By Kathleen Hartigan, Vice President, International, Clari
Modern business is about more than the glory of a big deal. It is about predictable revenue growth. The more precise your forecasts, the more impressed your board is going to be.
You’re focused on generating revenue, right? Revenue, revenue, revenue. But every so often – every month or every quarter – the people in charge of your company seem to want you to pause in that epic task and predict the future. If you find preparing the quarterly report annoying or distracting, you wouldn’t be alone.
“At the end of the day, that board report is really just going to be ‘how are we finishing this month?’ and ‘how’s the rest of the year looking?’” Ed McQuiston tells us. He is Chief Commercial Officer at business software company Hyland, responsible for sales, customer service, marketing. He goes on: “It’s going to be expected that I’m able to deliver that information with a great degree of accuracy.”
Ed comes from a sales background and admits that preparing for a board report used to be a panicky few days of pulling together customer reports and spreadsheets. Sometimes you’d see a sales rep lick their finger and hold it up in the wind.
Predicting the future is tough, but there’s a good reason the board wants you to do it. Every decision it makes on behalf of the company will be based on that forecast. It tells them whether they are in a position to make investments. It is the backbone of the company strategy. It will be the starting point for discussions about new hires. It will be fundamental to merger negotiations.
Your board is likely to be pretty smart – they’ll know how you arrive at your forecasts. When they see the revenue for the quarter which has just passed, they look back at what you predicted it would be and that tells them how accurate your forecasts are.
When it comes to forecasting business, it goes without saying that coming in under is bad. But have you considered the fact that unexpectedly over-achieving against your forecast is actually not what the board wants to see either? You see, far-sighted business leaders are not that impressed by a stellar quarter if it wasn’t in your forecast. They know a good business has predictable, growing revenue quarter after quarter after quarter. If they can look back at the last two years and see you precisely hit every single quarterly forecast… that, my friend, will impress them.
“There’s no version of gut or winging it, or old processes… you know, spreadsheets don’t get it done at that scale.” says Ed.
You have to look at tools and how those tools can scale the business, Ed says, now a customer or Clari’s revenue platform and a big fan. You may actually want to look to AI to provide the kind of accuracy your board needs. Such tools already exist and precise forecasting is only the start of what they can achieve for your revenue operations.
Your board is also going to be happy about better forecasting because it makes revenue leaders themselves more productive, allowing them to focus on the customer and strategic initiatives. In itself, that will help drive revenue. So board reports turn out to be a good thing – who knew?
