E16: JD Miller's CRO Playbook for PE-Backed Companies

So it's, it's the excitement, it's the pace. I guess also it's, it's a little less daunting thinking about signing up for a 10-year early-stage venture gig where for liquidity you're, you're like 7 to 12 years out. The, the—

possibly that too. You know, but for me it's always been, you know, you buy a company with an investment thesis that you know what you're supposed to get done. You know what you're supposed to do across the time horizon. And I love to focus and execute on projects. And so kind of rallying everyone around, you know, this new expansion or this new product development we're going to do or whatever it is, and having an end date in mind is, is really helpful and motivational. And then you may stay with the company for the next buyer who's going to have a different investment thesis and kind of, you know, hand off the baton to, to run the next part of the course. Which can also be really interesting.

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And today my guest is JD Miller, who brings over 20 years of revenue leadership and experience at 4 different private equity-backed software companies. Uh, he's got 6 exits under his belt, 4 of which were in a leadership role. And has recently written a book called The CRO's Guide to Winning in Private Equity. So you can probably take a guess what we're going to be talking about today. And the book comes out on January 14th but is available for preorder everywhere that good books are sold. So welcome to the show, JD. Thanks for coming on. Thanks for having me, Kyle.

It's great to be here.

So tell— I gave a little tiny intro, but give people your 60-second background so they know a little bit about you.

Sure. I'm JD Miller. I've worked in B2B tech sales for about 25 years. Most of it has been in private equity. Most of it has been in European companies coming to the US. Lately, I've been working at a private equity firm itself. I work for Five Arrows Capital Partners as an operating advisor to their portfolio of 36 companies. So I get to be mentor to their sales and marketing leaders.

Very cool. And so I think you have a good story about how you got into sales and a little— and your first exit is tied into that. So, so let's start there as our, uh, warm-up question. Tell, tell the people the story. Sure.

So I never actually intended to go into sales. I grew up in the suburbs of Chicago, and, you know, in the '90s everyone was either going to be a doctor, a lawyer, or an engineer. And so I went to college thinking I was going to go to law school, and I did a very traditional pre-law degree in communication, philosophy, and comparative literature. And then the summer before law school began, I did an internship in the Clinton White House, which taught me that, um, the lawyers weren't having a lot of fun. And so I went back to the university and said, I'm not going to go to law school, I'm not going to be a professional philosopher, I'm not going to be a professional literature comparer, so what can I do with my communication degree? And I wound up doing a master's in the '90s when the internet was just starting to, to come into being. And the research was really looking at— we knew everything about how groups form trust and how groups are formed in the physical world, what does that look like online? And so a year and a half later, I had this master's degree in social networking and a small dot-com came calling that said, we didn't know that anyone could get a degree in the technology we're building. And it was a sales job. So I began as employee number 26 at this company called Introspect. 6 years later, we'd been acquired by Vignette. Um, Vignette was the largest tech IPO until Google took the title from us. We went public with a $9 billion valuation. And so in 6 short years, I got to see everything from really small startup to really big publicly traded company and all the stages in between. And I was just hooked that that's what I wanted to do for the rest of my life. Very cool.

And so now owned by OpenText. It is, yes.

So back in the day, uh, we say Vignette was the inventor of credit card processing online, the inventor of Amazon, if you bought this book, you probably want to buy this book. And so there was a time when about 65% of the world's websites were built on our technology.

Wow. Very cool. And then a couple more stops in various levels of revenue leadership. So let's talk a little bit about your experience in leadership in private equity. So like give folks the background of some of these places and, and sort of the scale of some of these teams getting up to Modus?

Yeah, absolutely. So, you know, Introspect, when we started, was $750,000 in revenue and grew to be very, very large. And as a first job out of college, I was really spoiled because I thought, why doesn't everyone just get into tech sales? This is the easiest thing ever. You know, our pitch was, I'm calling from the internet. Do you need a website? And, you know, in Chicago, you know, American Airlines needed their first ever website and newspapers needed their first ever website. So, you know, naively, my next job, I went to a small startup that was doing CRM software and social networking. Ultimately, it was sold to LexisNexis because the product had, the product had a lot to do with social networking and how lawyers meet one another online. So about $15 million in revenue when we started. Again, LexisNexis itself is a big giant kind of conglomerate. And then that's really where I first started to get trained in how to manage people. So I began as an individual contributor. LexisNexis gave me a year-long leadership development class to learn how to manage salespeople. And then that just spawned the rest of the career, was constantly tech companies that were looking for big growth. Maybe they're going to do a merger and an acquisition with someone. Maybe they were preparing for IPO. And so it just became a sequence of continually bigger and bigger and bigger companies. Most of my life has been spent with companies at about $50 million in ARR, growing to maybe $300 million. Um, and sometimes that's organic, sometimes that's M&A, and, and usually it's a combination of both.

And what was the first private equity-backed job?

Uh, so that, that LexisNexis one, um, before it was acquired by Lexis— before it was acquired by LexisNexis, it was owned by PE. Okay.

And then West Monroe, Runzheimer, those were pre- private equity, post, like, I'm curious the—

Yeah, lots of mixes in there. So, uh, West Monroe Partners was the Andersen Consulting, uh, group in Chicago that after Enron sort of collapsed, um, West Monroe started on their own. And then, uh, ultimately we merged with, uh, BearingPoint to become the, uh, BearingPoint US kind of arm of that, that company. Um, Ranzheimer we'll come back to later on. And then Workplace Systems was owned by Lloyd's Development Capital. A UK company coming to the US. Bravo Solutions was an Italian company owned by PE coming to the US, ultimately sold to Accel KKR. Then we had Modus, which was owned by Thoma Bravo. And most recently, I've been the CRO at Contata, which is another Accel KKR portfolio company. Okay.

It's funny, I, when I talk to people who have had one PE gig, they tend to stick there. You know, the, the, the, private equity backer with good people, you see them just bring along to the next thing and the next thing and the next thing. And I have a friend who's just fallen into this and very quickly he's like, oh yeah, we're going to do this for 3 years and they already want me to do the next thing and that'll be another 3-year stint. What is it that you think pulls people in to falling into this out of the venture game and then just like sticking?

So for me, it's a focus constantly on the exit. It's a really high pace of we've got to accomplish things and we've got to accomplish them really fast. So I sometimes describe private equity as like house flipping with tech companies. You go find a company that's got really strong bones, and then you look at what can we do in my case to not renovate the kitchen, but put more money into the sales and marketing engine or help with an international expansion and make that house even bigger so that someone else can pick it up later on. And most PE firms are operating on like a 3 to 5 year investment horizon. And so while the things we do are exactly the same as anyone else, you know, it's the fundamentals of running a good business are the same everywhere. PE puts a really nice cadence and a really nice drive that we don't have a lot of time to waste. So let's get on it and let's get moving.

So it's, it's the excitement, it's the pace. I guess also it's, it's a little less daunting thinking about signing up for a 10-year early-stage venture gig where for liquidity you're, you're like 7 to 12 years out. The, the—

possibly that too. You know, but for me it's always been, you know, you buy a company with an investment thesis that you know what you're supposed to get done. You know what you're supposed to do across a time horizon. And I love to focus and execute on projects. And so kind of rallying everyone around, you know, this new expansion or this new product development we're going to do or whatever it is, and having an end date in mind is, is really helpful and motivational. And then you may stay with the company for the next buyer who's going to have a different investment thesis and kind of, you know, hand off the baton to, to run the next part of the course. Which can also be really interesting.

How often do people stay through the second leg of that journey?

I think it depends on the level in the organization. There was a Harvard Business Review study that said the average tenure of a CRO in any company is about 18 months. So it's, you know, at the— at that level, it's probably pretty rare. You know, for the rest of the team, certainly I see sellers with lots of long longevity, people in product development and other parts of the organization. But part of the reason I wrote the book is I really want to help other CROs live past that 18-month tenure. And I think there are a couple of basic things that we can do with communicating with our board and setting expectations on performance that can really extend that time and create value for the companies we work for.

Okay. So, and we'll, we'll certainly unpack a bunch of this and unpack some of the guide. Curious, before we get there, how is being a CRO in a private equity-backed company different than being a CRO in venture?

I'm not sure that it really is. Um, you know, I think ultimately the CRO's job is to drive revenue into the business. Um, and you know, you and your board or you and your owner, uh, have a sense of what that target is supposed to be. I think a CRO at a private equity-backed business probably has a bigger budget. So you're probably playing at a budget. Okay. Yeah. I mean, I think venture capital is, you know, and I haven't done a ton of venture myself, but I always think of that as like a startup company moving to be maybe $20, $30 million in ARR. And for me, the PE firms I've started with, you know, we're starting at the $30 million mark and we're taking them further on down the path. Right. And so it tends to be a bit more of established company. It tends to be bigger teams. That then gives us some bigger budgets to play with, you know, hiring in new geographies or doing some exciting more things in marketing that maybe a true startup doesn't actually get to, get to work with.

Interesting. So I've only done venture and we'll learn from each other then. Yeah, exactly. I mean, I worked at Shopify, which was obviously public at the time, but In my head, my assumption is that there's less money in private equity because they're trying to acquire a company, strip out any extra costs, they're trying to make it more fit, cranky, but duh, and then get that ready for the next buyer. So it's interesting for you to say that there could be more money, and I guess there's more money for revenue driving things.

And, you know, I think actually, you know, private equity talks a lot about the rule of 40 is sort of the best investment that we have. And so, you know, that means we're looking at what your— the profitability of the business is and we're looking at the growth and together, you know, great run company, those are going to add up to be 40 or more. So really deal by deal or company by company, you might have a company that's losing money but is growing at, growing, you know, 50%, 60% year over year. You might see the reverse that, you know, it's a company that's growing 18, 20% a year and you really want to find that 20% margin to make them add up. So it really depends on your unique context, I think.

Yeah, that makes sense. I was listening to a podcast on Invest Like the Best with Brad Jacobs. So He's apparently like one of the top private equity M&A guys of all time. He's done 500 deals and he's worth like billions of dollars himself. And so he was going through a bunch of his playbook in terms of like the how he identifies opportunities and wins deals and then what he does when he takes it over. And a lot of his was like consolidating multiple companies, stripping out a bunch of G&A costs, finding areas to drive growth either in new markets or bringing together complementary products. So I think that's probably where I'm thinking is like his messaging is all about like streamlining and making more efficient, but he does talk about, you know, investing in growth. And so as a CRO, it's, uh, that jives. That's interesting.

I, I think you'll find different— sorry, I was just saying, I think you'll find different PE firms will sort of specialize in different things. You know, there are definitely growth investment firms or efficiency firms. Uh, so when you're shopping your company across PE, you know, it's, it's really getting clear on what their investment case is and, and does that jive with what you're, where you're trying to take your business to. Okay.

So maybe not as different as we would've otherwise thought, uh, which is interesting. And so, um, talk me through Modus. So you, you came in as the company was bought and then you had a, almost a 5-year stint there. As CRO. So talk, talk, talk me through some of that story, and then I'd love to, to dig into the lessons.

Yeah, really interesting. Um, and the, the first lesson for me is never burn a bridge. I had been the head of sales at a company called Brunzheimer International in Wisconsin, um, 4 or 5 years before Modus. And, you know, Brunzheimer is a company that probably you've never heard of, but you've definitely touched their product if you've ever received 56 cents a mile in reimbursement for driving your car for work. Rundzheimer is the company that sets that rate for the IRS and has done it for 85 years. And so over time, you know, Rundzheimer had grown into this company that has this cool vehicle reimbursement product and collects a lot of research on the price of gas and price of a lot of commodities around the world, and then kind of packages that, sells it. Along the way, somebody in Boston created a company that was Modus, that became a competitor, uh, to Rundzheimer. And actually, right as I was leaving Rundzheimer is when we first started to see Modus as a competitor. So fast forward a few years, I had worked with Workplace Systems, which actually Shopify was a big partner of ours there, uh, and I had worked with Bravo Solutions. And as we were getting ready to sell Bravo Solutions to the next investor, everyone was looking through the bios in the investor pack and saying, tell me a little bit more about this job at Rundzheimer. and, you know, maybe I'm not that smart, but when 17 or 18 people ask you the same question around this very esoteric job, you know, something must be going on here.

Because they were thinking about buying Modus. Yeah.

And so, so eventually, I got connected with the CEO at Modus, and, we had a, a great conversation about, hey, I'm just getting ready to leave Bravo Solution. And he said, that's, that's really interesting. We're just getting ready to get bought by Thoma Bravo, who's also gonna buy Rundzheimer and put them together. Would you come on as a consultant and help us? He said, because when we merged with Runzheimer, you probably hired most of that sales team. And do you still have a good relationship there? And thankfully I did. So I began as really a consultant that was going to be on board for 2 months, just sort of teaching people what Waterford, Wisconsin looks like and making some introductions. And then a series of events happened where the CROs of Modus and of Runzheimer Both went off to do other things and that seat was empty. And so the CEO and Thoma Bravo, the PE firm, said, you know, JD, would you step in and would you do this job? And it wound up being a great investment for them. Uh, Thoma, I think, says it's the 7th best investment they've ever had in tech investing. Um, and, you know, we, we had a great, terrific run taking what was maybe 30 salespeople when I started to a sales and marketing team of just under 200. 5 or 6 years later and all of the growth and, and customer stuff that goes with that, which is just a really cool time for me.

30 to how many hundred? Uh, just under 200.

Wow. In sales, marketing, BDRs, and all the rest of it. Yeah.

Okay. That's awesome. And so what was, what were the things that you had to change, put in place? What were the big sort of innovations to lead to the 7th best investment, the Thoma Bravo? Who was very good at this. So that says a lot. Yeah.

So one of the things, one of the things I love from them that, you know, and it actually, you'll, you'll see flavors of it in my own book too, is they're very clear early on and helping everybody articulate what is the value creation plan of this company. And so from day one, you know, we start with an annual plan that says if we're going to grow 20% this year or 30% this year, How are we going to do it? And it's not just setting a number of, you know, go sell $30 million and cross your fingers and hope that you're going to get there. But if we're going to sell $30 million this year, how much of that is going to be new logo business? How much of that is going to be selling products to the install base? How much of that is going to be growth within your install base? You know, do you have contracts that allow for price increases? Are your customers happy? Are they going to accept those price increases and really plotting out month by month team by team, all of the bets that you're making that are going to add up to your, to your annual plan. And then they also have a really good rhythm and cadence that I think, again, every well-run company should have, which is a weekly flash report. You know, we set out this plan for the year within this quarter or within this month. Here's what we should have done with new logo. Here's what we should have done with price increases. Here's how many customers we were expecting to churn or not. How did this week's activity measure against that? And are we ahead of plan or behind plan? And where it's not working, why isn't it working? What can we do about it? What can we adjust and course correct to make next week even better? And so it's this constant communication between, you know, me as the CRO, my sales leaders, my individual contributors, the rest of the C-team, and the private equity firm board, all talking in really specific detail about The business plan, what's gone well, what's not, and do we collectively agree on what the next step is? And it drives a really great outcome.

That level of rigor is definitely more rare. And I would say venture-backed businesses, oftentimes they're growing so fast, you're just sort of like catching demand and flying by the seat of your pants. But I would definitely say like the PE folks that I've spent time with seem to bring rigor and it's sort of a centralized rigor from the PE that then emanates through the full portfolio. So that makes a ton of sense. So you started with an annual plan, established a really good rhythm. What else did you change strategically about the business to drive growth and to improve EBITDA? Yeah.

So there we also really realized that vehicle reimbursement market is a very broad market. I think like 1 in 6 American workers is a potential customer of, of that product. And so we also started to talk about, we're still a pretty small company in a very big market. Who's our ICP? Who's our ideal customer profile? What's the industries that we're going to pursue? Who's the type of person that we're going to pursue? And we really found 3 tiers of companies. They're the big giant enterprises, like the big Soda distributors and big grocery store chains. You have all these people, you know, stocking shelves, and that needed a really highly skilled enterprise sales team. Then there was sort of a mid-market segment. So kind of the typical businesses that, you know, maybe, you know, in your local community, but not big national names. And then there's also a lot of, you know, really SMB, small businesses, maybe 10-employee companies, 15-employee companies who also can benefit from the product. And so we divided the sales team into those 3 segments, you know, big enterprise sales team, our most senior sellers who can do the long, complicated processes with multiple decision makers. Most of my sellers were in that mid-market and then working with our marketing and our inside sales or BDR team to have a really fast digital motion that says, you know, if you're a tiny company that's going to spend $5,000 with us, I can't spend a lot of money selling to you either, but I can absolutely give you a great experience, you know, self-serving with video education and emails and, you know, the, you know, kind of daily or weekly webinars that you could hop onto and get sold to with, you know, a group of other folks doing the same thing. And then kind of instrumenting those and recognizing that the expectations of a seller on each of those teams is going to be different. You know, how do I manage that SMB team? It's all about volume and it's all about connection rates and, you know, average deal cycles that are like 6 or 7 days. It's very different to manage that kind of seller than it is for an enterprise seller whose cycle might be, you know, 3 or 4 months or 5 months, but average deal size is going to be in the 6 or 7 figures. And so really kind of getting the right teams in place and the right metrics for each of those was was a really key part of it.

Okay. So, so part of the playbook is structure, basically go-to-market org design and segmentation. Did you, were you opening up new markets as well? Uh, I would say really about existing market done better. We're opening new industries for sure.

You know, if you think about, if I start with this market that 1 in 6 Americans potentially could buy. you know, a 30-person sales team is going to be stretched really thin trying to cover all of that. And so really, we added a lot of sellers too that let us have kind of industry focuses or size-based focuses. Still largely the same geographies for us, that, that North American focus helped us there. And then over the course of 5 years, of course, we launched new products around 2019. You remember COVID 2019-20, shut everyone down. And our core customer was someone who got in their car and drove for work. And suddenly all of these stay-at-home orders, you know, no one is driving for work. But our product teams really said, okay, this infrastructure that we've got in place to track what's the price of gas today and how do I reimburse people differently, you know, with different cars, can absolutely be applied to the home office environment. And, you know, the price of electricity for your home office or the rent on your, you know, 2-bedroom square foot apartment is different. And so we created a reimbursement for the stay-at-home worker and the, you know, kind of legally appropriate IRS-certified, you know, stipends for home office workers to reimburse them for doing that kind of work. And we never anticipated that at the beginning of the journey. but, you know, really flex that muscle to say, okay, we understand a lot of the same kind of messages. We understand the same kind of buyers. How do we put this machine and turn it slightly with a new product? And then there were some acquisitions around cell phone companies and cell phone reimbursements that, you know, really rounded out, I think, what you would see of the, the total Modus picture today. Actually haven't been to that company in 3 or 4 years, so I'd have to revisit exactly what they're selling. But, um, at the time I left, it was, um, you know, certainly had grown on a number of dimensions, uh, organic growth, new products, new markets, um, and new kind of ideas.

Right. And we were talking before we turned on the recorder, but I have the new CRO of Modus, Vanessa Branwen, coming on in a couple weeks. So we'll get the, the bookend, bookend of this story. Oh, fantastic.

I can't wait. Vanessa and I have connected on LinkedIn, uh, but we, I don't think we've ever spoken to each other. So, I'll have to tune in and hear her say how terrible this company was. But the last guy, and now she's come in and taken it to the next level.

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Yeah, yeah. Well, it'll be cool to— it'll be cool to hear that part of the story. She's a stud, so I'm sure, uh, there's lots, lots to dig into. And so how much of this was part of the original investment thesis? So, because you got operationally more rigorous, made sure that planning was diligent, expanded in terms of the addressable market, new industries, scaled the team, launched new products. Like, was this all part of the, hey, we were going to take Runzheimer and Modus, put them together, and then these are the 6 things? Or how much of that was discovered, discovered as you were running the company? Yeah.

So I think when a PE firm invests in a company, they've got a whole range of theses. And you know, you hear, you hear people talk about the return multiple. Are we going to get double our money back, 2x return or 3x return, a 4x return or a more x? And so I think when someone makes the business case, and again, I'm, I'm not the smart guy in the room who decides what to buy a company for. I'm just the operator and executor. But I know that they always come and say, you know, our thesis is we're going to absolutely do this thing. And if I do this thing well, you know, that should get us our money back and that'll get us the 2x return. And then here are some ideas of 2 or 3 other things that we could do that if, you know, 1 or 2 of those go really well, you know, we'll get a bit of a bigger return. And sometimes, and I think at Modus, we, you know, we were really fortunate that the whole laundry list of possibilities ultimately were, were things that we were able to action on and, you know, ultimately led us to a great place at the end of the day. I certainly didn't expect it would be that run when I began. You know, I really thought it would be a shorter tenure and a, you know, kind of an integration of two companies. And now you've got a bigger company that does the same thing, but was so fun to get to play in all of these other kind of spaces.

Very cool. What was that range that you talked about? The, the, ranges of outcomes?

Um, yeah, I mean, private equity returns are all over the place, right? But if you think about that house flipping environment, uh, you know, you spent some money on the house. When you sell it the next time, you know, double your money would be great. 3x return is, is really good. And then, you know, 4x and more are fantastic outcomes for—

return was, was the word? Yes.

Yeah. So I'd say like a 3x return. So I bought it for this much money and I got 3 times that, you know, when we sold it later.

Very cool. So let's talk about The Guide to Winning in PE. I would love for you to unpack sort of the structure of the book and what are some of the key themes, and I'll have a bunch of questions as we go.

Yeah, absolutely. So, you know, we just talked a lot about Tomo Bravo's leadership with Modus. They had a lot to teach me as, as how to be a great CRO and CMO. And I've seen that with Accel KKR, the places that I worked. And, you know, all of these different private equity firms all have sort of a playbook of ideas. And now today at Rothschild Five Arrows, where I'm an advisor, I realize that the portfolio of companies I'm working with all tend to have the same sorts of problems or challenges, or I at least find myself pulling out the same templates over and over and over again. So I compiled them into a book and it's really structured as sort of a year in the life of a CRO at a PE-backed company. And so it begins with your annual planning, which actually doesn't start on January 1st. Your plan probably starts around, you know, September, October, laying out what is the program going to be. And the first chapter is really meaty about how do you design the annual plan and all of the inputs that go in there. There's a downloadable template to help people do that. I'll share the link with you later on. And then, you know, you're going to start January 1st with your annual plan. How do you roll that out into comp and territories and quotas and communicate that to your team? How do you have an amazing sales kickoff to tell everyone the important messages that they need to learn and explain we're going to win in the, in the coming year when we do these following things? And how do you motivate your team members to do that? And then it starts to look at what are those reporting and inspection cadences? You know, we, we need to inspect what we expect. So what is a weekly cadence like with one-on-ones with a seller? What is the weekly cadence like with the sales manager and the CRO? What is the, you know, weekly, monthly, quarterly cadence between the CRO and the executive team and the executive team and the board of directors to talk about know how we're progressing and how do we adapt over time? And then, you know, life happens. So team members turn over or we're going to go do growth plans. You know, how do we identify great talent? How do we model that into the business? How do we have a great interviewing process to make sure we're recruiting the talent that has the skills that we want to have? And then kind of continuing on all the way through the end of the year. And then ultimately the tail end of the book is because it's private equity specific, You know, how do you as a CRO get ready for that handing of the baton to the next person? So, you know, what is, what is the, you know, note that I leave maybe to Vanessa at Modus to say, here's what you're, here's what you're, you know, getting on board with. Here's what your team looks like. How do you negotiate your own next best deal? And how do you, you know, think about compensation and all of the rest of that stuff to pick it up and do it again and continue to help people grow and build?

Very cool. So I want to double-click into a bunch of this stuff. So let's start with annual planning. It's December when we're recording this. People will have just come out of annual planning, so this will be fresh in people's mind. What does a great annual planning process look like to you?

So for me, an annual plan is always built on fact, not hope. And I'm really maniacal in my planning process. It drives a lot of people nuts that I refuse to sign off on a number until we can say exactly why we think we're going to get there. And so, you know, you're— you have a— you have a target to grow $20 million next year, $30 million next year. What are the very specific things that you're expecting from each team that's going to add up to that $20 or $30 million? So we start, and, you know, my— my PhD background tells me that the best predictor of future performance is past performance. So let's look at our team. And if we just keep the same team members in place today as we had last year, you know, what's their win rate? How long does it take a new seller to ramp? You know, all of those kinds of things. How many appointments did they need in order to get to, you know, a certain dollar amount? In that context, if we just fast forward the tape a year, what's the performance we're going to see from your logo there? We also need to take into account things like attrition. You know, people leave the organization all the time. They have babies or they get promotions at other companies. How frequently does that happen? What months does that happen in? How long does it take HR to recruit the backup, the replacement person? How long will it take that new replacement person to come up to speed and get their first deal and then be, you know, fully ramped? So all of that kind of calculation is going into some piece of my new logo number. And then we look at the same kind of rigor on the install base. You can declare today because you've got a copy of every one of your contracts, which customers are up for renewal in which month. Hopefully you've got some customer success, their health, likelihood of churn. Yeah. All of that. And start to predict month by month, which customers are going to churn, which customers are going to accept the price increase, et cetera, et cetera. And then you've got your cross-sell up-sell into the install base. You know, what's your— what is your green, greenfield or whitespace account? So I've got 12 modules to sell. Which customers have 3 and which customers are most likely to take that 4th or 5th? What do we know about their budget cycle, their buying cycle? When might that happen? So I can start to plot those into this big kind of calendar and then anything else you're going to do on natural, you know, when are we going to launch a new product? How long do we think it'll take? To train the sales team on it, to get the first deal, to get the first 5 deals, to make it part of the total bundle? Are we considering M&A? When would that happen in the year and model all of that out? So you think about this annual plan is, you know, I describe it as a big Excel spreadsheet. You know, in practice you probably have some other tools that way, but, you know, it's kind of row by row each of the things that are going to happen and then column by column all of the months of the year. And that's your roadmap that you then start, you know, executing against.

Does that make sense? And there's always an expectation to take that and then do better. Like the, you know, the board and the CEO, they're paying us to do better. And, and I think where, from a lot of the conversations I have, where CROs get jammed up is this is a, this is a very conservative way to plan. You know, the, it's, it's built on, today's numbers, you're factoring it all in. And what ends up happening is CEO goes, well, that gets us to 70%, but I want to grow 110%, or that gets us to 15 and I want 25. So like, give me the 25 plan. Your plan is 25. And CROs don't necessarily want to say, hey, that can't be done, because then your neck is sort of on the, on the line. Oftentimes a CEO will say, well, I'm going to go find somebody who can do it. Whether or not they can or cannot, it ends up just being this is the person who says they can. And so how do you work with a board, a finance team, a CEO to come to a realistic ending spot of where you're not sandbagging as a CRO and giving yourself an easy plan because no one's going to sign off on that versus you're sign— not signing up for something that, uh, you're set up to fail. Like, any tips for that conversation?

Yeah, thank you, because that actually is the second half of annual planning. So thanks for that. There you go. Because you're exactly right. Once you've built, built the plan, it's guaranteed to not be what, what the board or your executive team or your CFO want. They always want something more. Um, so the next thing, and I think this is what can make me an unpopular person at the table during planning, is I'm happy to sign up for another number if we can all collectively agree on what are the bets that we think are going to get there. And so what are some of the common things, you know, are we going to invest in some sales training? What do we think is a realistic performance improvement on that? You know, if your plan is go take a 2-day training class and the sellers are going to be 20% more effective, it's probably a pretty bad bet. But, you know, can we agree and align on, Do we think it's 2% better, 5% better? How much longer after training do we think that's going to take? You know, so that might be one thing. It might be go hire a bunch more people. We've got a huge TAM. Go hire some more sellers. Okay, great. You know, let's align on how many sellers can we reasonably recruit on what time period? How many sellers are we culturally ready to bring into the organization? Because you can't just triple the size of your sales team overnight without you know, cultural impacts all over the place. And then let's have another line in our plan that says, okay, new sellers and the expected ramping performance and on and on and on down, you know, new product launch. We're going to go buy something, you know, we're going to bundle, you know, widget B with every, with every new deal we go forward. We're going to do a 10% price increase, whatever those are, kind of modeling each of those so that then, you know, the bigger thing isn't the plan. The bigger thing is the measurement against the plan, that every week, every month, we then go look at this plan and we say, here's what we expected to happen on all these dimensions. Are we getting the number? Yes or no? And if we're not, which one is missing? You know, I, I have outlived that 18-month tenure in, in most of my career. And it's not because I came to the board every month and said, hey, we're doing exactly what you expected and I'm well over quota. But when I haven't been over quota, I've been able to be really clear about saying, here is the assumption we had going into this month that didn't get met. Oh, we didn't hire those sellers fast enough, or that product we thought was going to launch in April now is not going to launch until September. And so you can actually measure, you know, I'm not just $1 million behind plan, but I'm the million dollars that really was expected on this line item. And then from there, What do we want to do about it? Do you want to accept the new reality? Do you want to put some more money to get that product, you know, coming up faster to speed or what? But I think that's what distinguishes CROs with long tenure from CROs with short. You know, as the CRO who sits in a box and just says, I'm going to deliver a number, don't ask me how. As soon as they miss, they're in big trouble. A CRO who can bring all the people together and have everyone aligned on What are we trying to do? How will we know when it's working? Is going to get a lot more grace than if it's not working out and everyone understands why. You've got the confidence of your board and your team. That's going to give you some more runway to, to course correct, right?

There's more people who were involved in the planning that didn't work, or at least they have a more detailed understanding of the ins and outs, the inputs and the outputs and why they didn't get there. That's really great advice. One of the other things that I tell folks, because I think this happens a lot more in venture where, you know, board or CEO will just like make up a number and be like, that's the one we want. I tell them to use— it's an objection handling technique— use yes and. Say, okay, you want 70% growth instead of 50% growth. No problem. Here's what we need. Right. You know, I'm going to go double the BDR team. I need the marketing team to sign up for a number that's 40% higher. I want to add an enablement headcount to the plan so that we can improve training and productivity. And then oftentimes the answer is like, whoa, whoa, whoa. Like, we can't spend all that much money. But at least now we're having a trade-offs conversation, right? We're not saying sign up for the plan or don't sign up for the plan. We're having a conversation around the details and we're on the same side of the table. And so you're saying, yes, we can get to it, but then also going back with the required inputs, which forces everybody else to do the calculation that we all have to do. And that is a— I think those are— that's a similar approach to what you're saying in terms of bets, but like yes and is sort of the technique. Well, and I like that you're doing the planning with finance and CEO early, as you're talking about.

Right. And that's why you have to start early, because it really is enrolling the rest of the organization. Yes, I'm signing up for a number, but when I sign up for a number, that also means my marketing team is signing up for a number. My HR team is signing up for a recruiting number. They're signing up for how fast and a service level, you know, replacements and all of that sort of stuff. And the more of that we can put in the plan, the better. So I also describe this kind of sort of win creation waterfall and really just within my go-to marketing organization to start with. So I'm a seller— Win creation waterfall? Yep. So, you know, I'm a seller that's got a million dollar quota. How do we get there? Well, if I look over, you know, history, my average deal for easy math is $100,000. So next year I've got to do 10 deals at $100,000. Well, what did history tell me it took to close a $100,000 deal? Do I win 1 out of 3? Do I win 1 out of 4? Do I win 1 out of 5? That then means how many opportunities do I have to have, right? To get an opportunity, how many first appointments or how many first demos did I have to have? To get to that first demo, how many cold calls did an SDR have to have? Or how much money did marketing need to spend on, you know, banner ads and retargeting and all the rest of it? Because it's, you know, the end result, the final number is revenue. But there are all of these leading indicators that can tell us a lot earlier, you know, are you on track or are you not on track? And getting everyone aligned on that so that my goal is the revenue number, that marketing knows what their goal is and everyone else knows what their, their piece is, is really what's going to get us to a successful place.

Yeah. And if that can be predetermined, then it's not excuse-making after the fact. It's, hey, this is what we all agreed to. This is where we landed, ended up. You can speak dispassionately about, hey, it's not marketing's fault, but we can objectively say these were the things in the plan. We missed revenue by 5%. Marketing missed by 7%. So let's go figure out how to make marketing work as opposed to you missed your number. It was a black box.

Right. It's the CRO's fault. Now, and I talk in the book a lot, I actually have a chapter about the marketing organization. So it's the integration of sales and marketing, which HubSpot coined probably in 2006. Through my career, I've sometimes had sales and marketing both reporting to me as CRO, and sometimes I've just had the sales side and a strong CMO as a peer. And then the BDRs or SDRs, you know, have been on either side of that for some time. But regardless of reporting structure, collectively, the marketing org has to agree on what the things are. And then when it's not going well, it's not about finger-pointing. It's just about, can we diagnose the problem and what are we going to do about it? You know, maybe I don't have as many leads coming in, and so I have to improve my win rate. Or maybe you say, yeah, your, your team talent is pretty bad and you're going to do a lot of turnover this year. So marketing has to step up more than you know, more than normal, as long as we agree on what reality is and what the result is, it's really helpful. Yeah. You know, you were talking about metrics in this conversation earlier. It reminds me of a story. I began at a company that recruited me as head of sales and told me that you've really got to fix the sales team. You know, we don't think that they're talented. You're probably going to have to implement a sales playbook or do skills training and really grow the talent of the team. I also had marketing there, and when I got into the organization and we really started to look at all these leading indicators, we realized that actually the sales team was winning about 36% of all of their opportunities. I think that's like world-class win rate. So I pretty quickly said, you know, I don't, I don't think that this is really a sales talent issue. Now, what are the other components here? And we started to look at pipeline coverage. And, you know, although, you know, the marketing leader in the past had come to every board meeting and said, I have hit the, you know, I have, I have created more MQLs ever than I, than I ever have before. The conversion rate of MQLs to SQLs was really, really low. And so our sellers were looking at their SQLs and their coverage for their pipeline was like 1.2 times their goal. And so, you know, they had a really healthy win rate. You know, 1 out of 3 deals, they would have had to win 95% of the deals that became an SQL. And so it really reoriented us because, you know, it was a piece of data that the executive team hadn't looked at. The collective, you know, marketing leadership team had never really looked at that MQLS conversion rate. And it totally changed our thought about what's the strategy. And what, you know, I was recruited to do was, you know, go build a sales playbook, make these sellers better, quickly shifted to a strategy of, How do we redefine what, what is a real qualified opportunity? Who's the ICP? How do we fix the MQL-SQL conversion rate? And as soon as we did that, the revenue numbers came.

Yeah, it's, it's interesting why this is not more obvious. Like, there's just a lack of data literacy in so many organizations. But it's, it's endemic. I had Kyle Lacey on the pod a couple weeks ago, and he talks a lot about this. He's like, the CMO should never celebrate hitting their pipeline number if the sales team is missing their bookings number. That is part of your job. You are signing up for the bookings number and that productive tension needs to be there. You need to have trust as a foundation so that you can have that product. This is like Lencioni's Five Dysfunctions, but you need that trust built that you have a common objective and we're in it together in order to have productive conflict to talk about the issues and problem-solve, then we can all collectively commit and be accountable. And what's the top one in the pyramid? And get results. Right. And oftentimes that's missing. But something that's not in that Lencioni's Five Dysfunctions Pyramid is common language, common data. Is there a single source of truth to tell us to tell us what reality is in the business, which was clearly the case here.

Well, and I think, you know, it's not because we're dumb and it's not because our organizations are terrible, but it is because they're really dynamic. You know, it is hard to get all the information together in one place. And by the time you've done that, the organization has moved on. And so I think, you know, I worked with a leader who talks a lot about the ages and stages of a company. And there's this really important shift that happens from startups where, you know, every employee in the company can all fit in one room and there's a lot of trust and kind of communication back and forth. And, you know, a group that can fit in a room can grow a company to about $20 million in revenue. And then all of a sudden, you know, that has gotten to be such a size that I can no longer know every customer. I can no longer resolve every issue. And I have to start specializing. I have to start hiring other people. To do the things that I do instinctively, or the founder does instinctively, and have it done at scale where 10 sellers, 30 sellers, 300 sellers all do it the same way. That's a really, you know, difficult transition for people to make because as a human in the early startup, the things that got me awards and accolades were being the superhero who said, I can do it all myself. I made the cold call, I did the demo, They love me. When the product is broken, they called me and I fixed it. And that, that was sort of a feedback loop that said, you know, work in this fashion, do more of that. And then all of a sudden, you know, your new context is do none of that, you know, delegate to someone else, solve the problems that only you know how to solve, routinize, standardize, inspect, inspect, inspect. And so, you know, on my LinkedIn, I kind of have this tagline about leadership at the intersection of business and humanity. Just because of the PhD in communication. But really realizing that the humanity part can get in the way of what the business part says is like, of course it's obvious, just look at the data and, you know, have a rational conversation.

Yeah, but tough to be rational when there's people's careers on the line and prestige and status. We're humans, are funny, funny animals in that way. When all of our status is questioned or under threat, we can make incredibly irrational decisions or convince ourselves of a very odd interpretation of the world. Yep.

I'm working with an organization right now. I've just started doing some consulting with them that has suddenly gone through all of this growth and they have one seller who's been there for 17 years and she is She's a great seller. She knows all the customers, but she's also kind of benefited from this legacy history that, you know, her territory's enormous and all the, you know, all the marketing, all of this kind of stuff is working. And all of a sudden we're going through this transition that says, well, wow, now we've got 50 sellers here. And so your territory is no longer the whole United States. It's only this, you know, small sliver of, you know, your particular town. And the first kind of human reaction is, oh, you're out to ruin my life. You know how I'm the top performer here. How are you going to— the transition we had to make is really think about, you know, how do you serve the company and how does your success help the company succeed? And actually, how do we change your compensation and your reward schema and everything else that, you know, you're exactly right. You're not going to have your name on every single deal. Maybe you have a different quota now. You know, maybe you, you have different kinds of things that you're going to be held accountable to that you can still make a lot You can still be a big leader, still have success, but what success looks like is a totally different kind of behavior than what success looked like 10 years ago. Yeah. They're tough kind of people issues to work through.

Yeah. And it's interesting going through these stages. So, I've been in two sort of hypergrowth environments and, you know, Reid Hoffman talks about this in Blitzscaling, going from like a family to a tribe, to a village, to a city, to a whatever else. The globe. Yes. Yeah. And being able to understand how our role in those places changes and how we need to adapt, but then how this system works within itself. People talk about Dunbar's number a lot. You can only really have direct relationships with a certain number of people, 150 for Dunbar's number. And so then how do you communicate and share information and keep people aligned when they can no longer do that on a one-to-one basis? Okay. Well, now your systems and structure have to drive alignment. Your culture and business process needs to deliver that outcome of engagement and inspiration that maybe the CEO played on a one-to-one basis at some point. It's very challenging for folks to get through, which is why I think is part of the reason why the tenure of most CROs is quite short because it's very difficult to— if you're growing 2x year over year, that business is so different every 12 to 24 months. And absolutely.

And I think our colleagues in people operations or HR, they have a lot to say in this realm as well. I think one of the— I tell this story in the book too, in the chapter on recruiting. I made a huge mistake early in my career. I was at a— I was at a company that kind of midsize, maybe, maybe $50 million in revenue, maybe a little bit less, probably. But the— I was recruiting a new role and a manager in the company said, here is this guy. Who, you know, came from Salesforce or Oracle or somewhere, somewhere enormous. I've worked with him in the past. He's always been a sales club qualifier. He's like 200% of quota. He's a wonderful seller. You should go recruit him here. And, you know, our recruiting process and the recruiting process I wrote said, you know, what are we screening for? Are you a tech seller? Have you done B2B tech? Have you made your quota? If so, come on board. And what we missed was all of the context about when you were at whatever that big company was, you had this huge BDR team that created all of your leads for you. At our company— who you were, right? Yeah. At our company, we didn't even have a BDR team yet. So you were going to have to self-source like 80% of your stuff. Well, now this great talented guy comes on board and he doesn't want to do that, or he hasn't done it in a long time. He doesn't remember how to do it. And then, you know, our first couple of months of conversations in one-on-ones and coaching, he starts telling me, like, you know, the best deals I've ever had have been through, you know, channel partners who refer the business to us. You know, when you've got a trusted channel partner that says you should go buy this product, you know, that's the best deal.

Excellent. We don't have channel.

We don't have a channel. Right. You know, another great thing that's always happened is when you can cross-sell new stuff into an existing install base, like those are easy sales. Great, we're a one-product company right now. And so, you know, 6 months later, he was leaving the organization, and I felt like I failed him. I know he looked at it as, you know, this total blemish on his resume that, you know, as this huge top performer, and then I had these 6 months that, you know, were just wasted. I felt badly I wasted his time, and I learned this huge lesson that, you know, you've got to start by thinking about what are the actual skills You know, it's, it's not just the results and the metrics, but what are the skills in the context to succeed here? And how do you write those into the job description so that you're, you know, you're being really candid up front? Like, I want great top performers who are also really comfortable with self-sourcing, who are comfortable. We're an underdog environment. We're the product that no one has heard of before. And there's a much bigger player in the space that you've got to be scrappy and overcome. And there are people who have those skills too. That, you know, eventually we found a great seller that fit that profile, but it wasn't the fault of the sellers that we hired. It was the fault of me as a manager for not screening for the right kinds of success metrics.

Yeah, I do this in our job descriptions, and when I post roles on LinkedIn, I talk about like, this is what you need to know about selling at Owner. We sell to blue collar, it's 90% phone, it's highly transactional, blah, blah, blah. And then we go, I go through the whole thing because I'm trying at the very top of the funnel to allow people to self-select out. They're like, oh, I'm going to be on the phone 90% of the time. Nobody's going to respond to my emails. Like, but I'm really good at emails. Okay, well, then there's a better place for you. And it's been interesting. A few people have now borrowed this template and are using it for their own hiring, which I love because I'm trying to bring more transparency into what I do. I'm strongly advocating that people are highly transparent. Because it doesn't serve you to convince somebody to come work for you that's not going to be a good fit. That's right. In my interview process, I'm the final step for like rep hiring, for example, like a final check. And in every one of those interviews, I say, hey, look, you know, you've probably heard all of this awesome stuff about Owner and, you know, we got the best product and all these awesome people. And I'm sure you're really excited. But here's the thing you got to know that's like not for everybody. And I make sure to hammer into them really what they need to understand about the environment that's going to turn people off. Hey, we're really competitive. Every other person was a President's Club performer at their previous thing, and now they're all here. So you're probably not going to waltz to the top of the leaderboard, and there's a lot of competitive pressure, and we're a pretty intense environment. We expect a high work rate. We do not miss. We are a don't miss culture. And people, you can see other, so you can see people's eyes light up sometimes. They're so excited to just be around other dogs. They want to be around in that world. And some people, you can see them sort of react. They're like, that sounds way too intense. I don't want to sign up for this. And the transparency is just so critical.

And you can have a successful career in any of these environments. You know, a lot of times, um, I've been through a lot of mergers and acquisitions, and a lot of times I find myself talking to sellers about, you know, you have been the top performer in a, in a small company that, you know, you're $30 million in revenue and, you know, you personally, you have a personal relationship with the CEO and everybody knows your name and you're a huge voice. And now you're going to go get acquired by this company that's $300 million in revenue. The CEO is not going to know you personally. You're not going to be the biggest voice in the company. Now, there's other good things that come with that, but it's going to be a very different experience than what you're in today. And there is no shame or nothing wrong with saying, I've been grateful for my journey so far. I love this journey, and I don't want to continue on that ship. I actually want to go start over and do another startup and come back. And there are some people that make that transition really, really well. And that's good too. You know, I know that I am never going to be the CRO of Salesforce or some big, you know, billion, billion dollar revenue companies. I'm really, really good at $100 million, $300 million kind of sized companies. It's going to be a lot of brands you've never heard of before. That's okay. It's, it's work that I love. And there's, there's no shame in not wanting to do whatever the rest of the world might think is like the next big progression looks like.

Yeah. Ryan Holiday writes a lot about this, accepting hard truths about the world because we can't wish the world was somehow different than it is. We have to accept reality and then make decisions from this reality. And he talks about that there's some things that are immovable and pain and suffering comes from wishing that immovable things can be moved. And you see this all the time. It's like, oh, well, this should be this way or that should be that way. It's not. It's not anymore. We got bought. We're a $500 million company now.

So that's awesome. And let's celebrate the past for what it was because it was amazing. We can mourn and be sad about it. And now we need to move on to the next thing, which is going to be exciting and celebrated in a different way.

Yeah. I want to get into reporting and inspecting before we run out of time here. So, absolutely. I loved that quote, inspect what you expect. And you mentioned sort of cadences between rep and manager, manager, CRO, CRO, board. So how do you think about building the right cadence? Because this can look different for different stages, but like, what are the core principles of building the right reporting and inspection framework? Yeah.

And I do think this is going to be another maybe distinction between venture and PE or startup and kind of midsize company that I've worked in. I do really well with a revenue ops person or maybe a rev ops team that can really manage lots of data for me. And I like to get out a weekly flash report, I call it, that looks at all of those leading indicators of what we laid out at the beginning of the year. So, Imagine a chart in the book. Obviously you can download it, but imagine sort of a look at your quarter that says the, you know, across the horizontal axis is every week, week 1, week 2, week 3, week 4. So what's the revenue target we're trying to hit at the end of this quarter? What did we sell in week 1? What did we sell in week 2? How did that kind of grow up cumulatively? How does that map against a similar line of what did we predict for the year? And then what does that look like this quarter, last year, the most immediately preceding quarter, so that we all kind of know on a new logo, are we on track or aren't we? You know, there are a lot of businesses that, you know, close all of their— close all of their revenue the last week of the month or the last week of the quarter. And I think we can correct some of that. But there's also some cyclicality that that's just the way the world works. If you're a CRO who can see data that says here's the shape of what we're expecting and we always expected, and here's what last quarter and last year, you know, always showed it. You're a lot less nervous when you've got week 1, week 2, week 3, we haven't sold anything, than if you don't have any data and you're just promising we're going to get there.

Especially when you can view that same chart by pipe, pipe moved, pipe created to understand the inputs. Exactly right.

And so also same kind of flash reports on, you know, renewal data. We set a plan that said these were the customers that were going to come up for renewal this month. And we set a plan that said, you know, maybe one of them is going to churn, but the rest of them aren't, and they're all going to take a 3% price increase or, you know, whatever that is. How does— how is reality matching up to— have we received renewals on time? Have we received the price increases on time, etc., etc.? And, you know, again, every element on that annual plan, new product sales, like, did the product come to market? How long did we think it was going to take to get the first one, the second one, the fifth one? Were we going to give it away? You know, all of that stuff. And so I find myself often with a really strong RevOps team who can make all of this, you know, kind of happen automatically. That usually it's a Wednesday for me, you know, all of this, you know, and it's really only like 4 slides of data. These 4 slides all come out that I see it, all of my sales managers see it, the rest of the C-team sees it, and at least some portion of the board sees it so that then we can have a conversation not about forecast the weather and is it going to rain or not, but we can have a conversation about it is raining. What size umbrella are we going to, you know, or how long are we going to stay in the house? And so it just raises the level of conversation and makes us all better.

And then how does that cascade into your, like, team meeting and one-on-one cadence? Is that Wednesday flash then, like, discussed in your meetings, or are people pulling stuff out of it? Like, how does this tie into the meeting cadence? Oh, great question.

Yeah. So it's actually the culmination of it. So it's, you know, early in the week, I start with my one-on-ones at a seller level on You know, let's look at your pipeline. What deals— and I talk about forecasting with a couple of different numbers. You know, is every deal has, you know, some stage in the CRM system, has some close date, and it has some dollar amount. Now, are you committing that deal on that date and that dollar? Is it a best case for you or is it just in pipeline? You know, you're going to lose it or you don't think you're going to win it. And how does that get rolled up to managers who then have a meeting with the CRO on, you know, the manager forecast. What are we committing? What's our best case? And then, you know, we ultimately forecast something in the middle there. You know, the commit number is, you know, a very conservative— just like we talked about with annual planning, like, you know, because you can actually name the deal. The best case is the upper limit of the best you possibly could do if every star aligned and we had perfect execution. And reality is going to lie somewhere in the middle. And so You know, we forecast with that in mind and then we have that sort of discussion. And then when the flash report comes out, you know, it summarizes, you know, here's our, here's our forecast, here's our performance, and are we ahead or are we behind? Then lets us have meetings on Thursday and Friday on a strategic level about, you know, 3 weeks in a row we're really not getting the new business or we're really not getting the MQL/SQL conversions. Now let's have our leadership team and the best minds come together about, You know, what can we try differently to get a different outcome? And I think a lot of organizations spend their time chasing their tail just trying to, you know, as you said earlier, like, you've got to have, you've got to have data literacy and you've got to be ready there. A lot of organizations spend so much time trying to find the number of what was closed, what wasn't closed, what did the rep say is committed or not, that they never get to have the discussion about what do we do about it. You know, if you have a good process, you have a good team, increasingly a lot of technology. You know, I'm a huge fan of Clary and their AI stuff. You know, the better you can get on having tools and processes that bring you the data immediately, then opens up the rest of your week to have discussions about, so now what do we do about what we see?

Yeah, I just did a webinar before we hopped on with Superhuman, the VP of Sales Andrew Johnson and Kevin Dorsey. And this is like one of the things that I hammered on and on about. You can't fix your business unless you know what's happening. And so it's, it's, it, you have to nail the instrumentation and the discipline to teach people to use the same things in Salesforce the same way. And it's rolled up on the same cadence and there's a level of rigor and operational excellence that's needed as an input, or else you're really just guessing. And so, like, for us, we run a monthly MBR where we do a lot of this, like, deeper inspection and problem solving. And we have a grid of every segment across one axis and then every sales stage from top of funnel all the way through to handoff and, and successful customer launch. And, you know, we have targets for every single one of those squares and we can see red, yellow, green. And we know that the reps are doing things in a consistent enough way. And there's very clear instructions in Guru and Notion of how we want things to be done so that we can rely on that information to make great decisions and then track it week over week over week because otherwise you're cooked. Like, you don't even Don't even spend time trying to problem solve until you can have your baseline of confidence in the inputs that are going into your Salesforce and how it's getting used and the integrity of your data. Just fix that first before anything else.

And to be clear, I mean, this comes, this comes with overhead and cost, you know, having an ops team, it's people, it's, it's spend, there's technology. And so, you know, this may be also why I talk about MySpace as like the private equity company in, you know, a certain revenue range. You— I go talk to founders in Chicago. We've got this incubator, 1871, which blows my mind. You know, little 3-person company founders with an idea. There's no way they could afford to have that rigor in their business yet because they're, they're just trying to make payroll. Um, so you have to do something different there. Um, and I suspect there are VC experts who can tell you all the, you know, the best tips and tricks for that too. But in my niche, it works really well. And then let's extend this out because, you know, we talked about HR issues. This also, if it's, if it's working really well, becomes a coaching cadence for your sellers and every member of the team where I like to begin every quarter having some sort of a performance plan. Now, I know that word performance improvement plan has a bad rep. You know, usually it means like it's a shortcut for I'm going to fire you in 90 days and, you know, legal wants me to cover it. I actually think every seller should have a performance improvement plan. It's not about firing you. It's about saying, let's begin the quarter with a conversation and look back. What went well? What didn't go well? Of course, really easy. Did you make your number or didn't you make your number? But then look through that whole win creation waterfall. If you didn't make your number, why didn't you? Were you not, you know, not winning enough? Are you not converting enough? You're not putting enough leads in, whatever that is. So now let's talk about our plan for the next 90 days. That's just going to improve the performance in your territory. What are the things that we need to put more focus or put more effort on or more investment behind or whatever? Maybe you need to prospect more. Maybe you've got more than enough pipeline. You just got to work on negotiation and close. And let's come up with that development plan that 90 days from now we can come back and look and say, you know, yes, did you make your number or not? Did you develop that new skill? And what's the next skill that we need to refine? Because we all constantly need to improve and get better. And so it's not about, you know, you're in trouble or I'm bringing HR in or you're gonna, you know, get fired. It's literally, how do I improve your performance so that we all, you know, our, our boat collectively rises?

Yeah, we do the same thing. We've got a monthly report card that the managers and the reps work on collectively, and they, they select together what we call secret sauce. Like, this is the, my, the secret sauce I'm working on this month. We sell it to restaurants. It's essentially the number one skill that will move the needle on your results. And we try to make this rep-driven. The rep explores their data and decides what they want to work on. And if they're way off, the manager can sort of course correct. But that is, unless you have that coaching plan in place, then it's too hard to get better every month. Um, okay, I wanna move to a quickfire. Okay. Before we wrap up. So, um, first question, what do you think separates a good CRO from a great one? One that it's like exceptionally drives results above what the market might freely give.

So I think a great CRO, you know, all CROs are probably inspirational people that teams wanna follow. I think the great ones recognize it's not about them. It is not about putting them in the spotlight. It's putting your sellers in the spotlight and showing their sellers how their day-to-day activity connects to company success. So being able to have that whole ladder that I didn't just give you a 20% quota increase because I'm a mean guy, but really showing them that like strategically, here's where the company is trying to go, you know, We're, we're looking at this growth rate. We're going to get there because of, you know, the new product or the new marketing or whatever. And your piece in the cog is this. And so the better— I think the best leaders can help frontline reps understand a direct connection between everything in their life and the company's bigger picture. And it also inspires them that the company succeeds because I, as a rep, succeed in these ways. Yeah.

All of the data would back that. The— all of the data on employee engagement would show that this is one of the single one of the biggest needle movers is help people find a sense of purpose and connection to the mission. So that's a good one. What's the advice you find yourself most frequently giving to other leaders, you know, people in the portfolio, CROs that are figuring this out?

Yeah, so I'm constantly telling folks to build a plan and measure the plan. And I think the biggest piece of advice is also recency and firsthand experience is not data. So, you know, you see it with sellers, you see it with, you know, a leader who's gone out on a sales call recently and the one customer they heard this week said your price is too high or, you know, named some competitor and said, I like this competitor better. And all of a sudden, you know, they're operating saying the whole market believes our price is too high. We're way too expensive. Yeah. You've got to drive back in the data and say, you know, of the 400 Sales calls we've been on, we heard that competitor's name twice. You happen to be in the room for one of them, so it feels this big to you. Set your emotion aside, set your recency aside, ground it in the data, and what's the fact that you can actually prove? And then you won't swing the business too far in one direction or the other without reason. Great.

What's the hardest lesson you've had to learn as a leader?

Humility. Owning mistakes and being really transparent about when I've got it wrong. It is easy to get in a hero complex that, you know, it all rides on me and everyone's looking at me, and it can be hard to own your failures along the way. You know, again, this kind of business and humanity thing, like the human always wants to brush that under the rug. Bad news doesn't get better over time. And so it's been really hard, but it's been a really good lesson for me that the earlier I can admit I was wrong, I made a mistake. I don't know what we're doing. I need help. It's always been better for me to get that stuff out earlier.

That was also a hard one for me to learn.

Yeah, absolutely.

Last question. What's the best thing you've read in the last 12 months? You can't say your own book, but no, of course not. That at the end.

Um, let me have a pause on that for a second. Okay. Ask me the question again.

What's the best thing you've read in the last 12 months?

Uh, so I've been talking to a CEO of SBI, uh, Sales Benchmark Index, uh, and he introduced me to this book called Halftime, which is really about, um, or it's something about halftime. It's about finding purpose in the second half of your life. And so, you know, the idea is that you've gotten to some level at the age, you know, that I am right now is maybe late 40s, early 50s, and you're halfway through life. And how do you think about how you're going to make the best use of the next half of it? Is it going to be continued business success? Is it going to be something philanthropic? It might be a shift in direction, but are you going to bring the same rigor and excellence that you brought to the first half of your life to the second? I love that.

I'm not too far behind on that halfway point, so I might have to pick this up soon. This is great. So, I mean, I've got tons of cool takeaways here. I think you've really hammered home the need for rigor in planning and inspection of the plan and having the data to go back to it. I think that's a really good message for folks to take away, especially as we get into the new year as people are executing on their plan, what is their rhythm to revisit? What is their rhythm to revisit? How are you performing against the things that you architected in your growth plan? That's a really useful takeaway. So how can people find you? Where can they follow your writing, your content, and maybe tell people a little bit more about the book? Sure.

Best place for me is on my website, jdmillerphd.com. You'll have links to the book, which you'll also find on Amazon and Barnes Noble and all the great bookstores. You'll also find me on kind of every social media as JD Miller, PhD. So you'll find that on LinkedIn, Twitter, Facebook, and so on.

Very cool. Well, this was awesome. And the book comes out January 14th, but you can preorder it now.

Preorder it today. It'll be on your doorstep first thing in the morning on the 14th.

There you go. I think folks are going to listen to this and be pretty compelled to listen because I took a ton away from this conversation. JD, this was— these are really helpful frames. Frameworks. So, uh, I'm excited we could do it, and thanks for coming on.

I appreciate it. Thanks for having me.

Thank you for listening to the Revenue Leadership Podcast. If you enjoyed it, don't forget to subscribe, and you can find a link in the show notes. And be sure to leave a 5-star review, share it with your network, and please join me next Wednesday for another great conversation.