What's the Dollar Impact of Ops? (with GoNimbly CEO Jason Reichl)
What's the Dollar Impact of Ops? (with GoNimbly CEO Jason Reichl)
Sean Lane: Hey everyone, Sean here. Before we get into this week's episode, I've got a special announcement for you. I mentioned on last week's episode that we have our Hyper- Growth San Francisco Conference coming up on November 18th in San Francisco. And I asked a bunch of you if you were interested to reach out to me and a bunch of you did. And so we decided to do something special for listeners of the Operations Podcast. We have a special code for you. The code is OPERATIONS99. This will get you a discounted ticket for$ 99 into Hyper- Growth San Francisco. This ticket is usually$ 599. So use this code. We want to see you there. Again, it's Hyper- Growth San Francisco, November 18th. If you want more information, go to hypergrowth. Drift. com. And remember, the code is OPERATIONS99. Thanks so much, now on with the show. Hello, Welcome to another episode of Operations, the show where we look under the hood of companies in hyper growth. My name is Sean Lane. One of the first interviews I did at Drift before we even had the podcast was with Mark Roberge, the former CRO at HubSpot. Something that Mark told me stuck with me. He said that now he's an advisor, a lecturer and an investor. And he said that he has this unfair advantage now because all of these new roles give him so many data points on the way dozens of companies operate as opposed to just the one he was at before. Essentially, he's smarter now because he talks to so many companies and he can find patterns in what works and what doesn't. Imagine you getting to do that through a purely operational lens with companies in hyper growth, how much more dangerous would you be at your job? That's exactly what this week's guest, Jason Reichl does every single day. Jason is the co- founder and CEO of Go Nimbly, the first ever subscription- based revenue operations consultancy. And through all the data points that he has observed and absorbed, he has developed his own very specific views and methodologies on things like the complimentary skill sets that you need on an ops team, or bringing a design thinking approach to ops, and something that is called Nimbly Fridays. Don't worry, we're going to hit on all of those in today's episode. After spending the early parts of his career as a consultant at Blue Wolf, which went on to be acquired by IBM, Jason also spent time as a product manager, and then co- founded Go Nimbly in 2013, which six and a half years later, is still growing strong at 100% year- over- year growth. To lay the foundation for the rest of our conversation, I first wanted Jason to explain what Go Nimbly is and how it actually works.
Jason Reichl: Go Nimbly is the world's first revenue operations consultancy. So that means that we actually work with GTM teams on the operational side to help them scale, and we focus all that energy on working with SaaS companies because SaaS companies have very demanding go- to market goals for themselves. They need a double in revenue, they need to grow by 100%. And so it's a perfect catalyst to be out in the marketplace with revenue operations and applying that methodology to very high growth organizations. We typically work with series C to IPO enterprise SaaS companies like Zendesk and Twilios and PagerDutys of the world. And we have been doing this now for three years. We started with a message of unifying your business stack, which was pre- revenue operations. And that came about because I was the head of product at a company called Tradeshift. And when I was there, I noticed that there are a lot of people who were great product managers, there's was a lot great people who could build product in SaaS, but not many people knew actually how to scale a business properly. I had a background in consulting and I decided, hey, maybe there's a space to create a subscription- based operation consultancy that focuses on SaaS and helps them actually go to market and scale properly.
Sean Lane: That's really interesting. In addition to this being unique in the fact that it's a subscription- based consultancy model, you also have a little bit of a unique model in terms of the way that you build your teams internally to interact with those clients, right?
Jason Reichl: Yeah. So we have what we call the revenue operation pod model. We help other organizations deploy this internally as well through a transformation process from going from what we call legacy operations into operations that's forward thinking, that has revenue operations. Revenue operations is just a methodology that focuses and unifies your entire operation team, meaning your sales ops team, your marketing ops team, your customer success team, not business operations, that's something separate, but those go- to market operational teams, it unifies them into one function that serves as a North Star, which is customer experience, which impacts revenue. And that team acts as its own element of the revenue stack, revenue team, essentially; revenue operations is part of the revenue team. And we are the first organization that I know of that's built a scalable structure for deploying those teams, so we start with the smallest teams that are like four individuals, all with very specialized backgrounds like sales ops, marketing ops, maybe SaaS analytics background, technical integration background. And then we take those people and we train them to be generalist in operations by giving them an hour every day for professional development, by giving them work that's outside of their specialty. And the whole goal is to create an army of generalists who are operators that can respond to anything that a SaaS company might have from a day- to- day perspective that needs to get prioritized.
Sean Lane: Jason gives members of his team time to learn each of the core go- to market functions. He believes that being siloed is not only a poor operational approach as a company, but it's also not good for a person's development. He told me that in ops, you have to be opportunistic about the things that are right in front of you while still prioritizing that work that's going to get you to your ultimate goals. And he said you have to bring to that work a holistic approach,
Jason Reichl: Sales ops people, marketing ops people are never really successful when they're siloed into their own individual areas. And so a lot of our consultants are coming to us from either working at SaaS companies or working in consulting firms and seeing firsthand that that work doesn't actually go anywhere. An example is you might do a bunch of lead management as a sales operations person, and you might make that really sing and work inside of Salesforce, but none of the marketing systems work appropriately. Ultimately, it gets routed to the wrong people anyway. And so those kinds of frustrations drive people to Go Nimbly because we're promising it can be better and your craft and your work does matter. And so we're getting hungry people who really want to become generalists coming through the door. And then we have a certain method that we apply to professional development, which is basically any kind of core competency we want them to have in any area, they have to first believe it. We have that one hour professional development, we also have something we call Nimbly Fridays where leadership team members and senior team members do essentially lectures on different elements of the tech stack or business process or anything across the board. And we're not talking about very junior stuff, we're talking about high level theoretical aspects of running these organizations or maybe their soft skills. And so, first, people come in and they can join these Nimbly Fridays and they learn it and they start to believe it and then they put it into practice. And so then we'll give them opportunities in their daily work to actually put those things into practice. A good example is, let's say you come in with a sales ops background, you might be the solution architect for all sales ops projects, but you probably won't be doing the hands- on tooling work in those areas, you'll probably be giving them to other teammates who don't have that experience. And so that process of unifying the team actually allows the team to get better and better. So these pods we build become more and more effective, and then we apply a book of business to them so we basically have a SaaS book of business that they operate. So first they learn it, and then they live it, and then they teach it. And so what we then do is have those people come in into the Nimbly Friday lectures, and they begin to teach the new class of people that we have coming in into the organization.
Sean Lane: First, you learn it, then you live it, then you teach it. Three seemingly simple steps, but once you've learned, lived and taught, you've likely reached some level of mastery in that specific topic or skillset. And that's what Jason's Nimbly Fridays are all about. Also, I don't know about you, but there's definitely some paid subscription play in here with these Nimbly Fridays, maybe a live stream or something, I pay. Anyways, Jason's emphasis on this holistic approach got me thinking about the flip side to being a generalist. At some point, does this charter of revenue operations or these super generalist ops folks become too broad? Do people ultimately get overwhelmed to the point where they can't get anything done?
Jason Reichl: It's usually operational decisions made by people who shouldn't be making them that makes that too broad to handle. So technology choices being not validated based on inflection point, but preference, that creates a tech stack that's unmanageable. Of course, you can't know every piece of technology to the depth that you need to in order to utilize it. Sometimes there are things that our marketing people do who are running your campaigns and they're not very analytical driven, maybe they're brand marketers and they don't really understand how important that is to the entire revenue stack. These are all things that get put upon the operation team to deal with. And I think in the legacy operations world, that's probably true, I think that's a true statement, that you really can't know everything. But I think with the revenue operations model that we've developed and the way that we prioritize our work, I think it is possible for a group of people to make up what we think of as the four diverse skillsets of revenue operations, which are strategy, tools, enablement, and insights. We think a team can make up those. Now, we might be all strategy and process. You might not have any enablement skills, you might not have any insight skills. That's okay, especially when you get to organizations that we work with like PagerDuty or something. Everyone can't know everything, but it's really important that you keep the balance on your operations team equal so that you don't value one specific area over another. A lot of times, we come in and do a skill assessments with our customers or even on our internal teams and we'll really say, " Well, this team is like 60% tools." And you'll see that in their work, you'll see that in the decision making that they make, you'll see that in what projects they prioritize versus using a method that tells them what they should be working on. So you see a lot of that. And then people start to cherry pick and they start to do the work that they know. I'm not arguing that it's not easier for specialization to happen but it also creates silos and that hurts the business. It's not easy to run a business, and so the work shouldn't also be easy.
Sean Lane: Totally. And I think the point about people gravitating towards what they know or something that they've done in the past or a tool that they're more comfortable with is completely valid. And I think the way you talk about your four components, strategy, tools, enablement, and insights, being able to assess a team the same way you might assess a team for like personality types or learning types, but you're assessing them for these different core operations components, I think is a really interesting way to build and scale a team longterm, both at a consultancy like Go Nimbly, but also internally as some of your clients.
Jason Reichl: Yeah, internally, what it actually does is operations is a weird job, you get put into an operation role and a lot of times, the structure to improve or the structure for promotion is arbitrary. They might just have you be a BA at first, and then they might have you be a systems person. But in reality, you keep doing the same job for the same company. That company is just growing, the complexity might increase, but there's not very many leaps in operations until you start to manage people where you're not doing the same job. And what I try to tell people is, Go Nimbly is a betterment culture. It's the same thing, operating an organization, it's kind of a flat job, but the way that you actually improve is be better every day, 1% better every day in these four skills. And so you always have room for career development, you always have room for how much value you can add. And then we actually look at things like the impact of that work to revenue, which allows us to look at pay differently than some operational teams look at pay. So if you are very good and well- rounded, you're going to have much more impact, you're going to be able to handle much more work. And for us, that means you can bill more, you can do more, but for an internal operations team, it means that you actually generate more revenue for your team.
Sean Lane: Wow. So you're actually charging clients and paying your internal folks based off of how many of those skillsets they can check the box on?
Jason Reichl: That's correct.
Sean Lane: So Jason and his team put such an emphasis on these four categories of skills that they actually pay their team members based on how well- rounded they are in those four categories. Did you catch how he said he knows that specialization might be the easier path. He's not looking for the easier path, he's looking for the right one. And he's not looking for a bunch of people who are only amazing at strategy, he's seeking out a balance of complimentary skills. You don't put only drummers in a band, you don't put only quarterbacks in an offense. Why make that same mistake on your team? In case you couldn't tell, Jason has clearly put a lot of time and thought into how he builds operational teams. And something I had read about him previously was that he believes in bringing design thinking to everything and everyone inside a business. And I wanted to know what that meant.
Jason Reichl: Yeah. Design thinking is all over the place, people have different philosophies on it. The most simple version of it is that you need to create an ecosystem that everything is bred from. And so when I think about most legacy operations scenes, there's really two. And it usually has to do with the head of operations and how their philosophy is, but there's these velocity based operations team, which had this idea of, " Hey, we're going to build it quick and then we're just going to watch it explode. And once it explodes, we're just going to build it quick again." And that's the velocity operations model. And then there's this other group who are all about scalability. You see them on forums and they're talking about, " Hey it's best to do scale." And the problem with that is they spend forever on something and then they watch no one use it, there's no adoption, there's no actual critical thinking that's put to it. Yeah, it's scalable, but do we need this process forever? And in SaaS, those are the two types of operators and operational leaders that we see all the time. And I always go, " Okay," I come in and do this assessment in the back of my head, I'm going, " Where is this company trying to go? Where's this operations team trying to go? And what are they willing to sacrifice to get there?" And that design thinking, those two questions allow you to build what I would call an operational funnel, operational ecosystem around core ideas. So something like, where are we going? Usually in a SaaS company, this is pretty easy to figure out because funding rounds lead to expansion goals. So unlike Coca- Cola, if you're like, " Hey Coke, where are you going?" They might be, " We want 1% market gain." It's not a really tangible thing. If you work with a SaaS company, they're like, " Oh, we're going to grow revenue by 100% this year." And you go, " Well, how are you going to do it?" And they have no clue. So funding rounds are a good way to look at that. Are you going to go global? Are you trying to scale your marketing efforts? Are you going to go up market, down market? Where are you going? And it's pretty easy to land on that. Everyone in the room, when we start that part of the design thinking thing have very big ideas and they can write on their sticky notes, " We are going to take over Europe." And then the next year, " We were going to get to$ 100 million in revenue," or whatever they have. So, that's pretty easy to get from a design thinking standpoint. And that is the internal motivator for the team. And so when we work with operation teams, you might ask, " Hey, where are you going? What do you want to accomplish?" If someone starts naming off projects, like we want to do this in Salesforce, you have an operational team that can't think big and really can't apply design thinking to their jobs. Those are more teams that are built of technicians who might not have been challenged to think strategically. And most of the time, once you tell them, " No, where do you really want to go?" They can get there. But if you try this exercise with your own team, if people are listening to this and want a piece of advice to go, try to keep people away from creating a project list, this is not about projects, it's, " Where are we going as a business? Where are we going to as an operator?" And then the second question is, what are you going to sacrifice? And in my experience, we've been doing this for a number of years, and in operations, there is basically six areas that you can sacrifice in. You can sacrifice in the way you think it should be done. So you can basically say, " Hey, we're willing to sacrifice and we're going to stop doing what should, and we're just going to do what we have to." And that's one thing that you can sacrifice. Another thing you can sacrifice is duration or time until you hit your next goal, maybe, " Yeah, we're going to Europe, but we're not ready to get there, so we're going to delay that for a year," and you could sacrifice the duration and timeline. Not usually a popular thing for SaaS companies to do. You can't say, " Okay, we're going to basically sacrifice internal alignment." And this is the one that SaaS companies do the most and that's why on every panel I'm on I get asked to talk about sales and marketing alignment. We can sacrifice alignment, we're going to move as fast as we can. You can sacrifice innovation and you can sacrifice a lastly customer experience, which is the one that people don't think about, but that is what you are usually sacrificing in order to gain alignment. So our design thinking as it applies to revenue operations starts with, " Hey, What are you willing to sacrifice?" And then we teach them that if they're going to sacrifice something, it's just an exercise to get them to thinking that everything has a reaction, there's cause, and then you do something and there's a reaction to that. But then we start to put in place, " Hey, if we look at this differently and we put the customer experience above all else, we can build a nice system where everything else is fed on it." So if you place the top priority of your organization, we're not going to sacrifice customer experience. Well, what you start doing is you start seeing all the gaps in the customer experience. And then you try to keep it lean and you try to apply tactics and solutions from an operational standpoint to those gaps in your process. And what that allows you to do is basically start to be able to move and know that you can get to your goal. And then you basically start doing that and iterating on it and being really fast, and then you focus on reaching out to those people and bringing it back in and get their feedback on it. So then you can innovate on it. So you can actually build a very simple five- step plan that we use to go, " Hey, if we focus on customer experience, we'll get all the other ones. Maybe we'll still sacrifice in some of these areas, but it will feed the rest. It's the top of the hierarchy." And most operational people when you ask them, what is your customer experience? They don't really know that. And a lot of times, even in SaaS companies, they don't know that. And if you say, " Well, where are your gaps at?" Then you're starting to get into a territory of someone might say, " Oh, we have these personas." Or, " We have these pains that our product solves." And a lot of times I see this specifically with operational teams, because it's so confusing on a SaaS company, but you start off on business operations and then you get moved to sales ops, or maybe you're a sales rep and you get moved to sales ops or a BDR or something like that, but the career path, we don't have a lot of career operational people. We don't have a lot of people that started in operations, they're actually trained in operations and they care about operations. They got put there because they understood the systems the best, or maybe they can talk the language. And so all of these things occur, and really what we start to learn is there's fundamental gaps at the SaaS companies of people who do not know how to operate the SaaS companies. And the ones who do know how to do it, they get promoted so quickly to management level that they can no longer have a day- to- day impact on the teams. And so it's like now I'm trying to manage people who have no context and that's even actually harder to do. And so you really need this the system in order to say, " Okay, where are we at and how healthy we are?" And that's the operational mindset that we try to bring to it. And that's where design thinking comes in. So when we look at a solution, how does this impact customer experience? How does it impact our speed to get to where we want to go as an organization or with our business objectives? Is this scalable enough that we can iterate on top of it? That's the check mark there. And then can we actually go out and get feedback from both the end users being your sales reps or marketing reps and our customers so that we can learn how to innovate on top of that. And once you do that, you can build a system that feeds itself. And that's why we don't call things projects internally, we call them work streams because the work for an operations team is never done. You're not going to nail sales territory management. If you think that way, or you hire consulting firms that way, you're just going to be in a land of SOW and change orders forever if you're actually serious about addressing the problem.
Sean Lane: Okay, take a breath. Did you get all that? Don't worry, I was taking notes. I've got you covered. If you think about Jason's design thinking approach, really the companies we're helping to build and make more efficient are like products. And the two key questions we can all ask ourselves and our teams according to Jason are one, where are you going? And two, what are you willing to sacrifice to get there? Can you stop and do this exercise with your team? Would you all be aligned? Does everyone understand the impact of the work you do and end up deciding to prioritize? And to Jason's point, a lot of these operational projects might not have a clear beginning and end, but if you're like me, you're sitting there saying, okay, I want to do this exercise with my team, but should I give them guardrails? Are there parameters? Is there a helpful time horizon that I should be considering when trying to answer these two questions?
Jason Reichl: When you're working with a company, the goal is to get them to talk about this stuff, you would be so surprised by if we asked them, bring some marketing people, both on the front end side, which we call the go- to market front end people, we call them the front end of the revenue team. So the people that actually interact with customers like your marketers who send emails, your CMO, bring in your salespeople who actually talk to customers and then bring in the operators who we think of as the directors, the behind the scenes component of the team. And bring them in and let's have a conversation about these things. You'll see those teams never come together to have that conversation. And so it's more about getting them to think in a way that allows operations to actually be a value add to the business, which we've talked about previously in one-on- one conversations about the need to change the perception of operations. And you need to change it and they need to see that you're impacting revenue, but more importantly, you need to change the mindset of operators. You need to change the mindset that, hey, we can bring people together and have a strategic conversation around a framework that's designed thinking is going to feel like a really cool workshop where we're all brainstorming together, everyone's going to leave energized. When was the last time that you brought all those people together and had an operational conversation that energized everyone? You had to be working at very great organizations for that to occur. Usually the conversations are, " This thing's broken, this isn't working." It's a lot of negativity, honestly, when you're an operator about things that could be better driven by people who are frustrated. And so if you can start to change that mindset, you can start to change the importance of operators. And I consider this part, the art form of operating. This is the art form of gain alignment. This is the art form, and this is what we teach at consultant. This is how you become a consultative member of your team. But then there is the science part of it, which is whatever people say, whatever they say the problems is or where they want to go, there's only one way to get there, and that's actually to look at the hard numbers and be analytical about where the gaps in that process is. So we've developed, and I think you had Marko on from FunnelCake and he's written about this, like a 3VC model for looking at pipeline. And that's essentially what's the volume, value, velocity of your pipeline, and what's the conversion rate. So that's 3VC. And what we do is we extract all that data out of Salesforce, most people have Salesforce, a couple of people have Copper, and we extract that out of Copper And then we actually benchmark all of your stages against those core metrics. And so we might see you have a stage one to stage two lower velocity rate, it's not moving as fast. And that might tell us, there's a process breakdown between the BDR and the sales rep. And so we would recommend tactics that solve those problems, but we would then also look into how those tactics influence the customer experience, influence these other areas of that sacrifice tree that I mentioned, the design thinking aspect of it. And that's the craft or science part of the equation, which is to actually take their pipeline, look at it and measure it against other SaaS companies and other Go Nimbly customers and say, " Hey, you've been talking about this project for every day since we've known you, and your conversion numbers at that point in your pipeline, actually doesn't support that project."" Because we could spend all the time you want, and you could spend all the time you want, and we could roll this thing out and it's going to have a very small change on the overall success of your organization. So let's not spend that time." And that part of the process is not actually broken. And this is actually to go back to an earlier point, how you teach specialists that there is value in being a generalist, because they'll learn that their instincts while smart are not always pointed in the right direction.
Sean Lane: It might not be best for what is best for the entire business at that moment in time. I think one of the magical things that can come out of that exercise that you're talking about, if you bring all those people together in that room, you do the sticky note or whatever version of the exercise you're doing, I think something that can come out of that is you actually realize that even though to your point, sometimes that exercises, " Oh, this is broken. This is wrong." if you throw those things out there of where you want to be, what you're going to sacrifice, chances are you probably actually going to come out with very similar priorities across all of those different go- to market teams. And when those teams can see that together, I think that's when you really can create the alignment.
Jason Reichl: Well, better said than I did. So yeah.
Sean Lane: I want to dig into the dollar thing you were talking about, because this is the, I think the crux of any operations team being able to do both the art and science of what you're talking about and being able to tie the priorities that they're walking out of that room with back to an impact on the business. And so a thing that I read was that you said that one of the goals of Go Nimbly is to increase each of their customers by 26% through eliminating operational silos. So, first question is where does the 26% come from?
Jason Reichl: Yeah. The 26% really comes from looking at the 3VC model and finding gaps. And so this all gets felled back to if you believe me and you think customer experience is key, which is what I think, I think everyone will want the personalized customer experience. I'm writing a book right now with my partner, Jen, who is our CSO around essentially what it takes to become a customer experience driven organization. What we found through doing research is that customers come to SaaS companies wanting to buy, wanting to buy as much as they can for as long as they can, and then our actual experience degrades that trust. We're past the age of an informed buyer, we're to the age where buyers know they want to buy you. And what they're judging on is how good is this experience so that I can justify writing this check? Am I willing to put my career on the line so that I can purchase Drift and I can roll it across my whole organization, or is the experience of purchasing Drift so scary to me that I'm going to do a small rollout instead? And so as an organization, really what our jobs are, is to find where those gaps are. And so we use that pipeline to measure that, and you can drive marketing operations projects, customer success projects, sales projects from pipeline, mostly because sales teams are in a mature state, mean that sales team, the sales pipeline process and sales process has been so ingrained that you can trust the data way more than you can trust marketing systems and way more than you can trust customer systems. And so we use that because it's the most trusted source, lots of people use Salesforce. They put a lot of investment in it. Salesforce does a great job saying you're going to have to invest in this platform to make it great. And so people put their sales process in there and you can trust it. And yeah, you can have bad contact data or accounts, but people usually have good opportunity data. They spend a lot of time thinking about that. And so you use that as the backbone for this. And what you find that happens is that when you find these gaps and you put tactics to them, you'll see the needle change A good example is you have low volume stage one, which probably means that your MQL definition is fucked up. And it's too strict, you're not putting enough in there. So we have to do a volume play. So we have to go back and look at all of the things that your MQLs are, and figure that out so that we can get more volume to the reps or maybe your paid channels aren't working, whatever that is operationally that we need to figure out. But then we deploy that work stream and we can see, because we're focused on increasing volume, we might get some velocity improvements. We might get some conversion improvements because we're giving them better leads maybe, but we're trying to see if that tactic increase volume. And what's really interesting to me is this term carry capacity because we use this term to mean how much can a rep do in a given period like a sales rep. But I actually liked that carry capacity applied to every front end marketer, front end. If we could send more emails with to the same amount of people, who should get the credit for that? And really it should be the people building the operational structure.
Sean Lane: You're applying that carry capacity model or measurement to every single person on those running teams?
Jason Reichl: That's correct. That's correct. And so we can say, " Hey, we've done this with the same amount of spend, we've actually increased the revenue that comes out of the pipeline. You have not changed anything from a front end perspective, it's all been back end, it's all been optimized, it's all been scalability. And now look, we've actually increased the revenue." And this is already happens in operations teams, just all the credit goes to your front end actors. And I've met a couple people in panels who say, " I believe what you're saying, Jason, but the role of an operator is to be selfless and think about the business and support their front end colleagues." And I go, " That's great, but people also make investment choices on that. Where are they going to put the money? And they're going to put the money into more sales reps, more BDRs, more marketers. In reality, they should be putting that money into more operators to drive more scalability, more revenue impact for the business." And CEOs when I talk to them about this, they just go, " Well, I don't even know how to measure my operations team. So I only give them money when they come to me and say, 'We can't handle this anymore.'" And so it becomes not an investment strategy, it becomes, shit, we have to keep the lights on strategy. And that's a flaw that CEOs make mostly because operations have not demanded to be taken seriously and we haven't put up the numbers to show that we're actually making an impact.
Sean Lane: If you need to rewind and listen to that part again, please go ahead and do so. I don't know about you, but I can totally relate to that, oh, shit moment when you're underwater and you realize that too late, and now it's time to start hiring when you really should have started doing that three months ago. Anyone else with me on that one? All right. Here's a challenge, can you measure the carry capacity of your team that Jason is talking about? Or can you measure the impact of your team on the carry capacity of one of those front end teams? Not to worry, I'm not letting Jason go without taking me through exactly how to do this, down to the numbers. How can we draw the line from an operations teams work to dollar impact on the business?
Jason Reichl: What we've seen is that$1 of impact basically generates about$ 20 of carry capacity per person. So it's like a one to 20 thing, which is a common thing that you try to do when you're talking about ROI invested. But ultimately, what we want to do is we want to say, " Hey, we estimated this work." So we estimate all of our projects, we encourage internal operations teams to estimate anything that's over a day of work. And then you can get the cost associated to it, and then you can say, " This is where we put it, this is what we've done, and this is how much volume or value." Really at the end of the day, the one that you want to look at is obviously you want to convert revenue. But all of those other ones are important to rally around to understand how to actually do conversion. It's very hard to do conversion tactics. It's a very hard operational thing to do conversion tactics. So if you can increase volume, velocity and value of the things that are coming in through operational means, you'll usually impact conversion, and you'll usually see clearly, " Oh, we went up market, we started getting more enterprise accounts. Our sales reps can't handle those accounts. And so the conversion drops off right here." So you'll see an improvement in stage one to stage two, and then let's pretend that you're stage three was negotiation on proposal, you'll see a decrease in conversion because you've started bringing them higher volume deals or higher value deals, which require a different sales rep. And that's where an operator can then go to enable matters or sales team and go, " Hey, we need to help. We need people to help." And you can be a proactive member of your team, which right now operators have not really considered that. So ultimately, that's what it is. And what we just try to do is we try to lock down the spend of the general front end teams and then we try to figure out, okay, you have a goal of$ 10 million, so instead of saying that 26% of that is ours, what we're going to say is we'll add 26% to that. So if you're going to grow the team by$ 10 million, give us 26% of the number and we're going to actually track these projects against it. Now, right now because of data and other things, it's still a little bit correlation, not causation. I would love it to be more of a science, and we're actually developing software behind the scenes to try to make it more of a science, but ultimately, it's a little correlation, but it's still enough. It's like marketing attribution, does marketing attribution really mean anything for real? It's hard to tell, but it's important to track because it does influence decisions that we make.
Sean Lane: So I understand that the conversions are probably not perfect, but I want to just like go through a little bit of math here with you really quickly to see if I'm following this right and see if this is a potential formula that people could use. So we've got$ 10 million number, we're going to put 26% on top of that, that's 2.6 million bucks, right?
Jason Reichl: Yep.
Sean Lane: So if I've got 2.6 million bucks that I want to as an operator contribute on top of the number that my company is going to do, and I'm going to use your general rule of 20X spend as my conversion point here. That means that with$130, 000 of spend, I as an operator should be able to produce$ 2.6 million extra. Am I following that right?
Jason Reichl: Yes. Depending on how the organizational structure is like. This already happens, traditional operations team actually generate about 10% revenue. They just don't measure it and they don't know. So traditional team is about 10% with revenue. Operations is up to 36%. So that's where we get the 26% number increase from 10% to 36%. So you will probably like an ABM program, have some success along that way by organizing and doing this method, you will have greater than 10% impact. So I can't tell you that for sure you'll have 36% impact on that, but we see with our customers that we are actually having more. So we're seeing that if you invest in a program which is 24K a month for an FTE team, with Go Nimbly, that we are generating much more revenue and scalability of the organization than that. And so we can really justify our costs in that way. So we've changed the conversation from a consulting perspective instead of being a cost center conversation into a revenue generation center. We've been looked at as the same organization that would book you meetings, for example. Those are the kinds of expectations that we're trying to set. So you are correct in how that is, truly most organizations get, I would say to generate like 2.6 million right now, it probably will take them 300 to$400, 000 of investment to get there, but it's still worth it because you're solving problems at scale. So the return on it year over year is pretty massive, whereas you might pay that in a sales reps comp structure, but then those deals are gone. And so it's investing in the same way that SaaS companies invest in software, it's investing in your operational layer and your work stream layer to work for you and improve the customer experience.
Sean Lane: No formula is perfect, and every company is different, but Jason's model might be the thing to help enable us to look ahead and be more thoughtful about impact. You can see his product background starting to emerge here because the whole thing feels like building a roadmap.
Jason Reichl: So you do the first exercise design thinking, you change them. You do the 3VC model against their pipeline. You come up with a list of work streams that they need to focus on that will make them industry leaders, or at least compliant with the other SaaS organizations. The last thing is, and you mentioned it, we build out operational roadmaps, much like a product team does where we actually say, " Hey, this is where we want to go, this is how we think doing these work streams will influence the pipeline. Let's build off of that." And then on top of that, because we are operators, there's still a certain amount of keeping the lights on work that we have to do, but we can prioritize that against the work that's actually going to push the business forward. And that's a visual that then you can start to have conversations with the CRO or the CEO, if you're an organization where that's possible, or even just your management team, And actually start to bring forward, not a list of projects and who asked for them, which is the loudest voice always wins in those scenarios in operations, but instead, this is how we're going to actually impact revenue and this is the plan to do it. It's very, very similar to building out a sales rep model where you say, " Okay, we're going to put this much quote on this rep and we're going to do this and do that, but you're doing that with the work streams that are going to actually impact the pipeline and your conversion rates. So that's the last piece. And I think that there's a few operation teams today that are doing roadmapping and that's very smart, but very few are doing roadmapping based on impact, which is the key thing here is impact and level of effort, and prioritizing that and trying to do the things that have the most impact that your team can actually achieve. And then visualizing that so that you can get support from everyone.
Sean Lane: Before we go, at the end of each show, we're going to ask each guest the same lightning round of questions. Ready? Here we go. Best book you've read in the last six months?
Jason Reichl: We just did Brave New Work, a great book by a consulting firm called The Ready. They do transformational processes, and they have a thing called The Business OS, which is about finding tensions in your business. And it's a great way to bring leadership together and talk high level, and also find out how you can build an organization that people want to work at.
Sean Lane: Love it. Favorite part about working in ops?
Jason Reichl: The favorite part of working with ops is actually it's like being in a factory. So some people like to be an artisan baker and they like making one cake and that's it. I get a thrill out of making a process that is repeatable and seeing it go to scale. And so the best part of operations is that you get to do a lot of that. Internal operations, the best part is actually making people's lives better by making them more money.
Sean Lane: How about the least favorite part about working in ops?
Jason Reichl: We help a lot of companies, but honestly, the shittiest part of operations internally at your own organization, and it's true with us is not being able to put what you know works to practice for yourself as fast as you want to. So we're having all this success with transforming organizations and all of our dollars are going into building these pods and building the structure. Well, our internal operations are not as strong as I would like them to be. And I've always thought you should eat your own dog food and you should really be pushing yourself to be operationally excellent. So our operational stack for a 50- person company is pretty sophisticated and good, but it's nowhere near where I'm happy with it.
Sean Lane: Yeah. You will have to carve off a pod for internal. Somebody who impacted you getting the job you have today.
Jason Reichl: Very early on in my career, I worked at Rackspace and I worked with one of the founders of Rackspace, and I was working on the special division, which was called the Redundant Server Cluster. And that turned out to be the cloud, and Salesforce was using that to build out early versions of Salesforce. I was working with them and I was like, " Why are you not the CEO of Rackspace? You created this huge company." There was, I think at the time, 2, 000 people that worked there. And he said, " My job as CEO was to give that to someone else because I didn't know how to do that job, but I'm really good at building small$ 10 million running businesses. And I am the innovation heart of this organization." And I thought it was really cool to know your own limitations and treat that as a strength instead of a weakness.
Sean Lane: Wow. I love that. Last one. One piece of advice for people who want to have your job someday?
Jason Reichl: See the connected patterns in everything, nothing is isolated, nothing happens alone. Interview people, this comes from product, but interview people, only write down what they say not what you think, and then build your thought process off what they said, which is a very, very important part of design thinking. Don't assume what you don't know, ask the question if you want to try to get them someplace, ultimately don't trust what they say and build your solutions and build your career off of that.
Sean Lane: Thank you so much to Jason Reichl for joining us on this week's episode of Operations. And a special thanks to Lorena Morales who helped set up the interview. Thank you so much to you both. If you enjoy the show, please, please, please leave us a six- star review on Apple Podcasts. Also, don't forget what I mentioned at the beginning of the show, if you're a listener to the Operations Podcast, we've got a special code for you for Hyper- Growth in San Francisco on November 18th. That code is OPERATIONS99. You can register for that discounted ticket at hypergrowth. Drift. com. Thanks so much for listening. That's going to do it for me. We'll see you next time.