In an era where unpredictability is the only constant, business leaders must move beyond vague optimism and lean into actionable planning. Recently, Enzo had the opportunity to dive into this topic with JD Miller, author of "The CRO's Guide to Winning in Private Equity." With his 25 years of experience in sales leadership roles at private equity-backed companies, JD shares invaluable insights on how businesses can not only survive but thrive during turbulent times.
Uncertainty continues to dominate the business landscape. From fluctuating markets to geopolitical tensions such as tariffs, leaders must navigate complex variables while maintaining growth and profitability.
JD highlights the Rule of 40 as a key metric for evaluating business health, especially during volatile periods. This formula adds your percentage of year-over-year growth to your percentage of profitability. If these add up to 40 or more, you're operating a strong, stable company.
The beauty of this metric is its flexibility.
In boom times, you might grow 70% with -30% profit. In lean times, maybe you grow 10% but keep 30% profit. The Rule of 40 helps you flex appropriately.JD Miller, PHD
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During market downturns or periods of uncertainty, businesses can shift their focus from aggressive growth to cost management and profitability without abandoning their strategic objectives. This adaptability proves crucial when traditional growth pathways become challenging.
For Chief Revenue Officers (CROs) and CEOs, tracking the right metrics becomes even more critical during unstable times. Beyond the Rule of 40, JD recommends focusing on the "win creation waterfall" – understanding all the precursors that lead to closed business:
Revenue Goal (e.g., $10M)
Number of Wins Required (based on deal size and win rate)
Opportunities Needed
Qualified Meetings Required
Calls/Outreach Needed
A goal without a plan is just a wish. You need to track all inputs, not just outputs.Enzo O'hara Garza
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This granular approach helps align every team member around specific, measurable activities that contribute to overall business goals. Rather than simply declaring "we need $10 million in new business," effective leaders break down exactly what activities and conversion rates will make that possible.
One of the most valuable insights JD shares is the importance of creating comprehensive, realistic annual plans. He recommends distilling your growth strategy into a single-sheet annual plan that maps out:
Different revenue sources (new logos, upsells, price increases, new products)
Monthly projections accounting for seasonality
Dependencies (e.g., product launches, team hires)
This approach enables leaders to diagnose issues quickly when results deviate from plans. If a new product rollout gets delayed, you can immediately identify the impact on revenue projections rather than simply perceiving "missed targets."
Don't wait until December to realize you're off-course. Adjust in June or July with smaller moves instead of year-end panics.JD MILLER, PHD
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The annual plan should incorporate historical data on sales cycles, ramp times for new hires, and typical employee turnover. As JD notes, "The best predictor of future performance is past performance." By incorporating these realities into your planning, you avoid setting unattainable goals based on perfect-world scenarios.
Before setting ambitious growth targets, smart leaders analyze their Total Addressable Market (TAM). This assessment prevents pursuing unrealistic goals when the market simply cannot support them.
JD shares an example of a company planning global expansion that discovered dramatic differences in market opportunity by country. "Some countries may only offer $6M in TAM—winning 100% won't meet your target. Others offer $150M. Start where the data tells you to," he explains. This intelligence fundamentally changed their expansion strategy.
For businesses seeking investment, understanding your market position becomes even more crucial. Investors want to see not just that you need capital, but precisely how that capital will translate to market capture and growth.
Beyond internal metrics, successful businesses closely track customer satisfaction and engagement. JD recommends implementing a color-coded system (green, yellow, red) to assess relationship health.
Proactive check-ins through account managers provide valuable feedback, while help desk interactions serve as excellent listening posts. For technology companies, monitoring product usage patterns can reveal early warning signs of potential churn - like mass data downloads that might signal a customer preparing to leave.
JD emphasizes that sales should be approached as a "noble profession" - not simply extracting money from customers but delivering solutions that genuinely improve their businesses. Establishing clear ROI expectations before the sale creates natural benchmarks to evaluate customer satisfaction over time.
Effective communication around metrics can transform company culture and performance. When everyone understands how their daily activities contribute to strategic goals, engagement and effectiveness increase dramatically.
JD illustrates this with a simple example: "Don't just tell your support team to 'answer every call in 30 seconds.' Say, 'when you do, you retain 5% more customers.'" Explaining how rapid response drives customer retention, which supports company growth targets, transforms an arbitrary demand into meaningful work aligned with company success.
This alignment requires different conversations at different organizational levels:
C-suite: Focus on growth, profitability, and strategic bets
Sales managers: Track win rates, deal pacing, and forecasts
Support teams: Understand how their metrics impact retention and revenue
For businesses considering private equity funding, JD offers valuable perspective on selecting the right partners. He compares the relationship to marriage - "Dating before marriage is key. Know what kind of partner you're getting—and what they expect from you."
Different PE firms specialize in different kinds of business transformation:
Some excel at scaling existing sales processes globally
Others focus on manufacturing efficiency or supply chain optimization
Some support founder-led growth while others immediately replace management
Before seeking investment, clarify your narrative: what specific aspect of your business will capital help evolve, and what investor expertise would most accelerate that transformation?
JD recommends building relationships with potential investors long before you need funding. Share regular business updates, meet for informal discussions, and learn their investment philosophy to ensure alignment before formalizing any partnership.
As economic conditions shift, sales approaches must adapt accordingly. JD notes that successful sales pitches typically fall into three categories:
During uncertain economic periods, risk-averse buyers gravitate toward the third category. Messages about avoiding loss typically resonate more powerfully than promises of future gains.
From spreadsheets to CRM systems, the key is consistency. JD's advice:
Use Excel/Google Sheets for early data tracking
Graduate to tools like HubSpot or Salesforce as your needs mature
Ensure all teams agree on a single source of truth
"Sophisticated tools come later. What matters first is collecting and trusting the data," JD explains. Having any system in place is better than no system at all.
Another essential metric JD shared is the Sales Velocity formula:
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Sales Velocity =(Number of Opportunities × Deal Size × Win Rate) ÷ Sales Cycle Length
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This calculation helps you understand how many dollars you're bringing in on a daily basis. Tracking this weekly helps leaders diagnose issues before they impact quarterly results:
Is pipeline volume dropping?
Are deal sizes shrinking?
Is the win rate falling?
Are sales cycles dragging?
By monitoring these individual components, you can pinpoint exactly where to focus improvement efforts rather than simply observing declining sales.
Sales forecasting should blend optimism with data. JD uses a three-number model:
Committed: What's locked in
Best Case: If everything goes perfectly
Forecast: The reasonable middle ground
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Forecasting is like Goldilocks—you don't want it too hot or too cold. Accuracy fuels better planning and better decisions.JD MILLER, PHD
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Organizations that consistently miss forecasts—either low or high—miss opportunities or create panic. Accuracy deserves recognition, not just results.
Volatility isn't new—but structured thinking and proactive planning make the difference between merely enduring and truly thriving. From Rule of 40 to sales velocity, from annual planning to PE readiness, these frameworks provide a durable compass for navigating uncertain times.
The most successful organizations balance ambitious goals with realistic execution plans. They understand that sustainable success comes not from wishful thinking but from systematically building and measuring the activities that drive results.
As JD Miller emphasizes, the fundamental principles of business health remain consistent regardless of economic conditions: know your market, understand your metrics, align your team, and balance growth with profitability. By mastering these elements, businesses can weather turbulent times while building foundations for long-term success.