The importance of operation is paramount to the success of your business. Without operations, it would be like running an airport without air traffic control – there would be a lot of confusion, things would break, and nothing would get done.
Many of today’s modern B2B teams have realized this, so they’ve invested in sales operations teams, marketing operations teams, and even sometimes customer success operations teams.
But, this is the correct model?
I recently sat down with Jason Reichl, CEO of Go Nimbly to explore this topic. Jason explains that while everyone has the best of intentions, they may still be operating silos. And if there’s one thing that we know about ABM is that silos don’t work.
Jason goes on to help us rethink revenue operations models, explore how to identify siloed teams, and work to break down the barriers.
Please enjoy my conversation with Jason!
Hey everyone, Brandon Redlinger here, director of Growth at Engagio, and I am stoked today to be talking to Jason Reichl, the CEO at Go Nimbly. Welcome, Jason.
Hey, thank you, thank you very much. It’s good to be here.
All right, so a lotta companies today have sales operations teams, they have marketing operations teams. Some even have customer success operations. And you know what’s wrong with this model? And why is the message of, you know, #nomoresilos so important?
Yeah, so if you have all those different, unique operations team, you know, I don’t wanna shit all over that. That’s like, that’s pretty okay. What you’re gonna find with an operations team that is spread out like that and not unified into a RevOps team is that you’re gonna probably have about 10% gain in revenue on that. That’s just a kind of standard to measure operations team in.
So let’s imagine you work at a company, you’re a hundred people, and you don’t hire any more sales and marketing people, and you say, we’re gonna operationalize this company, and we’re gonna try to be profitable. You should expect with those kind of models about a 10% gain on revenue just from operationalizing your environment.
A Revenue Operations team, because they’re unified and they’re only really focused in revenue impact, they’ll get about 36% out. And so that’s one of the main reasons why, you know, companies are so interested in making this transition. Something like 46% of SaaS companies are making the transition to Revenue Operations right now, right? So they’re doing it because, you know, you could have the same bodies, but just this more generalized approach to a more unified approach with this or North Star metric, which we’ll talk about in a second.
Ultimately, what that allows you to do is to align everyone and really get the most value out of what’s going on on the team. So if you have these unique operations teams there’s nothing wrong with it, except you’re not really, you’re probably doing as much work, and you’re not realizing the value. It’s kinda the same premise as the ABM, right? You’re doing the work, you know.
If you do a demand gen process, you’re still doing a ton of work, it’s just not the most effective work you could be doing to drive what you’re trying to drive. And so, it’s very similar to that. You know, Silo No More, and you know the reason that we kind of rally around that is, you know, we, I, really believe in like looking in at history and understanding, hey are we the first smart people to ever kind of think of this, or where does this come from?
And it really boils down to this guy named Phil Ensor, which he worked for Goodyear, and his job was to go around and basically look at all the Goodyear tire shops across the country, mostly in the Midwest, and try to make them work like all one unit. And he was finding this to be impossible. And he was driving past, you know, grains of silo, you know, grains of different things like rice and whatever in silos and he’s like, oh, they have a silo syndrome.
So he coined this term called silo syndrome. And then for the next year he did this study, and when he came out with this study it was basically, why do companies silo? And it’s actually very natural for us to silo, right? So, it’s very difficult, and so what he really boiled down to is four key points that I kind of go through whenever we have a customer onboarding. And it’s, you know, number of employees is like the first sign that something’s silos. So, this is really true in SaaS companies, right? You know everyone’s highly effective, you’re like this fifteen-person, well oiled machine.
You come out of Y Combinator, you’re kicking ass, or whatever, and then as you grow and you scale, you had that, and sort of everyone one kinda falls into place, you don’t get as much done as you think you used to with even more people. And so the number of employees really affects that. Second is the number of organizational units within a company. So as you build a company, you build these hierarchies within the company and it really doesn’t make for the best or most effective version of the company, because people are only trying to please their boss, right? Degrees of specialization is another reason.
So, people stop speaking a common language, they stop speaking this thing they can all rally around, and they don’t, they’re like, well I do this thing, I know, you know, that your tire example, I know how to make the rubber go like this, your job is to do this, we have nothing to talk about, and we’re too specialized. And the last piece is that in both organizations have a number of different incentive mechanisms. So people are just being incentivized on different things. And so, he, you know, this was I think, the mid 80’s, and when he came up with this, he spent the rest of his life trying to figure out how to solve this.
He died last year never having really solved it. And you know, you see it all over the place, but you really see it in technology companies, because there’s just a rise of technology across the board, B2B technologies all over the place. But you know, people who used to have, you know, business processes are now being asked to manage entire systems, and infrastructures, and tech stacks, and all this other stuff, as well as, still be strategic, as well as, understand insights and analytics, and train the people on those. And so it’s a lot to do.
And then the customer has become more demanding then ever before. Everyone has this kind of age of the customer. You know, the customer knows more about you before they ever buy. That’s not actually true, it’s the customer has already decided to buy from you by the time they even sort of engage with you. And what they’re deciding is how big of a check to write, right? And the difference between that is how personalized that customer experience feels.
Right, and so, you know, that’s kind of what I always look at. And then the last piece of this is, why try to solve this, is if you look at Google, and you look at terms like sales and marketing alignment issue, it’s increased by 1000% over the last two years, right? So, there are more and more articles being written about, why are sales and marketing misaligned? Why is customer success not treated this way? And the truth is, is because everyone is in these silos, and everyone is operating against these very real, difficult, people-problems to solve. You know, we want to act like everything is a business problem, right?
If we have better sign offs, and check offs, and all these kinds of stuff, things are gonna work better. And so, what we found is Revenue Operations kinda breaks down these silos, and it does it in a pretty interesting way. So, from a unified team perspective, we basically take your go to market team and say, this is your frontline, these are the frontline UI’s, your customer, and your operations team become one team, and that’s your backend to the customer, but you both service the customer.
Right? And then what you try to do is you try to find generalists. So, you promote people who have a more general skill set. You would promote the front end of the market side, the marketer who understands sales, right? You promote on the operations side the person who understands technology, but can also understand strategy. And over time you build a very good generalist culture, and because of that, it sort of allows them to talk and speak their same languages, and have a shared experience. Second thing you do is you separate your operating teams from layering with the operating structures, right?
And so you basically take away this thing where someone’s just trying to please their boss, instead they’re both trying to please the customer. You put that in the top layer, and you focus on the revenue. And the last thing is, again, I just always go back to this, when you focus on revenue, there’s no doubt if what you’re doing is impactful or not. And so it kind of cuts down this thing of, well I handed you this many MQL’s last month, you did this many SQL’s, what the hell’s happening? Right? Maybe you only got to hand someone two MQL’s, in order to get a huge boost in conversion across.
You know, it just kind of changes the conversation to not, you know, not them versus us, but us versus the market place in a way, and that really rallies teams together.
The post Is Having Sales Ops, Marketing Ops and Customer Success Ops the Wrong Model? appeared first on Engagio.