In today’s economic climate, driving efficiency is becoming increasingly critical for businesses to prioritise. Improving sales efficiency is an area where enablement can have a significant impact, as it can help streamline processes and activities so that reps can optimise the time they spend selling. In fact, a study done by Sales Enablement PRO recently found that enablement teams that track sales efficiency as a key success metric reported 3-percentage-point higher win rates on average. So why is efficiency so important in today’s business environment?
Shawnna Sumaoang: Hi and welcome to the Win Win Podcast. I’m your host, Shawnna Sumaoang. Join us as we dive into changing trends in the workplace and how to navigate them successfully. Here to discuss this topic is Chris Larson, the Chief Financial Officer at Highspot. Thanks for joining, Chris! I’d love for you to tell us about yourself, your background, and your role here at Highspot.
Chris Larson: Thanks for having me. I’m Chris Larson, the CFO at Highspot. I started my career at Deloitte here in the Seattle area and served a couple of different categories of clients, private companies, and public companies. From there, after several years, moved on to Amazon. In my first few years at Amazon, I was with AWS. This was some time ago when they were still really trying to get that business off the ground and really get momentum. My latter couple of years at Amazon was within the SEC reporting group, doing the global accounting closely following Amazon. I did a quick stop for a couple of years at a company called Porch, the local startup, now public, and I’ve been at Highspot since 2017.
My history at Highspot is that I got here right after their series B. We were about 65 employees with just a few million dollars in revenue and have grown quite a bit since then. It’s been a really fun journey being here for the growth, the new countries, and the new products. Here I am today.
SS: Well, Chris, it has been fantastic working with you as our CFO for, as you said, nearly the last five years. Over the course of that time, we had a period of growth at all costs and now we’re really starting to see a fundamental shift to focus on more efficient strategic growth. From your perspective, why is efficiency so important for business leaders to focus on in today’s economic climate?
CL: As you said, these last few years have definitely been growth at all costs and that’s what was celebrated. I think there are a lot of drivers that go into this. Some are logical, some are not, but I think what’s clear if you look at the last year, it’s been a very strong signal that scalable growth, durable growth, however, you want to label it, is what matters. Just to be clear, revenue growth, of course, still matters. That’s an evergreen, that’s always going to be there, but it’s super important these days that companies can show their ability to grow efficiently.
Now, in my opinion, it’s actually a return to a more sane and sustainable investing environment and businesses are getting back to the fundamentals. The question of like, why should leaders care about it, in a rational investing environment like we’re in right now and probably will be for quite some time hopefully, the evaluation of your company is going to be based on the present value of your future profits and your cash flows. Companies are being scrutinised right now like they haven’t been in years about what’s their unit economics sure great, show your growth, but you also have to show strong unit economics. If you want to stand out as a leader, right now, it’s demonstrating to your company that you’re thinking like an owner and you’re thinking with the current times where efficiency matters.
SS: For our audience, what are some of your best practices for helping the company manage change to drive efficiency?
CL: This is an area that I’ve thought a lot about recently. There are a few fundamentals that I would suggest here. First and foremost is to be authentic. I mean, that’s just general advice as you’re trying to make a change in your organisation, but be authentic. I just feel like it’s so foundational and hopefully, you’ve done enough research and self-learning to get the proper amount of education to just know how important it is that we are sustainable. We’re building something of the company that’s sustainable.
I think the second thing I’d say is to paint the picture of what’s possible. At the end of the day, people are going to be motivated by what’s at the end of the rainbow. That’s that way you can make sure that as you’re communicating, like here’s why we’re driving towards what we’re driving toward. For your company, it might be we want to create a great enterprise value or we want to deliver all these things to all of our available customers, therefore, we have to do it efficiently and effectively.
The third category I’d say is to ask people to act like owners. I just mentioned this in our annual kickoff for our whole company and talked about this notion of, look, you invest a tremendous amount of your time and energy at this company, you’re literally a shareholder in the sense that you have stock options. Think of yourself as an owner of this company and start making decisions accordingly. Then, finally, it’s kind of the call to action, but it’s to empower your employees. Encourage them to have a voice. They are on the front lines. They understand how processes can be made better, how efficiency can really be gained, and give them that voice to have those communications throughout their organisations.
SS: I think that is really fantastic advice, Chris. Now, to pivot a little bit for our audience in enablement, many enablement teams across different organisations today need to consistently prove their value to justify their budget and their resourcing investments. From your perspective, why is sales enablement a worthwhile investment especially as you think about efficiency?
CL: That is a great question. I’ll take a very CFO lens when I answer this question. If you just start with revenue, there’s inherently always going to be pressure to increase revenue in any business. That, again, is just something that’s evergreen. Sales enablement is the function that wakes up every day and they’re laser-focused on improving the output from your sales team. As a CFO, I personally sleep better at night knowing that there are people in our company that are obsessed with that and they make it their daily job. Growing revenue, of course, is lots of people’s jobs, but having that focus of making sure that our reps are incredibly effective is critical to unlocking that revenue growth that we need. I think that a great enablement team is a mobiliser within the business. They see a lot of surface area and they’re able to connect the dots, like take that strategy that we’re trying to drive as a business and turn it into action. I think the thing I respect about enablement teams is when they’re able to use data to paint that story and remove some of the anecdotal, which of course are important, but even more important is like, what are the trends? Where can we really focus our time to have the highest impact in order to grow revenue?
The second area I’ll talk about is OpEx. Compensation for Highspot, for many companies, is the largest expense category that you’ve got on your P&L. Even if you break down compensation, the amount you pay your sales teams is incredibly significant. If you can optimise that expense by just a point or two, it could be game-changing for the financial profile of your company. When I think about our sales team and our sales spend, I really want to maximise the output of that investment. A high-functioning sales enablement team is one key component to all that and making sure that we’re making that exponential impact on the sales organisation.
SS: Absolutely. I love that CFO perspective, so keep that coming. Now, how would you recommend enablement leaders stay aligned with the goals of the company, especially as change occurs to drive business impact on things like efficiency?
CL: I would say for enablement leaders, I would start with educating yourself on just the basic financial metrics. You don’t have to be wizard level or be able to keep up with your finance team, but I think just starting with that education on what our P&L looks like and what are the important KPIs that our go-to-market engine is being monitored on. What are some of the conversations that are being had at the upper management levels at the board level to understand the health of our function? If your company’s public, I’d say go read the earnings release. That will give you a lens into exactly what management’s objectives are for their bosses, who are the shareholders.
The second thing I’d say is just to know the goals of the company. If you’re setting corporate goals and things like that, that should be a lens into what management cares about. Even better is to find a way to advocate and influence what those goals are. That’s a way to demonstrate that you’re thinking like an owner and show that you care about the top line, revenue, and then the bottom line, which is profits. My final piece of advice would just go talk to finance. Just trust me, your finance team will appreciate having allies out there in the company. We’re not scary people, we’re happy to have the conversation. I think just establishing that bridge and demonstrating that you care about the financial efficiency of the business will be a huge unlock. I think you’ll find you’ll be warmly received coming in with that message.
SS: I couldn’t agree more. For those enablement leaders that don’t get as much access to the c-suite, how should enablement leaders approach conversations with c-suite executives, like a CFO, about the value that enablement brings to the business?
CL: Great question. I think I would first start with just some basic general advice, so speak at the right altitude. If you’re talking to the c-suite, they don’t live in the details or experience the same problems that you do. I will say, especially with the CFO, don’t be surprised if they’re ready to go dive into the details. We want to really understand on the front lines what’s going on, so be armed and ready to go down to that level if you need to. I would say the positioning that I would take with the CFO, for instance, would be that enablement is critical, both for revenue growth and efficiency. I think historically, there’s been a lot more focus on ‘how we’re going to help you grow the top line’ and not necessarily as much focus on, ‘hey, you have all these change initiatives that you’re trying to do right now to become more efficient we are a tool that can help with that.’
As I mentioned in one of the previous answers, just know the company’s initiatives, problems, goals, and as you go to the c-suite. They’re going to want to focus on those more and more because oftentimes that’s what they’re measured against in terms of their performance. I love talking to enablement folks and seeing their insights. There’s a lot that I don’t see on the front lines of the go-to-market. I might have a hunch that something is not working as well as it should be, and when an enablement leader can come to me and say yes, that thing that you’re wondering about is broken, but like here’s how enablement is helping to actually fix that problem, it’s a validation point for a leader that has that hunch.
I’ll give you an example. In this environment, you’re wondering ‘are my reps as good at negotiating as they should be’ because times have changed and negotiation is more important than ever. Knowing like, yes, we have a focused effort on negotiation, and here’s how we’re actually rolling it out through our enablement program gives me more comfort as the CFO that like I’m getting value for my spend.
Then, finally, I’ll just end with establishing a little bit of FOMO. I think as a category, sales enablement has been really hot these past several years and it’s getting to a point where if you don’t have enablement or even a robust enablement system within your company, you’re behind the times. I think preying on a little bit of the fear that you might get with an executive or a CFO is, am I missing a key part of my business process that should be there? If I’m not doing what’s normal, you really have to ask yourself, why am I comfortable being different from what’s normal?
SS: That’s fantastic advice. You hit on two things that I want to just drill a little bit into which are around the insights that enablement can bring. When it comes to investment in technology, what metrics would you recommend leaders bring to c-suite executives to show the value of the tools they’re using in enablement?
CL: I’ll just pick two here. ROI is one and then tool consolidation is the other. I mean, I think I hear tool consolidation every day in some sentence or another. If I just start with the ROI front, I’ve seen really good presentations of ROI and I’ve seen some really terrible presentations of ROI. I think from a CFO who is inherently going to be skeptical, don’t exaggerate the ROI that you’re putting in front of them. You really have to acknowledge where your assumptions are and where they may be conservative and just tread lightly with respect to how much you push that ROI. There’s a story I’ve told a couple of times recently of a CFO that I was talking to and he said, if I believed every ROI calculator that I ever got from a salesperson, I’d have a $10 billion business. There’s abuse out there with using ROI.
The second thing I’d say is to know the ROI backward and forward. Oftentimes I will push on the salesperson and say like, tell me about that number like where did that come from? The good people can dive down a couple of clicks and explain it. The bad experience for me as a CFO is them saying things like, oh, I’m not quite sure, let me go talk to my team and get back to you on that. You erode a lot of trust with an answer.
Then the third thing I’ll say on ROI is if you can get your champion out there to put their money where their mouth is, it makes a big difference. Here’s an example: if you’re claiming that the tool that you’re selling is going to increase revenue by X percent, as a CFO I’m going to look to the sales leader and say, okay, if I buy this tool, are you going to call up your number by that amount? If they’re not willing to put their money where their mouth is, it makes me much less skeptical that we’re going to get that ROI.
Now moving over to tool consolidation. If you can credibly position your technology as an opportunity to consolidate tools, that’s a tangible cost saving. That’s tangible cost savings because yes, you’re spending more with a certain vendor, in theory, you’re getting economies of scale and you’re actually going to get higher discounts. There’s also that element of just maintaining a tool which is expensive. There are a lot of people costs that go into maintaining lots and lots of tools across an organisation. The more you consolidate, the more you’re able to rein that in and actually concentrate on a few vendors. I found that companies are more open than they’ve been in many years to using a single platform rather than segmenting it into a whole bunch of different little parts so that everybody can get exactly what they want along the way. There’s certainly this trend around just let’s consolidate down the overall spend.
SS: Absolutely, I couldn’t agree more, we are seeing that trend. Can you share some ways that Highspot can help teams through uncertain economic climates?
CL: If you just go back fundamentally to what Highspot does, we’re all about improving the productivity of reps. As we’re aware, the selling environment has changed. A couple of examples of why this is important. In my opinion, from what I’ve observed and what I hear from our frontline sellers, the selling environment has changed from peacetime to wartime. What I mean by that is this element where someone just raised a bunch of money and they’re going to go juice their sales organisation and they need to hire like crazy and you just have to hustle and keep up with the demand is a thing of the past. I think a lot of selling organisations have lost some skills that they either never had or used to have and they got weak, which is how do you actually sell when you’re selling in an uphill battle?
I think Highspot is a tool where you start designing these initiatives to kind of sharpen those skills where you’re going to go do it. I would say Highspot is the place where those sorts of initiatives start to happen. Good old selling value, good old handling CFO objections, good old being a better negotiator, Highspot is where you can actually put some of those plays into the process and monitor that it’s actually happening.
The second thing I’ll say is every rep matters. Highspot is the way that you can improve every rep’s performance. In the last couple of years, there’s been slack in the system. You just inherently know that I’m going to spend a bunch of money on reps, some are going to perform, and some aren’t. I’m going to work on it and try to get them as best as I can. Much of that slack, maybe all of that slack, has been removed from the system and it’s more critical than ever that every rep is performing. I think that the element of improving rep attainment is more important than ever. I know it’s something we talk about at the board level, and it’s incredibly important.
Finally, I’ll say ramp time has to be reduced and Highspot is a tool that can help shorten ramp time. It costs a lot of money to hire a rep, ramp a rep and get them actually producing revenue. Of course, the faster that you can rein this in, the faster you’re going to be able to start recouping your investment.
SS: Absolutely. This has been a fantastic conversation, Chris. Given the economic uncertainty, my last question for you is what predictions do you have for the future of enablement and the value that it can bring to businesses today and in the long term?
CL: From a prediction standpoint, I think the category has a tremendous amount of momentum. This was building for years, even before we started to hit this economic uncertainty and this economic environment is going to be a bump in the road. Things always recover. If done right, I think that the downturn is actually an opportunity for enablement professionals and enablement tool providers to prove that they can not only drive positive impact when it’s good times, when you’re growing and it’s like you’re just trying to keep up and it’s crazy times. I think now it’s when enablement proves that they’re resilient as a category, and they’re a key contributor to adapting to an economic downturn. Fundamentally, for companies, I firmly believe that companies either weakened or they strengthened during a downturn, and if you’re investing in enablement and you’re really making a machine of a go-to-market organisation, you’ll slingshot out of this downturn once the downturn starts to subside and you’re going to capture all that upside ahead.
SS: I couldn’t agree more. Chris, thank you so much for joining us today. I value the insights from a CFO especially today in the current economic climate. Thank you so much.
CL: Thanks for having me.
SS: Thank you for listening to this episode of the Win Win podcast. Be sure to tune in next time for more insights on how you can maximise enablement success with Highspot.