Playbook to Achieving CEO - CRO Harmony with @Algolia CEO Bernadette Nixon and CRO Michelle Adams

This is Bernadette Nixon. I'm Michelle Adams. I guess they already introduced us.

Yeah, they did.

Do you want to—

voice of God.

Do you want to say something about who we are?

Sure. Absolutely. So Algolia, we're an API-first search and discovery platform. So whenever you're online and you're shopping, whether you're in the search bar or you're browsing around to get some inspiration, Or maybe you're a biker or a hiker and you're in the AllTrails app. All of those are us, embedded search within other platforms.

We have over 13,000 customers and doing about 30 billion search requests a week. So it's a little bit of our scale. And we thought we'd talk a little bit about our relationship because over the past 2 years getting to know each other, you know, we've heard a lot today about go-to-market, but go-to-market is also intentional. On the relationship of the executive leadership team and especially the CRO and CEO. So we thought we'd drill down to a few points and start with the first one. Ah, a CRO is not the head of sales.

Yes, the CRO is not just the head of sales. Certainly, obviously there's revenue in the title and Michelle is under no illusion that she has a number to deliver month in, month out, come hail, hail, or snow. What's the phrase? Rain, hail, or snow. But the CRO role, the O is important in the title, and the O is an officer, an officer of the company. So therefore, the CRO certainly is responsible for the top-line growth of the company, but as with any executive position, it is important that every one of the execs on the executive team have an allegiance to Team One. I don't know if you've heard about the notion of Team One, but it's the executive team is the team one within a company. And so having allegiance to that, having alignment with colleagues, having your colleagues back so that as you're bringing new products to market, solving new use cases for your customers. So the alignment is not just important for the CRO with the CEO, it's incredibly important to get alignment across the whole of the executive team. Because if that doesn't exist, then there's no way that there can be alignment and harmony between the CRO and the CEO. But the most important thing is there is a difference between getting a VP of Sales and a CRO. The CRO role is much more expansive. Now it can have different functions roll up to it— sales, marketing, business development. There's a whole host of different configurations, including also renewals. That's not what makes the CRO role different than the VP of Sales. It's the fact that this allegiance to growing the overall company and an understanding that there's got to be a marketing strategy that's in lockstep with the product strategy, that then when it— rubber hits the road and the sales team is out on the field, then they're equipped. We're not sending them out naked into the field. So I don't know what you think about that, Michelle.

So I've always been all things go-to-market. I love all things go-to-market. And over the evolution of this company over the past 2 years, it's bigger than just going to market. It's everything involved from finance to legal to how you build a PLG motion into an SLG motion. It is how do you build a new product introduction process with lockstep in with the product. And so Bernie is always reminding us every Tuesday at our executive leadership team, the one team is in this room. This is the one team. If we're not lockstep, we cannot drive where the company needs to be. And revenue is the outcome, the outcome of the success of this team. And so that is something that has been an evolution of my understanding of starting out in sales, growing through the ranks of sales, all things go-to-market. And now this role of helping to bring products to market and helping to build financial models that make sense to market.

Yeah, because when there's daylight between you and one of your colleagues or me and you, the team throughout the organization can feel it because what is a little gap on the one team becomes bigger and bigger as it ripples through the organization. And that's why it's incredibly important. And that doesn't mean to say that everything is always harmonious. I'm Irish, you're Italian. Sometimes voices get raised, but it's in a bid to get the best outcome. So harmony doesn't have to be, you know, peace and tranquility. It doesn't always look like that.

I will say it's very difficult working for a CEO that was once a CRO. So there's a, as she likes to say, it's a blessing and a curse. But somebody that does not come from the product side but comes from the sales side, she knows everything that I'm saying and she can call BS very quickly. When I'm saying something because he's been doing this a very long time. So next one. Yeah, next one.

So obviously delivering the result is incredibly important. I know how much you take that to heart personally and your team, but the journey matters to you. So talk a little bit about the other things that are important as you go along that journey.

Chief Revenue Officer, it's all about results. And I started out in my journey here that it's trust the process, surrender the outcome. That's a little weird to say as CRO, but I truly believe it, which is if we build a process, a repeatable process, and believe in the steps we are taking in experimentation and creating the environment, the courage to be able to experiment, then the outcome will come. And that is a difficult lesson to learn, that we have to continuously iterate on experimentation and to create that safe environment to test, A/B test. Examples would be, I made a misdecision a year ago on a workflow from inbound top of funnel to to how it gets to an SDR or BDR to an AE, 9 months later, the data that I had driving that decision has failed me. And it was AEs and BDRs raising their hands saying, "This isn't working anymore. We have an idea. Let's test a different way." And so making data-driven decisions, allowing the experiments to happen, and knowing that there's going to be failure along the way, that's how we continue to learn and we continue to iterate on this process. The outcome will happen. That is the culture I build, you know, based on courage, based on integrity, because you have to have the ability to have an environment of transparency that you speak up and say, there's something wrong here. I think I have an idea. I'm not sure it's going to work. I may fail, may fall flat on my face. I'd like to try it. And always showing up with honor. That's something I talk about often. And it's a culture that we are building in the go-to-market side.

I want to pick up on what you said about integrity because It's easy to have integrity in the good times. You need and you want to have it in the tough times. And that doesn't mean to say that you don't compete hard. I'm a firm believer that you compete hard. You punch hard when you're out there, you're in the ring, and it's you or the other person that's gonna win that deal, win that match. So I'm a firm believer in fighting hard, but not fighting dirty. There's a way that you've got to be able to stand up for the things that you believe in, for what your product will and won't do. So it's not a deal at all, at all costs. And in fact, we had a situation last year, actually Q3 of last year, where we had a customer who signed up. We did a 3-month proof of concept with them, proof of value with them. They had 2 main use cases, and we satisfied both in the proof of concept, got into production, turned out we only really truly satisfied one, and that was the secondary one. It wasn't the primary use case. Now, they were not happy. You know, they— it had some pretty serious implications within their own organisation, and we had the choice. We had the choice whether we still, you know, forced them to pay, bearing in mind we knew that they had a genuine issue, and we ended up taking a churn, and that churn was a significant amount of money, but it was the right thing to do, so we did it. So I learned a long time ago, 4 days on the job after a promotion one year, that I'd inherited a house of cards and everything was a fraudulent deal going back to the 3 years before. So anybody can post the numbers. You need to post the right numbers because it's the longevity. And especially in the SaaS business, we all know that making sure that you've got the right churn and contraction profile as well as the right ARR growth is incredibly important. And there's got to be— there's got to be integrity right along that customer journey.

Yeah. And one of our key values is trust. And that trust starts— it starts from within, within our teams. Trusting each other and our customers, building or earning the right to have their trust so they can grow. We can grow with them. I would also say the journey matters for our relationship. Many times we usually talk to each other, what, 5, 6:00 at night, 7:00 with the cocktail. We've stopped with the one-on-ones. Instead, we talk with the cocktail. It's said somewhere between 6 and 8 p.m. at night. And we catch up on the day. And through this relationship, we built a trust with each other that she can call me out and I can call her out.

And it's—

Frequently. It's important to have the ability to build that trust so that you can have the shorthand so that when times do get hard, that you have that foundation and can talk fast to each other and say, I don't think this is right. And know we're coming from a place of goodness, that we have each other's back. That's— crucial, I would say, not only for our customers but for our teams that work with us and for each other.

But it's interesting because there's other members on the exec team, and, you know, my one-on-ones with them are sacrosanct. They always come with a list, and that works for their and my relationship. That doesn't really work for us. So again, it's— there is no one-size-fits-all on these things. You've got to figure out, you know, your own, what works for sort of the matching pairs.

And back to the blessing and curse that you've done this job before I had, there was times where she would step in and say, "That's not the way to do it." And as we all probably know, that's not the best way to learn. And through our journey, she has, because I've earned some of her trust, she has stepped back and let me fail, let me fall flat on my face sometimes. Or solve the relationships I need to solve within the enterprise leadership or the executive leadership team. For example, the chief product officer and I, you know, she would get between us saying, okay, you know, we're going to roll out this product. Michelle's saying this, you're saying this. And there came a point where Bernadette would say, you two need to figure this out. Come to me when you have the right answer, the right approach. Until then, I'm not getting involved. And that, I believe, is also a tenet of leadership. Is building that trust, but also, you know, a level of vulnerability has to be present that she's showing how vulnerable she can be sometimes, and trusting me to figure out from my own mistakes and to build the relationships I need to be successful.

And I would say in the earlier days, we sort of tiptoed around each other, and it was like, I think we were walking, it was when we finally started traveling again, so it must have been in the fall of last year, and we both kind of said, I'm tiptoeing around you, I'm tiptoeing around you. It's exhausting.

It was in London. No, no, it was in Paris.

It was in Paris. That was right. Yeah, we were walking to dinner. I said, it's exhausting. I just need to be able to say what's on my mind. Are you okay with that?

Yes.

Yes. So that led to far more frank discussions, but it led to a far better relationship.

There's been a couple times I've called you and said, you hurt my feelings today. So that's— I don't know if this works for every CEO, CRO relationship, but it's been working for us. Anyway, journey matters. Ooh, my favorite.

Tops down and bottoms up. There's so many places you could go with this. So I'll start with— so it's getting to that sort of time of year where we're starting the planning process for next year. Our fiscal starts on Feb 1.

Fall planning. Fall planning.

Yeah, exactly. We're starting the fall planning tomorrow and Thursday, actually. And so that's one example of tops down and bottoms up. So obviously I sit down with our CFO and there's a growth curve trajectory that we want to attain and exceed. And then, but we don't just come up with that in a vacuum. We do come up with what our glide path is and what we want it to be. But then we sit down and we ask Michelle to go away with her ops team and to figure out, okay, what's feasible bottoms up? And so there's an interesting interlock there. So it is a very data-driven conversation. It is a very— it's a capacity planning conversation from a sales perspective. There's certain assumptions that go into that, that, you know, you kind of figure out your first cycle through and then it becomes easier as you go through it. But there's a power to having a tops-down and a bottoms-up, and then the crucial discussion on what needs to happen if there is a gap. If there's no gap, that's a beautiful thing. If there's a gap, you need to have a conversation about how you're going to get to the gap. But moreover, and we'll come on to this I think later, but there's a whole value drivers conversation about how you're going to drive to that growth. But I think best example, or one example of this, is just from a planning perspective and making sure that you've got that interlock. But that also involves a lot of trust because, you know, there's a judgment call that goes into It's not just cells in a spreadsheet. There's a judgment call on what you can do in terms of productivity gains and all of that sort of stuff.

So just to give a little bit more detail—

Oh.

Can you hear me? Oh. Oh, there I'm back. So a little detail on the tops-down, bottom-up. Oh, there I'm out again.

Hello?

You're back. I'm back. I give up. They don't want to hear me. How about the top-down? Sounds boring. So, top-down is what's the size of your world? What is the opportunity? What's the target addressable market? What's the service addressable market? What do we think we can drive on different use cases? What are the products being rolled out that we think we can drive inside those use cases? What is the expansion versus the net new? All that is a top-down approach to how you look at the world. Are you there?

Okay, good.

And this has to be aligned with everybody else in the leadership team. The bottoms up is, do we have the people to be able to achieve what we believe we can bring to the world? How many people will it take? How have those people that we haven't seen right now been building yield quarter over quarter over the past 8 quarters? How many we're going to need to hire? Do I have alignment across and the executive leadership team with finance, with legal, with the CEO to be able to drive that. So that's the discussion in between of the opportunity— oh, thank you. Hi. So between the opportunity of tops-down and the bottoms-up, do we have the people, that kind of discussion has to happen. That's what we're doing over the next couple days. There's also a tops-down, bottoms-up view how we look at the business. PLG and SLG. So when you think about, I'm sure you've heard today a lot about the product-led growth strategy. So organically, who's coming in? For us, it's developers, it's the builders. The tops-down is the sales approach. How do those builders continue to build upon itself, identify the use cases to get to a size, to critical mass, that it makes sense to start to talk to a human to be able to build into support use, you know, to support infrastructure. So that's also a top-down, bottoms-up. There's a third one. Do you remember what it was?

I just remembered. I was trying to think whilst you were talking. 52 hours to get to Australia and back last week. It was kind of crazy, but I'm there. It was the fact that, you know, you have your sales team and your marketing team, you go to market team, but it goes back to that Team One aspect. So the top team or the Team One, whatever you choose to call it, we call it ELT for short, Exec Leadership Team. There's a notion of loyalty to that team and then to each of the functional teams. And I know when I was coming up through the ranks and the first time I had this notion shared with me, I found it really alien. I found it alien because I remember, and I still have in my office at home, a pair of gold boxing gloves that I was given a number of years ago for fighting the fights for my team when I was in a bigger company. So the fact now I had to align with my peers and not with my team that was out on the battlefield felt really, really just alien, strange. Didn't feel like I was in my right body. And so, but that is something as you look at hiring for an exec team, something that you have to get. I mean, Slutman mentioned it in his book, I think what, last year when it came out. And I think he asked a CRO the question.

When he was interviewing people.

That was it, yeah. It's part of his interviewing process for a CRO. 'Who's your team?' I think was the question that he asked. And if he got the wrong answer, that was it. Out. So didn't get to the next stage. But it sounds a little bit alien, but it is so important. And it's important for each one of the functional teams. Because the more aligned that each of the execs are on the team, frankly, the easier it makes my job. But the better it is for the business.

Good.

And the better it is ultimately for the customer because they can't see the little infighting that, you know, sometimes erupts when you get one of these fissures.

That's a good one. Okay, drive alignment and accountability with value drivers. This is a new muscle we're building, and this is a muscle built across all of the leadership team, but mostly between my counterpart on the product side and myself. And this is— do you want to talk about why we learned this lesson?

Yes. So I'll hand it back to you in a minute. So we made an announcement yesterday that we acquired a company called Search.io. So we have been the leading API-first keyword search platform on the market. Search.io, cool startup, about 30 people, mostly out of Australia, and they are— and they have a semantic search but based on a vector search engine, which means it leapsfrogs the rest of what's going on in the semantic search marketplace, and it's a perfect partner. So the complementary nature of our products was— is really, really good, and we're gonna put them into one API for all of the developers out there to leverage. But we came across this— or I used it in a previous life— we started to drive alignment by this notion of, well, how are we going to hit a number to make the return on this fantastic acquisition that we've made? And what's going to be the driver for that ARR as a result of the combination of these two companies? And frankly, because I didn't want to have Michelle in my ear going, "I need product," and Bharat in my other ear saying, "I need them to sell what's on the truck right now," I instituted this process of value drivers so it could become a common language across the exec team. So do you want to pick it up from there?

Yes. So basically, Bernadette locked us in a room, said, "We're not coming out until we can agree on value drivers and come up with a dollar amount over the next 3 years that we will drive to be able to come come up with ROI to bring it forth to the board to get approval to purchase this company. And Bharat has his way of looking at the world, Chief Product Officer, and I have my way of looking at the world. And we started with a spreadsheet and he said, okay, we buy this company, it's going to take me a couple quarters to build out this product, but before I do, do you think that there is any lift in win rates by having this company on board? Yeah, how much? 1%? Come on, 2, 3? Let's think through what you're gonna do on win rates. All right, all right, 2.5%. And we started for that conversation, and then we moved on to, okay, first product, the first use case that we roll out. And we did the same exercise, and I now went back to him and said, can you deliver it by first month of Q1? Second month of Q1. And it was this discussion that built out 4 or 5 tabs on a spreadsheet of, okay, so we have 6 use cases, we've identified 10 products, we've identified win rate, we've identified what happens to the install base if we were able to address these markets inside of our install base. And we came up with a number that both of us looked at each other, it was midnight, and we, we, we brought Bernadette into the room which was a virtual room, and brought her in. So we got the number, and she just looked at us and said, you two agree on this, and you're gonna stand by this number. This is the number you two will deliver. And we looked at each other again, like, yeah, this was— this is the exercise you need to do. So what does this mean now? Now that we've bought the company, Bharat has a whole bunch of stuff to do to build out the— bid out, build out all of those use cases, all the products, the install base. I have my work due today on day one. How are we going to go to market? What is the marketing plan? What is the thought leadership? What are we going to do on, you know, enablement assets? But we both have our marching orders because she's going to check every Tuesday at our ELT meeting and say, where are we? Agreement still? Any discussion? Now, once again, trust the process, surrender the outcome. There's going to be stuff that comes up that we have not even recognized yet. That's just how life is. But if we're following a process and we have accountability alignment every single week and we're transparent and over-communicating, I think this is a really great process you can take away and use in your own business.

Anything on that? And there might be other processes that you use, but I guess the takeaway from us on this is figure out, for us what's been really helpful is it's provided this single language across the exec team. Where are we on value driver 1? You know, it's just, it's a shorthand that just helps us, which, you know, being remote, that also helps as well. And it keeps us on track because otherwise we can go in a million different directions. We're not going to do that. We'll focus on the value drivers. If it falls outside of that, it falls outside of that. So it just helps with the focus.

And it's a great way to, for go/no-go because we're about to go into fall planning. We're talking about products. And there's going to be ruthless prioritization. And the way you do that is with a value driver exercise that you have, you have everyone in the room agreeing that this one takes priority than the other one because it drives more in 8 quarters. And tying into what is going to drive the most value for our customers.

Right. And I would also say for any of you, the companies out there that are looking at potentially acquiring other companies, I think over the next 18 months there'll be a lot of activity. But so many companies, whether you're buying a company that's pre-revenue or post-revenue, people have great ideas, grand ideas about what it will mean for the business. But if you don't nail it down into something, a concrete deliverable through whatever framework you use, how are you gonna know you're on track? You know, we did the same thing with the Morphle acquisition last year. We didn't have this process, so it was a little more a little less elegant, and we did have the Michelle in one ear and Bharat in the other ear at different junctures, which is why, you know, we're trying to learn from our mistakes in the past too.

And because of this alignment, I think we can go back and retrofit value drivers to products we rolled out last year. Yeah, this is, this is a big aha moment for us.

Okay.

So key takeaways.

So this first one is yours.

Oh, is it?

You think you do better with me with data, I think.

I personally believe that data-driven conversations builds trust. It's very easy to go to anecdotes, which aren't necessarily helpful. If you can root— it's okay to support the data with anecdotes or qualitative, but if it's not rooted in the data of what the data is showing. And it's also okay when the data fails you. I'll tell you, Q2, the data failed me. The algorithms we built over the past 10 quarters from a tops-down and bottoms-up, it started to fail. And that's okay, but I got to be able to say to Bernadette, something broke in my data. Something that was working is not working anymore. I need to go back and establish a new normal, a new pattern. And having the vulnerability, which I'm kind of jumping to the third one here, but vulnerability is essential. It's getting comfortable with I don't know. I read that in Ray Dalio's, one of his principles. If you can do I don't know well, that's really hard. So data being able to support and data-driven decisions, but sometimes the data will fail you and how you can get comfortable with something just broke, I need to take 3 steps back to figure out what just happened. And be, and my first call is to Bernadette. 'Something's broke, I don't know, give me a minute, I'll come back,' and usually she gives me the space. Usually.

Well, and I love it because, you know, if there is bad news, it's not like a fine wine, it doesn't age well. Let's know it now, let's know whether we think we know the root cause of it, or let's go away and find that root cause. But I think that's really a combination of all of these. It requires requires trust, it requires vulnerability, it requires communication, you know, before you've got, you know, everything neatly packaged up. People are different. I don't need everything neatly packaged up. That seems too contrived to me. I like— there's too much wasted energy going into busywork, quite frankly. So I like the ad hoc communication, and I love the fact that you do trust me enough to come to me with the great news and the not so great news.

Yeah, and there's moments where I just need a cheerleader. I need her to— when I call her to build me back up. It's been a really tough day. Here's what happened. That's really hard if you don't have the level of vulnerability and the communication transparency. We've— and you've done that a couple times too, saying bad day. It's important sometimes. It's not about the data. It's about the emotions and talking through it so that we can have a level of equanimity for our teams?

I would always say just, you know, communicate, communicate, communicate, and figure out what works for you with your professional chemistry. And don't always think— I know harmony was in the—

we hate the word harmony.

We hated the word. We're like, what's our twist on harmony? And it's that it doesn't have to be all sweetness and light, you know. Sometimes it's an extremely direct conversation between us. Occasionally, I stopped one two weekends ago, I stopped one and said, "I'm okay with this conversation, are you okay with it?" She went, "Yeah, yeah, yeah, fine, let's get back to it." I'm like, "Okay." So, don't be frightened of having that element in the dynamic in the team, because provided there's always— what's the right word? Positive intention or assumed innocence, then I think it works.

Hanlon's Razor, that's what it's called.

Ah, okay, thank you.

Assume positive intention.