A few posts ago, I wrote about what makes a great Chief Financial Officer (CFO), and why some of them are truly the unsung heroes. I received some comments about other ‘Chief’ roles, and in the interest of balance I decided to share my thoughts on the Chief Revenue Officer (CRO) and Chief Technology Officer (CTO) in this and the next post. As I thought about these posts, I realized that not many CEOs rise up from the CFO position, so it is unusual for the CEO’s skills to overlap or eclipse the CFO’s skills. This is important because it makes the CFO a complementary fit and natural partner for the CEO. However, when it comes to the other ‘chief’ roles, it is more likely that the CEO once held those positions, so finding an individual that complements the CEO or is an ideal candidate will vary significantly from one CEO to the next.
Additionally, accounting and finance are rigorous disciplines with a lot of consistency across very diverse businesses and industries. Not to minimize the need to find the CFO with the best fit, but many of the skills are fungible across companies, so a great CFO in one company could be a great CFO in a completely different company in a completely different industry. The same is not necessarily true for the CTO and CRO, so a great CRO or CTO for one CEO in a specific business may not be as successful for a different CEO in a completely different business. All that being said, there are traits and characteristics that I have valued in each position throughout my career, and I have had the honor to work with some exceptional individuals in each role. So, lets start with what makes a great CRO.
Revenue makes the wheels of a business turn, so having the right leadership driving revenue is critical. Many CEOs come up through the revenue generating ranks, and have strong opinions about how to lead the revenue organization. For this post, I will keep it fairly generic.
A great CRO has brains, heart, dedicated commitment, creativity, and strong analytical skills. The range of responsibilities for a CRO can vary widely. In the narrowest definition, the CRO is a new-logo sales leader tasked with bringing in more business. In a broader definition, the CRO may be responsible for all revenue generating activities, including existing customer revenue generation through services engagements and/or renewals and upsell. An even broader, but common definition of the role will include marketing activities, particularly lead generation. In my view, sales and marketing are distinct disciplines, so I tend to draw a line between the two. Marketing owns the communications that generate or create the opportunity for leads, but sales owns development of the leads.
The ideal CRO for me takes responsibility for all corporate revenue. That may sound simplistic, but it means the CRO owns or influences every dollar of revenue, and their metrics are all inclusive. I do not want a CRO who is so focused on new-logo bookings that they miss the revenue impact of churn or customer upsell, or fail to see the revenues from services or other activities. They need to be invested in the top-line total revenue, and lead all streams of revenue throughout the business, even if the organization generating the revenue is not directly within their corporate reporting structure, as is often the case for the services team.
Selling requires a combination of analytic skills, people skills, creativity, technical skills, perceptiveness, perseverance, discipline, and luck. A great CRO has all of these traits, and brings them together to create a predictable revenue engine. If we know what revenue to expect, then we can manage the business accordingly, but when revenue is poorly forecast, the ripple effect throughout the company is devastating. Over promise in the forecast and the company will over spend without the revenue to support the expenses. Under promise, and the company will under spend, slowing the engine that supports the revenue. Consistency and predictability are hallmarks of a great CRO. To get there, they need strong analytic skills and a proven methodology to advance leads to closed deals. Teaching and growing a disciplined professional sales team is a requirement for a great CRO. Great CROs are also great leaders. They inspire the troops and build confidence with a ‘we can do this’ mentality. Sales is the most measurable activity, and the CRO has to instill a culture of accountability. Great CROs do not look for excuses (the product, the market, the competitor, the economy, etc.), they look for solutions, applying creativity and perseverance to achieve their revenue commitments.
I like working with smart people, and I expect them to be analytical and use that understanding to predict and improve the path forward. I want a CRO who dives into the numbers and is skilled at building forecasts that are based on facts and data and process, not hopes and prayers. If an individual is uncomfortable with spreadsheets, they will not be a successful CRO for me. At the same time, I want them to have ‘healthy optimism,’ and not let past failures cause them to be timid in their reach for success. They have to believe. Just because we had a bad quarter last year, does not mean we will necessarily have a bad quarter this year. They should rely upon the data and analysis to create caution, but inject judgement and look for what has changed and how we can erase the implications of past performance.
Most sales people are comfortable presenting in a prospect meeting, but the CRO will be presenting to the board of directors, and that takes the challenge up several notches. Boards quickly see through BS, and most boards are numbers focused and expect the CRO to support claims and forecasts with solid analysis and data. A great CRO is able to instill confidence in the board, and demonstrate that they have the revenue engine firmly under control.
Above all else, a great CRO has character. It is too easy to create a ‘sleazy’ sales environment that will sell people things they do not need or want, or over-sell a product’s capabilities or the team’s ability to get the work done by the client’s deadline. The CRO sets the tone for the entire revenue team, and they have to have character and demand it of their team. As the CEO, I want to be able to rely upon the honesty and character of the CRO, and be confident that they are representing our company brilliantly and leading an ethical and honest revenue team. I have often quoted Steve Jobs mandate - “never embarrass the firm.”
There are many great sales people, but few great CROs. Finding the one that matches the company, the CEO, and the board is a challenge, but when the right person comes along great things happen.