More And More CROs Are Failing. Why?
Introduction
As the commercial landscape evolves, the Chief Revenue Officer (CRO) has taken a pivotal role within the executive suites of numerous B2B corporations.
Yet, an alarming pattern has arisen: A substantial proportion of CROs are failing to meet their assigned objectives, and their tenure averages a mere 18 months.
This article will delve into the root causes behind this concerning phenomenon.
Prelude: A Recurring Dilemma
Frustration
Imagine the following sequence of events, an all too common scenario in many corporate environments:
A CEO is instructed by the board to lift revenues in the new financial year.
To meet these ambitious targets, the CEO proposes the recruitment of a CRO, which the board approves.
Following an extensive search, the ideal CRO candidate is appointed, but at this point, the first quarter of the sales year has elapsed.
The newly appointed CRO invests several weeks acclimatising to the organization, familiarising themselves with the teams, clients, and market dynamics.
By now, the organisation is approaching the end of the first half of its sales year, but the new ambitious sales targets keep getting missed.
The board is becoming impatient and puts pressure on the CEO to show results in the second half.
This pressure is passed on to the CRO, who now has serious concerns for their tenure in the new job.
In a state of panic, the CRO shifts focus towards short-term goals and swift revenue generation.
A few quick-win deals offer temporary respite to the beleaguered CRO and CEO.
But now the pressure is on to deliver MORE of these quick-win deals.
In this flurry, the CRO is now trapped as their role is reduced to that of a VP of Sales, with an emphasis on short-term targets.
As a consequence, the CRO never has the chance to demonstrate their capability and potential in the strategic role for which they were hired.
The promised transformation in revenue results never materialises.
Blame falls squarely on the CRO for the disappointing performance.
The outcome is inevitable: the CRO is dismissed.
The cycle recommences with the search for a new CRO.
How frustrating is that, for everyone involved?
What Went Wrong? The 3 Key Reasons.
out to sea alone, drowning
Assuming that the CRO is competent and proficient in their field, why are they failing?
In the following sections, we will unpack the three primary factors contributing to CRO failure.
1. High Expectations but Inadequate Support
The role of the CRO is not for the faint-hearted. They are tasked with growing revenues across the organisation.
However, high expectations are often not matched with equivalent support.
A primary reason why many CROs struggle to succeed is the misalignment between their goals and the company's expectations.
In the rush to drive fast revenue growth, companies often take shortcuts that overlook the need to clearly define the CRO's responsibilities, their level of authority, and appropriate performance metrics.
The result is that, while the CRO has the title, they often end up being treated like nothing more than a glorified VP of Sales, with a bunch of short-term revenue goals and little runway given to set the organisation up for sustained revenue growth.
2. Long Sales Cycles vs Short Tenure
In many industries, particularly in B2B sectors, sales cycles can be quite long. This poses a challenge for CROs whose tenure often lasts only around 18 months.
With such a short timeframe, it can be difficult for CROs to see their strategies through to completion and to demonstrate their effectiveness in driving revenue growth.
3. Inadequate Onboarding and Training
Like any new role, the CRO position requires an onboarding period and ongoing training.
Unfortunately, many companies are impatient to see results, fast, but fail to provide this essential support, leaving CROs floundering while they navigate uncharted waters.
Without a proper understanding of the company's culture, customer base, market position, and existing revenue strategies, even the most experienced CROs may falter.
Unlocking The Potential
getting CRO setups right
In a world where driving revenue growth is increasingly complex, the role of the CRO is now more important than ever.
To unlock their potential, companies must ensure they're setting their CROs up for success from the very start.
However, organizational silos, resistance to change, and lack of collaborative culture can make this task daunting and may hinder the CRO's ability to drive meaningful change.
As a result, many CROs find themselves without the necessary resources or organizational backing to successfully execute their strategies, which can severely hamper their ability to achieve set targets.
This misalignment can easily lead to false expectations and miscommunication, which too often result in perceived underperformance, and ultimately, results in conflicts that may shorten the tenure of the CRO.
So, how can organisations overcome these hurdles and prepare their CRO for success?
The Five Priorities for Your CRO Success.
A Unified Revenue Strategy
Rather than focusing on sales and on revenues alone, CROs should be tasked with bringing together the customer-facing departments, like sales, marketing and customer success, under a unified revenue strategy to drive revenue growth and to achieve ambitious sales targets.Sufficient Support
CROs need to be both empowered, and given enough time, to complete this significant sales transformation. CEOs need to give their CROs a reasonable timeframe to make an impact.A Shift in Focus
Further, the alignment should move away from focusing sales on the usual internal metrics, processes and products. The spotlight needs to be on improving the buyer's journey and enhancing customer outcomes.A Positive Environment
Clear communication of expectations, comprehensive onboarding, continuous support, and fostering a culture of collaboration and adaptability can make a significant difference.Stay the Course
Organisations might need to reassess their expectations in light of long sales cycles and potential internal resistance to change. Impatience can kill progress.There you have them. The 5 priorities for CRO success.
What Next?
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About The Author
Peter Strohkorb, Buyer-Focused Sales Specialist, USA, Australia, UK
Peter Strohkorb is the Founder and Principal of Peter Strohkorb Sales Advisory, the Sales Acceleration Advisory firm with a growing list of clients in the b2b services and tech space in the USA, in Australia, and in the UK.
Our motto is "Co-Creating Your Sales Success." , and that is exactly what we deliver to you, our clients.