- Tech Insights
Nate Andrews, Sr. Director - Product,
Technology, & Mobile, Internet Brands
I recently made an important mistake. After months of difficulty negotiating priorities with a certain business unit, I and one of its key technology managers sat down with the P&L owner to reset on what the key business drivers were. We’d had this discussion previously, but we’d discussed the drivers in the abstract, and hadn’t bothered to put any numbers on the different drivers. This time, we talked numbers. The P&L owner walked us through in dollar terms how much each product line contributed to the unit’s revenues, and as he did, a sense of horror washed over me. Under the cold fluorescent lights of the conference room, I felt exposed, gobsmacked by how badly we as a technology organization had misunderstood the relative importance of this business unit’s revenue driver.
We’re all aware, at least theoretically, how important revenue model awareness is when trying to establish technology as an equal strategic voice with other functional areas. What galled me personally, though, was that I’d already implemented strategies in various parts of my organization that raised technology’s standing in the company by deeply engaging with the same metrics as the P&L owners. The answer had been staring me in the face, I’d simply not exercised it with this particular business unit.
On its face, the answer is brutally obvious: make P&L goals your own goals. In many organizations, that’s already the case. But for many, you may be thinking, “I’ve got SLAs and performance benchmarks to hit. Those KPIs are challenging enough as it is.” Think of it from the other side of the table, though. If the sales team, for example, explains that they’re hitting their sales goals, or the account management team systematically touts their track record of keeping customer churn within an acceptable range, you don’t give these groups any special accolades. They’re just doing their job. The departments that are seen as all stars don’t just hit their own departmental metrics, their concentration on supporting big-picture financial performance provides a boost to the whole organization.
Tactically, getting access to and evangelizing an organization or business unit’s financial metrics can be difficult. Many organizations raise cultural or procedural barriers to obtaining or publicizing certain sensitive metrics. The following examples have worked in various forms across multiple business units within my organization, and may serve as a template for your own endeavors to provide focus to your team.
Five years ago, I recognized that one of my technology teams was filled with curious, engaged employees, but lacked insight into how their activities affected the broader business. We initiated a simple semi-annual presentation to the team outlining the performance of the business’s sub-units, how revenue for the current period compared to previous periods, and what drove the deltas.
To prepare for these sessions, I had to proactively seek out information from colleagues in business and revenue operations. Not only did these info-seeking conversations spark discussions about how to improve our business, they also helped subtly shift a perception that technology has been just a service organization doing the bidding of general management. Gradually, perceptions started to change. Technology managers came to be seen as people with valuable insights, even to the point that technical employees were asked to contribute substantively to the annual revenue budgeting process.
Over time, people from outside the technology organization began to attend the financial performance presentations we were providing. The presence of non-technology people greatly enriched these sessions, adding their thoughts, questions, and perspectives to that of engineers, project managers, and other technical specialists. Their participation helped further build a buzz about the technology team as a group making things happen, creating a halo effect around the technology organization’s credibility when critical business decisions were being discussed.
Combined with more-frequent team discussions to look back at our accomplishments and forward to our project goals, these sessions gave us the opportunity to craft a shared story as a team. We forged a common understanding of where we were, where we’d come from, and where we were headed as a cross-functional team pulling together in the same direction to create value for customers and increase revenues for our business.
With other business units, we’ve added a different wrinkle by asking general managers or monetization directors to present financial metrics to key players on the technology team. While articulating a financial story yourself is good for visibility with your own team, often times the best way to accumulate influence is to give it away. Offering business unit leaders an invitation to present their world to your team demonstrates your inclusiveness and commitment to team goals, while also subtly reinforcing the egos of those you’ve asked to participate. In this way, you’ve both built a bridge between technology and business stakeholders while also achieving your goal of giving the technology function more visibility into the drivers of business value.
Whether you’re presenting financial metrics and stories yourself or inviting your cross-functional colleagues to participate, exposing your technology employees to the real, hard numbers driving your business will accrue benefits both within and without your organization. Most managers have learned the lesson that I’d forgotten about the importance of understanding the relative priority of various revenue drivers. By being willing to stand in front of a room and explain those underlying business facts to employees, you have the opportunity to take a small lesson and turn it into much more effective influence.