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Do you need a CRO (Chief Revenue Officer)?

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What you'll learn

  • How to define the CRO role
  • The difference between a CRO and a VP of sales
  • What to consider when hiring a CRO

What is the CRO role?

Beyond sales or marketing, the Chief Revenue Officer in today’s workforce bridges several traditionally siloed departments and processes to target the one thing that matters most: revenue.

So, what is a Chief Revenue Officer? The Chief Revenue Officer or CRO oversees all teams and processes related to revenue generation within an organization. This executive position ensures sales and marketing alignment, identifies opportunities for long-term sales growth and maximizes profitability.

The CRO enables collaboration among the teams listed below towards a unified goal of revenue generation over a sustained period of time:

  • Sales, sales enablement and sales operations
  • Marketing
  • Customer support and customer experience
  • Account management
  • Product development
  • Finance

While each of these departments has its own objectives, processes and hierarchies, the CRO maintains a big picture view of the organization. Their cross-functional knowledge allows them to identify and take on previously unknown strategies, channels and opportunities.

What does a Chief Revenue Officer do?

CRO sales responsibilities vary greatly between organizations and industries but can be summarized as follows:

  • Communicate & integrate: Drive growth across all revenue-related functions by working with department leaders, executives and key stakeholders while extracting value from teams, relationships and partnerships.
  • Be forward-thinking: Anticipate the future of the market to maximize innovation and craft strategy accordingly.
  • Define talent: Define the type of talent needed currently and for the future of the organization.
  • Examine data & KPIs: Use data to establish practical KPIs and deliverables while making informed decisions for long-term growth.
  • Consider technology: Utilize the best sales tools and technologies available.
  • Be customer-centric: Shift the organization to a customer-centric mindset, using customer feedback to improve products, services and processes.
  • Establish metrics: Maintain accountability based on the right metrics.

CRO vs VP of Sales - What’s the difference?

Some question whether the CRO is simply a Head of Sales wearing another hat. Others may think it's just a modern name for the position at the head of the sales team. However, there are several clear differences between a CRO and a VP of Sales, primarily related to scope, length of outlook and number of positions within the organization:

Scope: A VP of Sales has one priority - sales. A CRO, on the other hand, considers sales as just one component of the machine that drives revenue.

Length of business outlook: Sales departments usually drive towards short-term objectives, such as quarterly goals. CROs look at goals 18 months or two years into the future, and consider what’s happening in the market and what needs to be done now to reach those long-term objectives.

Number of positions: An organization will typically only have one Chief Revenue Officer, while it may have multiple VPs of Sales, depending on company size, geographies, etc.

Will the CRO role replace the VP of Sales?

The next logical step for many is to question whether organizations need a VP of Sales at all if they have a “superior” Chief Revenue Officer. Heads of Sales need not fear, as the short answer is no. Generally speaking, the role will not replace the VP of Sales.

Naturally, the long answer is less straightforward. In a smaller organization, should companies choose to hire a for this role, that individual may end up doing both jobs, at least until the company scales. However, there is a benefit to keeping both roles- CROs cannot sustainably keep the big, cross-functional picture in mind and run sales simultaneously. Structurally, it makes sense for your CRO to drive overall strategy and the go-to-market processes while those at the VP-level run their respective departments.

The rising popularity of the CRO role

The CRO role is not a new executive position, but a growing one. Organizations have been integrating Chief Revenue Officers since Forbes labeled the position “the CEO’s new secret weapon” in 2012. The pandemic only intensified the companies’ need to evolve and adapt. Salesforce reports that nearly 25% of organizations will hire a CRO sales position by 2023. There are clear inside and outside forces driving this rise.

Rapidly evolving technology

The shift to digital has changed the entire playing field. That’s no surprise to anyone. However, many organizations are still struggling to adapt their sales playbook accordingly. Mark Grimshaw, Senior Client Partner of Global Sales Effectiveness Solutions at Korn Ferry, says organizations are using the CRO role to start on that journey.

The sales environment in a digital world needs to be adaptable for a wide variety of digital environments, marketing and sales automation, and disruption caused by innovations in artificial intelligence and machine learning. Many are finding it easier to attract customers when companies embrace the strategic use of these technologies.

Then there’s the data. These days, everyone is using data to help make decisions. Still, the CRO role maximizes the use of data by breaking out of siloed metrics to bring together data from every team to improve the buying journey.

A shift to sales and marketing alignment

For long-term sales growth and maximized profitability, sales and marketing can no longer remain siloed. The product team, go-to-market team, and customer support groups all need to be aligned towards the common goal of a better customer experience and, therefore, revenue generation.

Ultimately, how customers buy is changing. They demand a seamless experience, which simply does not happen when a company remains siloed. Omnichannel marketing, information sharing between departments and personalized experiences are now at the top of the sales playbook.

However, alignment is easier said than done. Traditional departmental processes often resist integration, which is why the Chief Revenue Officer is introduced to bridge the gap. By not belonging to any single department, they can more accurately analyze the market, identify new sales channels and go after new opportunities to increase revenue.

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Top considerations when hiring a Chief Revenue Officer

The CRO position is not an easy one to fill. To make the most of this position's possibilities, organizations need an executive with in-depth experience in sales, marketing, product and even technology. They need to understand details but also have a big picture mindset and the ability to set long-term, realistic and data-driven goals.

6 characteristics of a top CRO sales candidate

It is easy to become overwhelmed by the list of all the characteristics an ideal CRO should have. Instead, we recommend focusing on the following six attributes:

  1. Grounded and curious: Recognition of the marketplace and the environment one’s organization operates within and curiosity to question and explore new opportunities.
  2. Customer-centric: Understanding of what will enable your customers to achieve their business results, with or without your product.
  3. Strategic: Cross-functional strategy skills, understanding of business models, revenue models, customer service models, etc.
  4. Data-driven: Significant analytical skills and enough comfort with the data to make informed decisions and reach goals.
  5. Visionary: The ability to own the entire life cycle of revenue generation within an organization.
  6. Leadership: Communication and interpersonal skills to understand different points of view, establish credibility within different departments and align siloed groups of people.

What does the CRO profile look like?

After considering characteristics, organizations can dive a little deeper into the profile of a successful Chief Revenue Officer. Many see the role as a career progression for a VP of Sales. This may be the case as long as that candidate has the above traits and is ready to work across different departments.

Roshan Mendis, Chief Commercial Officer at Sabre, questions whether a sales background is the most ideal for a CRO. According to Mendis, there is a huge benefit to bringing in someone with a different background, whether in finance, go-to-market, product, technology, marketing, or business development. The need is for someone who can bring structure, organization, innovative strategy and diverse perspectives to their sales department.

Considering how difficult it can be to successfully fill a Chief Revenue Officer position, one strategy that companies can pursue is to hire a CRO or even an interim executive in the short term while building up leaders internally who could grow into the role. Look for individuals from any of the previous backgrounds with the curiosity to expand into the role. Put them in positions managing a geography, running international parts of the business and generally accruing a breadth of experience across different departments.

When should organizations hire a CRO?

The final question: When should your company hire a Chief Revenue Officer? It comes down to size and complexity.

An organization might not need a CRO sales position yet if they fit one of the following profiles:

  • A small company with dozens of salespeople or fewer
  • A simple suite of products and/or solutions

An organization should consider hiring a CRO position if they resonate with one or more of these situations:

  • Currently growing and scaling and now have over a hundred salespeople
  • Recently merged two organizations and have two completely different sales ecosystems
  • Selling to completely different customers, even if their products are similar
  • Looking to establish complex relationships with different parties in their sales ecosystem beyond classic selling.

Can companies expect resistance when hiring a CRO?

While different companies and individuals may have different reactions, in general, we have not seen resistance to adding this position to the corporate hierarchy. Denis Murphy, CRO at Couchbase, states that he’s seen the Chief Revenue Officer bring the front of the house closer together. According to Murphy, the Head of Sales role is not an easy one. Quarter after quarter of goals and KPIs and stakeholder pressure mean the head of sales remains focused on their team, while a CRO has a much more complex objective.

Onboarding the right Chief Revenue Officer is an ongoing process

It is not enough to just hire a Chief Revenue Officer and expect outstanding results to start rushing in. The CRO role is both a result of and a signal of deeper change. Organizations need to adopt this philosophy that acknowledges and embraces the fact that they work in a complex ecosystem that is constantly changing.

To achieve real success with or without a CRO role, organizations need to shift from being reactive to proactive in the face of current changes. Hiring a Chief Revenue Officer is an excellent way to do that, but it is also just one step. The change must go deeper. For more information about next steps to take when hiring a CRO, contact us.