The Evolution of the CRO: A Look Back, and Forward

I’ve lived in the startup and scale-up businesses world for most of the last 12 years, so it’s easy to identify significant shifts in priorities and approaches to hiring executives. A strong leadership team (SLT) is one of the aspects that will make or break a startup. This team's relationships, dynamics, and personalities are vital because they trickle down to rank and file and affect the entire organization’s culture and behaviors. One of the critical relationships in that group is between the CRO and the CMO. These two leaders in the GTM functions have gone through drastic evolution. I’ve written about the changes in the CMO position and role before. Today, I’d like to focus on the CRO.?

As companies grow, innovate, and adapt to the competitive market, their approaches to revenue generation often reflect broader shifts in corporate culture and strategy. In the last ten years, CROs positioned to take their companies on a growth tornado shared particular characteristics. Their growth mindset can only be described as aggressive, at any cost, based on a high volume of hires and activities. This mindset results from their hiring process and their perception of the CEO, whom they must impress. Having gone through hiring conversations where CEOs pumped their message of “conquering the world” or “we are going to change the world as we know it,” CROs got the message. Focus on the top line, no matter what. My CEO needs to see all my charts going up to the right, and “I need to hit that number no matter the cost.” CRO personalities shifted into motivational leaders aimed at attracting new hires and deploying them in volume to reach their assigned top-line number. Did you miss your numbers in the last two quarters? Board members will pressure your CEO to oust you and bring someone else. Aggressive also means internal clashes, specifically with the CMO, who’s more conscious about CAC and must consistently prove return on investments. This attitude was widespread when the market rewarded rapid growth and impressive valuations, often ignoring profitability and long-term sustainability. Board advice to the CEO to "take the money at the highest possible" exemplifies a rushed and somewhat supercilious approach to business.

Then, the market dynamics change.

Times are tough. Money is more expensive, and that graph showing growth up and to the right starts to flatten. A CEO's instinct would be to address their “marketing problem” first. That is because the sales team’s first excuse for not meeting their numbers is to point the finger at the lack of lead flow from marketing. But once that is covered and there’s no one else to point fingers at, a CEO will take a closer look at the CROs' fit to changing market dynamics and realize they need a different type of CRO. If they are smart, the CRO will initiate the change, partnering with the CMO, and the shift will result in increased revenue and better efficiencies. The shift should be more like this: “We are going to prioritize efficiencies over growth, making profitability one of our main KPIs.” Selective scaling will become the preferred methodology for execution, and routing leads to a much smaller and more select number of deal closers. Targeted partnerships for larger deals will become a critical element in the GTM motion, and the friction with marketing will reverse to a team mindset prioritizing cooperation and collaboration above all, including attribution. This approach will encourage responsible growth, where ops consistently track the top line at the right cost. A smaller team? Yes. But a much more efficient one.?

This is all fine and good if you want to react quickly to market changes. But my best advice is to avoid this situation in the first place.

Smaller, dedicated, more efficient teams will outperform large operations at any scale. While rapid growth and high valuations might be attractive in the short term, sustainable, responsible growth will ultimately lead to long-term success. The one piece that needs to be added to this approach is autonomy. Make your sellers the sole business owners, from lead gen to closed-won. For that, I have a GTM platform for you. ;-)