PODCAST 75: 3-Layer Approach to Stage-Appropriate Leadership w/ Jason Holmes

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This week on the Sales Hacker podcast, we speak with Jason Holmes, President and COO of Showpad.

Jason specializes in executive sales leadership with CRM, SaaS, and other tech companies. He’s been an executive and/or VP for a variety of household names, such as Marketo, Adobe, and Oracle. He also served on the board of directors for SIM Partners.

If you missed episode 74, check it out here: PODCAST 74: Picking Up the Right Company to Work for w/ Ryan Lallier

What You’ll Learn

  • Using revenue as the key metric
  • Tying compensation to cash generation
  • Jason’s 3 buckets for evaluating talent

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Show Agenda and Timestamps

Show Introduction

Sam Jacobs: Today on the show, we’ve got a great guest. — Jason Holmes. He’s the President and Chief Operating Officer of Showpad. They’re growing very, very quickly. They’ve got offices both in Europe and in the US. On this episode Jason walks through his career journey, beginning all the way back with a company called Hyperion. He also had important stints at Oracle, Omniture, and particularly at Marketo, pre-IPO.

First, we want to thank our sponsors. We’ve got Lucidchart Sales Solutions. Lucidchart is the leading account planning platform for modern sales orgs. With Lucidchart, you can visually map out key contacts and crucial account data to uncover critical insights that will allow you to close bigger deals faster.

Our second sponsor is Outreach, the leading sales engagement platform that enables sales reps to humanize their communications at scale, from automating the soul-sucking manual work that eats up selling time to providing action-oriented tips on what communications are working best. Outreach has your back.

Now, without further ado, let’s listen to this interview with Jason Holmes.

About Jason Holmes & Showpad

Sam Jacobs: Hey everybody, it’s Sam Jacobs. Welcome to The Sales Hacker podcast. Today, we’re incredibly excited to be talking to Jason Holmes. Jason is the President and COO of Showpad, which is a leading global sales enablement provider. He’s responsible for marketing, sales, customer success, and partnerships globally, and he’s really focused on creating customer value through making salespeople successful everyday. Jason was previously COO at Marketo, pre-IPO through the take private transaction, and has spent time at global executive roles at Adobe Omniture and Oracle. He also holds an MBA from Northern Illinois University. Jason, welcome to the show.

Jason Holmes: Thank you, Sam. Pleasure to be here.

Sam Jacobs: We’re super excited to have you. Tell us a little bit about Showpad. Who are they? What do they do? What do you do?

Jason Holmes: Showpad is a company in the sales enablement space in the tech industry. It’s a company that really focuses on making content findable, making sure that sellers are prepared, making sure that modern buyers are engaged, modern buyers are engaged with modern sellers, and ultimately providing incredibly in-depth analytics back to marketing organizations and sales organizations on how they can continue to improve. That’s the company and the space in sales enablement. My job is to help grow this company, for sure, but also make sure that we grow this company by making sure that we’re acquiring the right customers.

Showpad today is in excess of 50 million recurring revenue, in euros, actually. We’re a European-headquartered company in Ghent, Belgium, with a US headquarters here in Chicago, Illinois. We have about 450 people right now.

Marketing, sales, CS, should all be unified under one leader

Sam Jacobs: Particularly in your role as COO, do you have a perspective on where data needs to sit, and whose responsibility it is to own it within large organizations?

Jason Holmes: I firmly believe in having an operations team from a revenue standpoint. So, marketing ops, sales ops, customer success ops, services ops, al live under one leader; that’s essential to driving, 1) integrity in the data and 2) ensuring you don’t have politics and evils that exist by having different numbers in different departments supporting different agendas. That’s why I have created a unified team that reports directly to me.

I also see a very close partnership between the revenue operations team and the finance organization. All things actuals need to come out of finance. They should be reflected exactly the same in the finance reports and in the operational team’s reports.

Align the cash generation of the business with the cash distribution of the business

Sam Jacobs: When you think about compensation, what’s your perspective on incentive comp for functions that have traditionally not had a tremendous amount of their compensation in incentives?

Jason Holmes: I believe that, from a comp standpoint, making sure that your comp plan and the expected behavior around the comp plan is aligned with the goals of the business, is fundamental to making sure the business works well. That is the most Captain Obvious statement, but at the same time, many companies and leaders say, “Well, we want X to happen. We’re going to comp a little bit differently than that, but people will do the right thing.” To me, all things being equal, why don’t you just line up the comp with the exact expected behavior?

I take incredibly great care to make sure that those things are lined up. For example, customer success managers, what do I want them to do? I want them to keep and grow the business. So I comp them on keeping, and I comp them on growing. Sales is comped on revenue, and I very much believe marketing is comped on revenue. But we don’t comp marketing on MQLs or SQOs or pipeline contribution. It’s on revenue. So if sales is succeeding, marketing succeeds. I generally am a very large fan of having as big a percentage as people will tolerate in variable comp plans.

The important thing is: Just make it simple. Point everyone at the same numbers, and ultimately, people will collaborate, and you’ll get the best outcome.

Only compensate based on objective KPIs

Sam Jacobs: It would seem like a potential pitfall is comping the marketing organization or even any demand generation function, like SDRs, on pipeline contribution, when pipeline is an internal metric that is gameable and doesn’t align with revenue. Would that be an example of a mistake?

Jason Holmes: Completely. From my standpoint, you can mix them a little, like in the case of BDRs or SDRs. For instance, 75% of comp is tied on SQOs or meeting sets, but a piece of it also needs to be on sales success. Did we actually hit numbers in your region or in your segment? So yes, be highly productive day-to-day, week-to-week in doing meeting sets and in doing sales-qualified opportunities. But ultimately, you’re also not going to get to 100% of your comp if the sales team with which you’re working isn’t succeeding. So, I think you’ve got to straddle some in the cases where you can.

Also, people don’t want to come and talk to me about setting comp against something that is not objective. Step one: You only comp on things that are objective. Bookings are super objective. And revenue and expense management — very objective. Things that are like so-and-so’s opinion, or things that are dragged up and down based on survey scores & response rates are interesting and good in theory, but make sure you can prove to me that it’s scientifically objective. Then we’ll talk about how we put it into the comp plan. Otherwise, I keep it simple.

RELATED: A 4-Step Process to Define Your Key Sales KPIs

Jason’s 3-layer approach to stage-appropriate leadership

Sam Jacobs: There’s a set of wisdom out there in the high-growth environment around stage-appropriate leadership and this idea that you need to slot leaders that have experience with that specific stage. Also, the idea is that you need to swap leaders out as you go. I guess the alternative would be to invest in employees and their ability to grow and develop. How do you feel?

Jason Holmes: I have a very specific view on this topic. First, it depends on the type of business you’re in. We’re in a high-growth business. The business is growing faster than people can grow their leadership and management skill sets and careers. It just is. You can’t gain 5 years of leadership experience in a year and a half. The business may be growing fast enough that the size of the team someone might be managing, the complexity of problems they’re starting to solve grows exponentially faster than most humans can learn. So, I think there’s three areas to consider:

  1. You have people that you replace: They were great from 0-10 million, but now, they’re just wrong for the business for a variety of reasons. I think that’s a pretty small subset, by the way.
  2. There are people that you top. I think those are the majority of the people. You essentially say, “Hey, you’re a great manager for the CS function, or you’re a great sales director. You’re not ready to be a VP, but I really want you to stay the sales director for another couple years while you get more experience, so I’m going to go outside and find a VP to have you report to.”
  3. The third group is the people that you grow. That’s the sales director or CSM who is actually ready to become a CSM manager — or the BDR who really is ready to take on a BDR manager position. You grow those people.

Sam’s Corner

Sam Jacobs: Hey, folks. Sam’s corner. First of all, a lot of people are talking about revenue as the key metric, the main KPI for revenue organizations. What do I mean by that? Not comping the marketing organization on things like MQLs, leads, pipeline contribution, etc. It may feel like those are objective metrics. “We have a lead-scoring system in place, it gives this many points every single time we deliver this many MQLs,” but it’s not revenue. It is gameable, and it’s controlled, oftentimes, by the marketing organization itself.

So, try to align the cash generation of the business with the cash distribution of the business to its employees.

Secondly: Jason has three buckets for evaluating talent as the organization achieves hyper scale. The three buckets are removed, grow, and top. He says about 20% of the people are grow, and about 5% are remove. So, you’ve got three-quarters of the people that are top, meaning you’re going to have people that you bring in over them. If they’re the director of sales, you’re going to hire a VP of sales. If they’re a senior director of marketing, you’re going to hire a VP of marketing. If they’re a VP of marketing, you’re going to hire a Chief Marketing Officer.

The big thing there is managing expectations appropriately, and making it clear that that is your philosophy. Again, have objective, clearly-defined and articulated guidelines, responsibilities, and requirements of the job, so it’s not just, “Listen, I don’t think you’re there yet.” And then the person says, “Well, what do I need to get there?” and you don’t have an answer. You need to have an answer, in my opinion. Write down what you think the job of a VP or CMO is or should be, how it is different from the current job, and then you’ll be able to articulate the gaps.

I really hope, though, that you’re not using this framework as a mechanism for unconscious/conscious bias where, because that person is young or because they are a woman or because they don’t look the part, they’re not going to get the opportunity. The people that are the most talented in the organization, that are demonstrating capabilities, at least deserve a chance. Once you’ve articulated those guidelines, give them that chance to succeed.

What We Learned

  • Using revenue as the key metric
  • Tying compensation to cash generation
  • Jason’s 3 buckets for evaluating talent

Don’t miss episode 77

Before we go, let’s thank our sponsors. Outreach, the leading sales engagement platform and Lucidchart Sales Solution, which is the leading account planning platform for modern sales orgs.

If you want to reach out to me with feedback, you can reach me on LinkedIn. If you haven’t rated the show, please give us five stars on the iTunes rating system so that we can remain in business and continue to bring you this show.

As always, thanks so much for listening, I’ll talk to you next time.

This is a sponsored guest post from a Sales Hacker partner.

Sam Jacobs is the Founder of Aqueduct Revenue Advisors and the New York Revenue Collective and regarded as one of the top start-up CROs in the tech community.

He has has over 15 years of experience scaling companies from post-revenue to ~$300M, has helped raise over $400M in institutional capital, and has helped companies of all sizes achieve an average annualized revenue growth rate of 48% over the last 15 years.