In today’s fast-paced business environment, organizations face numerous challenges, particularly when it comes to attracting and developing top sales talent. In this two-article series, we uncover overlooked strategies to boost sales performance, examining the impact of technology, strategy, leadership, performance management, and other critical factors that drive business success.
In a recent interview, Professor Frank Cespedes shared his expert insights on effectively managing the sales function to enhance business outcomes. This interview is divided into two articles.
This is Article 1, where we begin by exploring Strategic Approaches to Sales and Sales Talent. We’ll delve into foundational strategies and best practices for building a high-performing sales team.
Article 2 will follow in two weeks, focusing on the Leadership Role in Sales and Sales in a Changing Environment, with an emphasis on how AI and technology are transforming sales functions. The discussion will conclude with Professor Cespedes’s practical advice for SMB business leaders looking to improve their sales performance.
About Professor Frank Cespedes
Frank Cespedes teaches at Harvard Business School and for 12 years was Managing Partner at a professional services firm. He has worked with companies on go-to-market and strategy issues, and has been a Board member at consumer goods, industrial products, services, PE and VC firms.
He has published articles in Harvard Business Review, European Business Review, Organization Science, and The Wall Street Journal, among others, and is the author of six books including Aligning Strategy and Sales which was cited as “the best sales book of the year” (Strategy & Business), “a must read” (Gartner), and “perhaps the best sales book ever” (Forbes). His newest book is Sales Management That Works: How to Sell in a World That Never Stops Changing (Harvard Business Review Press).
Strategic Approaches to Sales
In business, Sales is probably the most context-specific activity. According to Professor Cespedes, the strategies and methods for effective selling vary significantly depending on the product, service, or region involved. For instance, selling software differs from selling capital goods, which in turn differs from selling professional services, and so on. Similarly, the approach required to sell in Asia differs from strategies used in North America, Europe, or the Middle East. This high degree of variation is influenced by product specifications and cultural nuances, making sales distinct from other internal business functions like production, operations, or finance.
Good Practices Over Universal Rules
While universal, one-size-fits-all rules in sales are rare, Managers should be cautious of so-called gurus who claim such rules exist. Professor Cespedes emphasized the importance of sound practices that apply across most sales scenarios. Effective sales rely on key principles such as active listening, understanding the customer’s situation, aligning product or service features with projected customer outcomes, and articulating a company’s value proposition clearly and convincingly.
Professor Cespedes explains, “Think of it this way: effective sales conversations typically have three core components, Context, content and contact.”
Context involves ensuring that the conversation addresses what matters to the buyer. Far too often, salespeople discuss topic X while the buyer is focused on topic Y. Worse still, some salespeople initiate calls with unfocused PowerPoint presentations about their company and its products, failing to align with the buyer’s priorities.
Content refers to the salesperson considering what the customer needs to know, beyond their current knowledge, about the product, the seller, and any data, referrals, or other information relevant to supporting the value proposition.
Contact refers to the skills a salesperson must develop to communicate effectively, both verbally and nonverbally, throughout a sales conversation. While it depends on cultural norms, active listening is generally important across cultures and is rarely an innate skill. It requires deliberate training and practice. On average, people speak at about 200 words per minute but can process 300–500 words per minute. As a result, “listening” often devolves into merely waiting for an opportunity to talk or present prepackaged information. In contrast, active listening allows a salesperson to earn both credibility and the opportunity to be heard.
Effective sales conversations include these components, but their execution will vary depending on the salesperson, culture, and other factors.
Aligning Sales with Broader Business Strategy
According to Professor Cespedes, value in any business is created or destroyed ‘out there’ in the marketplace with customers, rather than in conference rooms or planning meetings. He emphasizes that businesses must first understand the external factors impacting their operations and then make strategic decisions to address the opportunities and challenges presented by these market realities. Key external factors include the industry in which the business competes, the segments it chooses to target, and the characteristics of the buying processes and purchase criteria within those segments.
These factors define the required sales tasks—what sales initiatives must achieve to create and capture value. As a result, salespeople and other customer-facing groups, such as service teams, must develop the capabilities needed to implement the strategy effectively. Professor Cespedes points out that the subsequent challenge lies in aligning selling behaviors with the required sales tasks. To address this, managers have three primary levers at their disposal:
People: Who you hire in sales, what they know, and how you develop their skills and attitudes to ensure they are effective at executing your strategy—not a generic selling methodology or the approach they learned at another company that made a different set of strategic choices.
Control Systems: Performance management practices, including how the sales force is organized and deployed across opportunities, the metrics used to evaluate performance, and the sales compensation and incentive systems.
Sales Force Environment: The organizational culture in which sales initiatives are developed and executed, how communication works (or doesn’t) across organizational boundaries, how sales managers are selected and developed, and the conduct of performance reviews.
This framework emphasizes that the alignment of strategy and sales involves both the “what” (strategic choices in response to current market realities) and the ongoing “how” (the actions, allocation of resources, and skill sets that connect people’s behaviors with those choices).
Sales Talent
When asked about the challenges businesses face in hiring good salespeople, Professor Cespedes explained that there are challenges in sales hiring that do not exist to the same extent in many other business functions. For one thing, there is no easily identified resource pool or educational background for sales positions. When hiring an engineer, companies can turn to engineering schools and select candidates based on specific disciplines such as electrical engineering, chemical engineering, and so on. The same applies when hiring for accounting or finance roles, as candidates can typically be found with relevant degrees in those fields. Similarly, software developers can be found based on their technical background.
But of the over 4,000 colleges and universities in the United States, very few offer sales programs or even sales courses. In fact, when it comes to including sales in the curriculum, the U.S. is actually ahead of many schools in other parts of the world.
The result is that most people in sales start with little preparation and must learn by doing on the job. Additionally, sales jobs vary greatly depending on the product or service being sold, the customers a salesperson is responsible for, the importance of product or technical knowledge, and the types of people contacted during sales calls.
Ultimately, companies must grow their own when it comes to hiring and developing sales talent. However, in addressing these challenges, many businesses often make hiring more difficult than it needs to be.
Common Mistakes in Sales Hiring
Over-reliance on Unstructured Interviews in Sales Hiring
Professor Cespedes explains that the most common mistake in sales hiring is an over-reliance on unstructured interviews to assess the quality and fit of potential hires. Research consistently shows that managers tend to overestimate their ability to predict a candidate’s performance based on interviews alone. The correlation between interview predictions and actual job performance typically varies between .1 and .4, which is lower than the .5 probability of flipping a coin. This highlights the limitations of interviews in making accurate hiring decisions.
There are systematic reasons for this gap. One reason is that first impressions heavily influence hiring decisions. They shape how the interviewer perceives and processes the remainder of the job interview with the candidate, but they reveal little about the actual performance of relevant tasks. It’s important to complement interviews with role plays, task assignments, and, whenever possible, job trials or internship-type hiring scenarios.
Clarifying the Key Sales Tasks and What to Look For
Another reason is that good hiring begins with knowing what you’re looking for. However, many busy managers fail to clarify the important sales tasks within their business. When Professor Cespedes asks managers what they’re looking for in sales candidates, he often receives lists of vague terms like ‘resourceful,’ ‘sense of urgency,’ ‘passion,’ ‘ambition,’ and ‘drive.’ In an interview, who wouldn’t want to appear hardworking, resourceful, and so on?
Remember, you are hiring the person, not just the polished interview candidate. Translate those adjectives into relevant tasks—such as the number of calls expected daily or weekly, the relative importance of technical expertise versus relationship-building, or the emphasis on upfront selling versus after-sale service or account management tasks. Selling is about behaviors, not simply attitude or demeanor during an interview.
The Mistaken Assumption that Success in One Company Guarantees Success in Another
Another significant hiring mistake is the common assumption that success in one organization guarantees success in another. Talent matters and sales stars exist: research shows that the top 20% of salespeople often generate a disproportionately large portion of their company’s revenues. Sales is akin to other creative fields where stardom is well-documented. In areas such as software programming, sports, and others, the top performers aren’t just slightly better than average; they’re typically much better. Performance profiles in these fields follow what is known in statistics as a ‘power distribution curve,’ rather than a normal distribution bell curve.
But research also indicates that performance is not only a result of an individual’s capabilities but also of the fit between those capabilities and the specific tasks. This is especially true in sales, where the relevant tasks are shaped by a company’s strategy, organization, culture, sales model, and metrics—factors that are unique to each company.
As a result, when a star from another firm is hired, that salesperson must re-create their capabilities within the context of your company. Take, for example, a company that hires a star Sales VP from a competitor only to find she doesn’t perform the same way in their environment. Similarly, startups that bring in an experienced big-company rep often see them flounder in the early-stage firm. These individuals haven’t suddenly lost their skills or become ineffective. In business, performance is never abstract; it is always performance within a specific context—here, not there. Much of successful selling depends on the relationships, knowledge, and mutual trust that the sales rep builds within their company.
The Cumulative Effect of Sales Talent and Peer Learning
Further, the effects of sales talent seem to be cumulative: good salespeople learn from each other. What researchers refer to as ‘modeling behavior’ is a key driver in how salespeople develop. Average reps improve by observing how the top performers handle key tasks. They pick up important lessons on pitching, answering objections, managing competitive comparisons, and other aspects of selling a product at a particular price in a specific market. This is one reason why coaching, performance reviews, and the sharing of best practices are so important.
The key messages are that sales is a performance art, salespeople exhibit a wide variance in performance outcomes, and those outcomes depend on both innate talent and the context in which that talent is found, nurtured, and deployed.
Conclusion
In conclusion, successful sales hiring requires a clear understanding of the tasks at hand and a well-structured, evidence-based approach to candidate selection. The key to building a high-performing sales team lies not only in hiring the right talent but also in aligning that talent with the organization’s culture and specific sales needs.
Preview of Article 2
In the upcoming second article, we will explore the critical Leadership Role in Sales and examine how Sales in a Changing Environment, driven by AI and technology, are reshaping the sales function. Professor Cespedes will share valuable insights on leading sales teams and adapting to evolving market dynamics, concluding with actionable advice for SMB business leaders aiming to boost sales performance.
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