For those working in Revenue Operations, high inflation or signs of a possible recession can be worrisome. But even during a challenging economic environment, there are steps one can take to try and ease the blow. What are the strategies that CROs and financial experts recommend to successfully navigate a recession or challenging economy? As part of this series, we had the pleasure of interviewing Scott Jennings.
Thank you so much for your time! Before we dive in, our readers would love to “get to know you” a bit better. Can you tell us your backstory and how you got started?
I started my professional career in the Finance department as an Analyst and was ultimately managing the software solutions we were using to support the team—which was way more interesting to me than spreadsheets. In 1998, I pivoted from a user to a software vendor (IBM) and have been in B2B sales ever since. After a few fantastic years at IBM I moved to a much smaller company and have been in startup-type organizations ever since. I prefer these smaller (<100 people) companies as there is more opportunity to work on different things and your contributions make a tangible impact.
It has been said that our mistakes can be our greatest teachers. Can you share a story about a mistake you made when you were first starting?
A Sales Rep and I had scheduled sales calls back-to-back with companies that were at different stages of the sales process. We got on the first call expecting to hear their decision and were mystified at the answers we were getting—hadn't we covered all of this? The call ended early, and badly. Only once we got onto the second call did we realize that the first call was an intro—we had never spoken to them before. The lesson here is to always make sure you know what you are going to say before every call and confirm that you know to whom you are speaking with. A good CRM can help.
None of us are able to achieve success without some help along the way. Is there a person who you are grateful for who helped you get to where you are?
My first manager knew when to be hands on or hands off and was also able to motivate each member of the team in a way that worked for them. I have tried to emulate this “individual approach” to management ever since.
Can you share a story about a time that was challenging for your business based on external factors like the economy?
In 2008 I was leading a go-to-market team of 10 when the economy went sideways after the collapse of Lehman Brothers. We were not prepared for this crash and struggled through several quarters of mediocre results before reducing the size of the team to conserve cash. With a smaller group we needed to be focused and efficient, so we revised our sales efforts and messaging. By targeting a handful of industries that were emerging from the crash before others, we were able to have a strong 2009—our best year of the decade.
Was there anything about the whole experience that surprised you? What was your expectation and what was the reality?
The two surprises for me were the resilience of the team and how quickly we were able to find vibrant industries and a message that resonated. Recession is a macro term, but many companies wanted to get back to growth and were determined to carry on regardless of the negative vibe in the media at the time.
Is there anything you would do differently? What would be your advice to business owners navigating an economic downturn for the first time?
Using 2008 as an example, I would move quicker to pivot in advance of a recession–“first in, first out” is a better play for small businesses than waiting too long to go conservative. For others experiencing a recession for the first time, there are plenty of recent examples to look back on; my key take away is that they are usually 6-18 months and that this too shall pass.
Do you believe that businesses can prepare in advance for such occasions? Is it about being appropriately proactive or reactive?
Expanding on my answer above, I believe you need to be proactive. It might be the most difficult decision a CRO/organization needs to make, but being prepared for a downturn a quarter early is better than a quarter late. Lean on world-class processes, make the appropriate changes to the team, and be ready to capitalize on opportunities that are always available coming out of a recession.
In your personal opinion, what is the telltale sign that a recession is looming?
A phrase that stuck with me is “irrational exuberance”—courtesy of Alan Greenspan in 1996. My opinion is that a recession is the natural after effect of such periods. If things seem too good to be true, the light at the end of the tunnel is probably a train, aka a recession. In recent experience, a few things that represent this exuberance is the price of cars and homes—that pace couldn’t continue forever. The good news is that a recession doesn’t happen overnight—one has time to prepare for the downturn.
What are your thoughts on the current state of our economy? Is there anything you’re anticipating or preparing for now?
For me the biggest concern is the uncertainty – for most people that lack of clarity causes inaction. Even bad news can be digested and allow to develop a plan moving forward. Right now, I am preparing for things to remain “as is” for the remainder of 2023 and adjust positively or negatively as needed.
Based on your success and experience, what are the five most important things a business should do to successfully navigate a challenging economy?
1. Focus on existing customers
During a down economy, it’s going to be harder and more expensive to find new customers, so focus on those customers you do have. If you’re in the position to add staff, add it to the customer-focused teams. And if you’re not adding staff, be sure that you're giving your current customers the proper attention. You need to keep them.
2. Prepare and provide your employees with tools for success
Provide training for your teams with new tactics and skills to help them breakthrough to their buyers. They are going to have to change their tactics because companies are less willing to part with their cash during a challenging economic time.
3. Focus on what you do well
This is not the time to go out and try to break into new markets, geographies or new industries. Stick with what you know and what you’re good at—and focus on execution. For example, at Centage, we find that we have done best going after organizations in the $20-50M range in healthcare and manufacturing, so this is where our focus will be.
4. Use the time to develop world-class processes
Review all your current metrics with a focus on the inputs—these are in your control. The macro environment might impact the results, but insist on consistent, high-quality activity from your team.
5. Be ready to capitalize on growth opportunities for the business
Continue recruiting, evaluating solutions to improve your process and operations, and identifying inorganic/acquisitions to add to growth. Tremendous gains can be made coming out of the tail end of a recession for those CROs who are looking to improve.
Can you share a few of the most common mistakes you've seen other businesses make during difficult times?
These are somewhat the inverse of the 5 above but it’s worth identifying them specifically:
- Not expecting world-class effort from your team. Demand (and celebrate) consistent, quality effort from the team.
- Not factoring in revised, realistic metrics into your assumptions or operating system. Sales cycles will lengthen, call connect rates will drop, and deal sizes could shrink—be aware of this and make sure your assumptions are sound.
- Letting a difficult macro environment impact culture. This is especially challenging in a remote environment, but staying positive is critical. Letting negativity persist can have disastrous effects on the team.
What would you say is the most critical role of a leader during hard times?
Staying positive. Have your team lean into the things that they can control such as effort and consistency.
Lastly, are there any silver linings or opportunities that can come out of a recession? We’d love to finish positive!
The best opportunities for success and growth are available at the end of a recession. Smart moves now will provide outsized benefits down the road.
How can our readers further follow your work online?
Readers can check out the Centage blog where I author several blogs a month.