To sell or not to sell: the impact of managers' sales experience on organisational financial performance

Abstract

Selecting a manager is an important decision for any organisation. If done right, the organisation should thrive with strong productivity and financial performance. If the wrong person is selected, negative issues such as low employee morale and low productivity can lead to poor sales and profits. While experience is an important factor in hiring, some organisations place a disproportionate amount of weight on certain kinds of experience. In particular, this study examined a Fortune 500 firm in North America that anecdotally believed that those individuals with prior experience in sales made better managers. Thus, we quantitatively examined if managers at this firm with prior sales experience produced higher sales revenue, profitability (earnings before interest, tax, depreciation and amortisation; EBITDA), and return on controllable assets (ROCA) compared to those managers without prior sales experience. The results of our analysis indicate that skill sets, other than those provided by prior sales experience, are necessary for managers to generate and manage revenue.