Tullman: When Should the CEO Stop Selling?

By 1871 CEO Howard A. Tullman. To view the original article, visit http://www.inc.com/howard-tullman/when-should-the-ceo-stop-selling.html

I realize that, if we were only dealing with conventional wisdom, the simplest, most straightforward answer to the textbook question of, when should a company’s CEO stop selling its products and services day-to-day, the answer would be: never. It’s not exactly the ABC rule –“Always Be Closing”– from Glengarry Glen Ross (Here’s the classic Alec Baldwin speech: https://www.youtube.com/watch?v=Q4PE2hSqVnk) but it’s pretty close. Maybe today we would call it the ABS rule. Always Be Selling. If you’re not excited about your business and your prospects, why would you expect anyone else to be?

The need for the management of any startup to be perpetually pitching is obvious– it always starts at the top. Whatever the target, (customers, prospects, investors, employees, etc.), there’s always a story to be told and sold. Telling and selling. And the CEO (so the experts inform us) should always be out front, succinctly retailing the story, deliriously describing the dream, and rigorously rallying the troops. That’s a basic part of the boss’s job description and not one you get to delegate. No one knows your business better than you.

Now, as a general proposition, I would say that it’s hard to disagree with this idea. If you’re not out there and constantly on the case, you can be sure that a competitor will be happy to take your place. You can’t sell anything sitting on your ass in your office and nothing today sells itself. The best CEOs are also great salespeople who could sell shoes to a snake, but that may not be their highest and best use for their business after a certain point of development. That’s really the key question – when does it make sense for the CEO to stop?

There’s actually a pretty good answer to this question– one that’s especially relevant for startups– and a pretty simple guideline that can help you determine exactly (a) when is the best time to start hiring some qualified sales managers and (b) whether the time is right for the CEO to take a step or two back from the front line, hand off the ball to the sales team, and focus on doing more valuable things for the business.

Timing is everything in building the right team for a new company and, notwithstanding the fact that too often people are too slow in bolstering their business with some seasoned seniors, it’s just as bad to be too early as too late. Getting some “grownups” in place and up-to-speed before you really start to scale is a key success factor in your growth and the best possible insurance that you won’t stumble along the way. You want people on your team who could sell muzzles to dogs. But you don’t want them too soon. It’s too costly to have them just sitting around while the product guys try to get things right and they hate it as well. The very best sales people take such things personally and want to be out there selling every day.

So the proper timing to add some professionals to your team is not an easy or obvious decision. In cases like this, it seems that it’s always too soon until it’s too late. However, the good news is that I can definitely tell you (with some degree of confidence and certainty) when it’s definitely too soon for a startup to add dedicated sales talent to the team.

There are two simple rules:

(1) You don’t need a sales team until you’re ready to scale; and

(2) You’re not ready to scale until you’ve sold a LOT of the SAME stuff to a bunch of SATISFIED customers.

We all know that there’s no real business without sales and satisfied customers, but not all sales are the same for all purposes. You’ve got to nail it before you scale it (confirm both product and market fit) and big businesses are never bespoke. That’s why it’s critical that sales that stick be of the same basic product or service without costly customization, without one-off incentives or add-ons, without a whole lot of handholding, and without spending more to get them than you’re ultimately putting in your pocket.

But what does this have to do with the CEO being out there selling? He or she needs to be out there selling until the concrete sets and the product or service is locked down and secure. Until you’ve had a dozen serious sales (with happy customers) and things appear to be sticking and the dogs are eating the dogfood. If there are still open questions, if there are changes or mid-course corrections that must be made, if there are pricing concerns or additional critical features to be added, there’s really only one person who can make those calls, meaning that the inputs to the decision-maker must be direct and, ideally, face-to-face from the market and the customers. No one will ever tell it to you straighter than a customer and you need to hear the unvarnished truth to ultimately get your offerings just right. You can’t fix things from afar – only from the field.

And in startups, especially in the early stages when everyone pitches in, a lot of people are trying to sell who aren’t even “sales” people and who have little or no training. They try to “sell” because there’s no one else around to do it. That’s not a good place for any business to be. “Trying” doesn’t drive “buying” in the real world–selling is a skill just like many others and not something you pick up in your spare time. See http://www.inc.com/howard-tullman/bring-back-the-peter-principle-please.html .

So it’s easy for an entrepreneur to lose patience and rush to get some skilled help in this area. But it’s smarter to make sure that you’ve got something real and solid for these folks to sell before you bring them in and turn them loose and ultimately that’s a call that only the CEO can make.