I was reviewing a sales leadership evaluation with my client, a CEO, who was a bit confused over how this was different from a sales management evaluation. He wondered, “Aren’t sales managers and sales leaders the same?”
He has a sales force that was typical of a mid-size business with a Sales VP (the sales leader), 2 sales managers, and about 15 salespeople between them. In my experience, there is a boatload of confusion over the differences between Sales Managers, Sales Directors, Sales VP’s, Regional Sales Managers, National Sales Managers, Senior Sales VP’s, Worldwide Sales VP’s, Sales Operations VP’s, Sales Enablement VP’s and Chief Revenue Officers.
Let’s attempt to explain some of the important differences between Sales Managers and the other Sales Leadership roles.
At Objective Management Group (OMG), we evaluate both Sales Managers and Sales Leaders as well as Salespeople. To use the proper evaluation, we often have to ignore titles and pay more attention to reports and function.
Who are the Direct Reports? One of the most obvious differences between Sales Managers and other Sales Leaders is who reports to them. Typically, salespeople report to Sales Managers and Sales Managers report to Sales Directors or Sales VP’s. One of the reasons that executives get confused is this example where, in one company, the manager of 5 salespeople is a Sales Manager, while the company across the hall with 3 salespeople has them reporting to a VP Sales. Sometimes, the very first hire a company makes is a Sales VP whose role is to sell. Titles do not tell the story but reporting structure does!
What is the Primary Function? The primary function of a Sales Manager is to coach salespeople, so the focus is on tactics. The primary functions of a Sales VP’s are market penetration, building an effective sales organization, systems and processes, and revenue growth, so the focus must be on strategy. Small companies, looking to hire their first Sales Leader, often want both – someone who can bring strategy as well as tactics. They must choose between hiring a Sales VP who is willing to perform Sales Management functions, or a Sales Manager who may be completely unproven when it comes to strategic thinking. A compromise is not usually the solution, so we need to look at who will be reporting to this person and recognize that a proven Sales Manager with a passion for coaching salespeople will have the most impact.
What is the Compensation? While this can vary wildly depending on the industry, there are some common range differences. Most Sales Managers earn between $125,000 and $175,000 in total compensation while most Sales VP’s earn between $250,000 and $350,000 in total compensation. When a small company hires someone to perform in the Sales Management role, but awards a VP title, the cost goes up significantly!
What about those other Roles? Sales Enablement VP’s, sometimes known as Sales Operations VP’s, arrange for the tools and training. Sales Directors sometimes report to Sales VP’s while in other companies, the reverse is true. Both positions are necessary when there are too many of one of those titles. For example, if we have 6 Sales Directors, each with 3 sales managers reporting to them, the Sales Directors would report to a VP. Or, if we had 6 Sales VP’s, each with 3 sales managers reporting to them, the Sales VP’s would report to either a Sales Director, a Senior VP Sales, or a Worldwide VP Sales. And finally, the senior sales leader and the senior marketing leader would report to a Chief Revenue Officer. In some companies, Sales Managers are the salespeople (think territory managers) while Sales VP’s are the sales managers with some expanded responsibilities.
So back to the Review of the Sales Leadership evaluation. One of the interesting findings that confused the CEO was that while his Sales Leader scored 81% on Sales Strategy and 77% on Sales Coaching, the leader’s tendency was to default to Sales Accountability (get tougher) and Sales Recruiting (hire better salespeople) despite having much, much lower scores on those competencies. We see this a lot with Sales Leaders – using skills where they aren’t that strong and failing to use skills in which they are really good!
There are many different styles of leadership and when it comes to Sales Leaders, you may have a preference as to the style and how well that style fits into your culture. Be warned though. Pick the style you like after you have determined that the sales leader has mastery over the competencies for that particular sales leadership role. A great style makes it easier to work with someone. When style trumps capabilities, your new sales leader could be the skipper of a sinking ship.