For example did you:
- Reach your New Customer acquisition targets?
- Retain your most important customers?
- Manage your talent properly? Reduce turn-over?
- Embrace the digital age of selling?
- Make your number?
Let’s focus on this last one for now. Making your number is how you measure yourself all year. It separates success from failure. Sometimes it makes the difference between jobs saved and lost. It prevents you from being part of the 19-month average lifespan as a VP-Sales.
If this metric is so important, it should be how the board evaluates you, right? Wrong.
It’s all well and good if you made your number. You should be proud- but that’s table stakes.
This is the metric that really matters to Boards; how did you do relative to your peers?
Ace Your Board Evaluation & Review
The best way to ace your board evaluation is to be prepared. You need to know what they’ll expect, and how they’ll evaluate.
Be Prepared: Download the Top 10 Metrics the Board Will Evaluate you On
There are two main categories on which the board will evaluate you. Both are important. But make no mistake – one is more important than the other.
1) Inward Out View: This first evaluation is how you performed vs. making your number. Did you surpass the number? By how much?
- Quota Attainment- What percentage of your sales team achieved quota? Are you relying on the top 20% to make your number? This is a dangerous spot to find yourself in. It leaves very little room for error. The Board will want you to address it.
- Talent Management – Are your top sales performers still with the team? Are you using a methodology like TopGrading for Sales? Moving out “C” players? Investing and attracting “A” players? All of these sectors need your attention. Remember: Cost of a mis-hire is a clear silent revenue killer.
- New Customers Acquired- net new customers acquired is a key indicator of growth and expansion. It’s indicates net new revenue today, future upsell/cross and a myriad of other revenue opportunities.
- Customer Expansion- you land that new logo last year. What have you done this year to upsell and cross sell them incrementally? Are they investing appropriately in your product vs. other area’s?
- Cutting Edge Strategy – This age of selling is engrained in the digital space. Social selling, inbound marketing lead generation, and personal brands are the name of the game. Is your team at this level? Or headed there? The board will want to know that you are planning for the future. To secure your place, make sure your team is on the cutting edge.
As I said, this is extremely important. But it’s only a portion of the evaluation.
2) Outward In View: This evaluation measures how you performed vs. your peers in the industry. This viewpoint is important because it measures you across a level playing field. For example, you may have dominated your number, but perhaps your number was low. Faulty forecasting could make your performance look much better (or worse) than it actually was
Greg Alexander wrote a great article on the Sales Metric of the Year for CEOs. Who do you think the Board is talking to about your evaluation? That’s right – the CEO.
- Conversion Rates: How does your team’s conversion rate compare to the industry average? If you’re below it, why? The Board will wonder, and you’ll need to be accountable for it.
- Win Rates by Channel: Do you close more sales on the phone than your competition? Do you close less while in person? These are all answers you need to have one hand. The Board will want to know.
The Board always wants you to be ahead of the curve. Nothing makes them happier than knowing you’re outperforming the rest of the industry. If this is the case, you have nothing to worry about.
The question you really need to ask yourself at this point is: Are you lagging your peers as the market expands? Or are you leading the expansion of the market?
How do you Compare to Your Peers?
The best way to discover this is through benchmarking. An accurate and comprehensive benchmark will tell you where you stand amongst peers.
Your CEO is evaluated on how well he’s leading the company against a benchmarked relevant peer group. The Board will be seeing benchmark data on things like:
- Earnings Per Share /Net Income
- ROIC / ROC
- Operating Income / Margin
- Cash Flow
The key to receiving a great evaluation is being properly prepared. If you performed well, that makes it much easier. If you came up short this year, you need to know why. And you need to have a plan to fix it.
Don’t wait for your CEO or Board to ask how you did relevant to your peers. Be pro-active by having a completed benchmark ready to share. Doing this will allow your CEO to rest assured he’s got a World Class Sales Leader at the helm.
Need some help to getting prepared- Dan, John, Mark, Matt, Greg and I have helped hundreds of VP-Sales prepare for these conversations and meeting. Drop us a note to coordinate a 30 minute conversation.