The RevOps Definition That Most People Get Wrong

the-revops-definition-that-most-people-get-wrong === Sean Lane: [00:00:00] Hey everyone. Welcome to Operations, the show where we look under the hood of companies and hypergrowth. My name is Sean Lane. In January of 2023, LinkedIn released its list of the 25 fastest growing job titles in the United States. The number one job on that list. Head of Revenue Operations. Now, if you're listening to this show, that's probably exciting news to you. But here's the thing. Roles dubbed as revenue operations can be foggy, amorphous blobs with one company's job description different from the next. If astronaut topped that list from LinkedIn, every applicant would show up to their interview expecting to go to space. So why can't we have our own clear version of space travel? That's [00:01:00] what we're here to clarify and explore in this episode. First, we're going to talk through the typical definition of revenue operations, and then I'm gonna give you my take on why so many people get the definition wrong. Let's start by actually defining revenue operations. The core reason why people can't seem to get on the same page about rev ops is that it's inherently cross-functional. As companies grow, silos naturally pop up between different functions. Marketing goes one way, sales goes another. Teams make decisions based on what's best for them so they can solve whatever challenges directly in front of them. And that's not always a bad thing. A sales leader, especially frontline managers, should focus on what their own team needs to be successful. I. But that focus, no matter how well intentioned, doesn't necessarily yield what's best for the company. A decision made in marketing has ripple effects in sales. A decision in sales can be felt by your customer [00:02:00] success team. Revenue operations though, is meant to break down those emerging silos and create a unique, comprehensive view of the entire customer journey. I'm not exactly sure when the term was invented, but. I do remember the first time I ever read about Revenue Operations. It was around 2016. I was working at a different company and I read something called the Rev Ops Framework by a guy named Marco Sek. Marco, who actually ended up being a guest on this show years later, was running a company called Funnel Cake at the time, which you guessed it gave companies visibility across their entire funnel. So this framework taught me that instead of having marketing, operations, sales, operations, and customer operations as standalone functions inside your company, rev Ops brings those operations teams together. Now sales, marketing, customer success are typically the three legs of the go-to-market stool inside of SaaS organizations. As a quick aside [00:03:00] to further the Rev ops identity crisis, many companies have taken this a step further to rebrand their Rev ops team as a go-to market ops team. Anyways, we covered the pros and cons of different team structures back in episode 62, but there are three primary motivations. Your various ops teams should be consolidated into a centralized function. Number one, efficiency silos between teams create inefficiencies. Break them down by centralizing this important resource and the productivity of your organization should improve. Number two, continuity. Every handoff in your customer journey is an important moment, but also an opportunity for friction and disjointedness. A team that has a customer journey designed from end to end can also implement and instrument the root processes and technology necessary to ensure a seamless customer journey, both for your external [00:04:00] customers and for your internal colleagues. Number three, source of truth. Every one of us has walked into a meeting where marketing has one version of the truth and sales has a different one. Instead of spending half of the meeting trying to figure out whose report is right, rev Ops can serve as the source of truth for all of your go-to-market reporting and analytics, and that's where most rev ops definitions end. They talk about the cross-functional nature of the team, the organizational benefits of forming a team like this within your company, and they send you on your way. But to what end. Too often operators are seduced by a unique design, or we get hung up on the complex workflow. That's gonna be the solution to our problem. And as proud as you might be of the seamless integration that you spent hours meticulously crafting, that's not what is providing value to your end users. Sure the engineers at Netflix can find satisfaction in the code they write, but it's the speed and [00:05:00] reliability. When you click play, that really matters. So if it's in the workflow building or the team structure that we see our team's value, we're missing the point. Deciding to invest in and build a revenue operations function is just an input, not an outcome. Your companies care about. No, they need outcomes. So what's a better definition? What are the outcomes we should strive for? Here's my tweaked version of a definition. Revenue Operations brings together cross-functional operators to build a high achieving, understood and scalable revenue engine, a revenue engine. We as operators, we are the mechanics that know every minute detail of the machine that we're building, and we're tasked with simultaneously maintaining and improving that engine. Let's break this definition down. Each of the [00:06:00] descriptive components of this definition are critical to your team's and your company's success. First I said cross-functional operators. I'm being purposeful here to avoid specific functions within the legs of the go-to-market. Stool systems, teams, product teams, BI teams. There are so many iterations of what can comprise rev ops. So let's focus on the fact instead that we're breaking down the silos to look at your business holistically, the whole engine. So what type of engine did I say first? High achieving. This is an easy one. We all wanna build companies that hit their targets, and we have a hand to play in that, but I think this component has evolved, especially in recent years. High achieving doesn't necessarily mean high growth or growth at all costs. High achieving should also mean financially sound. You as operators through your annual planning, through your [00:07:00] hiring targets, quotas, comp plans, policies, help, what you spend on technology. You have a hand in making the company financially successful. I. That's high achieving. Okay. Second, understood. Even if your results are good, that doesn't mean much if you don't understand why. A really strong Rev ops team has a clear understanding of the levers available to a business where there are inefficiencies in the customer journey, and they have the ability to push the buttons that will make a difference. And that understanding importantly then leads to predictability. Operations teams should be able to see into the future. If your results are spiky or you don't have a grasp on how your company's funnels work, you can't possibly predict what's gonna happen next. Third, scalable. If your engine can go a hundred miles an hour on its first drive, but then it fizzles out the second the terrain changes. Why building the car in the [00:08:00] first place? We as operators have to look around corners. We have to anticipate where the car will break down and then build accordingly. And sometimes, yes, this means going a little slower around that corner, and that's okay. You and your company are trying to thrive on a long journey, and operators are critical to making that happen. Look, I realize this is an ambitious vision, but this mindset shift to outcomes is a critical one for operators of any kind. Don't invest in rev ops just because you want to solve your internal reporting woes, though I agree, this is lovely. Invest because you're committed to building a high achieving, predictable, and scalable revenue engine, you'll be floored by the results when one of these teams is built well. Operational command of the business will increase. More people in your organizations will be comfortable leveraging data to make hard decisions. And when [00:09:00] done correctly, the high achievement against your business targets will follow. And perhaps most importantly, you, all the people building these engines will become among the most valuable employees in an organization. Through the work that you do, operators come to know a business better than anyone else in the company. Back in episode 53, Dave Link was our guest and he told me about this Harvard Business Review article that explored the informal networks that develop inside of companies. Specifically, we talked about a role within those networks called the central connectors. Central connectors are the connective tissue who link most people in an informal network with one another. They aren't usually the formal leaders within a unit or a department, but they are the go-to people they know who can provide critical information or expertise that the entire network draws on to get work done. Sound [00:10:00] familiar? Revenue operations hires are the central connectors of your companies. They're the glue. When we look back at how SaaS businesses have evolved, there are plenty of teams that are foundational to how companies run today that would not have been so widely accepted just 10 or 20 years ago. Take the customer success function, it rode a wave of category creation. Thanks in part to the evangelism of companies like Gainsight. No one would start a company today without a plan for customer success. Rev ops should and will be the same. I'll go even further to say that future CROs and even CEOs will come from rev ops. You all are the super connectors, and not just because you decide to structure your team in a certain way or because you read a trendy guide about why your reporting will get better if you have rev ops. It's because you brought together cross-functional operators to build a high achieving, understood and [00:11:00] scalable revenue engine. If you like what you heard from our show today, make sure you're subscribed so you get a new episode in your feed every other Friday. And if you learn something today or from any of our other episodes, please leave us a review on Apple Podcasts or Spotify or wherever you get your podcasts. Six star reviews only. All right, that's gonna do it for me. Thanks so much for listening. We'll see you next time.