Recently, I had a chance to ask Brian Halligan, Hubspot’s CEO, these 4 difficult questions:
- When you miss a revenue goal, how do you diagnose root cause?
- What causes you (CEO) to lose confidence in your sales leader?
- Why do CEOs give unrealistic revenue targets to their head of sales over half the time?
- How long does a new head of sales have to prove himself to the CEO?
These are questions sales VPs want to ask their CEOs but cannot. The political blow back would be too severe.
I posed them to Brian expecting him to tap dance around them. He has nothing to gain by being honest. But, to my surprise, he answered them directly. And for that we are grateful. Apparently, he is an authentic leader and believes in transparency. Maybe this is why Hubspot is so successful.
Here are Brian’s unfiltered answers to these difficult questions:
1. When you miss a revenue goal, how do you diagnose root cause?
One of the benefits of an inbound approach to sales and marketing is that you get data on every single component of your funnel, not just what’s going on at the bottom of the funnel. I think about the funnel in three parts: top (which consists of visitors to your websites, interactions with your social media channels, and folks who check out your blog), middle (people who subscribe to your email list or are blog subscribers, folks who have filled out forms on your site or downloaded materials recently from your team), and bottom of the funnel (people who have expressed a direct interest in your product and who are primed for contact with your sales team). Each of these three components should have monthly and quarterly goals associated with your sales and marketing teams, making it reasonably easy to diagnose where the problems are based on the over-arching goals you’ve set forth by your team.
Once you have the data, it’s a matter of asking the right questions–why is it that our website visits are down and what will be different next month to change it? Why aren’t we connecting with as many people this quarter as we did last quarter? Fewer reps? Less utilization from our team? What you’re looking for are levers you can fix for next time around, not excuses–unearthing excuses doesn’t improve your business, but identifying critical next plays can move the ball forward.
2. What causes you to lose confidence in your head of sales?
I think a head of sales is responsible for knowing their numbers and knowing them well, for motivating and engaging a scalable system and approach to sales, and quickly understanding and addressing elements of the machine that aren’t working. For us at HubSpot, we preach an inbound approach to business, so we needed sales leaders who weren’t afraid of the massive vision we have for how companies have changed, and who were willing and able to encourage reps and managers to think differently about the sales and marketing process. We’re very fortunate to have hired great leaders in sales and sales operations recently, both of whom have deep experience in building and scaling great sales organizations.
Generally, when I hear other business leaders gripe about a head of sales, it’s because he or she is not generating results, has lost the respect of the team, or no longer has what it takes to scale with the business. I think you know one of these things is amiss when you see gaps in results, when you hold a level meeting and hear lots of complaints from reps, or when you sit it on sales calls and truly put yourselves in the customer’s shoes. It’s normal for there to be areas of improvement in all three of these areas, but if you’re seeing colossal potholes, that is usually a sign it’s time to move on.
3. Why do CEOs give unrealistic revenue targets to their head of sales over half the time?
Part of the problem historically has been that targets were often just best guesses, so of course a CEO is going to encourage the highest possible stretch goals from his or her team. Now, I think one of the benefits of the proliferation of more sales technology is that now sales leaders are armed with more data to show what it actually takes to scale a business. For example, I can make X revenue goal happen if I add Y reps in Z territories. Before, a lot of that work had to be done in Excel, and now there is a whole new movement toward sales enablement technology to make it easier and more data-driven for reps to sell and for managers to forecast and scale–that’s huge for VPs of sales and executives alike. Signals is our first step into the sales arena, and provides great resources for reps to engage with prospects effectively, so we continue to be excited about that.
4. How long does a new head of sales have to prove himself to the CEO?
Most CEOs (including me) are impatient, but I’ve also been on the other side of the table on the sales team, and it’s hard to create change quickly. I think any head of sales deserves six months to present what he or she thinks truly needs to happen for the business to thrive and grow, then another three months to actually start making those changes happen.