Startups and second-stage companies do best when they focus on the fundamentals. Concentrating on the underlying structure of your organization and building a strong team of professionals who know their roles and responsibilities is far better for long-term growth than starting a new marketing campaign - or trying to keep up with the marketing dollars that more established companies can put on the table.
Whether you're hoping to become a unicorn, you're chasing venture capital, or you're looking for robust and steady growth over the long haul, it's time to take a close look at your org chart and see if a Chief Revenue Officer (CRO) fits into it.
A CRO is an increasingly popular role for organizations prioritizing client experience and growth; in fact, according to Financial Director, "The role of CRO is most valuable to a company when it is expanding and scaling – a time where executing the perfect strategy is absolutely critical to business success." But, the same article notes, CROs and Chief Financial Officers (CFOs) can butt heads because they're both involved in handling the company's finances but have very different approaches and responsibilities. Learn more about the differences and similarities between these two executive roles, which one may be a bigger priority for your organization, and why — as tempting as it might be — you can't just combine them.
Let's Analyze the Difference in Each Role's Responsibilities
Both CROs and CFOs care about the money: how much there is, how it's allocated, and what the numbers mean for the business. But the two roles immediately splinter off from there, prioritizing very different aspects of money and having opposing ideas about strategy. Because of this, their job responsibilities can sometimes seem contradictory to each other.
A CRO's job is to create holistic strategies for predictable, reliable revenue growth.
Their focus is on the money coming in, and they oversee all of the sales, marketing, customer success, and revenue operations department alignment.
A CFO's job is to manage every aspect of a company's finances: revenue, expenses, reporting obligations and filing requirements, and more.
All of the budgeting and accounting fall under the CFO's purview.
Imagine the two roles on a Venn diagram (like the example above). While there's overlap in the realm of revenue and grappling with budgets, the CRO handles client experience-related operations that fall outside of finances, and the CFO handles financial matters that extend past revenue. Due to this, both role descriptions need to be clearly defined and address how the CFO and CRO interact regarding investment and spending decisions. Your executives need to know who has the final say or, depending on your org chart, who reports to whom to minimize conflict.
Which Role Is Right for You?
When your company is growing, your executive board is growing. You may not have the budget or room for a full suite of executives. For example, a CMO, CFO, CRO, VP of Sales, or other more traditional roles. That often means you'll be faced with the hard choice of deciding which position to prioritize.
Sometimes, you can get the best of both worlds by melding the roles of CMO and CRO, especially with the right sales managers around. But when you're hiring for a CFO or a CRO, you can't just look for someone who will work in either position. After all, CFOs are all about the long-term; they prioritize financial strategies, reliable growth, and proven practices. CROs focus on the people aspect of marketing, sales, and account management.
A good CRO may not have the technical or professional background the role of CFO demands.
Can You Merge This Role?
No. It's that simple.
While CROs and CFOs may have job responsibilities that can overlap, especially as organizations continue to flesh out and refine the role of a CRO within the C-Suite, they have very different areas of focus. Conflating them can jeopardize your team's ability to target your company's weaknesses and effectively address them.
It's like having a single employee manage the role of salesperson and account manager (AM): both are vital, but the job demands are too different. What makes a good salesperson won't make a good AM (and vice versa).
CFOs and CROs come from different backgrounds and career paths. The two roles also demand different skill sets, areas of expertise, managerial skills for different teams, and even different personalities. It's virtually impossible to find someone with that dual background.
Unlike a CMO role, which can roughly align with a CRO role and easily take on the responsibilities, a CFO role is simply too different. CFOs need to focus on additional responsibilities. Instead of merging the CRO and CFO roles onto a single individual, consider choosing a CFO and a CRO who can partner with the other position.
When these two executives align on goals, strategies, and approaches to client experience, businesses experience far more growth - both in terms of revenue and profitability.
Here's how they can work effectively together:
- Chief Revenue Officer: By managing the front-end client experience, CROs can ramp up the revenue pouring into your company. They increase lead generation, conversion rates, total sales per customer, and recurring revenue by overseeing the entire brand, marketing, sales, and customer success alignment of the customer’s experience through The Bowie Funnel.
- Chief Financial Officer: The CFO operates on the backend to manage short-term and long-term risks. They generate budgets and projections based on incoming data, and they start refining client experience processes to lower costs and increase scalability.
As you can see, these roles complement each other; they're not the same.
Keep these distinct differences in mind when you go to fill one or both of these positions within your company. You can hire two professionals who complement each other, or you can prioritize filling the executive role who can have the most immediate impact on your business.
Choose the Right Approach for Your Company's RevOps Development
If your company has an excellent financial infrastructure and you’ve decided to focus on scaling your business, then finding the right CRO should be your new priority. However, if your organization has a good sales engine and poor financial stability, hang back and find a CFO that can build the right financial systems for your organization to thrive.
Hiring a CRO may seem like a logical investment and the first step when you're ready to scale your company. However, there are many problems with this line of thinking. The CRO role is still in its infancy, many candidates typically have a strong bias towards sales, and there is a small talent pool to recruit. Plus, once you hire a CRO, you must also build a high-performing team behind them.
Why hire a single-person CRO — who typically makes between $250k and $500k per year along with their necessary supporting cast — when you can add an entire 5-7 person revenue growth team for the low end of that salary range which has back to back proven experience in scaling companies?
At House of Revenue™, we equip you with a fractional revenue growth team of 5-7 revenue experts with a 100% success rate of scaling second-stage companies - Seriously.
Contact us today to learn more about our services and if we would be your perfect partner in your quest to scale your business.