One of the more frequent conversations we have with CEOs is around the right level hire to lead their sales and marketing organizations. The answer is nuanced, requiring an understanding of growth stage, current leadership, product complexity and more but by providing insight into the role differences and the impact each can make, we hope to bring more structure to your talent planning.
First, it is important to understand the difference between a Chief Marketing Officer, Chief Revenue Officer and Vice President level hire. The definition goes beyond the level of experience and is married to scope and accountability.
The difference between a C-level hire and a VP-level hire:
- CRO or CMO: The CMO or CRO is responsible for all revenue and/or marketing functions within the company, which are typically multifaceted. They carry the full responsibility for the company revenue or marketing ecosystems, including the support teams driving revenue operations and retention. The C-level growth leader writes the revenue and market growth plan, decides the organizational design and is accountable for end-to-end execution.
- VP of Marketing/Sales: Owns the responsibility of driving revenue or marketing growth by leading a defined team. Does not take accountability for the full ecosystem and is more singularly focused on direct goals.
Why consider a VP-level hire:
Many early-stage CEOs get wooed by the established C-level leader who has led sales or marketing divisions at well-known companies with enviable marketplace positions. With so much on a CEO's plate, it is hard not to be excited by the idea of moving the full revenue or market growth responsibility to a proven leader with an outstanding track record. But instead of jumping quick into the water with a high-salaried executive, below are a few reasons for early-stage companies to consider a VP-level hire instead.
- Marketplace fit: If your company is still navigating through marketplace fit, having a leader that is deep in the trenches and on the front lines with the clients or customer, is critical. Great C-level hires are always customer focused but their strength lies in their strategic thinking and ability to hire, lead and scale teams. Building a sales and marketing organization is expensive and it is important to have a clear understanding of the market and revenue opportunity before jumping into a large-scale investment.
- Ambition and drive: Ambition, not to be mistaken with ego, is a great thing. Ambitious VP-level hires will shoot for the moon to prove themselves and are hungry to have a big win.
- Lower salary: The cost of a C-level hire can be double or even triple that of a VP-level hire, in both cash and equity.
- Immediate activity: Your VP-level hire typically sits closer to the buyer or the tech leveraged to acquire the customer. They will pull the levers that will result in immediate traction.
When to consider hiring at a C-level:
Making a C-level sales or marketing hire is an investment in large-scale growth and will result in a big market impact. When your company has the financial backing and is ready to scale, hiring the right leadership at this level will bring outstanding returns. Here are a few signals to indicate you are ready:
- Proven revenue streams: The company has found marketplace traction and has an eye on multiple revenue streams.
- Understanding the customer: You are starting to look at multiple customer segments and see opportunities to serve each.
- A maxed executive team: Never wait until you are truly maxed out but be thoughtful of how much you can impact without more leadership support. Moving a large amount of responsibility to a trusted leader frees up space for broader corporate initiatives and growth strategies.
- CEO Experience: Hire for what you don’t know. Consider your background and bring on C-level leaders that will supplement for your gaps.
- You are well-funded: Sales and marketing teams spend money before they make money. Don’t believe that hiring a big market leader will result in immediate market returns. You must be well-funded to see the investment return on this level of hire.
Talent mapping is one of the most important things a company can do, regardless of size or life-stage. Smart CEOs take the time to look a year out and plan for the team that will help realize the company’s vision. Thinking about the level you need, for each stage of the company, will be game-changing in how you recruit. Assembling a well thought out talent plan will allow you to roadmap your way to growth and smartly network for future hiring needs.
