Essential CRO Competencies for PE-Backed Companies with Joe Gravino

Hi, I'm Warren Zenna, founder and CEO.

Of the CRO Collective and welcome to the CRO Spotlight Podcast. This show is focused exclusively on the success of Chief Revenue Officers. Each week we have an open, frank and freeform conversation with top experts in the revenue space about the CRO role and and its critical impact on B2B businesses. This podcast is the place to be.

For CROs, sales and marketing leaders who.

Aspire to become CROs and founders who are looking to appoint the CRO or want to support their CRO to succeed.

Thanks for listening.

Now let's go mix it up. Hello and welcome to this episode of the CRO Spotlight Podcast. This is Warren Zen. I'm the founder of the Ciro Collective and today I'm really excited to have Joe Gravino as a guest. Joe is a principal at Falcon Partners and Falcon, they appoint their. They're hiring a recruiting organization for C suite executives. They focus mainly on CEOs, CFOs, CROs. And Joe and I have talked a lot because as you know, I'm really interested in the way in which PE firms particularly are hiring and evaluating chief revenue officers. And Joe had this, I had this really amazing conversation about this and then what's going on today with how PE firms are hiring, evaluating and deploying Chief revenue officers. And we just got into a whole bunch of stuff. So absolutely listen to this episode. It was great and stay tuned for that. So thank you so much, Joe, really appreciate it.

Yeah, thank you for having me and I've enjoyed all of our conversations to date. I think we've got a lot in common and share a lot of the same opinions on various topics. So excited to unpack all those today.

Let's do it. So if you don't mind, first, why don't you walk through a little bit, just what does Falcon and what does Falcon do? And more specifically, what do you do there? And if you don't mind too maybe put together for their listeners, like why it is that you and I are talking a lot. Like what, what's the link there between what, what how we're thinking about the world?

Yep, I'll start with Falcon and I'll get into my focus within Falcon. So yeah, basically what Falcon is at its core we are a boutique retained executive search firm that does nothing but work for private equity firms and their portfolio companies. So where we focus all of our time and attention is helping private equity backed organizations find CEOs, CFOs, CROs and CMOs for their portfolio companies. So typically where we Focus is called the lower end of the middle market. So these are companies between, you know, call it 20 to 100 million of revenue. We will do searches larger than that. But these are a lot of the time companies that are first time institutional capital private equity firm buys a portfolio company from a founder and they need to build out the entire management team, scale it from 20 to 100 million of revenue and then exit to another private equity group or strategic buyer. So we do call it 75 searches per year across those main three. CEO, CFO and go to market. I do all three of those searches but my main focus is go to market. So I run a go to market practice. I started that and launched that five years ago. And so we do call it 15 CRO or CMO surges or even a VP of sales, VP of marketing if that's the number one person that is at a portfolio company that is on the management team and has an equity stake. And so I started that five years ago. We have call it seven to eight clients in terms of private equity firms that come to us for that practice specifically. And yeah, I love it that I'm very passionate about go to market. I know that's how you and I got connected because that is your main focus of the Sierra Collective. So yeah, happy to go in further there.

Great. So yeah, I think the first thing I'd like to ask you is, so as you're doing this, how are PE firms viewing the Chief revenue officer role when they come to you and ask you for a CRO? What are they typically looking to solve with that role?

Yeah, I know you and I both have had conversations about this. I think, you know, a lot of time private equity firms, especially ones that buy on the lower end of the middle market, they'll buy a founder like company. Let's just say it's a $15 million ARR software company and that has a founder who is mainly doing the demos. They've got two AES and they need to build everything in the go to market. Sales, marketing, CS and account management. Especially if they're thinking about doing some add ons at some point. And they'll come to me and say, hey Joe, we need a CRO. And I'll say, okay, well let's, let's unpack that. Why do you feel like you need a chief revenue officer? Because in my mind, a chief Revenue officer, the way that I draw the line between CRO versus VP of sales is that the organization is ready for a Chief revenue officer when there is at least the Fundamental parts of the go to market already built out. And there is a director or VP that owns sales, there's a director VP that owns marketing, and there's a director VP that owns CS and account management. At that point the organization in my opinion is ready for a CRO up until that. If they do hire a CRO, usually the main pain point they have is they need sales built from the ground up, which means hiring, it means icp, TAM work, building the sales playbook, like I said, hiring the team, making sure they're all trained and that's on the sales front. They also need marketing to manage and built. And usually CROs, if you look at their background, typically have a deep spike in sales. Most of them call it 90% and now they've, they've grown to a point where they've assumed sales, marketing and cs. But if you put them into a founder led organization and say hey, what are you going to be able to roll up your sleeves and do on your own? It's mainly building sales. They can oversee marketing and account management but they can't do they, they can't build it as well as they could with sales. So effectively you're going to hire a CRO to then only be focused on building sales and that's so you're, you're hiring someone who just is too elevated the role. So back to your original question. If it's a founder like company and they need all three of those elements built, what I always recommend is to hire a VP of sales to go build the sales function, hire a marketing leader to go build the marketing function and then from there, once those are built, the foundation is laid, then at that point you're ready for a CRO.

Yeah, I, obviously you and I are very much in agreement on that. My, I'm interested in hearing though, when you present that to your PE clients, is that a disruption for them or is that something that they come to you with an awareness of? Are you educating them about that or are they aware that that's sort of like the right way to do things? What's the gap right now today between your viewpoint. My viewpoint and the general PE viewpoint on the CRO role?

Yeah, I would say it's more on the education front. But then again, I mean there's a lot of different flavors of private equity out there, all the way from the mega funds and then down to even there's thousands of private equity funds all raising their first fund, second fund, buying portfolio companies. And I think it's around how much experience do they have and rigor they have around hiring. And if you look at a lot of private equity funds out there, especially ones that have called between 750 million AUM or above, a lot of them are hiring a role that's called a chief talent officer or a head of human capital or operating partner focused on talent. And those individuals sometimes are former executive search people, sometimes they're organizational design people or hr. And they're hired to create the archetype of what that looks like across every single role. CEO, cfo, go to market. And so they, they, they've seen more and they organizations that typically have that role, usually it's less education. They totally, they usually get that at companies of that size if they're buying a lot of founder like companies typically need VP of sales instead of CRO. But there are also a lot of private equity firms out there who are smaller, who buy fondlay companies who don't have that role and are looking for a thought partner from an executive search firm to come in and say, hey, here's what we see across all private equity and here's how we typically, here's how you can think about sequencing the hires and building your go to market for today and then how that unfolds, you know, years three, four, five in the whole period. So it's with a lot of those funds that we're doing a lot of education as opposed to the ones that are more mature. Have the chief talent officer already have a good hiring playbook and hiring profile in mind. They usually get it.

So it makes sense to me. Interesting to hear that. It makes sense that there's likely going to be some degree of fragmentation around awareness and knowledge based on experience and size that that's all makes sense. I think what I'm hearing you say though is that the more experienced PE firms ultimately come to that conclusion that a CRO is needed in that context and not the kind of sales leader. And it seems to me then that if that's the case, as more of these PE firms mature, they're going to come to that conclusion on their own or they're going to kind of osmotically kind of buy into it from people who come before them like any, any business. Right. As more and more companies are in any space, as they develop more and more awareness, that awareness becomes trickled down to smaller companies who, you know, kind of benefit from that. Right. So it sounds to me, I mean, if I'm, I'm asking here, would you prognosticate that over a period of time And I'd like to know what time you think that would be. That pretty much all PE firms will eventually come to understand that the CRO role is of that structure or how long do you think it'll be before this is sort of considered to be like a no brainer that when I'm looking for a CRO, that's the nature of the role. And how long away are we from the point at which there'll be no longer CROs who run sales? Or is there a future where that'll happen?

Yeah, look, it's a good question. I think go to market as an entire function is probably still 8 to 10 years behind that of finance and operations and other functions that have been around that have been core to private equity value creation for a long time. Go to market and you've seen this is, it's a new revolution. And you're starting to see I've done podcasts on in the past or webinars, I should say the go to market operating partner role. Private equity firms are starting to hire go to market focused operating partners to focus on driving that type of value creation across other portfolio companies. This idea of go to market and using it as a value creation lever is newer within the last. It's become more important over the last 10 years. So yeah, as, as you say that, yeah, I think private equity firms are going to go through, you know, all of the cycles of, you know, trying to hire a either CRO when they shouldn't have or a VP of salesman. They should have hired a CRO and they're going to go through all the reps enough times over the next call it, I would say probably seven to eight years to wherever the education is going to be there, they're going to have enough failures or trial and error at that point where there's going to be a general consensus as to where what, what life cycle of company and growth phase of company needs a certain type of leader.

That's interesting. Really seven or eight years. Is that what you think it'll take before it becomes sort of, if I may, like you said it correctly, I think you look at a cfo for example, right? That's probably a boilerplate way people look at CFO at this point. They've done so much work on that particular title that I'm sure it's probably pretty easy for every company to determine how to evalu that where that person should be placed. I'm sure there, there are obviously nuances based on the size, the complexity of the organization et CETERA et cetera. But generally speaking, everyone knows what a CFO does. There's no ambiguity about that. I'd say likely to. We'll get into this. This topic in a second. Is CMOS too have a similar sort of, you know, understanding of what a CMOS pointed to do. It's a. It's a marketing person. Whereas the CRO, and I know you and I agree here, that's a bit more of a nebulous title unfortunately. And as a result I think there are these fragments in the way it's viewed. And when you tell me in this conversation that you think it could be that long before it becomes, let's say codified. Right. In more. More terms that we think what would. What do you think would do. I guess there's two questions I have there. I'm interested in. This is what's the resistance? In other words, why is it that you think that this hasn't sort of caught on already? What's in the way of a PE firm Just sort of kind of generally understanding the business dynamics. And this is not to, you know, in any way sort of, you know, besmirch them. I'm sure they're just really smart people. But what do you. What do you think it is like why is it that the CRO role still has this sort of. I would call like the tofu ish. I can make it taste any way I want sort of thing as opposed to other C suite executive roles.

Yeah. And I will say this. There are a lot of private equity firms out there that do get this and understand that there is some complexity to it.

You say the majority do or the majority don't.

I would say the majority above call it a billion and AUM do.

I see. So the ones who have larger portfolios tend to get this.

Yeah, correct. Ones who have raised two or three funds, bought enough portfolio companies that have matured. You've seen the cycle over and over. And look, I think it depends on industry too. You're going to see varying titles based on industry. Software is the typical chief revenue officer. That's the. The highest go to market executive.

Yeah.

If you take more called industrial services or manufacturing company that grows to 100, 200, 300 million in revenue. Usually those companies that the lead go to market title is a chief commercial officer but there's different scope there. There's an operational element of the business. They usually have sales marketing operations. It's a CRO plus type of role. Maybe some corporate development. If. If it's an M and a Intensive investment or all makes sense.

Yep.

So, so, so look, I think you know, there's, it's very complex because, and I, I know this because we've done CEO, I've done CEO, CFO and CRO searches. To your point, CFO and really any other function, you know exactly what they're going to oversee from a functional standpoint. Right?

The scope is clear. Yeah, yeah.

With, with CRO and really as you're trying to hire the top go to market revenue leader, you're trying to solve for really two things. One, you know, where is the management team gap? So you know, sometimes we'll have a CEO come to us for a $60 million business and say hey, you know, I have a commercial background. So I've been leading the VP of Sales, VP of Marketing, VP of cs, rev ops. All of this including the rest of my management team. I need a CRO to come in and be my right hand person and just take everything off my plate. I want to trust that person, drive to go to market and they can be another doll in my leadership team. There's some of that in other cases you've got, you know, some CEOs that say in that same example, I, I have all that reporting into me but I have a belief, and there's a debate out this, on this topic out there that marketing should not report into the CRO. Marketing should report into me. Because while I think marketing should be serving revenue to a certain degree, there are other elements of the marketing function that I need reporting into me that support other parts of the business, the creative side of the brand, all that. And so in that case do you bring on a titled chief revenue officer to just own sales and cs? In my opinion you're starting to see, especially for a lot of market companies, call it between 60 to 200, 300 million in revenue. You're starting to see chief sales officers and chief marketing officers both be hired and both in the leadership team. Or if you see a CRO titled person then and also a CMO on the management team, usually that CRO title person is just still owning sales and account management or cs. So it's, you're trying to solve for one who's going to own certain parts of the business and then to what other talent do you have in the business? If you have a really strong CMO who should be report on the management team and being a peer to the CRO report and the CEO, then that's, that's fine. If you have a more junior VP of marketing that you think should report in the CRO, then that works too. It just, it just depends on what the business needed. So it's, it's not as much that private equity firms don't get it. It's. It's more about. There's a certain amount of complexity from business to business and what the need is from a leadership gap standpoint.

Thanks again for listening to the CRO Spotlight Podcast. We're excited about all the great guests we have and more importantly, we're excited mostly about you for being avid listeners and supporting the work that we do here. Feel free please to share this Hero Spotlight podcast with any of your colleagues. We just think there's a great wealth of information here and we want to get the word out to as many people as possible in. Your support of the show is really appreciated. I wanted to share information about a program that we offer called the CRO Masters Council. The CRO Masters Council is a bi monthly group of six seasoned Chief Revenue Officers who are looking for a Chief Revenue Officer, Board of Directors, so to speak, that they could share what's going on with them, collaborate with ideas, get some feedback on what's going on in their current role. And these are great conversations. I facilitate them. The CRO Master's Councils, again, they're twice a month and they last for at least six months to a year. So if you're interested in having your own CRO suite, your own Board of Directors of Chief Revenue Officers, it's a private, confidential conversation that we have. It's infinitely useful. Imagine having a room full of other Chief Revenue Officers you can talk to and say, hey, I'm working on this. Or have you guys figured that out? Or I'm having this issue right now with my business or my results. These are just invaluable conversations with Chief Revenue Officers. Chief Revenue Officers have a very, very unique role. It's a very lonely job and only other CROs understand what you're going through. So that's why we created this program. So if you're interested in being a member of the next CRO Master's Council, which we have a number of them being put together right now, just go to my LinkedIn and DM me masters or Master's Council, and I'll follow up with you and set up a call or send you some more information about it. Looking forward to seeing you there and thank you.

Yeah, that makes sense. I'm sure there are a lot of nuances and it's not so simple.

Does that track based on what you see?

It does I mean, I'm sort of thinking about it because it's, it's sort of a fascinating conversation. You know, it's sort of like, if I may say, I think there's a couple things going on. I think one thing is that there's legacy thinking, you know, inside these organizations that is hard to stamp out, right. People just have a certain worldview that they just have always had and they're comfortable with it. And that is that, you know, we have someone who runs marketing and we have someone who runs sales. And that's an understandable, you know, way of viewing things, mainly because that's just the way it's been done for a long time. And so as a result, I think too there's also this sort of. When you look at the way we construct leadership organizations and companies too, there are other dynamics that are not spoken about and that are things like ambition, right? So if I, if I'm bringing somebody into a functional role, let's say a marketing role doesn't matter, and they're running marketing. I think there's two or three things that go with that. One is I want to provide that person with an ascension to being able to increase their, you know, level of authority and, you know, give them a pathway to a better career. Right? So by, by giving them the ability to become a CMO one day, there's a retention opportunity there because the person now has an aspirational like future for themselves to see. Because people, people want that. You know, people have been sort of, I think, you know, culturally trained that they want a C suite title when they, when they grow up, you know, and so as a result, if I get hired to a company and someone tells me I'm going to make you the CMO one day, then naturally it gives that person some way to give them a two or three year viewpoint on how long their role is going to last. And I think that's sort of, you know, I'm giving someone an incentive to stay here through a need they have, which is to have a C suite role. And those things come with it. And I think those things are natural. I just don't know if they're, I think they're a bit antiquated. I, I think that while I understand that and that, you know, the, the, the challenge around wanting to give people sort of a reason to continue to pursue their careers can sometimes conflict with what's best for the way the business is structured. So that's one thing. I think the other thing too is you make a good point. Which is like, okay, so if I'm going to be looking at my business and I see we have a go to market problem and I think, I think let's say as the founder of the company that we have a marketing problem. And I see somebody in my organization that has marketing talent, maybe I'll give that person a CMO role to solve that problem. Whereas I just. My opinion is I think that usually marketing problems are indicative of actual systemic problems, not marketing problems. And I think this is like, I think where some of the older ways of looking at things is being challenged. And I don't know when, but I think that the view I have on this is that ultimately companies are going to come to realize that when you look at a go to market function, all the complexities associated with it, most of the problems you have, while they may occur, like they're tactical, they're usually more systemic issues. Right? They're related to the way the business is structured and some of the silos that go into the way we structure things. And I do think as companies become more mature and they see these things, they realize that they start to make those adjustments. It's when companies are a bit smaller, they don't. So I'm seeing that many times it's, well, I have a CMO in place already. I've already given somebody that title. And while I agree with this point of view, I'm not going to now remove that person's title because they're already in the seat and I don't want to lose them. So I'm going to figure out some way to construct a go to market organization where the CRO and the CMO can live together in some happy harmony and build some sort of a coalition. And I think that there are ways I've seen that work out, but most of the time I see ultimately the ugliness of the silos eventually becomes a problem and it needs to be looked at again. I know I'm a bit entering like three or four things at once, but these are just the things I'm seeing a lot. And because PE firms have such influence over the way these decisions are being made, I think that the interest in me speaking with you and this stuff is because I think that that's where a lot of this stuff is ultimately going to be solved is in the way in which the financing organizations view or philosophize around how they hire and how they construct and architect their leadership teams. So this is sort of like the challenge I think we're going through because A lot of my clients call me and they're in the situation you described where they're being hired to be a chief revenue officer. But they know it's not really a CRO role per se, it's really a head of sales. And they're left with sort of a confounding conundrum which I just take the role and hope that one day my role increases or do I go find a place where they're going to hire me in a way that I want? And I think this is sort of a thing. I. How long will it take before the organizations come to the same level of clarity about this role as other ones is sort of like, I think the journey that we're on right now, you know?

Yeah, no, you make a lot of great points. And there's, it's, it's funny there, there's this dynamic that has now happened in the market from an executive search standpoint where there are enough mature companies, let's say between 50 to 200 million in revenue who have CROs who don't own marketing. But it's still tight little CRO.

Yeah.

And so if I'm going to start a search for, let's just say a hundred million dollar business that needs a CRO, but they, they only want this. But they have a strong CMO already and they want this person just to own sales of account management and just the customer facing side of the, of the, of the business.

Yep.

Do you go to market as a chief sales officer or chief revenue officer?

What's your recommendation in that situation? I'm just curious. What do you, what do you usually say?

It's this thing that's happening where if you go to market as a chief sales officer role, it's clear for sure.

Yeah.

But you're gonna, it's, it's not gonna appear as attractive to someone who has a CRO title today.

So you're saying then you think that the merchandising of the role is equally as important to the marketplace as anything else. In other words, you think companies feel like what like a little more trustworthy of an organization that has a chief revenue officer as opposed to a chief sales officer.

Is that a. I think it simply as if you reach out to a current CRO for a chief sales officer role, they're going to see that and say that's a. Even if they're, they're not owning marketing today, that's a step back in title.

It's interesting.

So there is.

Even though it's not, even though It's a lateral.

No, no, like, I get it. It's a fascinating point. I think you're right. I do. I think that I've heard this one. I mean, you might have saw this thing I talked about once, which is people hire CROs because, to your point, they think that it just is more attractive to the marketplace to have that title on the rental. You know? You know, they want a CRO, right. And. And I think it's sort of. My clients can be very easily tempted by what comes with that title. Right. There's this weird magic about that title for people that when they get a chief Revenue officer role, they've sort of arrived, particularly if they're coming through the sales organization. That's like, that's a good goal.

You've arrived.

You know, if you don't want CEO, that's precisely. And I think they're being manipulated by companies who say, let's give this person a CRO title. And that'll be an enticement, Right. Maybe in lieu of compensation, because people want that title. And I'm. I'll be honest with you. I'm advising my clients not to fall for that. I'm saying, look, like, I know you want this title, but if you don't have that job, you know, there is. Sure, there's a benefit to having that title, no question. Because I know that there's a agreement in the marketplace that it means something and it may benefit you in some respects. But what I think is happening is this is interesting. I'm seeing companies who are looking at my. The products I produce, part of the products I produce are really great CROs who went through my programs, and they're really qualified now to do the job in a way that is unique because the perspective they have on it is they're ready to start from day one and do it certain way. So if they go interview for a job, it's their. It's their first CRO job. And I would say that, you know, we can. We could quibble here as to what qualified means, Right? I mean, and this goes to my point is companies tend to want to hire a CRO that has already been a CRO. Right. I mean, it makes perfect sense. However, to our point, many CROs didn't actually have that job. They had the title, but they didn't actually have that job. Right. So, you know, the title can be a bit of a cipher in a way that gets somebody in the door. But I'm trying to tell my clients is it's the competencies that you're looking for. That's more important if you want the role to be that expanded, if you're looking for the expanded version. So this is sort of an interesting thing that I think a lot of what's weird or unique about this role is that there's ways in which I think the role, how the role is being evaluated by, on the behalf of a company needs to change, not just the way that people present themselves. And this is where you and I have discussed a lot, which is sort of advising companies on the precariousness of hiring a chief revenue officer and the education that they need to get before they make this decision, which I know you guys are doing a good job of. And I think this is needed because I'm seeing the reason why a lot of CROs don't last is because, you know, they maybe reluctantly took the title over the job and then six months later they're not happy with the situation they took or you know, they end up with a target on their back because they're really responsible for a number. And as you probably also know, many times those numbers are not achievable.

Right.

For various reasons. Right. And so you're putting yourself in a tough spot. So I, I think this is just sort of the stuff that I, I see in the market and I think the PE sector has a great deal of influence over these things. So this is why it interests me.

You know, no doubt. That's why I'm passionate about it.

Yeah, I get it. I, me too. I mean, it's fascinating to me, you know.

Yeah. And look, I, yeah, I, going back to the original debate on, in that example, do you title a chief sales officer versus chief revenue officer? I think always chief sales officer. And you'd be very clear with the market.

Yeah.

It's funny, when we, when we do that, what happens is we'll take that to market. We'll still reach out to current CROs and most of the current CROs who are not, you know, it's not a full CRO role and they're just leading sales and account managers. Yes, they, they're interested. And if you look at, especially a lot of people who have been multi time, call it CROs or C Level revenue leaders, you will see some stints where they're CRO, cso, cs, CRO. And they'll bounce back and forth between those two titles. Yeah. And so anytime that I'm advising a client on the type of leader they need, how to title it all that before I do any of that the first thing that I always do is I encourage them to sit down, I do this with them, say, okay, what are the leadership gaps that you have that you need this person to oversee? And what are the top five things you want this person to do in the first year to two years? And if it is all sales related, success related, and it's not much on marketing because that's good and we got a good marketing leader, then yeah, this is a. You need this person to really be.

We have the same exact diagnostic thing. Yeah.

And that's private equity to a T. It's, it's you. You need to focus on two to three things at once and drive those like crazy.

Yep.

And if you, if you're focused on too many things or too many parts of the go to market and trying to fix everything at once, it's not going to work. So what are you really trying to change with this hire? Trying to push their thinking on that and then from there that, that shapes the ownership of the scope of the role as well as the title.

So this is interesting. So I want to kind of not switch gears but maybe focus a bit more on something else, which is. So let's say the situation is which you've presented one option. You're working with a PE firm who does have this awareness and they recognize the value of a CRO being the go to market leader and they want that person and they're looking for that person. The problem that we're also solving on my side of the coin here is it's, it's the qualified organization is there's sort of three or four components to it. One is the one we just discussed which is that the, the hiring company needs to understand what a CRO is and that that's what they want and that's what they need and that they're at, that they're at the stage where that's necessary, which you've articulator here. So they're at the right size. You know, they've got the right level of complexity and all the stuff that make for a good environment where a C would be necessary and would, would have the right kind of opportunity to succeed. But there's other parts to it. It's not just the definition and the stage, it's also the preparation. So as you know, we kind of coined this idea of sero readiness. And this is like another whole level which I see as being the bigger, longer, like unspoken problem that's going on here. And that is like even when my clients do know what a CRO is and they do want that person and it is the right stage. Many times the CRO still doesn't succeed. And the reason is because there are other things that clients on that end need to do to ensure that their CRO has the right environment with which to succeed in. And because they don't hire them that often, they don't know what that is. And those things are an operational rigor, clarity and process. You know, a data analysis, ICP reevaluation, many times compensation planning reevaluations, a whole series of things that when those things are being done either a, in coordination with the incoming CRO or before hiring the incoming CRO, they almost like triple the success rate of the CRO because the organization's ready for one. And without that process, I find it still hard for the CRO to succeed given all the stuff that they're going through today. What's your thoughts on that and what do you think that companies need to be doing more to ensure that not only do they know what they need and that they need it at the right time, but preparing properly for that CRO's success?

Yes, it's a great point. I think if you going back to your original question, why, why would an organization be ready or need a CRO at this point? Usually it's because they've done a nice job of building the core elements of the go to market. You've got the VP of sales, who's owning their function, the VP of marketing, you know, VP of CS or account management. And there, there's really strong operational rigor, there's strong data, the tech stacks are all integrated and, and humming. And at that point you want a CRO to one, come, obviously like take away all those reports from the CEO, but then two, to pour gasoline on everything that's happening from the go to market standpoint and start to stitch together from a strategic standpoint, everything on the go to market. Because up until that point they may be working together, but they're siloed still.

Yeah, they're still siloed. They may get along, but systemically they're not really connected. There isn't an actual process in a system that makes for the organization to work. Superficial. You know, it's like they meet a lot, you know, they talk a lot kind of thing. But that's not really, that's not a collaborative orchestration, that's more like a, I don't know, it's like a cope in some respects, but yeah, correct.

And a lot of time you'll have. In that case, you know, let's just say a company grows to 50 million in revenue, you have all three functions good, foundation built, you're ready for a CRO. What's happened to date is maybe you're really just driving that new logo. You've done maybe one or two add on acquisitions, you built the product portfolio, you've got your, your customer success team that's driving some cross selling upsell. Maybe marketing is just before supporting that new logo because that's what they've always done from a demand gen standpoint. They haven't supported cross sell upsell maybe as much. And so because the CEO, they're focused on so many things, running the business, the day to day, M and A, everything else, they're not going to sit there and focus on what needs to happen strategically and go to market. Especially if they don't have commercial background, which I would say half the CEOs out there don't. And so at that point you want to bring in a CRO to analyze everything that's happening across the go to market, how each can support one another, where you want to go, what's going to, what are the top three things it's going to take to go to market there and what needs to happen from hiring standpoint tech stack standpoint, bringing in revenue operations if it's not there, and helping, you know, drive the analytics and make all three departments smarter in terms of working together. And that's what they do is they, they come in and they analyze how to optimize the go to market. In my opinion, that's what the CRO is brought in to do when an organization is ready and then each organization performs two to three times better than they could on their own.

Thanks again for listening to the CRO Spotlight Podcast. We're excited about all the great guests we have and more importantly, we're excited mostly about you for being avid listeners and supporting the work that we do here. Feel free please to share this Hero Spotlight Podcast with any of your colleagues. We just think there's a great wealth of information here and we want to get the word out to as many people as possible. And your support of the show is really appreciated. I wanted to share information about a program that we offer called the CRO Masters Council. The CRO Masters count forms two or.

Three times better than they could on their own.

Thanks again for listening to the CRO Spotlight Podcast. We're excited about all the great guests we have and more importantly, we're excited mostly about you for being Avid listeners and supporting the work that we do here. Feel free please to share this Hero Spotlight podcast with any of your colleagues. We just think there's a great wealth of information here and Console is a bimonthly group of six seasoned Chief Revenue Officers who are looking for a Chief Revenue Officer Board of Directors, so to speak, that they could share what's going on with them, collaborate with ideas, get some feedback on what's going on in their current role. And these are great conversations. I facilitate them. The CRO Master's Councils, again, they're twice a month and they last for at least six months to a year. So if you're interested, want to get the word out to as many people as possible and your. Your support of the show is really appreciated. I wanted to share information about a program that we offer called the CRO Masters Council. The CRO Masters Council is a bimonthly group of six seasoned Chief Revenue Officers who are looking for a Chief Revenue Officer Board of Directors, so to speak, that they could share in. Having your own CRO suite, your own Board of Directors of Chief Revenue Officers. It's a private, confidential conversation that we have. It's infinitely useful. Imagine having a room full of other chief what's going on with them, Collaborate with ideas, get some feedback on what's going on in their current role. And these are great conversations. I facilitate them. The CRO Master's Councils, again, they're twice a month and they last for at least six months to a year. So if you're interested revenue officers you can talk to and say, hey, I'm working on this, or have you guys figured that out? Or I'm having this issue right now with my business or my, my results. These are just invaluable conversations with Chief Revenue Officers. Chief Revenue Officers have a very, very unique role. It's a very lonely job and only other CROs understand what you're going through. So that's why we created this program. So if you're interested in being a member of the next CRO Masters Council, which we have a number of them being put together right now, just go to my LinkedIn and DM me masters or Master's Council and I'll follow up with you and set up a call or send you some more information about it. Looking forward to seeing you there and thank you.

No doubt. So there's no question that that's exactly what a CRO should do. Here's the problem is that the process that it is that you and I are describing, this, let's call it you know, assessment analysis, you know, gaps analysis and then the actual fixing all this stuff, it, there's two parts of it. One is it takes a long time. You're not going to get it done in a month. It's a, it's a very laborious, laborious thing to do this for a company that's got, you know, 20, 30, 40, 50 million in revenues. Number two is, it's a specialized thing. It's, it's, it's, it's like a, it's not an easy thing to do, you know, and if a CRO comes in, it's not a knock on CROs. It's like they're, they're not necessarily, you know, data analysts. You know, they're, they're business leaders. You know, they have certain competencies. And to say to a CRO, well great, great, come on in and fix this, you know, they're going to need resources to do that. They're going to need specialized resources and more importantly, they can need Runway and they can need an opportunity to do it properly and make sure that things happen. And my clients tend to not get that. They get either a, well, you know, you got a month or you know, you got two months, go figure it out. And you know, it's just not, it's not feasible. So they do it in a superficial way and they may get some nuggets of data or opportunity, but they don't really dig down deep into the problem enough. You know, it's like, you know, if you take a, you know, if you take a, a certain type of medication and you know, you have to take the whole bottle or else it won't work. You know, if you stop halfway through the, the prescription, you know, you're not going to cure everything. And I think that's what ends up happening. They take only half the bottle because they don't have the opportunity to finish it. And so that's the thing. So what I see happening is that without some sort of specialized support or a process in place and also a buy in from the hiring organization, that this is important to us and that we are going to support the CRO to take time necessary to fix this because we know that it'll have a long term returns for us that doesn't happen all the time. And so this is sort of like where we're helping to coordinate a partner, right, with the CRO to ensure that the customer, let's call it the client is educated about the severity of the problem, the requirements that are needed, the time that's needed and the specialization that's needed to the CRO and is responsible for it. And they're the senior partner or the sponsor of this, but they're getting support in a specialized support or a process in place and also a buy in a system that's designed specifically to figure this stuff out. And without that I still think that I still CROs just sort of giving up after two or three months because now they're being told, all right, get back to the trenches, start making us some money and you know, get off this interesting sort of investigation you're doing because we need you to start to get the return on investment from you. And that's going to come through, you know, increased sales or whatever the case case may be. So what are your thoughts on, on that sort of thing? Like how do CROs kind of create that right environment for them to get the job done properly?

Yeah, I mean that's, that's where I think a lot of times CROs, if they're on the market and they're not happy in their current organizations, that's, that's a lot of why they come to, to us in the first place is because they get hired to do that. They get hired to stitch together to go to market, be that, that top layer across, you know, all three organizations. And then what happens is if one of those is broken, then they have to go spend a lot of their time fixing that one organization. So now they're hired to sit on top of all three. But they're spending 90% of their time fixing new logo sales or whatever it is, marketing cs. And so it's to your point, it's making sure that the organizations are all high performing, ready to go and there's not huge gaps and holes in each organization to where that CRO is going to have to spend a lot of time. And that's why I think having a really, really strong VP or director owning each of those specific functions is all tricky because you have three people you trust then to drive your organizations. On the day to day perspective, the best CROs are still digging in. They still understand what's happening on the.

Front lines for sure.

They're looking at all the data and they're figuring out what needs to happen from a coaching perspective. And they're driving that down to organizations. They're maniacal about that, they're maniacal about urgency, execution, everything that needs to happen in a private equity back setting. Because these are condensed whole periods. There's leverage on the business. These businesses are under a lot of pressure to perform in a very fast period of time. So as, as a CRO, the best ones that I've seen come in understand how to one, drive quick wins to start building trust in the organization. But then two, you know, are analyzing everything to try to catch leading. They're looking at leading indicators to catch things before they truly need fixing.

Yep.

If you're reactive at all in private equity, then, you know, private equity hate surprises. One and two, if you're reactive and they're catching things before you do, or you're catching them and bringing them up to them and you should have, you know, done something about it six months ago, then at that point it's too late and, and now you're, now the fire has started and now you have to spend all your time deploying in to fix that situation, putting out that fire as opposed to getting back to doing the things you were originally hired for. So that's a lot of what I see.

Yeah, exactly.

It's tough.

It's a tough situation. And there's other factors too, which I want to ask your point opinion about, which go into this, which is also what the goals are. Right. So a lot of time my clients are hired into companies and they're being told by pe, yeah, we want to get this thing sold in three years. That's a much, much different context than yeah, we want this to be a, you know, the leader in the, in this sector in 20 years years. Those are two different things. And so when my, when my clients come to me and they say, you know, I got this job as a CRO and you know, they told me that they basically want us to be acquired in three years, I know that that person's going to be on a kind of day to day fire drill because that's three years is a very short period of time to get anything like that done and means they're going to be doing a lot of things to make themselves attractive to the marketplace, which is large.