E29: Mastering Sales Forecasting: From Anxiety to Accuracy with John Moran, CEO Prevu , ex AVP Salesforce

John Moran is a high-performance sales leader. He is the CEO of Preview, an AI application which is going to transform the world of forecasting. John started his career in a sales role in Siebel and then grew through the ranks at Oracle and spent 15 years closing deals quarter in, quarter out. And then moved into leadership at companies like ABB Ventics, and then spent 10 years at Oracle, finishing as an area vice president and living through 60 quarters of sales forecasting in this environment. So John is going to share some amazing lessons on some of the challenges that exist in organizations around sales forecasting, what it means for teams and for leaders, and how to fix it and build an engine that creates accuracy, that creates consistency, and probably most importantly, peace of mind for everyone involved. So let's jump right in. So John, who taught you about forecasting? What's your earliest memory?

Gosh, I mean, I have strong memories of being a sales rep, an individual contributor, and forecasting. At Siebel, we used to have a Monday morning 8:00 AM forecast meeting. Which was a broader meeting than just the forecast, but the forecast was the primary thing. So, it used to make for a few anxious Sunday nights having to show up there. The culture at Siebel was very strong around the accountability of the numbers. So, you know, I guess I learned in those days that, you know, even as an individual contributor, I had a role to play and I was going to be held to account around those numbers. As a sales manager, I've experienced a full range of forecasting stories. And, you know, I think I've had teams with highly varied backgrounds in forecasting. So sometimes people who really take it seriously, understand the importance, and appropriately conservative with their forecasting, to people who, you know, really make numbers up on the spot and do or say anything to kind of relieve the pressure in the moment. And obviously that makes the job of a sales leader quite difficult to juggle all of that.

Yeah. So, you know, based on that, what would be the top 3 to 5 challenges that you have faced as a leader when it comes to creating an accurate forecast?

I mean, the biggest single challenge is interpreting the information that you're receiving. And, you know, I think when I talk to people around the sales discipline in various industries, the amount of, you You're in complex selling and enterprise sales, the amount of gut feel, the amount of manager judgment that's required to form a forecast is high. And that's because the data points that you have are inconsistently reliable, you know, reliable, they are sometimes incomplete. You've got data in systems, you've also got data, verbal information, feedback from people on the ground, those sorts of things. Sometimes you're close to a deal or close to a particular sales team, and that gives you some insight that you lack with teams that you're not as close to. to. All of that requires a huge amount of interpretation. That's, that's a huge challenge, that subjectivity and judgment. And it's particularly tough when you've got people around you that you don't know well, that you haven't had a lot of history with, and you don't understand their habits and how optimistic, pessimistic they are when it comes to forecasting numbers or calling the outcome of a deal. So if you don't know them well, then you find yourself trying to make judgments about their judgment. without really having any history to go on. And that makes it very, very challenging. That's probably the number one. Next couple, one is accountability. I find that accountability is always high at the top of organizations. If you're publicly listed, you're accountable to the street. There are always investors that want to understand where sales are at and where you're going to land for a given period. So anyone near the investor level, anyone near the top of the organization is highly accountable around where the sale where the sales number lands. That accountability tends to dissipate further down in the organizational structure and can be almost nonexistent from a forecasting perspective at sales rep level. Yet they are the people that understand the deals and the revenue stream better than anyone else in the structure. So that accountability and lack or inconsistency of accountability across the organization is another big challenge. And number 3, I would say, the lack of a systemized process. So a lack of a forecasting process. It gets left to individual leaders to create a process. Some have forecast meetings, some don't. Some have spreadsheets that they use outside the CRM, some don't. Some people try and use the CRM as a forecasting tool. And in one organization, you can have all of those techniques in use to varying degrees, with varying degrees of rigor and habit and practice. And that lack of systemization just leads to Randomization leads to error leads to inconsistency. So, I see that as a huge issue too.

And that's so typical of organizations that I'm hearing and I'm talking to on a daily basis to sales leaders who the moment we are heading into the end right now, the end of Q2 for a lot of American-based companies, and you can sense the stress, the frustration. it's all playing out. We're in mid-June. People are closing deals. It's all happening. So, the question that follows on from these main challenges, what are some of the symptoms that you see in organizations which lack the systems, the experience, and how does that affect the leaders who are carrying that responsibility at a personal level?

Yeah, great question. Well, I've touched on the accountability. The accountability is high. at key levels in their company, at the top levels of the organization. If you're the CRO and, you know, reporting into the CEO, or if you're the CEO reporting to investors and the board, the accountability around where the sales number is going to land for a given period is immense and the pressure is huge. And so that variability, inaccuracy, and inability to predict has a huge impact and it can shape careers. You know, your inability to do that just really can hurt. And you make a really good point about what the industry is going through or what industry is going through now in various segments. If you're an American-based company, you're coming to the end of Q2, it's been the tech environment, which I've spent my career in, it's been a more challenging sales environment of late. That tends to really expose these problems. When growth is high, when deals are more plentiful, when the pace of your transactions is faster, you've still got to be able to predict, but there is more there to cover you. More things happen out of the blue, more little bluebirds will pop up mid-quarter that help you feel gaps that form in the forecast, that momentum papers over a lot of cracks. And when things get tougher, like they have been more recently, that tends to expose problems in the system. It's much harder to predict a business that is not growing fast than it is to predict one that's just rocketing. So that's another key point. The bottom line though is that predictability is crucial because expectations are set through the numbers that are put into the forecast. And those expectations, the closer reality is to where those expectations have landed, the happier investors are, the happier the market is, and at the end, you know, will filter down into the organization. But the other piece of it, which, you know, I'm sure we'll go into, is that the discipline of forecasting feeds other disciplines that actually improve more than just your accuracy in predicting your outcome, They improve your win rates. They improve your deal progress. They improve your ability to actually execute the deals, not just predict whether they're going to close or not, but actually execute them. And so, there's a byproduct of that discipline, which is also really, really crucial.

Okay. So, we want to go to the promised land, but we'll take a step back. And the next thing I want to ask, because I don't see enough sales reps and sales leaders talking about you know, they've been trained on different sales skills, but forecasting for the rep and forecasting for the manager doesn't seem to come up as basic 101 training. Yet people's careers can be made or broken. Credibility can be made or broken on training on forecasting. Tell me a little bit more. You know, have you been trained on it? Was it, was it just coaching in the job?

Yeah. I truly don't believe I've ever done a formal training course on how to forecast. I am seeing them emerge now in the market in sort of a sales enablement side of things, how to forecast. But I've spent a career in, in selling and I've not done a formal training course. So I've learned everything I've learned has really been through osmosis. And it is staggering, as you point out, careers can be made or broken by how good you are at this, you know. So at a manager level, it's a core, it's a core skill set. If you're leading a sales organization or any part of a sales organization, your ability to forecast outcomes, to take the information you have and provide an accurate picture of where the month or the quarter or the year is going to land. It's a crucial skill set. It's critical. At a salesperson level, I don't think it's deemed as critical, and I think that shows. I think the— my personal view is it's one of the core competencies of salespeople to— because your ability to predict the outcome, your ability to forecast is tied to your ability to predict the outcome of Your ability to predict the outcome of sales opportunities is fed by your analytical skill set, objectively viewing your opportunity and understanding its probability to close. And if you can't do that well, you're probably not going to choose the right strategies. You're probably not going to objectively identify risks or timing issues or other aspects of your deal that need to be addressed, where tactics and strategies need to be employed in order to overcome obstacles or to steer the ship straight. So, the skillset to forecast is actually a core sales skillset to win, not just to predict, but to win. And so, I do think that that analytical skillset that fuels accurate forecasting is a core sales competency that we need to invest much more in skilling up people.

And just like you said, I would imagine, and I started my career as an AE. Did that for a number of years, then moved into sales management. And after managing managers, started my journey in recruitment. So I come at this from a user or an individual perspective, is that if somebody had put me through even a 4-hour session or a 2-hour session on forecasting and why and how, and given me a scorecard, a model, it would help me balance that optimism with the analytical sense because it would then help me to provide far more information back to my manager around the why behind the what that was coming through. So I think if it's a grassroots problem, then you need a grassroots fix for that problem. Let me— next question around this is, in terms of the impact of models, you hear TAZ, Med-PIC, What's your view? Is this important? How does this help teams become far more— because we are talking about consistency, accuracy, and basically ensuring that you remove the emotion or the personal stake around managing the pressure around a situation, actually provide information that's valuable.

Yeah. Great question. The first point I'll make is that Models have enormous value and all models are wrong. And both of those things are true. And it's a truism of models. Models by definition take the complex and simplify them. And of course they oversimplify them. So the first dismissive point that often gets made about these types of things is, oh, it's way more complex than that. Yes, of course it is. But do they have value? Yes, of course they do. And so I'm a massive believer in using models to create a standardized way of drawing people into an objective analysis of where things are. So there are people out there who are champions of MedPic or champions of TAS or champions of various other methodologies that have been used over the years. All of them have merits, all of them have weaknesses. It's way less important in my mind to which one of those you choose than it is to choose one and implement it rigorously and consistently across your sales organization. Because once you've done that, You've created a framework and then you build habits around that framework. Communication becomes easier. Objectivity becomes much more the rule rather than subjectivity. And if you do it well, it provides you with an incredible way to analyze where each individual opportunity is at and what you could potentially do to mitigate your risks or strengthen your chances of victory or speed up the sales cycle or whatever it is. needs doing. And of course, you know, in enterprise sales, forecasting's in the end all about being able to predict your deal outcomes, being able to understand the probability of sales outcomes occurring within a given timeframe. So that's coming back to your bottom-up, you know, sort of grassroots type approach. There's probably nothing better you can do to improve your forecasting than to rigorously implement A model that allows your teams to consistently assess where each individual deal is at across the organization. That'll fuel lots of things, but one of the things it will fuel is more accurate forecasts.

And that brings me to my next question because, you know, on one hand, you need people to be optimistic and expecting good things as they create pipeline. They organize their weekly activity. pursuing opportunity. But at the same time, you need them to be pessimistic or realistic in providing— so it's this analytical forecast. So it's almost like Dr. Jekyll and Mr. Hyde. You've got these 2 people. You want this person who's believing everything is going to go well and everything's going to go according to plan. And that creates the prospecting, the driving of the pipeline. Whereas you've got this other person who Believes everything is going to go, you're going to lose. How do you balance?

Well, it's not too much to ask, is it? We can just have people who are brilliant at both things. And, you know, once in a while you find a unicorn, you know, who's, who's actually analytical, structured, organized, disciplined, manages things in a systematic way, and has all of these other amazing creative, optimistic, you know, self-driven, self-motivated skills that, that make them good at the persuasive art of selling. So Generally speaking, what makes you good at persuading people to part with their money to buy what you are selling is a set of natural character traits that are not all that well disposed to being structured, systematic, and methodical in how you work. So you've got this working style which is really effective at the selling piece, and it works against the structure and analytical piece. So that is just a true thing. And there, look, there are more structured people and less structured people, but, you know, the sales discipline is biased in favor of people who are much more free-flowing. And that's a good thing, but it requires us to help them, right? That's what it really requires. We need to help the people with that skill set who don't naturally do these structured things or manage things in this way, or too optimistic and too free-flowing and too gut feel and not enough science and too much art. And we need to give them a structure, a system, and a toolkit to enable them to, when it's required for them to be analytical and objective and to use the data at their disposal, and that we're arming them with the right tools. I don't think we've done that well enough. I think the tools that are available to them, you know, we ask a lot of them, but we don't provide them with enough help in doing that. I think there's a huge opportunity in the sales profession to improve in that area.

So on that note, tell me a little bit more about how can technology solve this problem where you have an emotional individual who is excited about opportunities, is protecting their interests, is telling you what you want to hear when the heat's turned up, But you bring in a system or technology to help create accuracy systems. Tell me a little bit more about that.

So the goal is accuracy. And if the goal is accuracy, what creates accuracy? If you think of anything in the world that is precise, that is accurate, what sits behind that is a system, a reliable, tested, proven system. And the more robust that system, the more precision gets created. So if our goal is forecast accuracy, if our goal is to really understand where we are in our business and where we're going to be, then we need a system, a really robust and rigorous system in place. And system means, yes, technology, but it also means culture and people and business process. All of that is collectively the system. But technology has a really amazing role to play, and it's getting, you know, the richness of what's available now from a tech perspective means that a lot of the hard problems of a complex selling, of enterprise selling, which were always deemed too hard to systemize, too hard to codify, I believe within the realm now of modern software to be able to salespeople, sales leaders with insight, With a system, firstly, with a system to drive the sort of discipline and regimen and structure and objectivity we talked about, to use a system to kind of manage and enforce that better rather than kind of imagining that that's going to happen. And if we plug in this forecast number in there, we'll assume that all of this analytical work has taken place before that number got plumbed into the field. Well, instead of that, let's arm People with the data and the process to guide them to the right answer before the number gets plugged in. So there's that piece of it. And then there's all of the other richness around it. Once you start to build up a run rate of really high quality data supporting that forecast, then the outcomes that follow can be correlated back to the datasets that existed upstream. And suddenly you've got this incredible rich dataset that can fuel an AI engine that can start to tell you what is going to happen in your business based on the history it's seen in similar scenarios. And I think that's incredibly powerful. Not only powerful at a leadership level, obviously massively powerful there. Tell me based on all of my data where I'm going to land, obviously is an incredible data point for a sales leader at any level in an organization. But even for a sales rep, Being able to say to them that opportunities with this set of attributes at this stage of the sales cycle typically took this long to close from this point, or here are the top 3 steps that you should take in this deal because we've seen those steps work in like sales opportunities. So the opportunity is enormous here, but it requires It requires more than putting in a bit of technology. It requires you to buy into the idea that systemizing this is going to create the value. And the systemization involves the software and all the surrounding business practices that go with it. That's the key.

Yeah, I really like what you said about the key principle here that anything that is accurate, predictable, consistent in our lives is based on a system. And that's just a massive takeaway for people who get surprises around deals, surprises. And it's that anxiety. So just like you said, the Sunday night anxiety for the Monday conversation that you're about to have. So in terms of What are some things that leaders should be doing, the key building blocks to heading towards that predictable, accurate forecasting organizations and baking that in as a way of life?

Yeah, that's a good question. So, first thing to think about is what model are you using to assess your sales opportunities and determine likelihood of successful outcome? What model is being used for that? For most organizations in the world, if they're really honest, it is instinct. It's sales leader instinct. That's the most significant contributor. You've got obviously sales account execs, they've got their own set of instincts and judgment around it, but it's typically the judgment of a manager, either first-line leader or second-line leader, someone close enough to the transaction to be able to judge it. Um, and moving towards a model-based approach, a structured-based approach to that, is a, is a, is a very important step. Because what that enables is for you to— for individual salespeople to do self-assessment on their sales opportunities, to do them in one-on-ones with their leader, to do them as part of a team review, and for everyone to have the same language and the same criteria, the same rules and approaches, means that all of that assessment can be done much more objectively and is much more likely to lead you to an accurate view of where your opportunities are at. And that's the key building block. If you're in enterprise sales, the building block of your forecast is your ability to predict the individual deals. So that's the first piece. The next piece is you need to build a forecasting cycle that is discipline shared by everyone in the sales organization. So it needs— it's a forecasting culture, really. And that involves a level of accountability about the forecast. It involves, my view, weekly review of where things are at and a validation of where you're predicting the numbers are going to land at all levels in the organization. So that, that becomes just a rhythm in the business. So it's not something you do occasionally. It's not something that managers do on their own without the participation of the individual contributors. Everybody's part of that cycle and understands their role in it. So that's a key second key piece. And probably the third key element is something actually I wrote about on— posted a post on LinkedIn yesterday about this, or Tuesday. And that was that opportunity review, deal review, which is the old name used to use for the deep dive. I described it as, you know, a ritual beat-up session when I was early in my career. That's what it was like. If you got asked to do a deal review, it was basically a public flogging, and you just tried to get out of there with your dignity intact. It's changed. And a lot of insightful and progressive sales leaders have built much better approaches to this. In fact, Lee Hoxie, one of my former colleagues at Salesforce and a great, great leader in the software industry, calls his deal clinics, creating a sense of collaborative assistance. Come with your biggest problems in your deals. Let's workshop them. Let's contribute collectively. Let's, you know, the goal is to identify and mitigate risks to us winning this sales opportunity, uh, and we're all in it together. So that culture of review is also really important. It gives you immense insight into really what's going on. And, you know, you may not put every deal in your portfolio through this. You probably, you know, you'd cut it off at a certain size. But imagine a scenario where you knew that every deal above a certain level in your organization was getting this level of rigorous review on a really regular basis. And the knowledge gained from that was flowing up through the forecasting process, but also we were mitigating the risk of losing these deals, right? So we're strengthening our sales effort at the same time as strengthening our forecast. That, to me, that's like the flywheel of value that you get when you put a system like this in place in a sales organization.

This has been a masterclass. I could keep asking you questions and it's been fantastic. I wish this was the reality In over the 100 organizations and 250 leaders that I'm working with, I see some who do it well. I see others who don't. The cost of stress, health issues where it isn't working well has pulled careers apart, relationships apart. I mean, there is a real ugly side to— We have the good fortune of working in an industry where People tend to get paid a lot better than other industries. And there is a cost that comes along with the imperfection of the lack of systems or the lack of rigorous methodology in forecasting. So I have one more question before we wrap up. Tell me a little bit more about your current gig at Preview and why you've chosen to— you've had a stellar career at Salesforce. What is your current mission and what are you doing at Preview?

Yeah, well, so I mean, a big part of the decision to join Preview was my desire to experience taking a company, you know, from small scale and scaling it to success, still in the software industry and in a domain that I really understand, which is this domain we've been talking about, forecasting, etc. So Preview is a really exciting idea. And product. And the reason I'm so excited about it is because it's amazed me for really the last decade that this systemization of the forecast is sort of this area that's been a little bit left alone by the big CRM vendors. Salesforce in particular just didn't really solve for that. And spreadsheets still abound. Spreadsheet is the premier tool used to construct and calculate what the forecast should be in the vast majority of organizations around the world, no matter what CRM they use. And so it's, there's a gap there. And with everything that technology's brought, you know, it's a complex job forecasting, but it's so crying out for systemization. And so that's what Prewview is all about. It's systemizing the forecasting process, making it elegantly simple, drawing in the whole sales organization into the forecasting process and weaving into it the key. Here's the key. Weaving into the forecasting process this idea of model-based deal assessment, right? We call them milestone assessments, and you weave that into the forecasting process. So as part of your forecast, you're assessing individual deals, their probability of success, and that's rolling up to give you a much more accurate picture of what your forecast should be. So it's a very exciting opportunity, still early days for me, but I'm Really thrilled to be leading the company and doing something very, very new for me. I'm learning a huge amount and really excited by the domain and the opportunity. We've had great feedback from the market and looking forward to getting out there and meeting more customers and having the same conversation with them.

That's fantastic. You know, I can clearly see there is no doubt about it, there is a lot of pain associated with forecasting. And as such, there is a great need for a solution for forecasting.

There is. I mean, the point I will make is that we talked about a lot of things today that are fairly easy to talk about and much harder to do. It's that classic challenge in an organization that, you know, it seems simple, build a forecast culture, you know, get your rigorous application of a model in your assessments, you know, it's hard to do. And I've talked to people my vintage who've been around as long as me, who've been trying to kind of get organizations to adopt and behave this way for their whole careers. And it is difficult to execute, which is another reason why I think software's— I think the reason it's been so hard is because the technology hasn't been supportive enough. And so, people have largely had to rely upon their knowledge, their personal habits and leadership styles to drive all of this. And so, you know, I'm hoping now is the era where the software kind of elevates and takes half of the load. So it's not so difficult for companies to actually solve this problem.

Yeah. I'll finish with this thought because as an industry recruiter who's being asked about the future workplace, you know, as we are just at this initial genesis point of AI absolutely infusing every application that we interact with and people worried about all kinds of implications. The truth is you are not going to be replaced by AI, but you are going to be replaced by an executive who is empowered by AI, right?

Yeah.

Meaning somebody who has the tools for forecasting, which is baked in with AI, will always be much smarter, will always be far more accurate. That organization will be far more consistent. Because you've got checks and balances at the grassroots level without depending on individual consistency.

Yeah, it's great. It's a really great point. I'll add one extra element to that. The individual contributor, the individual salesperson, the account executive empowered by systems and AI, an AI coach helping them because they've applied a standard model, the coach gives them very specific support and assistance in guiding them to success. I think that the bulk of the sales professionals in the world are going to benefit hugely from that piece as well. It's going to be twofold. It's going to be, yeah, there's no way that that creative skill set of a salesperson gets taken away by an AI anytime soon, but they can be augmented really powerfully by that technology in the right environment.

Just to that, I have to add what's going to be really useful. is a coach that tells reps to prospect more rather than praying that that one deal is going to come through.

Yeah, yeah. Oh yeah, that's, uh, that's true. We, you know, and don't we— I used to— I've often said that, uh, sales is the discipline that finds out your weaknesses. You know what, everyone's got weaknesses, everyone's imperfect. Whatever your weaknesses are as a business person, as an individual, Sales as a profession will find it out. If you're too detail-oriented, you'll get exposed. If you're not detail-oriented enough, you get exposed. If you're a bit lazy, you'll get exposed. All of those, all of those things. And, uh, yeah, if you don't do enough prospecting and, and do too much hoping in your sales strategy, that gets found out pretty quickly too.

Fantastic, John. This has been an incredible conversation. I know it is going to be so beneficial to people who are going to listen to this episode. And most importantly, I wish you great success. Because you truly have great solution to a problem that is widespread. And I think it can change both people's lives as well as organizations' futures. So all the best.

Thank you, Preet. Thank you very much. Thanks for having me.