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Peak Your Profits: Hail to the chief
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Maybe it’s because... He always makes me laugh. He’s so blasted smart. He’s masterful at something I’m not very good at... playing the guitar. He’s such an empathetic and attentive listener.
It’s these reasons and a bunch of others, that make me proud to say, Chuck Reaves is a long-time, dear and valued friend.
He’s a talented speaker, author and advisor, who has been helping CEOs, C-class decision-makers and entrepreneurs grow their businesses for years.
Our conversations are usually irreverent and rambling, yet, on occasion, we do uncover some pretty valuable stuff.
Examples and excerpts:
Jeff Blackman: Chuck, in Chicago, when we reference the CSO, we’re ready to wax rhapsodic about the Chicago Symphony Orchestra. Yet, for you, these letters have a far different meaning... the Chief Sales Officer. Explain.
Chuck Reaves: When I begin working with a company and their leaders, I look at their organizational chart to see how they’re structured. I look for potential problem indicators in the org chart. For example, when I see a Chief Financial Officer or CFO heading up a sales organization. Nothing against the CFOs of the world, but their expertise is managing expenses, not generating revenue. They’re specialists at knowing what to do with the funds once they come in. But they typically lack the experience and training to know how to drive the sales force and sales volume. There are exceptions. I do know a CFO in Denver who is one of the best sales leaders I’ve worked with, but he’s atypical.
JB: So what’s the role of the CSO?
CR: If a company is really serious about sales, shouldn’t they have someone at the executive level focusing on it? Instead, the highest ranking salesperson in most organizations, is a vice president.
What’s the difference between a C-Level and a vice president? C-Levels are strategic thinkers, VPs are tactical thinkers. Strategic thinkers have their minds on the horizon; tactical thinkers keep their minds on the next objective.
For publicly-held corporations, the next objective is often the next end-of-quarter results. While quarterly numbers matter, are important, or even essential in today’s market, someone needs to be thinking about the company’s long-term sales direction.
JB: So that’s where the CSO’s role kicks-in...
CR: Someone in every organization is doing the CSO stuff. Most though, are unaware of it. As a result, they’re doing it as well as they can. Yet, the CEO should also be the CSO! Think about it. Who’s ultimately responsible for all areas of performance? The CEO. Here’s another way to look at it. Suppose a CEO comes to work one morning and the first order of business is his/her CFO walks into their office, hands in a resignation letter and exits. Who’ll be the de facto CFO until someone can be brought in to backfill that seat? The CEO, of course.
Bernie Ebbers, the former CEO of WorldCom and current prisoner, told the judge at his “cooking the books” trial, “I don’t know anything about numbers and accounting.” The judge replied, “You’ll now have time to take some courses!” So ultimately, sales is the responsibility of the CEO. If there’s no CSO, then the CEO must take on the responsibility and accountability for CSO functions.
JB: How come the V.P. of Sales or Marketing isn’t a better candidate?
CR: Picture an org chart. At the top is the CEO. On the next tier are the C-Levels, like the CFO, COO, etc. On the next tier are the senior executives; vice presidents - VPs, SVPs, EVPs.
Now imagine horizontal lines going through the org chart below each level. The top section, which would have only the CEO, is the “Visionary” level. Every organization needs a visionary, but there’s usually only one. Depending on the industry, market, sales cycle and other factors, the visionary’s mental focus should be months or even years into the future. The section below that, with the C-Levels, is the “Strategic” level. Again, depending on the organization’s situation, the mental focus of the C-Level folks should be months into the future. The next level down, below the C-Levels, is where the vice presidents are. This is the “Tactical” level.
Below the “Tactical” level is the “Task” level. This is where the tactics that support the corporate strategies are executed. Below the “Task” level are the techniques people who will accomplish the tasks.
Most sales VPs are held accountable for the results of their organization. They’re even often involved, sometimes intimately, with major sales opportunities.
This means they must be able to think at the Task level as well as the Tactical level.
Do we really expect someone with broad skills like that to also possess a “Strategic” sense on par with the other C-Levels? It’s like asking the CFO assist in cutting invoices or asking the Chief Operating Officer to pitch-in and operate a lathe!
Growing, sales-driven, customer-focused organizations need a full time CSO or a CEO who’s trained and experienced in the various roles the CSO must play.
JB: Roles like...
CR: Think about the sales-related questions you and I are asked most often by CEOs and you’ll see most of these roles:
“How do I hire good salespeople?” — “What is the best way to compensate my salespeople?” — “Should we be focused on industries or organized by geography?” Every one of these questions has the same answer, “It depends.” There are too many variables to quickly answer those questions.
Here’s an example. I’ll ask a CEO of a manufacturing firm, “Should you switch to lasers or water jets for cutting your materials, or is what you’re doing now the best way?” How do they answer, “I expect my COO to make that call.” Why? The COO understands the pros, cons, technology, customer demands and employees skill levels. Once, I had a CEO say, “We’re not leaving this room until we have a new compensation plan for our salespeople!” It was four o’clock, on a Friday afternoon! She was adamant and serious, that it could be done!
Jeff, you and I know, to make that decision, all we needed was:
— Current corporate objectives — performance metrics vs. objectives — key profitability indicators — the three/five year plan — salespeople skills and required training — existing client requirements — target markets (present and future) — target accounts within those markets (present and future) — competitive SWOT (Strengths / Weaknesses / Opportunities / Threats) analysis for major competitors — industry trends — client trends That would get us started!
The CSO position is as important as any other C-Level.
It’s complex and the CEO needs the input a qualified CSO can offer, to make the decisions that’ll drive revenue and profit.
For more strategies, take a peek at www.ChuckReaves.com and www.CSOToolBox.com
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Jeff Blackman is a speaker, author, success coach, broadcaster and lawyer who lives part-time on Marco Island. His clients call him a “business-growth specialist.” Send an e-mail to jeff@jeffblackman.com or go to www.jeffblackman.com to subscribe to his free e-letter.
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