Stephen G. Diorio, Chris K. Hummel: Revenue Operations

Revenue operations

Growth is good. Really good.

The core revenue-facing functions – Marketing, Sales, and Service – all operate in silos.

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.

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.

Today we lack a system for growth.

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.

Consistency, repeatability, and automation could help ensure that good performance is sustainable over time and scalable.

Telling the company story, getting the offer in the market, and orchestrating the customer experience. These are valuable activities that all contribute to demand generation and firm value.

Sales: Rising Complexity

Sales teams are tasked with converting interested prospects into transacting customers, increasing revenue per account, and managing relationships to increase loyalty and trust.

Selling has become more capital-intensive. Sales leaders now hold two responsibilities: managing both sellers (the people) and selling (the system). Selling has become a complex team sport. Selling teams are more distributed, digital, data-driven, and dynamic.

More business models create more revenue streams going through more channels. We lost visibility of what the customer is doing. The old-school “art of selling” is struggling against the new-school analytics. Selling now requires less human interaction to enhance relationships.

Sellers now need to balance the volume, content, and frequency of digital interactions with person-to-person outreach to find the optimal revenue yield.

Service: Progressive Emergence

Service drives the customer’s consumption of your product or service. This function covers activities like onboarding, activation, implementation, support, adoption, change orders, upgrades, maintenance, and many more.

Cloud software companies do often have a function called “Customer Success” that handles much of the adoption process for complex offerings, and this function is starting to pop up in other industries that have complex implementation requirements.

Stepping back into the CEO’s shoes there are common observations from all the functions.

Change is everywhere.
Real-world problems are interdependent and interdisciplinary.
A systems-based approach is required.

Executives and managers today are using outdated twentieth-century tools to govern and manage twenty-first-century businesses.

Revenue Operations, A System for Growth

Take Control of the Revenue Cycle

Revenue growth – the increase in a company’s sales over time – is the primary basis for creating business value.

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.

Growing a business is an interdisciplinary endeavor with many moving parts that don’t reinforce one another.

It’s impossible to deliver a superior customer experience when your revenue cycle consists of disconnected processes, policies, procedures, and machines.

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.

The marketplace values firms with hyper-growth (e.g. annual growth over 40 %) and predictable revenues (e.g. Net Annual Recurring Revenues of over 100 %) disproportionately.

Average purchase price multiples are at historic highs. PE investors are now paying in excess of 13 times EBITDA (which are earnings before interest, taxes, depreciation, and amortization) to acquire businesses.

Several private equity firms like Rockbridge Growth Equity, Morgan Stanley Private Equity, Tengram Partners, and Vista Equity Partners have created a growth culture, operating model, and infrastructure to support accelerated growth at scale across their portfolio. These growth-oriented investors have created centers of excellence in demand generation, call centers, and digital marketing channels.

Unfortunately, many people still perceive growth as a form of “art” and fail to understand the science of growth. These people often see business functions through a very narrow lens: marketing is a creative discipline with little or no connection to financial outcomes; selling is about personal relationships, not a method; and superstar sellers are treated as kings and queens – despite being hard to manage and even harder to replicate.

Corporate executives struggle with the long-term growth formula. They can rarely agree on the big questions underlying their growth strategy such as the measurement, value, and importance of growth assets.

Growing a business is an interdisciplinary endeavor. A team sport.

Less than 20 % of CEOs have direct experience in sales. Few marketers become CEOs.

Academic research has proven there is a significant relationship between how fast your organization shares data and customer insights across revenue teams and share price. Organizational Knowledge Sharing. Managers need to recognize and prioritize the importance of sharing knowledge across the business.

Lifetime value is being redefined as an economic model in a digitally-driven economy.

Any business can also unlock more growth and value by improving the return on their revenue-generating commercial assets – by which we mean your customer data, digital technology, digital channel infrastructure, and customer relationship equity.

Although the economy might have been built upon railroad tracks, canals, and factories in the past – today it is driven by intellectual property, software code, learning data sets, digital customer experiences, design, branding, and process know-how.

United Airlines and American Airlines recently secured multibillion-dollar loans by collateralizing their MileagePlus and AAdvantage customer loyalty programs, respectively. United’s customer data was valued at $ 20 billion, while its market cap at the time was about $ 9 billion. American’s data was valued at a minimum of $ 19.5 billion and up to a jaw-dropping $ 31.5 billion. The rising importance of intangible assets as the foundation for growth and firm value is a big change.

Here are some of the forces and megatrends that have changed the basis for generating revenue growth over the past 30 years:

Changing buyer behavior has elevated the customer experience and made it the primary goal. Customer expectations for faster cadence, complete answers, digital channel engagement, and relevant content. Most (55 %) of millennial B2B customers today would prefer to buy a complex solution without engaging a sales rep at all, according to Gartner. And when they do ask questions, they want fast and complete answers. The primacy of the customer experience puts pressure on managers to better manage the end-to-end commercial process rather than a few parts or stages of it. Managers struggle to coordinate revenue teams, management systems, metrics, and platforms into a more unified customer experience.
The speed and cadence of business is faster.
Selling has become more capital-intensive. Leading a revenue team in the twenty-first century is more about managing selling systems and less about managing salespeople. Worldwide spending on customer experience (CX) and relationship management (CRM) software grew 15.6 % last year as 81 % of marketers say they will compete completely on the basis of CX, according to Gartner. In all, the average enterprise now has invested in over 20 selling tools. Businesses are investing over 10 % of their marketing budgets on advanced analytics to find ways to monetize the valuable customer engagement, seller activity, and product telemetry data this digital selling infrastructure creates. “Connecting the dots” across the increasingly complex and expensive technology ecosystems that support revenue has become a basis for competitive advantage.
Selling is more data-driven. Advances in AI and a growing portfolio of AI-enabled selling tools are making data-driven selling possible.
The pivot to 4D selling has changed the economics and the architecture of selling. This has every organization rethinking geographic-based territory definitions, quota assignments based on face-to-face calling patterns, and labor-intensive coverage models.
Managing customer lifetime value has become a primary focus as businesses chase recurring revenues. Moving from selling products to selling subscriptions and SaaS solutions requires significant changes to the way you “go to market.”
Growth has become a team sport. A growing focus on financial accountability has made it more difficult to fund smart growth investments.

4D Selling Systems. How Digitally Enabled, Data-Driven, Dynamic, and Geographically Dispersed Revenue Teams Are Changing the Way We Manage Selling Systems?

The shift has changed the ways businesses sell to customers by:

Redefining field selling economics and capital investment.
Creating a burning platform to redefine the customer experience.
Accelerating the adoption of advanced communications, enablement, and visualization technologies.
Creating massive new customer and seller activity data sets.
Elevating the importance of analyzing customer sentiment and nonverbal cues.

Businesses will need to find ways to use new data from customer transcription and digital engagement platforms like Zoom, Teams, or Cisco Webex to understand customer emotions and all the non-verbal elements of selling.

Forcing sales operations to improve visibility and transparency.

Using an obsolete commercial model to manage a modern selling infrastructure has significant business consequences.

Organizations can leak 10 percentage points of EBITDA by failing to follow up on opportunities, enforce pricing discipline, respond to buying signals, or recognize when their biggest customers are about to take their business elsewhere.

The “stovepipe” organization consisting of separate marketing, sales, and service functions is a vestige of another era when media had greater reach, digital channels were just emerging, and customers followed an orderly and linear buying process.

Today, the functional distinctions between marketing, sales, and service exist more because of cultural and operational inertia rather than market reality.

The twentieth century commercial structure is collapsing under the twin pressures of changing customer behavior and shifting business models.

The CXOs we spoke with are also working to find ways to generate greater returns from the systems and technologies that support selling. Most feel their investments in CRM, digital selling infrastructure, sales enablement technology, and data assets are underperforming.

The majority tell us they are trying to rationalize, simplify, and better connect the many solutions in their sales technology stack.

Create Value and Impact from Revenue Operations

Gartner forecasts that most (75 %) of the highest-growth firms will have deployed a Revenue Operations model by 2025.

While most agree that Revenue Operations is a good thing, nobody has really defined it nor demonstrated the depth of how it can work.

Aligning the revenue-centric teams in marketing, sales, and service around a common workflow will also produce value in a variety of meaningful ways, including:

Productivity: Rep productivity gains ranging from 10 to 60 %.
Growth: Revenue growth improvements ranging from 19 to 31 %.
Ramp: The speed of ramping new sales reps of up to 60 %.
Churn: Reducing rep churn by 75 % or more.
Quota attainment: Improvements in quota attainment.
Value: Increases in firm value range of up to 71 %.

So far, research has failed to clearly define what a Revenue Operations model is, how those gains are being realized, and who specifically is achieving them.

It is possible to achieve immediate financial gains and demonstrable signs of progress from taking specific and measured actions:

Eliminate revenue leakage across the revenue cycle by eliminating the handoffs and “air gaps” in the prospect-to-cash cycle to revenue and margin leakage with a single point of management of the customer journey across the enterprise.
Enable scalable technologies that multiply your efforts by redeploying operations and analytics resources to create scalable and consistent growth including one-to-one personalization at scale, real-time training at scale, dynamic pricing, data-driven sales resource allocation, and account-based marketing.
Foster teamwork by doubling the engagement, speed, and productivity of revenue teams by adjusting the way they architect and systematize their selling systems, so they can grow faster while reducing the associated cost of sales.
Improve the return on technology assets by rationalizing the technology stack to reduce waste and sunset stranded or nonperforming assets.
Use data to optimize selling and resource allocation by generating more and better insights from customer engagement and seller activity assets.

Businesses can realize these efficiencies by sharpening segmentation, focusing account priorities, shifting engagement to digital channels, and fine-tuning the emphasis and priorities of their sellers. We call the optimization of all these selling system design variables “the commercial architecture.”

Reallocate sales overhead from real estate and travel to more scalable investments in training and enablement.

Improve the economics of field selling by improving the speed of ramping sales reps, raising the overall level of readiness and skill across the entire revenue team, and reducing churn to retain top talent that performs at a high level.

Eight Ways Revenue Operations Creates Financial Value:

Monetize commercial assets.
Manage the economics of selling.
Differentiate the customer experience.
Enable scalable growth technologies.
Support recurring revenues.
Improve visibility into selling performance.
Motivate team selling.
Turn technology assets into force multipliers.

The Management System to Align Your Revenue Teams

Understand Six Pillars of the Management System

What does it mean to have a management system that aligns marketing, sales, and service to generate more consistent, scalable growth? The answer breaks down into six specific pillars for managing the people, process, and technology of revenue growth: commercial leadership, commercial architecture, commercial insights, commercial asset management, commercial enablement, and commercial operations.

Commercial Leadership that unifies marketing, sales, and service.
Commercial Operations that consolidate and support all growth-related functions.
Commercial Architecture that maximizes the return on selling assets.
Commercial Insights that are built upon customer engagement and seller activity data.
Commercial Enablement that turns your technology into a “force multiplier”.
Commercial Asset Management that leverages best practices for managing data, technology, content, and intellectual property assets.

These six pillars can be detailed even further. Our research identified 18 discrete steps that best-in-class, leading organizations are taking to better align commercial revenue teams, operations, data, and processes and to grow faster at lower cost.

CEOs in slow-growth industries can generate higher business valuations focusing your revenue teams around a more precise set of high-opportunity clients. Assigning an individual accountable for finding ways to eliminate price, margin, and revenue leakage along your revenue lifecycle – which extends from awareness generation to account-building activities. Using AI to provide real-time selling guidance can help sales managers to monitor, support, and coach many sellers at the most teachable moments.

Only the CEO or chief operating officer can unify sales, marketing, and service into one revenue team because that is the only manager to whom these functions report.

The top growth leader in the organization needs to focus on three areas to empower and endorse the transformation of the commercial model.

Demanding accountability from every revenue resource, program, and capital investment.
Assigning an owner of the enterprise commercial process, assets, and investments. CXOs need to establish a single point of decision-making for the entire enterprise commercial process – from prospecting to customer expansion – as well as the assets, investments, and systems that support it. You can do this by giving an individual decision-making authority over the cross-functional commercial processes, digital selling assets, and sales and marketing support operations.
Leading change management from the top down.

In the twenty-first century, the customer experience has become the basis of competitive advantage, and the growth investment mix is dominated by owned digital channel infrastructure and the content, data, teams, and technologies that support them.

Managing cross-functional commercial assets, processes, and teams requires air cover and funding from their Chief Operating Officer, or from a newly created Chief Customer Officer, Chief Experience Officer, or other C-suite leader who has the authority to address tough issues that cut across the typical functional hierarchy of most large companies.

Leaders have three key focus areas to reconfigure the operations that support growth and enable salespeople to provide coherent, end-to-end management of all customer-facing employees, assets, infrastructure, investments, and the customer journey.

Make common purpose an operational reality.
Establish more cross-functional commercial organizations.
Establish a single, multidisciplinary, commercial process across the enterprise.

Pentair established a Commercial Excellence program that identified a number of ways to improve the “prospect-to-cash” process. These included customer segmentation, generating deep “voice of the customer” insights, and improving the product launch processes, to name a few.

Growth leaders are reconfiguring their go-to-market strategies, sales force design, and territory and quota plans to reflect changes in customer behavior and response, the impact of enablement technologies, and the need to focus on customer lifetime value.

Redesigning the commercial architecture must focus on maximizing return on selling assets by improving the speed, visibility, productivity, and engagement of frontline selling teams while reducing cost to sell. Here are incremental steps you can take to make this happen:

Redesign the go-to-market approach to improve performance and engagement.
Adapt the sales force design to improve speed, visibility, and engagement at a lower cost. This involves reconfiguring sales force segmentation (the roles within the sales team), sales force emphasis (what products they sell), seller compensation, and sales rep training and development strategy.
Reconfiguring selling channels.
Deploy sales performance management models and tools to better align with the opportunities.
Digitizing the process of planning, managing, and optimizing territory boundaries, seller targets, and quota assignments has many benefits. It will make the process faster and less expensive; speed up the process of making mid-period adjustments and plan reviews; and make their planning process more data-driven, accountable, and collaborative.

We have a sales operations team that runs analytics on things like the cost to serve an average client, what coverage models perform best, how quotas should be constructed by industry, and ultimately how we should compensate.

Certain core capabilities enable the transformation of customer engagement and seller activity data into valuable commercial insights. To improve performance and realize greater growth from existing resources, organizations should:

Convert revenue data into prescriptive and actionable commercial insights. Sales leaders need to increase the speed of communication by providing real-time training and guidance to help frontline sellers respond immediately and completely to “new school” buyers and follow-up on signals of buyer intent or attribution while they still have time to affect the outcome.
Focus on KPIs, common objectives, and goals. Key metrics and indicators align sales, marketing, and service around common objectives, goals, KPIs, priorities, and incentives and provide visibility into buyer engagement, seller activity, account health, and pipeline potential.

Steve Lucas, the CEO of iCIMS, is focusing his revenue team on customer lifetime value by pushing his team to clearly define and quantify what a good client relationship looks like empirically on a scale of one to ten. Any account team with a customer engagement score of less than 9 had to take a series of actions to improve customer health. In parallel, he created a tightly defined customer persona called an Ideal Customer Profile (ICP).

To enforce this discipline of delivering high-quality customer engagement to the highest potential customers, his teams were paid 20 % higher commissions when they engaged and developed ideal customers, as opposed to when they spent their energies on less-than-ideal prospects.

Develop predictive insights to improve account priorities and resource allocation. In the absence of analytics that quantify account potential and propensity to close, most organizations chase too many low-quality clients and opportunities – those where they stand little chance of winning but want to feel like they are still in the game. Understanding when to take a light touch approach versus hands-on sales or when an account should be more marketing-driven is key.

A common core of commercial capabilities will enable salespeople and maximize the contribution of selling assets and investments to revenue and profit growth outcomes. The following actions will create a “force multiplier” in your business:

Reconfigure enablement solutions to simplify day-to-day selling. According to Jeff McKittrick, who has led sales enablement at Cisco, Hitachi and WalkMe over the past 15 years. “Organizations are eliminating points of failure, friction and manual labor in the day-to-day seller workflow by connecting these dots across CRM, sales enablement, sales readiness and digital asset management solutions – which are largely managed in silos in most B2B organizations.”
Reconfigure the readiness, training, and development technology portfolio.
Focus the Revenue Enhancement technology portfolio to improve the lead to cash cycle and capture more revenue, margin, and price. You can do this by providing frontline revenue teams with configuration, pricing, and quotation (CPQ), order management, and fulfillment tools. They help sellers optimize the pricing, personalization, and packaging of presentations, proposals, and solutions they present to clients. Most organizations don’t need more technology as much as they need higher returns on their commercial technology and customer data assets.

Growth leaders need to strategically manage their commercial data, technology, content, and IP assets to maximize utilization, impact, and return on investment. Here are some ways to accomplish this:

Establish common stewardship of customer data assets.
Centralize the management and operational administration of technology assets.
Manage selling content as a strategic asset.

Setting up a function to more strategically manage, organize, and deploy these content, knowledge, and “selling intellectual property” assets.

Today content can represent over a third of marketing budgets (according to HubSpot) and most organizations are increasing their investment in content and the systems that support its delivery. Unfortunately, the utilization of that content by sales remains extremely low, and it is hard to create customized content at scale.

The importance of managing selling content as a strategic asset by using content reuse, templatization, and intelligence as ways to manage the growing cost and complexity of creating content to respond to increasingly demanding customers.

Not every one of these 18 actions will be equally important to every business. If you are working in a slow-growth industry, you may want to prioritize actions that can generate higher valuations. If you work in a large, complex enterprise, you should likely focus on breaking down functional silos. If your organization is undergoing business model transformation, you may want to focus their short-term efforts on redefining incentives to focus revenue teams on customer lifetime value, retention, and annual recurring revenue. If you work in a hyper-growth cloud company, you may choose to prioritize leadership by putting in place a single CXO (Chief Revenue Officer) to align commercial teams around the customer.

Lead a Modern Business That Aligns Marketing, Sales, and Service

Revenue Operations requires change, yet senior leaders too often delegate the process of change to lower-level managers or professionals within the operations group. These managers no matter how talented and motivated, usually lack the influence, authority, and risk tolerance to effect the change needed.

Companies are faced with several critical business imperatives that challenge the existing leadership structure and accelerate the adoption of a new management system.

Addressing investor pressure to grow faster.
Accelerating growth is a particularly big pressure for businesses transitioning to SaaS, cloud, or subscription business models, which rely on faster growth to transition from transactional to recurring revenue streams without a large short-term profit hit.
Facilitating teamwork: A big factor in the success of Revenue Operations is the growing mandate for teamwork.
Adapting to customer behavior: The commercial organization is becoming increasingly defined by the ways clients engage through a variety of human and digital touchpoints.
Taking on risk: A very big but unspoken factor behind the failure of organizations to adopt enablement technologies and transform their organization and operations around the customer is risk.
Improving speed and agility: A higher scope of authority over customer data and commercial processes is necessary to speed information across the enterprise and ensure timely decisions that will affect results in the short and long term.

There are three keys to success in a SaaS model – speed, talent, and incentives.

Do we have the right road map? Is my go-to-market model optimized? Am I retaining our existing customers? Are we expanding services to the base? And am I modernizing our systems and processes?

More and more we see companies and boards struggling to match their existing management roles against twenty-first-century commercial requirements for serving customers and finding new sources to create value for stakeholders.

The existence of silos in large enterprises is nothing new. It is one of the disadvantages of scale.

The common trigger that seems to cause these problems is when multiple revenue-facing functions are created under different leaders. This condition exists in businesses of every size.

Senior growth leaders must do five essential things:

Provide direction on the allocation of growth capital and operating budgets.
Create a common purpose across the organization.
Optimize the growth operating model.
Reimagine the growth technology portfolio from the top down.
Establish a growth culture and aggressive growth targets.

“I view my role as CEO as being the firm’s Chief Engagement Officer,” reports Steve Lucas, the CEO of ICIMS, “my job is orchestrating the customer experience across many touchpoints and functions. This means developing a real-world strategy for customer engagement.”

Executing a customer engagement strategy involves creating a vocabulary, culture, measurement system and model for orchestrating the engagement of sales, marketing, and services with all the key customer stakeholders in ways that resonate and deliver a superior customer experience.

Larger enterprises, such as Cisco, Honeywell, Splunk, and Pentair, are also introducing expanded CXO roles with titles like Chief Growth Officer, Chief Revenue Officer, Chief Commercial Officer, and Chief Customer Officer with broader scope and a remit to better manage commercial assets, the operations and enablement infrastructure, and the customer journey across the enterprise.

Use One of Three Leadership Models: The Tsar, the Federation, and the Chief of Staff

Many organizations have become too comfortable in their current set up and find themselves burdened with outdated structures and frustrated staff. A few innovative leaders, however, have moved beyond the status quo and clustered around three new leadership models for Revenue Operations: the Tsar, the Federation, and the Chief of Staff. Like different political systems – autocracy, democracy, or monarchy – none of them is perfect, and there are certainly shades of gray between them.

The Tsar uses institutional authority to align all the revenue teams. In this approach, the company consolidates decision-making and operational control for all revenue-related functions under one leader. Alignment happens from the top down because a single leader, the “tsar,” approves the growth strategy and allocates the resources to make it happen. Unfortunately, most leaders don’t have a professional background or hands-on experience in each of the core functional areas and thus struggle to competently extract the best from all of them. Christian Smith, CRO of Splunk, understands the impact of holding every commercial function, including sales enablement, accountable for generating measurable growth outcomes and financially valid returns on investment.
The second organizational model that emerged from our research and conversations with industry leaders is called the Federation. It uses processes outside the organizational structure to foster teamwork. In this approach, the company creates rules of engagement, steering committees, and service-level agreements among growth leaders to coordinate priorities, manage growth initiatives, and work together to remove obstacles. A matrix overlay emerges to establish joint accountability and common purpose without making any official changes in the reporting structure or organizational chart. It’s important to capture the more qualitative aspects of growth in terms of meaningful conversations with the customer and the number of times the sales team raised their hands. They brought marketing – as well as the engineering and product teams – into the conversations with the customer, in quarterly business reviews, and other account development activities. These collaborations demonstrated they were building trust and that marketing was being viewed as an extension of the sales team. They’ve moved to more of a ‘Quality of Engagement’ (QOE) score to measure our account teams that reflects all of the actions, activity and engagement that contribute to account health and lifetime value. Globalization of functions – the consolidation of functional resources, people, and budgets from all parts of the company into one global organization – has become popular over the last few decades. This effort is usually intended to increase professionalization by consolidating domain expertise and to improve efficiency by reducing fragmentation. Oracle globalized its marketing function in 2000. To maintain connective tissue with sales, the field marketing leaders in Asia and Europe pioneered a new concept, the Demand Generation Board (DGB), to serve as a transparent planning, prioritization, and alignment process between sales and marketing. The DBG was, in essence, a quarterly meeting between the key heads of sales and marketing in the region to review market, revenue, and customer data; agree on the primary go-to-market plays that we wanted to make; and prioritize the allocation of resources to generate sufficient demand for us to meet and exceed our revenue targets.
In the Chief of Staff organizational model, sales operations, marketing operations, and other similar roles – like sales enablement, customer analytics, and training and development – merge into one unit that provides support for the marketing, sales, and service functions. The mix of institutional authority and indirect influence required creates an ambiguity that some organizations find challenging to balance. Still, this approach is gaining some traction. This structure makes it much easier to collect first-party data from website and digital marketing campaigns (owned by marketing operations), match it to account structures and contacts in CRM (owned by sales operations), deliver it to frontline sellers (using tools owned by sales enablement), and report on account health (owned by customer analytics). It also helps connect selling playbooks (that reside in sales operations) with training systems (owned by training and development) with systems that track, record, and analyze what actually happens in sellers’ calls.

In his role as the leader of Sales, Customer Success, and Revenue Operations, Scott Kelley’s remit is to align GHX customer-facing revenue teams and the commercial operations that support them to deliver more sustainable and scalable growth and realize the full potential of this dynamic market.

“The single biggest thing that keeps me up at night is how effectively we are engaging with our customers,” shares Kelley. “As a SaaS business, if we are not engaging in a manner that aligns with client goals then we’re not successful. We need to constantly evaluate questions like do our front-line sellers know the most important customers and calling points in every account? Are they in regular and meaningful contact with them? Is our customer success team engaging in a way that’s not only fixing a problem but being proactive and helping customers get the most out of our solutions? Do we have technology in place that provides us visibility to when our customers are or are not using our tools – and will our customer success team rally quickly to engage with that customer? Will we find the right balance between videoconferencing and face-to-face engagement as we come out of the pandemic?”

An Operating System for Conecting Technology, Data, Processes, and Teams

Assemble the Nine Building Blocks of Revenue Operations

Consistency may be boring, but it represents a manageable path to value creation.

Consistent, repeatable revenue growth earns a lot of benefits: sellers execute the assigned selling motion and playbook better; programs generate predictable outcomes; analytics make more accurate predictions about who to call and what to do; and more sellers make quota.

This operating system creates value in three ways: revenue expansion, cost reduction, and improved customer experience.

Connected data, technology, automation, and processes serve as a bridge between the nine building blocks that make up the foundation of the operating system that enables Revenue Operations to take hold.

The Revenue Operating System (ROS) Technology infrastructure.

Growth assets include the physical and increasingly important intangible assets you use to acquire, develop, and expand customer relationships. People, data, technology, brand preference, selling methods, customer relationship equity, channels, and mindshare represent just a few of these.

Commercial insights inform actions, conversations, and decisions. To us, commercial insights are the intelligence that informs management decisions, selling actions, and resource allocation.

Value drivers are capabilities that generate more revenue and margins from your teams and resources. Talent management, innovation, pricing, promotions, and process automation help optimally allocate resources against opportunities, maximize the yield from every selling interaction, and unlock the full potential of your selling talent.

The Revenue Operating System can be broken down into nine discrete building blocks. Three growth assets include the selling technology stack, the customer-facing technology stack, and the channels your organization uses to engage and sell to customers. Commercial insights include data around customer engagement, data around seller behavior, and an advanced analytics hub that consolidates and examines all revenue-related data for patterns, insights, and triggers. Three value drivers also identify the capabilities to find and develop talent, optimally deploy resources, and deliver revenue enhancements like pricing, packaging, and promotions.

Revenue Enablement: The commercial technology assets, capabilities, and systems that support sellers.
Channel Optimization: The systems, processes, and capabilities that improve the engagement, productivity, cadence, intersection, and coverage of selling channels – both digital and analog (human).
Customer-Facing Technology: Your “owned” digital selling infrastructure, including websites, blogs, mobile apps, and e-commerce platforms.
Revenue Intelligence: The analytics and information technologies that extract insights from your selling and transaction data sources.
Engagement Data Hub: The technology and capabilities that aggregate, transform, and monetize all customer, revenue, and seller activity data from first-party systems and third-party data sources.
Customer Intelligence: The software applications, capabilities, and processes that convert customer data into actionable insights.
Talent Development: All the technology, processes, assets, and capabilities that you use to attract, develop, and retain selling talent. This includes training methodologies, selling playbooks, learning management systems.
Resource Optimization: The technology, processes, and capabilities your organization uses to optimally allocate people, time, and effort against customers and markets.
Revenue Enhancement: The technology and processes that help sellers generate more margin, revenue, and value in their interactions with customers.

Revenue Operations requires real alignment and integration across traditionally compartmentalized divisions of your revenue team to be successful. The team that connects the most dots wins.

Here are some of the top ways the executives we interviewed connect the dots to create value:

Eliminate margin, price, and opportunity leakage by getting greater control over the entire revenue cycle (demand, transaction, and consumption).
Increase the speed, visibility, and performance of your customer-facing employees by simplifying day-to-day seller interactions.
Turn your technology into a force multiplier that increases your return on growth assets, resources, and investments.
Attract, recruit, ramp up, and retain higher-performing sales talent that stays at your company longer.
Balance resource allocation to support more quota-achieving sales reps and capture more market opportunities.

Owned digital infrastructure and resources (i.e. content, data scientists, bloggers, and promotions) arguably fill two-thirds of the marketing mix.

Getting effective sales content to sellers at the moment they need it, for example, takes at least three steps and spans many systems. Data about customers is the same.

Rethink this through the lens of the Revenue Operating System, and you’ll find leading providers of revenue enablement solutions like Revenue.io, Highspot, 6sense, RFPIO, and Varicent span three or more established technology categories.

What’s important is not the number of tools, but your ability to connect the dots across the sales and marketing technology ecosystem. This looks complex. And from a product integration and data flow perspective it is. You need to orchestrate across the different silos of technology. That’s how value gets created in modern selling.

Connect Your Data, Technology, and Channel Assets to Acquire More Customers

Here are some examples of managing core growth assets:

People: Improve the return on investment from your customer-facing employees. Focus them on the right actions, clients, and conversations.
Customer data: Manage customer data like the asset that it is. Convert that data into insights that drive revenue and help reps in real-time.
Digital selling technology infrastructure.
Selling content: Align all selling content, regardless of which organization creates it, around a consistent value story and go-to-market strategy.

Sales reps still spend most of their time not talking to customers, data is not fully leveraged, marketing content is not utilized, and most CMOs don’t believe technology is replacing their marketing staff any time soon.

Most sales managers and performance professionals told us they cannot effectively use AI and advanced analytics to understand seller effectiveness or buyer intent.

Developing the operating system offers the best way to improve the productivity of salespeople, technology adoption, and return on selling assets. It will connect and coordinate your core selling CRM, sales enablement, training, and content management, and selling structures.

CRM platforms too often only serve as systems of record for the sales teams, yet sellers do want help actually selling – and try to ignore anything that feels like a burden.

The key measures of sales productivity – time spent with customers (34 % of rep time) and quota attainment (42 % of all reps) – have not moved materially over the last few decades.

Sales analytics and AI are accelerating the convergence of traditional sales enablement, readiness, and engagement software.

Individually, these solutions are automating and enabling critical aspects of the day-to-day customer workflow – from finding content, preparing for sales calls, and logging the results in CRM to responding to RFPs. Connecting them will revitalize legacy investments in CRM, sales enablement, digital asset management, training software, and customer data.

Greg Munster, VP of Global Sales Operations at Canonical. It often feels like we are working for the selling tools rather than the tools working for us.

Big financial rewards await the sales leaders who can knit together end-to-end platforms that effectively use AI and advanced analytics to deliver speed, simplicity, and scalability.

Rationalize the Revenue Enablement Stack.
Simplify the Day-to-Day Seller Workflow. Sales leaders need to insist on making the simplified seller experience a primary goal of their sales enablement strategies.
Automatically Enrich, Update, and Augment CRM with Real-Time Customer Engagement and Behavior Data. A single view of the customer to direct targeting and inform multichannel customer engagement programs. Common customer and account profiles fuel an array of event-triggered Account-Based Marketing (ABM), sales engagement, digital marketing, and media communications across marketing, sales, and service touchpoints. The best solutions automatically and immediately augment CRM systems, syncing customer engagement and seller activity data without data entry by reps – this ensures data integrity and process consistency.
Align Sales Enablement, Digital Asset Management, and Sales Readiness into a Single Selling Motion.

Jeff McKittrick and Jim Blum, who led the sales operations team at Hitachi Vantara, focused their efforts on connecting and creating a Digital Selling Platform.

The same five or six problems or ‘hot spots’ in the sales process that hold salespeople back. These include finding the right product, solution, and selling content to meet customer expectations. Getting quick and easy access to competitive information and customer references to support the deal. And getting help finding and preparing proposals, pricing, and RFPs.

According to McKittrick, there are five keys to connecting the dots across the revenue enablement technology portfolio to build a Digital Selling Platform that creates value:

Take a top-down approach to technology.
Identify the key points of leverage and failure in your sales process.
Rationalize and focus the technology portfolio.
Fill critical gaps with best-in-class tools.
Leverage digital adoption solutions to multiply utilization.

The compressed nature of these changes during the pandemic in 2020 – 2022 proved that selling via virtual channels without face-to-face engagement can work, even with complex, highly experiential solutions.

For those willing to harness readily available but not broadly applied technologies like AI, augmented reality, 5G communications, and haptics to truly transform the selling experience, 4D selling offers even greater untapped potential for financial gain and competitive differentiation.

To make the greatest use of scarce time we must equip sellers with better information about where the buyer is positioned in the buying cycle and meet them there with the information, content, and plays the buyer needs much faster.

Three Ways Technology Can Enhance Selling Channels:

Migration moves expensive selling interactions from high-cost field sales channels to lower-cost call center, digital, and contactless selling channels.
Automation removes low-value time investments for customer-facing employees and eliminates less productive tasks in the day-to-day selling workflow.
Augmentation helps sellers add more value during customer touchpoints and interactions.

Technology can optimize the cost, effectiveness, and experience of your channels, regardless of whether they are direct or indirect, physical or virtual.

Automating Direct Sales and Service Channels.
Enabling Virtual 4D Sales Reps with Tools and Technology.
Optimizing Direct-to-Customer Channels.
Migrating Sales and Service Interactions and Transactions to Low-Touch and No-Touch Channels.

As more millennials and B2B buyers are asking for 100 % no-touch buying experiences, channel migration is the gift that keeps on giving.

Augmenting and Enhancing Seller Performance by Providing Guidance and Coaching They Need “In the Moment.”

Here are four emerging data sources.

The first is what is called email, calendar, or “exchange” data.
The second is what we call “content data.” Most organizations are now systematically tracking content distribution, engagement, and consumption with buyers and prospects.
A third primary data group is first-party data. Most organizations have robust owned digital sales infrastructure to engage customers online.
And the fourth and emerging data set is recorded conversations.

Growth innovators are using AI to “connect the dots” between these massive new sales engagement data sets to the five ways they create immediate value: delivering better channel performance, resource allocation, people management, measurements, and product channel readiness.

If they are the right partner for the long term, they should be able to answer these questions about their ability to enable real-time data-driven selling guidance and coaching. Can you help us get control of the four core sources of customer engagement and seller activity data that already exist in our business – CRM, conversational commerce systems, marketing, and sales enablement? Can you provide real-time guidance at the “moments that matter” in the sales process? Can you help our managers coach reps during sales calls? Can you give us a complete picture of what works and what does not? Can you deliver signals of buyer intent or churn from marketing to our reps? Will your solution enable our CRM system as a practical and forward-looking system of record for revenue intelligence? Can you help us improve data integrity and save sellers time by automatically recording and updating customer data records?

The digital selling infrastructure includes all digital channels that the company uses to engage customers and where it controls 100 % of the message. Such channels include e-commerce, websites, mobile applications, and blogs.

Our definition extends to any digital marketing, sales, or service touchpoint that engages customers, collects first-party data about them, and is owned by your organization.

Much of the owned digital infrastructure is bought and managed by the marketing function. Consequently, this infrastructure frequently falls into the silo trap.

The real value of customer-facing technology is realized when an organization has a system for: identifying more of the leads coming in digitally, and getting that information to a human who can convert it into value.

Some people try to bypass the system – but ultimately if you want to have salespeople use marketing signals from your websites and third-party signals of intent – you need that data in your CRM – that’s why we put so much emphasis on cleaning data, eliminating bad data, filling missing data gaps in data. That’s where the ROI is.

The four sources of value creation outlined here:

Incorporating digital marketing data in customer profiles and frontline selling systems.
Leveraging data from contactless selling technologies with sales, marketing, and service teams.
Sharing digital marketing data with sales and service teams.
Enabling ABM programs to optimize account coverage.

ABM is a great example of a program that is much better described and managed as a system that connects dots across the sales, marketing, and service ecosystem rather than a narrow technology category.

“I define ABM as the new name for the age-old practice of intensely studying the customer and applying that meaningful insight to the development of masterfully choreographed sales and marketing plans,” reports Melinda McLaughlin, the CMO of Extreme Reach.

Growth leaders should focus on four keys to success to ensure their ABM strategies generate results in terms of firm value and financial performance: Make scalability the core strategic objective of ABM technology investment; Evolve performance measurement from marketing-sourced pipeline to customer engagement metrics; Improve how fast and efficiently your organization shares customer data and insights; and Establish a common economic purpose for long-term investment in ABM assets with sales and finance.

Blend Data into Insights That Inform Selling Actions, Conversations, and Decisions in Real Time

The leaders we spoke with were turning these investments into value by using advanced analytics to reinvent customer journeys, automate sales activities, and extract better prices.

At its core, this new Revenue Operating System creates value by unifying and monetizing customer data and insights at the center, while enabling and automating cross-functional sales, marketing, and service workflows at the periphery.

The combination of these forces compels growth leaders to change in several ways:

Curating platforms that orchestrate commercial insights will create more value.
Relying more on algorithms to define territories, account priorities, and the allocation of selling effort.
Connecting sales and marketing solutions into closed-loop systems that better support planning, measurement, and execution of the day-to-day selling motion.
Providing managers greater visibility into seller activity, customer engagement, forecast commitments, and pipeline health and enabling more data-driven decision making.

Visibility into opportunity potential, account health, seller performance, and pipeline activity are regarded as the four most important insights managers need to better manage their selling system.

Creating more precise measures of account health and lifetime value. Align their metrics and incentives with the activities and behaviors that lead to better selling outcomes, greater customer lifetime value, and improved account health.
Automating and improving sales forecast accuracy.
Quantifying seller performance, capacity, and consistency.
Using advanced analytics to improve the accuracy, predictability, and quality of growth plans, forecasts, and predictions.
Creating measures of the financial contribution of long-term growth investment.

The traditional measures of sales and marketing effectiveness based on the demand unit waterfall model – Marketing-sourced pipeline, Marketing Qualified leads, Sales Qualified Leads – are flawed on many dimensions.

One key to winning in the engagement economy is to develop a universal customer engagement quality score that defines engagement excellence to all the stakeholders in your organization.

Customer data is one of the most valuable assets a company has.

Digital marketing programs, digital selling platforms, and third-party data providers generate information that can signal buying intent, propensity to buy, or the risk of attrition.

Sales systems are transforming into Customer Data Platforms that are faster, more proscriptive, predictive, and actionable.

Aggregating third-party data from many sources to uncover selling triggers and insights.
Managing and organizing data around account structures.
Automating the consolidation, harmonization, and cleaning of data from customer-facing systems.
Integrating data from many customer engagement systems.

Organizations that are able to capture and unify customer data and convert it into insights that enable, optimize, and automate cross-functional sales, marketing, and service workflows will have a competitive advantage over those that don’t.

Digitally enabled customers want answers that are faster, better, and relevant.

The speed of selling has gotten so fast that revenue teams often need selling insights in real time to compete.

The revenue team doesn’t want big data – they want guidance, recommendations and prioritization on what to do next. Sellers need to know what actions will drive value and generate the highest return on their time and attention. We need to use data to focus revenue teams, not overwhelm them. To transform noise into sales guidance.

Enriching customer profiles with the third-party prospect, trigger, and behavioral data.
Opportunity prioritization based on propensity to buy, intent, and opportunity potential.
Analytic engines that recommend contextual content and the next best-selling action.

Shifting to a response management paradigm is critical because today we have to think about how the buyer will now ask the question – and how quickly and completely you respond.

Extract More Revenue and Margins from Your Teams and Resources

One major opportunity, when it comes to getting more revenue from your teams, is to focus on a better system for recruiting, ramping, and retaining top sales talent.

Another way to create value is to use analytics to “shrink the bullseye” and “cut the long tail” of customers.

Using your data assets to better align and allocate your selling resources with market opportunity is another way you can create more revenues and value.

Establishing integrated coaching, skill development, and reinforcement processes.
Improving your visibility into revenue team performance.
Creating measures that close the loop between seller performance, training effectiveness, and customer outcomes.
Making one-to-one coaching at scale part of an integrated learning and development process.

Sales leaders must make linking sales readiness to sales effectiveness a priority.

Automating the territory design and quota assignment process.
Algorithmic segmentation, targeting, and coverage modeling.
Account prioritization and profiling based on propensity to buy, intent, and potential.
Selling time optimization.
Using advanced analytics to improve the accuracy, predictability, and quality of plan inputs.

Some of the more impactful ways to digitize territory and quota planning include:

Automating the process workflow.
Develop scenarios to test different resource allocations, sales assignments, roles, and territory configurations.
Seller performance management offers advanced analytics that provide more accurate and empirical measures of seller productivity, performance, and profitability.
Automating quota management.
Dashboards.

Sales teams can use analytics to improve the 4Ps of selling by optimizing pricing dynamically based on willingness to pay, and by personalizing products and proposals to deliver and capture more value from sales transactions.

Pricing optimization and innovation.
Enabling data-driven personalized proposals, presentations, and offerings.
Proposal and presentation automation and personalization.
Creating content that is ready for digital and virtual channels.

Tune the Revenue Operating System to Get Maximum Performance

We’ve seen other organizations dramatically adjust the sales performance by shifting the key parameters such as calling patterns, customer targeting, and product emphasis.

There are three ways you can use advanced analytics to create business impact:

Digitize your planning processes to improve agility in deploying your resources.
Use analytics to make better predictions, forecasts, and investment decisions.
Adopt advanced modeling techniques to evaluate more scenarios and build consensus.

Here are some examples of the positive impact that digitizing your core planning processes can have:

Generating more revenue growth from existing sales assets. The revenue increase comes from four places: better resource allocation; tighter alignment between sales territories and your go-to-market strategy; improved sales productivity; and improved goal attainment.
The agility to reach the market faster. You can’t digitize a process you have not yet systematized.

Managers rarely agree on these three fundamental things: the most essential questions about their growth strategy, the true economic rationale for evaluating strategic growth investment, and the fundamental “math of growth.”

Cam Tipping, whose SABRE strategy simulation is used in 70 top MBA programs to teach growth strategy. These factors are always in conflict. Cost vs. customer service. Sales capacity vs. coverage. Seller balance and fairness vs. revenue maximization. Seller satisfaction vs. short-term revenue growth. Sales rep location, skill and expertise vs. market need. This leads to trade-off decisions.

Adjusting your territories, incentives, engagement models, roles, and customer engagement cadences to generate higher returns from your revenue teams.

Sales resource allocation.
Sales force emphasis.
Optimizing territory assignments.
Breaking down baseline revenues and revenue forecasts by product, channel, industry, and geographic mixes.
Optimizing top-down opportunity allocation.

Seven Places Where Analytics Can Help You Make Better Predictions, Forecasts, and Investment Decisions:

Sales forecasts.
Customer scoring and value models.
Opportunity potential.
Seller capacity.
Seller productivity and profitability.
The sales response function.
Workload estimates.

Your growth strategy can be improved significantly with advanced modeling and analytics techniques that use the following inputs:

Estimates of market potential and opportunity.
Seller profitability and performance.
Customer and account priorities.
Sales workload estimates.
Sales forecasts.
The sales response function.

Management’s ability to accurately estimate the effects of sellers’ efforts on business outcomes is critical to help them make effective and optimal decisions about how to allocate sales resources.

The response function (the relationship between effort and results).

The SABRE business tool mentioned earlier allows teams to “war game” different resource allocation strategies seven periods into the future.

Eight Places Where Advanced Modeling Techniques Can Be Used to Evaluate More Scenarios and Build Consensus:

Selling channel emphasis.
Opportunity allocation.
Territory control boundaries.
Quota type and definition.
Bottom-up targets.
Customer and account priorities.
The best engagement model.
Historic performance baselines.

How to Get Started and Drive Impact

Deliver Growth with Six Smart Actions

Smart Actions are a set of related activities that meet four criteria: they are practical to execute, interconnect multiple building blocks of your operating system, are accretive financially, and link together with other Smart Actions toward a longer-term objective.

Actionable
Connected
Accretive
Scalable

Commercial transformation is a process of continuous incremental improvements. Transformation starts at the top. The cost of not changing is greater than the pain of change.

Six Smart Actions:

Get better visibility into the revenue cycle.
Simplify the selling workflow.
Share marketing insights with frontline sellers.
Develop and retain high-performing selling talent.
Make selling channels more effective.
Streamline and personalize the selling content supply chain.

Revenue Cycle Insight: The key element here is the first-party data generated by your email, websites, calendars, and recorded conversations when customers engage with you. This data will provide a foundation for customer engagement, and seller activity data.

The Digital Selling Platform: The key elements here include your core CRM and sales enablement platforms. It’s important to incorporate all systems that support the selling process with content: digital asset management, competitive intelligence, “configure, price, quote” (CQP) tools, and dynamic pricing software solutions. Ideally, you can incorporate learning and development and readiness solutions that give you the capability to deliver training in context during the sales process.

Account-Based Marketing: There are three key elements to this Smart Action: your first-party data; specialized software to transform, orchestrate, and map those data streams to existing account structures; and contact profiles that reside in your CRM or other system of record.

The Integrated Learning and Development Process: The key elements of this Smart Action include many of the solutions and assets in your revenue enablement systems, including sales enablement and learning management systems and the selling content libraries that support them. They also include selling methodologies, selling playbooks, and development program assets that are generally curated by the training and development organization.

Real-Time Data-Driven Selling: Connecting your sales enablement, CRM, conversational intelligence, and digital marketing systems will make your selling channels more effective. The key element of this Smart Action includes a sales engagement solution capable of aggregating engagement data from many sources, including recorded conversations, CRM, sales enablement, and marketing signals. That solution must record sales conversations and compare them to selling outcomes and best practices.

Intelligent Response Management: Intelligent Response Management is an advanced concept that uses AI and ML to create a knowledge base of content built on actual question-and-answer exchanges between customers and sales reps. Intelligent Response Management is fundamental to Revenue Operations as it turns expensive selling assets – selling content, customer data, and engagement technologies – into customer conversations and selling outcomes that grow revenues, profits, and enterprise value. There are a wide variety of elements that factor into Intelligent Response Management. They include many of the assets and capabilities that span the cross-functional content supply chain from creation to customer. These include the solutions that generate and store content such as proposals, digital asset management, and competitive intelligence systems, as well as the people (subject matter experts), external agencies, and contractors who create content.

Tailor Revenue Operations to Work for Your Business, Big or Small

Complex enterprises are large matrixed organizations that can struggle to grow because of their size and structure. They are trying to save money by rationalizing the technology and eliminating waste, redundancy, or nonperforming assets. Simplifying the selling workflow. Streamline the way selling content is created, managed, personalized, and distributed to sellers and customers through all their channels.

Margin maximizers are large but slower-growing enterprises that create value by maximizing margin and price while simultaneously controlling the cost to sell. Invest in revenue enhancement systems that help sellers capture more price and value.

Agile enterprises are large organizations trying to pivot from their core markets to realize market opportunities in new, rapidly growing segments. They adopt real-time data-driven selling. They reengineer the roles on their selling teams to elevate development roles. They connect their digital marketing infrastructure with their CRM and sales technology systems in support of Account-Based Marketing.

Transformers are businesses transitioning a significant portion of their revenues to a recurring revenue model. They are redefining their measurements and incentives. They shrink the lead-to-cash cycle to improve cash flow. They use new revenue intelligence dashboards to give them better visibility into the entire revenue cycle.

Failure at launch describes businesses with high-growth expectations and funding that are unable to generate the high levels of organic growth their investors want to see. They find ways to “shrink the bullseye” with customer targeting insight. They link together the CRM, sales enablement, sales readiness, and digital asset management solutions.

Gas guzzlers are hyper-growth businesses on a growth trajectory to an IPO. They struggle to achieve scalable and sustainable revenues. A greater focus on accountability. Operational ownership of the entire revenue cycle. They push their commercial operations to better connect their sales enablement, CRM, conversational intelligence, and digital marketing systems.

Leaky buckets need to look at the combination of annualized recurring revenue plus account expansion revenues, minus revenue lost due to downgrades, cancellations, and churn. They redefine incentives to focus revenue teams on customer lifetime value, retention, and account health. They use data to measure and manage all the key factors leading to customer churn – satisfaction, loyalty, onboarding, success, and retention.

“Cloud Climbers” are fast-growing cloud-first businesses that see double-digit revenue growth rates by focusing on speed to market, optimizing the customer experience, and scaling selling technologies and channels. They provide real-time guidance and coaching to reps about the right response, content, action, or sales play to use in the “moments that matter” in the customer journey. They aim to shrink the development and ramp-up time for new sellers to add capacity and combat attrition, which is higher in technology sectors.

Make the Business Case for Your Growth System, from Activity to Impact

You must overcome a few common obstacles, if you want to build a financial case for taking Smart Actions to connect the dots across your growth technology ecosystem.

First, remember that Smart Actions span functions. Finding a single established budget and owner for cross-functional initiatives is a challenge.
Second, conventional measures of sales and marketing effectiveness, such as revenue attribution and sales waterfall metrics, have fundamental flaws and fail to clearly describe how a business grows.
Third, Smart Actions involve a mix of operating expenses and capital expenditures.

The Revenue Value Chain (RVC) is a framework to align leadership around a common view of how your business actually grows. The RVC also helps visualize how a Smart Action can credibly demonstrate its impact on firm value.

Start by agreeing on the basic arithmetic of growth for your business. The team must agree on the growth equation for your business.

Then document the core assumptions behind your proposed action. On a human level, it is much better to argue about assumptions than about a program idea. Use those assumptions to create a business case that connects Smart Actions to firm financial performance.

Use your research, customer insights, and program tests to validate, refine, and model your growth equation.