Doug Davidoff
When Scratchpad released its 2023 RevOps Trend Report (click here to download the full report), our marketing manager, Hannah, asked me for my take on it, including whether or not I agreed with the findings.
I shared that my take on this report is in line with my thoughts on most of the reports of this type. I don’t review or approach them with an agree/disagree mindset. The value of these reports is that they represent a snapshot of what’s top of mind with the audience surveyed. It’s important to remember who was surveyed, as well as when.
For context, at the time of the survey, rising inflation and economic uncertainty made money more "expensive" and elusive—and even in the best of times, early-stage funding isn't easily obtained. Companies looking for that next funding level faced tighter valuation metrics, making it harder to access money. Suddenly, the amount of cash businesses had on hand became more important.
I say all this because the report reflects a focus on cash flow over growth.
While this involves legitimate strategy choices, it's also about how people respond to the nature of their environment. To oversimplify, when the market's good and everyone looks like a genius, everyone's about growth. When things get a bit tougher, the focus is on making money, and that's reflected in the report.
What the top concerns indicate
A quick review of the top nine concerns supports the hypothesis that growth-focused companies in general—and RevOps teams specifically—are working in a tougher, more complex environment than they were in 2022.
Executive and board focus has switched from a “go for growth” focus to one with an emphasis on improving the underlying growth economics. While the broader economic environment certainly contributes to this feeling, it would be a mistake to view it as the primary cause.
This switch in focus has been slowly gaining momentum as the tailwind of the past decade tapered off, revealing weaknesses in underlying performance. Simply put, companies need to get smarter with their approaches to growth, and the impact of that responsibility is being increasingly felt by RevOps teams.
Addressing The Top Three Identified RevOps Concerns
1. Driving Data Hygiene
Bad data hygiene is a common challenge for RevOps leaders, and it is largely due to the "shadow sales stack" — the use of general-purpose tools that are not connected to the CRM. - 2023 RevOps Trend Report
The underlying issue
If you're battling a shadow stack, it's far more likely that your CRM implementation doesn't meet the demands of your go-to-market teams, rather the problem being compliance or adoption.
In my experience, that's often because the data structure and architecture have been built with an internal focus instead of an external business process focus. (No, they aren't the same thing; I'll explain more later.) If it's faster and easier for sales reps to maintain an Excel spreadsheet, throw stuff in notebooks, or sign up for a free application, you’re going to be dealing with a shadow stack.
In other words, salespeople don't feel they can manage the complete behavior, just a piece. The real problem is likely an ambiguity in the underlying business processes. To improve data hygiene (and enable better performance and growth), you must clarify those processes.
My recommendations:
Data hygiene & integrity are certainly important, but the problem is far more likely to be a symptom of an adoption or utilization problem. If your CRM and primary tech stack don’t enable your primary users to manage their activities completely, adoption will atrophy.
This means that you can’t underestimate your salespeople. For example, we frequently recommend configuring the reps’ ability to create, track, update, and monitor account plans. We get pushback that while they like the idea, they’re concerned that we’re asking the rep to do too much and that it’s beyond their level of technical sophistication.
While at a surface level, that makes sense, the reality is different. We know that reps create account plans (formally or otherwise), and they’re not doing so in the company’s existing CRM instance. This means that when the rep wants to manage their account plan, they’re going to do it outside of the CRM. And this means they’ll likely be doing a lot of other things outside of the CRM, which further expands the data hygiene problem.
When you're battling data hygiene and compliance, it may sound paradoxical, but users need the option to be more advanced if they choose. To accompany that, you must also define the minimum level of completion. This means the iteration and evolution of a tech stack must be viewed through a horizontal lens with levels of completion.
I can't say this enough: technology is not a solution; it's a means to a solution.
If you try to change the behavior without an underlying change in the system or structure, you won't get the change you seek.
2. Improving Forecasting Accuracy
According to the survey, only 22% of RevOps and Sales Leaders strongly agreed they had the right data to forecast accurately. This is attributed to a lack of quality data points, which is compounded by the shadow sales stack. … This information is transferred back into the CRM incomplete and inconsistent, leading to forecasts that are inaccurate. - 2023 RevOps Trend Report
The underlying issue
Forecasting is a probability-based prediction game; as a result, traditional forecasting typically fails because the underlying approach isn’t properly designed.
My recommendations:
Effective forecasting is a byproduct of a strong framework, process, and execution. If you’ve got a forecasting problem, its cause is likely a flaw in your underlying go-to-market motions or an adoption and utilization problem.
Here’s what you should do about it:
- Be clear on why you're forecasting. While this may sound obvious, I’ve discovered that one of the main problems with forecasting is that the objective isn’t to create greater insights or predictability. Rather, it’s to justify or prove something.
- Define what you’re forecasting. Are you trying to forecast new wins, new revenue, total revenue, etcetera? When you’re clear on the why and the what, map the key contributors and the flow for your forecast. This map is what you’ll use to configure and build forecasting into your CRM or other systems
- Define clearly the progression of a deal - This is all about defining your pipeline and the requirements for a deal advancing with it. We recommend creating exit criteria for each stage.
- Build more than one pipeline - One pipeline won't give you an accurate forecast (unless you're in a high-volume industry like insurance). A single channel means you give every sale the same milestone stage process. You need different pipelines for different products or services so you can capture the necessary data points.
- Create a quality rubric - Put the elements from the first bullet point into a rubric. You'll get a more accurate forecast, as well as a guide to effectively wrap up deals. Do not use deal stage probabilities to forecast.
At Lift, we use attributes that look and feel like exit and deal quality criteria. That means we get into decision criteria and likelihood to take action, which allows us to put together a more accurate forecast—or at least to have a better hypothesis for the forecast that we can revisit and assess. For example, if we think specific attributes mean high probability and an assessment shows that 50% of closed deals didn't have two or three attributes, we must adjust.
This has been coming up lately as a client and prospect concern. For those who want a deeper dive, I've recently written and talked about improving forecast accuracy.
3. Rolling Out Methodologies and Improving Process Adherence
86% of leaders surveyed agree that driving process adherence is difficult. This is largely because reps view additional processes as extra work and don't see the value. This is an inefficiency that drags down companies of all sizes. Not to mention, most new processes for reps means doing more admin work instead of generating pipeline and selling. - 2023 RevOps Trend Report
Hopefully, you're beginning to see how the top 3 concerns—and, in fact, all 9 concerns mentioned in the report—are deeply intertwined.
Driving process adherence has been a top challenge for go-to-market managers for as long as I’ve been in sales. The reason is that the typical focus of the processes that are created is to increase efficiency and control.
Here’s the problem: you increase efficiency by eliminating variance, and you increase control by making these processes simple and linear.
But your customers and your sales, marketing, and customer success teams operate in a highly variant, adaptive complex ecosystem.
Don’t get me wrong, efficiency is important, but only to a point. Once you get past that point, the focus on efficiency conflicts with the underlying system that you’re operating in, as well as with the critical results you’re seeking.
In your effort to eliminate or decrease negative variants, you eliminate and decrease positive variants. This can be short-sighted, making you focus on a symptom of the problem. For example, I keep hearing people say, "Adoption is the objective."
But adoption is not an objective. Adoption is a problem; it's not a solution.
The actual objective is performance.
My recommendations:
Stop confusing objectives with inputs (the ends with the means).
For example, as the role of RevOps has grown, along with an increased focus on the CRM, I constantly hear refrains from “thought leaders” along the lines of “adoption is the objective.”
If you attempt to deposit adoption into your bank account or report adoption to your board. It won’t get you very far. The objective is performance. Adoption, and more precisely, utilization, are crucial to achieving a performance objective but are NOT the objective.
Another example is the constant focus on sales and marketing alignment. The irony is that the harder you work to generate alignment, the more elusive it becomes. That's because you're focusing on the wrong things.
The goal should be alignment with your customer. That means your focus should be external, not internal, which means you're thinking about influencing and managing the customer.
When your concentration shifts away from internal alignment, you generate more empathy for your customer. Suddenly, your alignment problem solves itself.
Sustaining growth is about combining and managing a strong, defined go-to-market strategy with the systems and structures needed to activate and align strategy, a strong execution framework that enables adaptability and resilience, and the data and analytics to close the loop and feedback so you can constantly refine the strategy.
To address all these concerns, you must realize that the technology must support your business processes, not vice versa. That's the only way to address the underlying cause of your business symptoms.
