Hiring salespeople is scalable until you get to a dilution point - very similar to the expansion that took place in baseball. When I was growing up in the 1960's, there were 16 teams and expansion made it 20. Today, there are 30 teams and despite integrating more African American players, then Latin players and now Asian players, there isn't enough pitching or depth on most teams. Pitchers with ERA's above 5.00, who never would have made it to a major league team 40 years ago, make 40-50 appearances a year. And hitters that can't run, throw or catch, but hit home runs from the cleanup spot as designated hitters, would never have risen beyond the minor leagues back then.
Earlier today I was interviewed by Hank Walshak for a white paper on Sales Process, Sales Production and Sales Performance. As we discussed sales production - the concept that more salespeople equals more revenue, I explained dilution as it related to Baseball.
First, if you have a complex, expensive product or service and a very limited market to sell to, scaling is inappropriate. You can do with 1 what you can do with 100.
However, if you have a product or service that everyone needs and it is not limited in geographic scope, then it is scalable - but only to the dilution point.
10 should get you double 5
20 should get you double 10
40 should get you double 20
80 should get you double 40
The CEO hires the first 10 - excellent hires.
The Sales VP hires the next 10 - good hires.
The National Sales Manager hires the next 20 - decent hires.
The Regional Sales Managers hire the next 40 - so-so hires.
The Branch Managers hire the next 80 - awful hires.
The more you hire, the worse they get. That's when it's important to develop an effective hiring process that uses accurate, predictive sales assessments.
(c) Copyright 2008 Dave Kurlan