Does your company have a CRO?
If you answered “no” or “not yet” that likely means your organization simply does not have someone with the title of Chief Revenue Officer (CRO) right now. You see, asking whether you have a CRO is a trick question because even if a company does not have a formal CRO role, someone is acting in the capacity of a CRO.
Every for-profit company has someone overseeing sales and marketing functions at a high-level to control the overarching revenue strategy. So, let me rephrase: Who is the CRO at your company?
What are a CRO’s Primary Roles?
Originating from the tech industry, the position of Chief Revenue Officer has been around for a decade. Yet many people still do not understand what a CRO does or how the position differs from a CMO or Sales VP role.
A CRO is responsible for an organization’s overall revenue strategy – growth plans, go to market strategy, and the like. A CRO takes a holistic look at the company, overseeing more than just marketing and more than just sales. Simply put, a CRO controls the overarching revenue vision and its many touchpoints.
Who is Acting as the CRO at Your Company?
In most companies, especially smaller ones, the CRO role falls to the CEO. However, CEOs that are technical experts (those with backgrounds in engineering, manufacturing, law, accountancy, etc.) typically understand that they do not have the revenue experience needed to handle this role effectively, so they will rely on their CMO or VP of Sales to assume the role of CRO.
Is a CMO or Sales VP a Better Choice?
The Chief Marketing Officer or VP of Sales is primarily responsible for their own area, which makes their handling of the role unbalanced. A CMO acting as a CRO will create a marketing-driven company. While this strategy might work for some B2C companies, it will not succeed in the B2B space because the revenue there is primarily relationship-driven. On the other side of the aisle, a Sales VP will focus heavily on selling without regard to lead generation, which is too limited of a purview.
Do CEOs make Poor CROs?
A CEO’s job is to get the entire company from point A to point B, not simply grow profitable revenue. However, the CRO role is a full-time job in and of itself. So, when a CEO is acting in the capacity of a CRO it takes away from the availability needed to do a CEO’s job well and can distract from what is necessary to cultivate a successful revenue strategy. Furthermore, if a technical expert CEO tries to hold onto the CRO role even when they know they should bring in someone else, it can lead them down a leadership rabbit hole that distracts from the company mission.
Now, this does not mean that all CEOs make poor CROs. Some CEOs are quite adept at overseeing revenue strategy, leading them to believe that this is an integral part of their position. However, when they relinquish the role, they can focus on leading the company holistically and lift all departments instead of just sales and marketing. Regardless of efficacy, the CEO and CRO roles need to be split to achieve maximum results.
Who Needs a Dedicated CRO?
Due to the complex nature of their revenue strategies, mid-sized to large professional services firms and manufacturers always need a CRO. However, any for-profit company in any industry can benefit from onboarding someone into the role or hiring a fractional CRO.
How do you know if you need a formal CRO role? The following issues and warning signs indicate an immediate need for a CRO:
- Siloed Sales and Marketing Teams
Sales and marketing teams fighting, competing, or refusing to work together should be a signal to a CEO that the company needs help to thrive and grow. A CRO can smooth out communication issues and align goals to improve results.
- Flat Profits
Hitting revenue targets but not making any more money is a clear sign that a CRO needs to be brought in to generate profitable, sustainable revenue for the organization.
- Market Saturation
When CEOs feel like all their sales opportunities have been exhausted, they will become desperate and chase all possible opportunities to sell to a wider audience. Instead of continually trying to open new markets. Work smarter not harder. Bring in a CRO to form a coherent and sustainable revenue strategy.
- Executive Burn Out
When a CEO gets to the end of the year and is out of breath and worried about how to do it again next year, that is a major red flag. A CEO acting as CRO will almost certainly experience burn out eventually, even if they are good at it (perhaps especially if they are good at it). A CEO needs to create balance – trusting others to do the work that needs to be done to drive the company forward. CEOs can do far better at everything else they oversee if they let go of the CRO role because they can focus more on the broader picture of leading the company.
If you need to add a dedicated Chief Revenue Officer but aren’t ready for a full time executive, hire a fractional CRO to own the role externally. A fractional CRO offers impartiality while bringing unparalleled experience to the role.