For CEOs

Signs Your Chief Revenue Officer Isn’t Scaling

Post 3 of 4 in the Startup Series for CRO’s.

If you’ve hired a “great” CRO (see previous post) you might think that you’re set for a long time and that the great CROs are also able to scale. Not always, and you’ll have to check to make sure your CRO is scaling and growing as much as your company. I’ve found there are several telltale signs that your CRO isn’t scaling. Fortunately, they are easy to spot and easy to correct.

First, if your CRO gravitates to being an individual contributor sales rep and focuses on closing big deals instead of mentoring sales managers and sales reps to do that work on their own, that could be a sign that your CRO lacks the confidence to be a true executive. The risk in being an executive is not that you can’t do the work, it’s that you don’t trust your team to do the work. To be clear, sometimes the role of a sales leader (or a CEO) is to swoop in and help close a big deal—sometimes. But CROs who can’t shake their addiction to closing deals almost never build enough of that muscle into their organization and end up creating unhealthy dependency on themselves. Worse, they do not create a career path for others in the sales organization to learn and take risks.

Second, I’ve found that a CRO who gets the sales commission plans out in March or April instead of January or early February is maybe someone who can’t scale. While it’s true that, in a lot of businesses, it’s very difficult to get sales commission plans out until after the year starts, getting them out after late February is a sign that your CRO doesn’t have enough of a grip on numbers, isn’t partnering effectively with finance, doesn’t care enough about their people, or isn’t good at prioritizing the important over the urgent when needed. Obviously, if this happens once it’s not a big deal, but if you find that the CRO is the last person on your team to get their plans together year after year, that’s a telltale sign that maybe they’re in over their heads. You might hear them say, “They’ll all be fine, they know I’ll take care of them, the plan is a lot like last year’s.” That might be okay for the majority of the sales team but it won’t be good enough for the best reps who are constantly doing Sales Math in their heads. It’s a lot easier to mentor a CRO, or find a new one, rather than to build a new team of dedicated sales reps.

Finally, a sign that your CRO isn’t scaling is if they regularly deliver surprises at the end of the quarter—both good and bad surprises. A “surprise” every once in awhile is not a big deal, but regular surprises are a big deal and that tells you something important about the CRO: They might be incapable of scaling and the surprises are coming because your CRO doesn’t have a good grip on the pipeline and in particular on larger deals. Either they don’t have a grip on the pipeline or they are bad at managing expectations; or both!

-Matt Blumberg, July 12, 2022.