5 ms·

I saw a head of sales literally kill a business by endlessly doing this, when in reality he was deflecting from his own lack of ability. There was always a clea

by j4yav 3y ago

I saw a head of sales literally kill a business by endlessly doing this, when in reality he was deflecting from his own lack of ability. There was always a clearly articulated reason why it was someone else's issue that he wasn't closing deals, and by the time that issue was fixed as a company emergency he had come up with two or three new ones.

jddj 3y ago
This is a very common story. Unfortunately the incentives and general historical inertia around sales as a role don't always gel with the long term picture. It's a very human story, but it's one I've had to try to put preventative structures around for my whole career. The default, "your job is just to sell and your reward structures reflect that" creates an environment where the easiest path is to over-promise. Hence when that sales role sits too high in the org structure you naturally end up in the endless sell what you don't have -> scramble, sell -> scramble cycle. It seems very obvious that the best salesman would sell the lowest number of features for the highest price, but the incentives are typically based on the top line figure instead which is nice for cash flow but not for profitability. So far I've managed to solve it somewhat by building internal barriers, but they take constant maintenance. I'm sure the better solution is to lean the incentives towards profitability but the implications are complex.
- j4yav 3y ago
  A land and expand strategy could maybe help mitigate it, what do you think? Keep the focus on small deals constantly closing, and then follow up to upsell them. Separate spiffs for each part of the sales motion.
  - jddj 3y ago
    On the SaaS side, yeah I think that's a good move. In this case there's a large hardware component of the sale which incentivises the software over-promising. There's also a lot of competition (think a tender process). It's really about shifting the small decisions, removing that marginal "yes, we can do that" which didn't need to be there at all for the sale to close.
- esafak 3y ago
  You could have engineering estimate the cost of the new feature to deduct from the profit?

by j4yav 3y ago

jddj 3y ago

This is a very common story. Unfortunately the incentives and general historical inertia around sales as a role don't always gel with the long term picture. It's a very human story, but it's one I've had to try to put preventative structures around for my whole career. The default, "your job is just to sell and your reward structures reflect that" creates an environment where the easiest path is to over-promise. Hence when that sales role sits too high in the org structure you naturally end up in the endless sell what you don't have -> scramble, sell -> scramble cycle. It seems very obvious that the best salesman would sell the lowest number of features for the highest price, but the incentives are typically based on the top line figure instead which is nice for cash flow but not for profitability. So far I've managed to solve it somewhat by building internal barriers, but they take constant maintenance. I'm sure the better solution is to lean the incentives towards profitability but the implications are complex.

j4yav 3y ago
A land and expand strategy could maybe help mitigate it, what do you think? Keep the focus on small deals constantly closing, and then follow up to upsell them. Separate spiffs for each part of the sales motion.
- jddj 3y ago
  On the SaaS side, yeah I think that's a good move. In this case there's a large hardware component of the sale which incentivises the software over-promising. There's also a lot of competition (think a tender process). It's really about shifting the small decisions, removing that marginal "yes, we can do that" which didn't need to be there at all for the sale to close.
esafak 3y ago
You could have engineering estimate the cost of the new feature to deduct from the profit?