and the softwareas a service (SaaS) model. These developments may be responsible for thelargest transformative impact in a generation. The business model ofnearly every large technology company has changed in response.Consider the rising demand for massive meta platforms that help

customers wrap many core applications together to solve complex businessproblems. These solutions require sales teams to develop intimateknowledge of each individual customers unique tangle of technology.A similar demand for an intense customer-knowledge requirementaccompanies the emergence of business intelligence and analyticsapplications that enterprise resource planning (ERP) companies like Oracleand SAP have acquired in recent years. Such applications, when combinedwith the enterprise software firms massive databases, enable customersto convert under-utilized data into valuable and actionable information.These forces have fundamentally changed the execution and managementof sales forces. It is no longer sufficient for a sales team to address a singlebusiness issue. Instead, the sales team must deliver a solution, one that can

be woven into the overall business and IT strategyand satisfy specificfinancial metrics. Additionally, the most effective selling approach in thisnew world is not entirely consultative, but consultative and transactional.The need to close deals has only intensified.Finally, it is important to understand that others are well aware ofthese trends. In response, large services firms that perform systemimplementations are moving away from a custom shop mentality andinstead developing their own solution suites from a large menu ofsoftware products. In short, professional services partners that previouslyprovided enormous revenue streams (and required dedicated sales practices)to software companies are morphing into competitorsand competing forthe same sales leadership talent.Software sector after hard timesThe business software sector is in the throes of a structural break, a termeconomists use to denote an unexpected macroeconomic shift thatgenerates confusion and uncertainty. This stems from a number ofinterrelated drivers and conditions, including but not limited to the impactof the global economic crisis of 2008 and 2009. Now, as was the case in thewake of the dot-com bubble, customers demand rapid and clearly definedreturns on their investment. After both those recessions, consultativesellingbetter understanding customers and the exact nature of theirproblemsre-emerged as a preferred approach. Although many of thosedemands may feel familiar, it is prudent to recognize that todays sectorchanges are less cyclical and more fundamental.Consider the mushrooming growth of cloud computing and the software

as a service (SaaS) model. These developments may be responsible for thelargest transformative impact in a generation. The business model ofnearly every large technology company has changed in response.


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Consider the rising demand for massive meta platforms that helpcustomers wrap many core applications together to solve complex businessproblems. These solutions require sales teams to develop intimateknowledge of each individual customers unique tangle of technology.A similar demand for an intense customer-knowledge requirementaccompanies the emergence of business intelligence and analyticsapplications that enterprise resource planning (ERP) companies like Oracle

and SAP have acquired in recent years. Such applications, when combinedwith the enterprise software firms massive databases, enable customersto convert under-utilized data into valuable and actionable information.These forces have fundamentally changed the execution and managementof sales forces. It is no longer sufficient for a sales team to address a singlebusiness issue. Instead, the sales team must deliver a solution, one that canbe woven into the overall business and IT strategyand satisfy specificfinancial metrics. Additionally, the most effective selling approach in thisnew world is not entirely consultative, but consultative and transactional.The need to close deals has only intensified.Finally, it is important to understand that others are well aware of

these trends. In response, large services firms that perform systemimplementations are moving away from a custom shop mentality andinstead developing their own solution suites from a large menu ofsoftware products. In short, professional services partners that previouslyprovided enormous revenue streams (and required dedicated sales practices)to software companies are morphing into competitorsand competing forthe same sales leadership talent.


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Magic Johnson and the Einstellung Effect

Finding the rare leadership talent who can lead sales through thislandscapethe purple squirrelsrequires two things: overcoming theEinstellung Effect and dealing with the Magic Johnson problem.

The Einstellung Effect refers to a tendency to try to solve a problem withmethods that worked in the pasteven though there are better ways ofsolving the current problem (Brooks 2011). For example, software companiestraditionally promote from the sales supervisor ranks to the managerialand executive level. Those who become sales supervisors, however, tend tobe Magic Johnsons, that is, top sales athletes who have been promotedinto that first rung of management based solely on the strength of all-starsales rep careers.

Magic Johnsons all-around play helped the Los Angeles Lakers win fiveNational Basketball Association (NBA) championships. After retiring, heentered the NBA Hall of Fame and is widely considered the greatest point

guard of all time. Based on the strength of his on-the-court performance,Magic was named coach of the Lakers in 1993. His record? Five wins, 11losses and a very un-Hall-of-Fame-esque winning percentage of 31 percent.

Too often, software companies commit a similar foul by promoting theirMagics, and, worse, by overlooking their Phil Jacksons. Jackson was justa scrappy sixth man during his playing days. But his comprehensiveknowledge of the game, players, and inspirational techniques helped himbecome a coach who has won a record 11 NBA championships.

Likewise, the skills, behaviors, and leadership characteristics that define asuccessful salesperson, or even a sales manager responsible for five or sixsales representatives, differ dramatically from the qualities of a leader who

oversees numerous sales executives and their teams (see The evolution ofthe sales leader).

Great individual sales contributors get promoted to a supervisory (orfirst-level) position based on an ability to identify and close new business.But thats when they also tend to fall prey to the Einstellung Effect: Theyrely on their old selling instincts while nudging their representatives asideto show them how its donesometimes even closing deals in their place.Despite the long-term limitations of this approach, these top athletes tendto succeed, but only when they are leading teams small enough (five or sixsales representatives) to produce winning results.

This success earns them another promotion, typically to a middle-levelsales management or director position that presents the added responsibilityand complexity of leading a larger team of sales managers. This is where

The evolution of the sales leader

First-level sales supervisor

Highly specialized sales executive with

>

strong result orientation. Perceived as a

doer. Typically highly identifies with thetask at hand.


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Employs a lone-cowboy sales model to get

>

things done on my own.

Command-and-control approach to

>

management with a tendency to closelarge sales deals for sales representativeson his/her team.

Top-level sales executive

A generalist team leader with a strong

> ability to set the agenda for the entiresales organization.

An Orchestra Chief par excellence, he/she

> gets things done through others andunderstands how his/her decisions andactions affect the organization as a whole.

A network-builder with an innate ability to

> achieve consensus while developing acommon denominator in a team.


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4serious signs of trouble begin to materialize. The habits, behaviors, andmanagement styleoften a command and control approachtop athletescultivated during their sales and supervisory tenures begin to backfire.The responsibilities at this leveldeveloping sound go-to-market strategies,hiring talent, developing talent, empowering their direct reports, and

working closely with colleagues in other functional areasrequire subtler,more collaborative forms of influence.The impact of a low winning percentage, or outright failure, at this middlelevel can be extreme from an organizational perspective. The combinedeffects of two or more ineffective sales managers and executives can:> drive top sales talent out the door;> weaken the bench strength of the sales team;> hurt short-term sales; and> compromise long-term succession planning efforts.To avoid these threats, software company CEOs and top-level sales leadersshould focus their recruiting efforts on distinguishing between MagicJohnsons and Phil Jacksons.

Introducing science to sales leader selectionRather than reflexively promoting or recruiting top sales reps tomanagement and executive positions, software company leadership teamsshould bring greater behavioral and cognitive assessment to bear on theprocess. In doing so, software companies would be in good company;leading organizations in mostsectors are rethinking manytraditional approaches to talentmanagement. Google, for example,recently completed a year-longeffort to analyze the qualities that determined its most successfulmanagers. The results proved surprising: technical and analyticalexpertise, such as the ability to code, ranked dead last while softer

skills, such as making time for person-to-person meetings with directreports, topped the list (Bryant 2011).To be sure, this reframing should not devalue top athletes. High-performingsales representatives may be more valuable than they have ever been, giventhe uncertain and rapidly changing nature of the business softwaremarket. The questions to ask, rather, are whether top sellers are alreadysuited for different levels of sales leadership positions, whether theyrequire more development before being promoted, or whether they wouldbest remain individual contributors. The answers should come fromThe question is whether top sellers are suited forsales leadership positions, or should remainindividual contributors.serious signs of trouble begin to materialize. The habits, behaviors, andmanagement styleoften a command and control approachtop athletescultivated during their sales and supervisory tenures begin to backfire.The responsibilities at this leveldeveloping sound go-to-market strategies,hiring talent, developing talent, empowering their direct reports, andworking closely with colleagues in other functional areasrequire subtler,more collaborative forms of influence.The impact of a low winning percentage, or outright failure, at this middlelevel can be extreme from an organizational perspective. The combinedeffects of two or more ineffective sales managers and executives can:> drive top sales talent out the door;> weaken the bench strength of the sales team;> hurt short-term sales; and

> compromise long-term succession planning efforts.To avoid these threats, software company CEOs and top-level sales leadersshould focus their recruiting efforts on distinguishing between Magic


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Johnsons and Phil Jacksons.Introducing science to sales leader selectionRather than reflexively promoting or recruiting top sales reps tomanagement and executive positions, software company leadership teamsshould bring greater behavioral and cognitive assessment to bear on theprocess. In doing so, software companies would be in good company;leading organizations in most

sectors are rethinking manytraditional approaches to talentmanagement. Google, for example,recently completed a year-longeffort to analyze the qualities that determined its most successfulmanagers. The results proved surprising: technical and analyticalexpertise, such as the ability to code, ranked dead last while softerskills, such as making time for person-to-person meetings with directreports, topped the list (Bryant 2011).To be sure, this reframing should not devalue top athletes. High-performingsales representatives may be more valuable than they have ever been, giventhe uncertain and rapidly changing nature of the business software

market. The questions to ask, rather, are whether top sellers are alreadysuited for different levels of sales leadership positions, whether theyrequire more development before being promoted, or whether they wouldbest remain individual contributors. The answers should come fromThe question is whether top sellers are suited forsales leadership positions, or should remainindividual contributors.


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individual assessments based on validated systems and best-in-class models.As a recent Harvard Business Review article on how companies leveragetalent data to strengthen competitive advantage puts it, If you want betterperformance from your top employees youll do well to favor analyticsover your gut instincts (Davenport, Harris, and Shapiro 2010).

Promoting (or recruiting) best-in-class senior sales leadership starts withidentifying the key competencies required for success, and then identifyingthose who have them and have a demonstrated potential to learn andadapt to perform at the next level (See Be agile and adapt). To do so, it isimportant to understand the different leadership styles successful salesleaders use at each stage of their career. Likewise, sales managementtalent might internalize the changing-competency message this way: Whatgot us here wont get us where we need to go.

First-level sales supervisors: Front-line sales supervisors learn to influenceprimarily by being directive and with an emphasis on explaining how andwhy. They are primarily influencing downward, driving the performance

of their direct reports. Korn/Ferry research shows that best-in-class salessupervisors are inclined to use Task Focused and Intellectual leadership styles(see Figure 1), an overall approach characterized as being directive, decisive,and driven to produce results.

Be agile and adapt

Korn/Ferry research indicates that high-potential sales leaders approach theirpositions differently from those who willstruggle after promotion. The difference islearning agility, the ability to pick up thingsquickly and immediately extrapolate from

those lessons in brand new situations.

High potential: Like successful risingexecutives in all functional areas, high-potential sales leaders learn how to adaptthe way they influence, solve problems, andnavigate the emotionally laden aspects ofmanagement. Specifically, they adapt theirapproach to establish credibility, engageothers, drive performance through others,and navigate complex relationships insideand outside their organizations.

Low potential: These individuals tend to stick

Figure 1

Leadership style of sales supervisors

This model is an amalgam of first-level sales supervisors who are considered best-in-cone to seven scale measures how much they emphasize that style in their leadership.

7.00

6.00

5.00


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4.00

3.00

2.00

1.00

AC

D

B

Task focused Social Intellectual Participative

lass. The

First-level sales supervisorA> Communicates goals clearly> Carefully monitors andmanages executionB>Works to clearlyestablish roles> More focused on drivingperformance than onteam building

C>Conveys expectations ofquality and performance>Holds self and othersaccountableD>Receptive to newideas, but less likely tobe concerned aboutreaching consensus

with what they have always done, over-relyingon their natural capabilities of persuasion,motivation, negotiation, and selling. Althoughthese capabilities are valuable within salesrepresentatives, they rarely enable anindividual to make the transition from a salesmanager role to an executive role, leading asales organization.


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6Middle-level sales managers: Once front-line supervisors are promotedto a middle-level sales management role, their scope of influence expandsbeyond direct reports. Adding a layer of complexity, they now have todeal with issues that require collaboration, negotiation and, at times,confrontation with peers and others outside of the sales team.

In this elevated role, its important to use new influencing strategies, suchas collaboration, to focus on and develop key relationships. Learning tonegotiate, gain trust, and earn respect of peers becomes a higher priority.The manager needs to unlearn some of the command-and-control habitsthat previously sufficed.Sizing up the situation and selecting the right strategy is key whentransitioning into the more complex and diverse manager role. The best-in-class managers (see Figure 2) also demonstrate strong problem-solvingskills and begin to develop the capabilities needed to deal with peoplechallenges, such as the ability to assert oneself tactfully and the ability tonegotiate win-win solutions.Figure 2

Leadership style of sales managersThe best-in-class model of middle-level managers is strikingly different, especially in the first twocategories, which show a de-emphasis on individual tasks and greater emphasis onpeople skills,and thus leading a team to success.Top-level senior sales executive: Progressing to higher-level leadershiproles presents a new set of challenges. At this point in their evolution, salesleaders gain exposure and access to other senior leaders inside and outsidethe organization. Establishing credibility, being able to think quickly onones feet, and displaying high levels of social and political intelligenceAB

CD1.002.003.004.005.006.007.00ParticipativeIntellectualSocialTask focusedA> Responsive and agile,stays focused ondriving resultsB>Approachable> Works hardto strengthenkey relationshipsC>Keeps the team alignedwith the key goals>Reiterates thehow and the whyD>Collaborative>Strives to achievewin-win outcomesLevel two sales managerMiddle-level sales managers: Once front-line supervisors are promoted

to a middle-level sales management role, their scope of influence expandsbeyond direct reports. Adding a layer of complexity, they now have todeal with issues that require collaboration, negotiation and, at times,


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confrontation with peers and others outside of the sales team.In this elevated role, its important to use new influencing strategies, suchas collaboration, to focus on and develop key relationships. Learning tonegotiate, gain trust, and earn respect of peers becomes a higher priority.The manager needs to unlearn some of the command-and-control habitsthat previously sufficed.Sizing up the situation and selecting the right strategy is key when

transitioning into the more complex and diverse manager role. The best-in-class managers (see Figure 2) also demonstrate strong problem-solvingskills and begin to develop the capabilities needed to deal with peoplechallenges, such as the ability to assert oneself tactfully and the ability tonegotiate win-win solutions.Figure 2Leadership style of sales managersThe best-in-class model of middle-level managers is strikingly different, especially in the first twocategories, which show a de-emphasis on individual tasks and greater emphasis onpeople skills,and thus leading a team to success.

Top-level senior sales executive: Progressing to higher-level leadershiproles presents a new set of challenges. At this point in their evolution, salesleaders gain exposure and access to other senior leaders inside and outsidethe organization. Establishing credibility, being able to think quickly onones feet, and displaying high levels of social and political intelligenceABCD1.002.003.004.00

5.006.007.00ParticipativeIntellectualSocialTask focusedA> Responsive and agile,stays focused ondriving resultsB>Approachable> Works hardto strengthenkey relationshipsC>Keeps the team alignedwith the key goals>Reiterates thehow and the whyD>Collaborative>Strives to achievewin-win outcomesLevel two sales manager


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emerge as key prioritiesand important drivers of successful performance.To maneuver this transition, sales leaders must have learning agility; that is,they learn from first-time experiences and adapt quickly.

This more perceptive, agile, and responsive style, coupled with the abilityto make a strong impression and ultimately forge effective relationships,

also represents key success factors (see Figure 3).

Figure 3

Leadership style of a top-level sales executive

Individual tasks are further de-emphasized, and social and participative aspectsofleadership climb.

AB

CD

Top-levelsales executive7.00

A> Delegatesthe

6.00

smallstuff

>Retains close oversight

of major initiativesB>Outgoing and engaging> Opendoor

5.00

4.00

management styleC>Conveys sense of

3.00

knowing the answer

without arrogance

2.00 D>Reasonably open tolistening and teaming

1.00

Task focused Social Intellectual Participative


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Conclusion: adapt to win

Korn/Ferrys research indicates that the required evolution of leadershipstyle from a front-line supervisor to a high-level sales executive is fairlypredictable. This narrative illustrated in Figures 1 through 3 features atheme that business software companies will find quite familiar in their

intensely competitive market: Adapt or else.

Doing so can be difficult given the uncertain economic conditions anddisruptive forces buffeting the sector. However, by understanding theleadership qualities unique to each step of the sales leaders evolutionarytrajectory, CEOs and senior sales vice presidents will soon be able to select,recruit, and develop more purple squirrels.

References

Brooks, David. 2011. Tools for Thinking.The New York Times, March 28.

Bryant, Adam. 2011. The Quest to Build aBetter Boss. The New York Times, March 13.

Davenport, Thomas, Jeanne Harris, andJeremy Shapiro. 2010. Competing on TalentAnalytics. Harvard Business Review, October.


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Gren Millard is a Senior Client Partner and the Global Sector Leader ofSoftware within Korn/Ferry Internationals Global Technology Market.He is based in the firms Northern Virginia office.

David Beuerlein is a Senior Client Partner and the Global Sector Leader ofDevices and Platforms for Korn/Ferry Internationals Global Technology

Market. He is based in the firms Dallas office.

Patrick Delhougne is a Senior Client Partner and leads Korn/FerryInternationals Global Technology Market in the New York office.

David R. Knapp is a Principal Consultant in Korn/Ferry InternationalsLeadership and Talent Consulting group, based in Chicago.

About The Korn/Ferry Institute

The Korn/Ferry Institute generates forward-thinking research andviewpoints that illuminate how talent advances business strategy. Since

its founding in 2008, the institute has published scores of articles, studiesand books that explore global best practices in organizational leadershipand human capital development.

About Korn/Ferry International

Korn/Ferry International, with a presence throughout the Americas,Asia Pacific, Europe, the Middle East and Africa, is a premier globalprovider of talent management solutions. Based in Los Angeles, thefirm delivers an array of solutions that help clients to attract, deploy,develop and reward their talent. Visit www.kornferry.com for moreinformation on the Korn/Ferry International family of companies, andwww.kornferryinstitute com for thought leadership, intellectual property

and research.

2011 The Korn/Ferry Institute


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Rebooting Leadership Selection in Software Sales

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