“Create Confidence in Your Team Through Accurate Forecasts & Predictable Results!”
Now more than ever revenue forecasts are under intense scrutiny. While no one could have predicted the impact of Q2 on their plan, the results have shined a spotlight on the lack of rigor and process many of our clients deploy. Creating accurate forecasts not only instills confidence in your leadership team and/or investors, but they also enable you to determine where to further invest in your commercial organization. The following best practices will help you guide you in create best-in-class forecasting methodologies.
- Make each person’s role in the delivery of forecast clear and connected to the mission of the commercial team and company.
- Describe the holistic machine that delivers the forecast to everyone. This way they know there is a bigger picture they are contributing to. Transparency is key!
- They exude confidence and conviction in the process the team uses and thus inspire individuals and teams to do their part.
- They have an “always-on” focus on the forecast. It is not left to the end of relevant forecast periods. It is always a focus and is always important. The energy they bring to forecasting is even and consistent, not spasmodic.
- They have well-defined quality control measures and tactics that are used by a variety of people who approach it from different angles and perspectives.
- They are action-oriented about areas of the forecast that are weak and/or unreliable. They are always solving issues that can harm forecast reliability.
- They foster a community of leaders who are passionate about the roles, processes, and focus that deliver a robust and reliable forecast.
- They delegate responsibilities clearly to a variety of individuals with definite timelines. Forecast scrutiny should come from a broad set of leaders.
- They arm the CEO with metrics and measures to properly evaluate the forecast quality. As a result, both leaders feel accountability.
- They alert their peers and upper stakeholders early and often when there is an upside and/or downside risks. They don’t surprise anyone!
- Trends in the forecast are identified and used to further evolve your account prioritization models (for more information on using data to prioritize your opportunities, see LINK TO AGILE SEG)
Make each person’s role in the delivery of forecast clear and connected to the mission of the commercial team and company.
The forecast accuracy machine is a living, breathing animal. It has processes, systems, operating procedures, line management cadence, common principles, etc. The revenue leader needs to understand the entire machine and be able to describe the benefit of a Swiss-engineered forecast system. They need to know why each component exists, how it improves forecast accuracy, and why each part was put in place. There are often stories of unforeseeable situations that came up in the past that have been solved for. When the revenue leaders have passion and specificity for the story of the forecasting machine, it’s probability of success is greatly enhanced!
Describe the holistic machine that delivers the forecast to everyone. This way they know there is a bigger picture they are contributing to. Transparency is key!
OK, so this is where you want to mainly delegate to your sales operations person. This is THEIR story….even though you are fluent in it and you have passion for it, the sales operations lead should be the one who is mainly describing the forecasting process, tools, systems, and roles. It should be written out on an intranet (WIKI) – with flow charts, descriptives, etc. Ideally, there is a video with white-boarding and diagrams for each new person to watch and/or for people who have had various difficulties following their part. Make the system transparent and roles clear! Each person needs a certification in their role!
They exude confidence and conviction in the process the team uses and thus inspire individuals and teams to do their part.
As we will say so often the passion and charisma of the revenue leader needs to be fueling this success component very strongly. Think about how YOU will use your inspirational superpower to get behind forecast accuracy – list three ways you can add passion and persuasion to this process in a positive, constructive way – remember happy, high status.
They have an “always-on” focus on the forecast. It is not left to the end of relevant forecast periods. It is always a focus and is always important. The energy they bring to forecasting is even and consistent, not spasmodic.
Paying attention to forecast is similar to personal fitness. When you are always focused on it, it works wonderfully well. As soon as you miss a few days, you get behind and blow it. If you spend a little portion of every day of your life on your forecast, you’ll win. When you start to slack and come back to it, you’ll find things you don’t like and tend to get irritated about them. If you don’t let your focus slip, it’s easier to stay even-tempered and optimistic about it. It also sets a great example that your team needs to spend the same consistent, even energy on the forecast.
They have well-defined quality control measures and tactics that are used by a variety of people who approach it from different angles and perspectives.
The best revenue leaders have defined quality control measures. Some examples:
- Deal review team
- Red-flag identification in opportunities
- CRM scores
- Accountability partners
- Sales process czars
They are action-oriented about areas of the forecast that are weak and/or unreliable. They are always solving issues that can harm forecast reliability.
Once your quality control measures are in place, the best revenue leaders can see risky revenue components clearly. Look at this high-risk lists often and take action immediately. Be certain 100% of the time, that someone is focusing on getting answers or creating risk mitigation strategies for each risk item. Keep cycle times low – expect answers quickly – ensure that every step has an owner and a time frame for completion!
They foster a community of leaders who are passionate about the roles, processes, and focus that deliver a robust and reliable forecast.
By explaining personal beliefs inaccurate forecast measures to their team and modeling focus behaviors, the best revenue leaders distribute the load evenly amongst their team. When YOU are the only one with a passion for the forecast, you get into micro-manager risk mode! You may even be perceived as a technocrat. When the load is balanced, the focus comes from everyone around you. You also want finance and HR leaders focused on your tenets of forecast accuracy. They will applaud you and be happy to help!
They delegate responsibilities clearly to a variety of individuals with definite timelines. Forecast scrutiny should come from a broad set of leaders.
They arm the CEO with metrics and measures to properly evaluate the forecast quality. As a result, both leaders feel accountability.
When the CEO gets spoon-fed the CRO’s forecast accuracy objectives and measurement criteria, they can also exude confidence in their focus and approach. When the CEO is talking to the board without you present, you want them as comfortable as you, otherwise, they start to point their finger AT you instead of having their arm around you!
They alert their peers and upper stakeholders early and often when there is an upside and/or downside risks. They don’t surprise anyone!
Once you’ve uncovered risk and have been unsuccessful at mitigating, you should alert your boss and/or the C-suite. Take your best shot at assessing mitigation probability before you do this. Be prepared to explain what’s already been done before you highlight risks. You don’t want to highlight a risk you can solve on your own in a few days. Highlight the risk AFTER you’ve taken reasonable measures to mitigate. Come armed with data. Come armed with decision maker names and action steps.
In conclusion, having a consistently accurate forecast is vital to the success of a growth-oriented company. Taking these approaches dramatically increases your probability of success and improves collaboration and culture.
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Contact us today to find out more about systems and processes to increase your sales team’s probability of success.
We can engineer a system that works together!
