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One is responsible for money in, the other for allocating funds. While similar in some ways, yet distinctly different in others, the CRO-CFO relationship can be contentious. Nailing it can work wonders for an organization.
In separate conversations with Revenue Brew, SaaS platform Xactly’s CFO Jason Godley and CRO Sam Zayed dished on how they’ve built an effective relationship with each other, how to navigate difficult conversations between teams, and other advice for other CFOs and CROs.
This interview has been edited and condensed for clarity.
What is the biggest difference in how CROs and CFOs think?
Zayed: For us, predictability and meeting the plan that is in a profitable manner is job one. So there’s a little bit of the difference between creating, keeping customers and setting a plan and ensuring the company’s set up to meet that plan.
Godley: You need to have a holistic, systematic view of all of it—not just to assert [whether] the CRO…need[s] to understand those things, but in terms of what I think the CFO worries about versus what CRO worries about.
What are some common miscommunications that can happen between the CRO and the CFO?
Zayed: The CFO might think that the CRO is just like any other sales guy that wants to get a deal done at all costs, at any terms and discounts, and give away the farm just to kind of get a deal done and bring the register.
Godley: CRO probably has a shorter lens: “The world is quarter.” I’m looking both this quarter and in the future. So in the near term, if there’s an issue or disagreement around a certain decision right now, if we can frame it in the context of the long-term plan.
How do you bridge the gap between the CRO and the CFO?
Zayed: Things like accountability and alignment are important. Leaning into difficult conversations, that’s probably the best way.
Godley: Human nature is you both want to be right. So by introducing trade-offs and shades of gray into the conversation, it enables a more fruitful conversation around what is the right decision to make.
How is the relationship between the CRO and the CFO different from, say, the relationship between the CRO and the CMO?
Zayed: The operational execution is around taking and being fiscally responsible and diligent about how to spend that expense envelope to deliver the plan, both for the CMO and the CRO, whereas the CFO is then constantly doing sort of plan to actual analysis, variance analysis, [asking questions like]: How much of the budget have you spent? How much is committed versus uncommitted? What’s been the performance of the business so that they can maintain a pulse and understand, do we have to replan?
Godley: I would visualize it like a football field. In some ways, the CEO is like the quarterback, and you have positions. The CFO plays a bit of two roles. I can be both on the field running a play where I need to rely on the CRO and CMO, and sometimes I can be on the sidelines watching, again, because I’m doing both the finance in-the-weeds job, or I’m also on the sidelines because I have this broader perspective on the sideline.
What are some common contentious decisions or discussions between a CRO and a CFO about what they think might be what’s best for the company?
Zayed: The first is the annual plan, which is: What should the annual plan be? And there’s a bit of a pull and push or tug-of-war around what is the right level investment to make to get a return on that investment in the fiscal year that is reasonable and expected.
Godley: There could be decisions where we want to make an exception for a situation where a sales rep did a good job, it didn’t get closed in time, but we want to compensate them; or we want to do a discount on a really big deal that’s outside the range, or what we normally want with a discount or payment terms or certain financial things embedded in a customer contract that are outside the norm that can create tension in the moment.
What problems can arise between a CRO and a CFO during forecasting?
Zayed: There’s just a lack of collaboration between the go-to-market teams, the finance teams, and the revenue operations teams, and collaboration in terms of the teams using incomplete information to publish a forecast. Because there’s silo data, or there’s personalities, or there’s time zone differences, or there’s different systems, the sooner that you can align and collaborate truly to publish a forecast, I think the better off everyone will be.
Godley: Once we set the plan, how do you make sure you’re forecasting on a quarterly or semiquarterly basis, that you’re actually hitting the plan.
How do you use your own technology in your day-to-day workflow?
Zayed: There’s also a whole bunch of pipeline analytics within our forecasting app that does flow—change of pipeline over time, by product, by segment, by [geography], by type, and that pipeline analytics are out-of-the-box reports that provide you insight into what’s changed, and why.
Godley: Our tools enter the story with the bottom-up exercise, which is: How many sales reps do you need? What territories do they go after? How do we design their compensation plans to accomplish the goals that we want to achieve?