5 Takeaways from Conversations with 40 Chief Revenue Officers
The Chief Revenue Officer (CRO) role has gained prominence in the tech C-suite in recent years. CROs are responsible for driving overall strategy and aligning their teams to achieve revenue goals. The role is dynamic and evolving, and looks different depending on the type and stage of a company.
I spoke with 40 CROs about their role and the lessons they have learned as C-level revenue leaders. Individuals had a minimum of 12 months of CRO experience in technology companies based in the US, primarily in the Bay Area, and specialized in Software as a Service (SaaS). The companies ranged from late Series A to Series D startups. Of the 40 CROs, three were female and thirty-seven were male.
Here are 5 takeaways from these conversations:
Success as a CRO requires more than a classical sales background
Being an exceptional people leader is a competitive advantage
High-risk, high-reward bets are critical to success
Partnerships are the underdog of the revenue family
Create your own luck and ride the waves
TOP 5 TAKEAWAYS
1. Success as a CRO requires more than a classical sales background
While Sales is the most revered path to CRO, Revenue demands a broader set of competencies. The CRO is a multifaceted role that involves managing up to the CEO, investors, and board. In addition to Sales, CROs oversee a myriad of revenue-driving functions like Revenue Operations, Customer Success, Marketing, Partnerships & Business Development, and Customer Experience. Yet, it is unrealistic to expect a CRO to have extensive expertise in all or most of these areas. CROs face a steep learning curve in managing and collectively orchestrating these teams in unison. They must prioritize hiring senior leaders with specialized knowledge and skills to advise, lead, cross-collaborate, and scale their respective functions.
2. Being an exceptional people leader is a competitive advantage
CROs will tell you like it is: sales people make terrible people leaders. They’re ego driven, highly competitive, and focused on personal gains. CROs cite their own desire and ability to lead people (and do this well) as a major competitive advantage in their journey to becoming the CRO. Not only do they prove their ability to ‘carry a bag’, but they distinguish themselves by being outstanding team leaders. Individuals who embody both qualities are a rare breed.
3. High-risk, high-reward bets are critical to success
CROs carry the weight of revenue growth. Their success or failure is inexorably tied to the results they deliver during their tenure, even when external factors beyond their control, such as unfavorable market conditions, come into play. The role is characterized by its volatility, leading to an average lifespan of just 16 months. With little room for error, job security at stake, and only 5 quarters to demonstrate growth, CROs develop a penchant for risk. They invest in high-risk, high-reward strategic bets. Adopting a "go big or go home" mentality enables them to either thrive in their role or quickly move onto their next opportunity.
4. Partnerships are the underdog of the revenue family
Sales, Customer Success, and Revenue Operations are table stakes to a CRO. However, partnerships represent murky and uncharted territory. While they can be a vital revenue driver for certain companies and especially transformative in early-stage startups, CROs tend to struggle with partnerships. Not only do they have less direct experience with partnerships, but partnerships themselves have gained an unfavorable reputation among revenue leaders -- they lack consistent definitions and metrics, prove challenging to execute effectively, and are not viewed as serious avenues for revenue generation. Consequently, partnerships are often under-utilized, relegated as a tactic rather than embraced as a strategic opportunity.
5. Create your own luck and ride the waves
CROs take a calculated approach to choosing their next company. They evaluate factors like founder track record, CEO experience, product-market fit, revenue growth, company stage, strategic direction, and external market conditions. By optimizing for these constructive factors and embracing a little serendipity, CROs create their own luck. When factors align, they find themselves at the right company at the right time. This is how some end up riding waves (and in exceptional cases tsunamis) of success.
CROs have a complex and lofty role to navigate in tech companies. They attribute their success to those who have mentored and championed them throughout their careers. Consequently, it's no surprise that they were generous in sharing their time and experience with me. If you were one of those individuals: Thank you.
Tags: Revenue, CRO, Sales, Chief Revenue Officer, Partnerships, Customer Success, Marketing, Customer Experience, Revenue Operations, Business Development