main-logo-solid
©2023 Insight Partners

5 Strategies Marketing Leaders Need to Succeed in 2023

The famous Roman Stoic Seneca once said, “Luck is what happens when preparation meets opportunity.” Ultimately, you need both to succeed. The same might be said to marketing leaders in 2023: prepare, prepare, prepare!

There is no way to predict how the macroeconomic climate is going to shift or how it will impact B2B SaaS marketing teams. But one thing is clear — marketing leaders have their work cut out for them to thrive in what is likely a challenging environment. Many best practices that previously worked will be challenged, and agility remains critical.

Based on Insight’s close partnership and expertise in helping companies scale, we’re tracking the emerging questions we believe will shape marketing strategies in the coming year:

  1. How should you change your digital marketing strategy?
  2. What role will customer marketing play?
  3. Events: In-person? Virtual? Hybrid?
  4. How can personalization and generative AI help?
  5. What can be done to keep the marketing function whole in the face of organizational restructuring?

Read on for the marketing strategies we think will make a meaningful impact this year.

Organic efforts can yield higher ROI

One of the most significant challenges B2B SaaS organizations will face is the increasing cost of demand generation. With buyers pushing decisions out, there is a need for more touches to drive leads through the buyer’s journey, and marketers will have to be creative in order to keep their costs low.

Additionally, social media is becoming increasingly difficult to use for targeting given the recent changes across the major platforms and increased scrutiny around privacy. Facebook, LinkedIn, and TikTok have all seen CPM (cost per thousand) increase significantly in 2022. Facebook, and parent company Meta, is particularly difficult since they’ve been at the center of numerous data-related scandals, while Twitter’s shifting focus and paid options have been difficult for marketers to navigate. Twitter’s Ad Manager volume and roster of advertisers both fell sharply in October and November 2022. LinkedIn remains a great platform for targeting, though limited inventory and expensive ad spaces are becoming more common.


Key Insight: Your ROI on investing in stronger organic will likely be higher than paid digital. Reallocate budget to content and SEO.


Invest in customer marketing

As businesses started to experience a slowdown in new business ARR in 2022, customer retention and expansion became critical. Across the Insight portfolio, we saw our companies experience a 4% increase in expansion ARR between Q3 FY21 and Q2 FY 22, while new ARR was flat over the same period. Furthermore, our high-performing companies tend to see greater marketing spend efficiency due to a focus on retention and expansion.

marketing spend vs new and expansion ARR

It’s clear that customer retention will continue to be a major focus for B2B SaaS marketers. As the world continues to grapple with an unfolding economic crisis, businesses across all industries need to fight harder than ever to keep their customers from jumping ship and going to competitors that offer a cheaper price. Investing time into creating an effective customer marketing function is essential.


Key Insight: Expansion revenue will be cheaper and easier to drive than new logo this year. Consider reallocating both budget and people resources to these initiatives.


For more on the importance of customer retention and the role of marketing, read How to Grow by Marketing to Customers.

Shift the events mix

Overall, 41% of Insight portfolio companies indicated event budgets in 2023 will remain the same compared to 2022, while 25% are increasing budgets, and 34% are experiencing a decrease in budget.

events budgets in 2023

With inflation hitting everything from travel expenses to on-site cappuccino machines, events may become a more difficult and expensive prospect in 2023. Data from Insight portfolio company, Bizzabo, suggests that in-person events remain important and are here to stay: 72% of event organizers indicated that in-person events remain a crucial part of their overall event strategy, 98% plan to host at least one in-person event next year, and 85% plan to host at least three.

However, for companies experiencing significant budget constraints, virtual event platforms could provide the solution. Think webinars, tailored content facilitated by virtual assistants and AI bots, as well as interactive 3D experiences. These solutions can help marketers reach new customers and keep current ones engaged in a more cost-effective manner, allowing them to maximize their budget. According to Bizzabo, 68% of event organizers plan to have a virtual component at their next in-person event, and 53% are “focused” or “very focused” on a virtual events strategy for 2023.


Key Insight: Maximize your event budget by getting the right mix of virtual, live, and hybrid events. Make sure to include multiple tactics to drive multiple objectives for events such as brand building, pipeline acceleration, and partner marketing.


For a full playbook on how to think about Hybrid Events, read Virtual, In-Person & Hybrid Events? Oh, My!

Enlist help from AI

Personalization will be key in 2023. As the target market continues to become more demanding, B2B SaaS markets must lead the way in providing a bespoke journey for each customer. From tailored content and products to automated emails and personalized ads, marketers need to find ways to make their customers feel like they are the only ones that matter — and it needs to be done at scale.

Many companies are also starting to experiment with generative AI in creative ways. From creating short-form bespoke content and LinkedIn posts, to brainstorming webinar ideas and product names, the use cases for generative AI are expansive. Be careful to validate content produced by generative AI to ensure the facts are correct.


Key Insight: Personalization demands more content than most marketing teams are capable of creating. Begin experimenting with tools like Jasper and Writer to leverage the power of generative AI and bridge the gap.


For more on generative AI, read What Marketers Need to Know About AI-Generated Content.

Keep marketing’s seat at the table

Marketers will need to fight hard to keep the marketing function whole in the face of organizational restructuring. Marketers need to be aware of the dangers of “siloing” their team. It’s becoming increasingly common to split off demand generation and put it under the CRO’s domain, product marketing connected to the product organization, and marketing operations placed under revenue operations. As B2B SaaS organizations continue to become more complex, it’s important for marketers to have a seat at the table and ensure that their efforts are aligned with business goals.


Key Insight: While some marketing activities may seem to fit better under another functional area, the loss of integrated messaging and tactics will cost the organization far more.


2023 is likely to be an interesting year, but with the right strategies in place, B2B SaaS marketers can emerge as winners. So, start preparing now and maybe your organization might get lucky with a strong year of performance.

Editor’s note: Jasper, Writer, and Bizzabo are Insight portfolio companies.

How to Grow by Marketing to Customers

With many ScaleUps prioritizing customer retention and growth in 2023, marketers must deepen the impact of their customer marketing program.

Engaging customers is good for business, as they can be a company’s most efficient source of growth. GTM teams can generate additional revenue from customers for as little as 1/10th the cost of new business. It takes less time, effort, budget, and companies typically win customer opportunities at a higher rate.

When new business demand wanes or customer churn increases, ScaleUps must respond by changing how they market throughout the revenue cycle. But, in our mid-2022 survey, only 11.1% of Chief Marketing Officers (CMOs) reported feeling “very well prepared” amidst increasing macroeconomic uncertainty. Meanwhile, 87.3% were experiencing softening demand.

CMOs’ uneasiness might, in part, stem from their comparative lack of engagement with customers after the deal is won. Throughout recent boom years, most CMOs have focused on generating new business. As a result, they’re ill-positioned to retain and expand business from existing customers.

From Insight’s Budgeting & Planning survey of ScaleUp companies, we know that customer marketing has received the least investment out of the seven key marketing functions. By comparison, the typical ScaleUp adds a CSM for every 19 enterprise and 34 mid-market customers. Additionally, just 1 in 5 account-based marketers say customer expansion is in their remit.


Read more: CMO Playbook for Economic Headwinds: Make Your Move Before It’s Too Late


To mitigate softening demand and diversify a business’s revenue mix, marketers must help expand customers. Doing so will supplement near-term deficits in growth and improve marketing’s efficiency over the long term.

“It’s a team effort. Marketing must play a role in driving growth throughout the revenue cycle. They connect sales with new buyers and help close deals. After the sale, marketing partners with customer success to deepen our relationships with our existing customers, driving product adoption and expanding across divisions or territories within a single account.”

-Tal Kain, CEO of Velocity

How? By collaborating with their peers in sales and customer success to do the following:

  1. Forecast addressable customer revenue
  2. Set objectives, goals, and KPIs
  3. Develop a post-sale strategy
  4. Resource and integrate post-sale teams
  5. Execute a joint tactical playbook
  6. Operationalize a unified “go-to-customer” process

Forecast addressable customer revenue

Why it matters: Know the size and types of opportunities within your customer base to decide where to focus and how much to invest. Consider how investments in customer retention and expansion impact your firm’s “Rule of 40” performance (e.g., X% growth rate + Y% profit margin = 40%).

Analyze your current opportunity mix:

  1. How quickly and efficiently do you generate profit?
  2. What changes could you impart on your opportunity mix by investing in post-sale marketing
  3. How might your changes to your opportunity mix impact how efficiently you generate profit?

Based on your forecast, scope your post-sale marketing initiative:

  • Pilot. If the size of the opportunity seems modest or uncertain, plan a narrowly scoped, but representative, pilot. You might focus on improving one or two post-sale outcomes by deploying a small tactical play in a limited customer segment.
  • Sprints. If the opportunity is significant and certain, introduce customer marketing elements in waves, evaluating their impact along the way.

You’ll likely need to make tradeoffs, prioritizing which investments you make within your opportunity mix.

“As a startup company, your rapid-growth strategy for Year 3 should have a lot more customer opportunities than Years 1 and 2.”

-Kerry Cunningham, Senior Principal of Product Marketing, 6sense, and co-author of The Demand Unit Waterfall™

Set objectives, goals, and KPIs

Why it matters: GTM teams must align on goals and how they measure their progress toward said goals.

Once you’ve forecasted the ideal opportunity mix, define your objectives to focus your post-sale program plan. You could:

  • Accelerate time-to-value.
  • Improve product adoption and/or drive more utilization.
  • Upsell to more and/or higher price tiers.
  • Cross-sell the same buyers to additional products.
  • Cross-sell new buyers within a customer account.
  • Secure renewals, reduce churn, and/or prevent downgrades.

Once you’ve homed in the changes you seek to impart on the customer lifecycle, determine which KPIs best measure those changes and set goals for each KPI.

You can use benchmarks to help you set goals. But the benchmarks aren’t your goal, they’re a conversation starter. Consider variables, such as growth stage, expansion motion, and customer characteristics.

Develop a strategy

Why it matters: Businesses must focus on just a few key ways they can provide value to customers–beyond the product itself–and a few key ways in which they can enable staff to deliver on said customer value.

Here’s how:

  1. Brainstorm all the levers you could employ to create value.
  2. Prioritize those levers which create the most value. Pick no more than a few.

Once your go-to-customer strategy is set, refine your customer marketing strategy. Develop customer ICPs, personas, and buyer journey models. Then use those models as a basis for your post-sale messaging strategy.

Customers can be different than buyers in several ways:

  1. Marketers should clarify the differences between pre- and post-sale customer profiles.
  2. They must get to know which personas emerge once the buyer has purchased a product.
  3. They must understand their customer’s journey.

With these insights in hand, marketers can develop messages that motivate a customer to move through the post-sale cycle.

Resource and integrate post-sale teams

Why it matters: Resource your post-sale team well enough to deliver value to the customer, without burdening post-sale efficiency. Hire the right people and place them into the right structure.

Start first by identifying who in your company already owns each part of the customer journey (e.g., Customer Success Manager, Account Manager). Then, consider which marketers might be best suited to partner with them:

  • What capabilities do I need?
  • Given my targets, how will I resource the team? Which hires must I prioritize?
  • How will I balance in-house and outsourced talent?
  • How will I structure my staff?

Your opportunity mix offers clues, as does the functional scope of other GTM teams. Though the marketing team could outsource some of the work, it’s best done by in-house staff who have the skills and business acumen to engage precious customer points of contact.

Execute a joint tactical playbook

Why it matters: GTM teams can employ a nearly endless array of tactics. So, they must draw on their go-to-customer strategy to determine which tactics to execute. The delivery must be well-orchestrated if the message is to have its intended effect. The right tactics, at the right time, with the right people.

Like a sports team might coordinate its offensive players against the defense, a GTM team executes a post-sale play oriented to a target customer’s traits and the business’s objectives.

  1. Based on your objectives and strategy, which plays will you run?
  2. How do those plays suit your customer ICP, personas, and journey?

Based on your answers, create a playbook in partnership with cross-functional GTM teams.

Operationalize a unified “go-to-customer” process

Why it matters: Ensure customer-facing stakeholders know what, when, where, and how to support the customer.

“Our marketing team is partnering with customer success to offer additional value to our customers. We host product release webinars for customers, where they learn how early adopters are putting to work new software capabilities. We’ve found our customers respond better to learning from their peers — and are more likely to ask for a demo — versus a marketing email alone.”

– Jamie Walker, EVP Marketing at Keyfactor

Build boosters and remove blockers to ultimately create value for employees, suppliers, and customers.

  • Incentives. Evaluate your performance-based pay to ensure incentives align to customer outcomes and KPIs.
  • Recognition. Revise your internal communication and meeting cadences to celebrate customer wins.
  • Technology. Evaluate your tech stack to determine if you have the right tools, configured to meet the requirements of customer engagement. If you don’t, procure new tools and/or change the configuration of your existing ones.
  • Vendors. Evaluate the capabilities you have on-staff, the capabilities you need, and the gap between. Outsourcing might be the most efficient way to fill these gaps.
  • Enablement. Seek out ineffective elements of your cross-functional customer operations. Then, develop a “learning agenda” that addresses those elements via an enablement program.
  • Documentation and monitoring. Evaluate your operational performance. Then, define essential processes and monitor their performance.
  • Report. Brainstorm the key questions post-sale staff must answer for themselves. Then, consider which metrics they’ll need to answer those questions and how best to present the metrics in a self-service dashboard or report. Finally, decide which systems to use for reporting.
  • Automate and outsource. Audit your processes and procedures for opportunities to outsource and automate.
  • Fun and relationships. Foster an engaging culture for your post-sale staff and create avenues by which they can build relationships with your customers.

For many businesses, customers represent a compelling source of efficient growth. This growth results from strategically creating value for customers, as well as for employees, suppliers, and partners.
GTM teams can carefully craft tactical plays, executed by way of tightly coordinated go-to-market operations, to deliver an excellent customer experience. In doing so, they’ll earn their customer’s loyalty and advocacy, generating better margins for the business.

 


Examples in practice

To illustrate the strategies outlined above, let’s use an imaginary drone data analytics company to show how these principles work in practice.

Forecasting addressable customer revenue

A drone data analytics company offers software modules that each process three different types of aerial images: photographs, infrared, and thermal.

  • Most customers start by purchasing the photography module.
  • The software provider licenses the modules on an annual subscription and charges a small fee for each image processed.
  • Infrared costs more than photographs; thermal is the most expensive.

Here’s how they might evaluate their opportunity mix:

  1. Increase Utilization: Photography. The marketing team forecasts that it would cost $0.05 per image to drive more photograph processing (i.e., increase utilization). But they earn just $0.01 in revenue for each image processed.
  2. Cross-sell Infrared to the same buyers. They expect that marketing the cross-sale of the infrared module would cost $2,500 per sale, but earn the business $10,000 ARR.
  3. Cross-sell Thermal to different buyers within existing customer accounts. Supporting cross-sales of the thermal module would likely cost $5,000 per sale, but earn the business $20,000 ARR.

So, the marketing team will prioritize support for the thermal module, since it has the best dollar-cost return ratio, followed by infrared (if they have budget leftover). They won’t help drive more photographic image processing, since they forecast a net negative outcome.

Set objectives, goals, and KPIs

KPIs (Output Metrics)

1. Cross-sell thermal modules to 50 new buyers within customer accounts.
2. Cross-sell infrared module to 100 existing buyers within customer accounts.

Key Results (Input Metrics)

1a. Generate 100 cross-sale opportunities
1b. Improve win rates for thermal cross-sales from 35% to 50%

2a. Generate 135 cross-sale opportunities

Develop a strategy

Customer Value
• Community. Create an “advanced imagery” community, where pro users of infrared and thermal imagery can share best practices with novices.
• Training. Develop an “advanced imagery training program” to help photo users learn how to use infrared and thermal imagery.
• Discounts. Offer “existing customer” discounts for infrared and thermal modules.

Staff, Vendors, and Suppliers Value
• Incentives. Offer a spiff/bonus to relevant GTM staff for attaining net new cross-sale goals.
• Training. Direct all GTM staff to take the same “advanced imagery training program” we offer to customers.
• Data-based targeting. Develop a predictive data model to identify prime cross-sale targets.

Resource and integrate post-sale teams

The drone company will hire:
• Community Marketing Manager
• Learning & Development Content Marketing Manager
• Product Marketing Manager, Infrared and Thermal Sensors

They’ll outsource:
• Customer community event production
• Technical copywriting
• Training content design

Execute a joint tactical playbook

Here is an example of how a customer marketing playbook could look for our drone company.

customer marketing playbook example

Six Best Practices for Your First 90 Days as a Data Leader

For newly hired data leaders, the first 90 days are crucial. For existing data leaders, it’s prudent to take a step back at least once a year, think about the business with fresh eyes and ask: What would a new data leader try to address in the next 90 days?

Regardless of title, CxOs of young and established organizations realize their ability to make excellent data-driven decisions is a must to achieve the company’s business goals. In the current resource-stretched climate, the CTO, CIO, or CxO often wears the data leader’s hat. This is especially the case at early-stage companies too small to have this position. But while the role of the data leader is still often shared, a data leader’s acumen and approach for data-driven decisions can be adopted by many leaders to have a significant impact on revenue and growth.


Key Insights

Every enterprise and business case is unique, but today’s data leaders have established a set of best practices to chart the digital pathway to profitability:

  1. Unify data and AI strategies
  2. Cultivate an open data culture
  3. Solve customer problems
  4. Capitalize on early opportunities
  5. Align stakeholders on priorities
  6. Inspire the team

Unify Data and AI Strategies

Young organizations often struggle to create meaningful data strategies. The key is to recognize where emerging trends and company needs intersect, and then create a roadmap to fulfill short- and long-term needs with technology that provides a competitive advantage. The data leader is aware of the importance of aligning data and AI strategies to better serve the organization’s overall mission.

A 2022 survey revealed that over half of the data executives surveyed expect AI to become “critical” to multiple facets of their business by 2025. While most companies expect to adopt AI technologies, many data leaders are looking even further ahead to more advanced forms of artificial intelligence. Techniques such as generative AI — capable of creating rather than simply predicting — has a fast-growing number of use cases.

 

Read more: 8 Tech Investors Share Predictions for 2023

 

A sophisticated AI model requires a modern data stack. Companies that can invest in their data infrastructure will be able to more successfully capitalize on emerging AI techniques. A full-stack approach to ETL (extracting, transforming and loading) data, creating data lakes and lakehouses and de-siloing data architectures can give companies a real competitive edge.

Similarly, powerful AI needs DevOps and MLOps tooling to support it. As the role of AI grows within an organization, data leaders will need a more robust foundational toolset if they want to identify which features of their data provide signal (a process known as feature engineering). This also holds true if they want to improve model training, deployment, and monitoring. Additionally, not all MLOps stacks are created equal — AI working with unstructured data requires different pipelines than those working with structured data. The same distinctions exist for generative versus predictive AI.

Today’s data leaders are seeing these AI trends play out in real-time and are adapting their enterprises to take advantage of what AI can offer for data-driven decisions and strategies. This is important not only to promote growth and accelerate innovation but to build resilience during periods of austerity. With the global economy in a period of stagflation (stagnation and inflation), the ability of business leaders to extract value from data could be a deciding factor in how well a company weathers the storm.

Cultivate an Open Data Culture

How a strategy is defined is up to leadership, but how well it is executed is often a function of company culture. Executives are reshaping their organizations to become more data-oriented, but the vast majority still point to culture as the greatest challenge in becoming a data-driven organization.

Successful data leaders hit the ground to build a data-driven culture by identifying stakeholder needs and responding to them with data-driven decisions. Bear in mind that the ultimate stakeholder is the customer. Organizations invest heavily in research to identify who their customers are, what their needs are, and how they differ by region and culture. Expanding these data sources and creating channels where data can be translated into actionable insights is a fundamental part of a data-driven culture.

The organization itself has hurdles to overcome: diversification of customer base, changing business priorities, and infrastructure and scalability concerns. External regulators demand certifications and scrutiny to ensure compliance with standards.

To succeed amid this tangled web of expectations, data leaders have established a practice of identifying objectives that are mission-critical to meet — those actions or failures that could cause a loss of stakeholder confidence.

Solve Customer Problems

Without data, there is no visibility in customer buying patterns, adoption, and behavior. For SaaS companies in particular, identifying a common enterprise data model is foundational to learning about their customers and fulfilling core business responsibilities. This is especially critical in the wake of multiple mergers and acquisitions, when customers may have to deal with multiple quotes, orders, contracts, and invoice formats that don’t match.

At the heart of all data is customer identity data, and your process for customer identity conflict resolution will be key. Unified data models allow businesses to integrate multiple data streams into enterprise resource planning pipelines. How to create and interpret information gleaned from data models might be beyond the technical capabilities of the data leader. However, data gleaned from the data model can provide an easily accessible wealth of information about how well the organization as a whole is able to fulfill customer needs.

Read more: 7 Habits of Effective Data Leaders

Merging these data streams provides much better visibility into customer buying behavior. This includes better insights on lead generation, sales conversions, annual recurring revenue (ARR), customer acquisition cost (CAC), net revenue retention (NRR), and more. More insights allow for better decision-making in every department of the organization. As with software quality and usability for an engineering department, this is a case of operational details determining strategic success. For companies growing through mergers and acquisitions, this is especially important.

Capitalize on Early Opportunities

Understanding where the business’s data organization performs against key performance indicators (KPIs) is an important part of a data leader’s job. Data leaders use a series of self-assessments to understand the strengths and weaknesses of their organization’s data strategy and capabilities. To really deliver value, however, executives often chart a series of phases for their data strategy — the so-called “Crawl, Walk, Run” progression.

As with any “baby steps first” approach, the essential “crawling” phase sees the development of the initial capability by building out the data stack and analysis pipeline. Once a process is in place, leaders can advance to the “walking phase” — fixing the parts of the process that are present but broken. The good news is the switch from walking to running is the easiest, as process fixes eventually become process optimizations.

It’s also important that this process is iterative. At some point, a process can no longer be optimized. In strong data-driven organizations, there is a point at which the team will look for more advanced technology to build, introducing more capabilities than previous optimizations could accomplish. This is also where the data leader’s leadership in building a data-centric culture, their attention to instituting policies for governance and security, and their investment in technologies such as generative AI and MLOps pay off.

This step is important for new data leaders. The average tenure of a data leader is 30 months, significantly shorter than for other executives. Data leader turnover, driven by a gap between expectations and results, often happens because leaders do not seize these early opportunities. This applies equally to data leaders hired to build data departments, and to those hired to make structural architectural changes (especially after a big data breach). Data leaders that fail to deliver demonstrable improvements — both in the department’s operations and overall business impact — struggle to make it past the two-and-a-half-year mark.

Align Stakeholders on Priorities

Balancing a host of competing priorities — investing in emerging tech, building culture, and process optimization — is difficult. Today’s data leaders have adapted by creating a prioritization framework along two axes:

  1. Importance to the business
  2. Difficulty of implementation

Understandably, data leaders often pursue the low-hanging fruit first, consisting of high-priority and low-difficulty items. Although those characteristics seem mutually exclusive, there are changes data leaders can make to secure easy wins. Achieving success for these items can be as simple as instituting transparency policies to keep the board updated on data-driven processes, such as the company’s data privacy and security efforts.

In 2021, less than half of surveyed corporate boards received reports about cybersecurity risks. Another survey revealed progress continued to be slow — only 37% of surveyed board members felt confident that their company was secure. Providing transparency and clear reporting can be on the lower end of the required-effort scale, while it boosts the board’s confidence in the company’s data initiatives and security posture.

Data leaders can use clear reporting to secure buy-in from board members and other stakeholders, demonstrating that their leadership and priorities are leading the company to a better place. Creating this continuous feedback loop helps keep board members, other executives, vice presidents, directors, and even customers, on the same page. It also smooths the way for future initiatives.

Inspire the Team

Finally, every data leader is a team leader. Inspiring the data team to reach new heights provides a force multiplier for growth. Storytelling using data and visuals can serve as a way to lead by example to inspire the team, ultimately changing the company’s trajectory from being a follower to becoming a leader — even a disruptor — in an industry segment.

Investing in technologies like generative AI not only unlocks new capabilities for the company but also provides opportunities for employee growth. It creates better data scientists and engineers.

It also ensures that, as the company grows from early-stage to ScaleUp, the data department remains competitive from a talent standpoint. Data leaders today are capitalizing on the investment in new trends to attract diverse and capable data professionals.

Taking charge of an existing data department — or taking on the role of building one — is a daunting challenge. But data leaders are tackling that challenge with careful prioritization, an eye on the technological horizon, and attention to the intersection of customer problems and business opportunities. They identify low-hanging fruit and communicate their early successes. Make that your plan for your first 90 days, and you’ll be off to what everyone can see is a great start.

How to Plan a Virtual SKO that Educates, Motivates, and Entertains

November and December are always frantic times for sales leaders, as they are focused on closing out the current year while simultaneously preparing for the upcoming year. There are a hundred things to consider, from redesigning compensation plans to setting quotas, and capacity planning. And then there is the daunting challenge of hosting the sales kickoff (SKO). Each year, sales leaders develop multi-day, in-person events to train and update their sales teams on new techniques, processes, and tools, celebrate the successes of the past year, and energize the team for the year to come. With increasingly distributed teams, lingering concerns about the pandemic, and constrained budgets, more teams may be considering hosting sales kickoffs virtually.


Key Insights

  • With increasingly distributed teams, lingering pandemic concerns, and tighter budgets, teams are considering hosting virtual team events, including sales kickoffs (SKOs).
  • Planning a virtual SKO requires different planning and presentation than simply hosting your normal SKO over video conferencing.
  • Virtual SKOs can offer unexpected benefits from physical events, including opening the SKO to the entire company and offering guest speakers who may have previously been out of budget.

Making a sales kickoff virtual isn’t just doing last year’s event over video; it’s fundamentally different in both planning and presentation. And if you plan ahead and follow these tips, it can be even better than those in-person events. One of the biggest opportunities is the ability to extend the SKO into a full company kick-off. For a minimal additional cost and effort, everyone in the firm can hear the vision of the CEO and sales leaders, get insight into the sales strategy, and most importantly, understand precisely their role in helping sales achieve its goals. Another key benefit of the virtual event is the flexibility it offers when booking guest speakers: By avoiding the logistics of flying guest speakers to events, you can engage someone from anywhere in the world, or even engage someone previously outside of your budget range.

Virtual SKOs require a different approach than in-person events

To help you plan a successful virtual sales kickoff, here are 5 key considerations and a few useful tips from our portfolio and from Jacco van der Kooij, Managing Director of Winning by Design.

Drive impactful engagement

It’s easy to multitask during a virtual event, so you have to create something that is compelling and holds the audience’s attention.

  • Hype it up by leveraging short-burst videos to create breaks in the presentations and mix in music to change the mood.
  • Keep the sessions short and succinct — approximately 45 minutes.
  • Spread the sessions over a few days with no more than a 4-hour session block, rather than holding an 8-hour-long marathon event.
  • Leverage music, video, and interactive presentation tools to shake things up.

Plan and practice

We’ve all had those moments where the video platform doesn’t work right, or a presenter forgets that they’re on mute. In a normal meeting, it’s mildly annoying; in an SKO with 100+ people on the call, it’s disastrous.

  • Double the amount of time needed to create the event.
  • Test your technology with each speaker, and always have a backup plan.
  • Practice the transitions to create smooth and natural handoffs.
  • Record sessions in advance, and stick to the timing.
  • Have one dedicated moderator and one dedicated tech support person.

Teach them something new

This is true even in physical events, and in a virtual one, you can’t keep your audience captive.

  • Use breakout rooms to engage smaller groups.
  • Assign pre-work for attendees.
  • Train the trainers in advance. Make certain that they can drive impactful sessions.
  • Ask your reps in advance for feedback on what they want to hear or learn about. Also, at the end of a segment, ask one member of the audience to summarize their key takeaways. Then have them select the next person to do the same.

Let them catch up with their peers

One of the best parts of SKOs is being able to share best practices and war stories with peers. Make your virtual event memorable by giving them this capability when they weren’t expecting it.

  • Plan specific times for catch-up sessions.
  • Create coffee chats or happy hours with random assignments of attendees to breakout rooms.
  • Create “wedding table” assignments for breakout rooms to ensure teams socialize.

Keep it going after the event

Because a virtual event costs a fraction of a physical event, you can hold follow-on events throughout the year.

  • Create a reinforcement program to drive home key learnings from the SKO.
  • Host a mid-year event. Things change rapidly; a mid-year meeting allows you to course-correct.
  • Use Slack channels or Teams chats to collect ideas live during the sessions and to communicate with the attendees throughout the year.

The shift from physical events to virtual may seem daunting, but if you keep the above considerations in mind, you will create a game-changing event. Take advantage of technology and the reduced cost to expand the reach of your event and energize the whole organization, not just sales. But most importantly, remember that during your event, you should always aim to educate, motivate, and entertain.

10 Steps to Crush Your Sales Kickoff (SKO) Event

If you are a sales leader, you likely spent the last few weeks scrambling to close deals before the year end. As a result, you’re probably starting January by finalizing your compensation plans and quotas and planning two of your most important events of the year: the Sales Kickoff (SKO) and President’s Club.


Key Insights

  • Sales Kickoffs (SKOs) and President's Clubs are two of the most important events of the year for revenue teams.
  • SKOs should energize the organization, inform and excite everyone about the company’s strategy for the year, and get the whole sales team heading in the same direction.
  • The most successful SKOs are well-prepared, align around key themes and messaging, celebrate the previous year's success, and are delivered in an engaging, interactive format.

Designed well, these two events should excite the sales team for the year ahead. They help you set and sell a strategy that inspires everyone to roll up their sleeves (again), and also celebrate the team’s accomplishments from the previous year. If you put in the effort and attention to detail, you’ll put yourself in the driver’s seat as you scale up your business.  

How to design a successful sales kickoff 

SKOs may have a bad reputation amongst sales reps. This is largely due to a history of poorly planned events, filled with boring presentations, delivered to hundreds of people simultaneously with minimal interaction. Nobody wants to sit through that. To top it all off, these events are costly, and reps are out of the field for 2-3 days, meaning that there isn’t any revenue being generated.

Executed well, SKOs should energize the organization, inform and excite everyone about the company’s strategy for the year, and get the whole sales team heading in the same direction. If you adhere to the following criteria, you’ll deliver a sales kickoff that will align your team and make them productive this year and beyond.

  1. Have a well-defined strategy for the year. This is your chance to explain the strategy to the entire sales organization and rally them around a common aspiration. Make sure that the message is clear and that all the presentations delivered during SKO align with that strategy. Ensure your reps know their role in executing the strategy by giving them clear marching orders, as well as collateral that supports their key talking points with prospects and customers.
  2. Make the content interactive. Back-to-back presentations are boring for anyone, so refrain from a parade of presenters and instead create a series of workshops or rotational sessions. The best kickoffs combine amazing presenters (who present for 60 minutes in the main room) with round-robin sessions and workshops for 30-45 minutes. The best workshops impact how the sales team engages their prospects and clients and/or leverage and explain the tools and techniques that help them to do their jobs. The movement and change in pace will keep the sales reps’ attention, and the interactivity helps ensure that all reps are participating. If there are new products or features being launched, this is the opportunity to ensure that everyone is aligned on the messaging and sales pitch. Marketing, product, and tech leaders, along with the CEO, should describe their strategies and how their activities will support the sales team.
  3. Celebrate successes from the past year. SKOs provide the opportunity to have a formal look back on the previous year (what worked, what didn’t) and applaud your superstars. Take some time to talk through what happened — both good and bad — and then highlight anyone who achieved plan or showed exceptional effort to help another rep or the overall team. Small award plaques are a great way to present top performers with something that acknowledges the value they have contributed to the company. Bring them up on stage while their peers applaud them, have someone read a sentence of why they’re being recognized (e.g. Sally Jones achieved 145% of plan and $750k in sales), and take a picture with the CRO and CEO. By proactively building a culture of success and recognition in your business you will make your team excited and proud to be recognized in front of their peers. 
  4. Leverage themes and imagery. We’ve all sat through dozens of kickoffs where we are going to “Race for 202X” or “Ignite Sales 202X” or something similar. Those themes sound corny and can fall flat if they’re not woven throughout the entire meeting. Likewise, these types of themes can have a major impact if they’re integrated into all communications, internal branding, and contests for the remainder of the year. That theme should show up in your contests (i.e., Q1 – Start your Engines, Q4 – the Final Lap). Pick a theme, stick with it, and make sure it’s different from themes used in the last two years.  Work with marketing to be creative. Sales themes can become tired and overused.
  5. Be prepared for the meeting. If possible, you should communicate sales territories, compensation plans, and quotas in advance of the SKO. Clarity in segmentation, compensation, and territories will help to ensure your sales teams apply the material presented to their specific situation. Plans don’t have to be 100% complete, but the closer to final you can be, the better the outcome of your kickoff. If the sales reps go into the sales meeting blind, the best they’ll be able to do is apply it to last year’s activities. More likely, they’ll just listen without being able to truly connect the material with the activities expected of them. This is one reason that SKOs are often in late January or early February. The timing enables management to finalize strategy and plans before presenting to the team.
  6. Get new hires off to a great start. If you’re going to hire new sales reps, try make sure that they’re onboarded in time to join the kickoff sessions. There is no better way to indoctrinate them into your team’s culture than by surrounding them with their teammates and sharing stories. One of the best parts about an SKO is the networking that your teams can do, especially if you have a global team. Having your new hires meet the top reps from each region will help accelerate their onboarding process. For those that join after the kickoff, you can repurpose some of the material for your onboarding training. 
  7. Keep logistics simple. Pick a location that is near (the majority of) your team or easy to get to. You don’t want to have people waste an entire day getting to the location or getting home. Also, plan dinners at the hotel or nearby restaurants. This ensures that you can continue to build a solid networking experience for your sales teams and that they don’t waste too much time going to a new location after sitting in sessions all day. Finally, don’t forget to provide enough time for breaks. Your teams will still need to engage with customers, so give them sufficient time to catch up on emails and calls in between sessions.
  8. Stick to a reasonable budget. Because you’re celebrating success and kicking off the new year, you want a venue and event that reflects the company. We’re not suggesting that you host your kickoff at the Ritz Carlton, but make sure that the venue is designed for corporate events, and then invest in the key items that will make the event memorable. Make certain that you have audiovisual (AV) support, lapel microphones, large projector screens, and the ability to play music over the AV (which is essential to fill the time as presenters walk to the stage). Invest in a few small gifts for attendees (notebooks with the company logo, clothes with the company logo, or similar), a little something for them to take the experience away with them. These should preferably reflect the theme for the year (e.g., "Racing to Win"). Expect to spend around $2,000 per attendee for a professional event. This spending guidance varies based on the location, duration of the event, distance traveled, etc.
  9. Require attendance. 100% of your reps should be there to hear the company’s strategy and to network with their peers. If you’ve announced a save-the-date well in advance, you should require 100% attendance; sales reps should be expected to modify customer meetings or other plans if you’ve given enough notice. The best SKOs also have 100% attendance from the executive team — that’s right, even your CIO and General Counsel should be there — this is the chance to show the sales organization that the entire company is behind them and supports their efforts. Given the investment in the SKO, you should maximize the ROI through full attendance.
  10. Assign an owner and rehearse. Successful SKOs are successful because someone has been orchestrating the event and sales leaders are engaged early in planning the agenda and cadence of the content. Someone in your company should be managing the SKO, whether this is sales ops, sales enablement, marketing, or if you have a larger organization, an event manager. This person or team will ensure that presenters practice their speeches, stay on time, and ensure smooth handoff between presenters. Even if you are doing an SKO for the first time and you don’t have a dedicated team working on your SKO, you can still make this work with some basic project planning.

The SKO is your chance to start the year strong and get your team motivated and excited about the new year. Remember, align the team on a single strategy with a few big bets. Celebrate the previous year's successes, but focus attention on what needs to be done this year. Make your kickoff the jumpstart that your organization needs to ensure this year is your most successful year yet.

Move Over Quiet Quitting: These are the 2023 Trends to Watch for Talent Acquisition and Human Capital

2022 was another wild year. From the “Great Resignation” to inflation, talent acquisition and human capital professionals were left navigating a workforce that was consistently in flux. Looking to the year ahead, anticipate continued ambiguity and more change management given the evolving nature of the workplace, as well as the current economic climate.

So, what does this mean for the people and talent acquisition space? Here are the top trends to watch in 2023.

Hiring will be less about speed and more about rigor.

Companies will prioritize hiring a few specific roles versus growing at any cost. Recent Insight Partners’ data shows that leadership hiring is down 36% over the last year. The volume of executive hiring hasn’t been this low since Q4 of 2020. This indicates that companies are being more thoughtful in their approach to hiring and we expect this consideration to continue throughout 2023 – at the executive level and beyond.

There will be a greater focus on pay parity.

Over the past year, we saw compensation packages skyrocket. According to Hired, in 2022, the average tech salaries for roles at mid-market-sized companies (300-1K employees) increased significantly in the US (~$164K) and the UK (~£85.3K). The same report indicated that “average local salaries for candidates in mid-sized markets (medium-tier cities like Boston, LA, and Seattle) caught up to larger tech hubs.” This increase in salaries has caused greater pay discrepancies between new hires and more tenured employees. With new pay transparency laws coming online, there will be a greater focus on pay parity. Companies will need to reexamine their compensation philosophies and ensure alignment on compensation bands and leveling.

Deeper insight: Pay Transparency is Here to Stay. How Can You Build Salary Ranges in Good Faith?

How we define and measure productivity will evolve.

This past year we heard a lot about “quiet quitting” and employees feeling less engaged in their work. As a result, leaders have been evaluating how to manage productivity without micro-managing or using “big brother” types of tactics (i.e., pulling data on Teams or Slack usage). In the next year, we will continue to discuss not only how we manage productivity but how we define it. Productivity will be less a measure of time spent in a seat and more based on a mix of creating value, outputs, and relationship building.

Manager upskilling will be a must.

This was a wild year for the workforce. Some companies went from hiring surges to reductions in force, leaving employees to take on more with less. Remote and hybrid work isn’t going anywhere, which has left many leaders to ponder how to build culture and connectivity without in-person face time. To help employees navigate through all this change and combat continued fatigue and burnout, managers will need to elevate their skillset. They won’t be able to apply the same in-person tactics they did before.

 


Recent Insight Partners’ data shows that leadership hiring is down 36% over the last year. The volume of executive hiring hasn’t been this low since Q4 of 2020.


 

Stability will sell.

Given the market, candidates and employees are more risk-averse than earlier in 2022. People will be wearier of changing jobs or working for less-established organizations. It will be harder to woo candidates solely based on culture, swag, and fun. Instead, companies – and specifically, recruiters – will need to be able to clearly articulate what the business is and how it is positioned to win in the market. Additionally, companies will need to focus on the stability of the role, salary, and benefits – anything that feels concrete and tangible to help employees weather the uncertainty of the current climate.

The era of the Chief People Officer will continue.

Gone are the days when “human resources” could act as an administrative function. Heads of People are now expected to take a more strategic, forward-looking lens, especially as we evolve our workplace cultures and manage through continued ambiguity. This will require greater rigor and focus on getting processes and structures right, so companies are prepared for when hiring – and the market – picks up speed again. Human capital leaders will be expected to have an innovative mindset and develop true cross-functional, executive partnerships to meet the increased demands of the role and help elevate all business functions at the organization.

If the past several years have taught us anything, it’s that companies and leaders need to be agile. While we can’t predict everything the future holds, we foresee that 2023 will be the year of focus, flexibility, and foundations. Leaders will need to take a more thoughtful, strategic approach to talent acquisition and human capital overall to attract and retain top candidates, as well as ready organizations for scale long term.

Pay Transparency is Here to Stay. How Can You Build Salary Ranges in Good Faith?

Pay transparency. It’s a topic on many HR leaders’ minds. With a renewed focus on inequality in pay, many local and state governments are putting laws into place with the intent of positively impacting pay equity for underrepresented groups.


Key Insights

  • With NYC, California, and other jurisdictions passing pay transparency laws, it’s important for HR leaders to be prepared for how to stay compliant in their organizations.
  • Start by looking at your internal salary data by job level, function, and geography to identify the median or average salaries.
  • Avoid publishing salary ranges that are too broad.
  • Be ready to document and explain the reasoning behind the salary ranges and philosophy to create a truly equitable pay culture at your organization.

Most recently, New York City enacted a pay transparency law requiring employers to state the minimum and maximum salary within job advertisements. The law applies to any company that has at least four employees, one of which is based in NYC. It also impacts any jobs that could be performed in whole or in part in NYC – in other words, postings for remote roles are not exempt.

NYC isn’t the first nor the last jurisdiction to pass such a law. California is close behind, launching a state-wide law effective January 1st, and we anticipate more local and state governments following suit through the next year.

As this trend in pay transparency continues to grow, employers need to rethink how they approach their pay ranges to not only meet the demands of these new laws but also to ensure consistency and equity across their organizations.

So how can organizations create salary ranges in “good faith”?

  1. Leverage data. It’s important first to analyze your internal data. Look at salaries by job level, function, and geography to identify the median or average salaries. You should also leverage external benchmarks through a compensation benchmarking tool. Again, you can examine market data by job level, function, and geography to see how your current range compares to the broader market. As one way to potentially calculate a range in good faith, you can calculate a percent below and above those averages or medians based on geography, experience or education, scope, etc. It’s important to note that you should also proactively identify any employees that may be below your identified range. Once these ranges are shared publicly, you can anticipate employees asking why they fall below or on the lower end of said range.
  2. Try not to make your range too broad. As a workaround, some companies originally tried to state excessively large ranges such as $100,000 to $300,000. However, some local agencies – like the Colorado Department of Labor – are fining a few businesses and issuing hundreds of warnings to businesses with too broad of ranges. Broad ranges also can indicate to a candidate that you lack a transparent culture, which can detract from the overall quality of your applicant pool. If you do have a broader range, you need to ensure you have a good faith reason to do so, such as the role is remote and the salary will be based on a candidate’s geography (e.g., on the higher end of the range if based in NYC) or that the role can be done with varying levels of work experience. Additionally, if an employer has no flexibility in the salary being offered for one particular role, it is ok to make your range smaller.
  3. Document, document, document. To truly build a range in “good faith” you will have to put some forethought into those ranges. If you are able to document and explain why you’ve created a range, it will help you mitigate risk. It also helps ensure that you are truly building a more equitable pay culture at your organization and makes it easier to explain to employees your pay philosophy.

Pay transparency is here to stay. If you have employees in multiple states, it’s better to prepare at large for these laws versus trying to manage multiple processes as more laws come online.

At the end of the day, these laws are meant to close the racial and gender wage gaps and generally remove the stigma around talking about salaries. Preparing now not only ensures you stay compliant but also builds a culture of transparency and equity in your organization.

Setting Quotas in B2B SaaS Sales When Facing High Exchange Rate Volatility

Key Insights:

  • While typically normal changes in foreign exchange rates (FX) have limited impacts on SaaS companies, 2022 has not been a normal year.
  • Reps closing deals in denominated currencies other than the one applied to their quota should neither gain nor lose due to FX changes.
  • We recommend setting exchange rates at the start of each quota measurement period.

In 2022, the United States (US) Federal Reserve hiked interest rates in order to fight rising inflation. This has made dollar-denominated bonds more attractive versus those based on other currencies. In addition, US assets are increasingly viewed as a safe haven since the American economy has been less affected by fuel price shocks and by the war in Ukraine. Consequently, the dollar has strengthened against other currencies.

Exchange rate impact on company performance

The general impact of a stronger local currency on multinational companies is negative.

Consider a US-based company’s response to a stronger dollar. If the US company raises prices in Europe, then unit sales will likely drop by more than the price increase as buyers switch to cheaper European alternatives.  If the US company leaves its European prices fixed, then the value of each unit sold declines when converted to dollars.

There are some offsets to this lose-lose scenario. First, the stronger dollar lowers the cost of goods and services purchased abroad. Second, producers of differentiated solutions face lower price elasticity; in lay terms, companies can increase prices to some extent without experiencing as much of a drop-off in unit sales as would companies selling commodities.

While the puts and takes described above mean normal changes in foreign exchange rates (FX) will have limited impacts on SaaS ScaleUps, 2022 has not been a normal year. In the 23 years spanning 1999 to 2021, the euro has only fallen more than 10% relative to the dollar three times (see Figure 1). Thus far, the euro is down nearly 15% relative to the dollar.

Begins in 1999 at -15% and ends past 2021 -14.3%.Notes: (1) Change is from start of year to end of year except for 2022 which is YTD through Oct 7th (2) The 24-year average is 0% with a standard deviation of 9.9%. (3) Source: https://www.macrotrends.net/2548/euro-dollar-exchange-rate-historical-chart
Figure 1: €-to-$ Annual Exchange Rate Change
Source: macrotrends.net
Change is from start of year to end of year except for 2022 which is YTD through Oct 7th. The 24-year average is 0% with a standard deviation of 9.9%

Exchange rate impact on quota attainment

Let’s explore the impact of FX on quota attainment for sales professionals. For simplicity, and because it mirrors the current state of the world, we will compare a US-based rep to a Germany-based rep.

For our range of examples, we will assume:

  • Reps start 2022 with quotas based on the Jan 1st exchange rate of 1.1371 €/$. Quotas are thus $1M when denominated in dollars and €880K when denominated in euros.
  • Prices per deal are set at the beginning of the year at $100K or €88K.
  • The Euro/Dollar exchange rate is down 15% YTD.

In the first scenario, imagine each rep only sells domestically. In this situation, there is no FX impact for the reps other than the fact that it will be easier for the German rep to sell against US-based competitors who may have to raise prices (or limit discounts) to make up for the exchange rate impact.

Next, consider a German rep whose quota is in euros but who sells to US prospects using dollar-denominated contracts at $100K per deal. If this rep’s plan applied floating FX rates, then she would receive a credit of €101K instead of €85K for each sale at current rates. Hence, the rep benefits from the floating exchange rate. Had the FX rate been fixed, there would be no impact on quota attainment.

Assuming the company is based in Europe, they benefit as well since the increase in euro-denominated bookings more than offsets the extra commission paid to the rep in the floating FX scenario. If the FX rate were fixed, the company benefits even more.

The reverse is of course true for a US rep whose quota is in dollars but who sells into Germany using euro-denominated contracts.  An €88K deal converts to $87K instead of $100K if quota credit is subject to a floating exchange rate. With a fixed FX rate, the US rep is ‘protected’ and would experience no impact.

The stronger dollar is detrimental to the US-based company whose euro-denominated sales convert to fewer dollars than expected given the pricing set at the start of the year. Allowing the FX rate applied to quota credit to float transfers some of the company’s pain to the rep.

Our recommendation

One of the key best practices in sales compensation design is that reps should be compensated for their direct effort over what they can control. Since FX is out of their control, reps closing deals in denominated currencies other than the one applied to their quota should neither gain nor lose due to FX changes. Hence, we recommend setting exchange rates at the start of each quota measurement period. Fortunately, this approach is also easier for quota administration.

Our recommendation of a fixed FX rate for quota credit concentrates all FX benefits and risks in the hands of management. Even without elaborate hedging, organizations can protect themselves from FX risk by sourcing talent locally and by borrowing in local currency.

The silver lining is that strongly negative FX impacts are rare. They apply to companies with a strengthening local currency who conduct a large amount of business denominated in a weaker foreign currency and who lack the natural hedges described previously. Finally and fortunately, currency swings exceeding +/-15% are relatively rare in developed nations.

Enterprise Mindset: 3 Questions a Former Credit Suisse CIO Always Asks When Evaluating a Technology Experiment

This post is a special feature of Insights Distilled, a weekly tech-focused email briefing for busy financial services executives. Learn more and sign up here. 

While concerns of an economic downturn are driving cost-cutting measures across the enterprise, IT spending – including digital transformation budgets – is expected to remain strong. Not only can technology hedge against prolonged economic instability by driving efficiencies or increasing security, but the stakes are too high to slow down on transformation projects now.

“You can’t afford to not think about digital,” according to Radhika Venkatraman, Insight Partners’ CIO-in-residence. “This is not ground zero of digital transformation; we are now at a point of revolution.”

While the economic climate won’t cut off technology spending, it will bring project prioritization into sharper focus, making it more critical than ever for ScaleUps to understand the perspectives of enterprise leaders. Venkatraman – who served as a CIO at Credit Suisse and Verizon – can offer a peek into how top tech executives think about innovation.

“You can’t afford to not think about digital. We’re at a point of revolution now.”

During her five years at Credit Suisse, Radhika Venkatraman built a “well-oiled machine” for sourcing, evaluating, and scaling technology experiments. While serving as a chief information officer and chief digital officer for its investment bank, she built a process that helped it fundamentally change how it approached innovation.

“Having a digital mindset is not about taking your old process and just asking someone in IT to automate it,” she said. “At the end of the day, if you want to disrupt yourself digitally, you must reimagine your data, operations, talent, and culture.”

As part of this process, she honed her ability to efficiently filter ideas and select which experiments were worthy of funding. While her evaluation criteria mainly focused on internal projects, it’s instructive for ScaleUps to peek into her process: When pitching a leader like Venkatraman, be prepared to explain how your technology solution fits into this equation.

3 questions to ask when evaluating an idea

First, what’s the probability of success versus failure for a given project?

Leaders like Venkatraman want to surface bold ideas balanced with risk appropriate to the firm’s appetite.

“If the idea is absolutely going to succeed, you should just be funding it,” she said. Then, those ideas should flow through the typical business evaluation process versus the innovation pipeline.

For ScaleUps, the real competition to your product isn’t other similar solutions in the market: It’s the home-grown tools an enterprise could build internally. You should be able to articulate why it would be challenging to replicate your solution – and more importantly, its impacts – without a partnership.   

“And if an experiment has almost no chance of succeeding, then why bother funding it?” Venkatraman added.

Share several robust case studies on how you’ve worked with other major enterprises to give leadership confidence in your credibility and experience.

Next, she asks whether an idea is focused on incremental efficiency gains or something more ambitious.

“When you’re creating small amounts of efficiency through your experiments, I’m not interested in that,” she said. “I always tell people to go for a new market opportunity or a new pool of revenue, something which indulges and engages your creativity.”

Have a clear-eyed pitch on how your solution will genuinely move the needle. Don’t just tell the technology story: Prepare to explain the business rationale of your solution, with insight on the rewards that make it worth deploying. Finally, tell them how your product will help them gain an edge in a market that’s getting increasingly tight.

“If your experiment is outlandishly successful, but your output is tantamount to giving birth to a mouse, that’s not an experiment you want to spend your precious resources on,” she said.

Finally, she asks: What timeline is required for testing?

“Fail fast,” she said.

It’s best if you are prepared to quickly spin up a proof-of-concept in an enterprise’s sandbox environment with synthetic data and prototyping tools. Leaders like Venkatraman are juggling so many potential ideas and experiments that they don’t want to wait nine months to understand whether a given partnership could work. Make it clear that testing your product won’t require Herculean effort.

Then, once you score a deployment, start proving your value right away. Producing small wins right out of the gate will help you build a case for winning additional buy-in and potentially larger scope

During her time at Credit Suisse, Venkatraman’s innovation pipeline received over 400 ideas and funded about 18 different experiments. Ultimately, 10 went to production and 3 became new business opportunities – including a so-called “Netflix for bonds” project, a recommendation engine for bond traders.

For more interviews with top financial leaders, paired with incisive analysis and useful case studies, sign up here to receive Insights Distilled, our weekly email briefing all about innovation for execs at banking and insurance firms.


Insight Partners’ CxO-in-Residence program brings a G2000 C-level technology leader in-house to share their knowledge with Insight’s portfolio. Through focused feedback sessions, our portfolio can test messaging and positioning strategies, and learn best practices on selling to the enterprise.

 

About Radhika Venkatraman

Radhika Venkatraman

Radhika Venkatraman worked at Credit Suisse between 2017 and June 2022, heading the data and technology functions for the global investment bank division of the group risk and compliance office, Under her leadership, the division developed and implemented a comprehensive data strategy and delivered several bank-wide regulatory programs. She also spearheaded the bank’s innovation agenda, including developing and implementing large-scale platforms for trading, client experience and mangement, compliance, and risk management.

Before joining Credit Suisse, Venkatraman served as SVP and CIO of Verizon’s network and technology organization. There, she worked closely with leadership teams in strategy, finance, and operations on initiatives to expand margins, increase operational efficiency, and enhance the customer experience.Prior to being promoted to Verizon’s C-suite, Venkatraman led the software teams that scaled Verizon’s premiere internet service (Fios) to support 65% year-over-year growth. Her teams’ efforts resulted in 99% on-time customer performance and a 71% reduction in customer complaints.

Alongside her role as Insight Partner’s CIO-in-residence, she’s a member of the board of directors at internet provider Brightspeed.

Head of Enterprise Applications: An Often Untapped Orchestrator for Growth and Scale

Key Insights:

  • Many scaleups are seeing the need for a new role to handle daunting internal systems complexity, back-office business systems, integrations, and data.
  • Hiring a Head of Enterprise Apps and Architecture role in the organization can help scaleups proactively navigate key security and tech process questions while prioritizing growth and innovation.
  • The most common time to hire this function is in the ScaleUp stage — when a company is at $50-$100M annual revenue.
  • This role usually reports to a CIO, COO, or CFO.

 

Boards of directors are seeking digital acceleration from their CxOs and expect enterprise architecture to be orchestrated to enable growth and scale. For ScaleUps already on their digital path, that means transformation of business processes through technology and the deliberate integration of complex digital landscapes. It also means application rationalization to keep operating expenses in check, especially if mergers and acquisitions continue to be part of the growth strategy.

In early-stage companies, many CxOs must also absorb responsibilities for the company’s back-office business technology in addition to their core role. CxOs in these cases can tend to stand up internal business systems in silos while enterprise applications remain poorly integrated with the organization’s IT infrastructure. The repercussions are significant, resulting in low-data quality for internal users to work with, the inability to produce key business KPIs, and ultimately, a poor customer experience. However, there is a solution: The main strategy for dealing with daunting internal systems complexity is to form an enterprise applications and architecture team, responsible for back-office business systems, integrations and data. The head of enterprise applications and architecture thus becomes the master orchestrator of processes and applications for all business units.

Assessing the Need for a Head of Enterprise Apps and Architecture

The need for a master orchestrator was identified in a 2018 survey conducted by threat-assessment company F5. The survey revealed that 38% of the respondents could not name all the applications used by their organization, despite considering 34% of their web applications to be “mission critical.” So how do you determine if your company needs a head of enterprise applications? Below is a simple checklist:

  1. Unmet technology needs. Does the business have capability needs that aren’t supported by current back-office applications? This can happen as the company matures, when the customer base shifts and departments expand their tooling, both to meet demand and to deliver greater value to consumers.
  2. Software ownership. Scaleups often struggle to decide whether to buy off-the-shelf software or to build it themselves. In some cases, it can make more sense to purchase while, for others, an in-house solution works better. Left unchecked, these decisions can result in complex system landscapes.
  3. Architectural vision. Is there a clear internal vision for the company’s business systems architecture? The company should identify which systems add competitive advantage through advanced “best of breed” feature sets and where cost savings can be achieved with mid-market options.
  4. Gaps and overlaps. Which systems offer necessary features and which are redundant? With off-the-shelf enterprise software there will always be gaps in capability, and some redundancies. The problem goes further than unnecessary spending: if different teams use different software to achieve the same objective, progress can be hampered and KPIs can’t be reconciled. Leaders who are dedicated to managing the life cycle of enterprise applications will be able to identify these gaps and overlaps, and make effective rationalization decisions.
  5. Software integration. Are the company’s enterprise applications interoperable? The ability of applications like ERP systems to integrate with sales and marketing eliminates redundancies in capability and provides the functionality enterprises need as they scale. Business leaders have made interoperability a critical part of purchasing decisions, especially as technology needs evolve with the business.
  6. KPIs. Key performance indicators (KPIs) help you understand whether the company’s enterprise systems are delivering required outcomes. If they’re not, then the ScaleUp will likely re-evaluate the organization’s app development and management strategies.
  7. Projects. Perhaps the strongest signal that the company needs a cohesive application strategy – and leadership – is the failure of systems and data projects to deliver on time and/or to offer the expected business capabilities and KPIs.

head of enterprise applications

Scope of the Role

A head of enterprise applications and architecture straddles a wide scope of responsibilities covering the range of tech strategy. Responsibilities include the choice of enterprise platforms for the organizations to adopt, as well as its implementation and testing processes. Improving DevOps and predictable agile delivery also fall under their purview. They are bilingual, well-versed in the languages of business (including SLAs and KPIs) and technology. The head of enterprise applications and architecture connects back-office business technology to core revenue-generating product applications.

The enterprise applications team will oversee most major enterprise software systems, including:

  • customer relationship management (CRM) systems
  • marketing automation platforms (MAP)
  • enterprise resource planning (ERP) suites
  • human capital management (HCM) tools
  • enterprise data systems (EDS)
  • overall integration layer

This team does not need to own every business system, of course. Instead, they focus on those tools that require major investment, integrations or that affect business processes like quote-to-cash or hire-to-retire. These are tools that need to be properly integrated and governed if they are to deliver maximum business impact. ScaleUps are finding that a dedicated enterprise applications team is the optimal way to accomplish this.

head of enterprise apps-IT scope

As mentioned earlier, a key function of the head of enterprise applications is to navigate the build versus buy decision. While engineering is almost entirely a “build” team (they build the product the company sells), enterprise software leaders often lean towards “buy” in order to optimize cost and deliver the best value. However, some companies do give enterprise applications teams the freedom to build internal tools. As a result, enterprise applications leaders are often well-versed in the intricacies of building, integrating, and deploying software and DevOps.

business and IT scope

Timing Based on Growth and Cash Flow

Exactly when a business will need a dedicated enterprise apps team is difficult to predict. Innovation and scale are significant drivers — innovating and investing in digital transformation are top priorities in today’s tech landscape. For most companies, this point arrives as the company transitions from the growth to the ScaleUp phase, typically with between $50 million and $110 million in annual revenue. In later stages, we recommend a CIO, who reports directly to the CEO.

enterprise apps timing

Not all companies manage this transition successfully. Some continue early-stage practices of bringing in consultants to improve processes, but this is a stop-gap measure at best and, when consultants depart, their expertise goes with them. By contrast, organizations with a unified head of enterprise apps and architecture can avoid this churn. This role can serve as a focal point for specific knowledge within the company about business capabilities and managing enterprise applications.

From a cash-flow perspective, companies that struggle to fund and prioritize this role, often have to divest operationally first before they can re-invest strategically, or ask business CxOs to wear a more technical hat.

Reporting Structure

Many companies that create an enterprise applications team assign it to the CIO’s area of responsibility. In the absence of a CIO, the head of enterprise applications typically reports to the COO or CFO.

The CTO is the least-preferred executive to oversee this critical function. That’s because CTOs need to focus on innovating and driving revenue by building out the core product and finding the right product-market fit.

org chart

How does one find qualified IT leaders to occupy this position? The truth is, it can be challenging. Since this is a technical role, the best candidates will have a technical background. IT operations candidates that have only managed networks, desktops or help desks are not good candidates because they lack the business skills needed to speak to sales, marketing and finance executives.

Enterprise applications candidates will have deep experience building software integrations and navigating the complicated web of interoperable enterprise systems. They will also have experience with global implementations, doing configuration or code reviews, and building out proofs of concept for customer relationship management platforms, marketing operations, finance, and accounting systems. Because of the complex nature of the role and the need for outstanding technical, business and interpersonal skills, you can expect to spend at least three months searching for a qualified head of enterprise applications and architecture.

Aligning Business and IT Goals

The ability to unite the company’s business goals with the IT department’s priorities is a unique and critical skill for a head of enterprise architecture to have. That’s because enterprise apps teams serve the entire organization.

That makes this role strategic instead of operational — rather than just managing the status quo, a good head of enterprise architecture will be able to identify areas of business capabilities improvements and drive long-term business value. These skills are part of a wider trend in IT and business leadership – a radical shift from just “keeping the lights on” to planning and driving growth.

IT and business goal alignment

The process includes the ability to get stakeholder buy-in, especially for large-scale changes such as introducing new ERP or CRM systems, or a shift to cloud-based architecture. It also requires a solid understanding of the rest of the organization’s pain points. The best candidates for this role have the ability to identify and implement solutions that align with the organization’s business priorities.

Security Counts

Another critical skill set is a thorough knowledge of application security. As the number of applications a company uses increases, so does its security overhead and the risk of a breach. The diversity of applications also makes the task of securing them more complex.

Furthermore, since many of these systems are used by non-technical staff (such as sales, marketing or HR) there’s an increased burden on the enterprise apps team to educate staff on proper security, release management, and control procedures. ERP systems are notorious for vulnerabilities because they are large, complex applications often used by multiple teams. Their size and flexibility mean that different departments often configure them with customizations or plugins.

However, integrating these systems is not the only concern. Most modern enterprise software is based on cloud technology, which makes IT architecture leaders with strong cloud deployment and cloud security awareness an asset. The nature of cloud technology means there is some overlap between the IT-focused enterprise apps role and the infrastructure engineering role responsible for providing DevOps support to core engineering. While both enterprise app teams and infrastructure teams might work on cloud-deployed technology, they are very often different cloud environments to manage. Enterprise apps are usually deployed to dedicated, vendor-owned (and made) cloud platforms. Infrastructure engineers, by contrast, work much closer to the code on platforms that deploy the company’s core product.