- FEATURED ON CEO SALES STRATEGIES PODCAST
Is your sales team driving profitable growth—or maximizing the wrong revenue?
Revenue growth can hide a profitability problem when sales incentives reward the wrong behavior.
Many CEOs focus on increasing sales output without examining whether the revenue being created strengthens the company’s economics. A sales compensation plan influences what gets sold, when deals close, and which opportunities receive attention.
When incentives are disconnected from business priorities, growth can create margin pressure, delayed revenue, and weaker confidence in the quality of earnings.
The issue is not simply how much revenue the company generates. The deeper question is whether the sales engine is creating the type of growth that supports EBITDA and long-term company value.
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Key Highlights
- Sales compensation plans can quietly reshape profitability outcomes
- Revenue growth can create hidden pressure on EBITDA margins
- Sales incentives determine which revenue gets prioritized
- CEOs underestimate how compensation drives sales behavior
- Growth without profitable revenue creates valuation uncertainty
- Sales teams optimize incentives CEOs unintentionally create
- Deal timing can shift when compensation rewards delay
A lot of CEOs believe sales teams naturally chase what is best for the company.
What actually happens is salespeople optimize around the incentives leadership creates.
When compensation rewards the wrong behavior, revenue timing, deal quality, and profitability can move in directions leadership never intended.
The financial impact often appears later through weaker margins, inconsistent forecasting, or valuation pressure.
By the time the pattern becomes visible, it is already embedded in the business.
About Our Guest
Mike Brunnick
Mike Brunnick has built his career at the intersection of revenue growth, sales leadership, and operational strategy. His experience spans technology companies, executive revenue roles, and environments where growth decisions directly impact profitability. Before moving into advisory work, Mike spent time in the Marines and in intelligence work before transitioning into technology during the late 1990s. Through Valor Advisors, he focuses on helping companies understand the connection between revenue generation, incentives, and business economics.
Summary
1. Revenue Growth That Weakens Business Economics
Revenue growth is not always a sign of stronger enterprise value. Companies can increase sales while creating pressure on margins when the revenue being pursued does not support the underlying economics of the business. The difference between valuable growth and expensive growth often appears when leadership examines profitability, cash flow, and long-term valuation. Many CEOs discover the gap only when growth creates operational strain or investors begin questioning the quality of earnings. The real issue is whether the revenue engine is producing durable value—or simply increasing activity that looks positive until the financial impact becomes unavoidable.
2. Sales Incentives Shape Revenue Quality
Sales compensation plans influence more than salesperson earnings. They shape which opportunities receive attention, which products get prioritized, and when revenue enters the business. A company can unintentionally create behaviors that work against profitability when incentives reward outcomes disconnected from broader business goals. The exposure often remains hidden because revenue numbers can appear healthy while the underlying economics weaken. CEOs may not recognize the impact until forecasting becomes inconsistent, margins compress, or leadership begins questioning whether growth is translating into enterprise value. The compensation structure may already be influencing business outcomes long before the financial consequences become visible.
Your compensation plan determines the behavior your sales team will repeat.
~ Doug C. Brown
3. The Hidden Cost of Revenue Without Profitability
Pursuing revenue without understanding contribution to profitability can create a misleading growth story. Some revenue streams strengthen the company, while others consume resources and create hidden pressure on EBITDA. The challenge for CEOs is that top-line growth can look successful while the underlying business model becomes more difficult to defend. This becomes especially important when evaluating future valuation, because buyers and investors focus on the quality and durability of earnings. The question is not only whether the company can generate more revenue, but whether that revenue supports a stronger financial position. The difference often appears later than expected.
4. Compensation Plans Create Predictable Behavior
Salespeople respond rationally to the incentives placed in front of them. When compensation structures reward specific outcomes, those outcomes become the focus of behavior. This can create unexpected consequences when the incentives do not match what leadership wants the business to achieve. Revenue timing, deal prioritization, and product focus can all shift based on the economic signals inside the compensation plan. The issue is rarely whether sales teams are motivated—the issue is whether the motivation is producing the type of growth the company needs. The disconnect often remains unnoticed until the business feels the impact in profitability or valuation discussions.
The best sales incentives align personal motivation with company economics.
~ Mike Brunnick
5. Growth Decisions Under Valuation Pressure
CEOs often evaluate growth by looking at revenue expansion, but enterprise value depends on more than the size of the top line. The market considers whether revenue is profitable, repeatable, and supported by strong operating decisions. When sales incentives or revenue strategies create weaker economics, the impact can appear during diligence, forecasting, or valuation conversations. What looked like growth internally may be viewed differently by outside stakeholders analyzing earnings quality. The gap between reported growth and valuable growth is where many companies experience unexpected pressure. The warning signs are often present before the valuation conversation begins.
Every compensation plan creates behavior. The question is whether it creates the behavior your company needs.
~ Doug C. Brown
6. The Rational Salesperson Problem
A common leadership assumption is that salespeople will naturally make decisions based on what benefits the company most. In reality, sales professionals respond to the incentives and rules they are given. When the compensation structure creates a reason to delay, prioritize, or avoid certain behaviors, those choices can become predictable. This does not necessarily reflect a motivation problem—it reflects how the system influences decisions. The financial impact can surface through delayed revenue recognition, missed opportunities, or unexpected shifts in sales patterns. By the time leadership identifies the pattern, the behavior may already be part of the operating rhythm.
Salespeople optimize the incentives they receive. Leadership must make those incentives serve the business.
~ Mike Brunnick
7. Revenue Timing and Hidden Business Risk
The timing of revenue can reveal deeper issues inside a sales organization. When compensation structures influence when deals are closed, businesses may experience uneven forecasting and unexpected changes in financial performance. These patterns can create challenges for CEOs who need reliable visibility into cash flow, profitability, and future growth. A company may appear to have a strong pipeline while the actual economic impact depends on behaviors created by internal incentives. The concern is not only the amount of revenue generated, but whether the business can predict and trust how that revenue will materialize. Those differences become increasingly important as companies scale.
Reflection & Call to Action
Growth can appear healthy while the underlying economics become harder to defend. The incentives driving revenue decisions deserve the same scrutiny as the revenue numbers themselves.
- Are your sales incentives creating the type of revenue your company actually values?
- Where could your current compensation structure be influencing behavior you did not intend?
- If your revenue growth was analyzed purely on profitability and valuation impact, would it tell the same story?
If this feels uncomfortably familiar, a brief conversation can usually clarify whether the pressure is coming from the market, the model, or the way growth has been structured.
If that’s the clarity you want, email youmatter@ceosalesstrategies.com.
Related Content & Resources
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Guest Resources – Mike Brunnick
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