VP of sales: exalted or extinct, you tell us. With time spent in this top sales spot steadily shrinking for the last 10 years, estimates now put the average tenure of a sales VP somewhere between 24 and 32 months. So if you recently moved into a VP of sales office, don’t unpack your bags. Even more alarming than the length of time sales VPs are spending in this position, however, is the recent acceleration of the trend. Experts say that while tenure has been contracting for about a decade, the rate at which it is contracting has accelerated in the last two to three years.
“The situation has reached epidemic proportions,” warns Dave Stein, CEO of ES Research Group, an independent authority on sales-training programs and sales methodologies and tools. Stein says he’s seen tenure as low as 19 months – barely more than six quarters. “That’s three quarters trying to ramp up, two more of waiting until things get better, and one last quarter for executing the exit strategy,” he says.
It’s not just the sales department that’s dealing with a revolving door at the top. An ExecuNet study published in mid-2009 of more than 5,000 executives, search consultants, and HR professionals showed the average tenure of business executives in a single job declined 15 percent between 2005 and 2008 to 2.3 years. The figure nudged up to 2.6 years last year – and was 2.7 years for sales executives in particular – but ExecuNet president Mark Anderson cautions that the upward blip isn’t anything to get too excited about.
“The difference is only a month or two; it’s probably just noise rather than anything significant,” says Anderson. “What’s important is that it’s not four or five years, which is surprising to many people.” When ExecuNet, a private network for senior-level sales and other executives, first began in 1988, Anderson says the number was around the seven- or eight-year mark.
The HR Chally Group, a talent-management, leadership-development, and sales-improvement corporation, puts sales VP tenure at somewhere between 24 and 27 months, but CEO Howard Stevens says it’s tough to narrow it down much further than that. “Part of the vagueness is that you can be fired in two to three steps,” says Stevens. “You might first be given a different assignment or a different role before you’re fully let go. The lines of demarcation are fuzzy.”
What’s not fuzzy is the fact that tenure is shorter now than ever before, and it’s impacting everything from culture and morale to revenues.Ineffective Hiring
A big part of the problem lies in the way many sales VPs are hired. In a May 2009 article in Harvard Business Review
, “The Definitive Guide to Recruiting in Good Times and Bad,” authors Claudio Fernández-Aráoz, Boris Groysberg, and Nitin Nohria note that the problem of finding talented managers to replace Baby Boomer retirees is exacerbated by poor hiring tactics at the executive level. “Current hiring practices,” they write, “are haphazard at best and ineffective at worst.”
Their research focuses on recruiting at three levels: the C-levels, their direct reports, and those below the direct reports. Two of the most stunning findings were that only half of those recruited into these top three tiers were interviewed by anyone in the C-suite, and half were hired based on the hiring manager’s “gut feel” that the candidate “had what it took” to succeed in the job.
“Gut feel doesn’t work. One more time: Gut feel doesn’t work,” said Stein in a May 2009 blog post on this issue. To illustrate, Stein tells the story of a CEO looking to replace a VP of sales he had just fired. One of the CEO’s colleagues recommended “a terrific candidate” with whom he had worked “awhile back.” The CEO interviewed the candidate, liked him, and offered him the job.
The VP, lacking many of the essential skills necessary to succeed in his new position, made one error after another. He brought on two reps with whom he’d worked at a previous organization, unaware the reps weren’t well suited to the new company. Next, he adjusted existing sales territories to favor the new reps, which alienated two of the company’s star performers.
“Those two existing reps decided to leave to join other companies,” recalls Stein. “The VP quickly hired two more reps who were equally as unqualified as the two brought in earlier. Twenty-one months later, the VP was fired.”
The example is not unique; many sales experts tell similar (continued on page 2)