How To Develop And Update Your Sales Leadership Succession Plan In 2021
What if your VP of Sales or star sales manager left for a new job tomorrow? Your sales team might be thrown into chaos. Sales is a highly competitive profession, so it pays to be prepared in advance with a succession plan. Peak Sales Executive Search can help you avoid the pain of lost sales leadership by developing a succession plan.
What Is A Succession Plan?
According to Inc, “A succession plan is a written document that provides for the continued operation of a business if the owner—or a key member of the management team—leaves the company, is terminated, becomes incapacitated, retires, or dies.”
With this definition, every person will ultimately leave their role. Yet, a significant number of companies have not planned to mitigate this risk. For example, a PWC survey found that only 30% of family-owned businesses have a succession plan in place in 2020. Consequently, a significant number of these businesses encounter difficulties after the founders retire, sell or leave the business because new leaders are not equipped to take over.
Developing A Sales Leadership Success Plan
After the CEO, sales leaders are the most crucial part of the organization. Without their guidance, revenue growth is likely to stall if not fall. That’s why we recommend developing a succession plan for your sales leadership positions. At first, focus your succession plan on one sales leadership position (e.g., Vice President of Sales).
At a minimum, a sales succession plan will include the following elements:
Incumbent: Describe the focus of the succession plan (e.g., VP of Sales position) and the critical facts about the current incumbent.
Ready Now. Describe 1-2 individuals in the organization who are ready in terms of skills, goals, and other factors to take on the role on short notice. For instance, a direct report of the sales VP who closely supports the VP on strategy might be a good “ready now” candidate.
Ready Later. This part of the succession plan may name individuals who could move up to the “Ready Now” group in 12-24 months with the proper support and development.
Feedback to development plans. Your succession plan is unlikely to be perfect, so note critical skill gaps for each person considered in the succession plan. For example, a sales manager might be excellent at managing sales representatives but have minimal experience leading projects with other stakeholders like the VP of marketing.
Feedback to recruiting plans. Based on your analysis, you will probably find that there are some significant gaps. For example, most of your sales staff might be interested in maximizing their commissions rather than taking on a leadership role. In that scenario, a succession plan may emphasize recruiting for leadership roles over internal staff development.
Repeat the above process for each key sales leadership role in your organization. The same process can also be applied to other critical executive roles such as chief financial officer and chief marketing officer.
Avoid Making This Painful Succession Planning Mistake
Writing the plan on paper is a critical first step, but it is not the end of the process. It is essential to validate your succession plan by talking to people.
Kathleen Hogan, Chief Human Resources Officer at Microsoft, told Gallup that “successful succession planning is more than just identifying who will take over in the case of a role move -- it means having a conversation to see if the identified individual is interested in being the successor. It sounds obvious, but you can't just put somebody on the list without having talked to them first.”
By following Hogan’s advice, you may find some of your sales succession plan assumptions are incorrect. For example, you might find out that your top two internal candidates identified as “Ready Now” do not want the position. In this case, the succession plan has a gap that cannot be filled with employees.
Updating An Existing Succession Plan
If you already have a sales succession plan in more than a year old, it is time to update it. Use these techniques methods to bring your succession plan up to date.
Identify and provide learning and development resources to fill skill gaps:
Most succession plans, if they are realistic, note that a successor probably lacks specific skills. For example, a sales manager might not have the skills needed to manage and update the sales compensation program. A different person might have gaps in their public speaking skills.
For each internal successor with a confirmed interest in advancement, ask them to propose 3-4 learning resources to grow their skills. For example, reading a book like “Compensating the Sales Force, Third Edition: A Practical Guide to Designing Winning Sales Reward Programs” by David Cichelli might a good starting point. For leadership skill development, hiring a speaking coach to provide feedback is another option to consider. Online courses from providers like LinkedIn Learning like Building and Managing a High-Performing Sales Team provide a helpful starting point for employees interested in growing their leadership skills.
Leverage shadowing to introduce a successor to new responsibilities:
Formal learning is only part of the equation for development. Consider inviting a more junior person to shadow an executive in a series of meetings or through a process. For example, a VP of sales might invite their potential successor to plan the company’s annual sales meeting.
When executives actively participate in shadowing, it helps to bring the succession plan to life. Further, watching a potential successor in action gives some insight into their readiness to take on additional responsibilities. If the shadowing process reveals that an individual is uninterested in moving forward to a new role, that is helpful information to consider. Based on that insight, update the succession plan accordingly.
Monitoring the workforce for succession planning opportunities:
Succession planning is often conceived as a top-down exercise. The senior management team, CEO, or Board often lead the effort to develop a succession plan.
However, there is also merit in inviting managers to create smaller-scale succession plans in each of their departments. Invite managers to look at their direct reports and look for traits and capabilities that may make an employee a good fit to take on leadership roles. For example, a customer service representative who consistently resolves customer complaints and retains customer relationships might contribute even more in an account manager role. In this scenario, inviting the top-performing customer service representative to explore account management opportunities may be the next step in bringing a sales succession plan to life.
Build succession planning into your new hire recruiting:
Ask hiring managers and human resources staff to consider succession planning in new hires. While it is reasonable to focus on whether the candidate can be successful in their primary role, take some time to ask about the person’s career goals and leadership interests.
For example, a new junior sales professional with a track record of leading nonprofit organizations in college may be interested in taking on leadership responsibilities over time. By showing employees that they have a path to grow their career with the company over time, you can achieve company objectives simultaneously (e.g., reducing employee turnover).
Preventing Chaos Of Poor Sales Succession Planning
You’re not alone if you find gaps in your succession planning for critical sales roles. Many organizations have these gaps but do not discover them until it is too late to take proactive steps. When the VP leaves for a new job, the CEO may temporarily take on that person’s duties. As a result, the CEO will have less capacity to manage other parts of the business. This kind of ad hoc succession plan can be solved in new ways.
The first solution to gaps in succession planning is to look into remote talent. As a result of the pandemic, many companies have embraced work from home. According to a PWC survey released in January 2021, 83% of employers say the shift to remote work has been successful. Most executives (52%) report that average employee productivity has increased thanks to remote work arrangements. Despite these successes, challenges remain. The survey also found that many companies are not providing enough training to managers or employees to succeed in a remote environment.
There are several implications to draw from the success of remote work. First, employers with multiple offices may recruit staff from other states without the complexity of providing relocation packages. Second, recruiting an employee in another city or state is a practical option to grow your business. Recruiting remote employees may be challenging if your company is unfamiliar with the process.
The second solution to gaps in succession planning lies in expanding your recruiting strategy by working with Peak Sales Executive Search to introduce you to more executive sales leaders who can help your company grow. By meeting with candidates right now before there is a pressing need, your company is more likely to make a seamless transition when your top sales leaders eventually leave.
Looking Beyond The Familiar In Succession Planning
Psychological research has found that employers tend to fall victim to “hire like me” bias. That means you are likely to overlook outstanding executive talent different from your current sales leaders. There is a shortcut to overcoming this type of unconscious bias: leverage an outside resource’s capabilities.
The solution is to leverage outside expertise by working with Peak Sales to identify new candidates. Peak can work confidentially to identify new candidates for your succession plan even if you are not ready to advertise a vacancy. Your succession plan does not have to rely on internal talent.
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