The zen of missing targets
We are living in unprecedented times. 2020 has been a challenging year to say the least. With lockdowns, businesses going fully remote overnight and many more challenges, 2020 has tested our resilience, both personally and in our businesses.
Some sectors are way up. Think video conferencing and e-commerce. Others are down. Across the board, the assumptions that were behind your targets for 2020 likely got thrown out the window back in Q1.
As 2020 comes to an end you may be faced with the reality of coming in well behind your targets for the year. Here are my thoughts on how to think about this and how to navigate this with your board and investors.
Remember where targets come from
Let’s face it, in the early stages of a startup, financial targets come out of our asses. We take our best guesses, but we are not fully in control of the outcome.
As a company scales it gains more command over the drivers and levers of the business and thus should have more predictability in its results.
If your business is early stage (say < $2M ARR), just give yourself a pass. Even in good times, it would have been hard to predict your results for the year accurately. Just make sure you have a handle on runway and are doing the best you can with the channels and marketing/ sales programs available to you.
Focus on execution and the score will take care of itself
Regardless of company stage, the path to revenue maximization is not to focus on some arbitrary financial targets set from some top down forecast model and then figure out how to hit them. This is inaccurate and stressful.
Instead, the focus should be on continually improving goto market execution so that you know you are getting the best possible results out of your current team and current programs, campaigns, etc.
If you run an enterprise SaaS company as an example, your sales cycles may have been extended by COVID. The usual end of quarter lumpiness might be even more dramatic at the moment.
Rather than fret over the target for this quarter, focus instead on people and process. Ask yourself:
Do I have the best possible sales leader?
Has that leader built the best possible team that our scale and resources allow?
Are we clear on the make up of this team? Do we know the ideal ratio of BDRs to account execs, etc?
What is the mindset and culture of this team? Do they stop and wait when they run into objections with a prospect? Or do they proactively find ways to crush objections and compress sales cycles?
Does the team have feedback loops and review cycles so that they are regularly reviewing and improving the sales process in order to close more deals faster?
Do this consistently and over time the score will take care of itself. You will hit and hopefully exceed your targets.
As for your investors and board, focus the discussion on execution vs. arbitrary targets. Show the progress and momentum in goto market execution. Show the early indicators that revenue is coming. Yes, you may miss this quarter, but the signs are positive that future quarters are going to be strong.
Show evidence of superior execution. Show that you have your hands firmly in control of everything that you can control in this environment and that you are at peace with letting go of the things that you can’t control. This will give you peace of mind and will do the same for your investors.
This too shall pass. When it does, make sure you are poised to unlock growth in a systematic and repeatable way.
Photo by Sean Stratton on Unsplash
