By Adelaide Maffey, Bespoke Partners, and Tony Fogel, TriSearch

Taking on a leadership role as a new executive means inheriting an existing team. This transition is as exciting as it is daunting. With new perspectives and strategic visions in tow, the true challenge lies in unlocking the full potential of your organization, starting with the foundational middle management layer. This blog will delve into when to hire middle managers, the current hiring trends, and their critical role in fostering value creation.

When to Build Your Leadership Engine

The compulsion to quickly fill vacancies can be strong for any new leader. However, it’s crucial to curb the rush to make immediate hires within the first 30-90 days. This period should be dedicated to assessing organizational needs, identifying critical gaps, and determining priorities for key hires.

Initially, the focus should often be on securing direct reports, like functional leaders, or a chief of staff, to establish a robust support system. New executives must navigate common pitfalls such as prioritizing urgency over cultural fit or forming a team of individuals who reflect their own thinking and style too closely. Making informed decisions on organizational structure, required candidate profiles, and skills takes time but will help reduce the financial cost and wasted time of bad hires.

Navigating the Hiring Landscape: Current Trends

As the talent market intensifies, the demand for skilled middle managers has seen a parallel rise with C-level placements. Companies are recognizing the value of both strong C-level leadership and competent middle managers who can execute the vision and keep high-performing teams engaged. Harvard Business Review* research shows a 23% increase in managerial roles between 2005 and 2020, alongside rising wages and we have seen this trend continue in the current market. Anticipating organizational needs, securing budget approvals, preparing compelling job descriptions, and building talent pipelines will help organizations effectively ride this wave.

Notably, there is a significant shift in hiring focus from merely valuing experience to emphasizing skills. Pinpointing the exact skills necessary for each role is now paramount because these competencies directly influence an individual’s ability to perform and innovate within their position.

For example, a job description for a Marketing Manager might be:

Companies poised for success excel in identifying and evaluating these specific skills. This approach not only ensures a precise match for current needs but also aligns with the company’s strategic goals, setting them apart in a competitive landscape. While experience provides context, it is the skills that drive performance and future growth.

The Unsung Heroes: The Value of Effective Middle Management

Middle managers are often the unsung heroes within an organization. Their role is crucial in bridging the gap between executive vision and operational reality. These managers bring a unique skill set that amplifies the effectiveness of the entire management structure.

Here are some essential attributes to look for in potential middle management candidates:

Both sets of research are showing evidence of a closely related trend: emphasis on GTM leaders with a focus on customer retention.

Enhancing the relationship with existing customers enables revenue growth without new customer acquisition costs, a proven formula for capital-efficient growth.

This strategy has given rise to the Customer Success function in many companies and Bespoke’s data shows increasing recruiting interest in these roles and for CROs with a track record in customer retention. These GTM team members own renewal transactions and generate upsell and cross-sell opportunities by enhancing the engagement with customers after the initial sale.

*Source: Rand, Ben. “More Coaching, Less Commanding.” Harvard Business Review, 2024, [https://hbswk.hbs.edu/item/the-middle-manager-of-the-future-more-coaching-less-commanding].

Zhang, Letian. “The Changing Role of Managers.” American Journal of Sociology, vol. 129, no. 2, 2023, pp. 439–484.

Author:
Adelaide Maffey
Vice President, Strategic Partnerships

Adelaide has more than 11 years of experience in management consulting in the technology sector, including extensive work in private equity backed companies. As the VP of Strategic Partnerships, Adelaide engages the Bespoke team with industry partners to deliver tailored solutions for clients and to drive strategic projects.

She previously held roles at Bespoke focused on human capital management, talent assessment and development, and business operations. Prior to joining Bespoke, Adelaide was a program management consultant with Booz Allen Hamilton.

Author:
Tony Fogel
President & Co-Founder
TriSearch

Tony began his relationship with TriSearch as a client when he was a CHRO. He partnered with Co-Founder and CEO Bob Aylsworth to design a new type of recruiting model, ultimately called Customized Partnership Recruitment (CPR). CPR was a huge success for Tony’s organization and adopted by many other companies. Tony later joined the TriSearch board, and as of January 2020, stepped into a Co-Founder and President role for TriSearch. Tony brings over 30 years of progressive HR and Talent Acquisition experience. He spent his first decade progressing up the ranks at PepsiCo before transitioning to Financial Services by joining Morgan Stanley where he led global technical recruiting before being promoted and assigned to Europe to lead HR for investment banking, private equity, equities & fixed income.

He joined Lehman Brothers to lead HR for Europe and ultimately completed his service as the global head of HR for private equity, asset management and private banking. Post Lehman Brothers, he has been the CHRO of two public companies and two private equity backed organizations. While at Ciber, an IT services organization, he held P&L responsibility as the leader of their IT staffing organization that placed IT consultants. As President, Mr. Fogel is responsible for ensuring TriSearch is continuously improving, and at the forefront of Talent Acquisition technology, process, and client satisfaction.

By Matt Sommi, Bespoke Partners, and Rahul Puri, SBI

The good news is that most CEOs see growth ahead and are happy with their growth strategies and operations.

The not-so-good news is that far fewer CEOs are happy with the Go-to-Market talent executing on those growth plans.

These recent research findings underscore a significant spike in GTM leadership turnover appearing in the latest talent market data.

Our companies, Bespoke Partners and SBI Growth Advisory, just released a new batch of research that highlights the conundrum facing leaders as they look forward to growth in 2024. Both sets of research focus predominantly on companies with private equity sponsors.

Simply put, the tools are in place, but trust in talent is lacking.

Let’s dig into the findings and consider how companies can address GTM talent shortcomings.

Further, SBI’s data shows that most CEOs have confidence in their GTM strategies, Product-Market Fit, Operating Models, and Technology Infrastructures.

But the optimism is tempered by concerns over talent.

Specifically, more than 80% of the surveyed leaders view talent as a critical factor for execution on growth plans.

Addressing the Talent Gap

SBI’s report indicates that the majority of CEOs are focusing on addressing the gap in talent by managing out lower performing GTM staff and hiring in better performers.

Indeed, talent market data verifies this trend, especially among senior GTM leadership.

Guidance from clients is that this spike in turnover is being driven by the need to uplevel GTM teams. The trend aligns with SBI’s finding that CEOs are relying heavily on new hires to fill the GTM talent gap.

GTM Skills in Demand

The trend begs the question: if present talent does not inspire confidence, what are CEO’s looking for?

Bespoke’s research indicates that software and SaaS companies are increasingly focused on recruiting GTM leaders with strong track records in driving capital-efficient growth, to grow revenues while using resources wisely to enhance margins.

This is in contrast to the “landgrab” strategy that has been common in years past, based on the idea that grabbing market share is key almost at any cost because profit will follow once customers are engaged.

SBI’s research focuses on companies beyond software and SaaS but it still indicates a similar trend, with a rise in CEOs who say they want to accelerate growth without increasing expense.

Both sets of research are showing evidence of a closely related trend: emphasis on GTM leaders with a focus on customer retention.

Enhancing the relationship with existing customers enables revenue growth without new customer acquisition costs, a proven formula for capital-efficient growth.

This strategy has given rise to the Customer Success function in many companies and Bespoke’s data shows increasing recruiting interest in these roles and for CROs with a track record in customer retention. These GTM team members own renewal transactions and generate upsell and cross-sell opportunities by enhancing the engagement with customers after the initial sale.

Success Factors

The research and analysis from SBI and Bespoke indicate several critical considerations for GTM success in the evolving environment. They include:

Author:
Matt Sommi
Senior Vice President

Based in Philadelphia, Matt helps lead Bespoke’s client engagement  efforts across the firm’s suite of services.

Prior to joining Bespoke, Matt spent 8 years in research and business development at GLG, supporting private equity due diligence efforts and building relationships with GLG’s middle market private equity firms. 

Author:
Rahul Puri
Partner – Growth & Private Equity Practice Co-Head
SBI, The Growth Advisory

Strategic leader responsible for driving initiatives from ideation to execution across all functions driving revenue at SBI Growth Advisory. Consistent performer and over achiever in driving sales, client relationship, operational and productivity improvements and building teams.

By Matt Sommi, Bespoke Partners, and Rahul Puri, SBI

The slowdown in corporate spending due to economic and geopolitical uncertainties has prompted many companies to rethink their growth strategies for the near and distant future. 

When asked during a recent SBI Growth Forum hosted for sales leaders of companies with $250M in revenue or higher, those responding unanimously said that they wished they had taken action sooner relative to talent and productivity improvement initiatives.

The team at Bespoke Partners brings a unique process and data-driven insights to recruiting Go-to-Market leaders and executive teams for the software and SaaS industry.

SBI brings expertise to help companies achieve growth with superior GTM / sales processes and marketing strategies.

Given the uncertainty gripping markets and the prospect of continued market headwinds, the chief question for strategic planning is how to maximize the potential to grow when the market recovery occurs. Early indicators suggest the recovery might have started with inflation down and GDP higher than forecasted. The time to take action on talent and productivity improvement initiatives that will drive growth in 2024 is now – whether that be capital efficient growth or a more aggressive growth strategy.

GTM Leadership Trends and Insights

GTM leaders such as sales, marketing, and revenue executives naturally play a pivotal role in market expansion and customer acquisition.

Bespoke Partners places high-impact leaders in software and SaaS companies with a specialization in private equity backed companies. For our executive search initiatives, the firm analyzes data on thousands of executives at hundreds of portfolio companies to identify trends and insights for staying ahead in the talent market.

Trend 1: GTM Turnover is consistently among highest of the C-Suite

One trend is that GTM functions are the C-suite roles that are turning over the most in today’s private equity portfolio companies. For example, GTM turnover spiked at one point in mid 2023, doubling the rate of other functions.

The alternative is to focus the GTM operation for your company around profitable growth and recruit the GTM leaders who know how use capital more efficiently. The strategy calls for orchestrating growth that achieves higher margins earlier in the customer lifecycle, then using the additional profit to invest in more growth initiatives.

The key management objective in creating profitable growth is to identify customers for whom the value proposition of your offering is compelling enough to generate the highest margin engagements with the lowest cost of sales. You then identify and optimize the most efficient sales and marketing activities for engaging these customers. Today’s talent market is especially tight for GTM leaders who have exceptional track records in planning and executing this type of profitable growth.

Trend 2: Rise of the CRO

Another trend in the GTM function is that the Chief Revenue Officer (CRO) has become more prevalent in the C-suites of many companies.

The CRO can be generally described as leading both the sales and marketing functions, and in many cases these roles are also responsible for customer success and generation of recurring revenue. An ideal CRO candidate has the strategic outlook and analytical abilities that enable them to discover new avenues for sales and untapped markets.

By the time companies reach the 500-employee mark, the majority will have a CRO in place, approximately the same rate at which Chief Marketing Officers appear in the C-suite.

Sales Program Planning: Forward-Looking Strategies for Growth

SBI is committed to ensuring successful GTM strategies and driving growth. After evaluating empirical and anecdotal research from the previous 18 months, SBI believes it’s time to shift from a mindset of doing “more with less” and into a mindset of reinvesting in overall company growth.

Companies spent most of 2023 evaluating cost and processes and protecting company profitability by pulling back. But there are massive commercial productivity gains to be captured through reinvesting in growth.

SBI’s most recent CEO Value Creation Pulse report found an even split between CEOs who are looking at 2024 as a year to drive growth without increasing expenses and those who are considering increasing expenses to drive growth.

Gathering such customer feedback enhances their experience, fostering loyalty and reducing churn. Such insight reveals opportunities to offer new solutions for unmet needs, deepening customer relationships.  A contented customer base transcends mere satisfaction: it evolves into a powerful catalyst for business growth. Satisfied customers become enthusiastic advocates, creating a robust referral base and advocacy network. This not only bolsters your company’s reputation but also opens avenues for organic, word-of-mouth growth. This better positions the company to tap the full potential of an existing customer base and create sustainable growth.

Author:
Matt Sommi
Senior Vice President

Based in Philadelphia, Matt helps lead Bespoke’s client engagement  efforts across the firm’s suite of services.

Prior to joining Bespoke, Matt spent 8 years in research and business development at GLG, supporting private equity due diligence efforts and building relationships with GLG’s middle market private equity firms. 

Author:
Rahul Puri
Partner – Growth & Private Equity Practice Co-Head
SBI, The Growth Advisory

Strategic leader responsible for driving initiatives from ideation to execution across all functions driving revenue at SBI Growth Advisory. Consistent performer and over achiever in driving sales, client relationship, operational and productivity improvements and building teams.