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How to
the High
Cost of
the Bad

Illustration by Scott Thuen for The Partner Channel

Jason Pappas, Joe Mechlinski, and re you tired of hiring salespeople and The cost of making hiring mistakes is so
Jeremy Epstein having them not work out? high that, for many business owners, a single
What’s the issue – them, or you? bad hire in sales can mean that you don’t get
Every company is guilty of making paid for months. Making hiring mistakes
a poor hiring decision at one time – and taking too long to correct them – can
or another, yet there is a tendency cause sales teams to develop a losing mind-
to shrug off hiring mistakes and say, “We’ll set, which can negatively impact recruitment
do better next time.” But when you stop and and prevent you from growing the company.
take a look at exactly how expensive bad hires Most good business books will tell you
are, you’ll realize you can’t go on ignoring the that finding the right person is an art – and
problem and hoping for the best. that is absolutely correct. But this article goes

18 The Partner Channel Magazine

Now whose fault is it?

ng in Sales
In each case, the fault rests squarely with the
owner. No attempt was made to identify talent
properly, the structure was non-existent, and
the environment was counterproductive.
Does this sound familiar? If these stories
match your experience, and you are burdened
with the high cost of hiring mistakes, there
are two ways to get out of it. Locate, attract,
and hire the “right” salespeople, and under-
stand how to train and support them.
deeper than that. We’re asking you to cor- ing. He also claims that the company needs to When scaling your company, there are
rect your own experiences and expectations spend more dollars on marketing. Fred starts three components to address: culture, struc-
about recruiting and hiring so that you can getting frustrated. He starts monitoring ture, and talent. Let’s talk about them.
create a true sales culture of accountability what time Tom shows up, how many calls he
and accomplishment. makes, how long he spends on calls. Fred los- Creating a Culture of Excellence
es sight of quality versus quantity, and grows Culture, or environment, is the collective
The High Cost of Bad Hiring Decisions more and more concerned that the numbers mindset of the team or organization. Left
– What’s the Data Say? aren’t where they should be. alone, the culture can be self-perpetuating.
In a recent study of the hiring trends of top Six months later, Fred switches Tom to in- Losing will persist regardless of the struc-
Microsoft Partners, we discovered how low side sales but still gets no results. After a year, ture or methodology in place. Everyone takes
the ROI was for the average services compa- Tom has fallen far short of his targets, and Fred on the “loser” tag, and everyone loses. Con-
ny. Partners reported that a full 50% of newly fires him. The money he invested in Tom’s sal- versely, on a championship team, there’s a
hired salespeople were leaving after one year. ary is gone. The time he spent training him is higher level of standard, a higher level of ac-
That’s after their companies had invested gone, and now all he can do is denounce sales- countability and of pushing each other and
somewhere between $10,000 to $40,000 in people as a race. He begins to question how challenging each other. The winning envi-
training and support for each person. As al- much he really wants to grow his business, and ronment supports a culture of excellence.
ways, in sales, on top of the hard costs, there even begins to doubt the value his company What about the flat culture?
is also the opportunity cost to consider. How brings to the marketplace. In the average company, winning and los-
much new business could have been realized The problems in the example are many. First, ing coincide. Executives are seeing a lack of
had you made the right hire the first time? Fred is a technologist. He is brilliant in technol- consistency among their sales team. While
Making hiring mistakes is difficult enough, ogy, but not so bright in sales. But because he sales continue to come in, nobody seems to
but being stuck in a cycle of costly bad hiring has been able to sell as an owner, he expected be hitting goals or showing progress. To add
decisions indicates that the company fails to that it would be just as easy for anyone else to to the problem, the non-winning environ-
understand the discipline of recruiting, and sell in the environment that he’d set up. Second, ment creates a recruiting roadblock. It’s dif-
ultimately its own business model. he had no gift for recognizing sales talent, and ficult to lure top quality people to a non-win-
Let’s take the case of an imaginary Micro- no proven process to guide him. And finally, he ning environment. As a result, the candidate
soft Partner, an emerging technology com- had no supportive structure in place. they are luring is not their top choice. They
pany run by Fred Dread. Fred is a technolo- Who is at fault? hire what they thought they needed to have
gist who became an entrepreneur. He has Now consider another imaginary Micro- at the moment, according to an imaginary
done well in servicing his customers to the soft Partner, Sue Clue. Sue is usually good timeline – and made another bad hire. And
best of his ability, has experienced growth, with people. The first salesperson she hires, so, the non-winning environment continues.
and is ready to start leveraging different com- Ann, actually is doing a decent job. Ann has With regard to talent, you have the option
ponents of his business, including sales. He sold a deal or two. After six months, she is of paying six figures for a senior sales executive
posted a job opening online and in the paper, getting to the point where she is almost pay- (who may carry baggage from other firms), or
and he asked his friends and family network ing for herself. So Sue says, “This is great! you can bring in an energetic, incentive-based
if they knew of any really good salespeople Let’s bring in another salesperson!” She hires salesperson. High-end talent tends to be less
who could get out there and sell for him. Ed, and asks Ann to become Ed’s trainer, loyal, more expensive, and more demanding.
Fred interviewed two people. Salesperson A mentor, and sales manager. But by doing so, And new or budding talent takes a lot of your
didn’t make his skin crawl, and Salesperson B she has unfortunately ruined both Ann’s and time and effort to bring to fullness.
did. So, he chose Salesperson A (let’s call him Ed’s chances of success. You can find a par- In both cases, you need a winning environ-
“Tom”), and gave him the title “vice president allel in professional sports. The best manag- ment, a culture of success, to prevent the new
of sales” because Tom told him that if he had ers typically were not once superstar players. salesperson from becoming a bad hire.
that title, it would make him more successful. Most superstar players do not become good Keep in mind, when we say “bad hire,” we
Fred established clear sales goals (as all of his managers. Ann is out of position, so to speak. don’t mean the person is bad. Most people
good business books told him to do): $100,000 She isn’t selling because she’s spending all her are good people. Most people are hard work-
in software and $100,000 in services. time trying to support Ed, who is struggling. ers. As leaders of companies, it is our respon-
Ninety days later, it’s not going so well. And Ed isn’t selling because Ann doesn’t sibility to establish a winning environment
Tom can’t seem to even get a conversation know a thing about training or mentoring. for our good people. Success has got to be
going with a prospect, and he hates cold call- Both quit. easy and intuitive for them. If it’s not simple

Fall 2006 19
enough, whose fault is that? Just as Imu had built a pipeline of sales merse themselves in the business to under-
Creating a winning environment takes the leads, he knew he had to build a pipeline of stand how the business operates, how the in-
right talent and the right structure to support sales candidates. dustry works, how the market reacts to you.
them. He wrote up a job description and sought Let them begin to learn the best way to intro-
candidates through his network by posting duce your product/service. Let them study
What’s Your Pre-Hire Plan? ads and using other resources, remember- your best practices for qualifying and moving
Structuring a culture of excellence is a two- ing what a wise woman had once said to him: prospects through the sales cycle.
part process: the pre-hire plan for identify- “With only one option, you have no choice. Phase II: Try with Help. Let the salesper-
ing the right person by role, and the post-hire With two options, you have a dilemma. But if son take the lead on appointments. Let him
plan for supporting, training, and managing you have three qualified candidates to select or her begin to discover need. Give ongoing
the person. from, you can make a true choice.” He com- coaching on communicating and delivering
Let’s consider a third imaginary Microsoft piled resumes, screened them, and conducted the value that’s connected with the prospect’s
Partner, Imu Shatu. Imu is a technologist phone screening sessions to validate that the most important priorities.
who decides he wants to take the business skills, background, and experience matched Phase III: Fly Solo. Let them try without
beyond himself. But before jumping straight his criteria. After assigning and reviewing help, but still be there for support. Allow
into how that will happen, he pauses to take personality profiles, he was ready to begin them to learn how to take prospects through
a look at what must be done. He asks himself, this simple three-step interview process: contracting and beyond.
what he is trying to build? Who is he trying 1. In the first interview, Imu sought to
to serve? Why is his product/service needed determine the answer to two questions Scalability and Growth for the Culture
in the marketplace? about candidates: will they do the job of Excellence
Imu asked himself thoughtful questions and and can they do the job? He gave out a Most emerging technology companies be-
began to figure out what the role of salesperson homework assignment for them to learn lieve that once you find a salesperson with
would look like within his company. He consid- more about the company. a good mindset, you’re done. You’re not!
ered how the role of the salesperson must be To create a culture of excellence, you need
related to other aspects of the business. After 2. In the second interview, Imu sought to to continue to train, focus, and reward that
much deliberation, he determined that the determine whether candidates could be mindset and attitude. Even Michael Jordan
salesperson’s role for the first six months was coached. Did they have a strong work had a coach. You can find people with the
to be a junior sales support person. Because no ethic? Did they demonstrate behavior right mindset, and think that they’ve got it,
one knew his business better than he did, he that was clear and consistent with his but remember: There’s no such thing as “get-
knew that no one would be better at training company’s values? The homework as- ting it” forever. Focusing your team on the
the new salesperson than him. His goal was to signment asked candidates to explain right mindset every day is a constant quest.
hire an intelligent, motivated person who could why they wanted to work for Imu. One meeting per week won’t cut it. The best
help him sell better. The person could learn salespeople always benefit from ongoing sup-
along the way, documenting how sales hap- 3. In the third interview, Imu invited can- port and mentoring that continually discov-
pened for his organization while experiencing didates for an extended stay. He let them ers and brings out the best in them.
both the inside and outside of the business. shadow him on sales for three to four If you have the proper mindset, you will re-
Using the recruiting process outlined be- hours. This took away the “first date” alize that there is more than enough talent in
low, Imu attracted, found, and hired such a jitters and helped him assess whether the marketplace today. Take advantage of it.
person, Flo. Within a year, Flo shadowed Imu his candidates were gaining an under- Be clear on your growth goals, and let them
on dozens of appointments, and even han- standing of his business. They let their inspire how you hire, support, and manage
dled some sales that Imu couldn’t take on. Flo guard down, and he was able to sense for success. All of this is in your control.
began to build a pipeline so that when Imu whether they matched the culture of Remember, recruiting is a discipline. Re-
was ready to take off the training wheels, Flo his organization. The final homework cruiting a culture of excellence is not some-
could ride solo with confidence. assignment was: Explain why you are thing you can just do. You have to be a culture
Likewise, in your pre-hire planning, you right for the job? Why are you the best of excellence. Identify and align your sales
need to identify your expectations. Ask: ROI candidate? environment, and the hires you make will be
What am I expecting the salesperson to do? He then chose from three or four ideal good hires.
What will he sell? What market is she going candidates.
after? Who is he going to report to? What Jason Pappas and Joe Mechlinski are principals
expectations do I have about her productiv- The Post-Hire Plan – a Path Toward of EntreQuest, an organization focused on grow-
ity over three months, six months, and nine Continued Success ing companies’ sales revenue through sales train-
months? How willing am I to compensate Because training, mentoring, and coach- ing, consulting, and hiring programs. To learn,
him? What’s the draw? What support can I ing are what makes or breaks the hire, struc- visit the Web site at www.entrequest.com.
offer? Why would she want to work for me? turing a culture of excellence also requires
If you know this, you’re halfway to finding a post-hire plan. Now that you’ve made the Jeremy Epstein helps mid-Atlantic Partners le-
the right person. right decisions, how are you going to sup- verage Microsoft’s marketing capability to gen-
You have identified the specific role you are port, train, and manage the new hire? erate new leads. To learn how you can work
looking to fill. You have clarity on the “what” The phases of the post-hire plan include: more closely with Microsoft in the Washington,
they are here to do. You can now focus on the Phase I: Learning and Understanding the DC, Maryland, and Virginia areas, contact his
“whom.” Business. Just let them watch. Let them im- team at gemaa@microsoft.com.

20 The Partner Channel Magazine