Should a new sales leader address discount governance before or after hiring/firing decisions on the existing AE team?

Discount Governance First — Then People Decisions

Discount governance must come before hiring/firing decisions on the AE team. Why? Because you can't fairly evaluate seller performance when pricing authority is undefined, inconsistently applied, or completely ungoverned. Fix the system before judging the humans operating inside it. This is sequencing logic, not sentiment.

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THE DETAIL

Here's the hard truth most new sales leaders skip: discounting behavior is a symptom, not a character flaw. When you inherit a team where AEs are closing deals at 20-35% below list, your first instinct is to fire the "discount junkies." But the underlying cause is almost always a broken governance structure — no approval tiers, no deal desk, no MEDDPICC-gated discount authority.

Top CROs conduct comprehensive assessments of people, process, systems, and culture before drawing conclusions. Pulling the trigger on terminations before you've audited the system means you may fire a solid AE who was rationally responding to bad incentives — and keep the politically savvy one who wasn't.

The right sequencing (30-60-90 framework):

1. Days 1-30 — Audit: Pull every deal closed in the last 12 months. Segment by AE, segment, and discount depth. Map where approvals broke down. Christian Smith (CRO at Splunk) advocates measuring everything: "Capture it and keep it because a whole bunch of the science behind pipeline is measuring at a specific point in time and comparing and contrasting."
2. Days 30-45 — Governance design: Install a 3-tier deal desk model: AE self-serve (≤5%), manager approval (6-15%), VP/CRO sign-off (16%+). Align to CPQ tooling (Salesforce CPQ, DealHub, Zuora).
3. Days 45-60 — Run it live: Let the team operate under new rules. Now you have signal — who adapts, who games it, who asks for coaching.
4. Days 60-90 — People decisions: Develop a revenue/sales operating model that defines new ways of working. If a VP doesn't do something expected in the first 90 days — they never will. Same applies to AEs: now you have clean data to act on.

Key benchmarks to anchor your audit:

• Don't punish AEs for system failures you haven't yet corrected
• Start with quick wins in the first 30 days to build trust, benchmarking team performance, identifying gaps, and standardizing processes.
• The only exception: an AE actively circumventing *existing* controls — that's a termination conversation on Day 1

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