Go-to-market planning is a common, annual exercise for many technology companies, beginning in late August and stretching into mid-November. The process requires synchronization across multiple factors within the business including products, geographies, customer segments and functions around revenue and booking objectives, sales and marketing headcount, quotas, compensation plans and other elements critical to go-to-market (GTM) operations. The time and manpower committed to GTM planning is great with the work effort generally producing hundreds of meetings, documents and follow-up work steps. Alexander Group frequently assists leading XaaS companies with this annual planning process, and our clients frequently express two collective sentiments consistently: 1) a sense that they should have started the process earlier and, 2) a lack of clarity and consensus around which objectives they were trying to achieve.
GTM business planning can be an intimidating and overwhelming task. It is probably not surprising that most organizations put it off until Q3 (or even Q4) given the speed at which tech markets move and the level of uncertainty around performance and market growth. The objective of this article is to demystify the planning process and ground it in setting business objectives that match your company’s growth goals, risk tolerance and desired GTM model yield with your stage of development and maturity. At Alexander Group, we believe that if companies give themselves ample time and stay grounded in fundamental objectives, there is no reason the planning process needs to be rushed or for the participants to be confused or frustrated. Here are four basic steps to get your planning started right:
Every CEO in the tech industry has an elevator pitch in their head about how they believe the company will grow and evolve over time. The problem is, in many instances, this vision is confined to C-Level executive or board meetings rather than communicated broadly. Everyone charged with the commercial performance of the company (and those who support revenue functions as well) should have an idea of what the overall objectives of the company are. It could be something as simple as, “we expect to drive 30% ARR growth and 20 points of EBITDA by 2025,” or even a goal more specific like, “we expect to grow our footprint with our 10 largest MSSPs to attain the highest share in the edge security market within three years.” Whatever the objectives are, revenue organizations will be unlikely to hit them if they don’t know about them.
Done properly and thoughtfully, planning can provide guardrails vital to an organization’s success. Conversely, frenetic planning can create confusion and uncertainty that could compromise the success of the entire next fiscal year. Understandably, there is a reluctance to begin planning immediately after the rush of closing out the year, but companies should keep in mind that a substantial change to GTM structure and design requires at least three months to build and several months to fully implement. In larger organizations, that duration is even longer. If you postpone planning, you will postpone launching.
The key to determining when to start is to create a plan that works backwards from the beginning of your fiscal year and sets aside periods of time for each critical sequence of events (see below).
Alexander Group recommends that organizations contemplating major GTM transformation for their next fiscal year complete the market sizing process by the end of Q2 in conjunction with defining the top-down revenue and profit goals of the company. The second half of the year can then be dedicated to distilling these goals into operational plans across and up and down the GTM organization. Regardless, ensure time is left in Q4 for final revisions and communications. Avoid planning activities beyond mid Q4 at all costs; the revenue organization is consumed by closing the year and planners will get neither mindshare nor attention to communications.
While it may be tempting to parallel process to save time, planning out of sequence inevitably leads to misalignment of the critical elements within the GTM engine. Planning should commence in the following sequence:
A major project management institute recently reported that in 56% of the planning processes deemed suboptimal or failures, the root cause of the failure was poor or inadequate communication. Specifically, communications that works both horizontally across the organizational functions: Product, Marketing, Sales, Services etc…and vertically from C-Suite down to individual contributor. Communication and change management are required elements of successful GTM planning. The key element in this communication is repetition and sequencing. For example, the message about how individuals’ jobs will change cannot be communicated too early, or too often, without risking unnecessary disruption. In our GTM planning and transformation work at Alexander Group, we find that the linchpins in a successful change management initiative are the first-line sales managers (FLSM). FLSMs are positioned to drive and inspect the desired behavior changes on the ground, and best suited to intervene should the new model go awry. GTM changes should also be monitored periodically at the executive level (SVP of Revenue Operations or similar role) to ensure the newly adopted model is gaining sufficient traction.
Go-to-market planning, when completed in an orderly, comprehensive fashion, is a powerful tool to orient the organization around a set of growth, profitability and other business objectives. Future articles on this topic will delve more deeply into aspects of building and configuring a successful planning process.