Is Your Services Team Reporting Into Sales? Here Are 3 Reasons Why That's a Terrible Idea.

Do you have a PS organization reporting to a VP Sales? Managing Director of Business Development? Head of LeadGen? If so, you are setting your Services team up for failure.

On the surface, your PS team and sales team may be playing nice with each other, but odds are you probably have people who hate their jobs, resent their leaders, and are trying to rationalize the terrible situation they are in. 

How exactly am I setting my team up for failure?

That's a pretty blunt statement. Let me explain.

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PS and sales, while both are client-facing teams, have different objectives. Sales generates, acquires, and retains revenue. Professional Services provides the execution and build great trusted advisor relationships. These objectives, while interconnected, are different from one another and thus are measured differently. Having a leader who is focused on a sales metric leading a team that is measured by a customer success metric is simply setting everyone up for failure. This type of metric mismatch leads to a common problem where leaders lose objectivity, and they lead their teams down a path that will rarely end in success. I call this the objectivity conflict. 

So what does this type of "objectivity conflict" look like?

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The most common thing I see happening is services initiatives that are designed to boost long-term relationship building takes a back seat to projects that will bring in immediate revenue. Since the team leader is ultimately measured on dollars and cents, logically the team follows the leader to work on things that will boost that metric. It's not the leader's fault. There's no maliciousness here. It's just the simple fact that there's only so much time to accomplish our goals, and we just have to prioritize. It just so happens the accomplishments need to directly feed into a revenue measurement.

The problem is this: Imposing sales measurements on PS is the wrong thing to do, and asking a person who is measured on sales to lead a PS team is an equally wrong thing to do. 

What are the signs that this is a terrible idea?

So how do you identify if you're in this situation? 

  • PS Teams Lose their Voice and Objectivity - When PS initiatives to build great trusted advisor relationships are routinely being deferred for those that generate revenue, then PS teams feel helpless. There's nothing they can do or say that can allow them to do what they know is right for the client, so why try?
  • PS Teams Routinely Become the Organizational Scapegoat - PS teams should always be on the lookout for anticipatory problems, but if they can't solve them because they don't align with revenue objectives, what tends to happen is those problems grow larger and fester and blow up into an eventual revenue problem. Often times, PS teams are blamed for not addressing problems when they are initially identified, but if their leaders explicitly told them to ignore non-revenue issues, then they're put in a place of impossibility. 
  • PS Teams Operate from a Place of Fear and Stop Doing What's Right for Clients - When a PS team feels helpless and are often blamed unfairly for client blowups, then they start operating from a position of fear and regress to just being a dumb tool for sales teams. They will do whatever sales asks them to do because that's how they're being measured now. They stop mining for anticipatory problems. They stop trying to build great trusted advisor relationships with their clients. They stop thinking for themselves.
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I have a sales guy leading a services team... what harm can that do?

Ultimately, it leads PS teams down a depressive spiral and into a place where they are the technical extension of a sales team. That's bad for the organization because we become merely transactional with our clients. Being transactional means we're easily replaceable. Organizational leaders wonder why they can't retain clients, why clients don't refer new prospects, and why clients respond to our phone calls with shortness and disdain. 

Smart organizations know that building an independent PS team that thinks for itself and is focused on building trusted advisor relationships is as important as making the initial sale. It starts with bringing PS to the management table, assigning them unique objectives, and measuring them the right way. 

Next week, we'll discuss some of the ways organizations rationalize putting sales in charge of a PS organization, and how each reason, no matter how seemingly reasonable it may be, is actually completely irrational.