In Excel, Everyone Hits Quota (w/ Scott Domareck) - YouTube https://www.youtube.com/watch?v=I69nmhzkMAc

Transcript: (00:00) Today I'm talking to Scott. He was my VP sales back in the day at Falcon and he's now a fourtimes VP sales veteran. He has been through exits scaling and all the pain and joy that comes with that. Today we're talking about the topic of the season planning. But instead of taking a RevOps finance version, we are talking about the realities of a VP of sales in the process. And now enjoy. (00:30) Most misses are baked into the plan before the year really even starts. A lot of times it's actually not an execution problem on the plan. It's the the problem with the plan. Maybe you're practically building for an outside perspective for an investor potentially. And you will have your historical data and you have your averages and that is legit data. (00:48) And whenever there's something that basically goes into your favor but isn't quite real, like you'll still keep it in there because it's in the data and it's going to help you. And I think sometimes that bias creates then the friction to the internal side where then you as a leader comes like well but wait a minute you know yes that is the correct average that's the correct number that's the correct piece you pulled out of the CRM but as you mentioned the the the context is missing it's easy to sell to everybody right what person that you've hired for a high salary is going to say no boss I don't think I could increase (01:17) that by 5%. No one's going to say it, but they're also not being a mathematician in that moment, right? They're haveing to defend their value. So, today I have Scott here with me. Scott has been VP of sales four times, been selling to SMBs, Midmaria Enterprise. I think you did folks from Series A to C to Public, the whole the whole shebang basically. (01:42) But I think what's way more interesting to kick us off, um Scott, how did you how did you meet me? What was your impression back then when when that happened? Hey Tony, good to see you. Um, yeah, I remember it kind of kind of vividly. You could correct me here if I got this right. I I uh flew from Austin to to NYC. (02:01) You were in Williamsburg, the the wei work there on 4th or whatever. And um it was like had to have been a 90 100 degree day, something like this. And I get into the office. I'm wearing my, you know, blazer, you know, tech tech professional, right? Um, and I'm wearing the blazer. I'm wearing the shirt. And and uh you said, "You want to do a walk?" And I said, "Fantastic. Let's do a walk." Right. (02:26) Of course. Who Who am I to disagree? And and uh I look down and you're wearing uh some really nice like bright Nikes and some shorts that I think had lobsters on them. Yeah. and uh and I was well outfitted to go for a walk. uh you you weren't and and it was really difficult for me to def you know figure out at some point was it um was it my questions that made you sweat profusely or was it was it the sun at that point very difficult questions but also it was like a two-hour interview I think remember that it worked out to the end I (03:05) didn't happy there was some foreshadowing there I should you know then I'm working for you and then I started to connect the dots like a couple months later and I'm like, "Ah, this is all making sense. This is all coming together here. (03:21) " I I also remember we were driving back from like a team retreat, you know, the the bears and the bees, uh, if you remember that. Um, and I think everyone was completely hung over and like basically out of it. And you and I, you were driving and I was sitting next to you and I think for three or four hours I grilled you on some other stuff, too. (03:39) I still remember that how we basically kind of arrived back in NYC from the Catskills, I I think we were um and you were basically completely drained both hung over. You've driven for 4 hours and I grilled you for 4 hours. So yeah, there was some foreshadowing. That might have been the drive where you previewed the uh the revenue plan for the next year. Maybe you you waited you waited till I was worn down. There was no visuals. (04:03) You're reading off of the Excel spreadsheet there uh in the passenger seat. And I'm just saying whatever you say, Tony, you we got this. What a fantastic transition, Scott. Insanely well done. Which is also though what happened. Um, so that's actually what we would talk about today, which is basically, hey, yes, it's planning season. (04:28) you know, people are heads down into spreadsheets and, you know, we could do another session of Growlocks Tony talking about all of those intricacies, but instead we said like skip that and talk a little bit more about, you know, the reality piece that usually is being neglected when you build your new plan for the next year. Right. (04:48) Um, and I think in in this approach, we want to go through some of the issues um that you and I have, you know, run into. I think you can draw from a from a, you know, wealth of experience of things that went really well, things that didn't go so well, and then we're going to go into, well, how should you solve that, right? And really, this episode is intended for some of you to um, you know, maybe see some gaps in your plan already. Uh, o, you know, forgot about that. (05:14) But also, because usually these these problems and these solutions, you won't find them in the Excel spreadsheet. You find them somewhere else. And I think that's probably the bigger gap that people probably have. And ideally, Scott, with your help, we can we can try and cover that gap today. So, I mean, where is all of this starting? We already mentioned the spreadsheet. (05:32) Um, and to be I mean, this is my my favorite topic from back in the day is basically this whole top-own planning process, right? And just to kick everyone off, I still believe and that hasn't changed that much in the last, you know, couple of years. Um I still believe whether whether people are doing it in a spreadsheet bottom up or in a spreadsheet top down, it actually doesn't matter. (05:57) I think most of us are doing top- down planning simply you know the way of someone somewhere decides and usually that's the CEO the CFO or the board where you want to land in terms of revenue how much money you want to spend and then the Excel spreadsheet is being massaged massaged massaged to eventually return that number somewhere um and then everyone is happy and then they think they have a plan right but but usually usually there's a little bit of lacking transparenc arency there, right? Scott, what's what's your experience? Um, you (06:29) know, from that part of the of the process. Yeah. Hey, I totally agree. I think most misses are baked into the plan before the year really even starts. A lot of times it's actually not an execution problem on the plan. It's the the problem with the plan maybe. Um, and you and I have seen the difference of what it's like when you build a ambitious but executable plan, right? you've got this momentum of winning. (06:58) I mean, not to brag here, but I think, you know, at Falcon, what was it? Uh, we raised targets with AES and we hit hit for eight or nine quarters in a row. Um, but I think both you and I have the humility and to be on message here to to be aware that a great deal of that hitting those targets, you know, most sales leaders brag about hitting, but it's not, you know, just that that execution is that you planned really well, right? Yeah. Um, and sign off on the right plan. (07:26) So I think taking the transparency bit a little bit further, I think it's transparency, context and and compounding probably that you think about here. Um on the transparency side, I mean probably the most baseline thing is were historical numbers act actually used and maybe you saw some of that at Roblox uh during your day reviewing these revenue models. Yeah, for sure. (07:48) So I mean this is this this was a key starting point also working with you know two founders right now to figure out their next year and that's always it's always the starting point kind of what is really um what's really going on uh in terms of historic numbers but for me transparency and maybe I'm stretching this a little bit too far from where you want to go but transparency for me also means um you know making making those changes clear making it clear where something deviates from what has happened in the past. (08:17) You know, that's that's also part of transparency because I think in many cases it totally makes sense that it does, but getting to that, you know, making it clear to everyone where you deviate. I think this is I've I've seen it so many times that people are trying to hide it somewhere. Um, which then creates all kinds of other issues that we're going to get into. But that for me is transparency. (08:35) Yeah. I know. I mean, I think it it would take a lot of extra work inside the Excel sheet to be able to go and identify your baseline versus what you're tweaking. And so, this is, you know, typically what a go to market leader, whether it's marketing, revenue leader, um, they're stepping into an a spreadsheet, which hopefully at this point they're good at looking at, right? They should be familiar with with these numbers deeply. (09:01) Um, but it's still a little bit of this like it takes a minute to be able to see the matrix versus perhaps a CRO and and your CFO who had been living in that Excel sheet maybe a month before you're even taking a look at it for the first time, right? And I think that's that's kind of the uh imbalance already right there, right? kind of years ago to market leader being invited into this thing and they need to find your way and um and I mean in some case and I think you and I discussed this I don't know I think a year or two ago you were working with the company um and basically you needed to go on a on a (09:35) on a on a chase uh into the spreadsheet trying to find well where where is it that I'm you know quote unquote you know being screwed over here. I mean, isn't isn't that the fact sometimes, right, that you know that those two parts of the equation don't really fit together in terms of transparency for our listeners, that was not my quote that I was being screwed over. Just to just to clarify. Yeah. (09:58) I I think well, hey, especially if you have a new leader entering an organization, you have to treat this with extra care because everybody wants to believe that their leader is building a plan with the spirit of wanting you to be successful. (10:17) You're hired to execute on things that you've done really well in the past, but if you have to track things down or almost like reverse interrogate, like explain to me where these numbers uh uh came from um to double click. I mean, how many times have we revops are are amazing. Would be nowhere without them. (10:37) But we see errors in data all the time, right? Where we forget a filter, we forget a context switch, you know? So I think that leads to you know uh the ability to go in and and as a leader point out any of the context that that has changed. So you know once we believe that there's historical numbers that are accurate the next step is well are those numbers from last year appropriate to use in the context of the phase we're going into next year. (11:03) Right? remembering the little things, right? Marketing might go, "Oop, um, we actually changed that MQL definition midy year, so the volume went up, but we noticed that the win rate in our mid-market deals went down because of that that uh classification." or a sales leader is is recalling, hey gez, you know, um that win rate was predicated off of of a top rep that was 300%, we're going from a team of uh of of three and we're going to go up to a team of 10. I'm a little bit worried now that that AE has left (11:38) the business that we're applying that win rate to the future year, for example. So it's I think this is where the these senior leaders are really important because again when you're living in that spreadsheet it's very difficult for revop CFO CRO to remember all of the context around those numbers too to say hey are these going to be relevant for the next year. (12:01) Um and by the way they're not they're not making excuses in any way like we'll probably get into that but it's it's um making sure that they're pressure tested. And I think and this is a little bit of a side tangent that that I've just kind of seen myself now and I just want to bring it to the forefront for people that are working on this problem. (12:18) Um there's there's one side when you build the plan that you're practically building for an outside perspective for an investor potentially, right? And you will have your historical data and you have your averages and that is legit data. Um, and whenever there's something that basically goes into your favor but isn't quite real, like you'll still keep it in there because it's in the data and it's going to help you, right? And I think sometimes that bias um creates then the friction to the internal side where then you as a leader comes like well but wait a minute you know yes that is the correct average (12:52) that's the correct number that's the correct piece you pulled out of the CRM but as you mentioned the the the context is missing and and maybe to lead us to um kind of the next piece that you mentioned already here um these things seem small and people sometimes think like well who who cares But all of these things can compound, right? Kind of how do you how do you see that Scott? Yeah. (13:20) I mean, gez, when you think across, you know, marketing, uh, the talent team and sales performance, uh, metrics, all the different bets that you're playing, you know, seven seven areas times 10% each, that's a 100% improvement from a previous uh, uh, year. So, it could it could compound really quickly. And I think if teams took inventory of how many bets you you you mentioned just tweaking all the bottoms up numbers slightly, you know, at the end of to hit that topline number, um that's where the realistic view of how many bets are we actually placing here can make you start to think about this being a stretch plan rather (13:55) than your baseline. And honestly, kind of I I've very recently lived through this again. um where you basically build out this thing and you know what all the benchmarks are that a certain company needs to hit at a certain point of time right and really you're looking at this from a completely different perspective you're looking kind of where can I tweak and actually this compounding piece it's almost a tool for you in this process it's like you know like I can defend taking the conversion rate up by five you know points I can defend ACV up a little bit. Exactly. You can (14:32) you can defend each of these individually very easily. And by the way, that also traps you as the leader very quickly. You know, let's talk about that in a second. But because it feels so defendable and you know there's really nice compound impact coming out of that that kind of you know works when you need to uh convince your board, convince your investors, you know, do all of those things, right? But I think that compounding piece can very very quickly in the execution uh kick you in the butt, right? And it's easy to sell to everybody, right? Like I mean, what person that (15:03) you've hired for a high salary is going to say, "No, boss, I don't think I could increase that by 5%." No one's going to say it, but they're also not being a mathematician in that moment, right? They're haveing to defend their value in the business in that way. I mean, I I still remember when that happened to me the last time. (15:22) Um, and we were basically selling the business. So, we're basically in this in this exact situation kind of we're building this um spreadsheet to sell it to someone and I was sitting there and I was defending this obviously like a champ, no problem. But, you know, on the back side of those meetings, I was always because I also knew I would need to execute this thing, right? Um, and we were we were um we were exiting the business, not to the VC. So, you can't just the next day come and say, "Oh, you know what? New budget, sorry, we changed our mind." No, kind of (15:47) you were beholden to those numbers. Mhm. And I basically after all of those meetings, I went to my CEO and I was like, "Hey, this is this is this I don't think it's going to happen. It's really difficult." Um, and um because we had we used something a layered approach like you know a layer this and then a layer on top is PLG and a layer on top is enterprise uh and it all made sense within those certain layers but when you compounded the whole thing it was just crazy a lot. Right. Something you said that really stood out (16:14) you know who's left holding the bag. you you gave the example where you knew you wouldn't be holding the bag, right? Um and I think a lot of hey, if you're not part of a company where every single department realizes that they are stakeholder in in revenue success, there's a little bit of a problem here, right? Um uh that that that that's one thing, right? Uh if you're going up market, is products pipeline going to support that? Does marketing have the case studies uh that that with with the referenceable enterprise logos? Do you (16:43) have the security positioning set up? all that kind of stuff. It's a full it's a full team sport. But, you know, the holding the bag thing, we know that it typically lands with VP VP of sales, right? And, you know, I I've even seen it where um VP of finance um a company I was consulting with, they they signed off on a plan and then the VP of finance left a month later. (17:09) Do you think that VP finance cared about the the Excel spreadsheet and all the tweaking? Probably probably not. Everyone's talking about AI features, automations, and agentic tools. But here's the truth. Most just create or even amplify silos and often make RevOps the bottleneck since they are the only ones with access to all of the AI goodness. Ever growth is different. (17:32) It's the only shared go-to market workspace where RevOps train agents once and sellers can use them onetoone either in Evergrowth or directly inside any CRM be at HubSpot, Salesforce or Pipe Drive. If you need to automate topfunnel research, equip sellers with better fit ICP accounts and generate researchbased outreach that resonates to generate more revenue. Visit evergrowth.com. (18:00) And now back to the show. But you know, speaking of all of those things, right? Um, yes, the usual process happens to be done by different people from the ones that actually need to execute this. Um, so what what what's been your um main default situation kind of when do you get pulled into a plan? How do those dynamics work out? Tell us a little bit more about that. (18:27) Yeah, I mean I I it'd be interesting to to see what you you've uh experienced in the past or looked at as well, aside from kind of the the Falcon scenario that we shared together. But often what I see and hear is that your go to market leadership, they're brought in pretty last minute, like the plans mostly mostly baked at that point. And that might start off the dynamic on on kind of a bad foot. (18:54) It it kind of can I if if you're a CFO and you've already been in that sheet for you know a meeting a week for the fa past two months and you've already kind of lofted it to the board as I think we've got a plan and then in the spirit of collaboration you bring in your go to market executives right and I say the spirit of collaboration because that setup where you've already spent so much time in it you could be really attached to that plan probably already and then you'll be maybe annoyed like too many chefs in kitchen. Actually, you're bringing up stuff that maybe it's valid, but you're not going to hear it the same (19:30) way if you bring people in at the last minute once you're very attached. Is that does that resonate in any way? I don't know if you've seen that. I mean, it's um it's um I would call it a change management process that is being kicked off. It's not really asking for feedback. (19:48) You know what I mean? It's it's more like, oh, we you know, air quotes making you part of the process, so you will buy it. So you you're okay executing it, right? But what I've also seen is let's just say you have as a go to market leader you have all the insights you see the context of the numbers you understand which projects which initiatives will be hard to ex execute which ones won't where there is like risk in the plan you see all of these things right because you're going through the list and thinking about like you know I need to do all of those. Um the the issue that I've many times run (20:17) into both experienced it myself but also with you know my VPs working with me is a little bit this weird almost incentive system um which is well if you are a VP of sales and you complain about your targets being too high to a degree that is like oh yeah I know I have that conversation every quarter with my sales reps too and you know I'll just need to talk you of that latch and push back and just make you make you eat whatever the target is, right? Because if you if you push back and you see risks and you kind of I don't know, you worry. Um it might (20:55) also just be a thing where people then either feel like oh he's just trying to negotiate down his or her targets. Uh or like o maybe he or she isn't the right one for the job. Maybe we need someone else to execute this. Right? If if you're not a believer, if you don't think you can get it done, tell me now because I still course correct so to speak. (21:14) Right? And I think this this leads to a pretty silly situation where you have actually um the right intelligence, the right experience in the organization but basically it's not being used and and you tell me more about that. I think that's role that people are playing. I think that's very well known across and then people make this calculation in their head. (21:40) Well, do I want to come off as weak and you know push against and and basically do the right thing for the organization. honestly or do I just eat it um and take the battle when it happens in Q2, Q3, Q4 when we, you know, start missing uh all of those quarters, right? I mean, what how have you been dealing with that? Yeah. (22:00) So, hey, the first thing that I'll I'll kind of throw out there is I don't think this scenario is really anyone's intent, right? Um I think VPs getting in, brought in right before board, like give giving other leaders the benefit of the doubt. Like think about the season when this happens. Are are those leaders just protecting end of year focus, right? Like you're trying to hit the current plan at the same time that you're you're going into the next year's plan. (22:26) Is that really where you want your execs to be focusing their energy rather than making sure the team is closing all those deals end of quarter? So, I don't know. May maybe that that's one of the areas that come into it. But but maybe it is a a trust thing. I mean, you you did say that they show you the plan almost like it's just um something you need to do to maintain buyin, but you're actually getting the opposite when you do it this way, right? When you're already kind of married to your your sheet because you've been in it for for so long and um you're kind of annoyed when someone's asking questions like, "Hey, did where did we get that number?" You could almost see the room change (23:01) like what's that that like meme where there's like the skeptical face, you know, that's looking at you. It's like where uh typical sales gal, where's she going with this one? Right? And that, you know, you start to get a little paranoid. (23:21) You realize that you have maybe five of those questions that you could ask to get an informed opinion and then try to come up with the best plan for the year that's going to help you and your team to to be successful. because again you're holding the bag right and um I mean think about this a lot of times like the other dependencies uh you know product engineering um talent enablement like maybe they haven't even seen this thing right and and you rely on all of these people to execute a plan sometimes I think fundamentally and to a degree that's not a solution it's just trying to explain why this messy problem exists is um I think you're building a plan (23:58) truly for two different audiences and I think that's at the core of this. I think one is for again it's the you know the management team the senior management team building this thing out but one audience is your bosses that's new investors it's current investors for the next year it's like whoever it might be right um and you can fool them in you know in the nicest you know meaning this in the nicest way but you can fool them with a bunch of things because they just don't have the context right and then there's the other audience um which has some of the (24:29) contacts which needs to go um actually execute that stuff and it's really difficult to marry those two worlds sometimes. I I think I think it simply is right and I think this is where it's coming from and I also believe um could you do it the other way around? Yes, sure. (24:48) But in the reality of things u you will always optimize for your bosses and I think that's that's where some of the gap is coming from. But what does that lead to kind of what are all of those things actually leading to? I think it leads to um ultimately not hitting your targets. that leads to not having the same amount of trust from your board, from your new investors as you as you carry into this year. (25:13) It's um you know, one one guest on the pod once said like uh you can you can decide either fire me now for a low ball plan or fire me in 12 months from now. That's that's the only options you have, right? Um and I think, you know, finding that balance um is extremely is extremely difficult. I think you're kind of double clicking on that trust thing. (25:32) I mean earlier you said something um you know do do you maybe think that your VP is trying to lowball their target and like at the end of the day if you even have that thought about any of your executives you probably have the wrong executives in in in in the seat right if you don't trust uh also that your executives can have a good constructive debate over a plan to make sure that it's rock solid but then in front of the team you know leveling show someone that has ultimate belief in the plan, right? Then you've also got the wrong person. (26:06) They can't operate at multiple levels and and you you can't um I think you were saying kind of like, you know, you just want to deliver the target and say, "Hey, go execute." Like um you're not going to get buy in that way. Just if like a frontline manager went to the AES and said, "We're going to increase target. (26:24) " Of course you would bring the how. of course you would bring why you have that belief, right? And so I think a mistake could be made to in this moment to maybe manage your executive leaders like you know a front a frontline employee all of a sudden rather than the expert that that you you you fired. What does that mean managing your your your executive as a frontline employee? Yeah. (26:52) Uh, well, by the way, wouldn't ever manage frontline employees like this either because I just kind of gave the example of, you know, I'm a frontline manager and I'm going to my AES and saying, "Hey team, so we have an ambitious plan. We just raised our series B. We're going to turn up the heat on this thing and I got to let you know 2026 going to be an amazing year, record-breaking year for us. (27:18) " And here's why I'm so confident that we could go and break these records, right? And then you're going to tell them, "Hey, here's some of the things I'm delivering for you. We're going to redo pricing and packaging. We've already tested it. Higher close rate, uh, higher ACVs." And you're telling them all these wise that are almost compounding. And then their target only increased 10%. (27:35) Kind of thing, right? But you've done all of these other things, right? Any good manager would know that to retain buyin, you have to show that transparency and show that show that belief. I'm not just expecting my AEES to hear targets raised and go, "All right, boss, let's hit it." Yeah. (27:55) You know, and then be like high-fiving at the water cooler, right? They have to have a reason to be confident in me or you or you lose the trust, right? So, what a complicated scenario that if you're not bringing in your executives in a timely manner and the data is confusing and you're annoyed when they're asking questions about it to then go expect them to just go, "Rock and roll, baby. we got this thing right. Uh and then to uphold that belief in front of the team. (28:19) You're not equipping your your leaders with with the the the how and the confidence. So I think that's where where things break. But once you have the trust, okay, that you can bring your executives in and let's actually just talk about this plan. Let's set up something where we could win and look fantastic. (28:38) Then you could go through the process of, hey, let's take take a look at this and make sure there's no cracks in the foundation. Let's take a look at that. Actually, let's kind of go through a couple of examples and maybe go rapid fire between the two of us. (28:55) Um, in terms of what are the what are the top mistakes people are making and and how should they be addressing that, right? So, I I'll go first because, you know, I'm the host. Um, first one is also my favorite one. Hiring on time. So why is that a biggie? Well, usually the plan starts adding new headcount 1 of January and that you know maybe you have thought of all the other things but your your plan really only gets finalized maybe in November, maybe early December. (29:28) So at that point um have you actually started hiring already for those addition roles that were uh opened? Do you have the requisitions? is your talent attraction team or we kind of doing all of that work and the answer usually is no. The answer usually is no. Usually you miss your first one, two, three hiring month. You simply miss them. (29:47) So what happens then though especially if those roles are opportunity generating, right? Pipeline generating is that it gets really difficult to catch up on that thing, right? Um yeah, exactly. Because one hire you make in January, they have 12 months to deliver value. (30:07) If you then only make the replacement higher so to speak or the backfill higher in February or March, they have less time to deliver the same amount of pipeline. And let's forget about sales cycles and all of that, right? In reality, in order to make up for one earlier missed hire, you actually need to hire two people to make up for that. And that will get you into issues already with a CFO, right? So hiring on time, making proper um uh one I want to say kind of realistic targets for that. I think that's going to get you out of hot water real quick. Totally right. (30:39) The uh in typical any anything mid-market with a normal velocity and and ramp time uh for those reps, hires in H2 really aren't impacting that fiscal year. Yes. I think one that I see uh on the spreadsheet that's a common mistake is not uh staggering the the the supply and demand, right? Like when do the BDRs get hired versus when do the AES get hired? Obviously, you want to allow there to be enough ramp time uh and a realistic one for those new BDRs to start producing opportunities so that there's enough supply for the the AE headcount. And you could see things when hiring dates get (31:16) missed that BDR started late, for example. Did you push the AE? And if you don't, what the only thing you're going to do is you're going to start starving your existing AE team, right? You're taking people that are the most experienced that have the highest conversion and they're going to get less opportunities. So, it's kind of like a double whammy in that scenario. (31:34) Someone asked me once if I rather want to have a top AE leaf or two SDRs, and I was like, I'll take the AE. I I want to rather keep my STRs and and basically for this reason, right? And I and I see this is you know one of the mistakes a lot of people are making is they are um somehow getting jumbled up on um on the opportunity generation side uh but trying to hit their uh plan on the AE side and then that goes south basically because of that right so that's a that's a big you know playing into this basically also ramp time right kind of that's a thing that some fancy (32:11) spreadsheets have uh but usually what I see is there's some kind of an assumption that maybe the ramp um should kind of shorten a little bit. Obviously, that makes a bunch of sense, especially helps your C payback period. All of these things totally should try and achieve that. But you know what is actually impacting ramp time? It's enablement resources. (32:30) It's maybe some LMS that you have in place. It's the right ratios between your AEES and your managers, but it's also how many opportunities are you willing to give to those new reps, how quickly, right? I think this is a completely underappreciated and kind of missed thing across the board is people assume ramping just happens by way of time going by. But that's actually not true. (32:52) it yes there's a component of learning to it but then there's applying those learnings in a way of running those opportunities right and also by the way that's the main difference why enterprise companies have a 9 to 12 month ramp and SMB companies have a three and sometimes six month ramp because those opportunities also convert to actual you know closed one businesses faster and people are just forgetting about these things and then they're still saying oh let's kind of reduce ramp a little bit and again that will just put you on a terrible trajectory (33:23) um if you're missing out on on that super important tweak. Just noticing look at the first first two things that we're talking about breaking here and the the the plan for the year typically don't even roll up to revenue leaders, right? These are two separate functions. (33:40) This is TA which is normally under people which maybe what sits under CEO and rolls up head head of people for example and you know and then you've got enablement which hey I've seen it a lot that frontline managers are doing a lot of the enablement or you've gotmemes being tagged across the org. Um, and I think this is a one where deeply you need to evaluate the the context of, you know, how quick is ramp feasible and once you start to hire a higher volume, which scrolling through LinkedIn, I felt like every, you know, one out of every 10 posts today was like, we're hiring. So, I don't think hiring for these high volume roles is (34:15) off uh BDRs, SDR, and and AE's thing despite what we hear about AI and so forth. and um making the assumption or or giving it a nice haircut off of what a tenure rep's ramp time, you have survivorship bias. Like you forget the initial five reps that you hired back in the early days that attred really quick and didn't perform well and you remember like the superstars that stayed, right? So definitely one to double click on. Uh I think you know we've already talking about uh the tweaking the the volume and (34:48) the performance metrics uh quite a bit. Um, but I think the biggest one for me is lacking the the underlying how, right? Like we're tweaking all these things by 5%. It's very easy to say it's just 5%. Like I don't need a how. Like, hey, look at Scott, we hired you and look at we have these new managers, uh, kind of thing. (35:13) By the way, compounding, it's neglecting that maybe tenure is going down while you're also assuming you're going to increase the performance metrics. Typically those are inversely correlated, but we're making the double bet here. Uh typically um uh but we shouldn't hear like if you ever hear uh well we'll just do more coaching. This is not a how it it definitely is not a a how. (35:38) Most of those improvements come from something way more structural like hey we're going to do a new lead scoring system. We're going to pair our senior AES with a dedicated BDR, right? So they get more opportunities and they're with the best performing BDRs. Any of these types of things are are critical on the house. (36:00) And and in this Excel spreadsheet, we often see that they aren't even ramped improvements, right? It's like magically boom, start of Q2, win rates up 5%. You know, and so these need to be staged improvements over time with a clear how to get there. I think what is the reality and the challenge here though is um I think some of those initiatives and projects that you want to drive to improve win rate by a certain you know percentage or or ACVs or whatever I think there might be clear you know when you when you when you build this plan that's going to be Q4 there might be clear for Q1 maybe for Q2 (36:35) um but the rest is just really far out you don't even know if the bats you're placing for the first half of the actually going to pay off uh double down and really make sure they're working out. So I kind of understand and this is I think where the you know the the the guys that are executing and the guys that are planning where there needs to be this trust relationship also in place to balance this out where we are saying like yes we don't know yet what we're going to do in Q4 to achieve whatever improvement we want to achieve but we we all know we'll figure this out (37:04) somehow right and I think that that is kind of that collaboration is really important which also goes back to the trust piece um in terms of at least when when someone is I'm just going to say call it what it is is kind of cooking the books here. (37:23) Um at least they should be very clear on where are all the different leverage points that are maybe not extremely obvious from first glance at the at the spreadsheet. Right? There should be one tab that basically points out um where the changes are happening. Um so then you as a as a as a go-to market leader has bit of a understanding and road map what's potentially ahead of you. (37:45) Right? Again, building this trust relationship is is is pretty important here. One thing I would add is the the kind of we don't know exactly what the initiative is going to be, but we we will come up with one. I think that's where you could potentially run into these capacity bottlenecks, especially when it's crossunctional, right? That you have the best intent, but then everybody else is operating in silos. (38:09) like product and engineering has their own roadmap and their wise and we forget that we're going to need you know something uh a new enterprise feature right specifically to get that ACV up and we're going to do segmentation of the team which doesn't exist and maybe that kind of runs runs into the next one like thinking yeah a little bit holistically about uh the cross functional requirements right I I want to take the capacity piece even one step further um and this is why I really never liked to put a bunch of changes, especially on top of the sales team. Um, even though that's a great lever to pull, but it's it's dangerous because really realistically thinking (38:48) who in the team is actually going to execute those projects. Let's just be serious about that, right? Kind of as a VP of sales, you're going to be busy with hiring, you're going to be busy with running the forecast, the team, coaching, closing deals. (39:06) you already have a pretty packed schedule, you know, just maintaining what you're currently doing and then saying, "Hey, and now you're also going to run a project to figure out how to add another five points to the conversion rate. Who's who's going to do that and when, right?" Kind of also think in terms of capacity with like who can actually execute this and my belief is usually sales ops can't or revops can't. (39:25) It needs to be the VP, it needs to be leadership to kind of actually do it. And then just be serious like usually um sales guys are really kind of deep into what they're currently doing already. So adding projects is kind of it's not alien but it's not the the core motives of oper operating I feel. (39:45) Um and then kind of really understanding well do they even have time to execute these things right kind of really think about that really hard. Well, if you if you were really going to do it right, you'd create all the projects before the rapid scale because once you're uh looking to increase headcount by X, you are spending 30% of your time in interviews where normally you'd be spending that time with the team on performance, right? Your frontline managers are eating lunch with with their camera off doing an interview because it's the only time that they could eat in the day, right? So, you (40:14) really again an example of compounding things. you're adding uh initiatives at the same time you're losing the regular time that you'd be focused on performance while you're scaling headcount. You're doing onboarding yourself. You're running trainings the first week of every month with that new hire class. (40:34) Um so I I think you know I saw I saw it work really well. We had uh our friend Deb back at Falcon and she was like the the capacity police where she would argue with you to say you're overcommitting and what a blessing, you know. Thanks Deb. It was great because of course, shout out to Deb. (40:52) In that in that room, you're going when you're with all the executives or you're coming with the plan, everybody gets the endorphins going. You're at the offsite, right? And you're like, "Yeah, yeah, yeah, no, no, no. I I I got that project. All good, right?" And then real reality hits later. (41:10) You said one thing a couple of sentences back uh which is basically, hey, do we have this enterprise feature ready? For example, right? And that's that's a great lead into usually folks try and add some kind of a new thing to the plan like a new segment new motion new you know uh new industry or whatever it might be and the the the obvious problem with this is that there's just no historical baseline. (41:35) Uh so everyone is guessing on where the starting point should be which is totally fair. That's just the, you know, reality of doing those things. But that can also usually lead you astray really quickly, put you behind. You know, we talked about layers. That would be a layer you maybe look at separately, but suddenly that layer evaporates completely. You need to kind of catch up from other ways. (41:56) But also, it creates all kinds of different requirements uh in order to, you know, those requirements don't um guarantee that you will achieve the target, but they're still there in order for you to even have a shot, right? you maybe need to change, you know, the profile of AAES. Maybe you need to have those enterprise features. Maybe you need to have security and privacy features. (42:15) Maybe you need to have all kinds of other things that you kind of need to add to this thing. Um, which may or may not happen, right? And even though you as a go to market leader do the execution completely well and completely correctly, you still might not have all what's required in order to actually get there, right? Again, something that just let's just say, you know, it's not terrible. (42:39) is not a it's not a bad thing but it certainly adds risk to the plan that I think you can sell very easily to the board and say like hey look we have you know less data we did this research we could totally nail the segment but then in the execution a bunch of things you know sometimes get forgotten right um and I think that's that's a typical one adding something that hasn't been there before yeah yeah a couple couple of hand raiser enterprise logos come in that they had such a uh identified need uh through through themselves that they neglected to to exhibit the typical enterprise buying requirements, right? They didn't care about security. They you didn't (43:11) need the engineering team to help with the RFP kind of thing. Um and then you just assume that it's going to scale that way and that would be a mistake. This is a common one um that that I I've seen um certainly like helping early founders with their plans as well uh recently. Um and it and it breaks you. you really can't make up for it. (43:36) Like missing buffers, right? Um and it sounds super obvious like may maybe this is an obvious one, but you know the ideal is to build a plan that's significantly over the the board plan even with the buffer, right? Like you could sleep at night with with this type of thing. Again, you also have the house of how you think that's actually like 90% achievable and if you fall 10% short, you're still per uh uh you know over the board plan type of scenario. (44:02) But yeah, curious to hear your thoughts on that one. So the buffer thing is really difficult. Um I think there's a practical thing to it. Um if you think about it as you go down the hierarchy, um very top level, someone will own the net new revenue number and that's probably going to be at least the CEO. (44:21) Uh in some cases, which was the case with me, also was owned carried by me as a CRO. um and you have that board number um you know regardless that's locked in for the year you can't really do anything about that um but then you know having this go all the way down let's just say to your SDRs so SDR leadership or a leadership um that doesn't really work either because there are operational realities that make it impossible for them to hit that target you know let's just say AE quit or you know you couldn't find those hires you can't give those you know frontline (44:52) leaders does the same target as they should have according to the plan, right? It just doesn't work. So at some point in the pyramid, you will need to meet um and um when you do using buffers in order to derisk um you know to a certain degree especially for yourself. So this was in my case extremely extremely useful, right? Um the other way to think about buffers is also well you have all of those initiatives all of those things you want to improve and achieve and each of them carry quite some risk with them actually and I think (45:27) a really helpful way to think about this whether that's board or the operational plan which is kind of an audience thing to think about it more in a you know risk level plan right and I think the stretch version the riskiest version with most of the compounding impacts and most of the improvements maybe that that's what should guide your operational execution, but the one with fewer risky adjustments where a lot of the things that you're doing are kind of the same as they have been last year that ideally should be your board plan (46:00) because you don't really want to miss uh you know lose the trust of those guys. Um, and obviously then there's the reality of like does that work out? You know, do you have to pull a rabbit out of your hat this year in order to even, you know, be a viable company? And then obviously you're kind of back against the wall. (46:17) But otherwise, I think what I just said is probably the guidance for most of you out there. I think probably the last one uh that we see often um again this is thinking about context for the next year, right? But it's more like context for what what is the unknown? What can't you plan for? And a lot of companies they miss the attrition thing, right? Again, they assume like, oh, well, hey, Raes the average 10 years, two years, they're going to assume that that's what it's going to be for every additional hire um type of thing. And and really when you're going through growth and then instead of it being three OG AES, it's (46:50) uh 15 AES that were hired all within, you know, uh six months or or or a year type of thing. It's different for that AES. They're not sitting next to the CEO. They don't have that founder effect. they're not getting all the lowest hanging fruit on the marketing leads. They're now sharing those, you know. Um there there's a lot of different things that could come into play, but it's so critical to actually have an assumption of attrition. (47:14) It loops back to the hiring thing, right? Because there's going to be that delay that when someone leaves unexpectedly, you know, that then you're going to have the sourcing period to find that candidate, then the ramp time, and like it's never going to be in the same year to replace that that AE, right? type of scenario. (47:33) But I mean there's unforced problems, right? Like are you not planning for promos, right? Of course you should have promo pass and things like this uh built into your plan for for performers or even expecting the unexpected. (47:50) Someone goes on medical leave, they're enjoying time with their new child, right? A top performer has has a child. Like they should be able to enjoy that. And your entire plan shouldn't be hinging on hope that no one has a child, right? This would be ridiculous. Uh so so yeah that's the last one that comes up in my mind and I think to kind of wrap this up a little bit right I think especially the last one you should send that to your CFO because what that will translate to is maybe you can hit the same revenue number but you will definitely need to spend some more money in order to get there to manage those back fills to manage those redundancies to have a bit (48:22) of slack and buffer almost there um I think otherwise it's going to be extremely difficult to execute this on time right I I'm trying remember the acronym of once I was acquired by a public traded entity of you know what what that approval process was like to get the headcount and boy that was dysfunctional oh my gosh we've got a revenue model that doesn't speak to the people team that doesn't speak to the to the CFO and the people team's waiting to get sign off from the CFO for that budget and it's like hey if we actually want to derisk (48:51) our plan having extra salaries approved above in the case that they're needed and we already can identify Hey, this person's on a warning or hey, this person's going to go on leave. I know they're going to be going on leave. Let's start the back fill process now. And not being so rigid in that way that avoids some of these unforced errors. I think that's it for today actually. (49:15) So, we had a whole segment um and maybe just ping me or Scott on on LinkedIn, but we had a whole segment on uh diving much deeper on all the hiring intricacies and how TA plays into this and issues that kind of might surface because of it. Um, but I don't think we will get to that. (49:34) I think we're I think we're like way too far into the episode already. So, maybe this is a follow-up for for the two of us to to produce maybe the next couple of weeks. Scott, thank you so much for taking that time and and helping some folks figure out how to um build a plan that they can actually execute next year. Absolutely. Been a pleasure, Tony. Always great connecting. (49:54) Wonderful. Have a good one, everyone, and cheers.