What’s the ideal Span of Control (SPOC) for your sales team?
In conversations I’ve had recently with a number of CROs, this topic keeps coming up—so I thought I’d share a few ideas you might want to consider.
If finance had it their way, you’d be running at a SPOC of > 10:1, right? Looking through their lens (strictly looking at the numbers) I get it.
For mature tech companies trying to get to Free Cash Flow / Profitability—it’s obviously important to keep S&M costs in check.
If you’re a hyper-growth SaaS company focused more on top-line than bottom-line, it’s still important to keep SPOC in control to drive sales productivity.
Regardless, the first question to consider is—are the numbers really telling the whole story?
In other words, what is the downstream collateral damage of running with a SPOC of 10:1, 9:1, or even 8:1?
Is there a correlation between running a high SPOC and low employee engagement, burnout, and high turnover?
And if turnover is > 20% and the hard cost of a fully ramped AE is +/- $500K—not to mention opportunity costs of vacant territories/lost marketshare—how is that impacting S&M costs and top-line growth?
What impact does running a high SPOC have on field engagement—or lack thereof?
Do your FLMs have the bandwidth to have weekly (1:1) coaching conversations and proactively engage in field coaching conversations on high impact sales calls on key accounts?
And if not, how many reps (and deals) are lost each year because of it?
How might a lack of consistent engagement/reinforcement from FLMs be impacting ICs lack of consistent Pipeline Generation (PG) or Pipeline Progression (PP)?
And how might a lack of consistent PG & PP be contributing to reps chasing bad business, inflated pipe, and inaccurate forecasts?
If you’re scaling at a CAGR >25%, turnover is >25%, and you want to keep powering the growth engine you’re going to need more AEs.
To keep your SPOC in control you’re going to have to promote green AEs to FLMs who are ill equipped to lead their teams—which in turn, sparks more turnover.
And the virtuous cycle continues…
When you back up and widen the aperture a bit, a new picture will start to emerge and you’ll begin to see that all of these issues are inextricably linked together:
◆ Inconsistent, sub-optimal sales performance
◆ Lack of consistent PG / PP
◆ Low employee engagement / high turnover / burnout
◆ Inflated pipe / inaccurate forecasts
To build a world-class, high-performance sales organization you must build a coaching culture.
To build a coaching culture, you must free up your FLMs time so that they can consistently coach/develop their people.
One coaching conversation executed correctly can save a rockstar AE from leaving, fire up an employee who is burned out, or prevent a tier 1 deal from going sideways.
See the big picture.
Keep Span of Control in control.
Invest in your people and it will continue to pay dividends.