In Excel, Everyone Hits Quota (w/ Scott Domareck)

Most misses in sales are baked into the plan before the year even starts.

In this episode, Toni talks with Scott Domareck, a four-time VP of Sales who’s been through every phase of growth, exit, and burnout imaginable. Together, they break down the hidden mistakes that ruin annual planning long before execution begins.

From massaged Excel spreadsheets to unrealistic ramp times and compounding assumptions that look great to investors but kill execution, they get real about what actually happens inside revenue planning season, and how to build a plan you can actually hit.

This episode is brought to you by Evergrowth  —  Their Agentic GTM Workspace enables revenue teams to collaborate and win with AI-powered teammates, breaking down silos and helping B2B teams grow smarter with fewer resources.

Want to work with us? Learn more: revformula.io

• (00:00) - Introduction
• (04:16) - The Reality of Planning Season
• (07:22) - Transparency and Context in Planning
• (13:12) - Compounding Effects in Sales Planning
• (18:14) - Involvement of Go-to-Market Leadership
• (25:29) - Trust and Executive Leadership
• (28:43) - Top Mistakes in Hiring
• (30:49) - Staggering for Supply and Demand
• (34:02) - Challenges in Scaling and Execution
• (41:04) - The Reality of Adding New Elements to the Plan
• (43:34) - Risk Management and Buffers
• (46:31) - Planning for Attrition and Unexpected Events
• (49:13) - Final Thoughts and Future Discussions

Creators and Guests

Host

Toni Hohlbein

2x exited CRO | 1x Founder | Podcast Host

Guest

Scott Domareck

What is The Revenue Formula?

This podcast is about scaling tech startups.

Hosted by Toni Hohlbein & Raul Porojan, together they look at the full funnel.

With a combined 20 years of experience in B2B SaaS and 3 exits, they discuss growing pains, challenges and opportunities they’ve faced. Whether you're working in RevOps, sales, operations, finance or marketing - if you care about revenue, you'll care about this podcast.

If there’s one thing they hate, it’s talk. We know, it’s a bit of an oxymoron. But execution and focus is the key - that’s why each episode is designed to give 1-2 very concrete takeaways.

TRF - In Excel, everyone hits quota
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Introduction
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Toni: ​[00:00:00] Today I'm talking to Scott. He was my VP sales back in the day at Falcon, and he's now a four times VP sales veteran. He has been through exits, scaling and all the pain and joy that comes with that. Today we're talking about the topic of the season planning, but instead of taking a rev ops finance version, we are talking about the realities of a VP of sales.

In the process and now enjoy.

Scott: Most misses are baked into the plan before the year really even starts. A lot of times it's actually not an execution problem, OOO on the plan. It's the, the problem with the

Toni: plan. Maybe you're practically building for an outside perspective for an investor, potentially, and you will have your historical data and you have your averages, and that is legit data.

And whenever there is something that basically goes into your favor but isn't quite real. Like, you'll still keep it in there because it's in the data and it's gonna help you. [00:01:00] And I think sometimes that bias creates then the friction to the internal side, where then you as a leader comes like, well, but wait a minute.

You know, yes, that is the correct average, that's the correct number, that's the correct piece you pull out of the CRM. But as you mentioned, the the, the context is missing. It's

Scott: easy to sell to everybody, right? What person that you've hired for a high salary is gonna say, no, boss. I don't think I could increase that by 5%.

No one's gonna say it, but they're also not being a mathematician in that moment. Right? They're having to defend their value. So today I

Toni: have Scott here with me. Scott has been VP of sales four times, been selling to SMBs, mid Mario Enterprise. I think you did. Folks from series A to C to public, the whole, the whole shebang basically.

But I think what's way more interesting to kick us off, um, Scott, how did you, how did you meet me? What was your impression back then when, when that happened?

Scott: Hey, Toni. Good to see you. Um, yeah, I remember it kind of, kind of vividly, you could correct [00:02:00] me here if I got this right. I, I, uh, flew from Austin to, to NYC.

You were in Williamsburg, the, the WeWork there on fourth or whatever. And um, yeah. It was like, had to have been a 90, a hundred degree day, something like this. And I get into the office, I'm wearing my, you know, blazer, you know, tech, tech professional, right? Um, and I'm wearing the blazer, I'm wearing the shirt, and.

Uh, you said you want to do a walk. I said, fantastic. Let's do a walk. Right? Of course. Who, who am I to disagree? And, and, uh, I looked down and you're wearing, uh, some really nice like bright Nikes and some shorts that I think had lobsters on them. Yeah. And,

Toni: uh, and I was well outfitted to go for a walk. Uh, you, you weren't, and, and it was really difficult for me to def, you know, figure out at some point was it, um.

Was it my questions that made you sweat profusely or was it, was it the sun [00:03:00] at that point?

Scott: Very, very difficult questions, but also it was like a two hour interview, I think.

Toni: Remember that?

Scott: I mean, it worked out to the end. I did hire scrappy. There was some foreshadowing there, Aisha, you know, then I'm working for you.

And then I started to connect the dots like a couple months later and I'm like, ah, this is all making sense. This is all coming together here.

Toni: I I also remember we were driving back from like a team retreat, you know, the, the bears and the bees, uh, if you remember that. Um mm-hmm. And I think everyone was completely hungover and like.

Basically out of it. And you and I, you were driving and I was sitting next to you and I think for three or four hours I grilled you on some other stuff too. I still remember that how we basically kind of brutal arrived back in NYC from the Catskills, I guess. I think we were, yeah. Um, yeah. And you were basically completely drained.

Both hung over, you've driven for four hours and I grilled you for four hours. That might have been, so yeah, there was some foreshadowing.

Scott: That might have been the drive where you [00:04:00] previewed the, uh, the revenue plan for the next year. Maybe you, you waited, you waited till I was worn down. There was no visuals.

You're reading off of the Excel spreadsheet there, uh, in the passenger seat. And I'm just

saying whatever you say, Toni, you, we got this.

Toni: What a fantastic transition, Scott. Insanely well done. Which is also though, what happened?

The Reality of Planning Season
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Toni: Um, so that's actually one we would talk about today, which is basically. Hey, yes, it's planning season, you know, people are hats down to spreadsheets and, you know, we could do another session of Roblox Toni talking about all of those intricacies, but instead we said like, skip that and talk a little bit more about, you know, the reality piece that usually is being neglected when you build your new plan for the next year.

Right? Correct. Um, and I think in, in this approach, we wanna go through some of the issues. Um, that you and I have, you know, run into, I think you can draw from a, from a, you know, wealth of experience of things that went really [00:05:00] well, things that didn't go so well, and then we're gonna go into, well, how should you solve that?

Right? And really this episode is intended for some of you to, um, you know, maybe see some gaps in your plan already. Uh, oof. You know, forgot about that. But also because usually these. These problems and these solutions, you won't find them in the Excel spreadsheet. You'll find them somewhere else. And I think that's probably the bigger gap that people probably have.

And ideally, Scott, with your help, we can, we can try and cover that gap today. So, I mean, where's all of this starting? We already mentioned the spreadsheet. Um, and to be, I mean, this is my, my favorite topic from back in the day. Basically this whole top down planning process, right? And just to kick everyone off, I still believe, and that hasn't changed that much in the last, you know, couple of years.

Um, I still believe whether, whether people are doing it in a spreadsheet bottom up or in a spreadsheet top down. And actually it doesn't matter. I [00:06:00] think most of us are doing top down planning simply, you know, the way of someone somewhere decides. And usually that's the CEO, the CFO or the board where you want to land in terms of revenue, how much money you wanna spend, and then the Excel spreadsheet is being massaged, massage, and massaged to eventually return that number somewhere.

Um, and then everyone is happy and then they think they have a plan. Right. But, but usually, usually there's a little bit of a lacking transparency there. Right. Scott, what's, what's your experience? Um, you know, from that part of the, of the process.

Scott: Yeah. Hey, I totally agree. I think. Most misses are baked into the plan before the year really even starts.

A lot of times it's actually not an execution problem, OOO on the plan. It's the, the problem with the plan maybe. Um, and you and I have seen the difference of what it's like when you build a ambitious but executable plan, right? You've got this momentum of [00:07:00] winning. I mean, not to brag here, but I think, you know, a falcon, what was it?

Uh, we raised targets with AEs and we hit. Hit for eight or nine quarters in a row. Um, yep. But I think both you and I have the humility and to be on message here to, to be aware that a great deal of that hitting those targets, you know, most sales leaders brag about hitting, but it's not, you know, just that, that execution is that you planned really well, right?

Yeah. Um, and sign off on the right plan.

Transparency and Context in Planning
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Scott: So I think taking the transparency bit a little bit further, I think it's transparency context and, and compounding probably that you think about here. On the transparency side, I mean, probably the most baseline thing is were historical Numbers Act actually used, and maybe you saw some of that at Roblox, uh, during your day reviewing these revenue models.

Toni: Yeah, for sure. I mean, this is, this, this was a key starting point also working with, you know, two founders right now to figure out their next year. And that's always, mm-hmm. It's always the starting point, kind of what is [00:08:00] really, um, what's really going on, uh, in terms of historic numbers. For me, transparency, and maybe I'm stretching this a little bit too far from where you want to go, but transparency for me also means, um, you know, making, making those changes clear.

Making it clear where something deviates from what has happened in the past. You know, that's, that's also part of transparency, because I think in many cases it totally makes sense that it does. But getting to that, you know, making it clear to everyone where you deviate, I think this is, mm-hmm. I've seen it so many times that people are trying to hide it somewhere.

Um, which then creates all kinds of other issues that we're gonna get into. But that for me is transparency. Right?

Scott: Yeah, no, I mean, I think it, it would take a lot of extra work inside the Excel sheet to be able to go and identify your baseline versus what you're tweaking. And so this is, you know, typically what a go-to-market leader, whether it's marketing, revenue leader, um, they're stepping into an, uh, a spreadsheet, which hopefully at this point, they're good at.

[00:09:00] Looking at, right. They should be familiar with, with these numbers deeply. Um, but it's still a little bit of this, like it takes a minute to be able to see the matrix versus perhaps A-A-C-R-O and, and, and your CFO who had been living in that Excel sheet maybe a month before you're even taking a look at it for the first time.

Right.

Toni: And I think that's, that's kind of the, uh, imbalance already right there, right. Kind of years ago to market leader being invited into this thing and then need to find your way and. Um, and I mean, in some cases, and I think you and I discussed this, I don't know, I think a year or two ago you were working with the company, um, and basically you needed to go on a, on a, on a, on a chase.

Into the spreadsheet trying to find, well, where, where is it that I'm, you know, quote unquote, you know, being screwed over here. I mean, isn't, isn't that the fact sometimes, right? That you know, that those two parts of the equation don't really fit together in terms of transparency

Scott: for our listeners, that was not my quote that I was being screwed [00:10:00] over.

Just to, just to clarify. Yeah. I, I think, well, hey, especially if you have a new leader entering an organization, you have to treat this with extra care. Because everybody wants to believe that their leader is building a plan with the spirit of wanting you to be successful. You're hired to execute on things that you've done really well in the past.

But if you have to track things down or almost like reverse interrogate, like, explain to me where these numbers, uh, uh, came from, um, to double click. I mean, how many times have we. Rev ops are, are amazing, would be nowhere without them. But we see errors in data all the time, right? Where we forget a filter, we forget a, a, a context switch.

You know? So I think that leads to, you know, it, uh, the ability to go in and, and as a leader, point out any of the context that that has changed. So, you know, once we believe that there's historical numbers that are accurate, the next step is well. [00:11:00] Are those numbers from last year appropriate to use in the context of the phase we're going into next year?

Right. Remembering the little things, right? Marketing might go, oop. Um, we actually changed that MQL definition mid-year, so the volume went up, but we noticed that the win rate in our mid-market deals went down because of that, that, uh, classification or a sales leader is, is recalling, Hey, geez, you know, um.

That win rate was predicated off of, of a top rep that was 300%. We're going from a team of, uh, of, of three, and we're gonna go up to a team of 10. I'm a little bit worried now that that AE has left the business that we're applying that win rate to the future year, for example. So it's, I think this is where the, the senior leaders are really important because again, when you're living in that spreadsheet, it's very difficult for.

Rev, C-F-O-C-R-O to remember all of the context around those [00:12:00] numbers too, to say, Hey, are these gonna be relevant for the next year? Um, and by the way, they're not, they're not making excuses in any way. Like, we'll probably get into that, but it's, it's, um, making sure that they're pressure tested.

Toni: And I think, and this is a little bit of a side tangent, that then I've just kind of seen myself now and I just wanna bring it to the forefront for people that are working on this problem.

Um, there's, there's one side when you build the plan. That you're practically building for an outside perspective for an investor, potentially. Mm-hmm. Right. And you will have your historical data and you have your averages and that is legit data. Um, and whenever there is something that basically goes into your favor but isn't quite real.

Like, you'll still keep it in there because it's in the data and it's gonna help you, right? Mm-hmm. And I think sometimes that bias, um, creates then the friction to the internal side, where then you as a leader comes like, well, but wait a minute. You know? Yes, that is the correct average, that's the correct number, that's the correct piece you pull out of the [00:13:00] CRM, but as you mentioned, the, the, the context is missing.

And, and maybe to lead us to our, um, kind of the next piece that you mentioned already here, um, these things. Seem small and people sometimes think like, well, who, who cares?

Compounding Effects in Sales Planning
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Toni: But all of these things can compound, right? Kind of. How do you, how do you say that, Scott? Totally,

Scott: yeah. I mean, geez. When you think across, you know, marketing, uh, the talent team and sales performance, uh, metrics.

All the different bets that you're playing, you know, seven, seven areas times 10% each, that's a 100% improvement from a previous, uh, uh, year. So it could, it could compound really quickly. And I think if teams took inventory of how many bets you, you, you mentioned just tweaking all the bottoms up numbers slightly, you know?

Mm-hmm. At the end of the, to hit that top line number. Um, that's where the realistic view of how many bets are we actually placing here, can. Make you start to think about this being a stretch plan [00:14:00] rather than your baseline. And honestly, kind

Toni: of, I, I've very recently lived through this again, um, where you basically build out this thing and you know what all the benchmarks are that a certain companies to hit a certain point of time, right?

And really you are looking at this from a completely different perspective. You're looking kind of, where can I tweak? And actually this compounding piece. It's almost a tool for you in this process. It's like, you know, like I can defend taking the conversion rate up by five, you know, points I can defend.

It's just five points I can this a CV up a little bit. Exactly. You, you can, you can defend each of these individually very easily. And by the way, that also traps you as the leader very quickly. And I'll, let's talk about that in a second. But because it feels so defendable and you know, there's a really nice compound impact coming out of that.

That kind of, you know, works when you need to, uh, convince your board, convince your investors, you know, do all of those things, right? But I think that compounding [00:15:00] piece can very, very quickly in the execution, uh, kick you in the butt, right?

Scott: And it's easy to sell to everybody, right? Like, I mean, what, what person that you've hired for a high salary is gonna say, no, boss.

I don't think I could increase that by 5%. No one's gonna say it, but they're also not being a mathematician in that moment, right there. Having to defend their value in the business in that way.

Toni: But it's, I mean, I, I still remember when that happened to me the last time. Um, and we were basically selling the business.

So we are basically in this, in this exact situation, kind of, we are building this, um, spreadsheet to sell it to someone. And I was sitting there and I was defending this, obviously like a champ, no problem. But, you know, on the backside of those meetings, I was always, because I also knew I would need to execute this thing, right.

Um, and we were, we were, mm-hmm. Um, we were exiting the business not to the VCs, so you can't just the next day come and say, oh, you know what, new budget, sorry, we changed our mind. No. Kind of, you are beholden to those numbers. Mm-hmm. And I basically, after all of those meetings, I went to my CEO and I was like, Hey, this is, this is this.

I don't think it's gonna happen. It's really difficult. [00:16:00] Um, and, um, because we had, we used something, a layered approach, like, you know, a layer this, and then, and layer on top is PLG, and a layer on top is enterprise. And it all made sense within those certain layers, but when you compounded the whole thing, it was just crazy a lot.

Scott: Right. Something you said that really stood out. Yeah. You know, who's left holding the bag? You, you gave the example where you knew you wouldn't be holding the bag, right? Yeah. Um, and I think a lot of, Hey, if you're not part of a company where every single. Department realizes that they are stakeholder in, in revenue success.

There's a little bit of a problem here, right? Um, uh, that, that, that, that's one thing, right? Uh, if you're going up market is products pipeline gonna support that? Does marketing have the case studies? Uh, that that with, with the referenceable enterprise logos, do you have the security positioning set up, all that kind of stuff?

It's a full, it's a full team sport, but you know, the holding the bag thing, we know that it typically lands with. Vp, VP of Sales. Right. And [00:17:00] you know, I, I've even seen it where, um, VP of Finance, um, a company I was consulting with, they, they signed off on a plan and then the VP of Finance left a month later.

Do you think that VP Finance scared about the the Excel spreadsheet and all the tweaking? Probably, probably not.

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Visit ever growth.com and now back to the show, but. You know, speaking of all of those things, right, um, yes, the usual process happens to be done by different people from the ones that actually need to execute this.

Involvement of Go-to-Market Leadership
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Toni: Um, so what, what, what's been your, um, main default situation, kind of when do you get pulled into a plan?

How do those dynamics work out? Tell us a little bit more about that.

Scott: Yeah, I mean, I, I, it'd be interesting to, to. See what you, you've, uh, experienced in the past or looked at as well, aside from kind of the, the falcon scenario that we shared together. But often what I see and hear is that your go-to market leadership, they're brought in pretty last minute.

Like the plans mostly, mostly baked at that point and. That might start off the dynamic on, on kind of a bad foot. It, it kind of [00:19:00] can I, if, if you are a CFO and you've already been in that sheet for, you know, a meeting a week for the fa past two months and you've already kind of lofted it to the board as I think we've got a plan, and then in the spirit of collaboration, you bring in your go to market executives, right?

And I say the spirit of collaboration because that setup where you've already spent so much time in it, you could be really attached to that plan probably already. Then you'll be maybe annoyed, like too many chefs in the kitchen. Actually. You're bringing up stuff that maybe it's valid, but you're not gonna hear it the same way if you bring people in at the last minute, once you're very attached.

Is that, does that resonate in any way? I don't know if you see that.

Toni: I mean, it's, um, it's, um. I would call it a change management process that is being kicked off. It's not really asking for feedback, you know what I mean? Mm. It's, it's more like, oh, we are, you know, air quotes making you part of the process so you will buy it so you, you are okay executing it.

Right. But what I've also seen [00:20:00] is. Let's just say you have, as a go-to mark leader, you have all the insights, you see the context of the numbers, you understand which projects, which initiatives will be hard to ex execute, which ones won't, where there is like risk in the plan. You see all of these things, right?

Because you're going through the list and thinking about like, you know, I need to do all of those. Um, the, the issue that I've many times run into both. Experienced it myself, but also with, you know, my VPs working with me is a little bit this weird almost incentive system, um, which is, well, if you are a VP of sales and you complain about your targets being too high.

To a degree that is like, oh yeah, no, I have that conversation every quarter with my sales reps too, and you know, I'll just need to talk you off that latch and push back and just make you, make you eat whatever the target is, right? Because if you, if you push back and you see risks and you kind of, I don't know, you worry.

Um, it [00:21:00] might also just be a thing where people then either feel like, oh, he's just trying to negotiate down his or targets. Uh, or like, oof, maybe he or she isn't the right one for the job. Maybe we need someone else to execute this, right? If, if you're not a believer, if you don't think you can get it done, tell me now because it's still course correct, so to speak.

Right? And I think this, this leads to a pretty silly situation where you have actually, um, the right intelligence, the right experience in the organization, but basically it's not being used. And, and you tell me more about that. I think that's. Role that people are playing, I think that's very well known across.

And then people make this calculation in their hand, well, do I want to come off as weak and, you know, push against and, and basically do the right thing for the organization, honestly, or do I just eat it? And take the battle when it happens in Q2, Q3, Q4, when we, you know, start missing all of those quarters.

Right? I mean, what, how have you been dealing with that?

Scott: Yeah, so, hey, the first thing that I'll, [00:22:00] I'll kind of throw out there is I don't think this scenario is really anyone's intent, right? Um, I think VPs getting in, brought in right before board, like give, giving other leaders the benefit of the doubt.

Like think about the season when this happens. Are, are those leaders just protecting end of year focus, right? Like you're trying to hit the current plan at the same time that you're, you're going into the next year's plan. Is that really where you want your execs to be focusing their energy rather than making sure the team is closing all those deals?

End of course. So, I dunno, may maybe that that's one of the areas that come into it, but, but maybe it is a, a, a trust thing. I mean. You did say that they show you the plan, almost like it's just, um, something you need to do to maintain buy-in, but you're actually getting the opposite when you do it this way, right?

When you're already kind of married to your, your sheet because you've been in it for, for so long, and, um. You're kind of [00:23:00] annoyed when someone's asking questions like, Hey, where did we get that number? You could almost see the room change. Like, what's that, that like meme where there's like the skeptical face, you know, that's looking at you.

It's like, where, uh, typical sales gal, where's she going with this one? Right? And that, you know, you start to get a little paranoid. You realize that you have maybe five of those questions that you could ask too. Get an informed opinion and then try to come up with the best plan for the year that's gonna help you and your team to, to be successful.

Because again, you're holding the back. Right. And, um, I mean, think about this a lot of times, like the other dependencies, uh, you know, product engineering, um, talent enablement, like maybe they haven't even seen this thing, right? And you, and you rely on all of these people to execute a plan. Sometimes

Toni: I think fundamentally.

To a degree that's not a solution. It's just trying to explain why this messy problem [00:24:00] exists is, um, I think you're building a plan truly for two different audiences. And I think that's at the core of this. I think one is for, again, it's the, you know, the management team, the senior management team building this thing out.

But one audience is your bosses and that's new investors. It's current investors for the next year. It's like whoever it might be, right? Um, and you can fool them. You know, in the nicest, you know, meaning this in the nicest way, but you can fool them with a bunch of things because they just don't have the contacts.

Right. And then there's the other audience, um, which has some other, the contacts which needs to go, um, actually execute that stuff. And it's really difficult to marry those two worlds sometimes I think. I think it's simply is right. And I think this is where it's coming from. I also believe, um, could you do it the other way around?

Yes, sure. But in the reality of things, um, you will always optimize for your bosses. And I think that's, that's where some of the gap is coming from. But what does that lead to? Kind of, what are all of those things [00:25:00] actually leading to? I think it leads to, um, ultimately not hitting your targets. It leads to.

Not having the same amount of trust from your board, from your new investors as you, as you carry into this year. It's, um, you know, one, one guest on the part, one said like, uh. You can, you can decide either fire me now for a low ball plan or fire me in 12 months from now. That's, that's the only options you have.

Right. Um, and I think, you know, finding that balance, um, is extremely, is extremely difficult.

Scott: I think you're, I. Kind of double clicking on that. Trusting.

Trust and Executive Leadership
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Scott: I mean, earlier you said something, um, you know, do, do you maybe think that your VP's trying to low ball their target? And like, at the end of the day, if you even have that thought about any of your executives, you probably have the wrong executives in, in, in the seat, right?

If you don't trust, uh, also that your executives can have a good, constructive debate over a plan to make sure that it's rock solid, [00:26:00] but then in front of the team. Leveling show someone that has ultimate belief in the plan. Right? Then you've also got the wrong person. They can't operate at multiple levels and, and you, you can't, um, I think you were saying kind of like, you know, you just want to deliver the target and say, Hey, go execute.

Like, um, you're not gonna get buy-in that way. Just if like a frontline manager went to the AEs and said, we're gonna increase target, of course you would bring the how. Of course you would bring why you have that belief, right? And so I think a mistake could be made to, in this moment, to maybe manage your executive leaders like, you know, a front, a frontline employee all of a sudden, rather than the expert that, that you, you, you fired.

Toni: What does that mean? Managing your, your, your executive as a frontline employee?

Scott: Yeah. Uh, well by the way. Wouldn't ever manage frontline employees like this either. 'Cause I just kind of gave [00:27:00] the example of, you know, I'm a frontline manager and I'm going to my AEs and saying, Hey team, so we have an ambitious plan, we just raised our series B.

We're gonna turn up the heat on this thing. I gotta let you know 2026 gonna be an amazing year record breaking year for us, and here's why I'm so confident. We could go and break these records, right? And then you're gonna tell them, Hey, here's some of the things I'm delivering for you. We're gonna redo pricing and packaging.

We've already tested it. Higher close rate, uh, higher ACVs, and you're telling them all these whys that are almost compounding. And then their target only increased 10% kind of thing. Right, but you've done all of these other things, right? Any good manager would know that to retain buy-in, you have to show that transparency and show that, show that belief.

I'm not just expecting my AEs to hear targets raised and go, alright, boss, let's hit it. Yeah. You know? And then be like high fiving at the water cooler, right? They have to [00:28:00] have a reason to be confident in me or you, or you lose the trust, right? So what a complicated scenario that if you're not bringing in your executives in a timely manner. And the data's confusing and you're annoyed when they're asking questions about it to then go expect them to just go rock and roll, baby. Yeah, we got this thing right? Uh, and then to uphold that belief in front of the team, you're not equipping your, your leaders with, with the the, the how and the confidence.

So I think that's where, where things break. But once you have the trust. Okay, that you can bring your executives in and let's actually just talk about this plan. Let's set up something where we could win and look fantastic. Then you could go through. The process of, Hey, let's take, take a look at this and make sure there's no cracks in the foundation.

Top Mistakes in Hiring
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Toni: Let's take a look at that. Actually, let's kind of go through a couple of examples, and maybe we go rapid fire between the two of us. Um, in terms of what are the, what are the top mistakes people are [00:29:00] making and, and how, how should there be addressing that? Right. So I'll, I'll go first 'cause you know, I'm the host.

Um. First one is also my favorite one, hiring on time. So why is that a biggie? Well, usually the plans start adding new headcount 1st of January and that, you know, maybe you have thought of all the other things. But your, your plan really only gets finalized maybe in November, maybe early December. So at that point, um, have you actually started hiring already for those additional roles that were, uh, opened?

Do you have the requisitions? Is you talent an attraction team or you kind of doing all of that work? And the answer usually is no. The answer usually is no. Usually you miss your first. 1, 2, 3, hiring month, you simply miss them. So what happens then though, especially if those roles are opportunity generating, right?

Pipeline generating is that it gets really difficult to catch up on that thing, right? [00:30:00] Yeah, exactly. 'cause one hire you make in January, they have 12 months to deliver value. If you then only make the replacement higher, so to speak. Or the backfill hire in February or March, they have less time to deliver the same amount of pipeline and let's forget about sales cycles and all of that, right?

In reality mm-hmm. In order to make up for one earlier missed hire, you actually need to hire two people to make up for that. And that will get you into issues already with A CFO, right? Yeah. So hiring on time, making proper, um, uh, I wanna, I wanna say kind of realistic targets for that. I think this is gonna get you out of hot water real quick.

Scott: Totally right. The, uh, in typical any, anything mid-market with a, a normal velocity and, and ramp time, uh, for those reps hires in H two really aren't impacting that fiscal year.

Toni: Yes.

Staggering for Supply and De mand
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Scott: I think one that I see, uh, on the spreadsheet that's a common mistake is not, uh, staggering. [00:31:00] The, the, the supply and demand, right?

Like when do the BDRs get hired versus when do the AEs get hired? Obviously you wanna allow there to be enough ramp time. Uh. A realistic one for those new BDRs to start producing opportunities so that there's enough supply for the the AE headcount. And you could see things when hiring dates get missed, that BDR started late.

For example, did you push the AE and a a? If you don't, what. The only thing you're gonna do is you're gonna start starving your existing AE team. Right? You're taking people that are the most experienced, that have the highest conversion, and they're gonna get less opportunities. So it's kind of like a double whammy in that scenario.

Toni: Someone asked me once if I'd rather want to have a top AE leave or two SDRs, and I was like, I'll take the ae. Mm-hmm. I wanna rather keep my STS and, and basically for this reason. Right. And I, and I see this is. You know, one of the mistakes a lot of people are making is they are, um, somehow getting jumbled up on, [00:32:00] um, on the opportunity generation side.

But try and hit their, uh, plan on the AE side and then that goes south basically because of that. Right. Yeah. So that's a, that's a big, and you know, playing into this basically also wrap time, right? Kind of. That's a thing that some fancy spreadsheets have. But usually what I see is there's some kind of an assumption that maybe the ramp time should kind of shorten a little bit.

Obviously that makes a bunch of sense, especially helps your C payback period. All of these things totally should try and achieve that, but you know what is actually impacting ramp time? It's enablement resources. It's maybe some LMS that you have in place. It's the right ratios between your AEs and your managers, but it's also how many opportunities are you willing to give to those new reps?

How quickly, right. I think this is a completely underappreciated and kind of missed thing across the board is people assume ramping. Just happens by a way of time going by, but that's actually not true. It, yes, there's a component of learning to it, but then [00:33:00] there's applying those learnings in a way of running those opportunities.

Right. And also, by the way, that's the main difference why enterprise companies have a nine to 12 month ramp. And SMB companies have a three and sometimes six month ramp because those opportunities also convert to actual, you know, close one businesses faster. People are just forgetting about these things and then they're still saying, oh, let's kind of reduce ramp a little bit.

And again, that will just put you on a terrible trajectory. Um, if you're missing out on, on that super important tweak,

Scott: just noticing, look at the first, first two things that we're talking about breaking here. And the, the, the plan for the year typically don't even roll up to revenue leaders, right? Yeah.

These are two separate functions. This is ta, which is normally under people, which may be what sits under CEO. Rolls up head, head, head of people for example. And you know, and then you've got enablement, which, hey, I've seen it a lot that frontline managers are doing a lot of the enablement, or you've got SMEs being tagged across the org.

Um, and I think this [00:34:00] is a one where deeply you need to evaluate the, the context of, you know, how quick is ramp feasible.

Challenges in Scaling and Execution
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Scott: And once you start to hire a higher volume, which scrolling through LinkedIn, I felt like every. One out of every 10 posts today was like, we're hiring. So I don't think hiring for these high volume roles is off.

Uh, uh, B-D-R-S-S-D-R and, and and AEs thing, despite what we hear about AI and so forth and, um, making the assumption or, or. Giving it a nice haircut off of what a tenured rep's ramp time you have survivorship bias. Like you forget the initial five reps that you hired back in the early days that attributed really quick and didn't perform well, and you remember like the superstars that stayed, right?

Mm-hmm. So definitely wanted to double click on, uh, I think, you know, we've already talking about, uh, the tweaking, the, the volume and the performance metrics, uh, quite a bit. Um, but. I think the biggest one for me [00:35:00] is lacking the, the underlying how, right? Like we're tweaking all these things by 5%. It's very easy to say it's just 5%.

Like I don't need a how. Like, hey, look at Scott, we hired you and look at, we have these new managers, uh, kind of thing by the way, compounding, it's neglecting that maybe tenure is going down while you're also assuming you're going to increase the performance metrics. Typically, those are inversely correlated.

But we're making the double bet here. Uh, typically, um, uh, but we shouldn't hear, like if you ever hear, uh, well, we'll just do more coaching. This is not a how. It, it definitely is not a, a how most of those improvements come from something way more structural like, Hey, we're gonna do a new lead scoring system.

We're going to pair our senior AEs with a dedicated BDR, right? So they get more opportunities and they're with the best performing BDRs. Any of these types of things are, are critical on the hows [00:36:00] and, and in this Excel spreadsheet we often see. They aren't even ramped improvements, right? It's like magically boom, start of Q2, win rate's up 5%, you know?

And so these need to be staged improvements over time with a clear how to get there.

Toni: I think what is the reality and the challenge here though is, um, I think some of those initiatives and projects that you want to drive to improve win rate by a certain, you know, percentage or, or ACVs or whatever. I think there might be clear, you know, when you, when you, when you build this plan, that's gonna be Q4, there might be clear for Q1, maybe for Q2, um, but the rest is just really far out.

You don't even know if the bats you're placing for the first half of the actually gonna pay off. Uh, or if you need to double down and really make sure they're working out. So. I kind of understand, and this is I think where the, you know, the, the guys that are execut and the guys that are planning where there needs to be this trust relationship also in place to balance this out, [00:37:00] where we are saying like, yes, we don't know yet what we are gonna do in Q4 to achieve whatever improvement we want to achieve, but we, we all know we will figure this out somehow.

Right. And I think that that is kind of, that collaboration is really important, which also goes back to the trust piece. Um, in terms of at least. When, when someone is, I'm just gonna say, call it what it is, is kind of cooking the books here, um, at least they should be very clear on where are all the different leverage points that are maybe not extremely obvious from first glance at the, at the spreadsheet, right?

There should be one tab. Basically points out, um, where the changes are happening. Um, so then you as a, as a, as a go-to market leader has a bit of a, an understanding and roadmap what's potentially ahead of you, right? Again, building this trust relationship is, is, is pretty important here.

Scott: One thing I would add is the, the kind of, we don't know exactly what the initiative is gonna be, but we, we will come up with one.

I think that's where. You [00:38:00] could potentially run into these capacity bottlenecks, especially when it's cross-functional, right? That you have the best intent, but then everybody else is operating in silos like product and engineering has their own roadmap and their whys, and we forget that we're going to need.

You know, something, uh, a, a new enterprise feature, right? Specifically to get that a CV up and we're gonna do segmentation of the team, which doesn't exist. And maybe that kind of runs, runs into the next one, like thinking Yeah. A little bit holistically about, uh, the cross-functional

Toni: requirements, right? I, I, I want to take the capacity piece even one step further.

Um, and this is why I really never liked to put. A bunch of changes, especially on top of the sales team, um, even though that's a great lever to pull, but it's it's dangerous. Really realistically thinking who in the team is actually going to execute those projects? Let's just be serious about that. Right?

Kind of as a VP of sales, you're [00:39:00] gonna be busy with hiring, you're gonna be busy with running the forecast team, coaching, closing deals. You already have a pretty packed schedule, you know, just maintaining what you're currently doing and then saying, Hey, and now you are also gonna run a project to figure out how to add another five points to the conversion rate.

Who is, who's gonna do that and when. Right. Kind of also think in terms of capacity with like who can actually execute this, and my belief is usually sales ops can't, or rev ops can't. It needs to be the vp, it needs to be leadership to kind of actually do it and then just be serious, like usually. Um.

Sales guys are really kind of deep into what they're currently doing already. So adding projects is kind of, it's not alien, but it's not the, the core motives of operating, I feel. Um, and then kind of really understanding, well, do they even have time to execute these things, right? Kind of. Yeah. Really think about that really hard.

Scott: Well, if you, if you were really going to do it right, you'd create all the projects before the rapid scale. [00:40:00] Because once you're, uh, looking to increase headcount by X, you are spending 30% of your time in interviews where normally you'd be spending that time with the team on performance, right? You're frontline managers are eating lunch with, with their camera off doing an interview because it's the only time that they could eat in the day.

Right? So you really, again, an example of compounding things you're adding, uh. Initiatives at the same time, you're losing the regular time that you'd be focused on performance while you're scaling headcount, you're doing onboarding yourself, you're running trainings the first week of every month with that new hire class.

Um. So I, I think, you know, I saw, I saw it work really well. We had, uh, our friend Deb back at Falcon and she was like the, the capacity police where she would argue with you to say You're Overcommitting and what a blessing, you know. Thanks, Deb. It was great. Shout of course. Shout out to Deb. Shout out to Deb in that, in that room you're going, when you're with all the executives, you're coming with the play and everybody gets the endorphins going.

You're at [00:41:00] the offsite, right? And you're like, yeah, yeah, yeah. No, no, no. I I, I got that project all good. Right? And then reality hits later.

The Reality of Adding New Elements to the Plan
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Toni: You set one thing a couple of sentences back, uh, which is basically like, Hey, do we have this enterprise feature ready, for example? Right. And that's, that's a great lead into.

Usually folks try and add some kind of a new thing to the plan, like a new segment, a new motion, new, you know, uh, new industry or whatever it might be. And the, the, the obvious problem with this is that there's just no historical baseline. Uh, so everyone is guessing on where the starting point should be, which is totally fair.

That's just the, you know, reality of doing those things. But that can also usually lead you astray really quickly, put you behind. You know, we talked about layers. That would be a layer you maybe look at separately, but suddenly that layer evaporates completely. You need to kind of catch up from other ways.

But also it creates all kinds of different requirements, [00:42:00] uh, in order to, you know, those requirements don't, don't, um, guarantee that you will achieve the target, but they're still there in order for you to even have a shot. Right? You maybe need to change. The profile of AEs. Maybe you need to have those enterprise features.

Maybe you need to have security and privacy features. Maybe you need to have all kinds of other things that you kind of need to add to this thing, um, which may or may not happen, right? And even though you as a go-to market leader, do the execution completely well and completely correctly. You still might not have all what's required in order to actually get there.

Right. Again, something that just mm-hmm. Let's just say, you know, it's not terrible. It's not a, it's not a bad thing, but it certainly adds risk to the plan that I think you can sell very easily to the board and say like, Hey, look, we have, you know, less data. We did this research, we could totally nail the segment.

But then in the execution, a bunch of things, you know, sometimes get forgotten. Right. Um, and I think that's, that's a typical one, adding something that hasn't been there before.

Scott: Yeah. [00:43:00] Yeah. A couple, couple of hand raiser enterprise logos come in that they had such a. Identified need, uh, through, through themselves that they neglected to, to exhibit the typical enterprise buying requirements.

Right. They didn't care about security. They, you didn't need eng, the engineering team to help with the RFP kind of thing. Mm-hmm. And then you just assume that it's gonna scale that way, and that would be. A mistake. This is a common one. Um, that, that I, I've seen, um, certainly like helping early founders with their plans as well, uh, recently.

Um, and, and it breaks you, you really can't make up for it, like missing buffers, right?

Risk Management and Buffers
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Scott: Um, yeah, and it sounds super obvious, like may, maybe this is an obvious one, but you know, the ideal is to build a plan that's significantly over. The, the board plan, even with the buffer, right? Like you, you could sleep at night with, with this type of thing.

Again, you also have the hows of how you think. That's actually like 90% achievable. Uh, and if [00:44:00] you fall 10% short, you're still per uh, uh, you know, over the board plan type of scenario. Yeah, curious to hear your thoughts on that one.

Toni: So the buffer thing is really difficult. Um, I think there's a practical thing to it.

Um, if you think about it as you go down the hierarchy, um, very top level, someone will own the net new revenue number, and that's probably gonna be at least the CEO. Uh, in some cases, which was the case with me also was owned, carried by me as a CRO. Um, and you have that board number. Um. You know, regardless that's locked in for the year, you can't really do anything about that.

Um, but then, you know, having this go all the way down, let's just say to your SDR or SDR leadership or a leadership, um, that doesn't really work either because there are operational realities that make it impossible for them to hit that target. You know, let's just say a quit or, you know, you couldn't find those hires.

You can't give those, you know, frontline leaders the same target as they should have [00:45:00] according to the plan. Right? It just doesn't work. So at some point in the permit, you will need to meet, um, and, um, when you do using buffers in order to de-risk, um, you know, to a certain degree, especially for yourself.

So this was, in my case, extremely, extremely useful, right? Um, the other way to think about buffers is also. You have all of those initiatives, all of those things you want to improve and achieve, and each of them carry quite some risk with them, actually. And I think a really helpful way to think about this, whether that's board or the operational plan, which is kind of an audience thing to think about it more in a.

You know, risk level plan, right? And I think the stretch version, the riskiest version with most of the compounding impacts and most of the improvements maybe that that's what should guide your operational execution, but the one with fewer risky adjustments where a lot of the things that you're doing [00:46:00] are kind of the same as they have been last year.

That ideally should be your board plan because you don't really wanna miss, uh, you know, lose the trust of those guys. Um, mm-hmm. And obviously then there's the reality of like, does that work out? You know, do you have to pull a rabbit out of your hat this year in order to even, you know, be a viable company?

And then obviously you're kind of back against the wall. But otherwise, I think what I just said is probably the guidance for most of you out there.

Scott: I think probably the last one, uh, that we see often, um, again, this is thinking about context for the next year. But it's more like context for what, what is the unknown?

What can't you plan for?

Planning for Attrition and Unexpected Events
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Scott: And a lot of companies, they miss the attrition thing, right? Again, they assume like, oh, well hey, RA, the average 10 years, two years, they're gonna assume that that's what it's gonna be for every additional hire, um, type of thing. And, and really when you're going through growth and then instead of it being three oga AEs, it's uh, 15 AEs that were higher at all within.

You know, uh, six [00:47:00] months or, or, or a year type of thing. It's different for that AEs. They're not sitting next to the CEO, they don't have that founder effect. They're not getting all the lowest hanging fruit on the marketing leads. They're now sharing those, you know? Mm-hmm. Um, there, there's a lot of different things that could come into play, but it's so critical to actually have an assumption of attri attrition.

It loops back to the hiring thing, right? Because there's gonna be that delay that when someone leaves unexpectedly. You know that then you're gonna have the sourcing period to find that candidate, then the ramp time, and like, it's never gonna be in the same year to replace that, that ae, right? Yeah. Uh, type, type of scenario.

Yes. But I mean, there's unforced problems, right? Like, are you not planning for promos? Right? Of course you should have promo pass and things like this, uh, built into your plan for, for performers. Or even expecting the unexpected. Someone goes on medical leave, they're enjoying time with their new child, right?

A top performer has, has a child. Like they should be able to enjoy that and your entire plan shouldn't be [00:48:00] hinging on hope that no one has a child, right? This would be ridiculous. Uh, so, so yeah, that's the last one that comes up in my mind.

Toni: And I think to kind of wrap this up a little bit, right, I think especially the last one, you should send that to your CFO because what that will translate to is maybe you can hit the same revenue number, but you will definitely need to spend some more money in order to get there, to manage those backfills, to manage those redundancies, to have a bit of.

Slack and Buffer almost there. Oh yeah. Um, I think otherwise it's gonna be extremely difficult to execute this on time. Right.

Scott: I, I, I'm trying to remember the acronym of once I was acquired by a public traded entity of, you know, what, what that approval process was like to get the headcount and boy that was dysfunctional.

Oh my gosh. We've got a revenue model that doesn't speak to the people team. It doesn't speak to the, to the CFO and the people team's waiting to get sign off from the CFO for that budget. And it's like, Hey, if we actually want to de-risk our plan, having extra salaries approved above in the [00:49:00] case that they're needed, and we already can identify, Hey, this person's on a warning, or, Hey, this person's going to go on leave.

I know they're gonna be going on leave. Let's start the backfill process now and not being so rigid in that way that avoids some of these unfor error. I think that's it

Final Thoughts and Future Discussions
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Toni: for today actually. So we had a whole segment, um, and maybe just ping me or Scott on, on LinkedIn, but we had a whole segment on, uh, diving much deeper on all the.

Hiring intricacies and how TA plays into this and issues that kind of might surface because of it. Um, but I don't think we'll get to that. I think we are, I think we are like, way too far into the episode already. So maybe this is a follow up for, for the two of us to, to produce me in the next couple of weeks.

Scott, thank you so much for taking the time and, and helping some folks figure out how to, um, build a plan that they can actually execute next year.

Scott: Absolutely been a pleasure, Toni. Always great connecting.

Toni: Wonderful.

Scott: Have [00:50:00] a good one everyone. And cheers.