By: Regina Heffernan
In 2021, approximately 30% of Aequitas Partners’ total searches were related to Sales and Growth roles ranging in titles from Head of Commercial, to Vice Presidents of Business Development, Sales or Strategic Partnerships, to Chief Revenue Officer and Chief Growth Officer.
This trend is consistent with the demand we have seen in the marketplace as well as companies shifting from recovery mode to growth and retention. We have multiple resources available to support this notion as well, including our Annual Digital Health Compensation Study, that includes survey data from over 1000 senior executives across Healthcare IT and Digital Health, and breaks down the median ranges across Sales and Growth and across base salary, incentive compensation, and equity.
The study identified that the Sales and Growth function (not an individual contributor) is one of, if not the most highly compensated functions regardless of the stage of the company. Whereas, individual contributors (a professional whose role doesn’t include the management of others) tend to earn more through incentive compensation rather than base.
The study also reported that individuals within Sales/Growth functions negotiate more compared to virtually all of their other functional counterparts, and as a result, rake in an 11.7% increase in salary. Additionally, 36% reported being committed to their current roles for the next year or longer and 30% disclosed they would listen if approached for another opportunity. This aligns with the major game of musical chairs we’ve seen in this funciton for the last 18 months.
Recently, when speaking to potential candidates, multiple people shared that they are getting slammed with opportunities and receiving roughly 5 new inbounds a week on new roles, just in the first 6 weeks of the year.
Currently, on our Health Talent Exchange, there are over 220 open Sales and Business Development, and 100 Marketing and Communications positions. This democratized platform connects organizations that are actively hiring with people who are passionate about careers in healthcare, and is reflective of the remarkable demand for talent we’re seeing across the spectrum.
When I started at the firm, we were in the thick of multiple senior Growth related searches. Coming from the health plan world, I knew I needed to quickly familiarize myself with the way Sales teams in startups were structured and how to best identify the perfect candidate for these complex engagements.
I found myself asking things like: ‘How is a Chief Growth Officer different from a Chief Revenue or Sales Officer? How do these roles and responsibilities need to change as the company scales? When do Founders know it is the right time to hire a VP of Sales versus their Chief Commercial Officer?
As I became more familiar with our business, I also observed a similar question set from our clients as they thought through their needs. It is critically important for them and our team to be aligned on what we’re looking for in order to identify the best qualified candidate who also mirrors the core values of the company. Many of our scoping sessions revolved around delineating between all the possibilities.
Early on, I cornered our Founder and Managing Partner, Tim Gordon, and asked him what the most common misconceptions he’s seen amongst clients hiring for these roles are. He shared, “One of the hardest things for folks to figure out is whether they need to hire a senior executive that flies solo for a while before building a team, or whether they need more direct management right away. C-suite leaders are quite accustomed to managing managers, so sometimes being a Series A company still refining GTM and confirming product-market-fit, you’re just not there yet. You really need a Head of Commercial who can dive in with you as a thought partner on those questions, all while building a pipeline and setting up the infrastructure so that you’re ready when it’s time to hire the team. That’s just one example, but growth is on everyone’s mind for obvious reasons, and what you need is very situation-specific.”
As part of our process, we collaborate with our clients by first understanding their needs, issues, goals, and strategies to lend our industry expertise and assist in determining the appropriate role and title, qualifications and key attributes, and salary range that aligns competitively in the market by utilizing our aforementioned Compensation Study as a benchmark. This information is crucial as we go through a series of ongoing conversations with our clients discussing areas including but not limited to: target audience, existing networks, industry background, experience selling into specific markets and segments, and involvement in team building versus being an individual contributor. This information and direction then helps our team in developing comprehensive market research and speaking to the right potential candidates.
In a competitive market, it is important to understand the nuances across roles to best position yourself as an executive seeking somehting new, and as a company to optimize your budget when building out the executive team.
As a quick reference, here are the key differentiators to consider when considering hiring across the growth function:
CGO & CRO are quite often synonymous and interchangeable. Here, we’re usually talking about someone who owns all revenue, and thus tends to have Sales, Marketing, Business Development and Account Management reporting to them. In those cases, you’ll often see VPs of each of those subfunctions report to the CGO/CRO
Chief Sales Officers more commonly look like extremely seasonsed sales leaders. They know how to build and run sales organizations, and will have everything related to new logo acquisition within their purview. It also infers a certain size organization, meaning it’s likely that multiple VPs of Sales running distinct sales team will be reporting to this person.
Head of/Chief Commercial Officer indicates to us that the organization is looking for a strategic leader who is also a builder, and who excels at “figuring things out.” i.e. What’s our GTM, customer segmentation, early messaging, VoC feeback loop, etc., and suggests efforts that come ahead of a replicable sales process suited for ramping a sales team.
Vice Presidents of Sales can take two forms. The first, is what’s often referred to as the Player/Coach, frequently seen as the first growth hire who gets some initial lift for the organization by winning a few deals and getting the pipeline filled, before turning their sights on hiring a sales team which they then lead. Alternatively, VPs of Sales can also join as a leader of a sales team straight way, with no “player” expectation, solely focused on building and scaling a sales organization to meet revenue targets.
Vice Presidents of Business Development tend be senior, strategic individual contributors. Historically, the title would suggest a focus on indirect sales, i.e. channel sales, or strategic partnerships, but has evolved to mean a strategic deal shaper that excels in ambiguous, unstructured settings, and can “create” before a sales process becomes repeatable. A good way to think of it is that BD is Sales, but Sales is not BD.
There’ clearly a great deal of nuance among these roles, and there’s even some extra ones that don’t fit neatly into what we covered here. Knowing where you need to invest starts with understanding what you’ve got and where it hurts. Going to market unsure of what good looks like, in this environment, is likely to lead to a lot of frustration. If you’d like to chat with us about how to approach this, we’re always happy to. If your curious about how this all ties in to some of the broader trends we saw in 2021 and that we’re predicting for 2022, you can check that out here.