The Industry Insider Hiring Fallacy

Written by Chuck Brotman

Chuck is the VP of Sales and Co-Founder of Blueprint Expansion

April 17, 2020

Introduction

Most business leaders see hiring exceptional sales talent as a top priority.  However, many do not understand how to do this consistently.  They focus on the industry experience of a candidate instead of the skills and behaviors needed for success. Let’s look at why this mistake – the “industry insider fallacy” – happens, and how companies can avoid it.

 

The Industry Insider Fallacy

When running sales searches, leaders often look for individuals capable of achieving revenue success quickly. While most sales plan includes runway for new hires to ramp to full productivity, hiring managers think a lot about how to get new additions to the team to exceed those expectations. Given the pressures to achieving revenue numbers, they want their new hires to make an early splash.

Additionally, it’s common for sales leaders to look for people with a background in the company’s industry or software category. The thought process looks like this: “if I can find someone with prior experience in our market, I will be more confident they’ll come with a book of business and ready to close deals quickly. They will onboard much faster and need less management oversight. I’m hiring individuals who can teach us about our own market in the process and provide competitor insights.”

On its surface, this thinking may seem reasonable, but the reality is very different. Hiring for experience or industry background often produces mixed results at best. It reflects a basic attribution error, or a failure to understand the factors responsible for success in given roles. In fact, studies have shown little correlation between previous industry experience and better performance. How can companies avoid this and find qualified talent?

In our opinion, organizations that prioritize skills and behaviors achieve success more consistently. Rather than making decisions based on “what everyone else is doing,” they build assessments into their hiring processes to find the best talent available, irrespective of credentials. They avoid what we’ll call here, the “industry insider fallacy.”

Importance of Hiring Process

In order to understand how the best companies avoid the industry insider fallacy, let’s start with a definition of a hiring process. Put simply, a hiring process is an organized approach to identifying, attracting, and securing talent. It typically begins with an outline of the role needs and compensation levels, but also includes:

  • Mapping out the skills and behaviors needed for success in the role
  • Defining a step-by-step approach to assessing candidates from first screen to close, using some system of record, typically an ATS, for data management
  • Training of process participants, and oversight to ensure these individuals remain consistently involved and unconscious bias is removed during interviews
  • A plan for sourcing and attracting talent, including creation of a job description, publication to job boards, and tactics defined for reaching out to “passive” candidates in the market

At its core, a clear hiring process promotes alignment across an organization on what success looks like from initial recruitment efforts through onboarding and ramp. It’s the cornerstone to execution for any high-performing sales organization, whether a start-up or a mature business.

 

Alignment and Success Criteria

In fact, many organizations overlook the importance of alignment, particularly between recruiters and hiring managers.  In companies using third-party agencies, sales leaders often encourage their managers to run the process solo, “go with their guts,” and tap their own existing networks to attract candidates.  They focus heavily on passive candidates, despite limited evidence that this strategy yields better results.  They put little thought into defining questions in advance to assess skills and behaviors, or ensuring that a consistent number of participants are engaged in a process to cross-validate candidates or deepen assessment in key areas.

Making matters worse, few take the time to identify success criteria in advance. While it may seem obvious that “success” in sales hiring should be based on quota attainment, other factors often get ignored. For example, tracking acquisition costs for new talent and retention rates can provide insight into overall sales costs.  Measuring candidate experience feedback can help companies understand market perceptions that influence their brand. Hiring non-traditional talent outside of tech hubs can reduce costs of compensation. When companies do not define success criteria, hiring implicitly becomes only about who can “hit the ground running.” This leads to an obsession with hiring candidates on industry experience. It makes the search process one-dimensional, and it’s not even assured to support faster revenue success.

 

Skills & Behaviors Versus Experience

In fact, a well-defined hiring process typically makes industry experience a less significant criteria for hiring. Why is this the case?

Strong sales organizations want to understand context.  What was the culture at the previous company that may have contributed to individual sales success, or hindered it? How did the business go to market, work with buyers, and develop sales talent as a whole? For many sales professionals, industry experience may be a sign of a passion for specific types of business problems, but perhaps just as frequently, it could be an indication of a salesperson being reluctant to “leave their comfort zone” and hence continuing to interview with companies in the same market.

Rather than thinking too much about the “relevant experience” a candidate brings to an interview, the best companies look at it as part of an overall evaluation – neither punishing one for industry background, nor looking too favorably upon it without digging deeper.  These companies want to understand:

  • Does the candidate have the required skills to be successful selling to the kinds of buyers we see in the market? In other words, do they exhibit strong verbal communication and writing skills? Do they show an ability to listen actively? What is their approach to time management?
  • What are the behaviors of the individual and how do they align to the core values of the company? Do they exhibit commitment to teamwork? How well do they handle feedback and can they implement it? Are they respectful of others?

Conclusion – Establish Strong Hiring Process

Hiring great talent for sales – like selling itself – must be anchored in a clear and repeatable process for all participants. By establishing this early and aligning it to finding the skills and behaviors needed for success in a role, most companies will find themselves less likely to make the industry insider fallacy. Empowered by the confidence in their process and their commitment to measuring results over time, these become the most exceptional companies capable of attracting the best talent imaginable across the country.

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