Few companies impose term limits on sales leaders because people typically leave these positions too quickly, rather than staying too long. However, there are real risks of long-tenured sales execs growing stale, and companies need to take steps to make sure they remain actively learning and engaged, not just in P&L performance but with broader measures that show they are ready to meet emerging challenges.
Many countries have term limits for their leaders. The premise is that term-limited politicians will spend less time campaigning, amassing political power, and catering to special interests. Instead, they will focus on making policy, working for their constituents, and bringing fresh energy and ideas to government.
Although less common, term limits are also used in business. Consulting firms ZS (the firm we founded) and McKinsey have term limits for their CEOs. At ZS, CEOs can serve a maximum of three three-year terms. A periodic change in leadership at the top brings a diverse and updated perspective that keeps up with environmental change and benefits employees and clients.
We are not aware of any companies that have term limits for sales leaders, such as the vice president of sales. But should they? Term limits could help ensure that once-effective sales leaders are replaced before situations such as the following arise.
- The sales leader gets out of touch. As the leader spends more time at headquarters, they can get disconnected from customers and from younger generation sales team members. Meanwhile, evolving customer and employee needs, new distribution channels, technological innovation, and other sales environment changes put the leader at risk of becoming obsolete. For example, today many sales leaders are slow to adapt to the changes that digital and social channels are bringing to sales.
- The sales leader develops blind spots. Even the most effective leaders have flaws. Unfortunately, self-awareness of these flaws is often limited. Over time, a leader’s blind spots can weaken the sales team. For example, one sales leader’s strong managerial skills helped him address critical operational weaknesses to get the “sales machine” back on track. But once the immediate problems were solved, the leader’s continued focus on short-term tactics ahead of long-term strategies caused the sales force to drift.
- Subordinates cower as the sales leader’s personal power grows. A leader’s power comes not only from their knowledge and expertise, but also from the position itself. The leader controls the career progression and compensation of sales team members. Subordinates may start to curry favor, shower the leader with praise, or fear speaking up with ideas counter to the leader’s views. The situation gets worse if the leader abuses power by intimidating subordinates.
- The sales leader locks in on favorite team members. As the leader’s bonds with sales team members get stronger, personal relationships that were once a source of strength may cloud the leader’s perceptions and impede good choices. This creates complications when it’s time to make difficult personnel decisions about performance evaluations, promotions, or job assignments.
One reason the notion of term limits for sales executives isn’t commonly discussed is that generally speaking, sales leaders don’t stay in the job long enough for these situations to arise. Instead, many companies face the opposite problem: managing the high cost of frequent sales leader turnover. When sales executives depart too quickly, their initiatives don’t have enough time to make a significant impact. In addition, the learning curve gets disrupted and the company fails to benefit from the leadership wisdom gained through experience.
Instead of thinking about whether sales leaders stay in the job too short or too long, however, companies should actively think about making the time they spend in the role better. Rather than term limits, companies need strategies for helping sales leaders excel over time. Solutions require improving sales leader selection, development, and performance management, while creating a company culture that encourages sales leadership success. Effective strategies include the following:
Selecting a sales leader who is a lifelong learner. The best sales leader candidates are self-motivated to continually search for new knowledge and to adapt to environmental change. Companies can support leader development by providing new experiences for leaders, such as the opportunity to participate on a product marketing strategy task force. Companies can also provide leaders with opportunities to participate in executive education programs or attend industry conferences where they can share best practices with peers. Company culture also plays a role in encouraging leaders to seek constant improvement and adapt to change.
Using performance management to make sales leaders aware of their blind spots. Although financial results (such as sales and profits) are a key metric for evaluating sales leader performance, leaders also need feedback about how they contribute to results. Do they have the necessary capabilities? Are they engaging in the right activities? Coaching by superiors and mentors is critical for helping leaders avoid blind spots and strengthen their leadership skills. It’s also important to choose leaders who possess characteristics such as self-awareness and open-mindedness.
Creating a company culture that discourages intimidation and favoritism. Company culture has a big influence on sales leader behavior. A culture that promotes long-term customer success over short-term sales goal achievement discourages sales leaders from pressuring subordinates inappropriately to make this quarter’s numbers. A culture that encourages decision making based on data and frameworks, rather than on opinion and instinct, brings objectivity to sales leaders’ personnel decisions. Selecting a leader with the right personality characteristics helps reinforce the desired sales culture.
In the end, all sales leaders know that the limit of their term is tied to their own success at driving results. Perhaps that is enough.