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Are your go-to-market teams suffering from operational debt?

linkedin-shared-link 7While some degree of operational debt is unavoidable, organizations can make smart decisions early to keep it in check.

Quick Guide

1. What is operational debt?

2. What decisions lead to operational debt?

3. Whose responsible for keeping operational debt in check?

4. How to avoid operational debt

What is operational debt?

Operational debt is the cost in time and revenue for choosing a quick fix in revenue operations over a more sustainable solution. The trouble is, inefficiencies grow as an organization grows. According to research from IDC, these inefficiencies cost organizations 20-30% in revenue every year. The scariest part of operational debt is the more you grow, the more it grows. It’s even costlier for small to midsize companies because they have a smaller margin for error.

 

While some degree of operational debt is unavoidable, organizations can make smart decisions early to keep it in check.

What specific decisions lead to operational debt?

Early mistakes coupled with minimal guidance contribute to process and technology inefficiencies down the road. Operational debt usually stems from a shortage of time or expertise. To be fair, companies trying to hit revenue targets while scaling don’t have it easy. Most hardly have enough time to meet daily demands, let alone analyze the long-term impact of internal operational decisions. In some cases, it feels like the only choice is to do what causes the least disruption at the moment.

Real-life examples of operational debt in action

  1. When your Salesforce administrator built a workflow two years ago and no one realized the solution isn’t scalable. Now the team has to go back and change the tires while driving down the highway. 

  2. Perhaps an organization didn’t define its deal closing process. There’s no validation rule in place requiring sales to provide a reason for Closed/Lost deals. Now half the deals are missing explanations. This means sitting down with sales and trying to help them remember why a deal was lost. Even if the sales team did fill in the information, sales leaders will need to read and recategorize every deal.

  3. Or, an organization failed to set up user roles properly. When someone new joins the team or a current employee leaves, all the reports break. Before, it was easy to filter every report using people's names instead of assigned roles. But now changes from scaling a sales team and inevitable turnover expose gaps in reporting.

  4. In the beginning, wide-open permission settings worked ok. But after two big accounts in Salesforce were inadvertently deleted, the organization realized it’s time to lock down functionality for certain roles.

 

The good news is, operational debt doesn’t happen overnight. The sooner you get a handle on how your go-to-market operations work, the less you’ll have to deal with the cost of operational debt later on.

If your team is small, who’s responsible for keeping operational debt in check?

Scaling companies should consider hiring a Head of Operations or working with an outside consultant. An internal dedicated resource acts as an impartial expert who can focus exclusively on all the breakdowns contributing to your operational debt. If you’re not sure you have enough work to support a full-time hire, working with an outside consultant gives you fractional access to a team of experts for oftentimes less than the cost of a single qualified resource.

 

If you don’t have the resources to hire your own ops team or bring in consultants, the less desirable but sometimes-only option is to tap the team having the most trouble with owning the problem. (Usually, sales struggles early on because they use more complex systems right out of the gate. This flips once companies mature and their marketing strategy becomes more sophisticated.) 

 

If you decide to go the DIY route, be wary of the fact that those in control while problems developed are now the ones tasked with solving them. The team first needs to realize they’re in operational debt. The other tricky part is that operational debt springs from a lack of bandwidth. So now a team historically short on time needs to build in time consistently to work towards fixing issues. You’ll want to designate a project owner who can make impartial decisions.

How can you avoid operational debt?

One route to tackling operational debt is through your metrics and reporting. Once you get clear on the data you need to understand your funnel and your present-day ability to access it, you can start closing the gaps in your go-to-market operations.

1. Find out what you can’t measure today

Make a list of important KPIs that you need to dig for or calculate yourself. For example, if an organization’s ARR is declining but no one can give a consistent answer as to why, leadership can’t get meaningful data without spending extra time, and even then, the data might not be trustworthy.

2. Identify data requirements

If you find out in step one that you’re not tracking all the data you should be, consider this insight a huge win. Now you know what you don’t know and can use this clarity to focus on what matters. 

 

Conduct a cross-functional meeting with sales, marketing, and customer success leaders to align on core definitions across your revenue funnel. The truth? This step can be beastly. In Iceberg’s experience facilitating these discussions, it’s common to discover teams use different definitions. This is why we start here for every project—to clear up fundamental definitions like “What is a lead? What is an MQL? SQL?” 

 

(Check out this case study with 280 Group for more on the clarity that comes from solid prospect lifecycle definitions.) 

 

Only walk away when you achieve cross-functional consensus. (This is where it helps to outsource the initial strategy part. Outsourcing provides an impartial third party who can understand your funnel from top to bottom.)

3. Map requirements to processes

Once teams agree on important definitions that feed into your organization’s must-have revenue metrics, you’re ready to build the requirements into your revenue operations workflow. Ideally, your teams could work with a strategic operations expert who anticipates future gaps and has the authority to offer alternative recommendations.

4. Focus on a minimum viable solution

Building a minimum viable solution is an essential part of controlling operational debt. In the beginning, so much remains unknown about the future shape of your go-to-market operations. By choosing to build conservatively, you stand a better chance of fitting your systems to your business instead of losing money trying to fit your business to its systems.

5. Conduct periodic check-ins

One of the most critical steps in staying ahead of operational debt is conducting a regular operations health check. Keep an eye on how processes are working, meet with sales and marketing to understand where they're struggling to do their jobs, what’s eating up time from their most productive work, and what observations they make in day-to-day collaboration with other team members. Stay in tune with those on the frontlines so you can make the most of your resources.

Want actionable insights into your own operational debt?

Iceberg offers a no-strings roadmapping session that identifies the most expensive breakdowns happening right now in your go-to-market operations. (Plus a step-by-step plan for how to fix them.)




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