How to Build a Sustainable and Resilient Business Model

Amidst pressure from the board and an increasingly volatile market, many CEOs today make the mistake of pursuing growth at all costs when they should be building a resilient and sustainable go-to-market (GTM) model for their business instead. The key to success? Find the right balance between growth and profitability, then build up the talent to drive sustainable revenue streams.

In the first part of the discussion (The CEO's guide to Resilient Revenue Streams - Part #1) between Mike Hoffman, SBI CEO, and Chris Cabrera, Founder and Board Member of Xactly, we explore how GTM leaders can build a sustainable business model through strategic revenue operations and by cultivating a healthy seller environment.

Navigating the Pendulum of Growth Versus Profit

Many business leaders, especially those in the startup phase, dream of achieving unicorn status, where the company is highly valued, and growth seems to be never-ending. However, Chris, who has pursued such a growth thesis, believes that achieving a unicorn status does not guarantee that your business will survive a change in the market climate.

“You realized that many, many of these companies were built on a house of cards, and now many of them find themselves in an existential threat because they basically have shares that are effectively worthless. You have people with all this stock based on a valuation that they'll never see for years and years and years,” explained Chris.

However, it is often not the CEOs’ decision to pursue growth at all costs. Chris acknowledges that investors and board members frequently push businesses to pursue growth aggressively, particularly when markets are good. Describing the market as a pendulum, Chris has found that board members are often chasing the pendulum, leaving businesses ill-prepared for when it swings away from growth.

“If those investors are chasing the pendulum and the pendulum is going to swing back to growth at all costs, as soon as the economy returns, we will probably get through the next election and all that. I think that's going to be a shame because I think people are going to have short memories, and they're going to forget about what we just went through,” he continued.

Instead, Chris urges CEOs and GTM leaders to persuade their board members to consider a balanced growth model that focuses on long-term profitability and resilience. As Chris puts it, “Push back on your board if they're pushing you to one end of the spectrum because a balance will serve you better as a CEO and your company better in the long term.”

How a Hero Culture Creates Ineffective Sellers

A sustainable growth model is crucial to a business's longevity, but it is the GTM teams that will need to execute it successfully. In his experience with sales organizations, Chris realizes that GTM leaders often create a territory distribution system that is unfairly skewed toward the few “heroes.” Often, they are the sellers who occasionally bring in the big win that secures a quarter. Still, they often forego more consistent, quality leads that may contribute greatly to a company’s sustainability.

Furthermore, as sales managers tend to give the best territories to the supposed winners, this creates a divide between these “heroes” and the runners-up, who are often relegated to low-opportunity leads. This creates an unfair environment that increases talent churn and leaves businesses more vulnerable to market shifts.

For Chris, the key to creating a level playing field for sellers begins with having an objective view of them. Leverage your tech stack to cut through biases and understand how your sellers perform when they are provided with equal opportunity to succeed. Audit past territory allocations to identify potential inefficiencies and help cultivate a seller culture that emphasizes consistent, predictable wins over the occasional jackpot.

“Especially when the pendulum swings because the market has changed like we just experienced. Those heroes, you know, if you're banking on the hero culture, you're going to be left out in the cold,” Chris concluded, “make the management of your revenue more sustainable by looking at every single deal and the metrics within every single deal. It's just a little more of the blocking and tackling consistently rather than praying for the Hail Mary, the hero.”