If you get senior enough in any company then you’ll eventually have salespeople reporting to you. Of course if you are a salesperson yourself this won’t cause you too much problem; instead, you’ll have problems when an engineering organization reports to you and appears to be populated with people from another planet.
Managing a salesforce when you’ve not been a salesperson (or “carried a bag” as it is usually described) is hard when you first do it. This is because salespeople typically have really good interpersonal skills and are really good negotiators. You want them to be like that so that they can use those skills with customers. But when it comes to managing them, they’ll use those skills on you.
When I first had to manage a salesforce (and, to make things more complicated, this was a European salesforce with French, German, English and Italians) I was given a good piece of advice by my then-boss. “To do a good job of running sales you have to pretend to be more stupid than you are.”
Sales is a very measurable part of the business because and order either comes in or doesn’t come in. Most other parts of a business are much less measurable and so harder to hold accountable. But if you start to agree along with the salesperson why an order really slipped because engineering missed a deadline, then you start to make them less accountable. They are accountable for their number, and at some level which business they choose to pursue, and how it interacts with other parts of the company, is also part of their job. So you just have to be stupid and hold them to their number. If an order doesn’t come for some reason, they still own their number and the right question is not to do an in-depth analysis with them about why the order didn’t come (although you might want to do that offline), but to ask them what business they will bring in to compensate.
Creating a sales forecast is another tricky skill, again because an order either comes or doesn’t come. One way of doing it is to take all the orders in the pipe, along with a percentage chance they’ll close. Multiply each order by the percentage and add them all up. I’m not a big believer in this at all since the chance of a 10% order closing in the current period is probably zero and it’s easy to fool yourself. Yes, the occasional blue bird order comes out of nowhere, sometimes so much out of nowhere it wasn’t even on the list. I’ve never run a huge salesforce with hundreds of salespeople; the law of averages might start to work a bit better then, but typically a forecast is actually build up with the judgement of the various sales managers up the hierarchy.
Another rule I’ve learned the hard way is that an order than slips from one quarter to the next is almost never incremental. You’d think that if the forecast for this quarter is $500K, and the forecast for next quarter is $500K, then if a $100K order slips that you have a bad $400K quarter now but you’ve got a good $600K quarter coming up. No, it’ll be $500K. Somehow the effort to finally close the slipped order comes out of the effort available to close other orders and you are wise not to count on a sudden blip in sales productivity.
Salespeople are a pain to hire because you have to negotiate with them and they are at least as good, if not better, negotiators than you are. It’s even worse in Europe where, if you don’t simply lay down the law, you can spend days negotiating about options for company cars ("I insist on the 8-CD changer"). At least in the US most of the negotiation is over salary and stock, which are reasonable things to spend some time on.
Another thing I’ve discovered is that salespeople really only respect sales managers who have themselves been salespeople in the field. Not marketing people who have become sales managers, not business development people who’ve become salespeople. It’s probably partly camaraderie but sales seems to be something that you have to have done to really understand. You want your sales manager to be respected by the salespeople because you want them to bring him into difficult sales situations to help close them, and they won’t if they don’t trust and respect him.