Think back to the last board meeting you attended that addressed sales. The directors likely looked at the sales numbers, compared them to plan, and probably noticed some room for improvement.
But for board members of early-stage or high-growth companies, a higher-intensity focus on sales is necessary since these organizations may not have the same resources as larger, well-funded businesses. If you are actively serving on an early-stage company’s board—or are thinking of serving on one—you should keep several key sales-related concerns in mind in order to help mentor leadership, improve results, and increase sales transparency.
Customer Acquisition and Satisfaction
While it is probably unrealistic for the board to be completely familiar with all deals and sales representatives, directors can help sales and business development departments work on potentially game-changing deals. These deals should be reviewed in board meetings, and chances are that the board may have other ways to reach those target customers or partners and influence decisions. Being aware of these critical deals can enable a board member to deliver extra value.
The board also should be kept abreast of the company’s current go-to-market strategy. Elements of this strategy may include an emphasis on direct versus channel sales or the introduction of new customer acquisition strategies (such as “freemium” models) since these elements can greatly affect the company’s growth rate and potential. Having objective measurements around the company leaders’ performance against the strategy is the key to rapidly scaling sales teams. Sales problems like slow ramping, low win-rates, long sales cycles, and call reluctance can be symptoms of a failure to execute well against the strategy.
As the company grows, the board’s role no doubt will shift; however, until that time, an all-hands-on-deck approach may lead to the best outcomes for the early-stage company.
Sales as Strategy
Early-stage companies are under a lot of pressure to grow quickly. Budgets and sales models that are presented to the board must be bottom-up models, not top-down, and must be updated monthly with actual results to provide an accurate and dynamic revenue ramp-up forecast. Many times, startups can benefit from using sales as a strategic lever, tweaking their approach to completely change the growth trajectory for the better. For example, one technology company obtained a distribution deal with a leading travel portal, which lent credibility and allowed the number of sales reps to be multiplied. A company I co-founded introduced a free, much simpler version of the product that put it instantly on the map in its target market and allowed the company to acquire new customers at a much lower cost.
Identify Underlying Issues
Many company boards have problems with the transparency of sales teams and in understanding why adding sales reps does not correlate with increased sales. An important issue for these companies and their boards is determining the factors that might be limiting sales growth. In fact, many sales teams struggle until something fundamentally changes. The underlying problem may not be attributable to the sales team at all but instead to imprecise marketing positioning, immature technology, and perhaps a lack of applicable reference accounts. If these types of problems are present, the sales team will almost always struggle. However, when such problems are appropriately addressed, sales can flourish, and the sales leader’s ability to recruit and coach his or her team can make a huge difference in growing the business.
As a company scales, the board can play a critical oversight role in vetting the go-to-market sales strategy, assisting with contacts for game-changing deals, holding leadership accountable, and looking for areas of opportunity to advocate for fundamental changes that can break sales teams free and accelerate results. Over time, the board’s role no doubt will shift; however, until that time, an all-hands-on-deck approach to sales may lead to the best outcome.
This article was written by Margot Carter. Margot is an experienced lead director recognized by WomenInc. as one of the 2019 Most Influential Corporate Board Directors. She is also a cofounder of Cien, an artificial intelligence-powered sales performance company. The original version of this article was published on the official blog of the National Association of Corporate Directors.