The executive director is a very important figure in a company, both internally and in its external relations, that is, with customers, partners, the market, the public sector, etc. But what exactly would the CEO’s role be in sales?
Some professionals in this role, particularly in B2B businesses, believe they must maintain close proximity to customers as part of their role. On the other hand, there are also directors who do not closely monitor the work of the commercial team and only supervise the performance of sales managers.
As a general rule, we hear that CEO influence is always beneficial. In fact, however, the two postures we’ve mentioned—and, as we’ll see, all the others that fall in between on the CEO’s engagement scale in this area—have both strengths and weaknesses. Therefore, they can bring good and bad results, which depends on a number of factors.
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In this article, we’ll talk about the role of the CEO in sales and what the risks and benefits of different behaviors are. Follow up!
Discover the 5 levels of involvement related to the role of the CEO in sales
While a CEO’s visit to a potential customer can be strategic to close a deal, it can also be detrimental if the director is not prepared and aligned with the sales team.
However, this “calculation” is evidently not that simple. In reality, CEOs act in a variety of ways in relation to their role in sales. A study published in the Harvard Business Review described five different types of CEO engagement with the business area, which can give us an idea of the range of possible positions and what they bring good and bad.
Authors Noel Capon and Christoph Senn arrived at these profiles after conducting 30 executive education workshops with 515 sales leaders in the United States, Netherlands, Switzerland and Singapore between 2012 and 2018. According to them, in their interactions with customers, the directors they usually have two main goals: increasing revenue and promoting strong, lasting relationships. But is everyone successful in this endeavor?
1. “It’s not my problem”
It is not surprising that many believe that the role of the CEO in sales is quite limited and that they “wash their hands” in relation to the commercial area. This was the position of 28% of those interviewed by the survey — most of them.
The justification for this type of behavior is related to the growing responsibility and pressure that professionals in this position usually face. In addition, they tend to believe that customer relationships are the exclusive job of the sales force, just as the work related to hiring talent is the scope of the Human Resources team.
However, according to the authors, the sales area is not the same as the others, as it is responsible for making the direct and critical interface between supplier and customer and, therefore, it is a stressful function by nature, which would deserve special attention.
Another point to make here is that many CEOs mistakenly believe they cannot add value to sales. When, in fact, your precise and strategic intervention in some cases could mean fewer missed opportunities.
2. Wants to help but gets in the way
This type of leader believes that the role of the CEO in sales is to engage with customers, but without adequately preparing for it. For him, it’s customary to meet with important customers without asking for information or background to business managers — who often only find out after the meeting has taken place.
As you can imagine, such an attitude is totally risky and can result in very serious embarrassments, after all, there are high chances that the director does not know the pains and history of the client or commit to something that the company cannot fulfill.
In the survey, 21% of CEOs were in this category and, as you can imagine, they rarely achieve their goals: their efforts do not increase profit and they are more likely to harm than improve the customer relationship.
A delicate issue is that the professionals who act like this believe that they are really being useful and opening doors for the sales team, when, deep down, they are really interfering with the long-term work that is being carried out. Here it is worth highlighting the relevance of the CEO’s approach to the sales leader, who, if any, will avoid unwanted situations and make him really contribute rather than harm.
3. CEO socializer
Among study participants, 19% fit this profile, characterized by trying to build personal customer relationships rather than directly generating revenue. The role of these CEOs is to demonstrate commitment and build trust through socialization, i.e., meetings, events and travel.
What this executive director really likes is socializing and relating to groups, but the truth is that he rarely gets into business while he socializes — not least because he is usually with others.
The authors claim that these CEOs are less destructive than their predecessors, but their impact ranges from moderately positive to moderately negative. Customers usually enjoy the events and even go home happy.
However, if they realize that the director just wants to pose for a photo while signing the contract, they may get frustrated and look for competitors who get involved more deeply and connect more with their pain.
In this category fall those who believe the CEO’s role in sales should only be focused on closing deals and generating revenue and, to a lesser degree, building relationships. Of the study participants, 18% are from this group.
Such a director can do a good job when there is a need to demonstrate commitment to the proposal offered or when the client is hesitating when signing the contract.
However, this approach also has some risks: if negotiations are frequently referred to the board, it can become the norm and become unsustainable. Also, as they are not relationship-focused, they may neglect communication—which is not advisable at all if you want to secure the business.
5. Growth champions
Finally, the executive director’s last form of involvement with the commercial area is the most productive. But, in the study by Capon and Senn, only 14% were identified with this profile.
In this case, the CEO’s role in sales is understood to be essential and both goals—increasing profit and building relationships—are put first. In this way, they are able to intervene when necessary to unlock opportunities for growth and serve as a role model for other professionals in the organization.
Executive directors of this type often accompany business managers on visits to strategic customers and solicit immediate feedback on what they can do to increase the value offered. In addition, they also tend to keep a close relationship with their customers, making frequent video calls, for example.
These leaders are also growth champions because they support processes that aim to improve business performance, such as the use of metrics and tools that ensure best practices for the sales team. Yet, they are often willing to break down internal barriers to help with long-term customer success.
But, as expected, this profile also has negative points: they may be prone to paternalistic and micro-management behavior, especially if they have already acted as commercial manager. This attitude can put a lot of pressure on the sales leader, who may be happy to have a committed CEO but love it when he takes a vacation.
CEO’s role in sales: how to get the right and beneficial posture for business growth?
To ensure that the CEO’s role in sales is beneficial to the business and the health of the sales team, it is important to establish rules regarding their engagement, roles and responsibilities.
This is very common to be done for leadership and management positions in all areas, but, regularly, the role of the executive director is not very well defined – which leaves room for mistaken behavior. The study published in HBR shows that carrying out work in this direction within the organization is essential.
This is because, although the CEO’s style of dealing with customers is only one of the variables that influence the company’s results, among organizations that had executives of the first and second types, profits were usually stable. Meanwhile, those that had directors of the last profile, surpass the goals and show high growth rates. And that’s what you want for your business, isn’t it?