How to align finance and sales for success

Dana Therrien is a Principal on Anaplan’s Accelerate team, with expertise in business planning, sales operations, and go-to-market strategy design and execution.

Sara Baxter-Orr is the global head of CFO practice at Anaplan. A veteran CFO executive, Sara has deep experience in finance operations, risk governance, information security, and high-stakes business transactions.

Jason Loh is the Global Head of Sales and Marketing Solutions at Anaplan, where he leads the go-to-market strategy for Anaplan’s solutions designed to drive performance and revenue.

This discussion has been edited and abridged from a webinar entitled Finding Common Ground in Uncertain Times: How Sales and Finance Can Stay on Target. View the full webinar here.

Over the last several months, sales and finance leaders around the world have witnessed buying patterns shift in ways that they have never seen before. Some are calling this the Great Lockdown. And it’s causing business leaders to reconsider the sales and revenue plans that they may have just put in place only a few short months ago.

Sales and finance leaders are often turning to one another for answers to difficult questions about revenue and liquidity. The results of these discussions can help put organizations back on a path toward stable and reliable revenue, or they can mean poor revenue forecasting and delays in recovery once the economy rebounds.

What are some of a CFO’s biggest challenges in navigating through this crisis?

Sara Baxter-Orr: Finance leaders are working in a state of uncertainty and a fractured work environment with so many people working from home. They’re working on several time horizons, with some now solely focused on stabilizing in the short term and others looking at what comes next. They need to understand their sources of cash, and they’ve probably drawn down on their credit lines and activated any available government assistance. They are now looking for rapid cost reductions.

They are spending more time with their boards, investors, employees, creditors, suppliers, and customers, and they’re evaluating their products and revenue trajectories as they consider making a pivot or change. With this, they’re probably running a lot of scenarios. Never before has it been so important for them to radically collaborate with their team members. They are working especially tightly with sales and marketing to evaluate revenue trajectories, with HR to plan the gradual return of the workforce to the office and ensure workforce safety, with supply chain to make any necessary adjustments or form new alliances, and with IT, a partner who has been by their side through all of this.

How can the Chief Sales Officer (CSO) or Chief Revenue Officer (CRO) be a better partner with their finance counterpart?

Jason Loh: As we think about all the questions that finance leaders are struggling with, they are predicated on one thing: revenue. And it’s the sales organization that is actually bringing the revenue in. So one major role for the CRO, the CSO, and all sales leaders right now is to partner with their CFO and finance counterparts to secure the revenue line. They need to understand what business is vulnerable, what’s not vulnerable, and, given this new state of the world, what business they can count on.

The impact of today’s situation is certainly uneven. Organizations in travel and transportation, or hotels and hospitality, or certain kinds of retail, for example—those organizations are highly impacted. On the opposite side of that spectrum are industries like consumer essentials, telecommunications, and waste management. Some of the delivery services are ramping up their hiring to support this new demand. The CRO can help their heads of finance navigate through all this.

Dana Therrien: I’ve spent most of my career in sales, and I think what’s changed during all this is that you suddenly have to care more about things like liquidity and cash flow. You have to work more closely with the CFO and care about factors beyond just the booking, also looking carefully at the quality of that booking, and the timeline for when it could potentially come in.

As businesses look to build an accurate sales forecast, how do you think CFOs and sales leaders are working differently now than they did in the past?

Sara Baxter-Orr: Well, for one, there’s a lot more communication going on. Accurate and reliable forecasting is a cornerstone, and to get there, everyone needs to collaborate, cooperate, and innovate in ways that they perhaps never have. The viability and the success of the corporation means making the most precise move you possibly can. And the impact of the forecast on financial decision-making overall is mission-critical.

There’s a supply chain impact: Do we have the products that we ask the salespeople to forecast? Do we need to make substitution? Are our vendors healthy?

There’s a workforce impact: How are we ensuring worker safety? What investments might we need in this new environment? Do we need to reconfigure workspaces?

For me, it’s paramount to be running multiple scenarios as you build your forecasts, and then you’ve got to be able to evaluate things swiftly, accurately, and collaboratively, with the most critical and relevant data. That’s a cornerstone for setting a business up for success.

How are sales leaders and finance leaders working together to secure the revenue line and get a better understanding of the ability to deliver product during this crisis?

Jason Loh: In order to understand what potential revenue is going to come in, the first thing we need to do is to stabilize the foundation.

So often when we do this, we look at our past, document these revenue baselines or foundations, and then build the forecast on top of that. How do we know that the foundation we’re standing on is firm? One of the best ways is to meticulously inspect the pipeline in partnership with finance. And I mean “meticulously inspect” in the sense that we need to remove bias. We typically start by breaking the pipeline down across three dimensions: shape, size, and content.

When you think of a traditional pipeline shape, it’s often like a funnel, where it’s very wide on one end and then it gradually tapers until it becomes narrow on the other. The feature to notice here is that you can’t have more coming out of the pipeline than goes into the pipeline. From a ranking and scoring perspective, it’s all about understanding how to jettison the bad deals as quickly as possible.

There is also the size of the pipeline. I can’t say how many times I’ve sat in meetings and people say, “How big of a pipeline do we need?” It all depends, and not on the industry you’re in or the segments that you serve, but really on the selling styles of your sales team. For example, if you have cautious reps who forecast conservatively, you don’t need as big a pipeline as you would if you had a team that was overly optimistic.

Finally, consider the contents of the pipeline. Analyzing this involves questions like Are we focusing on the right customers? Are we focusing on the right products? Are the deals desirable and are they winnable?

Asking ourselves these questions and doing this assessment, I think, is paramount in order to inspect the foundation to understand what we’re building on.