Driving Peak Performance through Reimagined Management with Hootsuite CRO Melissa Murray Bailey

Good afternoon, everyone. It's really good to be here with you today. I'm going to start by reflecting back on 2005. So 2005 was when I landed my first job as a sales rep. I was thrilled. It was so exciting. I had finally gotten to this place in my career where I was going to be there helping the customers, working with them, and hopefully making a lot of money. I'm standing outside my boss's office and a whole crew of people comes out, two of them crying. What is going on here? That was back in a time where we used to beat up our sales reps. We had people who were the high performers and they were riding high and they were getting all the accolades. Their names were in lights, they won every spiff they were on the trips. And then you had the people crying. In fact, we used to have to do our calls in front of everybody else so that we could get called out for all the things we weren't doing correctly. I don't know if any of you experienced this or if you experienced this today, but we have a feast and famine culture in most sales organizations. And what is this leading to? This is leading to 60% of sales leaders anticipating that their teams won't be able to hit quota. I was scrolling through my LinkedIn feed earlier today and I actually saw another quote that said CROs think only 6% of their reps will meet their individual quotas this year. And when you ask the reps, they feel like we're not meeting it either. There has to be a better way. I remember going into one of my last roles and I said to the team, hey, show me our top performing reps. I want to get to know them and learn what they're doing and is it working or is it not working? And so they sent me a list of the top performing reps and they were at 80% of their number for the year, 82% of their number, 83% of their number. Not a single one of the reps in this organization had met their quota the previous year. But the company was doing well. The company had met their targets and they were celebrating. And we have this vast, vast gap between the company winning and the sales reps suffering. And we see this all the time in tech and SaaS where people, the growth is so high, yet reps aren't meeting their target. How can we leave them behind like that? Well, it's easy. We say we set the target super high and then they'll get further than they ever would have gotten if we hadn't set the target that high. But that doesn't work because they're not with us, they're not creating that success. We're not a team working together towards this common goal. I did work at a company that believed this. They believed you set the target so high and it was a top down quota setting process. So I got the number for the team and I looked at it and I looked at it some more and then I brought up some spreadsheets and I did some calculations and I couldn't figure out how we could get to the number. So what did we do? We actually reframed it. We reframed it to growth. If we get to 40% growth, that is going to be super successful. But we shouldn't have to do that. What if we changed the paradigm? What if we expected all of our reps achieved their quota and we did our planning that way and we built our organization that way? Melissa? No, we couldn't do that. We have models and our model says that only 50% of reps can meet their quota. That's how all the numbers make sense and that's how we don't pay out too much commission and we achieve our target as a company. How does that feel to a rep to come into an organization and say, like we're betting against you. We have set it up so you have a 1 in 2 chance of meeting your OT, of paying your bills, of sending your kid to university. How motivating is that for a rep? But it's what we do. So how did I get to thinking differently about this? I had a call about a year ago that kind of slapped me in the face, woke me up. I was talking to another CRO and she said to me, oh no, Melissa, we do our planning so 100% of our reps can achieve their quota. And I was flabbergasted. I had nothing left to say. I just said, I don't understand, how does it that work? How do you pay people? How do you not go under? And she said, well, we've organized it that way. We actually have a reverse buffer. So I'll explain what I mean by that. Because not every organization does buffers. But if you do buffers, I'm sure you do it where all the reps have a target and then the manager target is a little bit less and the director's target is a little bit less than that, the leader's target is less than that and the company target is less than that. Why do we do that? Because we are betting against our reps, we are creating scenarios where the company wins, but the people doing the hardest jobs don't win with us. What this organization does is they say here's the reps number and the manager has 105% and the directors have 110%. They are betting for their reps. And what that shows is this wonderful environment where people feed like they're set up for success, that they're expected to win. And the psychology of someone expecting you to win is totally different than knowing that we've set it up for half of you to lose. And so this has totally changed my mindset personally on it to where I'm starting to think more and more on what can we do differently for everyone to be able to win, for us to all win together? What would that do for our culture and our environment and our growth as a company? And so we start out by saying invest in self the development for each individual to develop their skills to be able to attain their targets. After you're investing in yourself and developing yourself, then it's about invest in customer. And as we pour all of those learnings and all of our great skills skills into our customers, then our company can grow. And that's the stage in which we do it. Because you know what? For the vast majority of reps, I don't think they're lazy. I don't think they're trying not to attain their targets. They want to, but what we're saying to them is go attain your target and not outlining how to do that and what that would look like. We're the lazy ones. We say let's hire great reps and they'll be able to figure it out. Anyone in this room heard that or said that ever. Thanks for being honest there. Yeah, we've all said that. That's the whole point of the hiring process. Get people, they'll figure it out. But why would we want them to use all of their energy out there in the deep end of the pool trying to figure it out when we're the ones who should actually be figuring it out. And that's where being a SaaS organization is a beautiful place to be. Because when done right, a SaaS sales organization is extremely predictable. It shouldn't be complex. It should be simple and straightforward. And a little secret is that just because you're selling SaaS does not mean you have a SaaS sales organization. So what does it mean if you're setting up or if you're in an organization that has a broken SaaS sales model one is it's not predictable. You have this feast or famine environment of your reps. And when you have some reps blowing it out of the water and other reps who aren't, and this cycle of performance management and people leaving the organization, you can't have the predictable model that is kind of the cornerstone of being a SaaS company. So you want to think about land and expand. Sure, everyone in this tent has heard land and expand. But in a SaaS organization, how do you know if you have the right land and expand model? Well, there's kind of two choices. You are encouraging and motivating, supporting, compensating your Reps for the $100,000 deal, or you're doing all of that for 10 $10,000 deals. In a land and expand model, we really want to create a system where people can get the ten $10,000 deals. Obviously, I'm just using those numbers for rounding purposes, but you want them to have as many deals as possible so that you're growing your customer base by which you can expand it. That one $100,000 customer may churn, may not have any growth left in it. And so you're not setting up this trajectory of being able to grow every single quarter and every single year. The expanding customer base that you have. The second piece is pace. You want to create a system that has a fast pace. So you might have some reps who are saying, like, oh, there's no good quality leads in here. I'm waiting for those good quality leads to come. Why won't marketing give them to me? But what we find is that it's quantity that leads to quality. And so having that pace of conversations with the leads and conversations with your customers is when you're going to uncover that really awesome, amazing deal. And the great news is you'll get a lot of other deals in the process, and you might come across a lead that you may have just pushed to the side, and then it's coming back again. The third is metrics. When we think about setting up this predictable SaaS sales organization, it is all about the metrics. Because when you have land and expand and pace, it's the math that helps you to know whether you're on track or whether you're off track. It's not a big enterprise software where we're always talking deal by deal by deal, because ideally, you have so many deals that that's not the way that you manage them. So thinking about the metrics that matter, that can be things like pipeline velocity, or it could be things like the number of meetings that people are having. The key is that they are leading indicators and not lagging indicators. Because with the lagging indicator, it takes too long to figure out that something isn't going right. So if you're measuring win rate, for example, you're not going to know that you're behind on your win rate till the quarter closes. And so that's too late to make the adjustments and pull the levers that are required to get back on track. And then the last piece in the scalable SaaS predictable model is the playbook. This gets back to what I was saying on we tell people, go get your number. Figure it out. There are organizations that have put playbooks and processes in place that actually tell a rep, if you do these things, you will be successful. And that is the way that we're able to enable and empower each rep to have success. We set them up for success. We believe and we've set our plan that they're expected to get to their number, but we give them the roadmap on how to do. Makes the coaching so much easier, too, because you can look at the playbook and you can know, did they do this? Check. Did they do this? Check. Did they do this? Nope. All right. This is where I have to lean in with them. And so it's not about saying, this person just needs to leave the organization because we're out of ideas. We're able to map it back to the playbook, and then we can constantly iterate on that. And because our great reps don't have to figure it out on their own, they're figuring out how to make it better. Instead of them starting at zero and then trialing and erroring, they're already starting at the 80%. And then they're using their awesomeness and their excellent skill set to move the entire organization forward. And it's a virtuous cycle we talk about. And there's been so much written lately about the great resignation. And many of us are probably feeling that where people are leaving and there are so many jobs and they just want to do something different that puts a lot of pressure on your business and your model. So we're thinking about it in a way of when people win, people believe they can win. And when you have more and more people in your organization feeling that they're set up for success, they're no longer sitting back with their arms crossed and saying, like, ugh, our product isn't working, or if only the features were better, or if we could catch up to our competition. We have people leaning in and they are winning and they're staying longer. And this is what we want. Because in the SaaS sales model, the people metrics have the greatest impact. So we get distracted by all the things out there, whether it's the product or the leads or the events or, or what have you, instead of focusing on the things that we can control. And that's these people metrics. And so I want to start by saying, like, we all need to know these. And why do we need to know these? Because these are key inputs into our plan. I've seen some organizations faltering because they take their attrition number and they take the number of. Sorry. They take the number of reps they have and they multiply it by their quota. Great. We have 10 reps and a million dollar quota. So our plan for the year should be $10 million. The end of the year you're going to be like, wait, that is not going to work. Because people don't stay and then it takes a long time to fill them. So what happens when a sales rep leaves the organization? Well, duh, Melissa, we backfill them. And sales reps, in my experience are treated as disposable resources. Like there is an infinite amount of them out there and if one isn't working, we'll just get rid of that one and we'll bring the next one on. And that's not true. We are running out of sales resources in the textbook space. It's one of the reasons we're all just stealing them from each other. And so we want to think about how do we keep them and not have this attitude of just moving them on if they're not successful. Because remember, we set them up to not be successful. We're the ones who said only 50% of you are going to meet your number. So if you're buying into all this and you might say like, I don't, you know, that's not how the world works. Some sales reps are successful, some aren't. And I love that. I love the dog eat dog world of sales. And that's what makes it great and fun. You're on this high, then you're on this low, then you're on the high, then you're on the low, then you're fired. So if you like that, go for it. But if you're saying like maybe, maybe she's onto something and what if we did want to create this environment where everyone can win and we're all Winning together and people are set up for success and we expect them to be great. How would we do it? So we must create this culture where people feel like they matter, where they feel like they have an impact on the organization. Any engagement survey you look at or any article you read about what keeps people, it's about feeling connected. It's about feeling like they have a small part in the success of the company. And so we have to do this if we want to keep our people and drive our business forward. And so I said at the outset that I'm new to this. I've only really been on this journey myself for about a year. You know, I was the person that was beating up the low performers. You have to do better. You stop, think you're lazy. So it's been a transition for me. I'll say. But so what are we doing at Hootsuite? Because at Hootsuite, we have made a commitment to this transformation. So much so that we have set a target as a company that we shout from the rooftops that everyone is aware of. A target that 100% of our reps meet their quota. We are far from that. When I came into the organization about a year ago, we had this old school environment that I was sharing about. And so every single quarter, we are measuring how we've been able to move the needle. And so we say, and every rep knows that my leadership team is accountable to 100% of reps meeting their quota. I measure it. This is the dashboard that I look at every single morning. Before I look at our bookings, before I look at how things are converting, I look at this dashboard. How are all of our reps as individuals doing? How have they moved week over week? How are we able to get them to the number? Which leads to the third thing that we're doing. We have a program that we launched called Lift Up. And so in the past, I had programs that were like beat down, manage out. If you're below 25%, you put them on a performance improvement plan, which was really code for you're going to be gone in 30 days. Instead, now we have this Lift up program where any rep who is below a certain threshold get their managers together and we talk about what are the things prohibiting this rep from success. We work with our sales enablement team to provide extra resources. But you know what? Like, it takes a lot to build back trust. Reps are a little bit uncertain about this. We tell them the Lift up program is us putting our arms around you, giving you a Hug. Helping you out, getting you the support that you need so you can lift up and win with all of us. I was talking to a manager recently and he said to me, you know, Melissa, I was really like taken aback. I was talking to this rep in the lift up process program and he said to me like, how much time do I have? Because that's over the years what had been beaten into him that this was just another code word for you're on your way out. And so we have to build the trust back so reps believe we're actually trying to help them so that they can be vulnerable and share back with us that they're having a problem or they're not sure how to self source or prospect or negotiation has been difficult for them because until we build the trust with them where they believe that we actually want them to be successful, it's hard to get to the root cause and help them in order to do that. And then the next thing we've been doing is creating our rewards and spiffs so that everyone can win. So a lot of times in the past history that I've had, we've set up spiffs that say the top performing rep gets trip to Bermuda or they get a weekend away or any of the things we put out there. But it's always for the top rep. Maybe we have segments, the top rep in commercial, the top rep in enterprise or emea, but it's always for the top. And in reflection on that, that's very exclusionary. You're competing with your friends and the people next to you and there's only one spot for someone to be declared excellent. And so what we do is now we have all of our spiffs and trips set up to be everyone can qualify. So if you meet a certain threshold, you can be a part of it. And we hope that that creates this environment and spirit where people work together, where they know the more the merrier. And so that's something that's been a change. And then finally leaning in on the managers, we've started recognizing our managers not on their percent to quota because right the feast and famine environment, a manager can have someone who's at 200% of their number and everyone else is at 30% and they're meeting their number and they're being celebrated. The purpose of a manager is to help each one of their reps to achieve their target, not just one, and leave everybody else behind. So now our expectation of managers is percent of reps on their team who achieve their quota. And we measure them and recognize them on individuals getting to their number. So we had our top manager last quarter who was recognized. He had 100% of his reps achieving their quota. Now we just had one. But it's a journey and we're on the way to be doing that. And so I will leave you with kind of five takeaways as you think about creating this culture and environment where everyone can win. The first is have a formula to drive success. This is the metrics I was talking about. Knowing what metrics drive the performance. The leading indicator metrics. It's also the designated playbook and process that will get people there. So whether you have a huge sales organization today or just a couple or you haven't started your sales organization, please do not depend on people figuring it out. That is our lazy way of saying, please do our job for us. Take the time to figure out what works and lay out that pathway to success for your team. Then looking at fair comp plans. I didn't talk too much about this, but this is also a change that we recently made where we were noticing that based on the OTE model and how people were paid, people were getting paid different amounts for closing the same amount of dollars. So we didn't think that was fair. So what we did was we said everyone who has this dollar amount quota has this much in variable comp. And so now every single rep in the organization knows that they are being paid fairly and equitably for the work that they're contributing to the organization and then changing expectations of managers. So this is what I was talking about of are managers successful if their people aren't successful? You have to decide what works for your company. But for me, it was pretty clear that a manager's role is to enable, empower, and help their people to achieve success and greatness. And the last one is an acronym that I introduced probably in my first quarter at hootsuite, which is gyat, because in tech we don't have enough acronyms now. So I had to add another one. So Gaia has become our rallying cry, which is give it a try. All these great ideas come to the table and everyone has a reason why it doesn't work. We tried that before. You don't know our industry, blah, blah, blah. It doesn't work. So what we try to do now when a new idea is brought to the table is we say, let's first start by talking about why could this work? And that opens up so much more productive conversations. Why could this work? What if we gave it a try? And then I have an acronym that goes with it, which is too long to actually remember, but it is what's the worst that could happen? And just asking that is so powerful to say, what's the worst that could happen if we gave it a try? And so I leave you with that. Creating a culture where everyone matters to your organization, they feel it, they know it, You've set them up that way, and why not give it a try? Thank you very much.