Latest / Rev-n-u Unplugged / You Don't Have a People Problem, You Have a System Problem

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You Don't Have a People Problem, You Have a System Problem · Rev-n-u Unplugged

• James: Welcome back to Revenue Unplugged. I've been looking forward to this one for a while now. My guest today is Warren Zener, founder of the CRO Collective. Warren has spent the last five or six years working with CROs, advising them, training them, and trying to fix what he calls the Pervasive Disease in revenue leadership. We get into a lot during this conversation. We demystify what a CRO actually is, and of course, we talk about what it isn't. Warren, welcome to Revenue Unplugged. been looking forward to this conversation for some time. You have a huge amount of experience and knowledge the Chief Revenue role I respect a lot of the CROs that you work with and talk with and advise. And I was keen to have on the just to get some of that knowledge out to our audience. So my intro really do it justice. Do you want just give our... audience a bit of background as to who you are and exactly what you get up to on a day-to-day basis. And we'll get going with ⁓ some interesting topics. We talk about who needs one, when you should hire one, and how to assess whether your current sales leader can step up into this role. Warren shares his Panda analogy with me, which I really like. And we get into why most of the time it's not a people problem, it's a system problem. Before we get into it, this episode is brought to you by Indigo, the go-to recruitment partner for all your key go-to-market hires. If you're enjoying the show, please hit like and subscribe. Warren Zenna: Yeah, sure. Thank you for having me and appreciate the nice intro there. ⁓ Yeah, so thanks. So yeah, I started the CRO Collective what was that, five, six years ago, which I can't believe, to ⁓ address a pervasive ⁓ disease ⁓ in revenue leadership, which is James: It really helps us. Right. Sit back, grab a brew and let's get into it. This is Revenue Unplugged. Warren Zenna: Uh, as we evolved over the last 20, 30 years or so in traditional leadership models, the revenue go to market space has become a lot, obviously a lot more complex, particularly with the SaaS businesses. And as it's grown, a lot of the ways in which we deploy leadership have not advanced with it. So we have really complex ways that we do business, but we still have the same old fashioned sort of traditional leadership structure that no longer applies. due to the silos are ⁓ created older leadership models ⁓ when have functional leaders like a chief sales officer, chief marketing officer, chief customer success officer, et cetera, et cetera. Whereas today's really requires singular leadership, a go-to-market engine builder who can actually create more of the true systems that drive revenue, it's in the services or SaaS businesses. And the chief revenue officer role is the one that is responsible for that. And unfortunately it's misdefined. It's not correctly identified. People have different definitions of it. They're not trained properly. They only last around 17 months on average. Most people don't really know what a chief revenue officer really is. And as a result, the companies aren't getting the benefit of that relationship or that role. And the people who get the role are sort of like in on a definite spiral down to a 17 month tenure on average. And we wanted to fix it. So that's what we do. James: that kind segues us nice into the first topic we're going to talk about, which is effectively ⁓ demystifying the role the CRO. And I'm keen to get your thoughts on this because you mentioned there that ⁓ the average tenure is 17 months. you know, I work in around this. And the bit that I feel quite about it is it's not really a true ⁓ testament to the CRO role because are people in those roles Warren Zenna: 18, 18, 17 something. James: or they're called a CRO, but they're not actually a CRO. So it's kind of muddied the water a little bit. And what I wanted to do is get your opinion on exactly what the CRO role is, who needs one and why do they need one? So if we could start with your thoughts on what is this role as a CRO? Demystify it for us. Warren Zenna: Sure. If you don't mind, I want to address something that you just said. Cause it sort of speaks to the real problem, which is this idea that somehow, you know, the chief revenue officer is not a real true chief revenue officer. know, they're, they're head of sales and that's true. But that the way, and again, this is not just, just sort of, contextually that perspective puts the onus. the CRO and their competencies as opposed to the company that chose that person. So it's not really as much a problem with the candidate as it is it's with the environment in which these people are being deployed. And that's not talked about enough. So that's really where we go to work is there's two there's two sides to this. There certainly is a competency development, there's a competency profile for a chief revenue officer. Well, I'll answer your question with that. And then the second part though is that there's also an environmental construction or design that is needed for that person to survive. So if you have a great CRO who's really amazing at the job, they won't do well in the wrong environment anyway. It's because of the panda complex, the panda. People go to the zoo, they look at pandas, they sit around all day, they don't mate, they don't eat. They're really weird, they're sort of like boring animals. You look at them and you're like, I don't care, so it's kind of cute, but... You like there's some entertainment associated with animals in captivity. And so there's this perception that pandas are sort of like incompetent creatures. That's not true. The fact is, that's how they act in in captivity is the environment they're in. When you actually look at pandas in the wild, they're actually thriving and they're really much more animated and they mate and they eat and they do all sorts of stuff that normal animals do. So what's happened is, is the environment is having an impact on this creature. And I think CROs are like pandas in many ways, because they're being put environments where they don't thrive. And that's why they have a bad perception. The role has got bad rap because that's, that's one thing. So the second question was the question you asked is what do they do? So the CRO really is the revenue architect. So traditionally they've been the sales leader, right? They come out of sales, they run a sales organization. And then what happens in many cases is they don't, they want to keep this person. they elevate this person with a C-suite title and they still run sales. So they're a CRO and they're running a sales organization as a chief executive. And maybe they get a little bit more authority and certainly more compensation and obviously a good deal more accolades in the marketplace because that that title has some cache to it. But essentially, it's still the same thing. It's a functional role that runs one piece of the revenue engine, which is the sales function, right? We're talking about someone who actually runs the whole cycle, the revenue cycle, all the revenue related components of a revenue engine, which is marketing, the acquisition engine. James: of the revenue issues. Warren Zenna: The bookings, right? The deals, the closing, the pipeline management, and then the customer success organization. Right. And so we see someone who really runs this whole thing. anyway, what I'm saying here is that this person has a different skill set, right? They're not someone who just runs a sales organization. It's a much different metric. So from running a sales organization, I'm responsible for the obvious things, which is bookings, right? Getting deals closed and running a pipeline and all the things associated with that, which by the way, that's incredibly important skill set and you need people that know how to do that really well. However, it's just a part of the system. Right? The acquisition engine, identifying the ICP, getting the right customer, closing the deal appropriately, repeating it properly, and then also getting the customer outcomes delivered so that there's an understanding of what the customer's buying and what value they want to get and how that can be measured and when the delivery of the product actually results in a business outcome for the customer. And then repeating that so that the customer expands and grows. and becomes an advocate. That's the job of a CRO. And then there's a revenue operations or rev ops component to the role, which is the measurement, the metrics and the numbers and the data and all those things related to how the system runs. So this is a very complex job. It's not a sales leader. That's the difference between a CRO and a sales leader. James: Okay. where's your view on sales leaders that are called a CRO, but they don't have customer success or they don't have marketing. They're not. And ⁓ in what saying, is there still a place for, ⁓ no. Warren Zenna: They're not a CRO. They just have a Nope. And it's not an insult to these people. Anyone listening to this is saying, Hey, screw you, man. I do that. I would say, look, I understand. But I would tell that person, and I do tell these people this probably daily. have five conversations like this a day is look, unfortunately you have the title and you're probably making good money. But if you were to get an actual CRO job in your next role and the way that I'm describing it, you wouldn't know what to do. And you'd find out pretty quickly that you don't know what to do. And what would happen is that if the company that's hiring you is really looking for an actual CRO, they would figure that out on the interview process. They wouldn't hire you. James: So let's, cause I want to come onto once we've got past the who needs one and why does a true CRO make a CMO redundant then? Okay, cool. Well, we'll come onto that. I think this is an important part. Who needs a CRO because I see startups series A funding who've got a CRO and it's just a title. Yeah. Warren Zenna: Yes. It's preposterous. It's proposterous. James: which is a large part of the challenge around actually seeing truly how long a CRO lasts in a role. your insight, from what you've seen and talking to and your experience, who needs a CRO? I'm talking about size of business, revenue. ⁓ do you start needing to be thinking about having a CRO? Warren Zenna: A great question. Probably the most asked question. Two questions you asked. When and why, right? And they're related. They're the same thing actually, because the when is the why. So when is operational complexity. So what does that mean? That's a very cute answer, right? But it's true. So there is a point at which a company scales, or not scales, let's say grows. They might not scale yet, but they grow to a unmanageable level of complexity where the model that got them there won't get them to the next place. And everybody sort of knows it. They know the company now needs to mature or transform in order for the company to get to the next level that they want it to. And that's usually, it's not science. somewhere between 25, 30, maybe even 50 million in revenues. I've seen companies hire them later, like 100. My opinion is, I think the 30 to 50 is the right time to bring on a CRO for reasons we can get into, but that's about the time. And the reason that number is because a point at which a company is making that kind of money on a regular basis or has an ARR of that number, there are required complexities to manage a business of that size that In order now to get it to the next level, because jumping from a 30 to 50 to a hundred is a very big leap. it's a, it's a, it's difference in business. And you then need now an architect to build an engine that's designed to get them there. And what happens is you run out of gas with the older, more traditional model that got you to 30, 50. And you keep doing it because you're comfortable with it. That's all, you know. And so you end up kind of crashing and you can't really get the company to. accelerate and build the right systems. Companies at that point get very fragmented, very siloed, very inefficient. There's a lot of revenue leaks. The data sets are really bad. The ICP usually is not identified properly. There's like a whole bunch of things that happen at that point, despite the fact that the company is making money. And so these are the sort of things that a CRO would come in and help to fix so that the company is prepared now with the right leadership model to get the company to double in size, I say, if that's still the goal. or be attractive for a sale or an acquisition, know, entities, something like that. James: So that makes sense. If you've got a that's got themselves to that size, got a VP or head of sales in ⁓ place. How do you assess if that sales leader has the capability of up the CRO role? Because we see often people the opportunity because they've done a good VP role. And more and more seeing True CRO's best skillset is not necessarily what they would have done as a VP of sales. yeah. So you're seeing these people gain the opportunity. So how do you assess if you're a VC or a CEO, that you're about to cross that bridge and you've got a great sales leader in place, but you need to know if that sales leader can take you to the next. Warren Zenna: and vice versa. ⁓ James: level as a CRO, how do you assess them? Warren Zenna: Well, the first thing you need to do is know what a CRO is. And if you don't know that, then it doesn't matter because you probably have an opinion about the CRO that it's just ahead of sales anyway. And that person probably is qualified for the job. So you'll just promote them. you know, without doing that first, it doesn't really matter because I think the issue there is actually where the big problem exists is that they understandably, they have this great sales leader who's running a sales organization and now the company gets this level of complexity and they want to elevate this person. But the reason they want to elevate the person isn't because they need somebody to run the organization, sales organization, mean the revenue organization. They want to promote this person because they understand the fact that the organization is probably growing and expanding and that this person is going to need to be compensated better in order to keep doing the job as the role becomes more complicated. the sales function, the person is going to ladder up and probably have a whole bunch of other sales managers underneath them. could be, you know, regional out, regionality, maybe multiple markets, maybe even other countries. So this person needs to be elevated. So this elevation of this person's sales role to warrant a CRO title. And that person may be perfectly okay to do that job. So you'd see that in the wild as an of a CRO that has been successful because that person was promoted and now they're successful, but that person doesn't actually have that job They're still running a sales organization. So it creates a false positive in the marketplace. What are you talking about? You know ACME corporations Promoted their sales leader to a CRO and that person's kicking ass. Yeah, but that person's really running a sales organization They're not really a CRO and this is the area where there's a lot of contention Because it is not the same job so I answer the question that way is James: This is the hair in room, there's a lot of tension. Warren Zenna: How do you know is by first knowing what the job is. And then when you do know, then you'll be able to evaluate that person and say, okay, does this person have the ability to up from being a functional leader into a real true revenue leader? And they may not have those skills. we self-servingly have a whole diagnostic to figure that out. We actually do all this all the time. We can actually figure out. whether or not the person that you're looking at as your potential CRO is in fact one whom has the potential to become one through some development and training, which we help do, or determine not so, and that you need to bring in somebody else whom can. It's a very, very important step. James: is in fact is, I'd like to deep dive into that, if I may, and just ask you to give some of the headlines ⁓ what looking at, what are you to assess? And when should CEOs, I think, get people like you in to do this? Because I personally, think, get experts in to help you do this. And ⁓ we get and advisors in on all sorts of things. And I think this is a critical one they should. Breakdown, we don't need to go into the nooks and crannies of it, but give some headlines of what you're assessing these people on and when is the right time to be doing it. Warren Zenna: Yeah. So, the profile of a CRO has dramatically even like in the last year with a couple of things, I'd say two years more so, but even right now I'm seeing now that every CRO search from like up until like, I'd say even like two or three years ago, people looked almost exclusively at sales leaders as their candidates to be a chief revenue officer. for obvious reasons. understand the sort of muscle memory and history that's kind of created this, this perception. It may in fact be the best person. That doesn't mean it's not the right person. However, however. I no longer think that that's the case. I've really evolved on this topic. I still think that they make great ones for the obvious reasons. People who run sales organizations have a really good understanding of a lot of things that the CRO needs to do, particularly in related to building value and getting customers to kind of understand things and getting deals closed and managing all the stuff that goes with it. What they're missing are a couple of things that are really important. One is data and metrics thinking, right? These are really, this is a very analytical job being a CRO because you're managing financing, finances, you're managing, ⁓ CAC, payback, you're paying, ⁓ mean, net revenue retention, you know, so there's a lot of other efficiencies, ⁓ profitability, efficiency, ⁓ OPEX, CAPEX, right? You're, running a different type of business now. All right. I look at the difference between a bartender and the restaurant owner. So the bartender, was, I was a bartender for a long time and I had a little business in the, in the restaurant. Like I had a literally like a little business. Like you're, you're, realized like you're, sort of given a storefront in the restaurant that has chairs in it and a table in front of it and a register behind you and a product. And people come over to your section of the restaurant and they sit there for a very specific experience within the restaurant. And your job there is to run that business. So I have. An inventory concern, I have to have enough beer and wine and ice and, you know, other tools are in my store that I could produce my product efficiently, which means I have to have a system for someone to bring me ice and bring me beer and bring me wine and bring me fruit. Right. And then I have a till behind me. That's my own till it's separate from the restaurant till. And I have to manage that. So in the morning, when the restaurant gives me my register and the tray is full of a certain amount of money. I need to know how much money was in that till when I started at the end of the day and how much was in there at the end of the day. Either it be cash or credit card payments, and then how many tips so that I can reconcile my business and know how much beer we sold and how much wine we sold and how many glasses of we sold, et cetera, et cetera, so that I can do a reconciliation of what our profit margin was from my little business. But I didn't understand the restaurant business. James: Thank Warren Zenna: I'm a part of a system that person is managing the rent and all the people that they're paying and the staffing and the scheduling and the buying of the food and managing the kitchen and the heat and the water and the plumbing and how, how many times you sit somebody and how long a table is filled for and how long you flip that table and how many times you have to turn. Right. mean, I'm not involved in any of that stuff. I'm a piece of it. Right. And, you know, a bartender might not make a great restaurant owner. James: staffing and the scheduling of the bike. Warren Zenna: A bartender might make an amazing restaurant owner. So I would be wanting to know if this person's thinking about the business or they're just thinking about the bar. Okay. So I think that that's the difference. And if I'm evaluating a sales leader, I might have an amazing bar manager, but can they run the restaurant? And I want to know that they can run the restaurant. James: So you ⁓ advising a CEO and a VC, where else ⁓ they be looking in the business for this person? Warren Zenna: I like rev ops people a lot for this. think, I think the snoop profile for a chief revenue officer is, three, three sort of competency contexts, right? One is a rev ops person. Rev ops people have a really good, very holistic view of an entire revenue business. That's their job, right? They're looking at the whole thing. They're not looking at just one thing. They're looking at every aspect of how revenue is generated and they're, building all the systems and processes and all the numbers and everything. Really good rev ops people are really good at this. problem is revops people tend not to have other skills that they need and this is an incredibly people face first job. You have to manage the board, you have to do board presentations, you to know how boards think, you have to understand how to do board engagements, how to put together the right presentations for boards. Not only what it is that boards are looking for, but how to communicate things to a board, right? The way that you know boards listen to things and what matters to them and how to manage the very difficult conversations you're having at a board. And then you also need to know how to be a leader. You have to run multiple teams. You have to have a marketing person that reports to you and a sales leader that reports to you and probably a product, line to product and probably someone in rev ops and certainly a customer success organization. You probably talk to a lot of customers. as you can see, right, a rev ops person who might come to the table being, if I may, a little nerdy and really good at numbers and running things like that. Those people aren't necessarily something you go put in front of a board, right? or manage people or set a vision. I see, and then the third component I didn't get into is the customer success component, which is the net revenue retention thing, right? You need to be someone who really understands like the psychology of a customer, like why they buy things, the value that they're looking for when they buy the product, how the value realization occurs, how long it takes for the value realization to occur. that you can manage that and learn from it and pull it back into the feedback loop and figure out how to find more customers that buy for this reason and renew for this reason. And this is like a different branch. As you can see, it's sort of a complicated thing. And I think that those are people who'd be really good at this job. James: the good revops people are tend to be data scientists background. They really understand how data is and ⁓ they can explain it. It's just about giving them. So I've seen it as well where I've spoken to sales leaders where they said, look, yeah. ⁓ How do you then get the point where if someone grows up through revops, they haven't necessarily had exposure to hit targets, you have multiple departments as a CRO that you have to bring everyone together. before, everyone used to say, you need to get sales and marketing working together. It's now bigger than that. You need to be bringing financing, legal everything coming together and working together in harmony. How have you found seeing Revops people capable and also not always capable, actually willing to do as well? Warren Zenna: Not many. Yeah, well, you know, not many and it's not a knock on them. But you're right. mean, look, all these jobs are very profile driven, right? I mean, there's certain kind of people that are salespeople, there's certain kind of people, right? mean, you know this, right? There's a reason why people that have these jobs all are somewhat similar because they attract certain types of personalities. And so, you know, this is a dynamic thing. This is why, you know, if I may sound like I'm contradicting myself, leaders tend to be good at this because sales leaders have those leadership skills, ⁓ They're running teams or training their coaching. They're developing people, right? I mean, it's a very ⁓ heavy kind of a role, right? ⁓ so because of those qualities, they make really good CROs, but if they don't have data or business sense, it's more business focus, sales focus. There's a difference between a sales focus and a business focus. ⁓ Like said before, the ⁓ bartender is good because someone who really understands bar management, you know, then you say, okay, run the restaurant and they would think, oh my God, I don't know how much steak do we order? How long do we keep it for? I don't even know. I'm gonna destroy my inventory. I didn't even think about that before. And how do I make specials for the week that take advantage of the leftover inventory that we have? And how do we price it properly to make sure that we make money on it? And how do we know that people are gonna want it? And it's a really complicated thing. And I think you need to find people that sort of think that way. that have a data ⁓ of mindset. And there are plenty, plenty of sales leaders that think like data scientists. are some sales leaders are really good at this. They really think a lot about like the nerdiness of a sales organization, right? Like how you put things together. But I think that ⁓ if ⁓ lean far on the side of someone just running a sales organization, they're gonna miss the pieces of being more of a true a revenue leader, they're to think a lot more about how to close deals. And a lot of reasons, because the incentives that salespeople, successful salespeople win by deal closing. That's what they get accolades for and that's where they get the money from. ⁓ people who are really good at driving people ⁓ make commitments and pay for things, and you can do it a lot, those people have developed that skill and they're winners as a result. People love people like that in the business, because I know you can get deals closed. But there's more than just closing deals. Now this is a customer. This is someone now we have to service. So we have to make sure they get the value and that they do it again and again and again. And a lot of sales leaders don't care about that as much as other ones do. They're sure like, okay, great. Now it's their problem. I'm go kill more deer. You guys cut the meat up and serve it. I'm just gonna bring you the animal and you guys go deal with that. And I think that you need somebody who thinks more about how is this customer being serviced and how does this person get value? It's sort of a bit of a personality mindset. know, it's an interesting person, you know. James: It's sort of a limited personality mindset. Yeah, love to ask a few questions in and around that because like what you said, they're exactly right about sales leaders just wanting to go out there and hunt and win. ⁓ And know that ⁓ it's they're good at. But we also know that because churn has never been a bigger problem than it is right now. Right. So ⁓ so got sales leaders that are going to win those new logos and and churn is a problem everywhere we look. But ⁓ and the really good CROs that I'm seeing at the moment who come up through the sales route. Warren Zenna: Cause that's the good end. Yeah. James: they tend to be engineers. They've been engineers and they understand the numbers and the data. One of the theories that I've had, and it'd be interesting for you to either completely crush this or your thoughts on it, is that businesses or business leaders ⁓ too much on the revenue part of the title ⁓ they want someone who's gonna hit the number and revenue drives a business. and people focus too much on thinking, right, I need someone who's going to get me the number ⁓ and we'll worry about the rest later. that part of the problem as to why they don't look at the rev ops so or they're worried about hiring a rev ops person? Warren Zenna: Mm-hmm. Maybe, I don't know, but I think the word revenue is, you the reason why I like the word revenue is because there's, in my view, there's a, a big difference between someone who's a chief sales officer and a chief revenue officer. Revenue is not the same as sales. Revenue a combination of factors, right? Revenue is identifying the customer, being able to attract that right customer, knowing how to measure what that right customer is. getting that customer interested in the right product, understanding the product that customer's needs and being able to know that the product delivery is gonna solve that problem in a predictable manner and that there's a measurable way that the impact on the business is gonna be able to be attributed back to that product and do it repeatedly and then know how to do it in a way that's really efficient so that the cost of that sale is lower the amount of money that you make and doing that repeatedly and making it really lean and efficient. ⁓ Unfortunately, and I'm not again, it's not a knock on them. They're just understandably not thinking about a lot of that stuff. They're thinking like, look, man, I got you a customer. Okay. That's you hired me to do. I'm getting you customers. So go do it, do something with them. Now. Why are you bothering me with this? That's your job. And it's not, that's not abdication. That's actual functional specialty. It's like, look, I'm sorry. You hired me to do something and I'm really damn good at it. Like I'm getting you customers and I'll go deal with them. Why are you making this my problem? I'm doing my job and I'm doing it really well. So why are you now? pulling me off of that important job to go solve your problem when in fact that's yours. the problem with that is that the silos that I'm talking about, that's where those things happen, is because there isn't somebody who's making the connection between how those things are all related to each other. If I was a sales leader underneath a CRO, the way I'd incentivize my sales leader would not necessarily be just about how much deals you close. More importantly, I'd say how quickly do those deals that you close turn into value for the customer? when that customer renews, you should get a piece of that. Right. So now all of a sudden, you know, the incentives drive a different thinking, ⁓ know, ⁓ you you sort of have to look at the world differently. So revenue is the right word, but sales is a different word. It's not the same. ⁓ So I think like the problem is, again, it's the system. What you're describing is a systemic problem. It's the way they structured the company to be set up in a way that these different functions are not working together. They're not collaborating because they're not incentivized ⁓ a unified manner. They're ⁓ James: Yeah. Warren Zenna: incentivize based on the functional outcome that they produce, which is fine. But you understand it has to all be connected and a CRO job is to build that engine where everyone is sort of, ⁓ okay, I see now. So when I produce the food, I know that when it goes out into the dining room, that it's going to be consumed and that the person is going to get the food that they ordered in the manner that they want every time and they eat it and they want to come back to the restaurant as opposed to, you you guys handle that. You guys deal with the customers. I don't do it. I mean, I'm making stakes, you deal with that. There needs to be more connection between the product and the way that the product is connected to the customer outcomes. James: Yeah. I love the way you described that. ⁓ we move on to the final point, I want to circle back to Chief Marketing and Chief Customer Officer, Being shooting from the hip, if you're looking get a CRO, those roles, shouldn't be there, should never be there, inflated titles that mean nothing. Warren Zenna: Yeah, I'm not sure I feel that way. I mean, I totally understand this and I come from the marketing business. I have an agency of my own, so I'm very familiar with this intimately and I have a good deal of expertise in that area so I can speak about it with some authority. so, know, marketing is a, marketing was originally a function of customer, of consumer businesses, consumer businesses, you know, like, you know, soap and food and apparel and things like that. where marketing is the engine that drives those businesses, right? I mean, the reason why you buy products and services, I mean, they have to be good products, but the reason why you buy consumer products is because the branding and the marketing of them. Marketing is the engine behind consumer businesses, and it's a very important part. And I would say that, you the marketing component of a consumer business is the leader of that business. That's how the business is built on a marketing, you know, facing sort of business. B2B is not, right? B2B is much more value driven, you it's a much different thing, but you still need marketing for it. Like it's not like it's absent. It's just that it plays a different role. And there are some ways in which B2B organizations can absolutely adopt a lot of the incredible value that consumer marketing brings to bear on B2B marketing. However, as you can appreciate, you know, it's a much more metrics driven sort of endeavor, right? It's really, really much more metrics driven. And so the function is different. So, uh, my opinion is a chief marketing officer would be someone whom I think would be a valuable person to have at a B2B company. I'm not eschewing the value of one. I just think that their role is that there, when they, when you give a marketing person a C-suite title, as you can already hear, that same siloization will take place that I was just referring to on the other side of the business, which the customer side, and that is someone whom is incentivized to get leads. And I don't think that that's. marketing's job is to get leads. Marketing's job is not to get leads. Marketing's job is to educate and inform customers about something so that they are smart enough about it, that they trust the source that it came from, so that they're now more willing to want to listen to that organization and see them as an expert and to buy something, right? So I want my customers to be educated and have their questions answered. around a problem that they have and they wanted to see that they're, that's being answered by us so that when my salespeople reach out to them, they go, yeah, that's right. You guys make, you guys are really smart about this topic. I'm, I want to talk to you. I've trusted you. have confidence in you. You have a reputation and that's a different way of thinking about it. And if I'm a CRO, I need to have control. And I say control, not in the, you know, passive aggressive sense, but control. Like I need to understand like how the marketing organization relates to the sales organization. And if I have another person who's also a C-suite leader that we have, you know, we're peers, you can already see that there's going to be some space between that. that's not, but it's sometimes it works. I mean, you can see anecdotally I've seen, ⁓ we get along great. We collaborate. It's really nice. However, the reality is that they need to be folded into a continuum, an engine, system. And when you have too many C-suite titles in the engine, Now you have a committee, you don't have a system and a committee is not a good way to run a business, it's not efficient. Maybe when you get to become like a billion dollar company, you can get some chief marketing person that does all sorts of crazy stuff. When you're at the 50, 40, 60, 80 million business, that person needs to have nominal control over that acquisition engine. And I think the CMO role, I think at that point becomes a distraction or disturbance. I know CMOs hate me for this, As an agency person, as a person who understands marketing, can say firsthand, having been on that side, I happen to still feel that way, despite the fact that I might be curtailing my own position. And I do recognize the role that they play in this space and it needs to be done that way. James: I think it makes perfect sense. the last which I'm really interested in, because when you you wanted to talk about this topic, which is how to get the board ready for a CRO, ⁓ I think is something that gets missed ⁓ so much you're looking the cro and thinking about hiring CRO. Warren Zenna: Well, like I said before, it goes back to basics. The first thing is the board needs to understand what a CRO is. Most boards don't. James: No. What do they think it is in your experience? Yes. Warren Zenna: They think it's sales leader. It's all heroics. They want to bring in some person that's gonna come in and save the day. There isn't such thing. It doesn't work that way. And then it is their fault. So if I took a job like that where there's like, need you to come in here and change things. Well, then you mean it's gonna be my fault. That's basically what it is. And there's nothing wrong with it being your fault. I'd say it's really, a difference between something being my fault and something being my responsibility. There's a difference. ⁓ If you're gonna give me that responsibility, well then in exchange, I need the following authorities, autonomies, resources and runway to do that. And if you're not gonna give me those things, well then it will become my fault and I'm not gonna do it. But most CROs aren't equipped to understand how to like address those things until they don't and they end up taking a job they shouldn't have taken and they inherit a system that they can't really do anything with and that's the problem. So a board first needs to know what they really need one for and we don't find a lot of times that boards. really understand what we're saying here. They have their own fixed on notions of it. if I were coming in as a role as a CRO to a company, I'd want to know what does the board think this job is? What's their definition of it? You know, because I want to know because ultimately, that's what they're going to be looking at me to do. And if we're not in agreement on that, well, then it might not be a situation where I could survive or I could thrive in. James: ⁓ do you work with the board to get them to understand that they're ready for a CRO and what the, the first 12 months looks like of a CRO? Cause normally, correct me if I'm wrong, when a CRO is hired, it's normally because there is a transitional phase. So it's either there's a problem, they're not moving forwards ⁓ or ⁓ they've got to a where sales leader can only take them so far and they need to go on to the next one. So, ⁓ so How are you helping the board understand the 12 months Or is that the wrong way to look at it? Warren Zenna: No, no, it's fine. It's a perfectly good way to look at it. mean, the first thing is, you know, there's evidence, right? You just mentioned some things. ⁓ we're not making as much money. We're churning too many customers. We're not as profitable as we used to be. know, sales have slowed down. They've plateaued. seeing a lot of churn or ⁓ or our sales leader that we have right now sort of has reached the end of their capability, right? And think CRO can come in and solve this. Okay, fine. Questions I'd be wanting to know, the way I would speak to the board is, is it this is happening? Like walk me through your understanding of those symptoms and what the cause of those symptoms are. And most of the time they don't really know, most of it's very opinionated. Well, we got the wrong person, you if we had a better person that wouldn't happen, right? Or, you know, customers don't like our product anymore or the markets change. All those things may be true, but they're all part of really more of a sophisticated way of evaluating why businesses are experiencing these things. James: shh shh shh shh Warren Zenna: And my pushback would be, well, you should know the answers to those questions definitively before you make a decision to bring on somebody because it may turn out that you need something different. Like you've determined that a CRO is going to save the day, but it may not be a CRO. Now it might be, it might be, it might be right, but we need to understand why. So two things have to happen either before you bring on the CRO, you have to do a very sophisticated diagnostic or diagnosis of the business to find out exactly really why. things are happening. So that's not just an opinion or observational opinion. It's really true facts and data that can verify what it is. And we can do that. It's not that hard to do, in fact, they just need to do it. Most people don't want to do it. They'll, they'd rather say, well, you know, my back hurts. So I'm going to take aspirin from my back as opposed to going to the doctor and saying my back hurts because my stomach acid is wrong, right? They don't look that deep into things. They just fix the symptom, right? So if there's symptom fixing, it's probably going to help fix the symptom for a little while, but the problem will persist. We want to know really what's going on. James: Yeah. Warren Zenna: And then we usually are able to pretty quickly ascertain that you have a system problem. You don't really have a personal problem. have a person problem. You have a system problem. Your system is wrong. Your system is set up wrong. This system, if it were adopted by this new CRO and you didn't get that CRO any chance to change that system, that CRO is going to have the same exact problems. This is the same system. So if they can understand that, then we can do work on getting them to understand the systemic issues and then the CRO should be hired to come in. James: system. Warren Zenna: for the first 90 to 100 days to further diagnose and fix that system and make a new system based on the findings of the discovery that we made about the existing system. That's what the CRO should do for that first three months or so. And the problem is that most of the time, CROs are brought in to do two things at the same time, fix our system and also get us more sales. And that's a recipe for disaster. James: from your experience, how long should a CRO be in place before, if they're doing everything correctly, assessing everything, before they start to move the needle? Because you do see that where they automatically jump to revenue. Warren Zenna: So moving a needle is question, like move the needle, right? So you just said move the needle. That's a common term. Like what does that mean? Like what needle, move it where? Right, see these are the things that you listen for is like move the needle. What it usually means is make us more money. Like okay, I mean, that's the case. I'll just get you really big deal and I'll make you more money and then I move the needle, right? But that's not solving the problem, right? So what do you mean move the needle? Like do you want us to make? like more money per dollar? Do you want us to make more profit per dollar? Do you want me to like get better customers? Do you want to keep customers longer? Do you want to like increase? Like there's so many things that you can do. I want to know what that needle is. And most of the time it's like, would you please just fix this shit, make us more money? You know, it's like, that's not a very sophisticated remit. And I would be really leery of like why I understand. And usually it's things like, well, we need more money. because we need to be attractive to investors. And if we have more money, you're like, okay, I get that. So why don't you just get a salesperson and just close more deals and just become attractive to an investor. I mean, that would solve that problem, right? And why don't you just do that? Get a really great salesperson to go out there just get as many deals as possible and then go tell the investors that you just made this many more deals and then you'll be attractive to the marketplace. And usually pushback is like, well, okay, okay, okay. It's not just more deals. You know, you need to also be the deals needs more profitable. Well, why aren't they more profitable? What's going on? Where are your leaks? What's it costing you? Why? What's the, you know, like now you're gonna get into a lot more sophisticated discussions, right? And you need somebody that knows that I come in and I diagnose and fix that stuff, you know? James: Totally, totally agree. As I say, it's not normally as easy as getting someone just to go and do more deals because there's a problem as to why the deals aren't being done in the first place. yeah. Warren Zenna: Right, there's a problem. And it could be a lot of things, but you just got to figure out what it really is, you know? And everyone has an opinion. Everyone's smart, right? People are really smart. They have really smart reasons. They can justify their opinions. But like, okay, let's really dig into this and see. It's usually not one thing. It's usually a combination of things, you know? James: is there a ⁓ framework you sit with boards? it different with CERs? I can't talk CEOs ⁓ and yeah. you come in and you work, how does it kind of work for you? Do you come in and do workshops with them, questionnaires with them? How do you get them ready? Warren Zenna: Yeah, it's definitely. Yeah, we have an entire process of diagnosing all the data. We work with some technology partners who help us to ascertain more clarity around what's going on inside their systems. So we know, like, for example, look at all their CRM data and all their other, you know, other sales related data that we can identify things. We look at all their processes, we look at their customers, we look at their costs, we look at their margins, and we have a pretty sophisticated way we do it. We have a very, and all that diagnosis happens. And then we're able to, pretty quickly, frankly, say, look, okay, here's what's going on, right? We can see what's happening here. And then and here's what has to happen. And these are things that need to be done to make these things happen. And we'll tell them you really don't need a CRO, you need someone to do this, you know, or you need a sales leader to do that, or you need a CRO to do this. So right, we're sort of not advocating necessarily all the time that a CRO is needed. We're advocating whether or not a CRO is needed and if not, what is needed so that you can do that. And then if in fact the CRO is needed and the second question is, whom is that person? What's the exact profile of the person for your company, your situation, your business, your commercial model that you need to find? Is that person at your company already? Maybe you can find somebody there who's the right person for that. If not, well let's go find one and of course, we know so many great CROs, we could probably pretty quickly make a match. we match that person with that role. And then we work with that person when they get hired for the first 90 to 60 days, maybe even more, sometimes even three to six months, ⁓ to kind of ride along and make sure that that process is being done in a way that ensures that that liftoff takes place properly. That's a very important thing. James: Well, before I let you go, Warren, I really appreciate you just spending little bit of time sharing. such an important ⁓ Anyone listening to this that ⁓ need to have a with Warren or How does someone get hold of you, Warren Zenna: Sure. So we do a lot of things. So if you're an aspiring CRO, you're listening to this, you want to be a CRO, we have the number one CRO development program in the market right now at the CRO Accelerator. You can just go to my website, thecrotocollective.com, thecrotocollective.com, and you can apply for it there. If you are a CRO and you're like, shit, what do I do now? I'm kind of have this job. I listened to this conversation. I really don't have that job and I want to do something about it. Just go to LinkedIn and DM me and say hi, I listened to the podcast, I would change. love to talk to you about that program. ⁓ If you're a CEO and you're to hire a CRO and you listen to this, you're like, ⁓ shit, you know, I really was about to hire a head of sales. I really shouldn't do the same. Just go to my LinkedIn and just go to my DMS and just say, Warren, you know, heard your thing. This makes sense. I want to talk to you about that. And, know, you're ⁓ in transition, like if you're a CRO and you just left the job and you're really mad about what happened and you're looking for your next role, you don't want it to happen again, then reach out to us. We have a program designed for you to help make sure that your next CRO role is a success. So there's a whole bunch of ways we work with people, yeah. James: Affid. you're doing a great job for these CROs. ⁓ I often I think the CRO is the hardest job in SaaS. I really do. I also think it's one of the loneliest jobs ⁓ I think you're a great job to them and just ⁓ get that line in the sand, which I think really important. People need to know that line in the sand and what it is and what it isn't and who it is and who it isn't. ⁓ So thank you so, so much for your time. appreciate it. Warren Zenna: Thank you. Great having you. For having me. really appreciate this conversation a lot. And it was great talking with you, James.