Pillar Talk: Building Sales Leadership with Rick Smolen
Join Rick Smolen and other seasoned B2B sales leaders on the quest for defining great sales leadership. Learn the pillars of successful leadership, hear stories about what works and what doesn’t, lessons learned, and come away with specific tactics you can apply to your job or career right now.
Pillar Talk: Building Sales Leadership with Rick Smolen
The Invisible Line Between VP and C-Suite Success with Andrea Kayal
Andrea Kayal, a seasoned go-to-market leader with experience as both a CMO and CRO, shares her unique perspective on bridging the gap between marketing and sales functions while making the transition to C-Suite leadership. Having worked across some of the fastest-growing B2B SaaS companies, Andrea reveals the critical mindset shifts that separate functional VPs from true C-level executives.
• Appreciating the art of sales requires hiring professionals who truly understand deal management and negotiation
• Using passion, curiosity, and grit as key indicators when identifying top talent during the hiring process
• Shifting focus from team metrics (pipeline) to business metrics (EBITDA, cash burn, rule of 40)
• Developing foresight to plan 3-5 years ahead rather than focusing only on quarterly results
• Making capital allocation decisions based on unit economics rather than traditional growth playbooks
• Expanding peripheral vision by studying competitors' strategies and identifying new revenue opportunities
• Aligning compensation structure with long-term business health metrics, not just functional KPIs
To learn more about developing executive leadership skills, check out Pavilion's CMO school where Andrea teaches sessions on the differences between functional VP roles and C-suite positions.
Music by Ben Cina & Ayler Young
Hello everyone and attempt to create clarity in terms of what good looks like for current and aspiring sales leaders. Today, I am fortunate to be joined by Andrea Kael, a seasoned go-to-market leader who has held both CMO roles and CRO roles across some of the fastest growing B2B SaaS companies. Andrea has led DemandGen, built marketing engines from the ground up, later transitioned into owning both sales and marketing as a revenue leader. Now I know Andrea for her candor, her directness and ability to cut through the noise, which is great. Andrea is now the CRO of Help Scout, a CS platform, and she shares her experience teaching Pavilion's CMO school, where one of her most impactful sessions covers the real differences between being a functional VP and stepping into the seat of the C-suite leadership position. So, andrea, welcome to Pillar Talk.
Speaker 3:Thank you, Rick. Appreciate you having me.
Speaker 2:So, andrea, sales and marketing are often at odds. There's some finger pointing that tends to happen, some memes and jokes that can come up from that type of thing. From your vantage point, how do you go about blaming yourself when things aren't going great?
Speaker 3:Well, I never blame myself, of course. I find that the leaders who I've worked best to like kind of combat that like finger pointing where we've agreed on a shared language about when the handoff, when it's appropriate to make the handoff between sales and marketing, they're like very specific. We call them like you know, an SLA around what quality means and we're like very specific about that. So up until opportunity, sales really doesn't care because that's all marketing's domain and we're really working to kind of like nurture that until it meets the qualifications, that we believe is like ready for sales. And then at that point sales agrees because it met the criteria and that's when the handshake happens, that's when an opportunity is created and we really find that like the finger pointing kind of like dissipates because we've all agreed beforehand. This is what makes something great.
Speaker 2:I've always collaborated really well with marketing. My primary background has been in the sales side of things, and it has always been fun, though, and playful, to sort of have that tension that exists where marketing is known for, you know, success being measured in the generating of leads and then, of course, sales being measured in success with the closing of deals, and of course it's like there's the, you know, the SLA type of environment that you described, which needs to exist so that we can celebrate the same thing. But it is fun. I can recall certain times when I've been on an all hands and like things are not going particularly well in the business and marketing is celebrating because they're at like 117. So it's just very funny. And now you're in a position where you own both.
Speaker 2:And so you know, hopefully that helps provide a lot more, a lot less friction in creating the cohesion.
Speaker 3:It certainly does, and for all those years I've been beating up my sales counterparts. I'm regretting that a little bit. Yeah, well, I would have gotten into that a little bit.
Speaker 2:You've been in both seats, which I find to still be pretty rare and giving you a unique perspective. Is there something you know? Your background originally was on the marketing side, when you started to own sales. In addition, was there one thing that stood out and surprised you that you hadn't anticipated?
Speaker 3:Well, the one thing I don't know that it surprised me, but got validated was you know, I've always, like, had a lot of respect for my sales counterparts, but truly, there is a very obvious art to sales that you really can't teach. I mean, you can teach it, obviously, because you know people come up through the game, but I, I I always knew that if I was ever going to take this role, I was going to need to hire a professional who knows how to sell. I learned from him every day. That includes, like sales processes, deal management, pipeline management, the art of the deal, how to negotiate for certain things. You know that those are all, I think, skills that I still I'm learning and so really just appreciate more and more being in the CRO role, what it takes to be a sales leader who really excels. It's, it's, it's difficult, and so, yeah, I have a lot of appreciation for that now.
Speaker 2:I bet you're learning faster than you give yourself credit for.
Speaker 3:I don't know, you know, sometimes I, you know, I like to think, oh, I could have closed that deal, you know. But I think back to how the deal was then constructed and I'm like, wow, this is smart, you know. And so I think it just takes years of learning how to be really good at sales and cannot take it for granted anymore.
Speaker 2:Well, to your point, when you see something that's put together whether it's a deal or a project, and you see like, wow, that was really thoughtful. I wouldn't necessarily have thought of that, those are like some of the best moments as a leader, right.
Speaker 3:A hundred percent, yeah, and but you know I've never, I was never the best marketer either, rick, like I, I, I think my, my talent is probably more on like knowing how to hire people who are just better than me at all these things. Cause you know there is, yeah, there, a lot of these roles and go to market are, you know, sort of like undervalued, I think to some extent, because you're like, oh, you're just like an account executive, or you know just how hard does it hit to hit the quota. You know it's like they're all really challenging, like content marketing, product marketing. These are all really challenging roles. So to find people who are like really good at them, I think, is just my job.
Speaker 2:Now is that ability to identify talent? Do you feel that is a result of an increased time investment in terms of doing the work? Is it a you know? You feel like you have a strength in identifying it a little faster than others. Like what do you attribute your success in getting those people that can do the thing really well to?
Speaker 3:I think it's two things. I have a profile I like to hire for. This may not be like a surprise or novel, necessarily, but the three characteristics that I think like show up in an interview when they're able to articulate passion, curiosity and grit, which I think curiosity, in particular, is going to become the most important skill as AI continues to be like on the rise how to ask good questions and get good answers. That is like that's what I dig for when I'm in. Are they asking me good questions? Do they like dig below the surface layer of this job to really understand, like, what it is they're going to do and how they're going to make an impact is one so like passion, curiosity and grit.
Speaker 3:The second is demonstrating a track record of success and having done the role, I give everybody a project. Show me how you did this in your last company. So, for the sales hire I made because that is not my strength, as I mentioned, I think I had 30 interviews. I went through like I don't know 15 projects. Out of those 30 interviews, really, only two of them could articulate their track record of success in a way that made me feel like wow, this person gets it and they're going to cross here because they just showed me they can do it. So this is a message to sales leaders listening like get good at storytelling like your, you know your success record Cause I think that ends up putting you above the noise.
Speaker 2:I have to concede that, like, while I feel you like, sometimes it takes 30 interviews or 30, you know first interviews in order to get the like caliber of talent that you want. Yeah, finding the time to put that in can be extremely difficult. It's so easy and tempting to like shortcut it over, rely on referrals and somebody that's like you've heard from somebody else is already good. It's tough.
Speaker 3:It's really hard. I want to shortcut it every time, but it's my, it's my job and I think if you're being hired at C-level um, if you do not have a good track record bringing in high quality, high bar setters to the company, you end up losing trust of, like everyone else in the organization. So I think putting in the time is is so important because if you're managing those people are managing people getting that wrong, very costly, like very problematic. So do the work.
Speaker 2:Curiosity. I understand how you test for any like fun little tips around passion and grit.
Speaker 3:You know, I think passion like kind of shows up in their curiosity, because you can and maybe this is just like a feeling, I don't know, but the way that somebody is like talking about how they like solve problems, you kind of feel like is this person just like checking boxes, or are they like you know, just you know BSing, or if they're like you know what this is going to be, somebody who's going to be a good culture fit, because they're really going to dig in here.
Speaker 2:Yeah, I have. I have trouble testing for passion because I'm, I'm, I'm explicitly passionate, like everyone who speaks to me can quickly see that I'm high energy and.
Speaker 2:I'm excited and so I can demonstrate passion more easily, but that doesn't mean that the passion that I have is better than the quiet intensity. I agree, yeah, situation where I was reluctant to hire somebody that was known to be the best, and everyone you talk to view this individual as the best, and in my interaction with this individual, they were very careful, very careful, wouldn't say one more word than was necessary. And so if you're like looking for people like yourself, that all of a sudden, all the red flags are going off, alarms are going off and you're like gosh, I'm not sure this person has the passion. Now I was fortunate to make the decision that I don't want people that are exactly like me.
Speaker 2:And I'm going to take all of the variables into play and we brought this person on and what I learned was there are many forms of passion. Passion yeah, this is the most intense, competitive individual held themselves to a standard that I could only aspire to one day and is an absolute winner. And so I was like, wow, looking back, was there a way that I could have tested for that intensity beyond the hands? You know, moving the decibel, volume of the voice.
Speaker 3:Yeah Well, rick, I actually think you kind of like mentioned it in that. But even just asking the question, like you know how right, maybe I'm just testing for like their external, like mannerisms in terms of how they like exhibit passion. But I think people were asking questions who are like involved, who seem to just like want to know about the role that they're going to be involved in. And, yeah, maybe I'm conflating passion and curiosity. But where the dialogue feels like the person is interested beyond just the surface level questions I'm asking makes me feel like OK, they're going to be, they're going to fit in here.
Speaker 2:Yeah, and then a grid, of course, if you're actually successful in giving a project and allowing people in to provide coaching and you can sort of see whether they get resigned. It doesn't go well, or want to double down and do all of that and maybe passion.
Speaker 3:Yeah, and to what degree did they put into the project right, Like that's great, Cause they're like I'm going to, I'm going to get this thing, I'm going to set the bar for this. It means like they just worked harder than the next person to kind of, and the person we just hired for like paid media, was just that.
Speaker 2:I'm like wow this person went way above the other presentations that came in in terms of the quality of information that they were able to share. Is it translating? Are the folks?
Speaker 3:that you've brought on to be, you know, meeting an exceeding expectation, surprisingly. Yes, you know also surprisingly, but that's the answer is yes.
Speaker 3:Yes, it's yes. But also you know I, I also dedicate a lot of time to make. I would drag these people over the line too if they weren't getting there. You know I am committed once they I do hire them to making sure you know they're successful. I'm a very like involved. You know, leader, I don't just like leave them to their own devices. You know I do provide a lot of support to help that.
Speaker 2:I mean to me it's like kind of the most important thing, right, like we can't. We enjoy our work. I this is like a theory we enjoy our work mostly based on who we work with.
Speaker 3:Yeah, a hundred percent.
Speaker 2:Yeah, the mission is super important.
Speaker 3:Like.
Speaker 2:Hey, are we doing something we believe in? Sure, the being on a winning team matters a lot. When you're succeeding, it feels really good, but it's like the grind day to day is the folks that you're working with and you are working with people that inspire you, that you learn from that hold themselves to the same standard as you do.
Speaker 3:It's hard not to like work A hundred percent. And you know what I will say. I leave this one off because I don't know how people will take it, mostly because I don't want to think people. I'm not hiring people because they're not funny, but when they're funny that makes all the difference in the world. Because if you can laugh about all the, if you're working in a startup, you have a fire to put out every single day. You need to be able to like laugh about it. You know you're taking a lot of hits from all directions and you know you need people who can kind of like shake it off and, you know, laugh through it. So I also think that helps a lot.
Speaker 2:Yes, sense of humor is Sense of humor. You know, you teach the differences about being a VP or even SVP. You know level and then stepping into a true C-level role and I want to dig into this a bit. Like what do?
Speaker 3:people miss about that shift until they're in it. I think there are five things that I wish I knew sooner or coming up in my career, that now that I'm whatever going to be 45, I feel, like you know, I have this, like this wise old sage you know because I've been in startups for 20 years which feels like I don't know, like In dog years that's 140.
Speaker 3:A hundred percent, that's how many years it feels like I've been working. But there's like five core principles that like differentiate a VP from a C. And by the way, I'm using the titles sort of like as examples C-level means something different in every company, but I just mean like when you become someone who is at sort of like this executive level, where you become the peer to the CEO and you're like running the business alongside of him or her in whatever capacity. In whatever capacity, there are a few principles that I think are the difference between the functional role you have which could be revenue, marketing, customer success or chief operating and the actual acronym before those functional letters, which is the VP is the management layer, the C is the management layer. And in that management layer, the first thing that I think is like really important are just like that you're operating against business metrics, not team metrics. Your team metrics, for example, your chief marketing officer you care a lot about pipeline. You're going to be asked about pipeline and how much revenue you've contributed from a marketing perspective. But business metrics is like EBITDA, cash burn, rule of 40, gross margin, like those are actually what I'm gold against now. So very important that we get to pipeline, because marketing reports into me very important, that we hit our sales numbers, because sales reports into me, partners, that we hit our partner number. But, like the end of the day, if we are burning more cash than we can consume over a long period of time, the business is going to be in big. We're going to have a problem. So, as the C, I care about those metrics as, like the functional leader, I care about some of the others. So that's one way of thinking about my role like business metrics, not team metrics.
Speaker 3:The second is foresight. I don't think that functional leaders, like at the VP level, necessarily have the like, sometimes the goal, or like even the skill set yet to think about where does the company need to be in three to five years. I use a framework which is basically called the iconic enterprise five to help me think forward about where the business is going and that helps me set the revenue strategy. But you should be thinking about this at the VP level. I just don't think it's a skill people like think to do. But you should be saying in five years and I can share this, maybe you can include it in any of the file material, rick, but it's a really cool way of like establishing, like, the valuation of the business in a few years, because everyone's job at a tech company is to increase enterprise value for the organization. That's the job, and you do that by making sure that, like in X years time, you've hit certain metrics that make the company valuable and Iconic uses, five metrics that signify value, and that includes things like your year growth rate, ndr, rule of 40, magic number, arop, fte.
Speaker 3:So there's like five metrics. They're saying like if you hit these numbers when you're in this revenue band, this is what our top decile and median decile of companies that are highest valued, look like and they have some of the best companies in the world in their portfolio. They have like Canva and Snowflake and Datadog. I mean so, but they're like, look, if these are like the best businesses in the world and you're mapping up to this like you're creating a lot of enterprise value there. So so that's the second one, which is like foresight. I'll stop there, like, because I could go on and on and on for like hours and hours, but like those are two that I think are you know.
Speaker 2:Well. I think there are two great ones. I think what I would do is then say how does this manifest itself in your day-to-day decision-making? So let's take the management layer, and I like the idea of you know you focusing a bit more on business metrics. Take EBITDA as an example which you wouldn't think of the CRO as mostly being EBITDA focused. But hey, if you're a C-level executive, like profitability of the business like really matters. It's not just growth at all costs anymore, all business like really matters.
Speaker 2:It's not just growth at all costs anymore. All of that. I get the fluency and awareness around that. How might that change your behavior as the C-level versus the VP of sales, as an example? Who's got a quota to hit?
Speaker 3:Okay, well, let's say you're the VP of sales and you don't care about cash burn or EBITDA. You're adding as many reps as you can possibly add and you're asking marketing to spend as much money as they can in order for you to get the quota coverage you need in order to hit the goals. If you don't have the check and balance on the money, okay, add more people. Well, you know you could add more people, but every time you add an AE, you're contributing to burn because they don't ramp for five to six months. So, should you add AEs, maybe you add an AI, something that you know helps. Maybe the current AEs you have be more productive. So it does change your decision making if you have the control on the other side that you know that keeps you focused on cash burn Marketing.
Speaker 3:If I could get Help Scout to a hundred million, like I don't know, in like two years, if I was, like you know, like shooting the money gun around. But we aren't running the business that way. We care about cash burn because we want to get to profitability first. Then we want to like, figure out how we like scale versus just, you know, the other growth at all costs number. So it does matter a lot. Before I add a single person to headcount, I'm figuring out how do we get this job done with less people. I add a single person to headcount.
Speaker 2:I'm figuring out how do we get this job done with less people. So if cash for I still perceive.
Speaker 3:the C-level execs are often gold, similarly than the VP. I am not. Yeah, I am not. My compensation is comprised of new revenue at like 30%, which is typically where a VP of sales is at a hundred percent of their OT. On new revenue, um, I am gold on NDR because that's, you know, has to do with the expansion and churn in our base, and I'm gold on cash burn 30. So it's 30, 20. No, what is it? I don't know, I can't do math. It's like 30, 20, 40.
Speaker 2:Wow, okay, so, yeah, so you 30, 20, 50. So you're caring just as much about cash burn yeah, more than you are about sort of new business. Yeah, so I think that is one aspect where C-level needs to think that way, but it helps when their goals are aligned with thinking that way.
Speaker 3:Exactly, yeah, I mean true CRO, probably I'm really, I think, not imbalanced, but I'm just as incentivized to make sure we are running a healthy business than, as we are, a fast-growing one.
Speaker 2:And then on the foresight example, I love, love this kind of framework of you know, growth metrics, NDR, rule of 40. You're talking like net retention, right?
Speaker 3:Net dollar retention, yeah, and they're saying, like you know, look, if net dollar retention is 105 percent when you are a 25 to 50 million million business, you are in the median decile of their entire portfolio company in terms of values that they've driven from having 105% NDR. You know, like you, if you go down and you check the boxes on all the numbers that they have there, well, you're just as valuable as, like a snowflake Now snowflakes in the top decile. So, okay, you're not going to maybe compete with that no-transcript, and that's the difference.
Speaker 2:You need to make a valuable business, not just a valuable moneymaker. And so today, is there a way in which you're like making decisions differently, or is there a way like you're like how is this manifesting in a change in your decision-making that maybe you wouldn't have made prior? Because I do think there's still some validity in that people don't people don't have blinders on like I think that most people, especially good business folks, generally have an aversion to like let's just spend money to hit the number. Sure, think about the consequences. Like I think people generally want to do the right thing, um, but so I'm kind of trying to get into that next click down of like okay, how does this actually, how's this changed your behavior in the way you're, you know?
Speaker 3:I'll give you two examples.
Speaker 2:Yeah.
Speaker 3:I'll give you two examples. Um, so we have an ACV of $1,200, which means we can't add a whole bunch of account executives to go at or SDRs to go after, upmarket or otherwise. So I added a partner channel because we only pay when those deals close through reselling. So I needed to hire a director of partnerships so that she could get reselling off the ground, so that that's a whole new channel to open up but that we don't pay for and there's exponential growth. Would I have added a partner channel if we could go directly after the money and didn't necessarily not care but cared less about the unit economics for like adding account executives, like absolutely would have added direct because you control that you have like much more.
Speaker 2:You train them, you certify them. Yeah, all the reasons.
Speaker 3:Exactly For all the reasons, you have an inside sales team and it's very like Machiavelli and like to say like oh, say, oh, you want to own your army, but sort of because of this reason, but once that's open now we could scale without cost. So that's one.
Speaker 2:That's a great example of going a partner route due to the ACV rather than the instinct of building direct.
Speaker 3:Exactly. So that's a decision I made specifically because of this. The second is on marketing. We have a when I was at Electric because the ACV was $40,000, we could test and grow using a bunch, bunch of different activities like primarily being like events, which is like a higher cost thing. So we did I don't know maybe like 100 events at Electric, but at Help Scout I'm just doing like smaller, more highly targeted events where we're like doing we're doing like a lot of like ruthless work around, like making sure exactly the ICP gets there that we want to see, and they're like they're much different, they're like much smaller, they're like more intimate, and so we just like we have to organize tactically around, like some of the marketing efforts, because our ACV is different and because we need to like definitely get a return out of every single thing we're doing.
Speaker 3:So, even tactically, my approach to like events or paid search, or affiliate marketing, newsletters, direct mail, sending like it all just changed in light of the ACV and like the market we're going after. So that's how it changed on the marketing side.
Speaker 2:It sounds like there's a lot more trade-offs to make. I mean, how are you making those Like? What approach are you taking to make those trade-offs between investment ideas or people strategy and so on?
Speaker 3:Yeah, I mean, you know we're just good about. First, the marketing budget in general is fixed against generally like our payback period, um. So so our cac payback period is one of the like metrics we use to say like what can the total budget be? We, we don't want to kind of like get outside of that um, and then the marketing mix is really optimized against which one of these channels is like the most productive. So we don't have every channel on. We have like very specific channels on. At Electric I could really have every channel on because you know some of them just work better than they're working at Help Scout because it's more competitive, and then some of them are just too cost prohibitive. So it's all, yeah, it's all just around the unit economics of like what's working. So that's kind of like how we're limiting the scope of what we do.
Speaker 2:When you teach folks about the difference between VP and C-level. I mean what you're describing is a lot of the logic You're describing, like the metrics. You look at these metrics, not those metrics. For these reasons, all pretty objective, all reasonable, all sort of logic-driven. I think there's also perhaps an aspect of I don't know, it's like the mental sort of side around the thinking that way or graduating from a more tactical level of thinking day-to-day to trying to put into practice, like what are the things I do to focus on these bigger level metrics that aren't maybe directly within the control of a functional area but it's across the harmony across multiple functional areas, like was there a pivot point or a switch that flipped for you that helped make it easier for you to sort of live in that, in the logical environment you just described?
Speaker 3:to sort of live in that, in the logical environment you just described, I mean maybe just 20 years of like mistakes or like living with it.
Speaker 3:You know, I did notice, though, in my role as CMO, I do think like a lot of tech companies like to fill like a lot of the functional roles at the C-level and again, I'm talking mostly about companies that are under like $100 million or $50 million or below.
Speaker 3:So this obviously changes when you get massive.
Speaker 3:But if you're in that range, I think the flip was switched when I'm like wow, I have a bunch of these very senior counterpart and we're all having to make strategic decisions that could be in conflict with each other.
Speaker 3:And so I just thought to myself, what if there was one arbiter of like the revenue strategy and then you just like hired a bunch of like great lieutenants below that to really just like nail the function, below that, to really just like nail the function. So I because I saw like, if it's, if it, there's too many senior people just like the CCO, the VP of marketing, cmo of marketing, the head of sales we're all like trying to like create revenue strategies together with our own like separate goals, and that ended up becoming like a lot of bloat and and like very disjointed strategy, I would say, for lack of a better term Despite the fact that all my partners were like amazing and smart. I think the flip switch for me when I like was thinking about this from the view of the CEO and I'm like, holy shit, he has to like really figure out who to listen to here, and this like mix of people.
Speaker 2:So translate connection points between all the good ideas.
Speaker 3:Exactly and I'm like there's no one like helping to do that translation and then just go to the CEO and say, look, here are like the things I heard from my lieutenants, who are all very smart people but like very functionally focused.
Speaker 3:Here's how I'm translating that for you into something that's cohesive and this is why I go to the foresight. Or like the revenue strategy, where I'm saying like this is when I started at Help Scout, I created the revenue strategy, which was just like one person who was saying to Nick look, I think we need to add more consumption-based pricing. We don't have that today, I think and you know, rick, I mean you're in this role at your company but you're saying here are all the ways in which we grow this business. Let's pick together versus that coming from four different people. And then he or she is like wait a minute, how do I then become the CRO, for lack of a better term? You put that work actually on the CEO and it's a hard job because that's not really where the CEO should be focusing their time necessarily.
Speaker 2:Right, this is not about. You know, it's funny, individual contributors often sort of shovel their problems onto their manager and then the manager has to run around and sort of fix it. What you're describing is where functional leaders are shoveling their strategies onto the CEO, left in a world where they have to sort of, and then great leadership is more about not enabling that dynamic and turning into a flywheel of running around and fighting fires and being reactive to it, but a sort of forcing mechanism in which to create an environment where folks are able to not be reliant upon you, the leader, and able to do that, and so that's a great example of it happening at a more elevated level versus down. You know, on the day-to-day. How do I differentiate this?
Speaker 3:or, you know, run this campaign or whatever it is Exactly, and I'm happy to be the funnel this way. You just can't be the funnel that way. You know like you need to, you know everything needs to come into you and you need to. Just well, I don't know if it's even a funnel the other way, but like it's just a conduit of that funnel, just saying like now I've distilled everything and, like I said, this is why hiring is so important. You're taking all that information from the ground level and then you just become the arbiter of, you know, information about what that strategy should be to the CEO and they can decide, but they're not having to decide and then go through that with four different people.
Speaker 2:So I still believe the easier people take generally the easier path and the easier path Generally it's not like a bad thing, it's just the way things are. The easier path is to sort of focus on the narrow metrics within the things that you can control and to demonstrate the behaviors of what we'll call functional execution.
Speaker 3:Right.
Speaker 2:That's just the general like inertia of how things are going to go and so we can talk a lot about. Well, you need to think differently and you need to look at different metrics and you need to have an action plan that connects to other functions and like that, all sounds really good. People want to get there.
Speaker 2:They go to CMO school and they go to other schools growth and they listen to this podcast as a way to aspire to be more senior. I guess, what advice do you end up giving to someone that's looking to make that transition and to try to up-level their thinking? You know, in the way you described.
Speaker 3:So, outside of just like making sure that, like from day one, you know that your job is to think about the business metrics and then think about how you're looking at longer term so that you can plan headcount and you can figure out how you're looking at longer term, so that you can plan headcount and you can figure out how you're going to get there. Whether that's adding a BD strategy today so that it produces in two years. Whether that's adding PLG motions so that you don't need a whole bunch of AEs to sell the thing and you can move down market a little bit. Whether that's adding a partner channel, going indirect, going up market, like whatever. There's a list of probably like 15 things a CRO should have in their toolkit and that's on day one. You're like well, if we want to be here in three years between 25 to 50 million, because we're only a five to $10 million business now, here are the six things I would consider doing and that's the foresight. The other things that I I would consider outside of hiring.
Speaker 2:Is that just a like, trying to narrow focus and trying to think like like? So is that the first thing you do differently is to not worry as much about the quarter that you're in, which is?
Speaker 3:what a lot of people are worried about.
Speaker 2:And it's actually trying to like. Take a step back and go through an exercise of like what does success look like at the end of next year If you don't have to go out five years? Go out to the end of next year and say, all right, what are the things that need to be true in order for us to be at whatever level is defined as success?
Speaker 3:Exactly. Yeah, because and let's just say you you, you theoretically went out three years because you're using your FB&A team or some help you're getting from finance to say, like, can we build a fake model with just like fake numbers in it that show us what this business would look like between, let's just call it $50 million and nails, these metrics? What would need to be true about the business today in order to do that? Because you could have high churn, you could have an NDR that sucks. But you're saying, but in order to get here, this is what the NDR. So, visually, people can start to paint the picture in their head like, oh, wow, here's where the focus needs to happen all around the org. And that helps you put people into seats, helps you think more, like it helps you think, yeah, a little bit more broadly than just the quarter here, because this quarter actually doesn't matter at all. It's like the quarter's over. Also, if you're a marketer, the quarter this quarter is for based on your sales cycle, like for the next six months or whatever. You need to be thinking way far ahead if you're a marketer, but um, but so so the fore foresight helps.
Speaker 3:So the three things are business metrics, not team metrics. Make sure you like hire really well as like a. That's a difference between VP and C Understanding the importance of hiring. The third is the foresight. The fourth is capital allocation. Like that's the.
Speaker 3:You know, the flow of money is like the LP to the VC, to the CEO, to you. That's the flow of money Every step of the way. Every single person on that chain expects you then to have made more money than they gave you. So if you can't articulate to the CEO or the CFO a plan that makes them more money and when they're excited to invest in like quit the job because that's the job. It's like you are just a value creator. You're like a hedge fund. Like you wouldn't give your money to a financial planner. My financial planner was losing me money every time I gave them another dollar. Like we have to move the money. So you have to think of yourself in that way, because that's how you're being evaluated. They give you one dollar, they want three back. That's it, period. I mean that's on the PE side. On the VC side they want 10 back.
Speaker 2:You know, and that certainly happens over time and you think that's an adjustment for folks is to be thinking that way, do you? I think so. I don't think people. As I listen, I'm trying to put myself in the shoes of someone in functional leadership and it's true, we do get caught up in the minutiae of inefficiencies that happen in our business and things we want to improve. We want to improve the sales process, we want to improve our search results, as an example. There's plenty of things that are inefficient about how we work together or how things happen in the company, and it is easy to have your compass be navigated by where you're sort of feeling personal pain or where you see the greatest inefficiency. But that inefficiency isn't necessarily tied to what you're talking about, which would be return on investment yes, beyond impact, to profitability on revenue, and I do sort of see how even our instinct to fix things as leaders right.
Speaker 3:We want to improve everything.
Speaker 2:It is often challenging to connect the things we want to fix to what would move the needle for the business the most, and I don't know that there's a science to solve that. But what I guess you're advocating for is don't do it independent of that. Actually, try to determine what's going to move and ask people like hey, I understand you want to do these three things, which one you know? And people will be uncomfortable, they will not want to answer which 100, 100. But so how do you force them to do it like, how do you help them with that exact? That's a perfect example. I have three things we have to do. Great, we can only do one. Which one exactly? You will not get a direct answer to that. They will hem and haw and try to find a way to make it all three. What do you do?
Speaker 3:what do you do, and even an exercise I'm doing now with the marketing team is I'm actually going to be the one that sits at the top of the prioritization for the input queue of things people are asking of the design team, Because I'm like what if I was prioritizing this with that lens, Would we be doing bespoke blogger? I'm like hell, no, we are going to. I'm going to have my head of design now that I'm going to sit at the top of the prioritization, figure out how he makes the team of three six by using bespoke AI generators. Now you know. And so, anyway, like I'm just I'm trying to go through, like that's a practical example you can do today is like figure out what's coming in and are people using that lens to like kick things out and like make them number one or whatever. The thing I'd say rick. The fifth thing for the um thinking about vp to see is, um, just peripheral vision, like in the same way that I don't necessarily think and, by the way, I I didn't know this, I wasn't doing this either like in my even up till 40. These are things that, like, again, I feel like I'm old and now 100 years in tech, but compiled along the way. So I'm not like I always knew this and I was always doing it, it's just like. These are things I've felt along the way. But the last one is just a peripheral vision.
Speaker 3:Are people reading S1s? Do you know how your competition has thought about going to market? Or are you thinking about how you could just acquire that business over there for a million bucks and get their whatever I don't know, like get their book of business If you bought it for 4 million? Cause it's like kind of struggling? Like are you thinking about indirect or inorganic acquisition Because, like that's going to help you, like with product, You're going to fill a product gap and actually, as a revenue leader, you just added, like you know, a million bucks to your book. Read an S1, like figure out what people are acquiring and like what people are doing and how they're how they're growing. And the S1 is the documentation that gets filed before a company goes public. I think that's part of the job too is just being like the SME on your market, and maybe that's obvious as an individual contributor in marketing, but um, it always it wasn't natural for me to like think that that was my job.
Speaker 2:And it is. I can see again, like just speaking of the I I, I overused the term inertia, but it's like whenever we get into roles within companies, there is a general like trajectory activities that we end up doing from the things that are closest to us, which are inside the bubble of the company. Your advocacy here is to like as the more senior you get in an organization, the more you've got to actually get out of the weeds and look across the landscape and say, hey, there might be interesting things that your competitors are doing from a go-to-market standpoint that you might learn from. There might be dynamics within the industry that are happening that you might need to be more aware of, because your individual contributors aren't going to like be able to do that. They're on deal calls, trying to close, and if you're not doing it, no one is.
Speaker 3:Exactly. And, rick, the specific example I can give here and I know we're probably just at time, so I'll make this one quick but when I was at UpServe, my mentor said to me did you read Squares S1? Because their fastest growing revenue stream is instant deposit. It was basically a product that they spun up which made fees off of restaurant owners wanting their money same day, like Venmo does. So they became a bank and I was like holy crap, I'm like wow, I thought we were competing against POS and they became a bank. And while we weren't going to become a bank, that was a big unlock for me as a revenue leader, because I'm like you want to talk about pipeline. I'm like they became a bank. You know, like that was like the most obvious. Like pick your head up, will you? We could have monetized all these transactions in a different way. Wasn't even thinking about that at all.
Speaker 2:So that's just one of the so that reset your thinking, just in terms of like there's not one way to skin a cat here.
Speaker 3:Like there's a lot of approaches we can take.
Speaker 2:We can learn from everything in the market's doing and, yeah, the journey from sort of different companies, from marketing, to owning both sales, to being a functional leader, to a strategic leader we've covered a lot of ground here. So, andrea, I want to thank you for joining us today. I think we could talk for hours.
Speaker 3:Same.
Speaker 2:This has been great. We'll continue the conversation and thanks. Absolutely, Ray. Thanks for having me.
Speaker 2:Reflecting on the conversation that we had with Andrea Kael her journey from being a marketing leader to a revenue leader and having responsibility over sales that stood out to me. She takes a fresh look at sales, having not been experienced in that area before, so she makes sure that she's hiring the right leadership and ownership around it and she can spot what good looks like. She talked about having a lot of respect for a deal that got structured and being very impressed by that and it made me think that, like sometimes we have the benefit of being able to see what good looks like when we aren't super experienced in an area and we should lean into that. I reflect back as a seller and we should lean into that. I reflect back as a seller. We teach sort of when you're new into an organization. Generally a rookie within a sales org asks a lot of questions because they're not burdened by a lot of knowledge, so they have to ask customers questions and then, as they get more experienced and become a veteran, they stop asking questions and start telling how it is and can have actual setback in their performance, because they're not. They've stopped, they've lost the curiosity and it's all about telling people what they should do and people might resist that and I just kind of like how you know, when you don't have expertise in an area and you can bring curiosity to it, you can really start to see what good looks like in a way where you know from sales execution. I have the bias of my own preferred style of doing it and there might be a better style out there and it might be hard for me to see that and I like how Andrea is able to see that with a clear lens, especially as it relates to sales.
Speaker 2:She also talked about the journey of a functional leader to a business leader. This is a really important area. We spend a lot of time talking about it. To me, this all matches up really well with the pillar of ownership. Can you be more about the business and not just about the team? And there's a continuum of that. And as you move up as a leader being more about the business and less just about the team is a growth curve associated with it, and I think a key thing that stood out in our discussion was the incentive structure. Andrea explained her incentive structure in a way that matched the business metrics and not just delivering a number of leads or not just hitting the number in revenue for the quarter. So I think that's a really important area. That is, as we become senior leaders, we have to have our incentive plan match the metrics that we're trying to have Seems pretty intuitive, but I don't think it always matches up that way in reality. Have seems pretty intuitive, but I don't think it always matches up that way in reality. And then I think just you know the roadmap of thinking bigger. She explained a bunch of areas in which to do that and so just you know, in each of us thinking about how this applies to our business, business metrics like which are the ones that are going to move the needle.
Speaker 2:She talked about the concept of foresight and planning ahead for the future, peripheral vision and like stepping out of the trenches as a senior leader and looking around the landscape what are competitors doing, what are other potential revenue streams? She had a great example about payments associated with that Capital allocation. Like we now are in a role where we have to think about maybe potentially inorganic strategies and not just hitting the number around it. And then, of course, it is all about the people. We spent some time talking about hiring, um, and you get the right people on the on the team and that they're perfectly suited for role. And the magic happens. And when you don't, you know this. We all know and have been into the challenges associated with that. So lots to take away from this episode. I I want to thank Andrea again for joining.
Speaker 1:I want to thank Ari Smolin for producing Sons of Summer and Isla Young for the tunes, and I want to thank you for listening to this episode of Pillar Talk. We will how you really feel, just be honest, like a joke. I can't shake, I can't quit.