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Many founders claim they want a world-class sales organization but are unwilling to make the tough decisions required. A key litmus test is their readiness to replace an incumbent, underperforming CRO. If a CEO hesitates, it signals they aren't truly committed to building an elite go-to-market function.
CROs are often blamed for missed targets, but the root cause is often a flawed hiring plan from the CEO. Rushing to hire reps without adequate ramp time leads to B-player hires, immense pressure from managers, a toxic "horse whipping" culture, and ultimately, missed numbers.
The most common failure mode for a founder-CEO isn't a lack of competence, but a crisis of confidence. This leads to hesitation on critical decisions, especially firing an underperforming executive. The excuses for delaying are merely symptoms of this confidence gap.
When shifting from a charisma-driven to a process-driven sales culture, leaders must honestly evaluate their team. Some high-performers may not adapt to the new system. Making tough personnel decisions is crucial for successful scaling.
An early-stage sales leader's greatest strength—being the superstar individual contributor involved in every deal—becomes their biggest liability at scale. A hands-on leader must be forced to evolve into a true manager who trusts and enables their team, even if it feels unnatural.
In a conflict between CEO and CRO directives, a CMO's safest tactical move is to side with the CRO. The sales team is your primary internal customer, and their success dictates your success. You can get fired while hitting all your CEO-mandated goals if the sales team comes for you.
When a startup fails due to team issues, the root cause isn't the underperforming employee. It's the CEO's inability to make the hard, swift decision to fire them. The entire team knows who isn't a fit, and the leader's inaction demotivates and ultimately drives away top performers.
Peets' advisory process involves pre-call research on a CEO's sales leadership. If he identifies a CRO with the wrong background (e.g., only large-company experience), he demands their termination as a condition of working together, forcing an immediate correction of a critical hiring mistake.
High-performing CEOs don't hesitate on talent decisions. One mentor's advice was to act immediately the first time you consider firing someone, as indecision only prolongs the inevitable and harms value creation. This counteracts the common tendency for CEOs to be overly loyal or fear disruption.
While founders focus on product or market pivots, the most regrettable decisions are often delayed personnel changes. Waiting and hoping an underperforming team member will improve is a mistake; the moment a founder knows a change is needed, they should act.
Early-stage companies often mistakenly hire a big-name CRO who has managed a $500M business. This leader is unequipped for the hands-on, resourceful work required to build a go-to-market function from scratch. Hire for the job that needs to be done today, not the one a year from now.