CRO is a “hot” trending title, but some CEOs are choosing a COO as their revenue partner instead.
“Our CEO needs to be out in front, building the case for Element to the market and investors. He is leading the charge in bringing a new approach to digital transformation in industrial enterprises,” Laurie said. “It just made sense to have an internal partner focused on tactical revenue execution across marketing, sales, and customer success.”
Element’s story of a CEO looking to a COO as their revenue partner is not unique. Companies across a range of industries and growth stages are marking a similar choice.
Consider these examples:
- Ready Education’s CEO hired a COO to run all revenue teams across the US and Europe so he could focus on acquiring new companies to position Ready for market leadership
- Forbes’ CEO reorganized all revenue and growth teams under the COO to support stronger alignment across the company and prepare for a public listing
- Mulesoft’s CEO put all its global sales, partner, professional services, support, and customer success teams under the President Field Operations as it prepared for an eventual acquisition by Salesforce
My conversation with Laurie identified three key trends that are making the COO the go-to revenue partners for many CEOs.
Trend #1: CEO as face of the company 😄
While the CEO has always been the face of the company, the external demands on the CEO have increased dramatically over the last decade. These demands create the need for “an internal” partner to keep everything moving forward with the revenue engine.
Data from Finmark show that the size of the average funding increased three or four-fold between 2012 and 2021. Series A rounds averaged $6M in 2012 and $15M in 2021; similarly, Series B rounds averaged $11M in 2012 and $40M in 2021. As a result, CEOs are spending a lot more time on investment strategy, meetings, and planning.
The rise of the thought leadership and influencer economy has also placed new demands on CEOs’ time. For most companies, content marketing has become their primary means to engage buyers and customers. CEOs are expected to participate in companies’ content by joining panels and podcasts, sitting for interviews, and writing point-of-view articles.
Trend #2: Demand for revenue predictability 🎯
“My role is about machine building. It is not dissimilar to a factory, but we have people not machines and they need to find their own style,” Laurie said. “The key to sales and revenue repeatability is to build a process, use data and analytics, then optimize and improve.”
Repeatability as a driver for top sales performance is well-known and well documented.
Almost eight years ago, CSO Insights showed in a data-driven study of 1,000 sales teams that the key to world-class performance was a repeatable sales process that is monitored by the company to provide continuous feedback to sales reps. More recently, Gong Labs showed that consistency in sales execution across the board was an often overlooked trait of top performers.
CROs often split between this process-driven mindset and a more traditional “heroic,” individual performer mindset. Like Laurie, COOs in contrast are typically strongly aligned to the process-driven model.
Trend #3: Increasing revenue skill specialization 🛠
“In my role as revenue leader, I am managing a range of different skills that all need to be aligned into a shared revenue process,” says Laurie. “This includes marketing, account development reps, sales, customer success, and revenue operations.”
If we look back just 10 years, most companies had just two revenue functions — sales and marketing. Now the typical company, even a sub-$10 million early growth company, like Element, has maybe six or seven revenue teams.
Customer Success has been elevated as a third major revenue team to handle customer engagement, renewals, and upsells. Many companies now split sales between hunters, targeting new logos, and account managers, who farm existing accounts.
Most companies have a sales development representative (SDR) or business development representative (BDR) to support pipeline development. Finally, growing complexity of the revenue technologies means many companies also need a revenue operations team.
Building a repeatable revenue process across all these teams often aligns better to a COOs skill set. COOs are used to build repeatable processes across more than five or six widely different roles and skills.
Many CEOs will continue to choose a CRO as their revenue partner, particularly those for whom market positioning and marketing to sales alignment are key company needs.
For many CEOs, however, the demand to build a repeatable revenue engine across a broader range of roles, skill specializations, and verticals has made the COO an attractive choice.