Navigating Volatility: Operational Playbooks for Turbulent Times

Navigating Volatility: Operational Playbooks for Turbulent Times

[00:00:00] Enzo: Thanks again for everybody joining today. I wanna welcome you to today's webinar. It's titled "Navigating Volatility: Operational Playbooks for Turbulent Times". I'm excited to be joined by JD Miller, author of "The CROs Guide to Winning and Private Equity". He brings his extensive experience helping revenue leaders navigate the complex world of investor backed business growth.

Today we'll explore everything from the daily operational tactics to strategic annual planning with a special focus on the metrics and frameworks that drive successful outcomes in today's volatile market. Whether you're currently working with investor partners or considering this path, this conversation will provide actionable insights to strengthen your revenue operations and reporting.

Jd, thank you for joining us to kick things off, thanks for having me. Could you tell us a little bit about your book, "The CRO's Guide to Winning in Private Equity"? I love it. 

[00:00:49] JD Miller: Absolutely. Thanks. It's good to see it there. So I have worked as a sales professional for the last 25 years, almost always at companies owned by private equity, and eventually I was CRO and CMO.

A couple of times we've been through five exits where they sell your company somewhere else. And now I work for a private equity firm coaching and advising CROs on that journey. And I'm a support and mentor in that, and I found that I was getting asked the same questions over and over again.

The same kinds of pieces of advice. So I ultimately put it together in a book, and that's what the CROs Guide is. 

[00:01:22] Enzo: I love your book. I've read a lot of business books and this one has so much actionable information in it, so I'll try not to be too much of a fan, and, talk about it all the time. But I love it. Anybody who's thinking about it, you need to buy this book.

And I liked that it really discusses a lot of things that you can do, as a business owner, as a sales leader that are actionable and something that you can install right now. And I know that there's a lot of things happening in the market. There's a lot of scary things with the economy and just so much uncertainty.

People are worried and asking, "How can I make my business grow?", "How can I keep it going?", what are the biggest challenges right now affecting businesses that are operating in this moment? 

[00:02:02] JD Miller: Yeah, I think you hit it right on the head when you talked about uncertainty. And it actually be began about a year ago.

I realized it was a curious environment. People would say, "I'm really worried about the economy" and yet the stock market is hitting record highs. And so yeah, it's always are we in a recession or are we not in a recession? And then as we sit here in April of 25 in the US we have this.

"Tariffs are not tariffs", and we see the stock markets fluctuating on that. Ultimately, the core fundamentals of a business, "How are you gonna grow and how are you gonna be profitable", are how you're gonna weather that storm. And so in private equity, we talk a lot about the Rule of 40 and we think and so that's, you add the percentage of growth that a company has year over year to the percentage of profitability it has.

And if those add up to 40 or more, you're a really strong, stable company. So as we look at that volatility in the market we may not be doing so much growth. We may be working on, managing our costs so that we maintain profitability, but always looking at those two factors are great ways for us to, to have healthy businesses.

[00:03:00] Enzo: So that's actually a metric that many SaaS companies are really interested in tracking. I hear that a lot with SaaS leaders, and I think it's interesting that you said that, it could be a different mix. It doesn't necessarily mean that you're gonna get high growth in a year where we've got a lot of uncertainty and that you might try to do other things like reduce your operational costs, your direct costs in order to get to that metric.

It's not like something that's set in stone where you must have, 10% growth year over year or 20% growth year over year. You've got some flexibility to work in the down times and and it doesn't feel like you're like stuck and this is the prescribed way of doing it.

And if you don't get it done this way, then you know you're toast. 

[00:03:37] JD Miller: I think you're right. When I began selling in the nineties, I worked for.com, that was, going through that.com boom. Their method to, to getting a rule of 40 is we were growing 70% a year, and we were spending the investor's cash.

We were, negative 30% profitable to get there. But it was a time when the economy was booming and, there was tons of talent around. And so it was like, great, let's seize as much of the market as we can. Today when the market's a little bit slower, people are more careful on their pennies and we might not, spend as much, so we'll trade that off with growth.

But ultimately, if you've got those balancing out, you're a stable business that is gonna keep people employed and keep creating value for your customers. 

[00:04:15] Enzo: Exactly. That leads me to think that somebody who is interested in becoming marketable to a private equity firm that they need to start looking at metrics and be really data driven.

And that needs to really be top down from leadership all the way down, CEO to sales leaders, to sales team. Are there any other metrics that CROs or CEOs need to be monitoring, especially now that things are on shaky ground? 

[00:04:41] JD Miller: Yeah, I think a few things.

First is having alignment on what is your growth target and what's your profitability target. But for the CRO, we're in charge of all the new revenue coming into the business, which is generally your growth target. I talk, and I talk about this in the book too, about a win creation waterfall and really understanding, not just, I'm trying to do $10 million of new business this year, but what are all the precursors to that?

Based on my win rate, how many opportunities did I have to get a million dollars done based on my cold calling success rate and show rate to my meetings, and how many appointments did I have to set to get that many opportunities and pipeline and aligning everyone in the organization around that.

And at the highest level, yes, you and your investor may be saying, we're headed for $10 million of growth this year. Then you need to be able to turn to every member of the Go To Market (GTM) team and other teams in the company too about, here's the metric of the things that you do that are a precursor to supporting the ultimate business goal.

[00:05:37] Enzo: Uh, What is it? A goal without a plan is a wish. Something like that. I feel like if you don't go through and do that due diligence, do the thinking of, okay, "I need to have X amount of calls and those lead to, this many amount of people showing up" and then this is gonna, keep going down the pipe until you realize, okay, I started with a hundred calls and I only ended with two or three people who signed.

You must realize, in that whole process that you've got to track the data throughout the entire process, but also understand, if I wanna make $10 million in revenue or whatever that number is, I need to understand everything that goes into it in order to make that happen. Instead of just saying, I wanna make $10 million, and that's the end of the conversation.

I think that's really just the beginning of the conversation. 

[00:06:16] JD Miller: Absolutely. And sometimes when it's annual planning time, I'm not the best friend of my CEO, because I push back on this a lot about, yeah, we can pick any number you want, but then we also have to talk about all the flowing numbers and I remember a particular CEOI was working with who said "we just need another $6 million and we need to just double down and find an extra here and try harder." And I was like, "Okay, aside from all of those platitudes, what does that really mean?" That means based on our conversion rates, whatever, that also means we're gonna have to hire 10 more salespeople, or whatever those things are.

And it's difficult to have those conversations, but when you do upfront early, then you've set up a plan that you're gonna wildly succeed. 

[00:06:56] Enzo: And then that goes back into something else that you mentioned in your book about hitting metrics and thinking about those plan of action. You're gonna hire people, so you've got recruitment costs and you've got the time that it takes to onboard a new salesperson.

You can't just turn a salesperson on and expect them to make exactly the amount of revenue that you want instantly; there's a bit of ramp up time. So you might be shooting for that Rule of 40 metric. But then, as you are ramping up your sales initiatives and maybe even bringing in new streams of revenue, the first bit of time, however long it takes to ramp people up is gonna be a down time.

So you can't be discouraged and say, okay, we didn't hit our metrics. This isn't working because you haven't even seen the plan all the way through. You've only done the first part of it. So I think it's also important to be realistic when you're starting those new sales initiatives to realize it's not just like flipping a switch.

[00:07:43] JD Miller: That's exactly right. And, ideally, and of course I'm a social scientist, so I love data on everything, but ideally we have a year or more of history that we can look to. And if not, we should start collecting it. So next year will be easier for us, but look historically at, how long does it take a new hire to go through your training program?

How long till they get their first deal how long till they get, up to speed and what's the regular production you can expect from them? And then also working with your HR business partner, what does turnover look like in the organization? Because I think a lot of times I've got 20 sellers I know how much each one can sell.

Let's just sign up for that number as if no one's ever gonna have a baby or just get upset and leave, and so the best predictor of future performance is past performance. And let's look at those trends and model all of that into our annual plans. 

[00:08:29] Enzo: So I'll just say that yes, we do offer HR services for anybody who wants to address those issues.

I won't do too deep of a pitch, but we can help with that. And thinking about going back to CEO's lofty goals, I feel like we're all dreamers and we're like, just pull it out of a hat and we're gonna, this is gonna work. And then somebody, at our side has to bring us down to earth.

And one other thing that you talk about in your book is TAM, which is Total Addressable Market. And I think sometimes there might be a super lofty goal, but if you think about it, there might not even be enough customers to satisfy the goal that you're after. So it's really also understanding the market, which, if you're a business who hasn't been around for a year, that's some of the things that you can do ahead of time is realize, I'm going into this even though I don't know what my win rates are and conversion and all that kind of stuff.

I at least know what's available in the market, right? I'm not gonna just go out and try to sell to nobody or, and just hear crickets. 

[00:09:18] JD Miller: Yeah, absolutely. I'm working with a company right now who is starting to do global expansion, and one of the first things that we did with them is to look at, in each of the rest of the countries, how much opportunity is available.

And it was amazing because there are some countries that there's, $150 million of opportunity, some that if you won every account, there'd only be $6 million of opportunity. And, the names of the countries are surprising, but the typical places you might want to go actually don't have a lot of market.

And some of the smaller places you never heard of have huge market. And so you have to think through that before you say, oh, my first hire is going to be in France, or the United Arab Emirates or Australia, or wherever you think you're gonna go. Look at the opportunity and all of that.

[00:10:02] Enzo: I love that. I think it's just a lot of homework before the work actually begins. And I think that is something that people forget about unless they're working with somebody like a business partner or a CRO that's been around for, long enough to know we need to do that first instead of just diving into everything else.

And I know in your book you talk about doing things like annual plans, quarterly, weekly, things like that, going through and building the entire framework. And I think saying something like, we're gonna make six or $10 million a year extra sounds great, but it could also be super frightening if you don't go through and build everything else, all the checkpoints in order to track against those things.

So let's talk a little bit about the annual plan and how to develop that and work up to that. So building and setting up a plan really helps people to avoid failure. And I wanna hear a little bit about the tracking that you put into place and, I know that you probably have a horror story, but is there ever a time where you've tried to put something in place they didn't listen and it just did not work out and you saw exactly what happens when you don't do a plan?

[00:11:00] JD Miller: Yeah, all the time. Or my own hubris. I think the best annual plans for me, I really like to get them boiled down onto a single sheet of paper, and you can think of it as a big 12 by 10 or something grid where the rows of this spreadsheet are, what are the different sources of revenue?

What is our new logo win gonna be? What's our upsell into the install base gonna be? What's our price increase to the install base gonna be? Are we coming out with new products? How much of that new product are we gonna sell? And then the columns are the months and I like to really set, whatever the annual goal is, a hundred million dollars.

It's, we think it's gonna be 20 million of new and 6 million of price increases and all the way down the path. And then again, if we have any seasonality data, we don't just take that number and divide by 12 and assign into every month, but we look and say, is somewhere a busy season for us, or a time when nothing gets done and set those things.

And I'm sitting in my home office right now, I usually have that one page plan. Right on the back wall behind the computer actually, where I can look at it in month by month, we can assess what did we think was gonna happen and then what's actually happening. And it informs a whole bunch of different things.

And so, you know, I was at a company that we planned $6 million of a new product to come out and, be sold. And we had anticipated that product was gonna be ready for sale in April and that we'd get the first deals done in July, and all of a sudden it's July, the product hasn't even come out.

Our collective we're behind our number and we're behind our number and behind our number. But instead of just going to the team and saying we've gotta work harder and we've gotta look for something else, we're actually able to diagnose not to point fingers at, oh, it's a slow product rollout, but to say, actually the sales team is really healthy and all the other things, they're hitting all the right pieces.

We're missing that piece of the plan on the new product because it's not even available. And, you know, you still are gonna have to figure out what are you gonna do about that missing revenue. But it helps you focus in on, oh, our customers aren't taking the price increases like they used to.

Our customers are churning more than we're used to. Maybe we need to go work on some of those things. And, keep you on track. 

[00:13:08] Enzo: Yeah, so I see that as like you're steering a ship, so you've got a ship that has a course that you're set out to follow. But if you don't follow your plan, you're, you can get way off course and not even realize it.

So by having those frequent check-ins and understanding, okay, I. I'm gonna look back and see how far off course am I and why, and let's make some small corrections or let's change course a little bit and, scrap some plans is important. But if you start at the beginning of the year, with a plan, and on December 31st, go back and look to see, did you meet the goal?

Then you're gonna be so far off course that you're not even gonna be near where you, you know, intended to be. And I think this is really important to be able to have your plan and also realize that, things change. Yeah, your software might not be ready on time, or there might be tariffs which influence the cost of your product and your customers might not want to pay the extra cost and you might have to look for another manufacturer.

Things like that. And there's so many things that can happen throughout a year. We just happen to be in a more wild one than usual. But it is really important to have a level ahead about it and realize, not everything's gonna be perfect all the time. And we've gotta chart the course, but also be okay with a little bit of change when it happens.

[00:14:17] JD Miller: Right, and I know you, you talk about this with your customers as well, is we can deal with any news, but let's get the news out early so we can figure out what it's, because when we're weighing that, growth and profitability, if you wait until November to decide, oh, I really am not getting the revenue, and we really have to cut a lot of costs, there's not much to do there except the really big, scary moves of, firing hundreds of people and closing offices or closing down plans.

If you can start in June or July and say, Hey, we're getting a little bit off course it may not be where we want for the rest of the year. We can slow down our spending. We can slow down our hiring and have a much smoother reaction without, messing up the culture. The, the, the employees who come to work every day.

[00:15:00] Enzo: For sure. You also mentioned having a check-in for the overall health of the customer relationship. So I think you used like a green, yellow, red, color signifier. Are they super happy with us? Are things shaky and do we expect them to churn? And I think having a system like that in place and just asking the clients

are you happy? Is anything we're doing wrong or could we be doing any better? Asking for those pulse uh, checks I think is really important. Have you done anything like that using different surveys or questionnaires to to get a sense of how people feel about the companies you work with?

[00:15:31] JD Miller: Yeah, there are a whole lot of ways you can do that. So one, having an account manager assigned to our accounts and getting a schedule that, quarterly or twice a year, you're getting a call from me just to see how are you using my product? Is it working for you? What do you like, what do you not, is one way we can do that.

The help desk is a great listening post for that as well. You've called in for whatever your issue is and having every help desk call and end with a very quick, on a scale of one to 10, how happy are you? Yeah. And then, I work in technology and software and so there's also a lot of cool stuff that we can do on our end to just see how are you using the product or is your usage, declining.

I was talking with a customer that said, Hey, we noticed, like on Fridays, all of a sudden our customer is, downloading every customer record and every, every piece of data out of the system. It's maybe a clue they're thinking of, getting off the solution and going somewhere else and being able to proactively call in and say what are you doing and how can I fix that?

Or Are you doing this 'cause it's a workaround that you're trying to do some big reporting that we can't support and, maybe that's something that I could fix for you. It's that kind of actual behavior is helpful to look at. 

[00:16:40] Enzo: And I think as more and more tools enable things like AI or allow you to use AI with them, you'll be able to surface that information, those insights much more quickly.

But I know that some of my clients that are in SaaS use different platforms that help them understand they're using the product or not. So did they get on onboarded? Did they finish the onboarding checklist? First of all, and are they in the software frequently?

Do you expect them to be. If this is something that you'd expect them to use in their day-to-day. If you're not seeing people use a product, then there's something going on, whether they don't understand how to use it or, they're not able to implement it on time. So maybe they need a little bit of implementation assistance.

Those sort of conversations, if they happen early on in the relationship, it can really save the relationship and they can, you can end up having somebody who's, really excited to, to tell other people about your product. But if you don't think about those things or track those things and just expect the customer to come to you and say, I don't really get it, that might not happen.

I think you have to do some of the investigative work in the background, on your own. 

[00:17:35] JD Miller: Yeah. And as a seller, I talk a lot about sales as being a noble profession. It's not something that I'm just doing to you and trying to trick you into getting rid of money. I'm actually trying to bring you solutions that are gonna make your business better.

And so as a seller, we really wanna start all of our opportunities by saying, I. What's broken about your business? What will our product solve for that? And what will that real return on investment be? And so before you buy the product, let's agree you're trying to grow sales 3% through this thing, or you're trying to cut costs by, automating something that you've been doing manually and that's why you bought this product to begin with.

And so that's a great benchmark for me to be checking back with you quarterly, annually, whatever it is to say, are we hitting those goals or are we not? Why? And then using that as a benchmark of how happy are you with how we're getting there. 

[00:18:25] Enzo: Got it. So I wanna talk a little bit about how the conversation around metrics might be different if you're talking to a CEO or other C-level person on the team versus somebody in, sales leadership position or a sales, somebody on the sales team.

I know that sometimes conversations are gonna be more tactical, with the C-level people and it might be more like, this is what we're doing and you're, and delivering the framework to the sales team. But what do those different conversations look like when you've already, decided on what the annual plan is and everything in between?

[00:18:57] JD Miller: Ultimately I'm trying to have the same theme up and down, but the orientation for everyone who's gonna be slightly different. At the C level or the board level, I hope we're having the big strategic conversations about how are we growing, we're penetrating new markets, or we're opening this country, or, all of that sort of stuff.

And I'm hopeful that I'm not in a board meeting that we're talking about which particular seller is not doing well. Because, let's go deal with that at the management level. But I also think once you've set that high level goal, it's really important to help your sellers and help everyone up and down the chain understand how they connect to it.

That engenders a lot of employee satisfaction too. It's one thing to tell someone on the support desk. You have to answer every call within 30 seconds. It's another thing to say, as a company, we're really trying to grow this year, and we're gonna do that by retaining our customers.

We're trying to save 5% more of our customers, and we know that one of the biggest things, of their satisfaction is speediness of, and so every time you pick up that phone call, within 30 seconds, you're making a happier customer, which is helping us make the goal and all the rest of it. And so when you have individuals understand the piece they play, like we are talking about kind of the same metrics, customer health, customer satisfaction, and all of that.

But we're personalizing it to the context that everyone has. 

[00:20:12] Enzo: Yeah, I think if you just tell somebody pick up the phone within 30 seconds, it's more like a demand and they might feel like, okay, why? What does this really matter? Or leadership doesn't talk to me. 

I'm never part of the conversation. I feel like they're siloed, leadership versus, the rest of the team. And I do really feel like the culture needs to be that we are a team. We all influence the result of our success or opposite.

[00:20:33] Enzo: So let's talk about how we can get there. But if it's really adversarial and, you need to pick up the phone within 30 seconds and nobody really understands why, then you end up having a pretty bad company culture. And then you deal with all other kinds of problems like attrition with your team, you don't have happy people doing great work.

Now you've got people who are grumpy, picking up the phone, or they're leaving to go somewhere else. And it's important to avoid that by being as open as you can. 

[00:20:57] JD Miller: And I have a PhD in communication and so the social scientist in me also is reminding us that, companies are made up of individuals with individual goals and, dreams and desires.

A lot of times if you go on a site like Glassdoor or any kind of social media, you hear, my company is stupid. My company did this bad thing. I can't believe they at the end of the day, they, the, they is usually me. Yeah. And there's a reason behind it. In practical terms, I've been at organizations where we've looked at product lines and said, we're gonna discontinue this product line because customers who buy it churn two years later, they don't hold onto it.

It's only $6,000 to get in the first place, and if you don't use it for at least five years it's worthless to us. But if you don't explain that really clearly, sellers sit from their own context and say, I can't believe the got rid of that product. 50% of my number was that product that was the easiest thing for me to sell, and they're just being mean to me and they're just making my job harder.

And it's, how do you align all the constituencies and get us all pointed at the same goals? 

[00:22:00] Enzo: I love that. Being able to understand all the context is super important. In your book you have so many different templates that people can download.

They'll just take a screenshot of a QR code, it'll take 'em to Google Sheets, which is super helpful. And I think that's really nice because not everybody has a budget, for big fancy analytics tool. Using something as simple as Google Sheets or Excel, I think can be a really great way to start tracking metrics.

Is that usually what you are recommending to people who are either just getting started or maybe starting to invest more in evaluating their metrics?

[00:22:29] JD Miller: Yeah, early on when you can get data anywhere that you can get it. And certainly when I'm working with smaller businesses that have never collected anything, some Excel and some sheets are a great way to start.

As you grow bigger, of course, as a sales leader, I want you to have a CRM tool. You also want a good, your finance leaders want a good ERP system that you can track the dollars in. If you have nothing Excel's a great place to start and your needs will evolve and you'll continue to get more sophisticated in the tools that you need to bring to bear.

[00:22:56] Enzo: I will shill for HubSpot because I absolutely love them. I use them for our marketing, for sales for our service hubs. We actually use it for our ticketing and everything. And I have my own AI thing that I added on. I made it myself using Make.com, and it evaluates customer sentiment whether or not they're happy or if they're upset with us.

I'm looking for key terms or looking for sentiment saying, your cost is too high, or I don't feel like I'm getting the service that I want. Something that's gonna tell me, Hey, maybe we should have a conversation and not just leave it to one person being involved. Let's see what's actually going on behind the scenes.

And there's lots of other tools that do that. But even just installing something in like Gmail would be great. But I make it your own. Find the tool that works for you. If it's Excel, awesome. If it's sheets, whatever. But I absolutely love HubSpot. They're my favorite. 

[00:23:41] JD Miller: Yeah. And it's also get everyone aligned on what the source of truth is so that we can agree, what are we gonna look to, to make our decisions.

I just wrote something the other day about this communication term about burging and corfing, which is very exciting processes for your sales teams. But so buring is basking in reflecting glory. And all the communication researchers say when your local sports team wins, you walk around and say, we won.

And when they didn't win the game, you walk around, you say they lost. And that's cutting yourself off from reflective failure, the corfing part of that. These, this win-loss data, it's very human for us as sellers to say, oh, every deal that I lost was 'cause the price was too high and the product sucked.

Every deal that we won is just 'cause I'm really great. And how do we find a tool like yours, whether it's your HubSpot maker thing or an independent third party interviewer or somebody that we agree, this is where we're gonna trust this data source to tell us why we won, why we lost, and then use that to adopt the way we go to market.

[00:24:37] Enzo: Regardless of the tool that people are using it sounds like you are looking at customer data and trying to spot important trends to see, are things working in the way that we want, are clients happy? Are we going to meet our targets? What other patterns should sales leaders or operational leaders look at in order to understand what's coming, what's coming ahead?

[00:24:56] JD Miller: Yeah. So as a seller someone taught me this little formula a long time ago called Sales Velocity, and it's this kind of math equation that says we look at all of the opportunities, the size of the number of opportunities that come into our pipeline times the size of those opportunities.

Are they $10,000 or a hundred thousand dollars times our win rate? And we divide it by the number of days it takes us to close. And when you do that math, it's basically calculating how many dollars am I bringing in on a daily basis or an hourly basis, or, whatever your frame of reference is.

And I really like to use that metric as a pulse check on my business really frequently. Because it's easy to sit in a boardroom and see the trend that sales is going down. But then when you have to diagnose, why do I not have enough opportunities? Do I have the right number? But they're not as big as I used to think they were.

Is that all right, but I'm not winning as much or am I winning the same amount, but my sales cycles are getting a little bit longer? It may be all four of those. But looking at each of those elements can then tell you, what do I need to do about it? Do I need sales training so I win more?

Do I need to spend dollars in marketing so I get more opportunity? Or do I need to do something process-wise to just shorten my cycles? 

[00:26:08] Enzo: I love that. I just gotta say, you're a huge nerd and I love it. So I love, like all the sales nerdery. It's great. 

[00:26:15] JD Miller: I think that's the difference between an individual contributor and a sales leader and, we do ourselves a disservice a lot of times because we take the number one seller and we promote them to sales manager. And actually the skills of a sales manager and then a CRO are completely different because as a individual contributor, seller, you're building relationships.

You're doing whatever it takes to win the deal anytime, because you've gotta get that number. As a sales leader, I have to think about all the strategy and where are we making investments, and I'm almost never in front of a customer trying to sell the product. And which side of your head and your brain are you using often distinguishes you know, which is the right role for you.

You don't have to become the sales leader. You can have a great long career being the best seller. And you could be a pretty bad seller and be an amazing sales leader too. 

[00:27:02] Enzo: What is that? The Peter Principle? People will rise to the, what is it? The level of their next incompetence.

Their next incompetence. Yeah. So it's not saying that they're bad at being a sales leader, that's just not the role. That's not the role for them. They're great, could be great sales person and that's it. And that doesn't mean that their journey has to end. Maybe you have other ways that you can work with them in that type of role, but it's the right person in the right seat on the bus, not putting people in the wrong seat.

So it's understanding, what do you actually need from a sales leader versus somebody who's gonna be, wheeling and dealing and talking with customers. And those could be very different skillsets. Doesn't mean that they're bad or wrong for having the skillset, it's just how they're built.

[00:27:38] JD Miller: And it may be that you're a great individual contributor and you're rising into that next role. Sure. Which you don't have the skill for yet, but let's at least be really explicit about that so that we can train and coach and mentor to help you see it. Yeah, because if we don't. As humans, we do the thing that got us rewarded in the past.

What does a great seller often do as a frontline manager? Oh, now I've got eight people on my team. I'm gonna take all of their deals and I'm gonna close them all myself, because that's what used to get them rewarded. How do we explicitly say, now your job is to take what's in your head and teach other people to do it, and monitor the metrics and enforce the process and have the playbooks and, it's a constantly learning journey.

[00:28:17] Enzo: Yeah. So it definitely is possible for someone to go from a sales position to a leadership role. But you did talk about educating them, getting them the right information or just setting them up for success rather than allowing them to go and take all those leads and close 'em themselves.

So do you ever help people understand what sort of education people need or what sort of training they can put under their belt so that they're ready for the next step? 

[00:28:40] JD Miller: A lot of times it's financial literacy. Now I grew up as a communication major. I did my whole undergraduate with no math at all.

I had a communication philosophy degree, and we talked about the philosophy of numbers and what color is 13 and it's blue and it's fuzzy. Boy, being a great public speaker made me a great seller, but suddenly having to shift on the management side, I had to get all of that financial, how do you read a P and L?

How do you understand the Balance Sheet? Accounting stuff that organizations like you are great at helping with. That's often a key skill that I think is what bridges the gap to people getting into the C-suite where yes, we care about the products we sell. Yes, we care about our clients, but actually you're in the C-suite not because of some deep expertise of that product.

It's because you understand the machinations of the financial structure, the business and the bets you're placing and the impact that's gonna have on creating more money at the end of the day. 

[00:29:35] Enzo: I love it. Yes. Financial literacy can be helpful in so many things. I love it. What about things like competitor research?

Do you ever help coach people or work with your teams to understand, what are our competitors doing? And I feel every day there's new competitors even popping up for us. So understanding there's a Total Addressable Market, now we have maybe a smaller chunk of it. How do you go about doing that competitive research and understanding where you fit and where your competitors fit in the market?

[00:29:59] JD Miller: Yeah, I think this is a place where there's a lot of specialization. Certainly there are marketing people who've made their career out of that. There are product management folks who have done that. The rise of the internet has given us a whole lot more data to find out. When I first began selling in the late nineties, how did you learn about the competitor?

You had to take a sales call from them , and it was probably pretty unethical. They get a secret shopper to go, collect their information at a trade show or something like that. Today we tell you everything about our companies online. If you're willing to look at it, it's all on our website.

If you're a publicly traded company, all your financials are there. So I think the challenge today is how do you sift through all of that data? AI tools are helpful for that. There are research agencies, marketing agencies that can do that. And it's just, staying engaged.

All the time. because the market, as you said it shifts really quickly every day and seeing it on LinkedIn might be your first clue. 

[00:30:53] Enzo: So if you are interested in getting investors through private equity or elsewhere, it seems like you might need to have some of that stuff already nailed down as well, even though it might change.

Being able to understand where you fit in the market is probably something that you would have to have a narrative around. 

[00:31:08] JD Miller: I think narrative is a great word, and as you think about looking for your investor the question is not just, will you give me $10 million for my business?

Is will you give me $10 million to do this particular thing? And different investors have different skill. So I sometimes describe private equity, like house flipping. You buy a property that's got good bones, if you replace the kitchen or you install a pool in the backyard, it's gonna be even more valuable a couple years from now.

Some private equity firms are great at kitchens, some are great at pools. So I think when you're looking for an investor, it's understanding what is the part of my business that I think I can evolve to the next level, and what is your investment gonna do for that? And that'll help you narrow down. I work for a private equity firm that does a lot of growth.

And so if you're a business that says, I'm gonna take this money 'cause we're building new sales teams and we're, we have a good sales process, but now we have to run it at scale across 16 countries great, we love to do that all day long. We're gonna send JD out to help you do that. If you're a company that says, I need to eke out a little bit on my manufacturing supply chain, maybe there's someone else who's good for you on that, right?

So it all does come back to data, knowing your business really well, not trying to pretend that everything's perfect, but being clear on the narrative of, what is the story of this business today? What's the story over the next three, five years? And then how can investment make a difference for it?

[00:32:31] Enzo: So being able to understand those metrics and say something like we want $10 million in funding our sales velocity is this, having all that stuff in place and knowing if we get this money, this is what we can expect is gonna happen. Even going back to things like, we're gonna hire a sales team and it takes us long to get them onboarded and you will be able to see a return, at such and such date.

Those, all those metrics are really important for helping people understand, how viable is your investment? Is this something that they're gonna see a return on, or is it something that they're just throwing into the void and they're never gonna see again? 

[00:33:03] JD Miller: Exactly right. And we talk a lot about the J curve, which is this really scary thing about you're this profitable, and then all of a sudden the investment is gonna come in and everything's gonna drop off because it's gonna take you a while to digest the new processes and frameworks and you hope that it's then gonna have this huge hockey stick up.

But, being able to know what that J curve looks like and have everyone hold hands and agree, this is what we're expecting, and week by week, month by month, is our bet paying off? And is it doing what we think it was gonna do? Is really the critical fraught time for leaders. 

[00:33:37] Enzo: Oh my gosh, I've been adding a new service line on our team.

We had an HR about a year ago, and that was frightening for me 'cause I was like, okay, we've gotta, we are investing in people ahead of time and processes and all this stuff that I know will have a return. But this is gonna take this amount of time to build everything up to make it. To make it something that can be profitable.

But if I hadn't planned in advance and known, what are the obstacles that might come our way, what are some of the things that we need to be paying attention to, then we could very easily have let that completely drain us, which I know can happen. 

[00:34:05] JD Miller: Sure. And being really close to your market to know what is the minimally viable product, right?

It's one thing for you to say, we do accounting services and now we're gonna do HR services. What does that mean to your customer? And does it mean, and I don't know all the details of hr, does it mean I just have to do payroll, or is payroll not good enough unless I also can do benefits and insurance and the rest of it?

Because the worst is you spend time and money building half the solution that nobody wants. And so that dialogue with your customers constantly back and forth testing is, really critical. 

[00:34:37] Enzo: Oh yeah, we had beta testers for sure. We gave them really steep discounts in order to get their feedback and understand what's working and what's not working.

I think you really need to have good relationships with your clients in order for that to work as well. Because if you ask somebody how are things going? Do you like it? And you don't know them that well, they're not gonna tell you the truth. So being able to ask those questions and be able to hear an answer that you don't necessarily wanna hear, but know that answer is gonna help you and everybody in the future is so important to just have to have thicker skin and know that it's not personal 

[00:35:09] JD Miller: And really probing for that specificity, 

[00:35:11] Enzo: Oh yeah. 

[00:35:11] JD Miller: The worst thing when we finish our webinar and I ask you how do you think it went is for you to say, great, because I don't wanna tell you, you were too wordy, or whatever that was. And so really probing for what is the thing I could have done better?

What are the three things that would've made you happier with, whatever it is. Yeah. And yeah, being vulnerable about that is, is sometimes hard. 

[00:35:32] Enzo: Yeah, for sure. I have a question that's gonna go back a few questions. You had mentioned going to private equity firms and knowing, you're good at this and you're good at that, you're good at growth, you're good at manufacturing.

So understanding the strength that the private equity firm or whoever's gonna be investing, knowing they're aligned with what you're after. So not going and working with somebody who might not be able to even help you on your path. So I can tell you, I get emails every day from private equity, from people trying to buy the business and or, give us money to help grow the business.

And it's so hard to even know. What do you look for? How do you find somebody that can help you invest? Is it gonna be something that is a good relationship? I think that there's some misinformation about private equity just being, sharks or, whatever. Just think of a bad word and apply it to private equity.

But I, I know that's not always true. I've seen it be really positive for lots of businesses. So if somebody is currently in a position where they know they need to get some outside capital in order to make their business really grow and move a lot faster, how would they even go about getting started?

[00:36:33] JD Miller: So I do think it is like a relationship. It's dating or getting married or something like that. And so ideally we do want a date for a long time before we get married to each other. I worked with someone who said they were a big boater and there's this clipper around the world boat race that they take 12 people and they put 'em in a clipper boat and the job is navigated around the world. And the speaker was talking about all the lessons they learned. And the first is that whoever is in your crew, you're stuck with them until many weeks from now. And people are gonna start to stink and even the people that you loved in the beginning, you're gonna get frustrated with each other at the end.

And so I think it's great if you can start building a relationship with a potential investor. Before you have to jump in and get married right away so that you know what you're getting into. And I think the best companies I've worked with, it's been part of my marketing team to just have a mailing list of who are all of those people that are emailing you and before you're asking for the money, can you be sending them monthly, quarterly updates on here's what's going on in our business, let's have a coffee about what's going on with you so that you really get to learn the nuances of, how do you think, are you a personality that I like?

Can we work really well together? And then they'll also start to reveal, " Our investment philosophy is", some private equity firms. We really double down on that founder and we really like them. Some private equity firms, the very first day we say the founder, "Thanks very much. Here's a big check for you and we're replacing you with someone who knows how to run the business."

Yeah, both can work, but you need to know what works for you and make sure your goals are aligned. 

[00:38:07] Enzo: Yeah, I was actually listening to another podcast about private equity and accounting. And I think, there's a lot of people who are trying to exit their businesses right now that are maybe just further along and might not have built processes out or might not have updated technology.

And they're at a place in their career where they realize, " If I do this, it's gonna take a whole lot of effort and I'm not really gonna get to see the result. I'm just gonna be done with the company in two or three years." So having somebody that you can align with that knows, we're gonna start installing new practices, we're gonna make things work a lot more smoothly. You don't have to think about it because we've already done it for you. And obviously that's not your strong suit. I think that can be really beneficial. But realizing, exactly where you are in business, what your goals are, what the PE firm is really good at.

I think that's important. So I think you're right. Dating. Yeah. I should be like dating before marriage. Spend as much time understanding, are they gonna leave underwear on the ground? Is it gonna be something I can't handle? Is it gonna be somebody that's like a real partner for me? 

[00:38:59] JD Miller: Right. Well, and kind of going back to what we talked about, the sellers becoming the frontline managers. As you're going through that progression, companies go through the same things. What a CEO needs to do for a million dollar business versus a $20 million business is very different than the journey from $20 million to $50 million to $100 million and beyond.

Some CEOs want to stretch and grow and learn the new skills and say, "This used to be my winning formula when I knew every customer, and now I'm, I'm so excited to be the CEO of a giant company where I couldn't possibly do that." Some don't and it's okay to say "I really thrived in that small startup phase, and I want to be in every deal."

And so it's time for me to hand off this company to someone else because I wanna go back to doing the things that I used to do really well. So it's, it's always a very personal decision. 

[00:39:50] Enzo: And also what do you like, what do you wanna let go? What do you want your life to look like?

I think so many people in my industry are so used to working, 60, 70 hours a week, in the busy season or more. And then even in the off season, it's still, you're married to your work. So if you end up working with a really skilled partner a private equity partner and you're suddenly freed up to do things that you like and you haven't actually spent the time figuring out what you like. You might realize, "Oh, I'm in a weird place now", I think it's important to, maybe do some of that self-evaluation ahead of time and understand, what does a perfect life look like?

And if it is working 60 hours a week and maybe don't go for someone who's gonna free up all your time. 

[00:40:26] JD Miller: That's right. That's right. 

[00:40:29] Enzo: If somebody does end up getting connected with a PE firm and they do get investment, do they have to provide any sort of reporting to the PE firm on a predictable basis?

And is that different than what you would give to a leadership team or to a sales team? 

[00:40:43] JD Miller: I think it might be more sophisticated. Certainly the PE firm is the ultimate owner and fiduciary of the business. And you may not be a public company, but you still want a monthly financial close and a quarterly look and forecasting out and you've got obligations to banks and loans and all of this that you have to be reporting all of that stuff.

I think businesses that aren't owned by PE, the best run ones are doing that for their own investor which is the CEO may not always be that case. My father was a small business owner and sometimes I think he probably just was like balancing his checkbook and didn't look that far in advance. I do think PE for sure is they're generally finance folks, so they're generally gonna have a cadence of reporting that they're looking for. 

[00:41:28] Enzo: Exactly. Yeah. And there's lots of tools on the market. We only use Xero as our accounting platform, and a lot of people use QuickBooks or QuickBooks online.

It's really super simple to get everything in there, but also understanding how everything relates to each other. I have some people who aren't quite doing things like checkbook accounting, where they're doing the math in their head, but they're not quite able to match, when revenue comes in and how those expenses will align with them.

People who are maybe just trying to get into following GAAP and get deferred revenue and accrued expenses and helping people realize, "Hey, when you make a bunch of money in January because you signed a bunch of contracts, that doesn't mean that January's, the best month ever."

If you're doing accrual basis, you've gotta look at it over time and understand the labor that goes into honoring those contracts over time. We've helped people to go from a less sophisticated way of handling their financials to more sophisticated. From the manager's perspective, I don't wanna see any valleys and troughs.

I wanna understand month over month how things are actually looking. Therefore, we have to match income and expenses to each other. And I think that takes, a bit of business maturity. I think even some SaaS companies that are funded struggle with that because they might have somebody in-house doing it, not really understanding, how that works.

But if you have, like you said before, given your team some education around financials and everything, I think that people will be able to catch onto that stuff soon and it'll get cleaned up rather quickly once people see what's going on. 

[00:42:51] JD Miller: And I do think it's working with a professional like you to understand what does the business need.

I've worked with sales leaders or companies that cashflow was a really big issue. And so they trained their sales team like sign people up for multi-year deals and collect all the money upfront because we really need that. And then later, when cashflow wasn't as big a deal, the guidance changes to, "You know what, we really don't need the cash sign people up for multi-year deals, but have big price increases year over year because it's like the long-term growth that we care about."

Where, the sellers sometimes are like, "I was giving all these discounts if you could pay up front. Now you're telling me, oh, I don't want the discount. It's more value me over time." The CFO or someone, a financial advisor like you in the mix can help guide what's needed today.

And how does that change over time is as your business changes. 

[00:43:43] Enzo: Yeah, and especially now with everything in flux. Maybe you did sign a multi-year deal three years ago and the contract is gonna be resigned this year and maybe based on your pulse of the company, like things aren't going as smoothly as you thought.

You might have more churn happening, or fewer people are interested in signing on to a three year deal. They want to do things differently. I think it's really having a sense of what do your customers actually need in this moment? What is the market really asking for and being able to respond to it rather than wondering why did I lose all my customers when I tried to do a huge price increase going into the fourth year or not having, not talking to your customers and just sorting out like what do they actually want?

[00:44:19] JD Miller: I think the best CFOs that I've worked with have gotten very curious about what's the state of our customer's business and what does their CFO need. And sometimes we can structure really creative deals of help them accomplish their goals that, will also be good for us in the end, but it's, it all starts with the dialogue and understanding the terms we're talking about.

[00:44:40] Enzo: Yeah, for sure. I'm expecting that some people might be in a cash crunch right now because things are a bit volatile. We talked about having, your annual plan, your quarterly check-ins to see how things have gone throughout the quarter and monthly as well. Then weekly one-on-ones with your sales team, understanding like what's in the pipeline, what do you actually expect to close, what's our sales velocity look like?

Is there anything else that people tend to look at or are important for leaders to look at on a weekly basis? We do cashflow forecasting for our clients. Do you do weekly sales forecasting to understand volatility in the market right now? 

[00:45:12] JD Miller: I do. So I, I have a RevOps team that produces, I call it the Weekly Flash Report.

It goes to my sales leaders, my executive team, and my board. And it has really three numbers. It's, here's my absolute committed number. I know that I know we're gonna do a million dollars this quarter. My absolute best case is two and a half million. If everything worked perfectly and we ran the table, it would be two and a half million.

And then what's my forecast? Which is gonna be somewhere between there. And I really like having that kind of three number conversation because then it lets us have the strategic discussions of, "Okay, if everything goes terribly, there's only a million dollars coming in. Maybe it's a conservative time and we're gonna run the business only counting on that million."

We know that we should never run the business counting on two and a half million. And then, it's that kind of where between those two are we comfortable and what level of risk are we willing to take? 

[00:46:08] Enzo: So, then what happens if you hit two and a half or 3 million? 

[00:46:10] JD Miller: We celebrate and we're excited. But actually I always describe forecasting as like Goldilocks in the Three Bears, that we don't wanna be too big or too small. We wanna be just right. Because if I kept telling you a million and then I did three, like that's great, but that was $2 million that you could have let me spend, on new product or hiring more people a lot earlier.

But the reverse is worse. I really don't wanna promise you 3 million and show up at the end with only one.

[00:46:36] Enzo: Yeah, no, I think that is important. If you had an extra $2 million to spend, you could have been adding fuel to the fire, like you said, also getting additional people on the team, understanding those ramp up times as well. Just not sitting on a boatload of cash waiting for things to happen. Like of course we're gonna be popping bottles and whatever people do to celebrate, but, there's a lot of missed opportunity if you're not realistic with what the forecast actually is. So it is so hard to get things just right, but I think understanding the business and the history and what's coming ahead, I think that can really help people dial those things in. When you get it wrong, you just adjust in the future and you try to get it closer and closer over time.

Will it touch? Probably not. 

[00:47:12] JD Miller: And this is where I think a lot about the humanity of people and the way that people get rewarded. This forecast accuracy. Is the conversation that is the hardest for me to have with individual sellers because, I've often worked with sellers who you know one, they don't wanna give you bad news, and so they promise you 3 million because they don't wanna tell.

And then, three days before the end of the quarter, they're like, ah, this huge disappointment. I'm, I'm so bummed. But the reverse is true too of, sellers who, really want a sandbag and be the hero and say, promising a million, I'm promising a million. And now it's the end of the quarter and you're a little nervous.

Oh, look, surprise, aren't I a great seller? I came in with two. It's all people and motivations that have us do both of those behaviors. As a leader, I'm really trying to cut through that noise and just have a discussion about, what's the right thing for the business.

Not too small, not too big, not too cold, not too hot. And, often I'll put in reward processes for that. Where, in addition to like sales club or whatever, we have a quarterly commitment club that, who were the people that were closest to the pin on their estimate, because it's a really important skill to run a business by.

[00:48:20] Enzo: Yeah. And I think being able to see those indicators like we talked about before people booking calls, people showing up to calls, and you actually have to go in and track those things inside of some tool, whether it's Google Sheets, Excel, or HubSpot or whatever you use. So I think it's important to also motivate your team to track those activities so that you can really dial in and understand, okay, you aren't tracking as many as you normally do, what's going on?

And trying to fix those issues ahead of time. Or if you see that somebody's sandbagging you've taken a lot of calls, those calls are showing up and you know why, you know what's actually happening are you gonna close something the the 11th hour? Or are you gonna pull something out of a hat?

Having those conversations with your sales team as those activities are happening. But tracking it is such an important thing to do and so hard to get people to do as well. 

Do you have a special formula for getting people to actually do those things other than like stern talking tos?

[00:49:11] JD Miller: It is a stern talking to, sometimes we'll make a game out of it and we're gonna have some kind of a, reward that sort of thing. I like the person process, but then I also really like AI, which comes back to our data discussion that if I have a year's worth of history, I can use a lot of AI tools.

That'll really tell me. I like to teach the lesson and have people go through the practice on their own. Increasingly, I'm running my business by what the AI tools are producing for me. 

[00:49:38] Enzo: Yeah, me too. 

Since your book was published, there's been some changes obviously in the economy.

Do you have any updated advice for somebody who might have your book now and now we're in a different, state of the economy. 

[00:49:51] JD Miller: The book is really about predictable, repeatable sales process, and I think that's good in every economy. Predictability. As a seller, when I look back over the kinds of products that I've sold, every product kind of boils down to one of three messages.

Either, the best is there's a law that says you have to do this thing, and my product helps you do it, right? You're gonna comply with Sarbanes Oxley when you have this financial package, it's gonna keep you out of jail. Boy, that's a really great thing to sell. If you're not selling that, there's not a lot of those products out there.

Every sales pitch is either about, I'm gonna help you sell more, or I'm gonna help you cut costs. And I think what the social science says is people will lean way more onto avoiding loss than they will on capturing gain. And so sales pitches that are about saving money. Are much easier to sell than sales pitch is about you're gonna make more and double the size of your business. And I think especially in this economy, when a lot of CFOs and boards and, the market is back to where we were a year ago, is it good, is it bad? What's it gonna be like tomorrow? They're getting more and more risk averse.

The best sellers are able to, dial in messages about how buying my product is gonna help you avoid some loss. Is probably what's in season right now. 

[00:51:09] Enzo: So I should be telling people that, you get an entire accounting team with Accounting Prose at a third of the cost of hiring a person.

That should be our sales pitch right there on the nose. Absolutely. 

[00:51:19] JD Miller: Yes. Think about all of the additional accountants you don't need to hire. Not, yes. Oh, think about you're gonna make twice as much money on your bank investment or whatever they are. 

[00:51:30] Enzo: JD this has been a really wonderful conversation.

It's been really nice to get to know you and to learn more about your book. You have so many wonderful insights to share and I'm really glad that you shared them with our audience. Do you have a place that people can find you online? I know that you can get your book on Amazon, but how do we get in touch with you if you want to?

Yeah. 

[00:51:47] JD Miller: You'll find me on my personal website, which is www.JDMillerPHD.com that's also my handle on all of the socials, JD Miller PhD. And they'll lead you to the book and they'll lead you to me as well. 

[00:52:00] Enzo: Thank you. I hope that people look for you online and are able to reach out because you're just a wealth of information.

And thanks everybody for joining today. I hope to see everybody again soon and the recording will be sent out to you, so you'll get that and have a good day. See ya. 

[00:52:14] JD Miller: Thanks for having me.