Building a Talent Lab: What the World’s Best Sales Organisations Do Differently

How is it that some companies manage to source, hire, develop, and retain a surplus of sales superstars whilst others, in the same industry competing for the same clients, are forever struggling in their quest for exceptional performers? This question and finding the accurate answers to it, are paramount in the pursuit of growth and profitability.

Is it the strength of the brand? The quality of recruiters? Effective onboarding? Above-average compensation? Or should the credit go to the assessment process? If you are thinking along the lines of a combination of factors, then you would be right. Building an impressive talent lab that strikes envy into the hearts of competitors, is no easy feat. In fact, I would argue that it is the most difficult aspect to master for the executive team building the sales engine. 

If any one of the inherently challenging talent management disciplines fail (for example candidate profiling, assessment, recruitment, remuneration, onboarding, account allocation, enablement, or sales management) the entire quest of hiring, developing and retaining a surplus of superstars will also fail.

This article will present some compelling data framing the problem and I will tell you a story outlining several truths that I have learned from my participation in one very high-profile talent failure. These truths form 7 concrete rules that the builders of successful talent labs would be wise to adhere to.

Data demanding our attention

Occasionally, types of data are used to frame the scale and scope of the problem for organisations that fail to build a successful Talent Lab. It paints a picture of considerable financial losses.

§ According to the Bridge Group in their 2018 study of 434 B2B companies, the average tenure of a field sales professional was just 1.5 years, which is half of what it was in 2010. These companies saw a 39% attrition rate. And, only of that turnover was voluntary. The remaining was involuntary. The average sales development rep is only at “full productivity” (tenure - onboarding time) for 15 months, and only 8% of SDRs stay in the role for 3-plus years. This data suggests significant turmoil and team attrition, possibly due to underperformance, which is expensive for companies to manage and backfill.

§ According to a DePaul University study, the average opportunity cost per sales rep is $97,690 when you add up recruiting costs, training costs, and lost sales. A large sales engine losing 10 reps a year burns around $1m. While research shows that the average time to replace a sales hire ranges between 3 and 6 months, I have personally experienced recruitment processes which have exceeded 12 months.

§ A Glassdoor survey found that only 19% of sales reps have no immediate plans to leave their companies. Meanwhile, 68% plan to look for a new job within the next year, and 45% of sales reps’ plan to look for a new job within the next three months.

§ According to Sirius Decisions only 3% of high-performing sales reps are actively in the job market.

§ According to the Sales Management Association (SMA), new sales hires spend an average of 10 weeks in training and development and only become productive after 11.2 months. Turnover is too high in 48% of sales organizations, and 60% consider themselves understaffed. [SMA]

It is hard to square such an important role with such transient patterns and financial losses.

The Story of a Very Expensive Lesson

14 years ago, I was approached by the COO (Africa) of a global strategy and technology consulting giant looking for an innovative way of bucking these trends and solving a talent dilemma through high-stakes shortcuts. They were starting up a new sales engine to sell across their service lines concentrating on deals $50m and above. In their brief to us – to recruit 12 of Africa’s top rainmakers selling Technology and Outsourcing Solutions – he asked my team and I to go and headhunt what he termed “beasts”, the best of best, accepting that most would be bound by non-compete agreements and other protective covenants. I had been recruiting sales talent for several years to that point and had a reputation for being an effective head-hunter in the technology sector. He said he was ready to pay a premium price and would be nimble in the recruitment process.

My client represented an exceptional brand, offered superb remuneration, and prided themselves on being a truly exceptional place to work. Candidates would be hired for their C-level network and record of accomplishment. Assessments were not considered. Onboarding was not even on the radar because it was assumed the candidates would hit the ground running.

Despite the successful recruitment of distinguished - 12 in total - the entire project ultimately failed as rainmaker after rainmaker resigned after many months of frustration and poor results. Why? The accepted explanation was that they failed because they could not successfully enrol and mobilise the very senior internal collaborators required to hunt the mega deals. The one or two remaining ‘beasts’ were given new roles and the project was disbanded. It was a very expensive failure and the COO left the company soon thereafter (after a tenure of almost two decades.)

The engagement and subsequent lessons reinforced 3 truths for me:

1.      There is no single profile, or set of talents and attributes, that make up a sales superstar. We managed to recruit the best of the best (despite the projects failure) and were stunned by the diversity among them. Sure, there were several foundational strengths, such as a superior network, a long track record of accomplishment bringing in mega deals, intense motivational drive and a strong work ethic. But surprisingly, there were introverts and extroverts, those terrible at detail and those great with it, those motivated by money and status, and those unaffected by it. Again, the diversity was truly impressive.

2.      Recruiting the best talent and facilitating their productivity (to the point of sustainable success) is a project of remarkable scale and complexity. Sales teams are sub-systems within larger systems and are dependent on a large network of factors / components in order to be successful over time. One oversight by the leadership – and a failure to understand the systemic nature of the sales engine, and you have a house of cards instead of the cathedral you aspire to. 

3.      Going outside of the organisation for senior sales talent is a very risky strategy. Growing your own is the better option. The reasons are numerous, with the most obvious being expensive recruitment fees (with no guarantee of success) or non-compete agreements and other protective covenants that can land the hiring company in expensive litigation. But moreover, the best sales talent is typically not on the market. They are usually thriving where they are. And they have a pipeline that is closing in the current quarter or the next (and which will earn them commission) and a bigger funnel that will likely close in the not-too-distant future (more commission). Given the sales cycles that they will face in a new company, they will inevitably forfeit high-probability commission and experience a big dip in earnings. Hence the hefty sign-on bonuses often paid to superstars. Also, as we have seen, success is dependent on a host of factors, many of them hidden in the system. I certainly wouldn’t have foreseen internal collaboration barriers as being the undoing of the most high-profile recruitment project of my career. When we did a root cause analysis on why it occurred; we realised the inevitability of the outcome. The new recruits didn’t have the internal networks to overcome a very siloed environment with unexpectedly rigid boundaries. They were always going to fail in that given culture.

7 Rules for building a talent lab

What do the world’s top companies do differently? How do they avoid the kinds of unmitigated disasters detailed above? They build a successful Talent Lab operating on a set of systemic principles which I have distilled into 7 rules.

1.      Choose your ideal candidate profile wisely, and cast your net widely

A talent lab recruits young guns with the right profile and grows them into superstars. They are far less concerned with experience and more focused on aspects of character, work ethic, motivational drive and resilience. Recruiting experienced salespeople looking for work is usually recruiting from a pool of failure. Of course, there are exceptions, and flexibility in the approach/tactics should prevent the loss of those people who don’t fit the mold. So, to summarise the rule, bring many contenders into the fold and put them through an exacting assessment process.  

2.      Fine-tune your recruitment process for efficiency and candidate satisfaction

Cumbersome recruitment processes are an aspiration killer, both for the candidate and the aspiring talent lab. This inevitably leads to the loss of future sales superstars. When highly talented people open the door to a new opportunity, few are comfortable having all their eggs in one basket. So, they make sure they have a few irons in the fire so they might be in a position to choose between several offers. I have seen many companies lose great people to competitors because those competitors were nimble in their processes. Implementing a net recommender score and getting feedback from candidates is a good way to ascertain if you are on the right track.

3.      Design the onboarding experience for rigour and personal fulfillment

The onboarding process in successful talent labs is a very serious undertaking and success is measured through a very consequential metric: Time to productivity (or target). Thoroughness, precision, challenge, variety and range are all qualities that should exist in the onboarding design. Make it a formative and unforgettable journey. Also ensure new hires graduate onboarding with a personal development plan. Sellers are supported in reaching career goals and other milestones. Growth and development are an ongoing conversation in high performing sales cultures. 

4.      Raise the stakes through an ‘accreditation to sell’ process

Branded by some companies as a ‘licence to sell’, the accreditation process is in-depth, challenging, and ensures that sellers are technically proficient enough to talk to the customer and have the confidence to do so. It sets out an important standard: The right to sell our products and services is earned.

5.      Make it very hard for superstars to leave (after making it compelling to join)

Build meaningful benefits on top of a base salary. Have a simple, uncapped commission structure based on cumulative quotas calculated on the profitability of deals (and not on revenue or units sold). Remuneration plans should be tailored to each individual and commission or bonus payments (and ratio of guaranteed vs. variable pay) should reflect the sales cycle, uncertainty in the industry, and how much the salesperson had to do with the sale. Don’t follow the practice of raising sales quotas every time sellers’ make their number (a practice known as ‘ratcheting’). Finally use non-monetary incentives like contests and achievement awards.

6.      Eliminate the possibility of any criticism relating to poor sales enablement

Superstars want to work in an environment that fits their status. The same can be said for aspiring stars. They want the confidence that they have the best of what they need, be it tech, content, tools or information. They don’t want to be looking at the sales enablement of a competitor and wishing that they could benefit from what others have. And they certainly do not wish to feel hamstrung by inferior enablement.

7.      Adopt the highest possible standards for Sales Management excellence

Nothing, apart from messing with their commission, will unsettle a top performer more than poor management. Top salespeople want to work in great environments and where they benefit from good management practices, supportive coaching and feedback, and a healthy, competitive environment that celebrates success and rewards achievement. Make 100% sure that they are getting this fertile ground in which they can thrive.

Conclusion

Building a world-class talent lab is a complex undertaking and an ability to ‘think in systems’ is important in getting it right. It is a property of systems that it is entirely possible to optimise one part of it only to have that change negatively affect the performance of other parts, and hence the whole. There is no magic bullet – building a talent lab requires the orchestration of cross-functional roles, systems and processes and an ability to inspire and motivate productive collaboration amongst diverse groups of people. In order to do this, the mission around talent needs to burn hotly in peoples’ minds and hearts, and their dedication to superior execution needs to be unfailing. 

End note:

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References

https://salesleadershipcenter.com/research

https://salesmanagement.org/

https://blog.bridgegroupinc.com/sales-development-metrics

https://www.siriusdecisions.com/