You survived the rollercoaster of 2020. Now, you have 2021 ahead. It’s a new year, a fresh start, and the much-needed reset with your Board of Directors. Whether your business boomed in 2020 or busted, the expectations you set around strategy in 2020 were null and void by March when COVID hit. 2020 was a reactionary year, full of changes and strategic pivots. In 2021, you have the opportunity to reset expectations with your Board of Directors. You have a well-thought-out strategy, some strategic initiatives, a strong execution plan, and a great team that will deliver. You also probably have an aggressive bookings target. You may have made some aggressive “big bets,” as described in our 2019 annual research that takes time to see returns. You have confidence that you can hit the 2021 targets. Now it’s all about getting board support. Below are six tips to help you connect with your Board of Directors and manage expectations over the year.
1. Clearly Describe “How” You Will Achieve the Bookings Targets for the Year
The number one mistake I see CRO’s make is not clearly articulating where the bookings number will come from. The board will have confidence in your plan if you can be specific on how you will make the number in 2021. Of course, how you actually achieve the number may change over the year, and that is fine, but establishing a plan upfront for the growth goals is critical to securing the board’s trust. Below is a list of questions to help you prepare:
- What portion of the 2021 goal will come from net new customer bookings? Cross-sell? Up-sell?
- What portion of the 2021 goal will come from specific sales teams?
- What portion of the goal will be attributed to renewals?
- Are key accounts expected to grow/shrink? By how much? How are we planning to address changes?
- What portion of growth is coming from our existing sales team? What is our confidence in their ability to deliver? Are we assuming increases in productivity? How will those be realized?
- Are we hiring this year? What are we estimating the new hires will contribute to the ’21 goal? How are we planning to ramp new hires quickly?
2. Seek Board Input BEFORE Executing Major Changes
If your plan involves changes to the sales organizational structure, sales compensation budgets, or sales strategy, make sure the board is aligned before you execute the plan. Every plan has risks, even the status quo approach. Leverage the board to discuss risks and mitigation plans associated with changes to strategy or GTM approach. If you fail to engage the board, they may question the strategy, and ultimately if the plan goes sour and they did not have a chance to provide feedback, your job could be at risk.
3. The Importance of the Pre-Wire
If you present new information in a board meeting and expect the board to vote on the path forward in the meeting, you are naïve. Board members need time to digest and contemplate information to provide the best advice. Meeting with the board members in advance of the board meeting to walk through your approach 1:1 is critically important to building consensus and support around your plan. It will also allow the board to help you field risks, concerns, and challenges early. That way, you can pre-empt questions before the board meeting and put your best foot forward in gaining a collective “yes” during your board update.
4. Establish How You Will Measure Success
Once you can articulate HOW you will hit the overarching goals, clearly outline the metrics you will use to measure success in 2021. Establish metric definitions upfront, and don’t change those definitions over the year.
Many CROs make the mistake of using only lagging indicators. The challenge with that approach is you only know that you missed the goal after it is missed. There is no going back. What is done is done, and you can’t adjust. Instead of only measuring lagging indicators, measure behavioral, leading, and lagging indicators. By tracking these additional metric types, you can identify risks early, collect feedback, and adjust the plan early.
You can download an example reporting dashboard for your sales metrics here.
If the goals are not being met, come prepared with an explanation as to why and a proposed path forward. Focus on the key changes that will be made to address the shortcomings in the goals.
5. Be Forthright With Facts and Answer Board Questions Directly and Specifically
The most frustrating thing for a board member is getting a “salesy,” unclear, or indirect answer to a question. You instill more confidence in the board when you speak factually and with data than when you make excuses. Try and avoid overly descriptive or emotional responses to board questions. The simplest application of this tip can be used when a board member asks a “yes” or “no” question. Simply reply “yes” or “no” as the answer vs. providing verbose commentary explaining things further. The board member will most certainly ask a follow-up question if they want more detail.
6. Restate Goals and Progress Every Board Meeting
Boards are forgetful. As you progress over the course of the year, start each board meeting by restating the goals for the year and the progress made thus far before digging into details. Remind the board of the high-level plan and where the company is in the journey. No matter how hard you try, the BoD is always looking for better results, faster. If an initiative was not supposed to generate positive returns for 6 months and you are in a Q1 update, it is important to remind people of the commitment and timing of the return so your board remains patient.
Following these six steps will ensure you establish trust with the board when describing your 2021 plan. Additionally, creating a dashboard to set clearly defined and agreed-upon metrics will keep your team focused on a diagnosis and solution. If you have an upcoming board update and need help preparing, we are happy to help. Contact one of our Revenue Growth experts through our Revenue Growth Help Desk to receive additional guidance on how to apply these tips to ensure a successful board meeting.