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Why Increased Demand for Vice Presidents of Sales

Ever since "the bubble burst", companies in the Technology sector have been hunkering down and cutting costs (or reducing their burn rate) in order to achieve a semblance of survival. The little senior-level hiring that was done was concentrated in the areas of Finance and Operations - executives charged with focusing on the company's bottom-line. Customers were not spending at the same level of yesteryear; therefore, sales and marketing staffs were reduced. But with the economy currently showing signs of revival, companies have changed their strategy from one of surviving the downturn to one of increasing revenues and this often involves rebuilding or strengthening the sales organization. We have seen a recent increase in the number of searches for vice presidents of sales. However, this one differs from the demand we saw in the late nineties in three important areas.

The vice president of sales must understand profitability. He or she needs to focus on increasing the top line while keeping an eye on the bottom line. Contribution margins are important. During the dot.com craze, we saw companies clamor for marketshare often acquiring customers via loss leaders with the intent of later earning their profits from a captive customer base. But one can only sell dollars at eighty cents for a limited period of time before racking up serious financial losses. Inevitably, that strategy leads to failure. The vice president of sales must train the company's salespeople to sell in terms their customers understand: ROI, lowering total cost of ownership, etc. Selling purely with a lowest price strategy erodes profit margins.

The vice president of sales must have a track record of success. We cannot overstate how many candidates we have interviewed that became successful as a result of the proverbial being in the right place at the right time. Today's sought-after executive needs to have experience developing a strategic plan. When asked, "How did you grow revenues?" they need to explain market identification and segmentation, sales model, staff recruitment and development, and pricing strategies, including discounts and rebates, etc. When candidates are being evaluated, it's critical to determine whether the person was successful as a result of the company for which they worked, or did the company become successful as a result of this person's sales leadership. (By definition, salespeople are very capable at blurring this line of distinction.) One tell-tale sign is a person who spent ten plus years at a Fortune 100 company in apparent roles of success, yet has not been able to last at a small to medium sized company for more than a year or two at a time.

Hiring companies have become incredibly specific in defining - and adhering to - candidate profiles. Although skill sets are still very important, other factors are often given equal weight in comparing candidates: industry contacts, product experience, education credentials, current location, etc. During the dot.com craze, we used to semi-joke that searches had to be completed at "Internet speed" - the standard twelve-week process had to be reduced to 30-45 days. Hiring companies were often flexible with candidate requirements. Nowadays it seems the pendulum has swung in the opposite direction. It's not unusual for a hiring company to set a list of ten requirements and to demand the candidate hired "check off" on all ten. There is also a belief that a candidate who is "ten for ten" can be found locally, given the perceived plethora of sales talent in the job market. Companies are reluctant to relocate their new vice president of sales and often instruct that searches only be conducted locally. It is no longer searching for a square peg to fit into a square hole; it is often looking for the decagon to fit in the ten-side hole.

Fortunately, all economic indicators point to a current recovery now underway. Customers are buying again. In fact, we've noticed how much more effort is required to reach key sales leaders today versus a year ago. Last winter it was easy to contact prospective candidates - no one was buying and the vice president was often in their office, available to take the call. Today, they are in front of customers, making presentations and closing deals. As a result of this economic recovery now underway, we expect the demand for high-caliber vice president of sales to be strong. The question, though, is: Are you positioned to capitalize on the opportunity to advance your career?