Want predictable revenue? This'll help

The most predictability businesses have for revenue is the forecast. But what are some other simple steps you can take to build more predictability on revenue?

Toni and Mikkel discuss non-magic steps you can take towards predictable revenue.

• The industrialization of sales (05:09)
• How to go about it (06:32)
• Giving targets to your team (08:31)
• Steer clear of magic (10:31)
• The 10% rule (11:02)
• Give quarterly targets (13:44)
• Where will you add a buffer? (14:47)
• How do you get to quarterly targets? (19:41)
• Too much cushion? (21:33)
• Focus on the 10 percenters (25:30)
• The board and the plan (26:50)

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Creators and Guests

Host

Mikkel Plaehn

Marketing leader & b2b saas nerd

Host

Toni Hohlbein

2x exited CRO | 1x Founder | Podcast Host

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.

[00:00:00] Toni: Hey everyone, this is Toni Hohlbein. You are listening to the Revenue Formula. In today's episode, we are going to talk about very pragmatic, tactical advice on how you can inch closer and closer to predictable revenue. Enjoy.
[00:00:21] Mikkel: There you go. There you go.
[00:00:24] Toni: Ah, Phil. So home suddenly. Woo.
[00:00:28] Mikkel: speaking of home. So this weekend, so we got, my son a bike and, uh, we were
[00:00:33] Toni: like with like, uh, training wheels or not
[00:00:35] Mikkel: Well, like with a stick, right?
[00:00:36] A stick in the back and, um,
[00:00:39] He learned to, uh, write himself. It is like that proud dad moment. So I never cry at movies, never. It's very rare that I shed a tear, but I was really close. I was really close to shedding a tear really close. And then, um, when we were done, we were only doing it for like, me running behind him for what, 10 minutes.
[00:00:57] And then, uh, in the evening I was like, why am my legs so sore outta shape? Really outta
[00:01:04] Toni: have the same thing. My, my little one, he's like trying to walk now. Yeah. And he is really upset if you don't help him. Yeah. So it is basically one, one of us is like walking with him like this, like everywhere, you know?
[00:01:16] And it's like, you're in this crouched position and it's like, okay, I'm sure
[00:01:20] that.
[00:01:20] Mikkel: But it was also like, then later I, I sat down on the couch and I got up and my knee like, make this huge crunch and I was searching for arthritis later than, yeah, exactly. I'm kidding. So that's the funny thing. My kid, he calls me like old man. I'm like,
[00:01:36] yeah,
[00:01:37] you get a bit subconscious
[00:01:38] Toni: No, but also, I mean, Noha,
[00:01:39] Mikkel: Yeah. Yeah.
[00:01:40] Toni: know, everything's like, uh, fits.
[00:01:41] Mikkel: teeth. It's like, yeah, it's terrible. It's terrible. But I mean, I guess we could predict that you are gonna grow old, I guess you're gonna predict that, right? today we're gonna talk about some other things you can predict, and not just listen to my amazing segueways,
[00:01:54] Toni: or can
[00:01:55] Mikkel: you?
[00:01:55] Or can you? Yeah, that's true. Uh, well, some can't. That's for darn sure. We're gonna talk a bit about predictable revenue. So I remember. Story time, way back. When I started here, it said predictable revenue on our website. I was like, isn't that a bit snake oily isn't, isn't it? But actually, you know, we've been through that mill, uh, together actually with some predictable revenue.
[00:02:17] So we're gonna get into some of the mechanics today and we kind of pivoted the episode a little bit to say, Hey, let's try and get a bit tactical here. Let's not be, you know, up in the clouds and, and be super strategic about it. Let's give away some very concrete steps that you can actually take.
[00:02:32] Toni: Yes, some.
[00:02:33] So, and, and really this is going direction, you know, we can, we can talk more about sales math and like, hey, these are, these are the things and don't forget and do this and do all of that thing. but, uh, when, when I sometimes talk about this, you know, the, the reflections from, from people hearing this, um, more about the how do you actually then execute this?
[00:02:51] How do you live this? You know, how do you. Deliver to the board, how do you deliver to the budget? How do you deliver to your team? And so forth. And, and some of these things are almost tactical in order to do it. Some of these things are comms problems actually. So that's why, um, maybe kind of going through this today is, is the right approach.
[00:03:08] Mikkel: Yeah. And I think it was also sparked, but uh, by a trip we had to Sweden where we talked a bit about some of the stuff we've been through. Yeah. And one of the things we're really Yep. Some of the stuff we've been through and, uh, I kind of wanted to get into one part. Of that conversation. That was super interesting because I hadn't, I hadn't realized what was happening in the background.
[00:03:28] So just some context for the listener. I was heading up marketing, you were heading up the commercial team, so obviously you were privy to some, let's say, pain and information that I wasn't, which is kind of interesting. Right. So I wanted to get into some of the, the problems around not being able to predict fully and not being able to control revenue production fully.
[00:03:47] Toni: Yeah. So the thing is, obviously everyone asks you to break that stuff. If you really think about it, the sales forecast is the, you know, it's to degree trying to, help the same problem with like, tell me the future.
[00:04:04] Mikkel: Let's put
[00:04:04] some tarot cards down and figure out what's gonna happen.
[00:04:06] Toni: Um, and um, and obviously when you go through this planning process, budgeting in the, in the beginning of the year, everyone is like super, uh, ambitious and, and once to achieve things. And then obviously in the, you know, later in the year, some of that is, is kicking you in the but a little bit. And the, the main issues with that is really twofold.
[00:04:26] One is, loss of investor trust. Yeah. You told them you're gonna do X, you're not achieving it. And then there's a question mark on next year plan, kind of these kind of things. Or on you if you're the CRO or the rev op leader or whatever it is. Um, and the other thing is obviously trust, with the team.
[00:04:43] So you tell them, Hey, we're gonna do all of those fantastic things. We're gonna get to, you know, wherever. And then you don't
[00:04:49] Yeah. And that then obviously erodes, uh, trust also with the team, right? So you have basically kind of both of those, uh, stakeholders to manage. I mean, it's really, this is the entirety of your stakeholder
[00:05:00] Mikkel: Yeah.
[00:05:01] Toni: Basically.
[00:05:01] Mikkel: there's a double whiplash, maybe
[00:05:02] Toni: maybe of a wife or partner at home
[00:05:04] or something like that,
[00:05:05] Mikkel: but, uh, you're missing.
[00:05:06] Toni: yeah. Where's that
[00:05:08] Mikkel: Yeah.
[00:05:09] Toni: Um,
[00:05:09] but, um, you know, besides that, those, those are, those are all the stakeholders that you can have, right? And. And, you know, talking a little bit today on, you know, maybe how to kind of go about it and manage this.
[00:05:20] That was kind of the idea, right? Because if you. The, the predictable revenue piece. It does sound sometimes snake oil if I think some other people might have read, predictable Revenue by Aaron
[00:05:30] Ross. Yeah.
[00:05:31] Um, I had a conversation with, uh, Dave Kellogg about this book, and actually from his perspective, he was not like, this is not about SDR AE.
[00:05:39] He, he talks about it, or Dave sees it as this is the industrialization of
[00:05:44] Mikkel: sales. Yes.
[00:05:45] Toni: That's, that's how he thinks about it. It goes away from this magic AE, you know, does a big deal. And everyone is like, you know, celebrating him to, Nope, it's a production line, it's a factory. You need to do those things.
[00:05:58] And if you don't do them kind of you, you, you ft. Right? and, uh, that then, you know, when you have it in this like, really nicely predictable setup or this, this factory kind of setup, guess what? It's predictable, right? Then you can kind of get into this thing, and if you take it away from this magic approach of the one off and the, you know, lucky sales guy at the end of the quarter and, and put it into this system, then you get this predictability, right? So this is kind of the, I think the overlap between those two concepts. But, so we've talked about this a lot.
[00:06:28] I think what we haven't talked about is kind of how to actually go go about it.
[00:06:32] Mikkel: Yeah. And so that's what we're gonna get into because I mean, we've, we've veered, you know, over the topic subtly in some of the other episodes we talked about forecasts, you know, great stuff you can predict, this quarter, but nothing else.
[00:06:44] And you know, it's. Pretty much the self-fulfilling privacy anyway, at that point in time, a bunch of hidden assumptions in the plan, which you kind of also talked about now. So what is the solution here? If you wanna, if you wanna start getting a bit more predictability into what you're doing, if you wanna be able to put forward the number both to the investors and the team, and actually be able to hit it rather than this.
[00:07:06] Oh, we thought you were on the unicorn path. Not anymore. Crossing you off the list. Right? How, how, how do you go about it? How, how do you do
[00:07:12] Toni: that?
[00:07:12] Um, yeah. And, you know, let's, let's not get too high up in the clouds.
[00:07:16] So this whole unicorn thing and all of these pieces kind of, let's keep it, you know, down to earth. I think number one is, Yes, there's a bunch of math you should be doing at the beginning of you will be forced into a planning cycle. You won't have anything to, you know, I'm gonna talk a little bit about kind of constraints and one of the constraints you will have is that there will be a budget for the year and there will be a number for the year.
[00:07:37] You cannot do anything about it, whether your RevOps, CRO, nothing. Right. And sure you will have a, a, a word to say and how this is being put together and. Uh, and you will be able to tweak the number up or the number down or you know, all of that stuff. But at the end of the year, you will be locked into these 12 months.
[00:07:54] Yeah. Yeah. There's very little you can do about it. What you can obviously do in order to improve the validity of this thing. Use data. Yeah, sure. And we have said this many, many times. Use some data, use some common sense, use some logic, use a model, blah, blah, blah. Right? All of these things, obviously important in order to get to something that is your today's best guess of the future.
[00:08:15] Does that mean that the future is gonna turn out exactly like that? The answer is obviously no. Uh, but you won't have a chance. But to commit at that point to, you know, that trajectory at least, right? And yes, people will be upset if you are 10% above or below or 20 or whatever. but that's just the reality of it.
[00:08:31] You, you will have to lock in this thing, the other thing you will need to do is, and that's the other constraint you will need to give targets to your team.
[00:08:42] Yeah.
[00:08:43] Um,
[00:08:44] Mikkel: ones.
[00:08:44] Toni: Uh, and the
[00:08:45] Yes.
[00:08:46] Um, and the thing is now, as you give targets to someone, you know, putting it in quota and commission and so forth, you're starting to, lock in your plan more and more. Yeah.
[00:08:58] Which can be good and can be bad. Yeah. If you think about the incremental giving someone quota, That's kind of okay. Right. And I think this year really is a, is a story for everyone that has crossed the 10 million threshold. I think if you're before that,
[00:09:12] it's chaos is the reality of this. So kind of really kind of thinking about it like that , giving someone a quota and AE giving someone a quota.
[00:09:20] That is kind of okay. You know, it's, uh, you can still play around with, uh, you know, not hiring mores or letting that one go, or hiring a lot more. You can still play around that quite a lot. So that's, that's okay. I think the difficulty is giving your VP sales VP marked in VPC as targets. Hmm. That's difficult, right?
[00:09:40] Because as you do that, you're starting to, uh, you know, you obviously want. That permit to add up to your number? Yeah. Or to the company number, right? Or the board number. Yeah. And you can have different numbers, by the way. That's totally fine. A lot of people do that. But as you kind of, as you lock your VPs in, uh, you basically kind of solidify some of these things, right?
[00:10:01] And, and those are really the two main constraints you need to work around is, number one, the budget, uh, which has costs on the target, and then your team communication, right? Kind of, that's, that's the world you live in. And now you need to start figuring out, okay, if those are really my only constraints, how should I actually go about it?
[00:10:16] Mikkel: Yeah, right.
[00:10:17] Toni: In the, on the, on the planning side, one piece that I actually forgot to mention is really the, yes, use data. And number two, you will probably have a couple of things. Where you wanna improve something.
[00:10:31] And when, you know, when, when I used to kind of do that kind of work, what I try to stay away from a lot is what we refer to as, uh, magic.
[00:10:41] Mikkel: Yeah.
[00:10:41] Yeah.
[00:10:42] Toni: So magic is everything that your CFO thinks, uh, we should just be getting better at, right? So this typical conversion rate, ACV, blah, blah blah, GRR, net retention rate, all of these little numbers are just kind of nudge up just a little bit. Um, all of these things stay away from touching those as much as possible, right?
[00:11:02] If you do. Which many of you probably will because you know, you might have not, you know, any other choice. If you do, you should totally follow the rule of seven times 10 equals a hundred. Yeah.
[00:11:13] Yeah. So again, what was that rule? Um, it's really, if you have . Seven, 10% improvements throughout your funnel, you will basically reach a hundred percent improvement throughout.
[00:11:24] Yeah. Because it's compounds. Yeah. That's the idea. So really, what does that mean? Place small bets place big bets. Yeah. And if you then play small bets, ideally have a team behind it that also executes that. Right. So really kind of as, as you do that, as you use. Data. And as you use non-magic ways to kind of stitch it all together, you will end up with a plan that you probably can execute.
[00:11:48] Right. And, and this is a difficult thing to navigate because it sometimes feels like it's unambitious. Right. And I think this is something where, um, you and the ceo, the ceo, you know, whoever's kind of involved in this, you just need to have an honest conversation about it. Where you say, this is where we think we can get, yeah.
[00:12:08] You know what? We, we are not party poopers. Yes. Let's, let's agree to this bigger target. It's fast. It's not about, you know, the commission check at the end of the day. You know, let's, let's figure out how we can close that gap. But, uh, having clarity on, you know, where you think you can get and um, and uh, what you maybe need to say yes to.
[00:12:25] There can be a bit of a gap to those
[00:12:27] things, right? Yeah. But have that honest conversation around the table, in order to really kind of set yourself up at least a little bit. Yeah, for, for this predictable revenue
[00:12:36] Mikkel: But I think it's such an important takeaway, right? Because, so I see this many times we're blinded and it's almost a fallacy by these big bets we wanna make because it's so attractive, it's so appealing.
[00:12:46] Like, we're gonna go to the state with this completely new solution and it's gonna be amazing, and we are gonna do all these things and you attach too many things onto it. The times we've accept, see the target in marketing. Guess what? We didn't do any of that. We took the most boring things, the most obvious fixes found like 15 of those.
[00:13:06] They didn't take a lot of time to do. But once we completed all the steps, it started compounding right. And then actually we started over performing as a team. Yeah. coming from a, a dark period. Right. So I think that's, that's super important. So, I mean, your point is really, you're gonna end up having a gap pretty much no matter what you do in the planning, you need to
[00:13:24] Toni: I'll, I'll get to that in a little bit. Right. So, so there will be some, some gap, you know, maybe not, maybe there will. Um, but if you, if you, again, if you try and tweak those CVRs and ACVs too much Yeah, you will, you will, you will mess up like for sure. The next tactical tip here is
[00:13:44] try and give targets to your leaders on a quarterly basis.
[00:13:51] So you, you sit there with a plan for the year. And, uh, there wouldn't be anything easier than to just give those plan numbers to your VPs and be like, okay, you know, done, they have it now locked in. Now they need to execute. Right? I didn't do that actually. And this is, you know, me talking CRO role.
[00:14:09] But the reason why I didn't want to, do that is because, some of that stuff kept changing as, as it, as it does. That's, that's part of reality.
[00:14:20] The, um, the underlying pieces. So, you know, sometimes we're starting to call it rebaselining a little bit. Right. But for example, it could be that, your hires are veering off.
[00:14:30] Yeah.
[00:14:31] It could be that some of the processing steps that you thought should be increasing. Are actually decreasing. Yeah. It could be that something is happening on the churn side and so forth. And you can now kind of take one out of two perspectives. One is like, well those VPs just need to deal with it.
[00:14:46] Mikkel: Mm-hmm.
[00:14:46] Toni: right?
[00:14:47] Or you can say, where in the chain do I actually wanna, have the buffer? Because you will always have a. I mean otherwise, then the 1% you will always have a gap between what you're executing and how you're executing into this like plan that was set. Right? And the board is kind of measuring you and you can now decide.
[00:15:12] Do I want to have that gap between my VPs and their directors, or to have the, between the directors and the AEs or wherever you're gonna go with this. Or to have it between you and the board. You can, you can decide where you want to have it actually. And I decided that for, um, operational purposes, it's actually best to have it with me.
[00:15:34] Right. So, uh, I took the hit on maybe then the commission side of Yes, boo boo. I didn't get, you know, the commission pay out. I took the buffer there, but it was also very clear with my VPs and said like, well, if we manage this in the other direction, I will take the buffer in the other direction, my friends.
[00:15:54] Mm.
[00:15:54] Huh. So it's a yes, here's a target and we need to achieve it. And if we are under it, then I'll take it on the chin if we are able to go over it. Uh, that doesn't mean that I only kind of put your comp plans to my target
[00:16:06] No, your compliance will go where your comp plans could take you. Yeah. Right. And it's kind of this, this is kind of how, how I also build trust with it, with my direct team.
[00:16:16] Yeah. In terms of like, Hey, you know, I take, I take the beating. But that then leaves you guys to operate, uh, very closely with your directors, your directors, with the managers and so forth, right? So really, Uh, you will end up with a, gap somewhere in the permit because the board target will never move.
[00:16:32] Yeah. They will just be like, I don't care. Um, and, you know, I need to, you need to be tactical about where you wanna place that buffer. Right. I decided to place that buffer with me, which then gave me the opportunity. To, hand out targets on a quarterly level to my VPs. And those targets now could be adjusted to what was happening, what was going on.
[00:16:53] And at the same time, as, as kind of those targets then reset to a degree on a quarterly level. We were then also able to put that number that I gave to the VPs. Onto dashboards that were visible for the whole organization. Yeah. Right. And those VPs now were responsible for, um, the actual resources that they had.
[00:17:13] And the non-magic way of processing those resources in order to get to a revenue target. Yeah. Which completely aligned them to, you know, the SDR and the AE and everyone kind of, and the CSMs and everyone that was kind of on the table. So they were fully aligned around that. And guess what happened? Because we didn't use magic in this approach. We ended up hitting those targets a lot. Right? A lot, a lot basically.
[00:17:37] And again, this quarterly approach, it also gives you a understanding not only how many hires you have, but also how many opportunities are those hires able to, generate and to, you know, to kind of turn into customers, et cetera, et cetera, et cetera. Right. So we basically, you could, you mentioned like, oh, you know, just a self-fulfilling prophecy.
[00:17:56] Mikkel: Yeah.
[00:17:56] Toni: Self-fulfilling prophecy is great. You wanna have a self-fulfilling prophecy in your, in your quarterly target setting. And in our case, we had, and that's why you're saying that we had like 30 to 45 days of sales cycles, right?
[00:18:08] So at the, let's just say a week or two before the quarter started, we already knew a lot how the next quarter's gonna pan out. Um, especially because we are on the range of like four, 500 opportunities a month or something like that. Yeah. Um, so, uh, we basically kind of knew very, very much what was gonna happen.
[00:18:28] The conversation with the VPs on which targets are gonna have was very, very straightforward was math. Yeah, we, it wasn't a bartering or something like that. We were like going back and forth and, you know, being all upset and playing this whole negotiation game. I was like, Hey, this is what it was. This is what you kind of need to achieve here.
[00:18:43] Here are things that you know, messed up. In some cases, for example, we had one team that went from 12 conversion, uh, 12 points conversion rate to six in a quarter, and I said, Hey, my friend, I'm not gonna give you that six. Forget about it. That that's, that's not gonna work. I'm gonna put it at 10. Yeah.
[00:19:02] You know, you need to figure out how to kind of close that gap. But I was, I was obviously kind of open to give some wiggle room here, right? Yeah. Um, and that thing all taken together, generated tons of trust and goodwill and, positive momentum and all of that stuff with the team and, you know, the, the whole thing around it,
[00:19:23] Mikkel: right?
[00:19:23] I think it also creates a sense of what truly matters. you've done the relining, you have a pretty good idea of what are the things that needs to hit. So whether you're marketing a sales, you know, well, we need to be able to produce. This amount of opportunities per SDR marketing, we need to produce this amount of opportunities from these channels.
[00:19:41] And that becomes a focus point, right? So I think that's super powerful. One question for you, though, not everyone is gonna be the CRO listening in this case, right? They're gonna have maybe a CRO or uh, they're gonna be VP RevOps, whatever the scenario. How do you go about then recommending, hey, we should consider a quarterly cadence for targets instead?
[00:20:01] How do you go about that?
[00:20:03] Toni: Yeah. I think the way you need to think about is almost like what are you optimizing for? Yeah. What is it, what do you wanna achieve? Do you wanna, and this can be a conversation that Rev Ops has with the CRO. It's like, do you as CRO wanna, offload all the pressure to everyone around you, so they then keep offloading the pressure to everyone around them and so forth.
[00:20:22] Is that what you want to achieve? And then, you know, that's okay. You can, you can totally do that. Or the alternative is, you, you go a little bit smarter about it and try and basic what you're trying to achieve and align, uh, do here is you're trying to align the, you know, each of the heads of the departments.
[00:20:41] Mikkel: mm-hmm.
[00:20:42] Toni: To everyone in the department. Uh, because otherwise you're basically handing down this, um, you know, discussion of who should be actually carrying the gap. if you, if you hand the, the full number to the VP of sales, the VP of sales now needs to be like, Hmm, okay. Am I going to give the full number distributed to my directors, or am I gonna want keeping the gap?
[00:21:06] If, if he or she sends it down to the directors, the director's like, okay. Uh, am I gonna now increase quotas?
[00:21:11] Mikkel: Yeah.
[00:21:12] Toni: Or you know, what, what are we gonna do in order to kind of offload me? So really the question is who is gonna, who's gonna have the gap?
[00:21:19] Yeah.
[00:21:19] it's it's not, it's you know, that's, that's, that's the question. Who's gonna have the gap? And if you ask the question like that, I think, I think it's a terrible idea to just, you know, hand it down.
[00:21:30] Mikkel: Yeah.
[00:21:30] Toni: Uh, that's, that's
[00:21:31] what I think.
[00:21:32] Mikkel: let shit roll downhill.
[00:21:33] Toni: No, exactly. And. It has one downside, obviously you're kind of creating a bit of a cushy, cozy environment for everyone, kind of, you know, it's like, oh, you know, hire didn't happen.
[00:21:43] Sorry, those five guys left. Oops.
[00:21:46] Mikkel: Yeah. Yeah. Oops.
[00:21:48] Toni: Right. So you need to, you need to manage through that obviously as well. Um, you know, then plenty of examples on the
[00:21:54] Mikkel: side
[00:21:54] Yeah, let's stop
[00:21:55] Toni: Um,
[00:21:58] so you need to manage through that as well. And, I would manage through that, um, in ways of, running the operating cadence, by the way.
[00:22:08] So the way I did it then, especially on the hiring side, creating like very, like strict, uh, you know, processes around the hiring piece. We had by so fortnightly. We had, uh, one session with the VP for, AEs Yeah. Per region. Who's on the track out who's on the track up, you know, what do we need? What's your quota on the street next month, quarter gonna look like?
[00:22:32] How are we gonna manage that? okay, we have risk here. You now need to go mitigate that risk and or come back and tell me the guys out, I mean, to kind of replace. Yeah. and uh, then the same thing on the SDR side. Um, basic performance review on a higher level. To be like, okay, those guys are coming up for promotion.
[00:22:50] They're basically dropping out of the team in a good sense. Yeah. here are people that are in ramp up. Here are people that, uh, missed now twice. They're basically on the, on the opposite end of promotion. They might be dropping out for the, the worst reasons. And then, okay, if these folks are moving up and down, how many do we need to actually backfill?
[00:23:09] And how many people do we have interviews right now and kind of. Uh, do, you know, run that pressure on that level actually with them. Um, and uh, and the same thing then with, um, marketing
[00:23:21] and cs, right? You can, you can have weekly cadence. That's why we're kind of advocating for this demand gen cadence, right?
[00:23:28] And this is what I did in actually the other shop I worked at. I had my VP SDRs, my VP marketing, And I think that's it actually in that case, and actually kind of my Rev guy was also in there. you know, let's go through the numbers. Where are we behind on the numbers? Why are we behind on the numbers?
[00:23:44] What are we gonna do about, you know, being behind on the numbers and what's gonna be the impact of that? And it's like, uh, okay, SDR behind can, can you do more on this side? Right.
[00:23:52] You know, shifting around some budget, like, are you late in hiring? That means I have like half a half a salary actually. Uh, to put into some other channels.
[00:24:00] Hey, marketing vp, do we see something where we could use that to some degree, right? BTech will push on this end, right? I
[00:24:07] Mikkel: I think, um, I think, sorry to interrupt you. Mid, mid trail, but one interesting thing you said, obviously it's a lot about the numbers, but you also had the people, how they're performing.
[00:24:16] And I heard this story, I can't remember the company, they were a big, you know, three digit AI company, but on a C level, they would monthly have a quadrant. Where each, c, cmo, whatever, they would actually have their team. And there was obviously a bad quadrant to be in as a team member. Yeah. And then there would be actions that would need to be taken to lift that person out of the quadrant.
[00:24:39] And, uh, next month, if the person was still in there, then the accountability kind of shifts to this CMO or whoever. Now it's like, so what's the plan now here? Because you, you do need to manage the, the talent you have in the shop. Again, if you're dealing with this as a factory and you have Greg. We don't like Greg standing on the production line and he, you know, only produces, uh, five laptops, but he actually needs to do 10 and he gets everything he needs to do it, but it's not happening.
[00:25:04] Right. Yeah. So I, I kind of like that dimension as well.
[00:25:07] Toni: No, it's, I'm, I'm not quite sure, but I think about the stack ranking kind of approach there. It's like, it's a little bit this
[00:25:12] harsh.
[00:25:13] no, not so there, there are some good solutions to it, but, uh, don't have a kind of, a really strong kind of, uh, opinion on this.
[00:25:19] But basically, instead of giving people just a big number, Help them, you know, manage on the ground actually. Yeah. Right. Kind of that, that kind of creates, creates another kind of side to it.
[00:25:30] Then the other thing, obviously, and this is, you know, have specific focus on those seven 10 percenters. Yeah.
[00:25:37] and try and figure this out. At the end of the day, those 10 percenters, those things working out. Those are the ones that help you as the rev ops or CRO person hit the, hit the full target. Yeah. That will be what it will be. And I can tell you from experience, Many times, none of this actually ends up happening.
[00:25:54] Yeah. And this is not a, oh, Toni, you were just a bad executor. I can tell you it's extremely difficult to kind of achieve those improvements and keep them and so forth. And I think, by the way, this is why I love plg. I think in PLG you can achieve some of those improvements. Actually, because it's all systemized, it's all a computer, uh, and, you know, things just happen and you should tweak this thing up, and then they do it with people.
[00:26:16] It's not like that. It's like you can, you can have, oh, you know what, from now on we should be doing the demo like this. Guess what? No one will do it tomorrow. Like that, right? Yeah. Um, so, so, you know, those, those achievements really hard to kind of gain and to keep,
[00:26:30] Mikkel: but I think there's also nuance to it, right? So I said, I told the story around, you know, marketing exceeding target by taking some very obvious things and addressing them.
[00:26:38] At some point there weren't any left. Right there weren't the, oh, this part of the website is broken, let's fix it. Then it was fixed, you know, nothing, nothing left. And then it obviously becomes more risky. Uh, so, so that's kind of part as well.
[00:26:50] Toni: And then the last point, right? Hey, the team loves you. You, you're hitting, you're not getting paid. You're basically on your way out.
[00:26:56] So you know what is then the connection to the board again, right? Because you need to kind of cover this gap, I think the trick is to, uh, show, you know, say yes to the plan and have your caveats and your ideas about it.
[00:27:12] But, um, as you will have meetings quarterly, give them a clear quarterly update on how this is going and, uh, where you expect next quarter to go.
[00:27:21] And, um, on some of the challenge maybe you are experiencing and you know what you're doing about it and so forth. But the trick will be that, to the board, yes, you will be behind on the annual plan. Mm-hmm.
[00:27:35] But to the board, and by the way, the boards are, you know, used to that, that's the, you know, that's the standard for them.
[00:27:43] Mikkel: It's because they try and create like a magnet. So they, they go, okay, we want them to be here, so we're gonna give them that number.
[00:27:48] Toni: now. Yeah, and I'm not a thousand percent sure there's, there's things around it like this, but it's also the, you know, everyone is gungho in the beginning of the year and then the board tries anyway.
[00:27:57] They are used to people not performing to plan period. So really if you can tell them at least that this is the number you're gonna expect to hit this quarter, and then you end up hitting this number. That is really powerful. Yeah. Right. And I think people can understand and appreciate that, if you're trying to forecast a whole year Yeah.
[00:28:14] In a volatile environment that you're gonna get it wrong, um, but that you even forecast the next couple of months and get it totally wrong. I think that's stupid. Yeah. And I think what, what will crush you much faster.
[00:28:28] If you come out of a a week Q1 and then act like you're gonna rebound in Q2 and hit the plan, even kind of catch up on the plan.
[00:28:37] Um, that's where then suddenly you're not gonna be looking at a 10% gap. Suddenly you're gonna be having a 50% gap. And if you're then as uh, not careful enough and put this number to your VPs and put this number on a dashboard and, you know, raise quotas and add more AEs and do all of that stuff, you can see how this whole house of cards is gonna just fall apart.
[00:28:57] Yeah. Right. And, uh, so, you know, Don't do that. Don't, don't do it.
[00:29:05] That's it.
[00:29:07] Mikkel: Okay. So we don't like magic.
[00:29:11] Toni: We don't like magic. And I think the other big takeaway is, uh, figure out, figure out who, who should be, covering the gap.
[00:29:19] Mikkel: Yeah, Yeah.
[00:29:21] Toni: And what you really, really, really want to achieve, you know, maybe until 50, a hundred million when.
[00:29:27] The, the, you know, executive VPs below you basically, uh, you know, little CROs
[00:29:33] themselves. yeah.
[00:29:34] You know, that's the time we then give them that thing. Yeah. Um, but, um, but until then, try and kind of keep the quote unquote operational guys as, as directly
[00:29:44] connected to the actual operational folks. Yeah.
[00:29:46] Otherwise,
[00:29:47] it's, um, otherwise you're just, uh, uh, handing the problem to someone
[00:29:51] Mikkel: else.
[00:29:51] Yeah. So Toni, are we gonna do some, uh, more guests soon?
[00:29:57] Toni: Well, I thought so.
[00:30:00] Mikkel: We've been ditched today, but that's fine. It happens. We'll, uh, we'll reschedule. We'll reschedule. But we will have more guests.
[00:30:06] Toni: Yeah. Yeah. So this is this special thing. Mm-hmm. Ain't gonna be so special anymore.
[00:30:13] Mikkel: No, it's gonna be a.
[00:30:15] R you know, scheduled special. I can't talk anymore.
[00:30:20] Toni: We're gonna have more specials. We're gonna have more
[00:30:22] Mikkel: Special. Yeah. They're gonna be recurring. That's
[00:30:24] Toni: If anyone of you has a great idea, who should be on the show, by the
[00:30:27] way? Yeah.
[00:30:28] Uh, ping Mickel or me.
[00:30:30] and um, then let's kind of talk
[00:30:32] Mikkel: it
[00:30:32] like a magician or your brother-in-law who likes something like chess or whatever. We'll figure, or
[00:30:38] Toni: if you just wanna talk to me and maybe all of who come to the GTM live every wednesday, PM CET uh, we actually launch it now as a podcast so people that missed it can listen to it. We're gonna have a video library app, all of that good stuff. it's coming uh, let's go.
[00:30:56] Mikkel: Cool. Well, thank you so much, Toni.
[00:30:58] Toni: Thanks, Mikkel. Bye-bye.
[00:31:00] Mikkel: Bye.