CHAPTER 1 Take Control of the Revenue Cycle

      Introducing Revenue Operations, a New Way to Create Sustainable, Scalable Growth

      Revenue growth – the increase in a company's sales over time – is the primary basis for creating business value. The more sustainable and scalable that growth is, the more valuable your business becomes. Despite this importance, the “science of growth” is not well understood. Most businesses approach growth as a disjointed, episodic activity.

      Why? The core reason is that many business owners, CEOs, and leaders lack a practical and proven system for growing their business. Every other primary function in a business – from the procurement, manufacturing, and shipping of products to the management of financial and human resources – has an established system. Purchasing, manufacturing, HR, and finance leaders have spent decades standardizing and automating those systems. Despite that, few of the executives we spoke with could clearly describe any kind of connected approach, system, or model they use to generate the revenue and profit growth they forecast to their investors.

      They gave us some pragmatic reasons for this. First, go-to-market processes have proven hard to manage, measure, and systematize because they are more “art” than science. Second, customers and markets change too often and too quickly to create stable, repeatable processes. Third, they lack the customer feedback data needed to anticipate customer needs, measure performance, and manage the channels, investments, and actions aimed at meeting those needs.

These arguments had some validity in the twentieth century. Not so today. A revolution in data analytics and the emergence of digital selling technology has given managers unprecedented visibility into and control over the full revenue cycle. Analytics improve measurement of customer engagement and account health. They also help to manage selling teams and predict sales pipeline performance.

      Our conversations uncovered a more fundamental reason. Namely, growing a business is an interdisciplinary endeavor with many moving parts that don't reinforce one another:

      In other words, it's impossible to deliver a superior customer experience when your revenue cycle consists of disconnected processes, policies, procedures, and machines.

      No established commercial model exists to get these different pieces of the growth equation working together. Business leaders lack a management framework for coordinating their growth teams, functions, and disciplines. They lack an operating system for managing their growth assets, technologies, data, and processes.

      Until these fundamental issues are addressed, efforts to accelerate or sustain profitable growth will be defeated.

      The solution to this problem is clear. A new system for growth is urgently needed. One that aligns revenue teams with the infrastructure, operations, and processes that support them across the entire revenue cycle. One that generates more growth from the expensive data, technology, and channel assets that are the foundation of modern selling.

      Our goal in writing this book is to better define that system for growth. We call it Revenue Operations.

      Revenue Operations represents a bold new commercial model for the twenty-first century. Its goal is to create sustainable and scalable business growth. As we define it, Revenue Operations comprises two components. First, the management system – our EQ – aligns the people in your revenue teams. Second, the operating system – our IQ – combines technology, processes, and data assets to generate more sustainable and scalable growth. Revenue Operations weaves these two together to grow revenues, profits, and firm value.

Throughout this book we strive to articulate what Revenue Operations is and to show you examples of how to make it work. This book will help every person who cares about growth – from the business owner to customer-facing employees on the front line – to take steps that can generate more consistent and scalable growth. Because everyone has a role in the growth equation.

      The book will specifically help business owners, CEOs, and leaders of the marketing, sales, and service functions to better allocate growth resources, make more profitable growth investments, take intelligent risks, and create a common purpose across revenue teams. It provides operations leaders and performance improvement professionals a blueprint for knitting together the systems, processes, and operations that support revenue growth in ways that generate scalable and consistent growth. This work will also help customer-facing employees on the front line to better leverage the systems, information, and tools available to them and work together as one revenue team.

      In addition, this book provides a career road map for any professional who seeks to advance their career and ultimately lead a business. It provides essential knowledge to any student who seeks a career in any growth discipline – marketing, sales, service, operations, or analytics.

      Furthermore, the lessons and insights inside will help any business, from large enterprises to small companies, looking to accelerate growth.

      How Is Revenue Operations a System for Growth?

      At the simplest level, a system is a combination of things that work together as a united whole to achieve a common purpose.

      Exactly what those “things” are, how they “work together,” the nature of the “united whole,” and the “common purpose” all define how any given system works. Systems can do many things: run a computer; educate people; manufacture and distribute products; and even manage money.

      The “things” within a system can include a wide variety of ingredients – ranging from people and organizations to technology, devices, or software code to principles and procedures. The way they combine to “work together” can take the form of a machine (a computer), operation (manufacturing), a network (railroad), or a biologic process (digestion).

      Businesses have established systems for most of their operations including: manufacturing, distribution, supply chain management, and finance. These systems are generally well organized, automated, managed, and measured in a mature organization.

      The conversation changes when you start to talk about a system for growth. In most businesses, fragmented groups of customer-facing employees, silos of automation, and a lot of disconnected processes, policies, and technologies don't work well together. Nor do they work with a common purpose toward a common goal. There is no system to generate consistent, scalable, and profitable growth.

Revenue Operations changes that. It introduces new elements and shows how they work together. It offers a systems-based approach to growth across the entire revenue cycle: awareness, demand, purchase, and consumption (see Figure 1.1). Companies of all sizes and profiles can use it without having to rip the current business apart.