The role of the Chief Revenue Officer (CRO) is experiencing unprecedented demand right now. Resources on why a CRO is important are gaining traction, and CRO job postings are increasing. So, why are so many companies looking to hire a CRO for the first time?
Over the past last year, the B2B space has likely made about ten years' worth of digital adoption progress. CEOs are still trying to do it all themselves, but with advancement happening faster than ever before, they can no longer keep up, making CROs critical in a post-pandemic world.
No industry has been spared by the disruptive effect of this global pandemic. Some B2B organizations have been negatively affected by supply chain disruptions, stifled sales models, and shifting buying patterns. Others have seen exponential growth due to the emergence of new markets, shifted buying patterns, and grappled with scale-up operations. But businesses experiencing a boom are not in much better shape right now because they are also managing unprecedented revenue challenges.
The pandemic has not created a need for a CRO; it has accelerated the need.
Hiring a Chief Revenue Officer these days requires executive leadership identify a need for the role, create a distinct CRO role that fits into the existing organizational structure, remove internal barriers to success, and properly set the role's expectations.
Identifying the Need for a CRO
How do you know when your B2B organization needs to hire a CRO? It may sound like an obvious answer but, the right time to hire a CRO is when the company cannot go on without one.
That does not mean that only companies in trouble can benefit from hiring a CRO. Nor does it mean that only high-growth companies need a dedicated CRO role. No, businesses on both ends of the growth spectrum need a CRO.
Organizations that can no longer do the things they once relied on to grow profitable revenue need to bring in a CRO to fix their revenue issues. This has been a common scenario since the pandemic hit, which is one of the reasons CROs are in such high demand right now.
Alternatively, companies growing quickly cannot keep up and need a CRO to oversee the puzzle pieces related to revenue generation. This frees up the CEO to deal with culture and alignment issues that come from growing pains elsewhere in the business, across areas like supply chain, manufacturing, finance, HR, and purchasing.
Overcoming Hiring Barriers
The most significant barrier to hiring a CRO is not finding top talent or putting together an attractive compensation package, rather it is overcoming internal resistance. Before beginning the hiring process, an organization must obtain internal buy-in from the existing leadership team. The CEO must acknowledge and make a case for why a CRO is necessary and detail how this role will interact with sales and marketing leadership to avoid a power struggle.
Once buy-in is achieved, candidates should be evaluated for fit first and foremost to increase the likelihood of a successful hire. While skillset and experience are undoubtedly important, fit is the most critical criteria to gauge during the hiring process. When choosing between similarly qualified candidates, give preference to whichever person will be the best cultural fit within the company. If none of the candidates seem like an excellent match, hold out for someone who is the right fit because a bad hire in the CRO role can stall not only future growth plans but also derail existing revenue efforts.
Today's CROs in B2B organizations face unique revenue challenges like managing a remote workforce, generating leads without in-person sales opportunities, and pressure to adopt a fully digital approach to fix widespread revenue issues.
But those are not the only barriers a CRO will face coming into a new role. There is often turbulence when a CRO is brought in, especially when the organizational structure changes to accommodate the role. It is the CEO's job to manage any friction that results so that the C-suite can improve with the addition of a CRO.
Attracting Top Talent
When you are looking for someone to fill a CRO role, you should certainly expect that whoever you hire has management-level business experience, including responsibility for a P&L (Profit and Loss Statement), as well as both sales and marketing knowledge. But what will the candidate be looking for from you?
To be successful, a CRO must be given both the responsibility and the authority, which is why any experienced candidate will look for a role responsible for overseeing revenue and the authority to achieve revenue growth. Ownership over strategic decision-making is likely the most compelling driver for these highly motivated, well-compensated professionals.
An effective CRO is expected to take an inclusive approach to increase collaboration between the CEO, CFO, CMO, and CSO, thereby strengthening the leadership team. But it is not just executive leadership that should draw closer together when a CRO is succeeding in the role.
Bringing in a CRO should reduce finger-pointing and divisiveness, resulting in a growing alignment between sales, marketing, and customer service teams. As a result, morale should improve across the organization because as teams become better aligned, they reinforce the company mission.
After bringing in a CRO, the other fundamental expectation is that the company will see an increase in new revenue initiatives across all lines of business, including vertical markets, new products/services, and geographies that grow revenue. Profitable revenue growth is the ultimate measure of how a CRO performs, although this can be a longer-term result.
Outsourcing the Role
Companies that need the level of expertise that a CRO brings but do not have the budget to bring someone on internally, can outsource the role to a third-party by hiring a fractional CRO. A fractional CRO provides all the same benefits of an internal hire without the hefty price tag. As an added benefit, a fractional CRO can act as an impartial advisor while also leveraging the experience that accompanies working with multiple companies simultaneously.
Alternatively, an organization can choose to create an internal working group that consists of marketing, sales, and finance leaders with the specific charge of working together to formulate and implement a profitable revenue plan. However, for this idea to be successful, each participant must have the time needed to devote to this endeavor and the willingness to set aside their organizational hierarchy to give each an equal say in the strategic plan. Then, these leaders need to be willing to set aside their default mindset of marketing, sales, or finance to work outside of their silo. This can be a difficult ask for people who live and breathe a set area of the business and are loyal to their own team's mission. To make this work, the CEO must be an influential leader because they are going to set the boundaries and deadlines and act as the final arbiter of decisions.
Get more information on where to look for a Chief Revenue Officer as you start your search.