The COO as a new CEO Revenue Partner
CRO is a “hot” trending title, but more CEOs are choosing a COO as their revenue partner instead.
While there is not great industry data on this point, CEOs in a range of industries and growth stages are looking to COO for consistent revenue execution. Consider these examples:
- Forbes: the CEO reorganized all revenue and growth teams under the COO to support stronger alignment across the company and as it prepares for a public listing
- Mulesoft: the CEO put all its global sales, partner, professional services, support and customer success teams under the President Field Operations as it prepared for an eventual strategic acquisition by Salesforce
- Ready Education: the CEO hired a COO to run all its revenue teams the US and Europe to free the CEO to continue to raise money and identify new companies to acquire that will position Ready as the market leaders for the student engagement and student
- Element: the CEO put its COO in charge of marketing, sales, customer success and revenue operations to allow its CEO to be out in the market building the case for a new approach to digital transformation in industrial enterprises
There are several cross-industry trends that are making the COO a “go-to” revenue partner. Here are a few that you as CEOs should keep your eye on.
Trend #1 — CEO as face of the company
As CEO you have always been the face of the company, but the external market and investor demands on your time have increased dramatically over the last decade. ‘
“My job is to partner with our CEO to keep everything moving forward with the revenue and go-to-market engine,” says Don Ross, COO at Ready Education, “I need to free him up to focus on fundraising and new company acquisitions.”
CEOs are spending a lot more time on investment strategy, meetings, and planning. Data from Finmark show that the size of the average funding round increased three or four-fold between 2012 and 2021. Series A rounds averaged $6M in 2012 and $15M in 2021; similarly, Series B rounds averaged $11M in 2012 and $40M in 2021.
The growing size and complexity of fundraising rounds also increases time on acquisitions, whether it is acquiring new companies like Ready Education’s case or preparing to be acquired like Mulesoft’s case.
The rise of the thought leadership and influencer economy has also placed new demands on CEOs time. For most companies, content marketing has become their primary means to engage buyers and customers. As CEO you are probably now expected to participate in more heavily your company’s content creation. For many CEOs it means more frequently joining panels and podcasts, sitting for interviews, and writing point-of-view articles.
Trend #2 — Demand for revenue predictability
“My role focuses on machine building. It is not dissimilar to a factory, but we have people not machines and they need to find their own style,” Laurie said, “The key to sales and revenue repeatability is to build a process, use data and analytics, then optimize and improve.”
Repeatability as a driver of top B2B sales performance is well-known and well documented.
Almost eight years ago CSO Insights showed in a data-driven study of 1,000 sales teams that the key to world class performance was a repeatable sales process that a company monitors to provide continuous feedback to sales reps. More recently Gong Labs showed that consistency in sales execution across the board was an often overlooked trait of top performers.
The demands placed on you as CEO for increased revenue predictable had redoubled with larger investment rounds and higher levels of competition in all markets.
Most CROs come from a successful sales background and as a group are often split between this process-driven mindset and a more traditional focus on the “heroic” individual sales performer. Your COO, by contrast, is probably strongly aligned to the process-driven model.
Trend #3 — Increasing revenue skill specialization
If we look back ten years, companies had just two revenue functions — marketing and sales.
Now the typical company, even sub-$10 million early growth companies, has six or seven — that may include marketing, sales, customer success, account management, a sales development representative (SDR) team, technical sales as well as a revenue operations teams.
The rise of the subscription economy had elevated Customer Success as a third major revenue team to handle customer engagement, renewals and upsells. Many companies now split sales between hunters targeting new logos and account managers who farm existing accounts.
Most companies have a sales development representative (SDR) or business development representative (BDR) to support pipeline development and new opportunity generation.
The growing complexity of many solutions and platforms has increased the importance of have a technical sales team. Similarly, the growing complexity revenue technologies means many companies also need a revenue operations team.
Building a repeatable revenue process across all these teams often aligns better to your COOs skill set than any other C-level executive. COO are used to building repeatable processes across more than six or seven roles that involve widely different skills. Most CROs, by contrast, have come from a sales leadership role and may lack experience with other skills.
Trend #4 — Verticalization and buyer personalization
Ninety-two percent (92%) of B2B buyers give the most credence to peer reviews according to 2019 Content Preferences Survey. They are less interested in hearing about your product, service, or business outcomes in general and much more interested in hearing how it applies directly for their industry peers.
Once largely the domain of large enterprises, the demand to personalize the buyer journey means that even early growth and growth companies need to verticalize. Mulesoft, for example, organizes its solutions around Financial Services, Governments, Healthcare, Higher Education, Insurance, Manufacturing, Media and Telecom, and Retail.
A common approach is to build vertical platform teams that connect marketing, sales, customer success and product. While it is rare that a COO would own all these functions, the drive to platform teams is another trend that positions a COO as a leader around cross-company alignment in building repeatable processes for multiple functions.
As a CEO with intense internal and external demands on your time, you need a partner to make sure the revenue and go-to-market engine is consistently functioning.
A CRO partner is a fine choice, particularly for companies who are strongly focused on market position and marketing to sales alignment.
An increasingly viable alternative, however, is your COO. Your COO is adept at building repeatability across the many specializations and verticals touched by your revenue teams.
Written by Brent Keltner.
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