Episode 66: What is WRONG in the World of Sales with Alex McNaughten

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And engaged teams, stronger sales teams is right where you need to be. Welcome to Stronger Sales Teams, the place where we provide real world and practical advice to help you develop super powered sales teams today. From just over the other side of the ditch to us here in Australia, we have Alex McNaughton coming in hot from New Zealand. Well, it's New Zealand at the moment, but I know it's soon to be San Francisco as Alex's fantastic new business starts to take shape and dominate the world as we hope it does sometime soon. But before we get into that, Alex, he's the co founder of his business and co CEO of Grow. So it's GRW AI rather than Grow Grow AI and this is a team performance platform. So Alex's business with Grow, it's all about solving frontline management and coaching gaps across the sales organization. Fantastic place to be. Very topical at the moment when we see revenue growth being such a huge focus once again on businesses. But prior to that, and I think this is where Alex is really impactful in the messages that he delivers. He was a seller, he was a sales leader, he was a founder not once but twice and has been supporting revenue teams across his entire career. So first of all, Alex, welcome to the podcast and thank you for coming on.

Ben, thank you for having me. Great to be here.

My pleasure. Please tell me a little bit about Alex McNaughton about your journey and what's happened the last 15 years or so in your career. Sure.

So as you can probably tell from my accent, muddled accent, originally from London, but have lived in New Zealand for about half my life. Fell into the world of sales like we all do. I don't think many of us say, yes, I want to be a salesperson when we're 18, 19, but I fell into sales. I was the first sales hire at a tech startup, fell in love with the profession. I Ended up the VP of sales at this tech startup. Given the nature of startups and how quickly things grow. And I caught the bug and I've been in the profession ever since. After that did two corporates and then another growth company in various sales and leadership roles. And then the last five years I've been building companies to support the sales and revenue function and my two prior businesses worked across about 150 companies. Everything from pre rev through to publicly listed corporate and everything in between, helping them build, develop and transform their sales and revenue functions. And it was all of that learning over 11 ish years as a seller, then leader and then serving the profession that we earned the insights that we're now applying to grow AI.

And I think 150 companies having worked with is a really good baseline to bring something new and different and better to the wonderful world of sales. Could you please tell me a little bit about grow? And I'll repeat that again, it's GrowGRW AI for those that are interested. Can you tell me a little bit more about grow AI?

Yeah. So there's a lot of dysfunction in the sales and revenue org right now. And you know what really got my attention when I started diving into were a few headline stats which is 39% quota attainment, 14 month average tenure of a sales professional. Less than a third of sales professionals getting any coaching despite the fact that 84% of managers think they're coaching their teams. And you know, I could rattle off stats all day but really it's broken and that's what we set out to solve. The specific part of that mess that we're focused on where we think there's a massive opportunity to level things up or in two key areas, the frontline managers who are unsupported, who are, you know, typically the best salesperson who is promoted and then given a pat on the back and it's like good luck, you've got 10 reports. And that's the extent of their support and enablement. And as a result of that their teams aren't getting coached. So those are the two areas we're focused on. Is so supporting frontline managers to be excellent leaders whilst at the same time ensuring that their teams are getting excellent, high quality one on one coaching delivered by our AI.

Such impactful numbers. Can you repeat those again? The percentage of employees that feel they are getting coached versus the percentage of leaders who feel they are coaching. Really powerful numbers.

Yeah. So less than a third of salespeople are getting regular coaching despite that over 80% of sales managers think they are coaching their teams. And that's interesting because it shows that sales managers have no idea what coaching is. And that's not a slight, by the way, because. And here's another fun fact, 95% of sales managers have never been given any sales management training whatsoever. Yeah, and this was my experience. I was 19, then suddenly I think I just turned 20. And I now have a team at this point and I've got direct reports. No one showed me how to run a team. No one showed me what my week should look like or how to coach and develop them or any of that. And that's the experience for most people who are leading these sales teams.

And look, I definitely don't disagree with those numbers. There is a huge gap in competency training being provided to sales leaders. Exactly because of what you said. You are really good at being a frontline salesperson. Let's throw you in the deep end as a leader and see how you go. You'll work that out too. Everything will be fine. I certainly do think that there is a percentage of coaching training first and then coaching that happens from sales leaders that employees may not recognise. There's often really good coaching happens when you don't even believe you're being coached. So I suspect of that big gap, there's a percentage of coaching not being recognised, but there's certainly a big chunk of coaching actually not happening. And it's not because people don't have the will to do it, but they're simply short the skill. That whole will and skill model exists in droves here around being able to prepare yourself to coach at the right time and with the right content.

Not just the will and skill, but also just the sheer time.

Yeah.

You know, your average manager has 9.7 direct reports, so 10, you know, as near as makes no difference, 10 direct reports. With all the other things that you need to do to run a sales team coaching, often you just run out of time to do it as much as you'd like. We know that sales training is impactful only if it's retained. And the problem with sales training is most of it after the first month is forgotten. And you need that continual reinforcement. And we know that regular sales coaching increases performance, depending on who stats you believe, between 25 and 40%. So there's a massive amount of untapped revenue potential here in these teams, as well as being able to keep teams together longer if we get this right.

Yeah, absolutely. And those stats you're going through, I agree with you. They're not Necessarily the same everywhere you look, but thematically, no. Thematically very much important. And so I think that's what we're going to talk about today. And those who know me know that I will almost always look forward, solution focused. Let's look at the positive of what's going on. But we're going to flip the script a little bit today and we're going to talk about what's wrong with sales right now. And for those listening whose shoulders have just dropped, I promise we will flip that back to how we can see it improve again and return to the. Do we call it return to the glory days or perhaps we say get to the top of the mountain again. But let's start with your perspective around what you think is wrong in sales right now.

Look, there's lots of things, I think part of this has been created in a cheap money environment where it was very cheap just to throw bodies and throw volume at the problem. So, you know, if we look at how we've approached outreach with the predictable revenue model over the last however many years that's been running, let's say for simplicity sake, last 10 years, it's probably a bit less than that where we've had this sort of mass outreach approach, very inexperienced people as SDRs calling and sending out a lot of emails and then hand over to A's, etc, etc, that's kind of been the model, particularly in sas. Well, it did work for a time where you could just throw more bodies and volume at the problem. Now though, budgets are shrinking, money is more expensive and the bar has been raised in terms of what good looks like, what buyers expect now. And also what happened during this time period is we stopped investing in our sales teams. So a lot of the sales training programs that even bigger companies like this still, don't get me wrong, there are great companies out there that do good stuff. But if I talk about, broadly speaking, a lot of these kind of sales training programs or sales academies at these organizations just disappeared and there was this lack of investment in their sales professionals. So, you know, now if we look at the state of the nation as we've got a fairly young sales force who hasn't been well trained, they haven't been well developed, they've changed jobs every 14 months whilst at the same time our buyers are expecting more from us. And you know, it's all happened kind of gradually, bit by bit. And I think a lot of companies are really feeling it now when, you know, interest rates have more than tripled and money is not so cheap. And people are evaluating their spend a lot more carefully.

So we're four years since COVID hit, it's been quite some time now. And I think what we're starting to see is changes that were temporary become permanent into businesses. And we've obviously seen a couple of role changes during those times. So a lot of that really good knowledge around training around how to grow teams that existed at a micro level within businesses has disappeared because we're two or three rolls through. And I'm working with some companies at the moment where they have had such significant loss of IP in their business that they're actually needing to start again when it comes to their sales training and coaching programs, which is a disastrous situation for a business that's reliant heavily on the quality of their sales consultations. If that's your bread and butter and you're having to reinvent the wheel post the COVID era, then you're in trouble, right? You're behind everyone else and needing to look at some other points of competitive advantage. But more importantly than what I think, how did you come to the realisation about what is wrong with sales these days?

I'll just add one more thing before I answer that that I'd forgotten to mention is we've also sprinted towards remote selling and it was already gradually happening, but now we've sprinted towards it and it's much harder to develop a sales team when you're not with them in an office environment from a coaching and development perspective. And I think that's another factor that's that's been in the mix here that was accelerated with the pandemic. So anyway, that's just something I forgot to mention prior to answer your question, like where have my opinions come from? Seeing it again and again and again, like working with these organizations, you know, originally as a seller, then a leader and then working with these companies and just seeing the same challenges again. You know, seeing frontline managers struggling, seeing sales people, you know, not getting development. And then, you know, my prior company to this Apprento was a hybrid sales recruitment and sales training company. And we saw that the results of running three month coaching programs alongside new hires cut new high failure rates to less than 3% as well as half ramp times. So, you know, then I saw the flip side of it in terms of like, well, what works? Like how can we change things? How can we do things better? That's a simple example. So yeah, that's really where a lot of this has come from. It's like just doing it, seeing it Solving it, you know, just noticing the patterns across, you know, 150, maybe more. I've sort of lost track after 100, to be honest, but sort of a.

Lot of companies, there is no substitute for boots on the ground. And I want to talk more about what's changed. But before we do, digress, and I think I'm going to digress back to what you spoke about, that teams are sprinting towards a hybrid model. And to me that doesn't necessarily mean everything's being done by video, but it certainly means that we're having less and less time together in our offices being able to workshop ideas, being able to solve problems and generally progress as a team. How are you seeing sales leaders who are succeeding at handling the drive towards a remote workforce? How are you seeing sales leaders handle that successfully?

I think structure and consistency of like how they're setting up their teams, their weeks, their cadences, what they're measuring, how they're approaching development. I think consistency is probably the theme around it is consistency and structure because obviously it's easier to, you know, jump in and provide coaching if you're sitting next to someone. It's a lot harder if they're 1,000 miles away. So yeah, I'd say those are the areas. And then what I definitely see is that they are bringing their teams together throughout the year, even if it's a couple of times or quarterly, but they are making sure that they try and bring everyone together at points in time because I think that can really help from a cultural perspective.

Yeah, there's no doubt that if we can break bread and go through challenging situations together. I've just run a workshop two weeks ago and it was all about dealing with uncertainty as a team. I threw them into situations where the answers weren't clear. They had to listen to multiple voices to get to a conclusion. And what I saw was this team hasn't been together in 12 months. But what I saw is that they really struggled not to solve the problem, but to work together. When they were face to face, when they couldn't take a moment to go and read their emails, when they couldn't put their video, turn their video off. Oh my God. What happened to connection? I lost my video for a minute right when they couldn't mentally chop out for a few minutes and they had to actually solve the problem through interpersonal dynamics and logic cheated this team work hard and by the end of the two days together they were exhausted. They were as tired as I have ever seen a sales team on a two day workshop. In my life. But, gee, they made some ground about learning how to work with each other. And the key for them now is, as you said earlier, is to make sure they don't lose that information, that ability four weeks down the track, and that they can really embed it. So, yeah, absolutely agree with you. Okay, so let's talk about then, what's changed? So we've seen the bad, we've seen why you think it's happening, but what's actually now changing in the sales world.

To work through this information is so much easier to get now. So our buyers are a lot smarter than they used to be. So, you know, I think salespeople used to be able to be information providers, and that was obviously the best. I think the best salespeople have always been operating fairly similarly. But if we look at like, again, averages, you know, you could just kind of feature dump and sell based on features and functionality and be an information provider to your buyer. That is definitely no longer the case. There's also an increasing percentage of buyers who don't want to deal with salespeople. However, what is interesting in the data is that although more buyers don't want to deal with SalesPeople, it's about 70%, 60 to 70% of buyers don't want to deal with the salesperson. Those that aren't dealing with salespeople are getting worse results and outcomes post their buying experience. So what does that say? To me? It says the role of the salesperson is still very much important and valuable. However, we're not showing up well enough right now because our buyers don't want to talk to us. So there's a massive opportunity there for salespeople to level up in terms of, and I guess the provocation I always try and give salespeople, what I used to do when I was coaching them one on one or in groups, was if you're just providing information that they can read in a document or read on your website, you're not adding any value in the process. You've got to be more than that. You're not just a brochure. If it could be read in a brochure, you need to be more than that in the conversation. So, you know, I think this is going to continue is that the demands of salespeople to be more consultative, to be able to add value outside of just knowing about their product, will continue to increase, particularly as information is easier to get hold of.

I haven't heard that one before, but I love it. If it can be read in a brochure, there's no point having the consult. I'm going to paraphrase what you said and genuinely, we've heard a lot, I think, over recent years about providing value. So it's not just about features and benefits, but it's about providing value. I'm certainly at the moment are working really heavily around outcomes, providing really strong outcomes, which is your value in overdrive. Have you seen a shift yet in businesses you're working with being able to focus on value and outcomes at a generic level or it's still really taking time to work through?

I would say the best organizations have been focused on outcomes for a while and I'm definitely seeing that which is good. And the best top performers are definitely about, you know, focus on that. They're able to have an outcomes conversation. They're able to have a commercial conversation with a customer and then also add value beyond just selling the thing, but also through things like connections, through, you know, curating information can be useful, by the way. So, you know, curating the right information for someone is valuable. So, yeah, I definitely. And then I guess probably only like one other point that's like, worth touching on here is like, there's a lot of talk in sales and AI that, you know, what happens to salespeople in a world of AI and you know, automating SDRs, etc. Etc. And I think, and I was speaking to Todd Cappone about this recently, and I know he's talked about it a lot, is every technology wave that happens, we hear, oh my God, this is the death of salespeople. Every single one. If you look back the last hundred years, he did a brilliant post about this recently, actually, and he's written about it quite extensively. But every single technology revolution, whether it was like catalogs, whether it was E commerce, you know, et cetera, et cetera, we always hear that's the death of the salesperson. What actually happens is that sales evolves, but the number of salespeople has continued to increase. And I think it's going to be the same here. I'm actually very confident that it is, is that sales will evolve, the expectations of the salesperson will be different. But I don't think salespeople are going anywhere. I think what will disappear is that the salespeople who aren't embracing the new technologies will get outperformed by those who are so AI. You know, salespeople that are utilizing AI and utilizing the right tech, they will continue to thrive and flourish. But those who don't embrace change, I think they will go extinct.

Well, there you go. You heard it firsthand from Alex McNaughton. Salespeople are not soon to be extinct. And for what it's worth, this podcaster over here fundamentally agrees with you. We will evolve and move to the next generation of what great relationship building and consultative selling looks like. So thank you very much alex for today. GrowGRW AI, where can people find you apart from that website?

Best place other than that is LinkedIn. Alex McNaughton I'm on X but not as active on there. So yeah, LinkedIn's the best place to find me. Excellent.

For those listening, encourage you to check out Grow AI. I know Alex has huge ambitions for this business and it's going along very well from all reports, so well, he's off to San Fran very soon to continue the growth of the business. So thank you Alex, very grateful for your time today. Some really nice insights, but particularly I think the key message for me to take away is don't fear that your sales role or the roles of people in your team are soon to be extinct, but make sure you're evolving, coaching and learning along that journey to stay ahead of the tech change and that next generation of selling. So thanks again Alex, and for everyone else, keep living in a world of possibility and you'll be amazed by what you can achieve.

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