Revenue Collaboration & Governance

How Finance and Revenue Leaders Can Partner to Thrive in a Downturn

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Clari Staff



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Nine percent of companies come out of downturns stronger than they were before. That’s not a lot—but it comes as no surprise.

Companies entered this year with an operating plan designed to help them reach their growth targets based on existing macroeconomic conditions and company structure. When the economy threw them a curveball, it was nearly impossible to pivot quickly.

But it’s possible to successfully shift the business strategy. Recessions and turbulent economic environments present the opportunity for good sellers to become elite, and promising growth companies to become unicorns.

The common thread for companies that emerge stronger from downturns is airtight collaboration between the Chief Revenue Officer and Chief Financial Officer.

Our CRO Kevin Knieriem and CFO Adam Meister joined Pendo CFO Jennifer Kaelin and CRO Jennifer Brannigan to discuss navigating an economic downturn and how finance and revenue leaders can master cost and revenue to thrive in uncertain times. 

Here’s how revenue and finance leaders can partner to navigate through a downturn and celebrate the company’s success out of a downturn.

Build trust between revenue and finance

The relationship between revenue and finance may suffer due to friction. For example, the sales team might stress about ambitious quota goals with limited resources and consolidation, while finance needs to keep an eye on the sales team’s spend. It’s common for these two teams to work independently and have different priorities. That’s why the most important part of the relationship is trust.

“Because of the tight relationship Adam and I have,” says Knieriem, “our teams work together as a unit. And what we see is much more coordinated and efficient planning and decision making—but the most important thing is trust that they can make really informed decisions.”

According to Meister, a partnership based on trust is underlined by an understanding of the nuance of the business. 

“I owe it to Kevin’s organization to deeply understand their business and appreciate the nuance of what’s good, what’s bad, and what needs to work better and what’s already working well so we can align and focus and prioritize,” says Meister. “That’s so critical in an environment like this one.”

What does trust look like? While the revenue team is always looking for ways to achieve growth, the finance team’s priority is to be efficient and do more with less. This is a natural conflict and a barrier to trust. But when revenue and finance collaborate and truly understand business and growth initiatives, both sides can rely on each other to make decisions that are best for their teams and the company.

Align the whole company on metrics and data

Businesses need to leverage all the resources at their disposal to make good decisions right now. One way to do this is to lean on data. Revenue and finance teams need to understand past success so they can take the right action in the present and make decisions that unlock better outcomes in the future.

Some of the most successful revenue organizations in the world align their teams with data, also known as a shared source of truth, to stay informed and make better decisions faster. What metrics matter most?

Annual recurring revenue, quota attainment, and win rates are crucial to make important business decisions. In addition, Knieriem and his team keep their eyes on top-of-funnel metrics to tighten their alignment.

“We’ve brought other parts of the executive staff into the leading indicators so they can see the level of signal from top of funnel, the level of signal from the customer, and the level of signal of how things move through our process. So they’re actually getting grounded in what we’re all seeing because we’re making real-time gameplan decisions based on that data that impacts things like roadmap, investments we might make in segments, and verticals and geos. So by giving other departments a view into how we do things, there’s an opportunity for them to learn and give us feedback.”

“One of the things we always lead off with from our scorecard is how the business is performing from a bookings perspective,” says Kaelin. That allows us an opportunity to really talk with our CMO about what’s working. What’s not working? Where do we see risk? Where do we see opportunity?”

In addition to top-of-funnel metrics and signals from customers, tracking what has changed in the business is critical for revenue and finance leaders to adjust to the macroenvironment. 

“We’re really rigorously monitoring changes we’re seeing right now,” says Brannigan. “As an example, dips in conversion rates, lower volume of IDRs, and elongated sales cycles, because those are all signals telling us that we need to think a little bit differently. When you’re operating in uncertain times, it is so critical that you constantly have your eyes on leading indicators. Otherwise, it’s going to be too late to pivot and course correct when you see the wheels getting a little wobbly.”

Plan for every scenario—but keep an eye on growth

One of the challenges that companies face is that many of their sellers have never been through this before. This presents a unique opportunity for leadership to help their reps redefine success and teach them skills they can deploy through their entire career.

“Many of our sellers are early in their career,” says Knieriem. “So you have to work with them to reset expectations on what accomplishing success this year and the following year looks like.”

Very few companies thrive in a downturn, and it’s hard for reps to continue their winning ways. But that doesn’t mean they should concede defeat.

“Never waste a good crisis,” says Brannigan. “Let’s look at this as an opportunity for reps to hone their skills and teach them the foundational sales skills they will need to succeed in any type of environment.” 

While adjusting to the current environment is important,  Kaelin suggests keeping an eye on the future as you plan for brighter days.

“We’ve been very careful to make sure that we’re setting ourselves up for success for ongoing growth and success in the next fiscal year. What do we need to make sure we’re executing well today, and how do we make sure we’re making those right investments for the growth areas so we can scale next year.”

“You’ve got to continue to make those bets in those growth areas now, even through these tough times,” says Meister. “I think the tough times put a greater emphasis on prioritizing the ROI on some of those areas. But if you just look at it with a pure blunt instrument cost view, there’s a very good chance you’ll overcorrect and have a tough time accelerating out of this period.”

Watch the full recording to learn how leaders from Clari and Pendo navigate the uncertain economy.

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