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You're brand new in an organization and you have 90 days to figure out what's going wrong and what you need to fix now. How do you start?
In this episode, Raul and Toni run through how to run a proper GTM diagnosis.
In this episode, Raul and Toni run through how to run a proper GTM diagnosis.
Creators & Guests
What is Revenue Brothers?
What happens when a VC and a CEO come together?
– They nerd out about all things revenue. And they don’t always agree.
Raul Porojan of Project A Ventures and Toni Hohlbein of Growblocks are the Super Revenue Brothers. In every episode they dissect and debate current issues in B2B SaaS, and offer solutions on how to solve them
No matter if you’re an early-stage startup or a scaling unicorn – you’ll always learn something new.
Introduction
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[00:00:00]
Raul: Me just telling you, you twisted your ankle is not helping you very [00:00:03] much. So you always need the second level, if you're going to come in and [00:00:06] be like, Hey, Tony, you just twisted your ankle. Now, thanks. And pay me [00:00:09] money. You're like wait.
Raul: But that doesn't really help me. And it's the same, [00:00:12] right? So if you go to an go to market organization, [00:00:15] maybe they learn something new within an hour of talking, but [00:00:18] most likely it's not.
Raul: The stuff that really helps them is what comes out [00:00:21] after a couple of weeks of actually looking at all the x-rays and all [00:00:24] the scans and everything.
Raul: Toni, events [00:00:27] are back and I'm really excited about a couple. [00:00:30] Actually this year I'm going to many more events than I normally [00:00:33] would. And obviously there is our beloved [00:00:36] Pakcon next week. You're coming to Berlin, right?[00:00:39]
Toni: Yes, I'm coming to Berlin with the whole [00:00:42] family. My wife is even speaking at Pakcon. This [00:00:45] is, she's at the management hive, so she's a grown up. [00:00:48] You and I at the sales and marketing hive, so we are, I don't know, [00:00:51] still toddlers, in that regard. But no, absolutely.
Toni: [00:00:54] We're looking forward to this. And so this is going to [00:00:57] release you know, on Friday at the [00:01:00] PACON basically, right? So if you're listening to this on your way to [00:01:03] work and you're thinking you're in Berlin and you want to maybe step [00:01:06] by PACON, just, walk over I think there are a couple of different [00:01:09] locations this year.
Toni: Just check in and maybe find us at [00:01:12] PACON, the sales and marketing hive.[00:01:15]
Live Podcast at Pakcon
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Raul: And I know you're actually doing a talk there as well, right? So you'll [00:01:18] be recording a live podcast again. And that's [00:01:21] always cool and people like that a lot.
Toni: no, [00:01:24] exactly. And it's it's actually going to be with my other [00:01:27] podcast buddy this time around it's with Mikkel and [00:01:30] him and I doing the revenue formula together. We're going to have [00:01:33] an episode, a live episode down there. [00:01:36] We will actually bring some of the equipment ourselves.[00:01:39]
Toni: Which will be fun to set this up [00:01:42] in time and not mess it up and so forth. [00:01:45] So we hope we're going to walk away with an actual recording, [00:01:48] but you never know, it's it could be really great [00:01:51] live. single lifetime podcast [00:01:54] episode that we have for the people in the audience, but not [00:01:57] for anyone else.
Toni: So if you don't want to miss out again, come over [00:02:00] to the pack on Sales Marketing Hive. I don't know what our slot is. [00:02:03] I think our slot is sometimes at 1 or 2 PM. That's it.[00:02:06]
Raul: So you're taking care of [00:02:09] everything there. You're, it's basically the whole band comp. [00:02:12] And you bring your family your family takes care of [00:02:15] all this the content you take care of the technical [00:02:18] setup. And basically it's your event, right?
Toni: That's absolutely what it [00:02:21] is. I think you summed it up really nicely. And How are you doing, [00:02:24] mister? You sound a little bit, you're hit by a little bit of sickness [00:02:27] in my are we hearing this correctly?
Raul: Yeah, I'm [00:02:30] fine. I'll be fine. Just a little bit a big crybaby. [00:02:33] But this nose and everything and [00:02:36] I hope it works out. I think it's fine for the podcast. But I'm [00:02:39] really excited to talk about some things.
Reunion in Mannheim
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Raul: And [00:02:42] so the way that this came along, by the way, is maybe that [00:02:45] I spent the weekend [00:02:48] Having a lot of fun in a reunion with some old mates [00:02:51] from university.
Raul: I went to Mannheim and then we met back [00:02:54] in Mannheim and with seven people from the study [00:02:57] group I studied with 10 years ago. And there was a lot [00:03:00] going on in Mannheim around the time including the Bad [00:03:03] Dürkheimer Wurstmarkt
Raul: I don't know if you know that, but it's the [00:03:06] biggest wine fest in the world.
Raul: And it's, [00:03:09] there's more wine being consumed there than at the Oktoberfest and everything. [00:03:12] There's 700, 000 visitors there everywhere. It's crazy. [00:03:15] And we had a lot of fun there. As you maybe know, I don't drink [00:03:18] alcohol. So actually I survived all that quite well. [00:03:21] But apparently all the traveling and everything still made me a little bit [00:03:24] sick.
Raul: But If you ever get the chance it's quite fun. [00:03:27] Even for someone who doesn't drink. I did say [00:03:30] goodbye when it got too crazy in the tents in the end, like when people [00:03:33] are in Lederhosen, I really don't like Lederhosen, [00:03:36] jumping on the benches and everything. That's like when [00:03:39] it's, it becomes a little less fun when things go too crazy.
Toni: I [00:03:42] thought this is a Bavarian thing. Is this also like a [00:03:45] Mannheim thing? Gliederhausen?
Raul: do this everywhere in Germany. There's [00:03:48] also the Cannstatterwasen, which is also very [00:03:51] famous in Stuttgart. There's. Especially in the south of [00:03:54] Germany there's various sizes of events and the [00:03:57] Oktoberfest just happened to be the biggest one in the biggest city in the south [00:04:00] obviously and also then became very famous around the world and [00:04:03] everything.
Raul: But the city I'm from, Freiburg, also has a lot of wine [00:04:06] festivals just not very big ones,
Toni: so how does this [00:04:09] reunion thing work out? Like I never had one, like [00:04:12] sad me. But it's just a little bit like, who's [00:04:15] winning the reunion? Who's partnered BCG already? Who's [00:04:18] five kids and a picket fence how does that work?
Raul: [00:04:21] It's funny because this one guy is actually a partner at VCG and just became [00:04:24] that right now. So yes, actually all my friends [00:04:27] went into VCG and Bain and McKinsey and Goldman and I'm the [00:04:30] only fuck up who just went into this weird world [00:04:33] of VC and like struggling to, to make a buck with like [00:04:36] startups and everything.
Raul: No, it's not like that. Like these are actual [00:04:39] friends and I would, Even say good friends and bros, if you [00:04:42] want and it's not like that at all. We support each other a [00:04:45] lot, just have a lot of fun. Yes, people are having kids now. [00:04:48] People are moving to partners at bigger firms and everything.
Raul: [00:04:51] I'm questioning what I'm doing with my life, but they're actually doing quite [00:04:54] well and we're enjoying that. And, we're not that old yet [00:04:57] that it's like we it's everything is like so much back that [00:05:00] it's like we or when we were kids right it's nine or ten years ago [00:05:03] that we graduated so it's still present in our mind [00:05:06] and it was fun man like we went back to the university parties and [00:05:09] everything and had a lot of fun.[00:05:12]
Toni: So talking about [00:05:15] consulting, and partners and stuff. [00:05:18] What did we want to chat about today? Roll.[00:05:21]
Understanding GTM Diagnostics
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Raul: So I think the way we're approaching this right now is one [00:05:24] way to approach this topic, but basically the question is [00:05:27] when you get into a new organization, either as a, let's [00:05:30] call it a new CRO or a consultant or anyone [00:05:33] coming in from the outside or not familiar yet with everything in the [00:05:36] organization, how do you quickly assess And find [00:05:39] your way around what's going on commercially and [00:05:42] what should be done or maybe should not be done.
Raul: And as [00:05:45] a kind of an asterisk, we're calling that like GTM [00:05:48] Diagnostics. You can call it any way you like, like the even if [00:05:51] you know this concept, the first 90 days in a revenue organization, what, [00:05:54] how do you find out what needs to be done? And I know that you and me [00:05:57] we've had a lot of touch points with this kind of problem.
Raul: So we [00:06:00] thought it would be very interesting, not just for people who are [00:06:03] consulting, not just for people who are getting into an organization, but [00:06:06] maybe also people who are looking to get some outside [00:06:09] help on that and shed a little bit of light on how this can be done.[00:06:12]
Toni: Yeah. This is something that [00:06:15] frankly, we at Growblocks sometimes do as part of the [00:06:18] product rollout. So I don't want to talk too much about that part, [00:06:21] actually but it's also something that you at Chromansky [00:06:24] sometimes do, right? So not only [00:06:27] is this something that we have experienced ourselves in our past, so when I [00:06:30] was a CO joining the organization, or when you were working at Project [00:06:33] A and entering a new organization, but it's also something that's, [00:06:36] I think we're starting to be experts in this stuff, right?
Toni: So do you [00:06:39] maybe want to take it away a little bit and give a little bit of [00:06:42] a how is it that you do it? How do you enter a new [00:06:45] organization? And let's just say the CEO founder says, [00:06:48] Hey, roll my go to market, my [00:06:51] funnel, my sales team, my whatever. There's so many [00:06:54] synonyms, basically talking about the [00:06:57] commercial function.
Toni: It's, [00:07:00] I think it's broken somewhere, but [00:07:03] I just don't know where. Can you help me and, [00:07:06] triage and diagnose so we then can fix? [00:07:09] Like how do you approach this?
Raul: Yeah, so that kind of just [00:07:12] snuck you just snuck that in there. I think we've never actually talked about that, that I [00:07:15] now have joined another company called Kamansky which is doing [00:07:18] revenue consulting, revenue architecture. And [00:07:21] it's, I might write about that on LinkedIn or maybe, I don't know [00:07:24] about all the timings yet, but we'll see.
Raul: Yeah, maybe we'll talk about that [00:07:27] another time. I'm super happy about that. And they're [00:07:30] basically combining a lot of [00:07:33] things that I've done in the past with some new approaches doing things [00:07:36] a little bit different. And we're now trying to combine [00:07:39] that to, to make the best of both worlds, which is a really exciting [00:07:42] mission to me.
Raul: And away from that. So I think [00:07:45] just. Basics first.
Approaching Organizational Diagnostics
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Raul: There's a lot of different [00:07:48] names for this, right? So maybe you've heard benchmarking or [00:07:51] diagnostics or audit or however you want to call it, [00:07:54] right? 360 degree view or whatever. It's the [00:07:57] same thing. At the end of the day, it's basically get a bird's eye level view [00:08:00] of what is happening commercially and why not?
Raul: Why is [00:08:03] this a very important topic to, and why is this coming up? And a lot of [00:08:06] companies are doing this, such as Kremansky is doing that. And I'm actually on [00:08:09] one of these projects right now, already within the second [00:08:12] week that I'm on right now. [00:08:15] It's, there's maybe two or three main reasons, but I think the [00:08:18] biggest one in, in, as a, as an overarching topic is [00:08:21] it's just.
Raul: Very messy out there. And people [00:08:24] just want some help sorting through the mess [00:08:27] on all kinds of detail levels. And that starts at [00:08:30] the strategic level. Just understanding what are [00:08:33] we even doing here? Even if I'm the one who has been doing this for a couple of [00:08:36] years, it's really easy to lose sight of what is happening, what's [00:08:39] not happening.
Raul: Cause there are so many moving parts, but then it goes [00:08:42] down even over a bunch of other levels to the lowest or [00:08:45] highest resolution level, which is Processes and [00:08:48] tech and data and what's working with each other and what's not working [00:08:51] with each other, because ultimately people are not understanding that [00:08:54] this is where execution fails.
Raul: And I would say [00:08:57] that the openness to looking at a machine more like [00:09:00] this or looking at go to market more like this is coming [00:09:03] from the fact that people are wisening up and understanding a bit more [00:09:06] that the machine actually depends on all these different resolution [00:09:09] levels.
Toni: Yeah.
Raul: What's your take on this? Why do you think this is [00:09:12] becoming more relevant right now?
Toni: I think it's [00:09:15] always been relevant. It's always been like, Hey, my [00:09:18] commercial thing isn't working. This is probably [00:09:21] as old as, sales and marketing is. I [00:09:24] think what is happening right now is that some people are [00:09:27] waking up to the reality that, instead of having [00:09:30] some kind of a strategy consultant coming [00:09:33] in, telling you some rough stuff, there's starting to [00:09:36] be a little bit of science behind it.
Toni: And I think [00:09:39] the calling it science is always a little bit too much, but there's some [00:09:42] theory behind it that is starting to make sense, right? [00:09:45] And sometimes when I look at this it's almost like two [00:09:48] different steps, right? The first one is always [00:09:51] on a super high level Hey, tell me your [00:09:54] ACVE.
Toni: Tell me your sales cycles. How do you go to market? [00:09:57] And already there, I can just spot flaws like, [00:10:00] Oh, okay. You probably this doesn't work, like on, on [00:10:03] this very much heuristic level, I can and this is the same for [00:10:06] you. It's the same for many people. You can basically have an understanding [00:10:09] of Oh, there's probably something that.
Toni: It's going to be [00:10:12] difficult to work out for you, right? [00:10:15] And this can be super helpful, I think but you don't need [00:10:18] a big consulting team or anything like this for that, right? This [00:10:21] is, you need to have a, it's almost like an [00:10:24] advisory thing. You need to have a call with someone like [00:10:27] yourself or myself go through the pieces and then you can point [00:10:30] in a direction, right?
Toni: This is honestly what I've done when [00:10:33] I was interviewing for a COO role. I [00:10:36] basically did a bit of pre triaging to understand [00:10:39] what kind of a mess I'm stepping into, [00:10:42] right? I think the next level down usually [00:10:45] gets pretty messy pretty quickly, [00:10:48] I think. Because those [00:10:51] commercial funnels, those commercial processes, all of that [00:10:54] stuff, is [00:10:57] usually not an order.
Toni: It's usually a mess [00:11:00] by itself, right? So basically going from a very [00:11:03] high level perspective. of, ooh, you're doing [00:11:06] outbound on a 5, 000 euros a year [00:11:09] product, for example, like spotting that it's [00:11:12] easy, but going to the next level and [00:11:15] okay, we can actually see that there's an issue in your [00:11:18] funnel in this conversion rate to over [00:11:21] there.
Toni: That is really difficult actually, in most cases, because there's a [00:11:24] lot of pre work that needs to happen [00:11:27] to sift through the whole thing. and then be able to [00:11:30] do the next level of diagnostics, right? So for me, it's [00:11:33] sometimes a little bit like, imagine [00:11:36] you call up a CFO friend of yours [00:11:39] and you say Hey, I have roughly this gross margin.
Toni: I'm making so [00:11:42] much revenue. I'm growing this much. Do you think I can get VC [00:11:45] funding? It's yeah maybe you can, maybe can't. If the CFO [00:11:48] wants to dig in a level deeper but then [00:11:51] finds out that you don't close your books on a [00:11:54] monthly basis, that you don't record revenue properly, [00:11:57] that you don't do all of that stuff, the CFO really [00:12:00] quickly will look and he's I'm sorry.
Toni: With, without [00:12:03] some of these things being partially in order, I [00:12:06] actually can't give you more granular and impactful [00:12:09] advice. So some of these things need to be cleaned up first. So this is [00:12:12] actually how I sometimes see it. It's sometimes [00:12:15] surprising for people how little information [00:12:18] they need to give me for me to tell them where that probably likely [00:12:21] is.
Toni: But then the next level down, everyone [00:12:24] goes wait a minute, why do you need to have a one month [00:12:27] project involving all of those people to give me the next level of [00:12:30] advice? That's usually where people like don't actually get [00:12:33] it. But that, that's been my experience so far.
Raul: A [00:12:36] thousand percent. And I have project after project that [00:12:39] basically went exactly like you just said, which is [00:12:42] So people are waking up to the idea that this is [00:12:45] something that they need. But then this understanding [00:12:48] of like how this thing comes along is really the difficult part. [00:12:51] And this exact sentence you said is yeah, but you can just, you already [00:12:54] told me 50 percent of what I need within two days.[00:12:57]
Raul: So why can't you just do the other 50 percent in two days? [00:13:00] It's, and I have tried, I'm an analogy guy and I don't know if I [00:13:03] always hit the mark, but if you twist your [00:13:06] ankle and you walk into my office, and I'm the doctor, right? I [00:13:09] will be able to look at your ankle and say, oh it's a twisted ankle, [00:13:12] right?
Raul: I'll be able to do that in three seconds, right? But to really [00:13:15] find out like what's been done and what do we need to do to therapy and [00:13:18] should we get you a massage or should we get you heating or [00:13:21] I don't know, like whatever kind of treatment and how long The treatment [00:13:24] let's not talk about the treatment yet, but the diagnosis could still take a [00:13:27] day in the hospital or it could take multiple days, it could take some [00:13:30] x rays, it could take, I don't know, maybe you have a very complicated fracture [00:13:33] and I've never seen that, so whatever happens, right?
Raul: You get the [00:13:36] analogy, right? It takes a doctor three minutes to look at it or [00:13:39] three seconds and say, yes, it's twisted, but then [00:13:42] three weeks to figure out what exactly is the [00:13:45] problem.
Toni: Yes.
Raul: It's only an analogy, but I can tell you that [00:13:48] it's 99 percent accurate on to how this kind of topic works. [00:13:51] It's exactly how you said, right?
Raul: And the thing [00:13:54] is and that's the thing, right? Me just telling you, you twisted your [00:13:57] ankle is not helping you very much. So you always need the second [00:14:00] level, right? If you're going to come in and be like, Hey, Tony, you just [00:14:03] twisted your ankle. Now, thanks. And pay me money. You're like wait.
Raul: But that doesn't [00:14:06] really help me. That information is not enough. And it's the same, right? [00:14:09] So if you go to an go to market organization, maybe [00:14:12] they learn something new within an hour of talking, but [00:14:15] most likely it's not. Stuff they already know and it's stuff that they're already [00:14:18] aware of and it's not gonna help them very much.
Raul: The stuff that really helps [00:14:21] them is what comes out after a couple of weeks of actually looking at [00:14:24] all the x-rays and all the scans and everything.
Toni: Yeah. [00:14:27] So let's talk maybe about the x rays. [00:14:30] Let's, I have my little [00:14:33] methodology, but let's maybe you go first. So let's just say someone [00:14:36] says Hey my, my ankle hurts. And you look at it and [00:14:39] it's it's probably twisted. It could be broken. Let's see. [00:14:42] And they say, thanks, that, I knew that already.
Toni: [00:14:45] But what's the next step now? Let's just say, they say, okay, please find out [00:14:48] in detail. Yes, I want to be in the hospital for, [00:14:51] three full days so you can do all the scans. What are those [00:14:54] scans? What are those, what is the blood work that needs to do?
Toni: What about [00:14:57] those x rays you need to do?
Raul: So the way that I like [00:15:00] to section this up is you can look at [00:15:03] basically every go-to market organization in four [00:15:06] or five different buckets that can be split up into further level, but it's [00:15:09] always the same thing. And I've talked about that before. People process [00:15:12] data and tech and also as an overlying.
Raul: Layer [00:15:15] strategy. That's why I'm saying four to five. This is where we [00:15:18] start from and then we go more and more into detail each of these levels [00:15:21] up to down like 13, 14 different topics. [00:15:24] The idea here is that for every one of these topics, there is [00:15:27] different things you want to look at. And the way that you want to do that [00:15:30] is you would quote, that's the term I use, [00:15:33] I call them modules.
Raul: So what are we looking [00:15:36] at? For example, people, process, data, tech, as [00:15:39] I said, or maybe like even one more level below, and you're [00:15:42] looking at them in different ways. That's the methods that are used. So it's [00:15:45] modules, methods, and then there's a third part of [00:15:48] it. And the methods are, what are we talking about?[00:15:51]
Raul: to determine what's going on or not. And there are some [00:15:54] classics, like for example, surveys or interviews. Although the [00:15:57] question here is like, what exactly are you asking in those interviews and in what [00:16:00] order are you doing those, I found out after doing this a bunch of [00:16:03] times that actually the order in which you do these is quite important.
Raul: And [00:16:06] there's a natural way of doing that. That's better than another [00:16:09] way. You can also do like quantitative analysis and go through the [00:16:12] bowtie model and maybe lay out the whole I would say, go to [00:16:15] market numbers and the aspect of that and understand where [00:16:18] this is going and where the funnel breaks down and all that.
Raul: And that already [00:16:21] helps a lot. By And there's more, by the way, process mapping and many [00:16:24] more. By doing this, you already create [00:16:27] typically transparency and assets that the organization has never had [00:16:30] before in that clarity because nobody ever bothered to take a [00:16:33] couple of weeks off of what they're doing to now do [00:16:36] some, I don't know, go to market analysis the [00:16:39] way that you're doing it.
Raul: So this is already quite helpful. And then the third [00:16:42] part of the framework, again, modules, what are we looking at? [00:16:45] Methods, how are we looking at these things to come to a, to an assessment? [00:16:48] Or I call them deliverables. So modules, methods, and [00:16:51] deliverables. And this is what are we trying to get out of that.
Raul: And [00:16:54] this always has to be linked back to the project in the beginning. I'm not [00:16:57] a fan of I would say go to market assessments [00:17:00] or go to market audits in a vacuum. And what I mean by [00:17:03] that is in a vacuum meaning, Just look at my [00:17:06] stuff and tell me how I'm doing. I don't think that's a great question to frame [00:17:09] it.
Raul: Or that's a great way to frame it. I think a better way to frame it is [00:17:12] look at my stuff and tell me how ready I am to do what I'm trying to [00:17:15] do. And I like to start out with strategy at the [00:17:18] top layer and basically in the beginning, and then assess [00:17:21] against that, and that's a major difference, right?
Raul: I'm not just telling you in a [00:17:24] vacuum, you're doing well or not. I'm telling you, are you doing [00:17:27] well or not compared to what you want to achieve? [00:17:30] And so if I'm, if you're saying, hey, we want to go to a series B and this [00:17:33] is the number that we're trying to hit, it's quite simple, [00:17:36] but simple but not easy because there's still a lot of work [00:17:39] involved to break that down into the individual factors that [00:17:42] go into you achieving that or not.
Raul: If you know you want to go series B or [00:17:45] series C in 12 months, we can break that down and [00:17:48] say from today on, are you going to achieve the conversion rates [00:17:51] you need to achieve? And if so, how and how can you improve them or not? [00:17:54] And so that's the first one is like measuring the [00:17:57] kind of the auditing against something that you're trying to achieve, [00:18:00] typically a strategic goal.
Raul: For bigger organizations, it can also be [00:18:03] something like readiness to go into a new market or opening [00:18:06] up new verticals or opening up enterprise where they didn't do it [00:18:09] before. So it could even be something like a go to market enterprise audit. [00:18:12] And then the second part, which I'm typically [00:18:15] not a very big fan of, although I do see some merit in certain aspects, [00:18:18] is measuring against benchmark.
Raul: So just [00:18:21] saying okay, maybe we don't know exactly our strategic [00:18:24] goal. There's not exactly one specific thing you're trying to achieve. [00:18:27] You just want to get a feel of how well are you doing compared to others? I [00:18:30] think that this is strictly inferior to actually going [00:18:33] against targets because I don't actually, me personally, I don't give a fuck [00:18:36] about others.
Raul: Like you only should care about what you're doing. [00:18:39] And if the methodology is sound, the value of such [00:18:42] an audit is the same.
Toni: I generally agree with this. You always have [00:18:45] been executing this more holistically for a while, from a Grolox [00:18:48] perspective, we've been focusing on the data piece [00:18:51] but blending those perspectives of myself together, meaning, [00:18:54] Me as a CEO entering organization [00:18:57] versus from the Growbox perspective, which is very limited, very narrow, very [00:19:00] specific, obviously.
Toni: I think for me, it's, [00:19:03] it always comes down to three things. It's team, [00:19:06] it's data and it's goals. I actually don't [00:19:09] care too much about the tools, [00:19:12] actually. Maybe I should with my Revolve's background. I [00:19:15] think the tool stuff the process stuff is something you, [00:19:18] fix after you figured out the, you [00:19:21] need to figure out where the problem is first.
Toni: Before you know which process [00:19:24] you need to fix. That's how I'm thinking about it, right? So [00:19:27] as a CRO, I went in and basically spent a lot of time [00:19:30] with the leadership team trying to figure out, hey, are they switched [00:19:33] on? Are they getting what we're trying to achieve? Are they the right people?
Toni: Are they [00:19:36] the right folks on the bus? Basically to, to get, [00:19:39] to help me get to the next level here, right? And already [00:19:42] there, in your mind, you start thinking like, Oh, okay. Maybe this [00:19:45] person scales for another year. Maybe this person needs to be replaced [00:19:48] already. Maybe this person is like shooting against everything you [00:19:51] do anyway.
Toni: So you need to get. [00:19:54] So there are kind of things around the team that need to think about, [00:19:57] which from a consultant perspective is a little bit [00:20:00] different. It's always a very delicate [00:20:03] balance to strike and say that person probably needs to be replaced. I it's [00:20:06] difficult to say that as a consultant, as a boss, [00:20:09] as a COO, you can have those thoughts and then execute on them later.[00:20:12]
Toni: Team is a really fundamental thing. And this is [00:20:15] also where you want to spend most of your time in the beginning, try and [00:20:18] really get close to the team, bring it together, especially [00:20:21] if it hasn't been led under the CRO before, et cetera, right? [00:20:24] Number two for me is, [00:20:27] and I think you also spend a lot of time on talking about this, but it's the [00:20:30] data piece.
Toni: And for me, this means mapping [00:20:33] out mapping out the full funnel. Really [00:20:36] understanding how does this organization generate cash? [00:20:39] Just understanding that, right? And I think when you step into a new [00:20:42] organization, you have a very clear, idea in your [00:20:45] head, how this is going to work out.
Toni: But getting into the [00:20:48] weeds of this a little bit really making sure you, you [00:20:51] define things properly. This goes to your perspective [00:20:54] they probably don't have a customer journey map. They probably don't have that. [00:20:57] No, no one ever sat down and did that. Just generating that [00:21:00] asset, that's great already, right?
Toni: And for me, [00:21:03] that means, basically seeing what are the different steps [00:21:06] from All the way up the funnel [00:21:09] to all the way down when someone leaves your, organization like a churn, [00:21:12] right? And and then figuring out for the key [00:21:15] events there, what is actually the definition of this thing?
Toni: And what [00:21:18] we've seen most of the time is, There's either no [00:21:21] definition or there are five definitions. It's very rarely, it's just [00:21:24] one definition that everyone agrees on, right? Somewhere in between. [00:21:27] Getting this together, this can be a COO job in the beginning, or it [00:21:30] can be a consultant job, but just agreeing on what this is [00:21:33] great.
Toni: And once you have that done. This then [00:21:36] unlocks the next level of granularity of the [00:21:39] dataset. Now you can actually start to understand like, where do you have [00:21:42] drop off points? Where your conversion rate is trailing? Where's your [00:21:45] ACV kind of dropping? Why, how is that all connected?[00:21:48]
Toni: Which then might inform you. [00:21:51] on, what things to do where to fix things basically, [00:21:54] right? So this is goals. And then the third sorry, [00:21:57] data, the third one is goals basically. And [00:22:00] goals is really around what you also said, what's the strategic [00:22:03] thing here that we want to achieve.
Toni: And as a [00:22:06] CRO you'll always be asked to grow, 50%, [00:22:09] 100%, 200%, whatever the number might [00:22:12] be. And what you then need to do realistically is, [00:22:15] And I think we're talking the same language, there may be just different [00:22:18] words. What you need to do realistically is okay, what is my best [00:22:21] bet to get there?
Toni: Kind of, what are the big levers to pull [00:22:24] in actually order to achieve this, right? And and this [00:22:27] then, it's very difficult to do this without [00:22:30] having a little bit of a data foundation behind it, because, you can't just say [00:22:33] more inbound. It's just not going to work out for you.
Toni: Because some of the [00:22:36] channels are tapping out, some of the channels are still, room to [00:22:39] grow and you really need to understand which, which levers to [00:22:42] pull. And you can't do that without that granularity, [00:22:45] but ultimately the goal piece also gives you a clear [00:22:48] roadmap for yourself, which, which [00:22:51] parts of the organization to go after and fix first or [00:22:54] which parts of the organization to go after and focus on the most, right?[00:22:57]
Toni: Let's just say you have a very underdeveloped marketing team. [00:23:00] And 80 percent of your revenue comes from outbound. Even if you [00:23:03] double your marketing efforts, it's probably not going to get you [00:23:06] to the goal that you want to get to, right? So you really need to [00:23:09] think about where in the bow tie do you want to spend [00:23:12] your time and, your effort and really fix this thing [00:23:15] in order to achieve that overall growth goal that you're having.[00:23:18]
Toni: So those are usually the three ways as a [00:23:21] CEO and something, to degree with a very narrow focus, Growworks goes into [00:23:24] this kind of team, data and then [00:23:27] goals.
Raul: Yeah, I think it's we've arrived [00:23:30] interestingly at quite similar approaches to how we structure [00:23:33] this. Different terms but it's the same and it also makes [00:23:36] sense to me, right? There's, however, there are some things that don't make [00:23:39] sense to me. And you didn't name them, which is which is nice, [00:23:42] but,
Toni: what?
Raul: I think, so [00:23:45] I, maybe I'll go into a couple learnings and just rattle them off quite [00:23:48] fast that are maybe quite high level learning.
Raul: I have [00:23:51] understood how much value learning has. is already in [00:23:54] the benchmark audit. However you want to call it, even though I'm not a [00:23:57] big fan of benchmark, but as a project itself [00:24:00] and also how much it can educate and give direction to a company [00:24:03] because so we live in a world with CROs who are [00:24:06] like almost always, especially in the [00:24:09] Anglo Saxon world, but even in Europe as well have to act [00:24:12] incredibly overconfident to even get the job for in the first place, [00:24:15] have to keep that act up very often even though maybe [00:24:18] deep down they know that they have some deficiencies, which.
Raul: All of us [00:24:21] have in methodologies and maybe they're not up to date on, on, [00:24:24] on how things are being structured. Maybe they don't have a full [00:24:27] understanding of their go to market and what even go to market is, [00:24:30] right? And all that can be helped with a, an audit [00:24:33] or diagnostics quite well.
Raul: Because basically what it brings is it [00:24:36] also, it doesn't just give you the answers to what's going and what's not going well. [00:24:39] It also helps you structure your thoughts a lot. And so this is one of the [00:24:42] first findings that I did is when we do something like that, [00:24:45] Suddenly things change in the company.
Raul: The CRO very [00:24:48] confidently starts talking about things such as go [00:24:51] to market motions. And now actually knows what they're talking about. [00:24:54] So they're not just saying go to market, like a VC says it, who [00:24:57] doesn't really know Oh, what's your go to market? But no. So a motion [00:25:00] consists of a marketing part and then a sales part and a customer success part.
Raul: You put those [00:25:03] together, it's a motion. And these are the two motions we're starting right now. [00:25:06] And this is when we know then we'll stop there, right? And that's crazy. Like it gives [00:25:09] them a lot more confidence. And it also gives the whole organization a lot more [00:25:12] confidence. Even taking away the findings you actually did, just [00:25:15] bringing in those frameworks and the order on how to think, right?[00:25:18]
Raul: And that's the first one. The second one, [00:25:21] you were hinting to that as well, is I [00:25:24] find that 80 percent of the value, maybe 60, [00:25:27] 70, however, but most of the value, for sure the majority of the [00:25:30] value and of the findings come from what's already [00:25:33] working and what's already going well. And typically people [00:25:36] frame this kind of problem as in what do we need to do better and what do, [00:25:39] what's going wrong and what, where are we fucked and what do we need to improve?[00:25:42]
Raul: I find that the better, Audits and then also [00:25:45] executions of those findings are almost always with what's already going [00:25:48] well and then distributing that because if I go into an org [00:25:51] and this is a very practical as a CRO, if I go into an org and then [00:25:54] there's seven or 10 salespeople and Toni happens [00:25:57] to be the best one, rather than trying to fix up all the other nine [00:26:00] fuck ups, I'll try to see what's Toni doing and then try to replicate [00:26:03] that onto the others, either hire more Tonis or [00:26:06] see what he's doing differently and try have him teach the others, [00:26:09] maybe me teach them, whatever.
Raul: And it's the same with the [00:26:12] diagnostics like this, right? So if I see that one, one part of the [00:26:15] process is going well, or maybe if I see that marketing and sales are [00:26:18] communicating well, but marketing and customer success aren't right, I'm [00:26:21] trying to see what's working well and just do more of [00:26:24] that. I find that to be the fastest approach, even obviously [00:26:27] as yeah, it sounds yeah, sure.
Raul: Of course. But I think most people [00:26:30] underestimate that. They always try to focus on what do we need to change? What do we need to [00:26:33] change rather than what do we need to scale? That's already working [00:26:36] well.
Toni: I think it was a good way to look at this and while listening to you, I was [00:26:39] also thinking okay I'm listening to this podcast now I'm [00:26:42] thinking, do I need this thing?
Recognizing the Need for Diagnostics
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Toni: How do I know that I need this thing? [00:26:45] And you can buy it from a bunch of other folks don't worry about that.
Toni: But [00:26:48] I think, organizations that [00:26:51] have just say management meetings [00:26:54] where there's always dispute around, how to get to a revenue [00:26:57] number and who to blame for, not hitting [00:27:00] it. I think this is a symptom. I think this is one [00:27:03] symptom. I think another symptom is you have missed [00:27:06] your revenue tag last quarter and you go to [00:27:09] the board or you report to the [00:27:12] CEO or CFO and, what do you say is we didn't have enough [00:27:15] pipeline and the sales team is lazy. If those are, if [00:27:18] this is the quality of your root cause analysis to say Hey, this is [00:27:21] what's holding us back, I think this [00:27:24] should give you some, hint that, Hey, maybe. [00:27:27] Maybe we actually haven't fully understood why we're not hitting.
Toni: And [00:27:30] maybe we need to do a bit more of an analysis here to [00:27:33] actually get to the root cause. And then, the trick is obviously once you have the root [00:27:36] cause, you can finally fix it. That's the whole idea about it. And [00:27:39] because this whole go to market engine and system, [00:27:42] it's.
Toni: it's so interconnected, there's so many [00:27:45] moving parts it's sometimes really difficult to get to the [00:27:48] floor basically, right? Do you have some other symptoms that you [00:27:51] see of organizations that have those issues that should, either do [00:27:54] it themselves or, use some from the outside, but execute like a [00:27:57] diagnostic like this?
Raul: Yeah, a lot. [00:28:00] And maybe just like the top one or two. High [00:28:03] fluctuation in all aspects. So high fluctuation [00:28:06] in data quality, in people quality, in the [00:28:09] team in general, typically means that there is something that's not [00:28:12] been fixed or maybe yet understood yet, and also just high [00:28:15] fluctuations, things like conversion rates and, or sales [00:28:18] cycles.
Raul: It just means that there's it's less of a machine and less [00:28:21] of an understanding of what that machine is. That's basically number one. What I [00:28:24] really dig is your approach at Hey the less educated your [00:28:27] discussions are with the board the more you probably need [00:28:30] this. One caveat here though, and I know I keep harping on this, but [00:28:33] it's more like tongue in cheek.
Raul: And I'm really just trying to wake people [00:28:36] up. It's Most CROs are just very overconfident [00:28:39] and act that way, not because they're dumb, but actually because they're [00:28:42] smart, because that's what got them the last jobs in the first [00:28:45] place. And that's what got them promoted. And now that's how they [00:28:48] act even 10 years later in a board meeting.
Raul: And [00:28:51] I still see this. Where there is really not [00:28:54] enough, I would say, root cause analysis going on in their heads. [00:28:57] And it's more about how do I present this and how do I make sure that I get [00:29:00] over this topic quickly. And these are also the CROs and VPs that [00:29:03] are in a revolving door kind of situation typically [00:29:06] after 12 months and are out of a company.
Raul: And they come with big [00:29:09] applause and big fanfare and all that. And I find that in [00:29:12] this kind of situation, it almost always makes sense to do something like that, [00:29:15] right? So if you're a CEO even of a company [00:29:18] And that CROs are coming in and they're also flying [00:29:21] out a couple months later. And you don't really know why, because [00:29:24] you hired the big guy from SAP.
Raul: You hired the big person [00:29:27] from, I don't know, whatever kind of gong competitor, big [00:29:30] company you think is important to hire people from. Which I think, by the way, is [00:29:33] completely overrated. If you do a lot of that and it's still not [00:29:36] working out, maybe it's a good thing. Idea to, as a [00:29:39] CEO under put some frameworks into your company, understand that a little [00:29:42] bit more, to get some more stability into things, because [00:29:45] you cannot be at the whim of of a CRO [00:29:48] for three, four or five years forever.
Raul: You have to get a little bit [00:29:51] more stability into the company in itself. One more thing though, [00:29:54] and I find that. Always,
Toni: last [00:29:57] thing. Do you
Raul: yes, but I find that this is always the most [00:30:00] important thing in this kind of project is [00:30:03] the execution of now we found these things and now [00:30:06] we know what to do. I find that a [00:30:09] lot of companies are not always super surprised by these findings, [00:30:12] right?
Raul: But and then they sometimes even think that there's not a lot of value in a [00:30:15] diagnostics like that because we already know what needs to be done or we [00:30:18] had another consultancy come in and we we got all the findings and [00:30:21] everything. I think that's missing the point. [00:30:24] The point of a diagnostics like this is not to be in its [00:30:27] own a product or something that generates incredible amounts of value, [00:30:30] even though it can sometimes like a customer journey can be very [00:30:33] valuable for many different things.
Raul: The point of this [00:30:36] is to prepare and deliver what we need to [00:30:39] execute the improvements and to execute what then [00:30:42] needs to be done to have the, Revenue architecture [00:30:45] as it should be and without this it cannot [00:30:48] be done right again going back to the example you cannot [00:30:51] treat the foot until what's actually wrong with the foot And that's why [00:30:54] a lot of people tell me there but I can tell you all this stuff in an [00:30:57] hour We can just sit down you and me CRO and all and you just [00:31:00] skip all these steps and they go straight to execution [00:31:03] I cannot I think I'm pretty good at this [00:31:06] shit.
Raul: Maybe there's people who are better at this. I cannot do it for [00:31:09] you. I physically or I, my capabilities are [00:31:12] not there yet where I can go from a one hour discussion with you and [00:31:15] six weeks later you have exactly what you need. It's impossible to [00:31:18] me and I think it's impossible to everybody else as well.
Final Thoughts
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Toni: No, but it's [00:31:21] also, I think about it like this the other way. So let's just say [00:31:24] you have the person limping into the doctor's office. [00:31:27] And something is obviously wrong with the leg. And [00:31:30] then within a minute, the doctor says, sorry, I think we have [00:31:33] to take off the leg. Would you would this, do [00:31:36] you think, it might even be the right, solution, by the [00:31:39] way, it might be the right thing to do, but would you [00:31:42] actually believe that after spending five minutes on this [00:31:45] case, that he actually has all, or she has all the [00:31:48] information to make a drastic, decision like that, right?
Toni: [00:31:51] And the answer is no, you wouldn't do it like this. So if you [00:31:54] don't accept this, even with your dentist. Think about [00:31:57] this, you go to the dentist and say, sorry, we need to pull the tooth. If you don't [00:32:00] accept this, even with your dentist. Why do you accept that [00:32:03] with your multi million dollar a year go to [00:32:06] market revenue organization?
Toni: You shouldn't, you simply [00:32:09] shouldn't, right? And I think this is the point you wanted to make. [00:32:12] We need to cut here now. We're over time. Sorry for everyone. If this was [00:32:15] two commutes, you had to listen to us here. But if [00:32:18] you like this, hit subscribe, send it to your friends, your family, [00:32:21] your wife or whoever.
Toni: And otherwise, yeah, have a great [00:32:24] day and see you at PAKCon. Bye bye.
Raul: see you. [00:32:27]