Knowing When To Hire a CRO with Michael Hard

INTRODUCTION: Welcome to the Daily Bolster. Each day we welcome transformational executives to share their real world experiences and practical advice about scaling yourself, your team, and your business.

Matt Blumberg: Welcome to The Daily Bolster. I'm Matt Blumberg, co- founder and CEO of Bolster, and I'm here today with Mike Hard. Mike is a fractional chief revenue officer. In fact, I'm going to guess that Mike is the Fractional Chief Revenue Officer that bolster has placed more than any other Chief Revenue officer in jobs over the last few years. Mike founded Microsoft's financial services sales vertical years ago, and then spent 15 years as a growth stage startup CEO, and startup CRO, both full- time and fractional. So Mike, a wealth of experience. Thank you for being here.

Mike Hard: Yeah, thank you. I've had successes and more importantly, the mistakes, and so I could speak from the lessons learned. It's great to be here.

Matt Blumberg: The question that I thought the CEOs listening to this might be interested in is, how do you know as a CEO or founder that it's time to hire your first Chief Revenue Officer? And this is a great question. We frequently have founders come to us and saying, I need a CRO, and we talked to them for a few minutes and it turns out they actually need a sales rep or they need a sales manager. So the question is, how do you know it's time to hire a CRO?

Mike Hard: Yeah, and of course, these are things that you and I have talked about over breakfast at times. Well, first of all, I think there's a caveat, of course, because it depends on the skillset of the CEO. I was a revenue focused CEO, and if you're a revenue focused CEO, you know how to pattern match, you know the right questions to ask. And so let's assume that somebody is not a revenue focused CEO.

Matt Blumberg: Good assumption.

Mike Hard: And so I usually think at that stage you need a Chief Revenue Officer, a CRO, when you're ready to scale. Who isn't ready to scale? But I think that you're ready to scale when you have a predictable, repeatable sales motion. And not everybody would agree with that, but I think, because you got to be careful, you need to know that you're not only closing, your sales team is closing 10 deals a month, but you need to know generally why. You're generally predictable on deal cycle, percentage of deals closed, relationship of pipeline to the forecast, all of that noise so that you know you're ready to scale. Because if you scale too early, you're just compounding the mistakes. And so when you have that, then you want to... It's not just adding two or three AEs, which is a capacity problem, and that can be handled by your VP of sales. You really know that you want to scale, which is really adding resources in tandem across marketing and sales, and aligning them. And that's a CRO.

Matt Blumberg: And what are some of the pitfalls in hiring that first CRO?

Mike Hard: Yes, I have some thoughts on that. Yes. So I think there are common mistakes, and it's funny for me to say, because I'm a fractional CRO, and so I've seen times when people, I'd say, mistake number one, people bring me in too early. Now if you're a fractional CRO, then the risk isn't that great. That's why fractional CROs exist. You can come in before you can afford a full- time Chief Revenue Officer. But the biggest mistake in hiring somebody full- time, is bringing them too early when you're not ready to scale, and when you're trying to fix a sales problem with a CRO and you really need to change your VP of sales, or you really need to add a director of marketing. So mistake number one is bringing in a CRO too early. I'd say mistake number two, and not to denigrate all the big company people out there, of course I will, but is bringing somebody who has just shown success scaling a team at a big company. I scaled the team from 50, I managed 50 AEs at Salesforce let's say. I brought revenue from 50 million to 150 million. I can personally present really well. That's great, but that person doesn't really know what it's like to create pipeline. You need somebody who can not only manage pipeline, but then create it. Who can say, I see where it's missing. That's mistake number two.

Matt Blumberg: It's got to be stage appropriate person, for sure.

Mike Hard: I absolutely do. And it's easy to get wowed by somebody who can present really well. I think the third thing is, don't treat it like a black box. It's very easy to hire a Chief Revenue Officer and then just have two meetings with them every month, forecasting and then resources, maybe pipeline. But all you're doing is asking them, do you have enough pipeline coverage? You really need the right kind of CRO who'll want to be asked, what kind of questions you want to be asked? How do you do this? What should I be looking for? I'd say those are the top mistakes, at least that I've seen.

Matt Blumberg: Great advice. Mike Hardt, Chief Revenue Officer extraordinaire, full- time and fractional. Thank you so much for being here.

Mike Hard: Matt, it's a pleasure.