HBR On Leadership: Episode Summary – "How CEOs Make or Break Sales"

Release Date: March 5, 2025
Host: Harvard Business Review
Guest: Christoph Sen, Marketing Professor at INSEAD

Introduction

In the episode titled "How CEOs Make or Break Sales," the Harvard Business Review delves into the pivotal role CEOs play in B2B sales dynamics. Hosted by Kurt Nickish, the discussion features Christoph Sen, a marketing professor at INSEAD, who uncovers the intricate ways CEO involvement can influence sales outcomes. Drawing from years of research, Sen categorizes CEO behaviors into five distinct archetypes, exploring their effectiveness in fostering successful client relationships and driving business growth.

Overview of the Episode

The episode opens with a compelling scenario illustrating the delicate balance required when a CEO engages in sales negotiations. Kurt Nickish sets the stage by highlighting how CEO involvement can either propel a deal to success or derail it entirely. Christoph Sen introduces his research on CEO behaviors in B2B relationships, emphasizing the discovery of five archetypal roles that CEOs adopt during sales processes.

The Five Archetypes of CEO Behavior in Sales

Christoph Sen identifies five distinct CEO archetypes based on their engagement in relationship building and revenue seeking during sales interactions:

1. Hands Off / Not My Problem (28% of CEOs)
2. Loose Cannon (21% of CEOs)
3. Social Visitor
4. Dealmaker
5. Growth Champion (14% of CEOs)

1. Hands Off / Not My Problem

• Description: CEOs adopting this approach deliberately avoid direct involvement in customer relationships, trusting their sales teams to manage these interactions.
• Insight: Contrary to expectations, 28% of CEOs fall into this category, choosing not to engage with customers directly.
• Impact: This detachment leads to a lack of frontline awareness, akin to a general unacquainted with the battlefield, potentially hampering strategic insights and overall company performance.
• Notable Quote:

  "It's like a general who will never engage with the troops on the front line and also doesn't pay attention to what's going on on the battlefield."
  — Christoph Sen [04:56]

2. Loose Cannon

• Description: CEOs in this archetype engage with customers unpredictably, often without adequate preparation, leading to hasty and potentially detrimental decisions.
• Insight: 21% of CEOs exhibit this behavior, described metaphorically as "seagulls" that create chaos and leave a messy aftermath.
• Impact: Such unpredictability results in unfulfilled promises, damaged relationships, and increased frustration among account managers.
• Notable Quote:

  "These senior executives... make unsound agreements. They create a highly damaged relationship."
  — Christoph Sen [06:07]

3. Social Visitor

• Description: CEOs focusing solely on relationship building engage in superficial interactions without addressing substantive business issues.
• Insight: While fostering goodwill, this approach neglects the core business dialogue necessary for deep engagements.
• Impact: Leads to missed business opportunities and frustration among sales teams expecting meaningful discussions.
• Notable Example:

  A CEO visits a customer alone without functional experts, resulting in only small talk and missed business talks.
  — Christoph Sen [10:01]

4. Dealmaker

• Description: CEOs intensely focus on closing deals, intervening when significant revenue opportunities arise.
• Insight: Though effective in securing individual deals, this strategy is not sustainable for long-term relationship building.
• Impact: May result in short-term gains but can backfire, leading to customer attrition and damaged reputations if overused.
• Notable Example:

  One CEO's exclusive dealmaker approach led to short-term success but ultimately resulted in his dismissal as the company was sold.
  — Christoph Sen [09:54]

5. Growth Champion

• Description: The most effective archetype, Growth Champions balance relationship building with proactive revenue seeking, fostering long-term, profitable partnerships.
• Insight: Representing 14% of CEOs, Growth Champions engage deeply with strategic customers, investing in mutual growth and sustained collaboration.
• Impact: Demonstrates the highest levels of growth and profitability, ensuring both customer satisfaction and company success.
• Notable Quote:

  "If you really follow that growth champion role, you're creating a positive environment... for your sales team."
  — Christoph Sen [14:39]

Impact of Each Archetype on Sales and Profitability

Christoph Sen's research quantifies the performance implications of each CEO archetype:

• Hands Off:

  • Impact: Negligible or slightly negative on profitability.

• Loose Cannon:

  • Impact: Marginally better than Hands Off, with minor growth and profitability increases.

• Social Visitor & Dealmaker:

  • Impact: Both generate approximately twice the growth and three times the profitability compared to Loose Cannon.

• Growth Champion:

  • Impact: Yields the most significant and sustainable growth and profitability, substantially outperforming all other archetypes.

Notable Summary Insight:

"Growth and profitability would by default mean that the relationship is progressing, showing good signs of growth and profitability."
— Christoph Sen [16:23]

Managing Different CEO Styles

The discussion transitions to strategies for addressing CEO behaviors that may hinder sales effectiveness:

1. For Hands Off CEOs:

   • Strategy: Encourage engagement by demonstrating the missed opportunities and fostering awareness of frontline dynamics.

2. For Loose Cannons:

   • Strategy: Implement protective processes to shield the salesforce and establish protocols for executive involvement. For instance, allowing sales teams to request executive sponsor changes when necessary.

3. For Social Visitors and Dealmakers:

   • Strategy:
     • Social Visitors: Pair with a strong dealmaker to balance relationship building with revenue generation.
     • Dealmakers: Integrate role-playing or mentorship to cultivate relationship-building skills.

4. For Growth Champions:

   • Strategy: Promote this archetype as the ideal standard, encouraging more CEOs to adopt a balanced approach to relationship and revenue management.

Notable Quote:

"You cannot just delegate the deal maker role to your CEO every single time. So you can apply this role probably only every now and then."
— Christoph Sen [09:50]

Recommendations and Best Practices

Christoph Sen offers actionable recommendations for organizations aiming to enhance CEO effectiveness in sales:

• Identify CEO Archetypes:
  Conduct assessments to determine which archetype your CEO aligns with, using exercises that plot interactions based on relationship and revenue dimensions.

• Educate and Align Leadership:
  Encourage senior leaders to understand the benefits of the Growth Champion role and facilitate training to develop these capabilities.

• Balance Roles Within Leadership Teams:
  If a CEO leans towards dealmaking or social visiting, delegate complementary roles to other team members to ensure both relationship and revenue aspects are covered.

• Foster a Customer-Centric Culture:
  Develop processes that support strategic customer engagement and protect the salesforce from erratic executive involvement.

Notable Recommendation:

"The best way is certainly that you want to make sure that you simply educate your senior leaders."
— Christoph Sen [23:08]

Conclusion

The episode underscores the critical influence CEOs wield in shaping sales outcomes within B2B contexts. Through Christoph Sen's insightful research, it becomes evident that while various CEO behaviors can affect sales dynamics, the Growth Champion archetype stands out as the most effective in driving sustainable growth and fostering strong client relationships. Organizations are encouraged to assess and cultivate CEO engagement strategies that balance relationship building with proactive revenue seeking to unlock their full sales potential.

Key Takeaways

• CEO Involvement Matters: Active and balanced CEO engagement is vital for successful sales outcomes.

• Five Archetypes Identified: Understanding whether your CEO is a Hands Off leader, Loose Cannon, Social Visitor, Dealmaker, or Growth Champion can inform strategic adjustments.

• Growth Champion as the Ideal: CEOs who effectively blend relationship building with revenue seeking significantly enhance growth and profitability.

• Strategic Management of CEO Roles: Organizations must implement strategies to align CEO behaviors with optimal sales practices, ensuring sustained business success.

Notable Quotes

1. Christoph Sen [04:56]:
   "It's like a general who will never engage with the troops on the front line and also doesn't pay attention to what's going on on the battlefield."

2. Christoph Sen [06:07]:
   "These senior executives... make unsound agreements. They create a highly damaged relationship."

3. Christoph Sen [10:01]:
   "...they sit there with the whole entourage. But the CEO of the supplier company comes all alone... it's a missed opportunity."

4. Christoph Sen [14:39]:
   "If you really follow that growth champion role, you're creating a positive environment... for your sales team."

5. Christoph Sen [23:08]:
   "The best way is certainly that you want to make sure that you simply educate your senior leaders."

This comprehensive summary encapsulates the core discussions and insights from the "How CEOs Make or Break Sales" episode of HBR On Leadership, providing a valuable resource for leaders aiming to optimize their sales strategies through effective CEO engagement.