Sales Management

Hedy Holmes knew it was time to find a sales manager. In 1994 the warning signs were flashing around her and the company bearing her name, Hedy Holmes Staffing Service, in Stockton, Calif. As both the CEO and the top salesperson, "I was becoming overwhelmed," Holmes recalls. "Strategic thinking was going by the wayside. Accounting and technology were neglected. Customer service was suffering. My employees were saying, 'Well, I guess the only thing that matters around here is sales.' "

The CEO knew it was time, and yet that didn't make hiring a sales manager any easier. From the day Holmes started the company, in 1979, she had reveled in her ability to make the cash register ring. During one three-year period, she nearly tripled revenues. So it wasn't until she was on the brink of burnout that Holmes finally relented and hired someone.

Bringing on a professional manager--whether a chief financial officer or an information-systems director--is never easy. But many company builders find that hiring a sales manager comes with a cargo of emotional baggage all its own. "As an entrepreneur, it's hard to hand over your hard-won accounts," attests Paul Lyon, CEO of the Lyon Co., a $10-million wholesaler and manufacturer of gift items in Salt Lake City.

Even when a CEO recognizes the need for change, it can take time to accept that fact and the consequences. In the interest of helping you "grieve and move on," we've identified four stages that the owners of growing businesses typically go through before making a successful sales-manager hire. Do any of them describe you?

DENIAL I can make 10 sales calls a day, manage the sales reps, and run the company. Maybe for a while. But waiting too long to delegate can have dire consequences. Holmes's health and profits took a hit. "The cost of sales was going up because no one was paying attention to the margins," she confides. When the CEO finally brought on a sales manager, "it was out of frenzy," she says. And it was a mistake. "I didn't take the time to make sure this person had business values complementary to mine. And I didn't do my usual due diligence--like asking for commission reports." The new sales manager lasted all of three months. It took Holmes many more months of networking and interviewing to find the right replacement.

ANXIETY What happens if I bring a pro into my business? Call this stage fear of the sales professional. It's common among entrepreneurs and can lead to misguided hires. "My first official sales manager was almost double my age, and frankly, we were all intimidated by him," says Ed DuCoin, copresident of $12.5-million Impact Telemarketing, in Woodbury, N.J. "We fell into the professional-manager syndrome: we let him come in and set our direction instead of laying out our goals. By week six,the question was, How am I going to get this person out of here?"

Afterward, DuCoin realized that a loyal employee who'd served as the sales manager's assistant was perfect for the top post. "She had exactly what we were looking for: a background in direct marketing and sales." And something else--an intimate understanding of the company's history, which DuCoin felt was crucial to closing deals.

Other CEOs have overcome the obstacles to bringing on a "career" sales manager by working closely with the new hire. Kevin Owens, CEO of Select Design, a sportswear producer in Burlington, Vt., recruited his sales manager just after passing the $1-million mark. "We hired him a little bit before we had to, because we anticipated the training effort. Although this person had 10 years of industry experience, my partner and I needed to spend a lot of time with him on the company's image and story." For the first year, Owens scheduled time to talk before and after the sales chief made a sales presentation. The mentoring paid off. Two and a half years after his arrival, the sales manager has been crucial to bringing Select Design to the next level; Owens projects it will have $3.3 million in 1996 sales.

For Paul Lyon, the fear was a financial one. Lyon couldn't imagine handing out equity in his company, but he felt that was key to attracting the person he had in mind. "Emotionally, it is difficult to offer someone a piece of your baby," Lyon confesses. He spent a year trying to recruit a sales manager--and adjusting to the idea that he'd have to fork out big bucks. He persuaded his candidate to relocate from New York to Salt Lake City by offering a salary close to six figures, incentives, and a percentage of the Lyon Co. Other entrepreneurs have successfully used perks like flextime and telecommuting as lures.

SADNESS I'm gonna miss this job. "Customers really do become your friends," says Owens of Select Design. Perhaps that's why many owners hold on to the sales reins long after the days when making payroll depends on their heroic 11th-hour sales. Owens handled the dilemma by handing over some--but not all--of his company's key accounts to his new sales manager. The arrangement put some healthy pressure on the manager to prove he could bring in new customers (he did), and it allowed Owens to keep a hand in sales.

ACCEPTANCE If I want my company to grow, I have to give up something. When Hedy Holmes stopped traveling her 150-mile-radius daily sales territory, she had time for neglected tasks such as beefing up support for the sales reps, securing a credit line, and raising profit margins. "I also wanted to open new locations, and that wasn't possible without replacing myself," says Holmes, whose company projects 1996 sales of $5 million. Her sales successor, she reports, "is very different from me, but when it comes to customer service, we think the same way." So how did the CEO feel the first time her new sales manager walked through the door with a big sale? Says Holmes, "I was relieved."