Insights From The RevOps Manual

As your company grows and evolves, incorporating a Revenue Operations (RevOps) function becomes essential to optimize and align your revenue-generating activities. However, determining where RevOps should sit within your organizational structure is critical for its success and effectiveness. This decision depends on several key factors, including the stage and size of your company, the roles and responsibilities of your executive team, and the specific needs of your organization.

A couple things to consider

RevOps is designed to be the objective source of truth for revenue data analysis and operations, bridging gaps between different departments and ensuring that all revenue-related activities are aligned and optimized for growth. The right placement within the organizational structure will allow RevOps to function impartially, provide valuable insights, and drive strategic decisions that benefit the entire company.

That being said, so much of this depends on a few key factors:

1. Stage and Size (Operational Complexity) of the Company: If the company is in the growth stage ($10M - $100M in revenue), then I think the CRO should own RevOps. This structure works best if the CRO actually oversees the entire revenue generating team and not just sales.
2. Role of the CRO: If the CRO is essentially a glorified sales leader without authority over the entire revenue operation, then RevOps should report to the CEO or CFO. Because otherwise RevOps will likely just be Sales Ops.
3. Role of the CFO: Generally, having RevOps report to a CFO could be optimal, but comes with some challenges. The CFO might bring too much of a financial perspective, which could limit the process and technical innovation critical to RevOps' success.

‍

So let’s get into the details of each option you have.

‍

RevOps Reporting to the CRO

When RevOps reports to the CRO, the alignment with sales and marketing functions is immediately apparent. This structure leverages the CRO's expertise in revenue generation and go-to-market strategies, aiming to create the integration of RevOps into the core revenue-driving activities of the company. The CRO typically gets what’s happening in the funnel and will be able to provide RevOps with the support they need. But again, it's crucial that the CRO truly oversees the entire revenue operation, not just sales.

Pros:

• Alignment with Sales and Marketing: Placing RevOps under the CRO ensures close alignment with all go-to-market functions, which leads to better collaboration and integration of sales strategies.
• Finger on the pulls for Revenue Teams: Being embedded within the revenue team allows RevOps to be close to the entire GTM team to understand and address the specific challenges and needs of sales, marketing, and customer success teams.
• Unified Revenue Strategy: This setup enables a single executive to oversee all revenue-generating activities, ensuring a cohesive approach to revenue growth.

Cons:

• Potential Bias: If the CRO is primarily a sales leader, there can be a bias towards sales, potentially marginalizing other critical revenue functions.
• Neglect of Non-Sales Revenue Teams: Functions such as support, billing, and customer success might receive less attention if RevOps is too closely tied to sales objectives.

‍

RevOps Reporting to the CFO or COO

Positioning RevOps under the CFO or COO can ensure objectivity and strategic alignment with financial and operational goals. However, if the CFO is solely focused on the numbers and has no appreciation for the Go-to-Market strategy or understands what’s required to make an impact on the revenue funnel it could be hard for RevOps to be effective.

Pros:

• Objectivity and Centralization: Reporting to the CFO or COO ensures that RevOps maintains objectivity, providing unbiased insights and recommendations that serve the entire organization.
• Integration with Financial Goals: This structure allows RevOps to align closely with financial objectives, supporting comprehensive financial planning, profitability analysis, and long-term strategic initiatives.
• Support for All Revenue Functions: With a broader view of the company's operations, RevOps can support all revenue-related functions, ensuring a balanced approach to revenue management.

Cons:

• Lack of Go-to-Market Insight: The CFO or COO might not have the detailed understanding of sales and marketing dynamics that the CRO possesses, potentially limiting the strategic impact of RevOps in these areas.
• Defensive Positioning: RevOps might struggle to advocate for reasonable sales quotas and compensation structures if their priorities conflict with financial constraints imposed by the CFO.

‍

RevOps Reporting to the CEO

Having RevOps report directly to the CEO positions this function at the highest level of strategic influence within the company. This approach underscores the critical importance of RevOps and its role in shaping the overall direction of the organization. However, it is often impractical and may be more suited for companies lacking a true CRO or operational CFO/COO. This could work well for early stage startups that want to make the investment in Revenue Operations.

Pros:

• High-Level Influence: Reporting directly to the CEO gives RevOps the authority and visibility needed to influence major strategic decisions and enforce processes across the organization.
• Comprehensive View: This position allows RevOps to have a holistic understanding of the entire company's operations, fostering better communication and coordination between departments.
• Unbiased Perspective: Free from departmental biases, RevOps can provide objective insights that benefit the overall health and growth of the company.

Cons:

• CEO's Limited Bandwidth: The CEO may not have enough time to provide the necessary oversight and support that RevOps requires, potentially limiting its effectiveness.
• Lack of Specialized Insight: While the CEO oversees the entire company, they may not have the specialized knowledge that a CRO, CFO, or COO might offer to guide RevOps in specific areas.

‍

Conclusion

Determining where RevOps should sit within your organization depends on your company's specific needs, growth stage, and the structure of your executive team.

• Reporting to the CRO is ideal for tight integration with sales and marketing, provided the CRO truly oversees the entire revenue operation.
• Reporting to the CFO or COO ensures objectivity and aligns with financial goals, but the CFO must have a broad operational perspective.
• Reporting to the CEO offers high-level influence and a broad perspective but may suffer from limited oversight and specialized guidance.

‍

Ultimately, the key is to ensure that RevOps has a seat at the table, maintains objectivity, and aligns with all revenue functions to drive sustainable growth and efficiency. Making this decision thoughtfully will set the foundation for a successful RevOps function that can significantly enhance your company's revenue operations and overall performance.