Thursday, April 20, 2017

The 10 Rules to Guarantee a Promotion to Channel Chief

I decided to have fun with some data over the past week.

I started by downloading the 337 Channel Chiefs from CRN's annual list (2016 version) and ran them all through Linkedin to see what insights I could come up with.

I decided to focus on 10 attributes that could shed light on the road to becoming a Channel Chief. The data had some obvious edge cases, but statistically, it formed a relatively tight bell curve around the averages.

The 10 Attributes I looked at:

1. City where Chief lives

2. Are they still working at the same company (a year later)

3. Gender

4. Age (estimated based on undergrad date and other factors)

5. Attained Masters degree or above

6. Number of companies worked for in career

7. Time spent in current company

8. Time spent in current role

9. Did they have channel roles leading up to Chief role (if not, what?)

10. Size of company, and impact on above attributes

Before we get to the rules, why would anyone ever want to be a Channel Chief?

[begin sarcasm]

The head of indirect channels for an organization is (by far) the best job an individual could hope for! Spending your time traveling the world to glorious destinations, hosting parties and galas for partners, spending millions of dollars in marketing funds, and striving to drive more boondoggles than last year.

All this while not being held accountable to senior management. Perhaps it sounds too good to be true. But wait, it gets better...

What could be easier than dealing with people who are passionate about your products and want to promote them to the world? How hard could it be recruiting this fan base and keeping them motivated by dozens of expensive programs? Oh, and look at that, another industry magazine just put you on the cover!

Sounds good so far, but how do Chiefs get a free pass internally from management?

Easy. Channels tend to be nebulous – not only hard to measure because of their indirect nature, but time-delayed as you are collecting data through a complicated multi-tier supply chain. Sales in, sales out, end user reporting, return on invested capital - these are metrics that confuse even the best CEO.

The VP of Sales gets the brunt of the pressure because direct sales are easy to measure, forecast and build KPI’s around. And most CEO’s out there didn’t rise through indirect channels. In most cases they were engineers, direct sales leaders or financial people.

So, is a Channel Chief is basically a rock star without responsibility or accountability? Not quite.

[end sarcasm]

These common perceptions actually make the job harder. The average tenure of a Chief is only 4.2 years – contrast that to the average CEO at 8.1 years. If the job was that great and liberating – why the short stay?

1. Channels take a very long time to develop. 

Trying to explain to a CEO who is (very publicly) measured quarterly that developing an effective channel takes years is not a very popular conversation.

2. The indirect organization is usually the red-headed stepchild. 

Getting access to top people, technology, resources or investments is last in line behind the sales, marketing and product teams.

3. The Rodney Dangerfield Effect. 

Because it is not understood by other executives, it can be glossed over in senior management and board reviews. While the commitment to channel differs by company, the attention it gets is, in many cases, out of alignment.

The end result is a high pressure job, without adequate support and dubious respect.

A Channel Chief is a part-time sales leader, marketer, finance and operations exec, lawyer, motivator, counselor, trainer, product manager, strategist, economist, support agent and futurist.

If this is the life of a rock star, perhaps it is not as fun and rewarding as we once thought. It truly takes a special individual to step into the above chaos day in and day out and maintain a sense of humor.

So, do you still want to be a Channel Chief? Read on.

Armed with a nice big spreadsheet of data (and a number of strategic VLOOKUPs and COUNTIFs), here are the rules to becoming a Channel Chief:

1. Live in California

More specifically, San Francisco. About a quarter of all Chiefs live in California, with the majority of those (60%) living in the Bay area.

2. Don't get too comfortable

I analyzed the 2016 CRN list on purpose, to see how many of them stayed put after making the list. A year later, upwards of 25% of them are now working for different companies! Even more have been promoted internally into new responsibilities. This is not a "set it and forget it" profession.

3. Unfortunately, the gender gap exists here too

The Channel Chiefs are 77% male on this CRN list. Unfortunately, it gets worse when you narrow down this list to choose only the most senior from each company (248 companies). At this point it jumps up well into the 80's. As an industry we NEED to do better - check out this analysis of the Top 100 Global Women in Technology groups that I compiled recently.

4. Be born before the first moon landing

Specifically 1968. The average channel chief on the list is 49 years old. While there was a wide range of ages, most were clustered tightly around mid 40's to mid 50's.

5. Don't rely on an MBA for career progression

Almost three quarters of the Channel Chiefs do not have a masters or above degree. While college degrees number in the high 90's, most Chiefs relied on career progression to get to where they are. More on that to come.

6. Move companies to achieve higher positions in the Channel

The average number of companies the Chiefs worked previously for was 4.8. Many used company changes to elevate from Rep to Manager, Manager to Director and Director to VP. Larger companies are the exception where some have progressed internally for a few decades to get that coveted title.

7. But don't move companies too often

With only 4.8 company stops on average, the average Chief has spent 8.7 years at their current company. You may not get hired as a Chief right away, but one or two promotions may land you there within 4 years.

8. Prepare your career (and family) to be somewhat transient

The average tenure for a Channel Chief is 4.2 years. If you remove the Fortune 500 sized companies, where the stays are much longer, this drops down to the 2-3 year range. Moving jobs and moving cities is very common in this group of 337 people. Very few are employed in their hometown or college town.

9. Don't be too concerned if you haven't worked in the channel previously

Half of the Chiefs came from different backgrounds including sales (most common at 50%), general management, marketing and product management. While the progression of Channel Account Manager (CAM) to Channel Manager to Channel Director to VP Channel to SVP Global Channel is the most common, it is not the only way. Reference #6 above on how to make those jumps faster.

10. Be careful on size of company you work for

If you are looking to be a Channel Chief at a Fortune 500 company, jumping to smaller companies to get higher titles doesn't seem to work. The better bet is to start in the mailroom and plan for a 20+ year career of linear progression. If you want to be a Chief at a midsize company, multiple jumps as a VP (especially in the same product category) seems to be the best path. I can see a recruiting trend here, where they seem to target the Chief of their competitors.

If you haven't figured out by now, the title of this article was meant as click bait. There are no guarantees in life, or in the channel.

However, if you do know what you want, there are certain tactics you can deploy to elevate your chances of success. Luck plays a role as well - fast growing companies in exploding product categories tend to hire underneath their current employees. This results in rapid career progression. 

At some point in this growth, usually after a sizable round of financing or IPO, the company will hire a senior, recognized Global Channel Chief to play the adult in the room. This person usually comes from a Fortune 100 company.

Well, there it is. For those of us who have spent our careers in the channel know that it is an equally exciting and frustrating place. Under-recognized, under-funded but filled with some of the best people I know. 75% of all world trade goes indirectly, and these are the heros that make it happen.

Good luck on your indirect journey!

Monday, April 3, 2017

Have Channel Sales Executives Forgotten Why We Have a Channel?

Have channel industry sales executives forgotten why we need a channel to build business? Is this even a legitimate question to be asking? Of course, we all know the reason for a channel. It is to expand a vendor’s reach in the market through capable, enabled, and motivated business partners that can generate new customers for our brands.

Partners provide vendors a multiplier effect by cross-selling a vendor’s brand to many of a partner’s current customers. This working relationship is a win for both parties because when a partner sells a vendor’s brand they also can sell additional partner-delivered services. At the same time vendors gain new sales they would not have generated on their own.

So why do so many channel sales executives seem to misunderstand this basic concept of the purpose of a channel? Let’s better define the problem.

Why Channel Sales is Off Track with Their Channel Strategy

The Partner Sales Manager Role - Given the intense pressure of quarter-to-quarter sales targets at public companies, many have transitioned the traditional role of a Channel Account Manager (CAM, PAM, RCM, etc.) to a 90% direct sales role and 10% and fading role of a traditional channel manager. This traditional channel manager role as a business consultant, enabler, trainer, and motivator has morphed into a part-time or even smaller role to make way for a shorter-term focus on closing deals - today, tomorrow, and the next day. More channel executives have turned the focus of their teams on developing and closing deals for their partners vs. the role of activation, enablement and sales-assist of partner developed opportunities.

The pressure of delivering short term channel sales sacrifices the development of enabled and motivated partners that are capable of developing sales opportunities on their own. As a result, partners have become too dependent on the PSM to identify, develop, and close most or all the opportunities within their client portfolio. This process is crippling the multiplier effect of having a channel and reducing the self-reliance of a partner organization to become a competent and motivated seller.

The Channel is More Important Today than Ever Before 

It is important to take a step back. The channel organization’s role in a company has steadily increased in visibility and value over the past ten years. In the past, many channel departments would be buried under layers of sales, marketing, operations or financial management.

With over 75 percent of world trade flowing indirectly across all industries, many CEOs have elevated the role of the channel chief directly into the boardroom as a key member of the management team. One of the consequences of this added exposure is the pressure to drive KPIs that are directly reported to the board in private companies, and publicly in listed companies.

The New, More Complex Role of Channel Managers

The channel organization has a myriad of responsibilities to their partners that include sales, marketing, operations, support, finance, legal and supply chain. In fact, the average channel professional has 75 distinct roles.

The Harvard Business Review ( recently stated that the most successful channel managers look more like general managers than sales managers. We know that channel managers often don’t have direct control over the sales process of a partner, they use other skills to enable, engage, and drive revenue. This includes:

1. Strategy

Understanding the nuances of a specific territory, including competitive strengths, weaknesses, opportunities and threats, which allow a channel manager to build a strategy with a partner on a deal-by-deal as well as macro level. Sales managers tend to be much more tactical in nature, and most strategic planning is at a customer or deal level.

2. Coaching 

Good channel managers understand that enabling a partner is critically important and so they spend their time ensuring that they are covering the details such as solution creation, logistics and compliance. It is more than just selling a deal, it is ensuring that all the ducks are in a row so that many downstream deals can be closed as well. This is the multiplier effect of having a channel.

3. Finance 

The economics of running a channel territory are much different that running a sales territory. Beyond things like revenue targets, contract profitability, and pricing strategy, channel managers must also focus on areas such as inventory management, partner cash-flow, and distribution terms.

There is a real danger in focusing a channel team too much on revenue and tactical deal flow. While the win rate per opportunity may be higher in the short term, the multiplier effect of self-sufficient channels will hurt long term success. Striking the right balance of a channel team between driving deal revenue and channel enablement, engagement and strategic planning is imperative. It is the classic “teach a person to fish” analogy.

There are a few difficulties in the measurement of this channel role, especially as it is reported to the senior management team. Many of the KPIs are soft by nature, and that doesn’t play well in a boardroom where sales and marketing professionals are managing now to the seventh decimal point. As it is a longer-term investment, it doesn’t play well in the daily/weekly targets that businesses are being driven against.

Another danger in focusing a channel team too much on sales is that they may miss the changing dynamics of the partners they are working with. Channels in all industries are going through a major transformation brought on by multiple factors including digital transformation, demographics, new competitive pressures and economic realities post 2008.

In the IT channel, for example, there has been a roughly 30 percent decline in the number of partners since 2008, with an additional 40 percent of remaining partners looking to retire in the next seven years, according to CompTIA. By the end of that seven year window, over 75 percent of the channel will consist of millennials. An effective channel manager would see these shifts happening and refine programs, incentives, messaging and even coverage to support it.

End Customer Buying Process is Forcing More Changes in the Channel

Another major shift in channels is being driven by changes in the customer buying journey. Ten years ago, the CIO made 90 percent of technology decisions in an organization. Gartner is forecasting a complete reversal by 2020, where 90 percent of those decisions will now be made by business professionals in the lines of business. For example, the VP of Sales or VP of Marketing is now the main buyer of technology solutions – not the IT department.

This new buying journey, once called rogue or shadow IT has generated new areas of influence called the shadow channel. ( A channel manager will understand that a customer VP of Marketing may not have IT in the room during a technology decision - and there is a good chance their traditional partner won’t be in the room either.

Having a macro level strategic view will guide a channel manager to make sure their organization is in the right customer discussions and exerting the right influence. This could involve getting closer to accountants, digital agencies or legal firms. It could also include diving deeper into other company’s ecosystems, building an independent software vendor (ISV) program, or even participating in the startup arena around the solution areas.

Having a channel manager focused too much on sales will hinder the multiplier effect of channels, drop the satisfaction of current partners who are looking to brand themselves and become more self-sufficient in the marketplace, and miss the ever-changing partner and alliance ecosystem.

[This blog was originally posted with 10K+ views on Linkedin at:]