In all my years of working with private equity (PE)-backed portfolio companies, their upside deal model is typically based on three key assumptions:
- That their sales headcount will increase.
- That their ramp times will get shorter.
- That there will be increasing productivity per quota-bearing headcount.
These are reasonable assumptions, but often times post transaction focus is diverted to other shiny objects. Without this focus Your sales team won’t get the results and growth you’re aiming for if your business doesn’t focus on initiatives to improve seller productivity.
When did we stop focusing on talent?
When the pandemic and the Great Resignation hit, we saw lots of people in some sectors leave their jobs due to job dissatisfaction. Many companies resorted to hiring quickly to fill the seats without paying attention to who they were hiring. And with adoption of AI, many leaders are expecting technology to be the solution to productivity challenges without having a clearly defined strategy.
Today, companies taking this approach are starting to realize that no matter how much of the sales process is digitized and automated, they can’t “set it and forget it” when it comes to sales talent.
Why do I say, “Talent is at the center of growth”?
I firmly believe that talent is more crucial to a company’s growth than even the go-to-market (GTM) strategy or operating model. Why? This conclusion comes from observations on the thousands of companies that SBI has worked with to improve GTM performance and drive growth over the years.
1. Talent is one of the quickest ways to get results.
If you want the largest revenue growth overall, you will need optimal operating conditions, the best GTM strategy, and the right product-market fit. But that can take a while to happen, and for PE-backed portfolio companies who are under pressure to make fast returns under suboptimal conditions, optimizing talent is the fastest way to get results good enough for a respectable exit.
2. Great talent can cover for other shortcomings.
I’ve seen hundreds of companies who succeeded in outperforming competitors with superior products just by having better salespeople. Never underestimate the importance of your sales talent having the ability to connect well with customers and create a positive customer experience.
3. The right sales talent can close bigger deals faster.
In a recent piece of SBI research, we examined the effect of different sales approaches on average deal size and cycle times. Surprisingly, the most common seller approach led to 20% longer sales cycles. In a market where potential customers have been exercising more cautious decision-making, the best-performing salespeople are the type to anticipate customer concerns in the buying process and work proactively to reduce risk and prospect anxiety. You can explore the full findings of the research here.
4. Without a talent initiative, the upside model may not bring the desired results.
Almost every growth-based value creation thesis I’ve seen assumes that each seller’s productivity will go up over time. However, like any other aspect of the business, this will only come true if you have initiatives focused on improving in this area. Without optimal seller productivity, you’ll only see a fraction of the returns you’re expecting.
So, what’s next? Where do we start with talent?
First and foremost, CEOs need to put talent back at the forefront of their growth initiatives. Start with a talent map of skills and competencies. Once you’ve identified the most impactful skills and competencies that your top performing sellers have in common, you can then design a training plan to develop these skills across the rest of the sales team.
We’ve seen heightened caution in buyer behavior today, which has dampened the effectiveness of sellers who try to drive urgency in the deal. For your sellers to adapt to this, they need to be trained to learn about and develop a deep understanding of a prospect’s business. Your sales talents’ efforts can then be augmented by introducing generative AI as a tool that can assist them in this new process. With the combination of these initiatives, your GTM talent should have everything they need to bring in fast results to a degree that might surprise you.
The original version of this article was published on Forbes.com. Click here to read the article.
