Revenue Operations. Stephen Diorio
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Papatla (Northwest Mutual Life Big Data Institute), Don Sexton (Columbia Business School), Dave Stewart (Loyola Marymount University), and Kimberly Whitler (Darden School of Business).
Our research would have been impossible without access to experts who have helped hundreds of businesses become more data driven, accountable, and productive, including Howard Brown, Cam Tipping, and Neil Hoyne. This also includes key friends like Ian Lowles, Bill Wohl, Rick Devine, Rob Halsey, and Anthony Johndrow and others who provided counsel on the ideas and models we built.
We drew heavily from the Marketing Accountability Standards Board (MASB), and in particular their leaders Frank Findley and Tony Pace, who are doing the hard work of proving the financial contribution of growth assets and investments.
We learned critical lessons on breaking silos, aligning revenue teams, and creating a common purpose across the organization from General Stanley McChrystal and Victor Bilgen of the McChrystal Group.
We also received generous perspective and advice from the leading analysts in the sales and marketing technology sphere, including Brent Adamson of the Gartner Group and Rich Eldh, the Founder of Sirius Decisions
This research leaned very heavily on the decades of experience from the leadership of Blue Ridge Partners, an elite go-to-market consultancy. We relied heavily on the experience, judgment, and research of Jim Corey, Carter Hinkley, Marten Leijon, Allen Merrill, Jim Quallen, Michael Smith, and Corey Torrence.
We received tremendous support and access to research and executives' perspectives from the leading associations and professional organizations in the field of growth, notably: Bob Liodice of the Association of National Advertisers, Bob Kelly of the Sales Management Association, and Earl Taylor of the Marketing Science Institute.
We are indebted to the team that sponsored and guided the production of this book, including Richard Narramore, our editor at John Wiley and Sons, and his crack editorial, production, and marketing team that kept us on task and on time, including Jessica Filippo, Deborah Schindlar, and Donna J. Weinson.
Researching a book takes a tremendous amount of analysis and digging. Heartfelt thanks to our research team that analyzed thousands of technology solutions, including Blake Brown, Robert Diorio, Jeff McKittrick, and Greg Munster.
We needed the painful and valuable contribution of our crack editing team, including Ingrid Wenzler, Adam Sirgony, and Matthew Schmitd, plus special contribution from my brilliant daughter Anna Diorio, who added elegance to our visuals and storytelling.
Of course, none of this could have happened without the personal support and encouragement of our families. They were strong enough to push us when challenges seemed insurmountable and were gracious enough to give us the space we needed when we hit our stride. We are blessed to have our spouses, Lyn and Tatiana, who provided the support, motivation, food, and “air cover” to make this book possible. Our children, Anna and Robert and Angelina, Dante, Chris Jr, and Arabella, should all take credit in this, too, for the inspiration they provide us every day.
Introduction
Growth is good. Really good.
Growth elevates short-term performance. Growth has a disproportionate effect on valuation. Growth – especially organic growth – generates intangible goodwill and positive momentum among customers, influencers, analysts, and employees.
Here's the challenge: organizations too often treat growth like a disconnected, functionally driven art form rather than the interdisciplinary, data-driven science it should be.
The core revenue-facing functions – Marketing, Sales, and Service – all operate in silos. Each function is trying to do its individual job and maximize the impact of its activities on customers and revenue. Managers optimize the parts – brand, demand generation, pipeline conversion, retention rates, etc. – while coordination between the three is episodic, temporary, and heavily influenced by the personalities involved. They allocate resources as a cascade along organizational lines using historical precedents as the primary guide.
Even when this approach works, managers generally celebrate only the fact that growth happened, since they usually cannot explain why. Teams assume that someone else will take responsibility for the whole. When cross-functional collaboration happens, it requires Herculean efforts to marshal the collective troops and achieve one-time, almost artisanal objectives.
Who is ultimately responsible for coordination of key growth assets and initiatives in the business? That often falls on one person: the CEO. Because no other c-level officer typically controls more than 40% of the identified 18 levers of growth, CEOs get dragged into the nitty-gritty of optimizing all variables that cross organizational boundaries. There are a lot of these. Organizations may be built around functions, but real-world opportunities and challenges ignore those artificial boundaries.
So, we have functional experts trying to manage an interdisciplinary, multifaceted problem. This gap between the importance of growth to firm value and the limited understanding of how to achieve it creates heated discussions in boardrooms, management meetings, and planning sessions everywhere. What are we all missing?
Today we lack a system for growth.
Such systems for the back office and supply chain have already been developed over decades. It's time that we brought similar discipline, rigor, and methodology to the process of expanding our revenues. The three teams involved work hard and do their best, but somehow things just aren't clicking. The front office needs standardization and repeatability, too.
To understand how a systems-based approach to growth might work, let's look at what's happening inside each of the revenue-centric functions. To start, here are some common problems all functions are faced with:
The financial criteria for allocating growth resources, OPEX, and CapEx across these disparate functions differs wildly.
Change is everywhere. Not only does change scare people, but it raises questions about whether the benefits of transformation are worth the pain.
Real-world problems are interdependent and interdisciplinary. Regardless of what its org chart looks like, any business needs to manage the entire revenue cycle as an integrated whole before, during, and after the transaction.
The digital selling infrastructure, including the customer experience and data it generates, has become one of the biggest growth assets, even if ownership is unclear.
Investors, owners, and boards need more predictable and forward-looking forecasts.
Consistency, repeatability, and automation could help ensure that good performance is sustainable over time and scalable.
Marketing: Increasing Ambiguity
Telling the company story, getting the offer in market, and orchestrating the customer experience. These are valuable activities that all contribute to demand generation and firm value. In a digital world where innovation, trust, and customer experience matter more, the perceived value of marketing activities has increased, yet budgets are shrinking, and the scope of the function is fluctuating.
A relatively recent invention of the twentieth century, the Chief Marketing Officer (CMO) role has changed dramatically over the course of its short span of existence by shifting from managing media and building brands and demand in the last century to curating the customer experience in digital channels and managing customer analytics in the modern era.
At its best, Marketing should be a commercial function that delivers significant, tangible impact on the business performance of a company, affecting both revenue and valuation. Whether you're the CMO, a brand manager, or a creative specialist, the role can be exhilarating, frustrating, intellectual, administrative, strategic, creative, scientific, powerless, and game-changing – usually all of these and often simultaneously. Transformation is happening, and many fronts are moving. Ambiguity is a marketer's constant companion. Why?