Regardless of whether your organization is being led through a period of unprecedented success, or if your sales team is in need of a leader with strong vision, succession planning for the future is something that is often left untended to until it’s already too late.
Succession planning for sales leaders is critical for a company’s continued financial and organizational success, especially considering the looming exodus of seasoned baby boomers from the workforce.
Effective planning is not as simple as identifying a list of replacements for key positions. It incorporates ongoing leadership development for potential talent in advance of a succession event and reaches into all levels of the organization to create a deep leadership pipeline.
Succession planning is below par at most companies today
Despite the importance of succession planning, many companies fail to take the process seriously. In a recent survey of corporate professionals conducted by XpertHR, about 40% of respondents reported that they have no formal succession planning process, while 20% expressed a lack of confidence that their organizations have adequate talent pipelines for critical positions.
Download a copy of our free guide to Succession Planning for Your Organization’s Sales Leadership, or read on for a high-level summary below.
At Peak Sales, succession planning has become a top priority for many of our clients, across all industries, as more baby boomers leave the workforce. Succession planning, particularly in sales organizations, can make the difference between a company experiencing strong revenue or a company experiencing poor revenue for years to come.
Business impact of sales succession planning
Getting succession planning right for core sales positions is critical because of the sales function’s direct connection to a company’s bottom line. A poorly executed transition can lead to lost revenue and issues with customer relationships, while good planning can help avoid issues caused by the absence of effective sales leadership, such as costly position vacancy time and impaired team morale. A Head of Sales also has great influence on the success of a CEO, because when even just one direct report is not a high performer, the CEO’s effectiveness is significantly hindered.
Succession planning for sales leaders is not as linear as simply promoting sales stars. Top salespeople may be the best in their field and adept at nurturing and closing customer deals, but they don’t necessarily know how to coach and lead teams. However, companies do tend to promote their sales stars more frequently than lesser-performing colleagues. The reality is counterintuitive and unfortunate: the company loses a star salesperson and gains a mediocre manager. The skills, aptitudes, characteristics, and even goals of an excellent leader differ entirely from those of a top-performing salesperson.
Succession planning for sales leadership
The picture is even more bleak when it comes to planning for the organization’s near future. According to a survey by the Center for Executive Succession, a mere 38% of respondents had developed clear role profiles for direct reports to the CEO that aligned with the company’s business strategy for the next five years. Renowned leadership expert Marshall Goldsmith sums it up well: “On average, the executives we meet give their succession planning process a grade of C+ and they give their execution of succession plans a grade of D.”
True succession planning involves more than simply making a list of potential successors for a VP of Sales position; it is a deep, systemic search into the company to identify employees with management potential and then to develop them over time.
Steps towards developing an effective succession plan
We recommend the following course of action to set your succession plan on the right path:
- Formalize your plan with a structured process and documentation
- Approach your plan in three phases:
- Preparation; reflect and answer key questions to truly understand the context of your plan
- Planning; identify which positions will be involved and review your existing talent
- Development; nurture your talent for progression
- Understand when and how to hire externally
- Define the picture of an exemplary sales leader
- Include all levels of the organization in your plan
- Use frameworks to evaluate existing employees for management potential
- Facilitate successful transitions
- Track key metrics in the succession pipeline, including number of executive-level sales positions that will need to be filled, number of candidates identified for succession, and number of candidates being actively developed for succession
Succession planning is more than simple “replacement planning,” or a surface-level list of potential replacements for the Head of Sales. Rather, it is an integrated process that places emphasis on leadership development for employees well in advance of a succession event. It also reaches deep into all levels of a company’s talent, creating a strong leadership bench and generating greater leadership capacity across the organization in general. Succession planning also involves an approach for hiring externally and an awareness of the times of strategic change that might require an external candidate to bring new skills to new sales challenges—while also remaining mindful of their culture fit and network fit.
For an in-depth guide to Peak’s Sales Succession Planning process, download a copy of our guide below.
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