The RevOps Mindset: Think Strategically, Execute Tactically

Episode Summary

Revenue operations is an increasingly popular function within revenue organizations. It essentially brings together marketing, sales, and customer success’ operational teams under one umbrella that allows for greater coordination. As companies look to transform, accelerate revenue, and improve productivity, the RevOps model eliminates the siloed nature of these operational teams and expedites the execution of change. Dan Carpenter has taken on this kind of role four times in his career. In his most recent position at PTC, he leads a team of 400 professionals who are responsible for the company’s revenue operations. This wealth of experience uniquely positions Dan to speak about all things RevOps, which he competently does in this conversation with Rico Mallozzi. Listen in as Dan shares his take on the roles and responsibilities of a best-in-class RevOps organization, the key balances between process, analytics and go-to-market strategy, how sales enablement can be supercharged with RevOps, and what makes a great RevOps leader. 

The RevOps Mindset: Think Strategically, Execute Tactically

On this episode, I had the pleasure of speaking with Dan Carpenter. He leads a team of 400 professionals who are responsible for revenue operations at PTC. As many of the readers may know, PTC developed the MEDDIC framework and has had a huge influence on how enterprise technology sales processes are done. Prior to PTC, Dan was SVP of go-to-market excellence and operations at Carbon Black where he created the RevOps organization and led the company to a successful IPO and eventual acquisition by VMware. On this episode, we talk all things RevOps and we cover how Dan views the roles and responsibilities of a best in class RevOps organization, the key balances between process, analytics and go-to-market strategy, how sales enablement can be supercharged with RevOps and lastly, what makes a great RevOps leader. I hope you enjoyed this episode as much as I did.

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Dan, thank you so much for taking the time to do this show with us.

You’re welcome. 

I’m excited to have you because you bring a unique perspective as a revenue leader. I want to start with your career journey. At one time, you were a buyer of enterprise technology and now you’re sitting on the other side leading enterprise technologies that are selling to buyers that you once sat in that seat before. Can you explain that journey and maybe also talk about how that has influenced you as you’ve taken on these new roles in sales leadership?

Fundamentally for my background, I earned a Computer Science degree. I spent my first ten years in IT. I did some consulting, worked in telecoms, worked for startups, blue chips, generally international roles. I’ve moved my way gradually from technology into more operations and the commercial roles, sales, the frontend of the house, which has been a phenomenal journey for me. I’ve learned so much along the way. When you sit in these kinds of revenue operations roles and you look at supporting COOs in terms of how to manage the operational side of their business, you are buying software all the time, whether it be Gainsight, Clari, Seismic, etc. or any of the other tools we have in our infrastructure. 

You have a toolset and you’re buying a toolset. You’re experiencing what it’s like to be a buyer in that process. You’re also supporting your own go–to–market organization in terms of how to effectively sell, create a great experience during sales, and then make sure that all the post-sales activities are lined up so that you have a good customer journey from a customer’s point of view. In revenue operations, you’re a buyer of technologies. You’re also supporting your organization in how best to sell or drive retention of those technologies, drive revenues and adoption from those technologies that have just been sold. 

I would imagine building up the empathy for that buyer.

We were having a conversation about price increase. What level of price increase should you have at a point of renewal? There are various different philosophies out there. There’s the discussion about not to exceed 8% being a price increase philosophy. On the other side of the house, when you were buying software, you’re like, “An 8% price increase? You’ve got to be kidding me. There’s no way I’m going to pay an 8% price increase.” You then go, “How do you help the seller position an 8% price increase?” If you as a buyer wouldn’t ever agree to 8%, how do you help the sales organization do that? It gets into a lot of the enablement. How do you help enable a sales team position price increase and the increase value that you’re providing? 

It’s fascinating when you’re sitting in that buyer situation and you’re hearing the seller’s position, you’re reflecting back on the playbook that you developed for your own sales organization on how best to position price increase. You’re like, “Did that work? Would I do something different?” You develop a lot of empathy for the challenges of the sales organization in dealing with price increases, conversions, consolidations, and all the complexity of that customer engagement. 

Can you talk a little bit and provide the audience with some context on your RevOps experience? I believe you built this up at Carbon Black and where you are now.

This is my fourth time through a revenue operations type of role. A little bit before revenue operations became trendy as well, we call it commercial operations or something else, go–to–market operations. I’ve had all three titles in my background. Fundamentally for me, revenue operations is the bringing together of all the operational teams behind the go–to–market organization. If you think about all those activities around marketing, sales, renewal service, support, you bring all that operational group together and consolidate it into one operational team. Why should you do that? As companies look to transform, accelerate revenue and improve productivity, when you have all your operational groups aligned to your functional silos and loyalty of functional silos, it’s quite challenging to accelerate change in your business. 

What I’ve found in my experience and others have found it out as well is when you take those operational groups and you’ve put them into one operational organization and you stick it up at the COO level, you have an ability to accelerate the evolution of all your operational infrastructure. Why is that important? Think about things like moving to ARR or Annual Recurring Revenue concepts. It’s hard transitioning a business from perpetual to subscription to SaaS. It requires a lot of evolution in your infrastructure. If that team that’s driving that evolution are not aligned on how to do that, it makes it a difficult and slower transition. It provides the worst experience for your customer, new employers and partners. 

Fundamentally, bringing all those operational groups together into a revenue operations team helps to accelerate transformation in business. It helps accelerate revenues. I focus on accelerating revenues. It helps you focus on productivity. How do you leverage an operational organization to improve productivity across all of those fuel groups, not just 1 or 2? You get into a position of being able to balance out your expense across the customer life cycle, making sure you’re moving your investments to provide a great experience, not just in sales but also in post-sales. It gives you a lot of advantages and looking right across that customer life cycle in terms of how your go–to–market functions operates. 

I want to peel the onion back a little bit on that RevOps role. What are the actual teams that are underneath you at PTC as a RevOps leader? What are their responsibilities? You did a great job at talking about how it’s there to be that connective tissue across the whole revenue organization, go-to- market organization. How does that materialize itself in teams, roles and responsibility?

You could structure it in various different ways. I’ve gone through three different formations or structures. Fundamentally, how I like to approach it is, first of all, for all the functional leaders, they need an operational capability to support them. If you’re in marketing, you want marketing, sales ops, customer success ops and support operations. In principle, making sure that there’s an operational leadership team and operational capability of supporting each one of your field leaders is a good move. There are some horizontals. The horizontals give you world-class capabilities. Classic horizontals are things like analytics, processes and systems, enablement, planning and strategy.  

Those kinds of horizontals allow you to create a collaboration model across the different functions in terms of how do we do strategy and planning for go–to–market, how do we drive processes and systems, think about an end-to-end customer experience and a great set of processes and systems that enable that? Analytics thinks about how you do make sure that the data that we need to run the business is curated, accurate and timely, and then put the analytics capability on top of that. Your operational and your business leaders are digging deep in the organization to find the critical metrics around their business. They’ve got an analytics capability that’s providing that, turning the data into insights, and what actions should we take from the insights. There are two groups, operational groups and then horizontals, which are global capabilities. 

I view operational groups in my head as vertically aligned to the different business units, whether it’s sales, customer success or marketing.

It could be business unit. It could be functions, however you organized your go–to–market teams. In the PTC world, that’s marketing operations, sales operations, customer success operations, partner operations and service operations. The horizontal is the planning and strategy, enablement, customer training, analytics and incentives. 

PTC is a mature company at this stage. It has a large revenue figure. When you were building that out at Carbon Black, could you compare and contrast a little bit?

In the PTC world, there’s a counterpart to myself, a guy called Paul Lenfest. He looks after central operations. Central operations do things like change programs, IT, a lot of the common back-office topics. For me, I could focus more on the front office while Paul worked more on the back office. That’s a great partnership in our organization. In the Carbon Black world, that function wasn’t there. It was a little raw. You have an IT team. I needed to put a wrap–around IT. I created the process and systems group. In the Carbon Black world, we had marketing operations, sales operations, customer success operations, and then process and systems in finding a strategy. In that situation, we evolved the revenue operations team. We put more of a central focus around processes, systems and data because we needed to accelerate the evolution of our infrastructure, our revenue engine. The processes and systems were too fragmented across the organization. 

When you have a good revenue operations team organization, what is it able to facilitate for the organization? A lot of times, maybe before you set up a RevOps organization, you’re going to have someone in marketing ops working underneath the marketing team, someone in sales ops working under the sales ops team, and maybe even customer success ops, which is becoming a more popular higher in the customer success team. What are the insights you’re able to glean by bringing them under one group called RevOps?

It starts with planning and strategy. Think about when you have those operational groups sitting with the functional teams and then there’s a COO or a CRO, how easy is it for you to define your strategy? It’s hard. You’ve got a number of functional leaders that you’re working across. You’re trying to work with them to define that strategy. In the RevOps world, you have a revenue operations team. You have a revenue operations leader. As part of that group, you have a planning and strategy team. You have a team that can run your go–to–market strategy conversations. What should that process be for strategy development? Strategy is a process at the end of the day. 

You’re looking at what are your long-term goals? How do we get there? What are our routes to market? We benchmark ourselves against our current performance and external performance. We look at some of those opportunities. We dig into some strategic questions. How do we accelerate direct sales? How do we accelerate channel sales? Where were our new routes to market? Have we got the right kind of sales coverage to attack our town? Is our sales organization efficient? How do we benchmark productivity against our different groups? You’ve got a team that can look at some of those key questions and work with the business leaders on how you do address some of those more strategic go–to–market questions.  

As you address those questions and you get your go–to–market leadership team aligned on some of those key strategies, when you move into a planning cycle, not only do you got your team again to your revenue operations team to manage the planning cycle, but you’re walking into a planning cycle with your leaders aligned on some of those key strategies. It makes an incredible difference. When you finish a planning process and you have your go–to–market leadership aligned on how you’re going to win and what activities are you going to do to win, it makes a tremendous difference. You accelerate as a team. You can feel that. As you go out of that planning process, you feel more aligned. The team talked about being more aligned, execution strategies between marketing and sales or sales and customer success.  

The teams are easier. It’s easier for the leaders in terms of getting the groups working together. Collaboration happens more naturally. For me, having revenue operations manage that strategy and then that planning cycle. It enables your field leadership team to get aligned on how you’re going to win and attack the market. Your planning processes are a lot slicker. Your goals are more aligned. You start talking about incentives. What are the incentives to achieve those goals? A lot of the time we spend working on incentive alignment and making sure that the strategies for marketing are aligned to sales. The goals in sales and marketing are aligned. The customers that were going to win, how do we service them effectively? How will customer success enable them? What do we do about adoption? Which segments of the market are we attacking? You’re getting alignment between that leadership team.  

It goes a stage further. You do your big launch at the beginning of the year. You get everybody’s goals out the door nice on time as you would expect from a good operational group. All the quotas are out there. Everybody knows the way and how to win and march forward, but then you’re getting into management operating rhythms. You say, “We said that we were going to go and attack these sections of the market.” How do you align up your management operating rhythms and your QVRs to go and validate the fact that you’re going to go and win where you said you were going to win? What were the issues to get there? 

You had a bunch of assumptions in your planning process that builds your planning assumptions back into your QVR process and hold your team accountable to achieving those milestones along the way. It’s not just planning a strategy. It’s the operational infrastructure you put in afterwards that maintains the team alignment. You then bumped into analytics group and say, “I need the analytics to go and demonstrate the strategies that we put in place were correct.” The whole thing hangs together. It’s like, “Why would you fragment that organization around all of your functions? Why not bring it into one group so you can have this continuum from strategy planning, operating rhythms, analytics and management accountability? 

It makes the organization nimbler to look at the picture from a macro perspective but then operationalize it in a cohesive nature. A lot of times when people operate in silos, the price change. How does that impact marketing? How does that impact customer support? How does that impact sales? If it’s done in a silo by the product team, you lose that connective tissue and that holistic strategy.

Think about enablement, you’ve got the tip of the spear. You got all your field people out there in front of the customers every day. How do you then make sure they’re aligned to the key messages that you thought through in this whole strategy process? You want to go and win. We’re going to go march that way. This is how we’re going to go and do it. How do you translate that back down to simple messaging back to your field teams? What do we say in front of the customer? How should we act? Which assets and tools should we use? How do we make sure that that customer engagement is aligned to the strategy that would define the way we’re going to win? 

That’s where your enablement teams start kicking in. It creates enablement programs across your different communities in the customer life cycle, sales, technical, partner, customer success. You got your big four enablement programs. You want those enablement programs to be helping to pivot your frontline employees to line up to the same message that you had in your strategy. This is how we’re going to win. This is how we’re going to beat our competition. It‘s all connected from your strategy and planning through your operational execution into enabling your frontline employees. Having the enablement function as part of revenue operations allows you to make this almost like a virtuous circle. 

You go through your planning and strategy. You go through your operational execution. You enable you field and you ended up with these waves of enablement. We do a quarterly enablement program for all of our field employees. Every quarter we’re assessing with our stakeholders. How can we make our frontline employees even more effective and aligned for our message? We run that as a quarterly program. It’s four quarterly programs running. It’s all connected back to our strategy and our stakeholders across product or marketing and sales on where we feel we can help our frontline employees be most effective. 

A lot of times when you think about sales strategy, you think, “We do that at our sales kickoff once a year.” If you’re able to get these analytics, you can be much more tactical and make those changes throughout the year. Quarterly maybe even to the point if you’re collecting that data and then providing different types of sales, enablement programs to help refine based on what you’re collecting and measuring can be powerful.

One the concept we’re huge advocates for is the concept of an academy. Back into that enablement program, you think about, “What is an academy?” We’ve got tons of frontline roles right out there. Each of the roles need a learning path, which is specific to them, whether you’re a seller, a sales person or a customer success individual, sales engineer. You create a learning path. You have an academy. It’s a concept. You create a learning path for that particular role. You have a basic, intermediate, advance, new hire. You want to try and push your organization through to more advanced training for all of the teams. 

The whole point is when you look at your metrics and you go, “I wonder why we were a little off over here in our partner world.” You realize that you haven’t trained half your partners in terms of what your propositions are. What’s the level of education in our partner sales organization on how to pitch our solution, how to win against the competition? You realize that X percent of your partner sellers have trained only to a certain level. You want all your partner sellers trained to as high a level as you do with your field sales teams to win using concepts like a field academy and an enablement program. One of the pillars of that being around your partners helps push forward the level of capability of their partner sellers as well as an extended part of your network. 

You can see that again through enablement, concept of an academy, your metrics that you’re reviewing and your reviews on a quarterly basis. You can see how mature and how engaged our partner sellers in our enablement programs. Is there more work we need to do? We’ve done quite a lot of work lifting what we’ve done for our sales enablement, bringing it over and rolling it out into our partner organizations. We’re in the middle of doing a wide scale partner enablement program. 

The benefits are obvious for a RevOps organization. I want to ask you for a startup, when do you think is the right time to build this? It’s not going to be there from day one. At what point in their maturity lifecycle should they start thinking that it’s time to do some consolidation, bring in a RevOps organization? The second question to that is where do you think RevOps most effectively sits? I’ve seen it sit in different parts of the organization. I’d be curious to get your perspective on that.

I’m an advisor to a couple of companies, the smaller firms and more in the startup mode. It is an interesting question. At what point in time do you consolidate your operational teams into a RevOps group? It’s the same time as you’d assign a COO. If you’re putting a COO in place, you probably need a revenue operations function. That’s one indicator for me. The other indicator is if you’re getting past 10 to 15 employees and crush your operational teams, there’s an opportunity to start thinking about how do you get leverage across those groups. You probably got your marketing ops in one thing. Your sales ops is doing another and your customer success ops. You’ve got a couple of training people, maybe an analytics guy and maybe a planning guy. 

You’re like, “I’ve made my investment the resources of that.” They’re all working with different data sets. They’re operating relatively tactical as your CRO or your COO. If you’re feeling that you need more support and more capability to drive not only an operational dollar but maybe more of a strategy alignment. You’re looking for accelerated growth, improvement in productivity, better customer experience or employee experience. They’re indicators that you need to scale up and maybe think about bringing it together into a RevOps group and bringing a RevOps leader in place. 

From our conversations, it sounds like analytics is core to this operation. It’s the truth to help dictate strategy enablement and execution. What do you consider the analytic measures that are critical for a RevOps leader to consolidate and understand to be effective in their role for a SaaS business?

I think about analytics in a pyramid, different levels in the organization looking at different types of metrics. In one sense, it’s a pyramid in terms of the level of metrics but in another sense, it’s like you’ve got lanes in the pyramid if you’re in sales, marketing, customer success or finance. Recurring revenue is critically important. You’re looking at net retention rate, which is a critically important topic as well. Are you winning your bookings classically sitting underneath that churn? You end up in this kind of pyramid of metrics. You’re looking at your land and expand, adopt and renew life cycles. Are they operating effectively and efficiently? That’s what you’re getting to. 

You end up with this hierarchy of metrics net retention being a critical one. It’s helping you understand the customers that you have. Are you growing your share in those customers? Classically from a SaaS perspective, you’re not only working through the land, but you want to get quickly to adopt and expand. The expand from a SaaS perspective is not only more licenses of your existing solutions but cross–selling into other areas of your platform. You want to have your sales organization enabled, focus, top gold on cross–selling. You can see some of the results in your net retention rates. Are we increasing share within those particular customers? 

Those are all the classic things that you would imagine, bookings, renewal rates. Productivity is in there in terms of bookings per rep, renewables per rep. We look at productivity from a couple of different perspectives, not only against the bookings of the revenue numbers but also in terms of transaction rates. Large deal sizes can easily skew quickly productivity measures. I’m looking at the activity rates as well. For a mid-market seller, how many deals should they be closing? What’s their level of coverage in the pipeline? It’s a skill in itself looking right across that customer life cycle, making sure you’ve got the metrics in place, not only for performance but for productivity, pivoting those metrics more towards SaaS than maybe classic perpetual type models. 

Is NPS another statistic you look at? What’s your view on that?

There are lots of different ways of looking at Net Promoter Score. Customer health is one of them. In the customer success space, you move a little longer customer life cycle. We use Gainsight, the fabulous product, with customer health. We implement a load of work around customer health and customer risk. When you get a little further down the lifecycle, NPS is important. Not only when you do your regular surveys but also transactionals. You do customer surveys on particular types of transactions.  

You do a renewal survey. How did the renewal go? What was your experience like? Did you feel that the seller understood your business well and position the renewal appropriately? Would you recommend DTC as a customer or a product? NPS is important. It gives a general indicator as to how your customers feel. I don’t think it replaces the need for real feedback from your customers, making sure that there’s some kind of reach out to your customers about how they feel about the service, the sale or the experience with you is important. You need some contextual feedback on top of some of the statistical work.  

What do you think is the biggest mistake someone could make leading a RevOps organization? What would you say is critical that they would need to get right to run a successful RevOps?

I spend quite a lot of time when I came into PTC. We were looking at consolidating. I was at sixteen different teams. We’ve got a group of about 400 or so in revenue operations. Trust is critically important between your operational leader and the business leaders. When you’re thinking about moving into a RevOps model, you need to find a RevOps leader that will engender trust and provide a vision to the organization. If the field leaders don’t trust their operational support, they will look for change. Trust is one of the most fundamental things to establish relatively quickly and then credibility. You don’t move to a RevOps model to create fiefdoms and create empires.  

You’re looking at it to create productivity, accelerate, drive transformation and increase revenues. We’re trying to make sure that the team you put in place on revenue ops has that front and center in their mind. We’re a cost at the end of the day. I try and run as lean up businesses. I count on the RevOps side because I know every operational person we hire is one less customer–facing person. It’s having the right mindset with our operational team that we’re here to drive those efficiency topics, productivity topics and essential growth. We have it be part of the leadership team with the field leaders.  

Also, we’re an independent mind. You want to have an operational group in an appropriate way. Challenges the norms and looks for ways to be even better. Bringing in some external thinking on that is always helpful, whether that be in terms of the people you hire or the support, the information that you get or the agencies that you engage. Having that external perspective is important. Looking at benchmarks and being able to have an honest conversation about like where are we in the marketplace versus our competitors and what should we do to be even more effective.  

You’re looking for those types of attributes when you’re a RevOps leader to establish an effective revenue operations function. It’s an interesting blend of skills that you’re looking for in that person. You want someone commercially minded but yet operationally capable but has an idea around process and systems, relatively structured but sensitive to the business issues, can have effective relationships and can operate everything from sensitive compensation topics to go–to–market strategy. It’s quite a blend of skills that you’re looking for when you’re hiring a leader. 

That’s insightful to talk about the profile of the leader that would be successful in that type of role. This was an insightful conversation about all things RevOps. There are a lot of key takeaways here about how you organize your RevOps team, the processes, the analytics, the enablement that goes along with that and the benefits. I like to end these conversations with a question that has nothing to do with RevOps, SaaS or anything like that, but something that the readers can take away that humanizes the conversation a little bit. Could you tell us what is your favorite hobby when you’re not doing RevOps? RevOps is one of your passions. What is your favorite hobby outside of that?

We’re a big snowboarding family so we did a lot of snowboarding and mountain biking. 

You’re in the mountains.

I’m at a ski place in Colorado, which is awesome. I could have done with a little bit more snow. I got two older boys. I’m struggling to keep up with them. They’re challenging me, but they keep me energized and young at heart as they run around the place, either snowboarding, bikes or whatever. Adrenaline sport comes up next. We’re an active family which is great. It’s a good fun. 

No casts I can see. They stay up mostly on the board.

We’re generally okay. Thankfully, I managed to avoid any small serious injuries, fingers crossed, for some of the crazy stuff that we all do. 

I want to thank you for your time. This was a great conversation. If readers would want to get in touch with you, where’s the best place to find you?

Ping me on LinkedIn. Any specific questions, let me know. I’m happy to do any follow-ups. If you’re a CRO, a CEO or a COO of your business, it’s a challenging role. It’s a hugely broad role. Having an effective operational group supporting you is like any leader, you want to create the best team. This is one of the best structures that I’ve seen to help enable a commercial leadership team to achieve its goals. 

It’s one of the more prevalent roles we’re seeing in go-to-market organizations especially as they scale to bringing this RevOps type function. It was a great conversation. Thank you once again, Dan. I look forward to keeping in touch.

Thank you very much, Rico.