The average tenure of a Vice President of Sales in the B2B Cloud industry is reported to be anywhere between 16 - 20 months, with 18 months being the median.
Why is the tenure so short? Is this really an issue considering the high growth rates of B2B Cloud companies? How can we increase the tenure of the VP Sales?
Amy Volas has a broad array of experiences in B2B Technology including roles as enterprise sales professional, recruiter, and sales leadership, and is well-positioned to opine on this critical topic.
B2B Tech sales experiences a 30%+ attrition every year and this was before the trending topic of the Great Resignation!
Missing the VP Sales hire is a seven-figure mistake, and there are basic steps that can be taken to reduce the probability of a poor fit hire.
It starts first with clearly defining the "job" that needs to be done now, and not hiring for the future state 2-3 years down the road. Identifying the "milestone" that you want the VP Sales to help you attain is a great first step. Being real, by clearly defining the "work" that needs to be done NOW is critical to hiring the candidate who has the experience and skill sets to accomplish that goal, but may not be the right person to lead the efforts to the second or third milestone years down the road. In fact, in Amy's 20 years of experience, she has only seen one (1) VP Sales successfully scale from $1M to $1B+.
Just because a VP Sales has been part of a company that scaled to $100M+, that does not necessarily translate to what is needed when a company is just beginning to scale from $1M to $5M. By clearly defining what is needed in the next 12 months, you can develop the criteria, including specific experiences and skills sets, all captured within an associated scorecard for the VP Sales candidates.
Being honest is a top recommendation that Amy says every CEO needs to bring into the VP Sales recruitment process. At $1M ARR, let the candidate know that you are hiring a VP Sales to get to $10M ARR, and that this person may or may not be the VP Sales when the company is trying to scale from $20M to $50M.
This honesty in the VP Sales recruitment process goes both ways, as a candidate who may be a great fit for scaling a company from $20M to $100M+ may not be a good fit for scaling a business from $1M to $10M. An example, if a candidate wants to be a CRO, responsible for marketing, sales, and customer success for a company with less than $1M ARR, they may be a "poor fit" for this stage of the company.
It is imperative to be very careful and precise in this hyper-competitive market. Stepping back and clearly defining the top goals for the VP Sales candidate over the next 12 months is critical to minimizing the risk of over or under-hiring for this critical role.
A key takeaway from this conversation - with a 18-month average tenure for a VP Sales in the B2B Cloud industry may be ok...as long as both the candidate and the hiring executive is honest and transparent about the role, the goals, and the commitment to providing an environment for growth...though it may not be in the top sales executive role.
Amy also highlights the importance of "self-awareness". No one can be great at every aspect of their role, and being able to admit when you need help and then be confident in asking for help. All too often, assumptions between the CEO and VP Sales lead to a lack of credibility and/or trust. As a sales leader, being able to say this is where I need help, here is the result of me getting assistance and this is who I need help from (type of person/resource) and what it will cost.
If you are hiring or interviewing for a VP Sales role in the B2B Tech industry, this conversation with Amy Volas is a great listen!