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Sorenson - Principles of a CEO Overview.pdf

29 Mar 2023
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Sorenson - Principles of a CEO Overview.pdf

  1. www.sorensoncapital.com GETTING THE MOST OUT OF YOUR BOARD OF DIRECTORS Chapter 1: CEO Overview Best Practices January 2023
  2. Proprietary and Confidential Maintain Focus on your “Strategic Imperatives” Sorenson Notes • Maintain focus on the key initiatives that must be accomplished this year • Results-oriented goals Overview on your strategic imperatives for the upcoming quarters Overview of StrategicInitiative Metrics/ KPIs Achieve TopQuartile ARR Growth & GTM Unit Economics • Goal: Achieve top-quartile SaaS growth & efficiency metrics ‒ Grow new logo quota capacity & build out customer success function to support customer base and enable upsell bookings • Rationale: Prove ability to achieve repeatable, top-quartile go- to-market motion • Meet 2023 ending ARR budget of $20M (>200% growth YoY) • Achieve New Logo ARR growth of >200% YoY • Achieve >$1M ramped per-rep-productivity Improve Net Revenue Retention • Goal: Build highly predictable upsell and retention motion ‒ Finalize modular pricing and upsell strategy ‒ Ensure sufficient capacity from customer success function to support customer base and upsell goals • Rationale: Improve GTM efficiency, create more value for existing customer base • Achieve >90% renewal rate from customers with contracts expiring • Achieve >130% net expansion Release Scalable SecondProduct • Goal: Release second scalable product for general availability by year end ‒ Finalize product, test in beta, and release for GA ‒ Finalize modular pricing and sales strategy for existing customer base • Rationale: enable upsell, expand TAM, add more value for customer base • Roll out and attain >10% adoption of new product by year end; >25% adoption by 6-months post- general availability launch Hire Key Leadership • Goal: hire CFO and CMO • Rationale: improve financial controls and predictability; improve top of the funnel lead gen & brand awareness • NA Note: all metrics and commentary are illustrativ e examples
  3. Proprietary and Confidential Maintain Focus on your “Strategic Imperatives” (Cont’d) Sorenson Notes • Maintain focus on the key initiatives that must be accomplished this year • Results-oriented goals Overview on your strategic imperatives for the upcoming quarters Q1 Initiative Target Completion Forecast Completion Status Issues Achieve TopQuartile ARR Growth & GTM Unit Economics • Maintain 3x YoY growth • Hit new logo bookings target of $2M in Q1 12/31/2023 NA • Maintaining sufficient pipeline coverage to support sales capacity growth • Staying ahead on AE hiring Improve Net Revenue Retention • Finalize modular pricing • Finalize expansion quota program and incentives for customer success team 2/28/2023 2/28/2023 • Managing account executive morale now that upsells are directed to CS team Release Scalable SecondProduct • Beta test MVP of product to >100 users 9/30/2023 11/30/2023 • Degrading time to remediate bugs on flagship product & slowing rate of feature updates for flagship product • Need to scale SMB product team Hire Key Leadership • Onboard and transfer ownership of sales process management to CRO 6/30/2023 8/1/2023 • Finding a CFO that is focused heavily on accounting cleanup and financial infrastructure = ahead of plan = on plan = behind plan Note: all metrics and commentary are illustrativ e examples
  4. Proprietary and Confidential Exceeding Expectations ● Business goals or metrics that remain stable / high performing ● Areas we have seen process improvement What Keeps Me Up at Night ● Key competitive concerns ● Significant business threats ● Persistent Problems Today’s Discussion Topics and Objectives ● Have we spread ourselves too thin in certain areas? ● Are we focused on the wrong key questions or problems? ● Areas to optimize performance in future periods Structure & Calibrate: Align Board on Priorities Example Sorenson Notes Overview on what is and isn’t working across your organization • Communicate mostcritical topics facing company • Provide opportunity for management team and board members to raise questions and concerns • Be willing to adjust agenda and reserve time forhigh- priority concerns and discussiontopics Note: all metrics and commentary are illustrativ e examples
  5. Proprietary and Confidential Balance Big Picture/Details: Performance Update (Example 1) Example • We typically evaluate software businessesacross five key metrics: ‒ ARR growth ‒ Customersatisfaction ‒ Productprofitability ‒ Sales efficiency ‒ Cash burn & liquidity position • While sometimes more is consideredbetter,in this case, clean and concise summary slides like this can help keep discussionfocusedon core business performancemetrics Sorenson Notes Note: all metrics and commentary are illustrativ e examples
  6. Proprietary and Confidential Balance Big Picture/Details: Performance Update (Example 2) Example • Provide context around metrics.Explain what decisions drove outcomesand how to improve future outcomes. • Include commentary on performancetrends and underlying drivers: What drove variance to plan; which decisions worked as expected, etc. • Disciplined approachto self- diagnosis can help drive company improvement. Sorenson Notes Note: all metrics and commentary are illustrativ e examples
  7. Proprietary and Confidential Reflect and Introspect: Progress by Department / Goal Example • OKR example 1 provides static view of business goals. OKR example 2 communicates organizational health by departmentover time. ‒ Understand goals defined in prior meetings and measure performance over time on quantitative and qualitative basis. • Effective board meetings typically produce follow-ups, deliverables,and action items. • Track, prioritize, and execute on board meeting action items and provide progress updates to Board. Sorenson Notes Sales • Expanded sales engineering team • Reduced sales headcount by 4 AEs • Sales cycle shortened by 60 days on average Marketing • Significant improvement to MQL generation, pipeline regularly up • Hiring larger content marketing team, focus on whitepapers Product • Understaffed and focused on maintenance, need to expand • Urgent hires required on senior product manager side Engineering • Product team ‘subbing in’ to help with maintenance • New features rolled out in 2022 were buggy • Customersatisfaction and NPS remains high Team • Outhired in 2022, team in place to execute on 2023 plans • Reduced headcount with RIF of underperforming employees G&A / Finance • Closed bridge loan from existing investors • Aligned budget to decrease burn and increase runway Great Problem Note: all metrics and commentary are illustrativ e examples
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