Leadership Masterclass: The Sales Management Operating System

Folks, at the end of this hour you will literally have everything that you need to be a President's club level sales leader. Whether it is how you get your AES, closing deals, how you land your forecast every single time, how you run pipeline reviews that don't suck, how you actually train your team so that they level up and they get better at stuff, and how you hire reps who are so good that they literally make your job easy. And we've brought one of the greatest sales leaders in the game today to teach you exactly what he has learned. If you do not know Mark Costco, he was literally employee number one at outreach. He led them for from zero to 250 million in ARR as their eventual SVP of sales, which by the way literally never happens. And he also has now coached eight managers to become VPs of sales. And today we are going to break down his exact operating system as part of his Sales Management operating system course which is officially available to you all today. You can catch a discount code right here on the screen. We will resurface it multiple times throughout this presentation. But number one, you're going to get this entire presentation, this entire course summary for free. And then number two, at the end of this we will send you 1, 2, 3, 4, 5, 6, 7, 8, 9, 10 one pagers for all of the frameworks that Mark is breaking down today. So even if you don't get the course, there will be something that you take home already. Mark, so what is inside of the sales management operating system?

Number one, we have the operating system that includes the key structures and frameworks that you have to have in place in order to build. Think of it like the foundation, right? That includes your sales process, how do you forecast, how do you do deal reviews so that you can really ingrain into people how to do their sales process. And also like make sure that the forecasting data that you have is accurate. And also how do you get those AES to self source? That is like one of the super top secret things that great managers do is they help their reps out self source other teams. So we'll give you exactly how to do AE prospecting. The second part is the rhythm. Alright, so now that you got all the these things in place, what's the rhythm of your business? How do the meetings take place? How do you do trainings? What do you have in your one on ones versus your team meetings? What kind of metrics do you review and how often do you review them? We'll talk about all of that and Then the last part, man, is, we've talked about this a lot, Armand. If you don't have the right people, it doesn't matter how good the other two are, they're going to suffer. If you have unbelievably great people, the other two can just be okay or good and you'll still get unbelievable results. So knowing how to hire and onboard those new hires, that is like a superpower of unbelievably great managers. So we'll cover that too.

So folks, probably the most important three modules are the first three of the course. Your five stage sales process, which is how your 80s close deals. Your forecasting process, which is how you use that process to assess risk and deals. And then your deal review process. How do you make sure your AES are following the sales process and the forecasting methodology? So let's start with Mark's five stage sales process. Probably the biggest paradigm shift for me in this one was the fact that most people run a meeting based sales process instead of a stage based sales process. So meeting based sales process looks like discovery, demo call, proposal call. And the problem is when you have your sales process be a series of meetings, number one, you can actually slow deals down unintentionally, because what if you get the problem in the first five minutes of a discovery call? Why wouldn't you just jump to the demo and then jump to show pricing in the last 10 minutes? If they got to solution agreement when you did a five minute harbor tour demo, and then if they were like, can you just tell me how much this thing costs so I can buy the thing on that one discovery call. If you always force yourself to set four meetings in your sales process, you are purposely going to slow down deals that have higher velocity or you might find the other thing around. In enterprise sales, you might actually need to do two or three or four discovery calls to get to problem agreement, which is what you're really trying to get. And so instead of having meetings be your sales process, Mark has five agreements or stages he has in his sales process. In other words, he wants to get problem agreement. And one tool you can use to get problem agreement is a discovery call. And so Mark, could you walk us through your five agreements and the key question you're trying to answer in each of those?

Yeah, the first stage is the problem agreement. We can't go any further unless they answer this question. Do we have a problem that you can solve? Right. And your buyer must answer that question and you have to agree with their assessment. So we need to Agree, not just answer the question. The second one is priority agreement. Is this problem big enough for us to prioritize solving versus is this just a problem that's going to take us forever to close this thing? Because it's not that big of a deal. The third agreement is evaluation agreement. How are we going to buy? What is the buying criteria? What is the spreadsheet that has all the stuff that you're going to use and rate all the vendors on so that I know what's important to you, so that I can make sure that I communicate that. The fourth is value agreement. Right now that we know how to buy, do you agree that I can create the value? I'm telling you I can. I'm telling you this might be one of the most difficult things to get a buyer to do right now. People are so skeptical. So if you're not extremely intentional and focused about getting them to say, you know what, I can see how you can get me a 30% increase in my outbound pipeline. If you can't reach that agreement, then that's when your pricing and everything else falls apart because there's no agreed upon value. And then the last one is commercial agreement. Well, they agree about how much they should pay to get the value that you've agreed on. And that's where proposals and negotiations come in in order to help you cinch up that agreement with what budgetary constraints they might have.

Now the key thing, folks, is whether you're an SMB sales or an enterprise sales, these five agreements always happen. It's just a matter of how many calls or interactions does it take to get these five agreements. So Mark, could you give the examples of SMB micro at outreach and then big enterprise deals just so people can see how the sales cycle will like Slinky down and up.

Sure. So at outreach, we had three basic segments. Our SMB segment had kind of two sub segments. One of them was called micro. For 35 employees or less, that's what we were selling outreach to. So you think startups that ended up being about $7,000 deals that we could close in seven days or less that by the time we got it cranking, we're over 130% NRR. So these are amazing revenue building deals. Right. What we did for those reps, we call those inside sales reps, is they were completely inbound. They had a one call close. They would go through every single one of these agreements in a single call. And we had what we called the October 10, 10, 10 minutes of discovery. And that's where we would use the tool of discovery to get the problem and also the priority. Then 10 minutes of demo, we'd say, all right, let's look through the demo and give them an idea of what they need to build their buying criteria around and show them and get them to believe that we can create this value that everybody's reading that we can do. And then the last 10 minutes was when we would sit down and do negotiations and we get that commercial agreement. So you can see we easily packed all five agreements into a single 30 minute call by making sure that those reps were really teed up with the right deck and talk track to get those agreements to make sure that we could push the velocity that we needed to have in those smaller deals. Now in my enterprise deals, our average cycle time was over 270 days. Our deal size was, you know, over $150,000. We might spend the first two to three months just in stage one and stage two just getting alignment on the problem, getting agreement on is this a big priority? And quantifying that problem out to make sure that they actually believed it was a priority, not just a priority that day when we are talking about it, because something came up with the CEO. So the also in the enterprise cycle, new people get put into the buyer group. Multi threading becomes much more important. You're taking multiple buyers through this process. At the same time, you're kind of going back and forth between buyers that might be in stage four, agreeing on the value and buyers that are coming in new at stage one problem agreement. But because you know how to get them moving, because you've done the work with other people, you can start to accelerate that stuff. So I think that's a big, big reason why like you have to have a fundamental process that works across segments, but how it manifests itself in that deal cycle super different.

So folks, the magic of this is the way that you now forecast off of this five stage sales process is you just assess how well did you answer the question in each stage. And that will tell you how much risk there is in the deal and that will tell you how to forecast it. So Mark, the way that you forecast deals is any deal that has a business initiative and a timeline attached to it is in play for forecast. From there there are four levels of risk. Could you walk through what those four levels of risk are?

And don't forget we are paying our managers and our reps to make a call. As a aspiring manager taking this course or as someone that is a manager Trying to upskill. You can't prove yourself better than by showing that you understand and can control your business. This forecasting will give you that. So the four types of risk that you can assess when a deal is in play. One is green. That means it's committed, it's locked, it's a hundred percent blood. Commit is what I've heard a lot of people call it. It's definitely coming in. That's in the forecast. Two is best case, meaning that we're going to win this thing. There's risk associated. It's not a commit because commit has no risk. But there's risk here. But we believe that we can get over that risk and when that deal would be in your forecast. Now we have two types of risk that are out of your forecast and become the deals that you cover any gap that you might have between the number you're forecasting in your goal. The first one is orange. Orange is also in best case. So best case orange and what it means is that this is a deal that everybody's telling us it's going to close now. But because we have our own internal measures and we're asking the right questions, we believe that it's going to push and we don't want to make sure that we include a deal in the forecast that we're feeling like might push. And then the last one is best case red. Best case red means we're going to lose this deal unless something majorly changes. And that gives you a real way to like box in the strategy for those deals that are out of forecast to get them in the forecast and how to make sure that those deals in the forecast are communicated up into your overall revenue number for that quarter or month.

So Mark, let's go through an example here. If I have a deal that's mostly oranges, for example, that would be a best case push deal. So if we look at stage one, problem agreement, what would be an example of red, orange, yellow and green risk in problem agreement?

So let's say that you actually get to a real problem, you get a timeline. And so now you're in that stage one, you're ready to forecast. All right, the way that I would go look at how do I assess risk on the pain problem level is to make sure that we say if it's red, there's just no pain there. Right. We haven't gotten a pain that we actually think is a real pain. We think we're dealing with a preference or a project or something that's low level. We haven't gotten to real business pain. Orange is all right, we got some pain. Like people are feeling it a little bit. It hurts. The yellow, though, would be we have actual problem, right? There's a difference between pain and problem, right? Pain is something that you feel, something that annoys you, something that gets, you know, under your skin. A problem is something's going on. The business that I have to fix. I can deal with the pain. I can't continue to operate successfully with a problem, right? So now that's why yellow goes into the forecast. But we could do better. If a problem is tied to a business initiative at the C suite level, that's the kind of stuff that gets prioritized. I'm a CRO at a publicly traded company right now. If, for example, I had a problem around my enterprise pipeline generation, that would be a reason why I might do a deal. If I am reporting up to my board and my CEO a slide every single quarter that says, this is the progress I'm making in enterprise level pipeline gin, guess what? I am absolutely buying something for that. And so that's what we want to do is we make sure that we elevate from pain up into problem, up into initiative. And as you do that, the deal becomes less risky and becomes locked in your forecast.

So, folks, inside of the full course, we go through literally every single stage. We go through the exit criteria you need to accomplish in each state, the people you need to get in front of, the tools you need to achieve the exit criteria, and all of the risk stage by stage, so that you know exactly how to assess forecasting risk in each stage. So from there, Mark, I have all of my stages or all my deals categorized by red, orange, yellow and green. What goes into my forecast versus what is excluded from my forecast?

There's three areas that go into your forecast, Armand. One is your best case, yellow. Those are the deals that are risky, but you know you're going to win them and you need to make a call on that as a good manager. Then there's your commit or locked deals, your green deals. And then the last part is your create and close. Those are the deals that you open and close inside a quarter. So on day one of the quarter, they're not even in your pipeline, so you can't forecast them. That is something that you get from your finance team or your rev ops team. That is a model of how much revenue you can expect to win inside that quarter that doesn't exist at the beginning of the quarter in terms of an opportunity like you create it and you close it inside that quarter window. So when you're doing your forecast, you add all those up. That's your forecast, right? Best case, yellow, green, commit, locked, and you're creating close budget. That's what you got. Then you have your goal or your quota. The difference between those two is the gap. Now, you can have a positive or negative gap. Maybe you're forecasting $2 million on a $1.5 billion number. That's awesome. But maybe you're only forecasting a million dollars on a $1.5 million. The 500,000 would be the gap. That's how much you have to go from your forecast to get into your quota and get your goal. But how do you close that gap? Well, there's four types of deals now that we've identified because we have this great process and all of this forecasting stuff set up that makes it super simple to find what deals can I go close that gap with? And that's like your job. Great managers close gaps, y'. All. They don't report the news, they change the news. And so how do you close that gap? You get your red deals. These are the ones you're going to lose. What is the executive play you're going to run? These are urgent. Like we either need to spend more time with them and get them into a better state, or we need to quit spending time with them because they're going to lose. But that's a group of deals that we can pull in. We also have our best case, orange or our push deals. How do we increase the urgency there? That's a very different motion than taking something that we're about to lose. This is something that we might win, but we need to increase the urgency and shrink the timeline. That's a deal that you could pull into your forecast. If you do that, then you have pull ins. Those are deals that are in out quarters that we can bring into this quarter. They're telling us that they're not going to close until Q4. We're in Q3. How do we pull that deal into Q3 versus a Q3 deal that's in orange that we think will push because of delays internally or delays with security or there's some complexity. Those are two different types of deals, but same bucket of stuff that you can pull in to cover your gap. The last one is more creating closed deals. That's where you can bring in some extra revenue by focusing your reps on what are some quick and easy wins that we can do in this quarter to affect our number.

So let's talk about how to make sure that the reps are the ones that are categorizing their deals the right way and doing that work. So most deal Reviews devolve into one deal reviewed in 30 minutes and you get every useless detail about a deal. Like the guy's eyebrow was furrowing when I gave them price. And so it was a Tuesday and it was 72 degrees outside. So I think this is going to be a best case yellow deal. And then here's what happened with my dog last Saturday. I was mad that he pooped on the rug. Every single deal review that I have seen in most sales organizations is a complete waste of time. Mark, you are able to get through 30 deals in a 30 minute meeting. Can you talk through the three steps that you use to run a deal review and maybe we can even do like an example readout here.

Yeah. So the first thing that we do is you got to verify that forecasting data, that data in the CRM. That is what a deal review is. Number one purpose. The second step is let's assess the risk in those deals so that we really understand what what is going to be pulled into our forecast and what is deals that we are just not feeling great about. And then the last one is we want to do next steps where a rep leaves with a next step that they can do that week for every single deal in their pipeline that moves that deal forward so that we're creating that momentum inside the pipeline. All right, so the key here is that we need to help a rep understand that their data communicates something to the business. And the best way I found to do that is to say, let me read back to you what you are communicating to me with your data in CRM right now. So we, let's look, let's take a fictional company, A Plus Security, let's say that that's $120,000 deal that's closing at the end of July and we're in the commercial agreement phase, meaning we're trying to decide how much they're going to pay for the value that we've agreed that we can create using the buying criteria that we've agreed upon using the priority of the deal based on the problem that we found and agreed in the very beginning. Right. So what we're going to do is we're literally going to say to the rep, Armand A plus Security, let's start there. First thing is let me tell you what you're communicating to the business with your Data and CRM. Right now, you tell me if this is accurate or not. This is $120,000 deal closing at the end of July. Right now it's in commercial stage, which means we're looking for these two exit criteria. It's in the commit forecast category and it's green, meaning that we're definitely winning this thing. Is that accurate?

Well, what's happening in my head is I'm like, I don't think it's going to close by July 31st. I think the stage is correct and I think the risk assessment is correct. But I realize that this is probably not going to close by the end of the month.

And so right there, that answer, I think a very standard answer you get from a lot of reps, shows you why your data is meaningless. Right? They put data into the CRM that they actually don't believe in. So what you're going to do as a manager is right then and there, you're going to correct that. You're going to say, okay, you don't think it's going to close this month. Let's go into how you figure out if a close day is really good or not. You might do that little coaching. And that's where you're starting to drill these new neural pathways into the brains of your reps to think about, how should I work this deal according to the process that our company supports and enables and is optimizing all the time. And so that is what you need to get to, is you need to get to that place where you're saying, do you agree with what you've put in the CRM or not? Because that's what we're making decisions on if you don't let me show you how to do that. And therefore, what you end up with is a chance to correct some thinking and then immediately change the data in CRM to reflect the right kind of thinking that the rep should have done. You do that for two or three months in a row. I am telling you, everybody on your team will speak the same language, will think the same way, and they'll start coming to these deal reviews doing this. Hey, Arman, real quick, I only got 15 minutes for this deal review thing. Let's run through them. The A Plus security is 120k deals closing at the end of July. It's in commercial. I'm getting the like final contract review right now from security. And you know what? It's in commit. It's coming in 100%, homie. Like next deal. Unless you got Any questions? And that's when your team is rolling. That's when your team feels empowered, that's when you create momentum and you do that as the manager. The reps will never do that on their own.

So folks, you have your five stage sales process to close deals. You have your forecasting process to assess the risk across the five stages and then you have your deal review process to make sure the reps are actually following the process and the risk assessments. Now from there, the only thing that's left is you have to make sure that your AES are prospecting enough so that this does not look like an empty pipeline. And that brings us to Mark's three stage, keep it simple AE prospecting process. Most teams, when they try to get their AES to Prospect, they basically take an SDR prospecting commitment of 200 cold calls a week and then they just cut it in half. And then they hope that their AES are going to do that prospecting. They're like, all right, do your 100 cold calls and instead of finding four meetings, find two meetings every single week. And nine times out of 10, most sales teams cannot get their AES to prospect for their life. So Mark, could you talk about how you approach AE prospecting differently?

The process for an SDR works because it's built for someone that spends 40 hours a week, five days a week prospecting, which an AE does not. Therefore you must have a completely different way of doing it. So the first thing that we do is you have to set those self source targets. We need to know from finance how much of our pipeline that we need to source so that we have a really great intentional target to move towards. The second is, is we have the AES build and present a very specific prospecting plan that works like this. We need you to go get three really great deals that are two extra ACV into your pipeline this quarter so that they're there in the future when we're going to start to figure out how we're going to hit our number in our quarters so that those three deals, we want you to go after 10 accounts to get those three deals right. And we could talk about that in the course of how you do that selection and how you make sure that your reps stay focused on that. And then the last is every single week in our team meeting, this is a rhythm thing and a metric thing, we reinforce the prospecting plans in that team meeting. If you're not reinforcing it, if you're not sitting in front of it, if you're nervous to show them that they're not doing well. If you're ignoring it because you just hope it takes care of itself, it will always be your Achilles heel. Talking about it every single week, setting that expectation, showing that lead board every single week shows people that you're serious about it. And when you're serious, they're serious. So the general process Armand, that we used in order to help somebody get into this kind of prospecting motion is in week one we have our AES meet with their managers and they select these 10 accounts of which they're going to get three of them in their pipeline and all of them need to be 2x acv. And that's where the manager and the rep work together. You know, ChatGPT prompts account research. We're trying to find accounts that actually have problems that we can solve. Not we're going after Nike because I like Nike and I wear Nikes. That's not a reason to go after an account that go after an account that has a problem that we can solve. And we need to help them out. The second week, what you do is that manager and the rep then present to the VP or the CRO. These are the accounts I'm going after and why. That's your chance to get correction into how reps think about accounts or this isn't really a big enough problem or like if you go a little bit deeper, you might find something better. That's where you get that coaching. You lock in those 10 accounts. Then in week three, your VP needs to go advocate for your sales reps. AES are closing business dealing with customers and prospecting and a million other things, including stuff in their personal life. And I found that AES that feel like they're being supported in prospecting prospect 2.3x as much as ones that feel like they're just on an island and they're being saying here, you know, have fun young man, go figure out how to create your pipeline. And so your VP goes to marketing, it goes to figure out like what is the ABM we're going to run, what kind of events can we put together? And then the rest of that quarter, you have 10 more weeks now to get in three deals out of those 10 accounts using these like really awesome coordinated prospecting plans, not just trying to act like an SDR and cold call your way to your pipeline.

So folks, that brings you through the operating system, which is everything that's covered in section one of the course. And now section two is going to cover the operating rhythms in Other words, how do you use operating rhythms, trainings, ongoing meetings within your team to make sure that the operating system is going well. So let's start with your training programs. Most sales teams make the mistake of today I'm going to teach you discovery. Next week I'm going to teach you forecasting. Next week I'm going to teach you prospecting. Next week I'm going to call Sandler and ask them to train you. And then you wonder why nothing ever sticks with your team. Because one, you don't stick with any one topic long enough for it to actually get cemented into your reps heads. And then two, you change so many topics that you cognitively overload your reps with information. So Mark, how do I think about how much training my team can handle?

I've created this nine box and this nine box has an X axis that talks about capability. Capability helps us understand two things. One is the expectation of how good a rep will be at something after a training program is done. And secondly, what do we need to do to make sure that we certify someone to make sure that they're at that level of capability. So the three areas of capability are aware. Aware is, hey, somebody's passed the quiz after a little training and they'll do it 10 or 20% the way that you would expect them to do it. In a live fire conversation, we have competence. Competence means that they have done an internal role play that is graded against a rubric to understand that they're good at what they've been trained on. And you might hear it 50 to 60% the way that you think you should when you're in a live fire conversation with a buyer or a customer. And the last is mastery. Mastery means we go out into the field, we get a gong or call recording, we bring that back in and scored on the rubric. And we've now seen in the wild a rep performing the stuff that we've asked them to do. And it scored well against the rubric. And that means you're going to hear what you expect to hear 80 or 90% of the time. And each one of those tells us what kind of a program and how big of a program we need to create. Right on the other side is cognitive load. You can start low with something like changing a button in Salesforce or the cognitive load can be high, which would be like changing how somebody does discovery. Those are the things where you're actually having to change, like root behaviors that are a rep has learned over the years and you have to stop them from doing something before they can start doing the thing that you need to do correctly. So each of those boxes has a point value. You over time can kind of figure out how many points somebody can take of change A quarter. At outreach it was 16 points. And so now I want you plot what the initiative or project or training that you want on this nine box. It tells you how many of those you can do once you meet out all the point values up to your budget of 16, for example.

So let's say for example I have a topic that's like a little bit more complex. We'll call it discovery. So I would assume that that would be a pretty high cognitive load exercise to master discovery. And if I want my team to be all the way at mastery, aka like really good at it, what would an example training program look like? How long, what reinforcement sessions, all that stuff.

Yeah. So another major mistake that managers and teams make is that they think doing a trading creates change. That's not true. Doing a training tells somebody information. Reinforcement is what makes that that knowledge become a behavior and a habit and ultimately a way that somebody does something. So when you want to get the mastery, that means you're probably going to need a quarter long, 13 week long program. And the way you break that up is you'd find like the three big topics of that program. So let's say that you're doing discovery. You would say, all right, on week one of the month, we're going to do a discovery training. It's going to be the initial methodology, how it works, and we're going to take you through that for the next three or four weeks and reinforce what we've learned just around that. Once we get that, then we're going to go to the second thing about discovery that we need to teach you. Maybe you know, you're digging. I call dig the pain hole. That's the second part of discovery. So we're going to spend a month teaching people how to dig. Dig that pain hole. That might mean like week one we're going to do internal role plays. Week two, maybe what we're going to do is we're going to get live fire stuff with actual customers and we're going to tear down a call. Step three might be like individual sessions with your manager where you go through and they take a couple calls that they've heard you do this new technique on and they're going to give you direct feedback and you might role play in that. So you gotta have all that reinforcement. Then in the Third month, you cover the last part of your training and then you do the same thing. And so this creates a nice awesome rhythm or a nice awesome process to help you get somebody to take information and of a training and turn it into behavior change that gets you the results that you need to get.

So, Mark, let's do some other examples. You talk about your four rhythms. In other words, you should never schedule a new meeting. If possible, you should try to use your existing rhythms to reinforce your training. So what are your four most common rhythms that you use to run your sales team?

Yeah, the first one is a team meeting. That's something that you do with your team. So a manager to a meeting. And that's where you're going to have like a set agenda that you kind of follow every single week. You'll go over specific metrics. You might do like very micro learnings around a specific tiny little topic. You might do celebrations and shout outs. Right. And in the course we go through all of the agendas of a team meeting. But that team meeting is a place for you to build culture. The next one is a deal review. We talked about deal reviews earlier. That deal review is the one on one with your, the manager and the rep, where you go through every single deal every single week and you make sure that they're doing the process the way they should, that you have the data the way that you need it, and that they're leaving with a list of next steps that they can go do. The next one is one on ones. One on ones are not deal reviews. One on ones are not a chance to talk about deal strategy. If you need that, you need another meeting. One on ones are the foundational way that you build relationship and connection with your reps. If you want to talk about Netflix for half an hour every other week, and that helps you get closer to your reps and helps them buy into the initiatives that you're doing, then you should talk about Netflix. Even though it's not related to the company. This is more about creating that connection than it is about like, hey, this is another chance for me to talk about a deal that I'm worried about. And the last one is bi weekly skill building. Every other week you get together, you take an hour and together as a team, you work on a specific skill that is reinforcing maybe the training that's happened later. The key is you want important containers that are already existing in a rhythm and then your job is to use the stuff that you're doing right now to fill those containers. And so listen, we have a program we're doing on discovery. You don't have discovery specific training calls every week of the entire quarter and just go through that. You could do that. But what works better is we have a bi weekly skill building meeting that's a container. We now have a way to do the reinforcement that's already on the calendar. And that's a container we just fill with the new content that we're emphasizing at the moment. And this really limits the amount of time that your reps are out of the field in meetings that they're usually not paying attention to you anyway.

Let's talk about your five part team meeting. Most team meetings, the VP of sales is half asleep and doesn't even want to be there. Marketing comes in, gives announcements that make the entire team fall asleep, and then they try to tell people what metrics they should care about. And then basically they just burn people's Monday morning with a complete waste of time. So, Mark, how do you think about the purpose of your Monday morning team meeting? And then how do you run an effective Monday morning team meeting?

The team meeting, again is to create camaraderie, to create momentum, to create shared focuses. And the way that I run it is very specific and it has basically five parts. Part one is a centering exercise. It can be a breathing exercise, it can be a gratitude exercise. But people are coming into this meeting frazzled. They just had a bad meeting, they just got an email, they had to write, oh my gosh, they just dropped the kids off at school. Whatever it is, people are coming in with a circumstance and when you don't center them, let them give them a second to breathe and settle into what's going to happen. Usually, no matter what you share, no matter how good it is, it's not going to be communicated nearly as well because people aren't open to receiving it. So take two minutes, do a breathing exercise, get everyone focused on the meeting, and now you're ready to run a good meeting. The second part is we need to shout out people on the team. We need to give celebration, we need to do recognition. People, no matter what they say, most people want to be recognized for good work. This is a great chance for us to do that. It can be around, hey, here's a great deal story that we want to tell or hey, this awesome email that we just wrote booked a meeting that we've been trying to get for the last six months. Or somebody revived, somebody that was gone had gone dark on them using this method, right? So that's where we want to shout out cool stuff that's going on in the team and recognize that part three is we want to share metrics. And there's two types of metrics. There's North Star metrics, which never change. That's what you talk about every single week. Our buddy Kyle asai, he always talks about what is your level of attainment this quarter, how much pipeline have you created this quarter, and what's your quarter plus one pipeline coverage look like? If you get three out of three, you're gonna rock it. You get two out of three, you'll probably do pretty good. You get one out of three, you need some extra coaching. Right. So those North Star metrics are something you share every single week without fail. And there's momentum metrics. Momentum metrics are things like, we have a city series going on with marketing, and we want to track how many attendees that we've each gotten to go to that meeting. You'd only do that for a month leading up to the city series, and then that metric dies off. But it's trying to create momentum around a specific project or initiative that needs focus in order to really sing. Right. So that's the third part is sharing your metrics. The fourth is these kind of black belt updates is what I call them. We bring in, like, the person that's organized city series. We bring in the rep last year that closed four deals at city series. We bring in the event marketer that's setting up all the stuff and talks about the menu and why you people should be so excited about the chef or whatever. Right. So we bring people in to talk about specific areas that are experts and that could be an AE on your team talking about something that they're awesome at. Right. But we really want to make sure that we have a chance to bring in other people that help our team see a wider perspective than just kind of what we're always talking about. Maybe deeper learning than what you can run as a manager. And then lastly, is upskilling the team. This is where you might do housekeeping, emphasize some information that's come out. You might do a quick little role play. You might emphasize somebody that's done an unbelievable job at something that you've been trying to train them on and show an example of that. But it's just like a really quick little everybody a little bit better. Let's get everybody a little bit more informed, and let's do a little bit of housekeeping right at the end so that we can, like, move into the Rest of the week or the rest of our day just to ready to pop. Because everybody is now focused on the right stuff, concentrated and celebrating what's going. Awesome.

So that's the team building exercise. Mark, talk about your structure for running one on ones which is probably of all of the meetings you have the least formally structured meeting of them all.

Let me tell you what lazy managers say to someone that wants to do a one on one. Listen, it's your one on one Armand and you on the agenda. I'll show up and walk through whatever agenda you create that would like, come on y'. All. Like most reps don't know what they need help with. Most reps are busy. They don't have time to sit around and think about what they want to talk to their manager about. Like your job is to come with some kind of structure that is used to create relationship and connection in your how you work with that person. Right. We don't need to get into deals because we got a deal review to do that we don't need to get into, hey, let me coach you on something because we got coaching sessions to do that. Can you do those in your one on one? Sure, if the rep wants to to but they shouldn't be a place for that. This should be a sacred space for relationship building. And that's the first part. Take some time. You know, sometimes in my one on ones, even with my VPs and SVPs, we might just shoot the ship for like 10 or 15 of the 30 minutes and. But you can feel them open them up, you can feel them relax. You can feel more truth coming out of people when you get them into that mode where they're just like, hey, I'm just talking to one of my buddies right now. Let's do a little relationship building. The second one is personal development. What's going on with you personally? Like is there something in your family that you need help? Is there some motivation that we can talk through? Like what's going on with you personally so that I can make sure that I understand what I can ask from you right now. You know, if I have a rep that's moving, having a new kid and is only six months into this job, I need to check on that person, not just the rep because that person has a lot on their plate and this is where you can help someone develop personally. The next one is professional development. And again, you don't have to have all these sections, but these are examples or ideas or a flow that you could use in professional development. Has to do around, like how do they move in their career? You know, how do they get to another level? Like why do they want to get to that level? Like, are you actually ready for it or not? And like, oh, here's a plan so that you can be ready the next time this opens up. Probably one of the most impactful things I've done for people is this professional development phase. I've helped eight people get their first VP of sales jobs. And one of the reasons is because I proactively try to develop them so that their careers are better. And then the last could be skill building. This might be where you do some one on one coaching or they want some extra emphasis or maybe they're just really struggling or they're not participating in the team skills, skill levels. So this is a chance for you to take a little bit of time and maybe work on some skills. And they don't have to be all sales skills, y'. All. Maybe it scales on. Hey, how do you manage up? Maybe it skills on, like how do you work with the customer success team? So it doesn't always have to be like skill building around like specific stuff that you're doing on sales calls.

So folks, at this point you now have all the operating systems to get your AES closing deals, all of the operating rhythms to make sure that they actually follow the system. But then the last piece is you need metrics to make sure or measure how well your operating system is functioning. So Mark, could you talk about like what people usually get wrong with metrics or why metrics are important at all?

Yeah, the reason they're important is that is the signpost that points to the area of your systems and processes that need help so that you can go apply specific fixed to them. And you have to have it organized correctly. And if you don't, you're going to get lost in the sea of metrics. I used to have a saying at Outreach and I was like, every dashboard begets another dashboard, begets another dashboard, begets another dashboard. It was like a never ending, you know, black hole into metrics and you'd look at 30,000 things to figure something out and that that doesn't work. That is inefficient. And it also gets you so far into the weeds that you can't find your way back out and you end up fixing stuff that won't impact the results anyway. There's a couple key concepts that you need to know in metrics. The first one is L1 versus L2 metrics. L1 metrics are lagging metrics. They're typically counting stats like how many biddings do we book, how much pipeline did we generate? How many stage one opportunities have we created? Right, so those are counting stacks that are usually the result of a major process that has multiple parts to it. Then there's L2 metrics. L2 metrics are the metrics that use the diagnose why an L1 metric is bad. So you start with your L1. If it's bad, not on par, then you go look at your L2, and your L2 metrics are the ones that help you diagnose what to fix. And the thing that's important is you must designate between five or nine different L2 metrics that you can use that are stacked in order of how important they are to achieving that lagging metric. And the minute that you get to something that's wrong, you stop and you go fix that. And then you watch what impact it has on the L1. So the L2 gives you that kind of control. The L1 tells you, is that control actually having impact or not? So it's a really great marriage. The second thing that you need to know is that a number absent of context and trend is meaningless. For example, Armand, if I said, I'm going to charge you a million dollars for this, you wouldn't know what to do with that. Because if I was like, well, this million dollars will make you one penny. I'm charging way too much. But if the million dollars you're about to spend is about to make you a billion, then you want to spend as many million dollars as you can. So the context of a number tells us whether it's good or bad. When I look at 83 meetings a week, I don't know if that's good or bad. If I know that my goal is 50 meetings, I might say that's good. Until we look at the second part, which is trend. Right? Trend is like the week over week, month over month, quarter over quarter results, so we can see what's going on. So 83 meetings on a 50 meeting goal looks great. But I've booked over a hundred meetings the last four weeks. 83 meetings actually is telling me something's starting to go wrong. So we need to have context and trend to understand any number. And then the last part of it is we have counting number stats, and then we have percentage stats or conversion stats. You need to make sure that you're looking at your counting number stats. That tells you are you delivering what the business needs. Then you have Your percentage stats, which tell you are you converting inputs to outputs efficiently? And that's where you start to see where leaks are happening. It's very difficult to control conversion in and of itself. But when you go back to your L1 and you see, oh, I see where I'm losing conversion, my L1 is below where it should be. Then you go into your L2 and fix it. That's what impacts your conversion metrics. So it all dances together. But if you get lost in a sea of metrics and dashboards and you don't understand systematically how to go through your part of the customer journey and understand these are the important metrics, those will probably be your North Star metrics, by the way, that I need to do as my L1s. And then here's how I diagnose if the L1 is a good setting up that dashboard is a game changer for managers.

So let's actually walk through that dashboard. If you put what Mark was just saying, in a practice, it's really straightforward to map out all of the key revenue metrics in chronological order. So if I Look at this L1 manager dashboard, mark has active outbound accounts. So how many accounts are you outputting meetings booked from those accounts pipeline generated from those meetings? Stage one, opportunity, stage two, stage three, stage four, stage five, how much you closed one after stage five. And then lastly you have the closing holy Trinity, which are your win rates, your deal sizes and your cycle time. That's pretty much every metric. You would want to figure out where something could be going on in your funnel. And then if you look at the columns, there are two different columns. You could have numbers and dollars in toggle, so you can look at things in both numbers and dollars. And then in the right hand column you have conversion. And you'll notice that these numbers show month over month so that you can see trend lines. You can see if things went down in January, February, March. So, Mark, let's do an exercise. Let's pretend that I'm reading this dashboard and I see that active outbound accounts are stable or going up. And so that looks good. But then I see that my meetings booked is down, so I see a big dip in my metrics and that's not good. How could I dig into that L1 metric using L2 metrics?

So when we see that the conversion from active outbound accounts going into meetings booked is down, we know that there's something broken. When you organize your dashboard like this, it becomes so simple to see. So what we start to do is we say, all right, what are the things that if we're actively outbounding to something that could go wrong, that would mean we're not getting the conversion that we want? The first one I think of as well, listen, we're an email heavy shop and my sequence reply rates are down. Or maybe we're not making enough cold calls, or maybe we're not connecting on those cold calls, or maybe we're not targeting the right accounts or the right Personas. And what I'm going to do is going to sit down with my team and we're going to dial in five to nine of these symptoms or leading metrics that impact that lagging counting L1 metric. And so you want to make sure that you just list these out and when you click on the active outbound account, so the conversion rate, which is actually messed up, you'll end up seeing, here's all the things that contribute to that listed in order of importance. And you go find the first one that's broken. As soon as you find what's broken, you go fix that.

So, folks, now you literally have the entire L1 dashboard with an L2 example that you can go and implement today. And the final piece is section three walks us through the talent system. In other words, how do you find people who are capable enough to execute the operating rhythms, operate within the system and ultimately, hopefully make your job easy so you don't have to have 17 operating rhythms to reinforce one thing in your system. So first, let's talk about what you want to look for when you are evaluating talent. Mark, a lot of people look for backgrounds. So 10 years of selling to enterprise cybersecurity companies, a lot of people look for skills. I looked for skills. You're really good at running a discovery call or you're really good at cold calling. And then some people look for traits like you're a really hard worker or you have really high EQ or you have the ability to connect the dots and talk to me about how I should think about traits versus skills versus background and experience.

With Gong call recording, with enablement functions, with ChatGPT, someone can get up to speed on a industry or how something works really quickly. Experience isn't that valuable. That's just a little bit of learning. Skills are something that I can teach somebody as a manager, you can teach somebody to negotiate better or to do a better demo. And so, and honestly, when they come in with some of those skills, they're not exactly how I want them done. So sometimes I have to unravel that skill to get it. The key is the trait. Traits are like instinctual, part of our DNA and personality. They are who we are. If we don't have those traits, it's very difficult for us to acquire them. And therefore, if they're required in the job, we're always going to be deficient because that trait is never going to be outclassed by how good of skill or how much experience that you have. And so, first of all, we screen on experience and skills just to give that kind of like initial kind of easy way to figure out what we're going on. But all of our interviewing has to do with traits.

So, Mark, let's go through some example traits and how you would test for them. Pick any trait that you commonly want in an AE and give us a sense of how you test for it.

Yeah, I think any manager not hiring for coachability is making a humongous mistake. Mistake, because think about it. Your job is to coach this person. If they're not coachable, you're making your job really, really hard. So coachability is difficult to figure out. Right. Like, how do you figure that out in a half hour conversation? Well, the way that you do that theoretically is you put someone into the place where that trait is activated and you see if it activates and if they use it or not. If I want to interview for coachability and assess coachability, what I need to do is I need to put someone into a coachable situation and see if that coachability trait activates. So I might do something like this. For coachability, I'd say, Armand, tell me about the number one objection that you get in a sales cycle. And he might say, price. All right, great. Price. Would you mind if we did a role play real quick? The first thing I'm looking for is that non verbal response to the role play. A lot of times people will cross their arms or they'll sit back a little bit. That is a sign that already they're resistant. The role playing and coaching. So now that you've seen that first part of how they're reacting to it, now we go into the coaching and they'll. I'll say something like, well, Armand, you know, you were great to work with. We really love you as a sales rep. Your product's awesome. Love the company, but you know what? This other company is way cheaper and we feel like we need to do that for budgetary reasons. So, like check with us back in a year and see how things are going and then the rep is going to answer. However, that they want to answer. And I don't even really care how they answer. What I'm looking for is, you know, what can I coach them on in that moment to put them into a coachability situation. So after they're done, I might say something like, well, Armand, that was really good. But you know what? You didn't ask a clarifying questions. Most objections are just a knee jerk reaction, a trained response in order to kind of get us off of our game and so that that person can move on with their stuff that they're more interested in. So why don't we redo the role play real quick and let's see how you think that feels doing it the way that I'm asking you to do it. Again, I'm looking for non verbal signals, arm crosses, sitting back. I'm looking for are they leaning in? Did they grab a notebook and start taking notes? And then they go into the role play again. And I'm not looking for them to do it perfectly, though some people do that. What I'm looking for is, are they trying, am I breaking their brain? Are they trying to inject something I just coached them on into their behavior? That's coachability. Coachability isn't your willingness to listen. It's your ability to take what you've heard and make it change your behavior. And so I can see with 95% certainty in about 10 minutes if somebody's coachable because I put them into a coachable situation and then I watch for the verbal and nonverbal cues that tell me that they enjoy being coached and they get value out of it or are they resisting?

So, Mark, let's talk about how you actually fold this into an interview process.

Now.

So you pick six traits that you want to test for and then you sprinkle them across the interview process. Could you talk about your four step interview process?

Yeah. First one is the recruiter screen. That's where we're looking for, like these kind of rapid fire questions just to orient ourselves to is this person in our stratosphere or not? Like, do they have the ability to do the role? Like, listen, I have a great friend who's a contractor. He wouldn't be a great salesperson. And I need to kind of figure that out before I spend, you know, the next four or five hours of our team's time and his time to figure that out. So, recruiter screen, 15 minutes, rapid fire machine gun questions just to make sure that we have somebody that we should actually be talking to. The second one is the hiring Manager interview. That's where the person who will eventually be managing that person has to spend time assessing two traits. Mine were coachability and the ability to transfer passion. I became a master at those. I knew in a hiring manager interview I was going to come in and do it. I knew exactly how to do it. It was like really, really strong. And I'm also looking for, can they have a conversation with me? Are they a person that I would want to work with? Right. And then at the end, I'm giving them a chance to ask some questions. And a lot of times you can tell about the person based on the questions they ask. Then they go into the loop. If I've cleared them from that point, then now they're going to talk to two more people that will do two additional traits to get us all six of our traits covered in an expert way with a high degree of confidence. They have those and we might even do like a panel interview around culture or something like that. Now that we've identified these people who are definitely have the traits. And then the last step is the talk them out of it interview. This interview is the one where I tell them everything that's bad about the job, bad about the company, bad about their business, you know, boss, whatever, where we're trying to make sure that they really want the job. And I'll be honest with you, Armand, the secret here is nine times out of the 10, a person wants the job more after that interview because they start to feel like you're being super, super honest and transparent, which you should be.

So, Mark, I get through the end of this process, how do I run a debrief and make a decision on whether or not I should hire this person?

So in your applicant tracking system or your interview guide, you should Write each trait 1 to 4. I don't like 1 to 5 because too many people pick 3 and 3 doesn't tell me anything. If you're going to interview, I need to know either positive or negative or very positive or negative. So you might have strong no, no yes, strong yes in that trait and then a box underneath that where they log the trait and why they think that is. Right now, anybody that isn't a strong yes is a no. There are no soft yes hires. The reason for that is simple. Every time that you hire an unbelievable person, they can make your job 10 to 20% easier. Every time you hire the wrong person, they make your job 20 to 30% harder. So why would you hire soft yeses that have a much stronger possibility of making your job harder when you can just spend more time trying to find the person that you're so excited about and, you know, make your job easier. So we get the people in the room that did the interview. Those people go person by person. They explain the trait that they were interviewing for, talk about why that person has it there, and then they need to make a call. Is this a strong yes or something else? If it's not a strong yes, you don't hire them.

So, folks, the final piece is you know how to evaluate talent. You know the process to evaluate talent, and now you need to go get the talent. So there are five different sources that you have to source candidates. You've got your squad, your internal talent pipeline, your referrals, your outbound and your inbound. And you prioritize those five in order. So Mark, give me the one liner on how you approach each of them.

The first is your squad, who's a group of people that love working for you, that you love working with, that you want to work together again. The second is internal people. Are you identifying the awesome people internally that you want the work for you? The third is referrals. Who can you go out to in your network and ask for help and they'll send you their squad people because they know that you're a great person to work for. The last that you control is outbound. Outbound is you taking on your SDR hat or your recruiter hat and making sure that you always have somebody on your bench by finding great talent and making sure that you're forming relationships with them. And the last is inbound. That's where most people live. They sit around waiting for their, their Recruiter or their LinkedIn post or job description post to fill up their ATS with like wonderful candidates. And Armand, we both have been burned by that, so we know where that goes.

So folks, you literally have pretty much everything that you could need to be one of the best sales leaders in the game. We walked through the five stage sales process to get your AE's closing deals, how you forecast on that process, how you run deal reviews on that process, how you run an AE prospecting process to get more of those deals. Then from there we talked about the rhythms, how you train your team, how you use team meetings to get them fired up, how you run one on ones to develop your people, and then how you use metrics to make sure the people are actually working within the system the right way. And then the last piece is the talent system. You now know exactly how to hire, evaluate and Find the best salespeople in the world and you have all of that for free. And guess what? There is a one pager documenting every single process that we went through today. Every operating system, every operating rhythm, and the entire talent system, all for free. And what I can say is, if that is what we are willing to give away for free, you are not going to believe what is inside of this course. It is five or six hours of, frankly, everything that I wish I had as a VP of sales with multiple examples for every single one of them. An example of where it's going to go 10 times deeper is we will have specific examples of how you make certain judgment calls on deals, or how you forecast a yellow versus an orange, or how you might build a training program around any specific skill. Folks, it is literally the last thing you will ever need to consume if you want to be the best sales leader in the game. And guess what? You get a special discount because you have attended this masterclass. It's on the screen. And on top of that, we're going to send you all of these one pagers afterwards. Folks, thank you for joining along. Mark, any finishing notes before we go?

Yeah. One Armand is. I had a situation early in my sales leadership career where I had a repair just cussed me out for being a bad manager. And it took me 18 months to figure out that I was doing the wrong thing. And you know what, if I'd have been in the wrong company, I probably would have been fired. I was lucky. I was in a big company, a big corporate company, and it didn't seem like anybody could really see what I was doing. And I was kind of brute forcing results that was, you know, burning my team down. And this is the stuff that in the last 20 years of sales leadership I have learned and stolen and perfected and iterated on. This is how I've gotten eight sales managers to become VPs at other companies. And I'm telling you, if you get this stuff set, you're setting the foundation of an unbelievable career as a people leader.

Folks, go check out the sales management operating system and we will see you on the flip side.