How To Hire a CRO
The Chief Revenue Officer (CRO) Is responsible for all revenue-driving operations in the business. Their reach often transcends individual departments, as the CRO aligns and unifies them to drive revenue further. They primarily focus on synergizing the work of the marketing and sales teams. The CRO is a powerful and influential role, and knowing how to hire a great CRO will enable you to get the right leader who can “make revenue happen!”
Please note that CRO is also the acronym used for the Chief Risk Officer, a completely different role who is C-Level in charge of monitoring and managing all risks associated with the business.
Let’s first try to understand the role a Chief Revenue Officer (CRO) could play in your business, including:
- What are their core activities
- What are their key responsibilities
- Who they report to and who reports to them
- how they should be compensated
Then I will share my best practices on how to hire a CRO.
What is a CRO?
A CRO has three primary objectives:
- Grow – Chief Revenue Officers are expected to drive revenue growth. The people under their leadership, such as the sales organization, may be focused on hitting sales quotas. Marketers may be focused on generating quality leads, creating campaigns, and monitoring performance metrics. The CRO has a much higher-level view of generating more revenue, including exploring new channels, improving existing channels and focusing on the tools the teams use to reach their clients.
- Align – The CRO often has to align departments and encourage work between them to enable growth. Working together to achieve a unified growth. Many metrics encourage teams to focus on themselves and their own performance, which can often be detrimental. The CRO ensures they collaborate with other groups and share resources that could benefit the company.
- Plan – CROs are extremely data-driven since they are responsible for revenue growth. They must use the data and performance reports from across the company to assess where revenue is being missed. This can manifest in assisting poor-performing teams or poorly allocated funds that could be deployed in better ways to generate sales.
Their data-centric work style is how they make decisions and inspire confidence from the various teams they may be working on. For the CROs to have the most impact, the teams must believe in the actions they take and the results they will bring.
Their key responsibilities
In completing their main activities, they carry the following responsibilities:
- Communicate directly with the CEO
- Setting revenue-related targets
- Proactively manage revenue that is at risk
- Encourage and show how collaboration between various departments, especially sales and marketing, could lead to revenue growth
- Helping improve negotiations with vendors and suppliers
- Optimize product value propositions
- Improve pricing structures and go-to-market strategies
- Focus on scaling operations by selecting tools that enable sustainable, scalable growth.
- Auditing various team performances
Who they report to and who reports to them
The CRO typically reports directly to the CEO. The direct reports to the CRO include the VP of Sales, CMO, CFO, and any other applicable department head that touches on revenue creation.
How they should be compensated
In start-ups CROs commonly include equity in their compensation packages (0-5%), as well as salaries. They do this as given their direct impact on the value and success of the company; generally CROs are interested in equity. In more mature organizations, salaries start higher for CROs than in many other C-level roles due to the high pressure and specialized entrepreneurial mindset required to succeed.
We can see the following Base salaries in the US for CROs (per percentile):
- 10% – $174,069
- 25% – $233,415
- 50%(Median) – $298,599
- 75% – $378,535
- 90% – $451,313
And a total average compensation (salary + bonuses + benefits): $448,215
Things to keep in mind while hiring a CRO
Here are some key insights I think you need to understand before you hire a CRO.
CROs are Entrepreneurs
CROs are leaders in business development and company direction. They need to be confident and assertive, ensuring the actions they want to carry out drive revenue quickly. In addition, they need to be able to sell their vision to all involved. They need to be great communicators and leaders.
CROs Have Short tenures
Being a CRO is an extremely high-pressure role. Companies expect results fast to prove their CRO’s worth. CROs have an average tenure of only 2.5 years!
CROs need to be data driven
CROs need to be able to use data to prove why the significant actions they want to make on your business are worthwhile. They also need to prove their worth by showing the success of those actions. Without real-time and accurate data, it is very difficult for them to manage effectively.
CROs are Team builders
CROs make and restructure teams to enable as much growth as possible. This may be as simple as mentoring leaders or redesigning how a team functions, or how they are compensated for driving revenue. They require natural leadership skills, so they can motivate teams and inspire people to perform and grow inside the business.
CROs need to be agile
The needs of employees, the market, and the countries you operate in can change yearly, and sometimes things change overnight. Take the recent pandemic as an example that impacted work norms and employee expectations. Identifying these and reacting to them accordingly to retain and incentivize top-class talent will be fundamental to them succeeding. A CRO requires the best talent on their teams to succeed.
Best practices on how to hire a CRO
Here are my top pieces of advice on how to hire a CRO. That will ensure you hire the best CRO for your business, given its unique needs and structure.
Start your search early
Develop a Search team
Given the level and responsibility of the CRO, the recruitment will usually be led by the CHRO and the CEO. The heads of sales and marketing may provide input but are usually not part of the selection process since they will report to this position.
Develop your list of needs and wants
As you quantify what you want to see in your new CRO, the pieces required to create a detailed and accurate description will evolve. Let’s explore some of the common things most companies are looking for in a CRO:
- Developing revenue growth strategies with the CEO and effectively communicating those strategies
- Establishing processes for revenue generation
- Clearly identifying market opportunities and creating targeted products for those markets.
- Unifying the effort of both sales and marketing. Companies that have these groups working in harmony perform better.
- Managing channel development, introducing new sales channels, and identifying new partners.
- Creating a desirable customer experience possible that increase both retention and loyalty.
- Maintaining communication across every department that touches revenue creation.
- Watching over all the revenue sources and redeploying assets as needed.
- Forecasting revenue generation and the strategies required and planning accordingly.
Work with executive search firms
Executive search can be an exhausting process. It takes a business, on average, 76 days to replace a CRO that leaves without notice. Given this, it can be a significant distraction for the company, and this distraction could go on for three months or longer. An executive search firm can help you hasten the process and find top talent otherwise unavailable to you.
An executive search firm can use its knowledge and skill to manage the entire recruitment process on your behalf. They will help mitigate the risk of a bad hire. Finding a CRO is complex, and offloading the intense work to a firm like Boyden will allow you to remain attentive to your business.
Please contact me if you have any questions about hiring a CRO or need help conducting CRO search locally or abroad. I have 25+ yrs of experience working with Boyden working as a Managing Partner. We have executive search specialists focusing on revenue-related positions with experience in almost every industry in 43 countries worldwide.
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Want Professional Executive Search Help for any Industry Globally?
As a Managing Partner at Boyden, I can assist you personally or refer you to a member or group of our global search team who is best suited to assist you and your company's specific executive search needs.