Grow Sales With a Revenue Operating System
Grow Sales With a Revenue Operating System
This article is based on a podcast interview about building revenue operating systems. Check out The Sales Lift, Episode 62!
When all departments in your business work together, in synergy, towards a common goal, that’s when results are achieved. That’s when revenue is made. Revenue growth requires coordination, collaboration, and mutual understanding across marketing, sales, service, and management.
But so many organizations still work in silos, working under completely different (largely incompatible) paradigms. The solution is unification. A revenue operating system is a system by which this organization-wide unification can be nurtured.
This article will provide you with all the information you need to understand what a revenue operating system is and how to implement one in your own business for expedited, continual, revenue growth.
What Is a Revenue Operating System?
A revenue operating system is not a particular tool or software. Rather it is an ideology and process that brings an organization’s departments and people together. Revenue operating systems are processes that reduce friction and unite organizations towards a common revenue-driven goal.
The core of this process is unity. For a revenue operating system to succeed, silos must be dismantled and everybody working within the organizational structure must agree to abide by an accepted set of frameworks, measures, dimensions, processes, and workflows. All of these factors, united together, are the key tenets that will bolster revenue long-term.
Why Revenue Operations Matter: The Problem With Silos
The problem plaguing many business organizations today is that departments tend to work in silos. Because of this, there is a fundamental lack of coordination, communication, and agreement between these departments.
More often than not, marketing teams will be operating under one paradigm, sales teams under another paradigm, service under another, and management under yet another completely disparate set of criteria. Each value and comprehend things fundamentally differently.
But in order to reach a high-level executive revenue goal, this disparity must be eliminated. Everybody-from decision-makers to employees on the ground-must start speaking the same language, must share the same scorecard, and start moving in the same direction.
What Is Revenue Operations and How Is It Different From a Revenue Operating System?
The term revenue operations is widely used but, though intrinsically connected, is not wholly identical to the makeup of a revenue operating system, per se.
Revenue operations: this is the fundamental technical aspect that determines how an organization can be enabled to drive revenue. But this term does not adequately describe the value of revenue operations for non-revenue stakeholders.
Revenue operating systems: this is a largely more inclusive process that aligns every player and individual contributor in a business. Revenue operating systems benefit everybody from C-Suite executives to those working on the ground. Revenue operating systems are actionable processes that nurture synergistic ecosystems where revenue can grow.
The Revenue Operations Risk
Revenue operations without a revenue operating system brings risk. The biggest risk that can occur when revenue operations work in isolation is that when a revenue operations program grows and matures, it will often end up forming its own department.
Yet this is exactly what we have been trying to avoid by implementing a revenue operating system in the first place. When revenue operations are allowed to become their own department, it serves only to add yet another stakeholder and another silo into the organizational process. Ultimately this prevents people from working together in a collaborative and interdependent way.
Instead of thinking of revenue operations as an end goal it is better framed as the foundation upon which revenue can be built. For example, readers familiar with the CRM platform Hubspot will know that Hubspot has a contact database at its core. From this core database, users can plug into a variety of different ‘hubs’ all of which link back to the central core.
If we take this framework as an analogy, revenue operations play the same role as the Hubspot contact database. It is the enabler. The core structure. It enables people to move from one place to the next. In much the same way, each aspect of a given organization (marketing, sales, service, and management) plugs into revenue operations in order to extract value that is relevant to their particular context. And in order to achieve that revenue operations must be framed within a robust revenue operating system.
How to Build a Revenue Operating System
Implementing a successful revenue operating system is a large undertaking and requires a strategic and well-planned approach spanning the width and breadth of an organization’s culture, infrastructure, and operational processes.
The process can be defined under three clear stages:
Understand current reality
Define success for each department
Create a 7-day scorecard
Step 1: Understand the Current Reality
The first step to creating a robust revenue operating system is to understand your organization’s current reality. Everybody defines their reality based on their own perspective. Oftentimes, even if they’re using the same words, executive leaders end up speaking an entirely different language to their fellow marketing, sales, and service leaders. So, the first thing you should do is to collectively agree on what the problem or the opportunity in our organization is.
A great place to start is with a common scorecard. This scorecard will outline the processes and outcomes that matter and why (what is the end result that everyone wants?).
This exercise rarely gets enough attention. Most organizations will have a top-end revenue goal but, more often than not, these goals aren’t being effectively cascaded down and contextualized to realize how individual departments can contribute to achieving that goal.
It’s so important that each element understands exactly what is in their realm of control. Once you have defined that common scorecard, it will be much easier to unite departments under a common banner and engage in productive conversations.
Step 2: Define Success for Each Department
The second step to creating a robust revenue operating system is to capture all existing business processes, permission systems, and workflows. Essentially, you need to carry out an audit. Decide what can stay, what needs to go, what can change, and what processes require more long-term leniency. Identify what can be fixed immediately and what requires a period of observation and adjustment.
For example, if you notice some persistent inefficiencies in your ticketing system, you may decide to provide additional training to your service team or implement a system to further augment existing product marketing and sales processes.
Your common scorecard comes in handy here and should allow every individual contributor to answer the simple question ‘was I successful today?’ These achievement goals should be relevant and actionable for the individual contributor’s role and context.
In order to achieve this, companies need to conduct a regressive analysis back through their pipeline and determine what actionable steps can be taken throughout the process to contribute towards top-line goals. It could be something as simple as the number of phone calls, contacts, activities, or notes individual contributors need to accomplish each day. This is how you create a universe that is both aligned with corporate goals and completely actionable for each contributing individual.
Step 3: Create a 7-Day Scorecard
The final step is to mobilize your scorecard. Each individual contributor should have a seven-day scorecard – and that’s the minimum. For even better results a daily scorecard is ideal. As a manager you should know where your people are in terms of their projected outcomes on at least a seven-day rolling basis. Then you will be able to identify friction points, intervene, and resolve the roadblock before it becomes a serious impediment.
You can then use these variants to have higher-level conversations at the supervisory and managerial levels. This is the time to ask questions like: how can we reduce friction? How can we increase volume? How do we encourage or discourage this particular type of behavior? This time also offers a great opportunity to work towards mitigating project management risks and bringing targeted opportunities to the strategy table.
Should companies seek external guidance? Should Companies Seek External Guidance?
There are two options when it comes to executing a revenue operating system implementation. You can source guidance in-house or bring in an external vendor or partner like Velocity Strategy Solutions.
In general, companies have permission systems that are designed to be preserved and therefore it can be very difficult to create movement from within the system. Bringing in expertise from the outside can be a huge advantage and helps create clarity, direction, and momentum.
Executing a RevOps system requires dealing with multiple constituencies. You will need:
(a) somebody working internally who has the ability to step outside the organization and look at the situation from the outside in, or…
(b) somebody from the outside partnering with somebody internally to help observe how things fit together
Most individuals within a company are just too close to the situation to see things objectively, but there is also the issue of revenue cost. The financial impact of stopping everything to allocate the resources necessary in order to conduct this kind of audit without an outside partner is huge.
Your business needs to keep moving towards continuous improvement. And that’s exactly what we help businesses achieve at Velocity. We instill a culture of learning to create environments where departments and executives can continually learn, adapt, and grow.
Grow Sales With Revenue Operations
Now that you understand how departmental unification can impact revenue growth, it’s time to develop a revenue operating system of your own to streamline your sales, marketing, service, and management processes towards a common organizational goal.
We’ve learned that to achieve this, we must eliminate silos, generate a common scorecard, and define success in actionable terms for each individual contributor.
By doing this your business can move towards a state of continuous improvement and growth.
Ben Stroup is Chief Growth Architect and President at Velocity Strategy Solutions where he helps leaders design, develop, and deploy smarter business growth strategies. Ben is a futurist, disruptor, and data champion. He leads a team that takes a structured learning approach to business challenges, which allows them to assist leaders in bridging the gap between ideas, innovation, and revenue—taking ideas from mind to market.
Velocity Strategy Solutions is an on-demand, next-generation business strategy and management consulting firm which provides clients with a relentless focus on data, execution, and results that positively impact the bottom line. Velocity delivers integrated people and revenue strategies combined with a disciplined approach to growth architecture that elevates the capacity of leaders, teams, and organizations to succeed and win more.