As the CEO or President of a company, you have been successful because of your impeccable attention to detail. Staying on top of every trend and monitoring every metric. When the business was limited to a handful of products, geographies, and routes to market, this was easier. Communication across divisions has been pervasive, and the executive staff was aligned on the core metrics. But as the business continues to expand, scaling becomes more difficult. Layers of management, competing priorities, time zones, and general multi-national complexities create a list of challenges. What KPIs do I track? How do we stay connected as an executive management team around the corporate goals? What is a leading indicator of success? What is lagging?
Creation of a Revenue Operations Function
A core, and often overlooked, component of managing corporate goals is who owns the function. What group or person is responsible? And not just accountable for documenting the KPIs, but also for maintaining the data hygiene. Responsible for the fact base, data definitions, and benchmarking. Responsible for managing the interlock across Sales, Marketing, Product, Pricing, Customer Success, and Finance. This is a critical role within the company and has created the emergence of a Revenue Operations function.
Revenue Operations is an evolution of Sales Operations. Its core difference is the elevated state. Here is a link to the Revenue Operations Role in More Detail. It is not just a Sales function but a cross-functional discipline. It is the glue across business units that keeps all departments aligned on the core corporate metrics. Though groups have different personal metrics, the company requires alignment on the over-arching goals. Making sure that all functional leaders are aware of and committed to the core metrics. Revenue Operations manages this process, tracks, and reports on the KPIs throughout the year.
The Trivial Many vs. the Critical Few
During the annual planning process, there is a tendency to push towards tracking an over-abundance of data points. At SBI, we call this the “trivial many” versus focusing on the “critical few.” Focusing on too many things instead of picking a handful of impactful outcomes that we can actively engage around.
That concept is outlined in the SBI 2020 Annual Planning Best Practices guide and shows how the top 16% of companies stay focused on core metrics. Top market performing companies align around a handful of KPIs. They recognize a need for focus and simplicity, as well as a need to track both leading and lagging indicators that are cross-departmental. Here is a list of the top 10 KPIs:
The definitions of these KPIs can be found in the 2020 Annual Planning Best Practices report. A few of them are listed here:
These are agreed upon during the annual planning process. Revenue Operations benchmarks the peer group, and the metrics are tracked on a weekly basis. The executive team understands what the core metrics are and can recite them. Everyone is aligned on the definitions, and one dataset is used as the source of truth. The entire team is on board and focused.
Here is a link to the SBI KPI Dashboard tool that allows you to better visualize the “critical few.” These are the cornerstone pieces for Revenue Operations to manage the interlock between corporate business units.
SBI is a management consulting company specializing in helping our clients grow faster than their competition and the industry. Will you hit your number in 2020? Take the SBI Revenue Growth Diagnostic and see what your odds are. If you don’t like your chances, contact me for a free half-day workshop on how you can improve your odds.