The CRO Hiring Playbook

Three Signs You Need a Chief Revenue Officer

Stalled Revenue Growth

Misaligned Marketing, Sales, & Customer Success

Overlooked Processes & Scale in High-Growth Companies

A CRO is a complex hire — and one that ultimately changes the dynamic of your C-suite. In some cases, a CRO may fill an obvious leadership gap. Other times, the need for a CRO could be evidenced by business growing pains. Here are three common growing pains according to two former CFOs:

Stalled Revenue Growth

If revenue growth has declined or stalled (which can happen for any number of reasons), it may be time to consider a CRO focused solely on revenue.

“Revenue growth often correlates to the value customers are extracting from your products,” said Sandy Smith, former CFO of Segment. “If the value is no longer there, or it’s being bottlenecked by something internally, you need someone that can expose the customer perspective and push to close the gap.”

“A CRO does that by putting themselves in the shoes of a customer or potential customer,” says Smith. “The CRO looks at all the different customer interactions and touchpoints across the lifecycle and says, ‘Where do we need to be investing in order to improve that experience?’”

Hiring a CRO doesn’t automatically mean you’re going to solve for stagnant or declining revenue, but it assigns the responsibility of revenue to a single owner. “A CRO comes in and has to come up with a theory for how the company can reach the next phase of revenue growth, and then execute against that theory,” says Smith.

Misaligned Marketing, Sales, & Customer Success

Marketing, customer success, and sales are traditionally separate parts of the revenue machine; however, as companies grow larger and more complex, it often becomes increasingly clear that alignment and consolidation of these organizations is critical.

Misalignment between marketing, sales or customer success means that there is a disconnect somewhere in the customer journey and typically manifests in one or several ways, from poor lead quality and low conversion rates to higher customer churn or low customer net promoter scores. These issues almost always impact revenue growth, which is why bringing them all under one revenue leader can not only help fix any misalignment, but also ensure the revenue machine is operating at maximum efficiency.

“A CRO can be effective at aligning the needs and goals of marketing and sales around solving for revenue growth,” says former Twilio CFO, Lee Kirkpatrick: “You can have a strong VP of Sales and a strong VP of Marketing, and each is hitting their KPIs or sales quotas. But what CROs can bring to the table is strategic alignment of both sides of the house. They’re not just focused on top of the funnel or bottom of the funnel - they’re investigating every step of the customer journey and looking to see that every touchpoint and process is in service to the customer’s needs. More often than not, there’s a lack of sales or marketing enablement that is a bottleneck to revenue performance, and it’s the CRO’s job to help identify and try to solve that.”

Overlooked Processes & Scale in High-Growth Companies

Companies rapidly increasing revenue may find that they can function without a CRO. But what often happens, particularly in product-led businesses where the CEO has been the de-facto revenue leader, is revenue starts outpacing internal infrastructure. “All of sudden you’re at $20 million in ARR and you realize you need to hire and train 25 or 50 more sales reps,” said Smith. “Or perhaps you need sales enablement to help make that revenue growth more scalable and predictable. The CEO certainly can’t do that alone.”

In a hyper-growth company, a CRO can offer two things: rapid scale and process efficiency. “Ideally, your CRO is someone that has led sales organization growth at a company much larger than yours, and so they can come in and tackle all of the low hanging fruit and start to introduce step-functions of change."

Lee added that the CRO should be a strong proponent of sales operations and sales enablement. “They’re not just coming in and saying, ‘We’re going to continue to hit the revenue target.’ They’re creating a well-oiled machine that ensures the sales team is set up for success with effective hiring, training, systems, support processes and compensation plans."

The Go-to-Market Revenue Leader

What They Do:

• Lead the sales organization
• Validate the business model by aligning the product and selling strategy with customer needs.
• Engage with customers to learn their pain points and turn them into a value-selling strategy.

Typically Hired When:

• The company has developed a product that is ready for prime time
• The company is at $5 - $20M in ARR
• There’s a need to build out the inbound or outbound sales function (or both)

What You Should Look For:

In the go-to-market growth stage, a company likely won’t have a true CRO, but rather a Head of Sales (or Head of Revenue). This individual is responsible for generating pipeline and establishing the value-selling strategy for customers. More importantly, they’re focused on scaling revenue growth and laying the foundation upon which they can either step into the CRO role in the next 12-24 months, or that role can be filled by someone else.

At this stage, quality of experience is as important as the amount of experience, says Michael: “Look for a revenue leader with an entrepreneurial spirit. If you just go out and hire the most experienced sales leader or someone that doesn’t have experience working at startups, that person may not be able to function in an environment with limited resources and infrastructure.”

Jaimie agreed: “At this stage of growth, you want a revenue leader that can fly both high and low. Flying high means that person is comfortable making big decisions about budget, headcount, and resource allocation while also being able to offer insight on product direction. Flying low means providing mentorship and guidance to the sales team and creating a repeatable process for outbound prospecting. They need to be comfortable rolling up their sleeves to develop a strategy and sales enablement while also thinking about how to grow the overall sales organization.”

Top Interview Questions:

1. “How do you think about revenue?” Look for a response that defines revenue not just in terms of dollars or business value, but as an output metric measuring the value you provide to the customer.
2. "What do you think are some of the highest-potential revenue models or customer segments we should be exploring?” Look for a response that shows the candidate is thinking strategically about the growth of the company or can bring in expertise with a certain customer cohort that may be advantageous to the business.

The IPO-Ready Revenue Leader

What They Do:

• Create the revenue and growth projections required to build investor confidence
• See that the organization has what it needs to meet those revenue targets within a comfortable margin
• Ensure there are strong internal controls and processes for revenue recognition

Typically Hired When:

• The company is 2-3 years out from an IPO

What You Should Look For:

“Definitely look for someone with public market experience,” said Buss. “There’s a lot of work that goes into IPO readiness and the CRO needs to know what guardrails and processes need to be in place to meet the public market requirements. You want someone that can dial down the risk as much as possible.”

Michael added that “Far and away, the most valuable thing a CRO can do to help get a company IPO ready is drive predictable revenue growth. Accurate revenue projections are not only going to give investors confidence but also unlock investment within the organization because CFOs and other leaders are going to be more willing to invest if they know the revenue growth is there.”

Our CRO experts agreed that it is critical to have a CRO disciplined in revenue recognition and in contracts.

Top Interview Questions:

1. "When do you place bets vs. stick to tried-and-true strategies?” Look for a response that shows a clear approach to testing and scaling new revenue growth initiatives. The candidate should show they’re comfortable taking risks and proving those investments out on a large scale.

The CRO’s First 90 Days

Once you’ve found and onboarded the right CRO, that person will have to hit the ground running. “The CRO’s goal is to get growth going as quickly as possible,” says Scott Davis. “In order to do that, they need to develop a hypothesis for how that growth can be achieved and then they need to execute against it.”

Having been new CROs before, here is where Jaimie, Jon, and Mike believe a CRO should spend their time when first joining a company:

Understanding the Current State

“In the first 90 days, I recommend staying in ‘the bubble’ and assessing everything about the organization," said Kaplan. "That means talking to people in different functions, talking to customers, and getting a sense for how the company operates and the talent that is available.”

The CRO needs to establish a bottom-up view of the company’s growth targets to understand what is achievable in year one and adjust the strategy accordingly. “That requires a lot of time spent with product, engineering, and marketing to understand how their departments work and the potential gaps,” said Buss.

Michael spent his first few weeks at GitLab accompanying the CEO on sales calls and learning how to optimize a sales pitch. “I wanted to talk to as many customers so that I could understand their biggest pain points and translate that into product value-alignment.”

Jon agreed, adding that the “voice of customer” needs to come from the CRO. “At times customers will have a different perception of your company or product and so the CRO needs to establish what matters most to the customers and what changes need to be made operationally to meet those needs.”

“Fanned-Out” Networking

CROs need to extract information from relevant stakeholders within an organization to augment their understanding and start building relationships. Jaimie recommends the “fanned-out networking” tactic, which involves interviewing individual leaders and asking them for two or three critical individuals in the organization they think the CRO should meet. “By doing that I could really understand how things were impacting each other and met and formed relationships with all the key players in the organization quickly.”

Focus on Revenue Operations

For companies in the scaling or IPO phase, Jaimie and Mike highlighted the importance of quickly building out revenue operations. This provides greater visibility across marketing, sales, customer retention, and attrition. Revenue operations are critical for aligning people, processes, and data so the CRO can develop the level of accountability and predictability needed to scale revenue growth.