How to Run a Sales Quarterly Business Review (QBR)

We were mid-way through the region’s first quarterly business review (QBR) under the new head of sales. For the first time, we were running the QBRs out of Salesforce.com — no decks, just screenshares of last quarter’s opportunities, the pipeline and the forecast. As one of the presentations wrapped up, one of the reps still waiting to present — let’s call him Frank — turned to another rep and asked, “Where do I find these leads…where are they coming from?”

Shortly thereafter, Frank went up to deliver his QBR. He had previously closed a few landmark deals at big banks, but hadn’t closed much business recently. He didn’t have any pipeline to speak of for the coming quarter, and he didn’t really know how to use Salesforce. After some time, the head of sales asked, “Frank, what opportunities are you working on for this quarter?” Frank stumbled, “Well, after closing those big deals at BankCorp and AcmeBank it’s taken me some time, but marketing is doing some campaigns at InsureCo for me, so…”

“Okay, Frank, let’s pull up your opportunities at InsureCo.”

Silence.

Frank backpedaled some more. He didn’t have any new opportunities. When the head of sales pressed him, he pulled up a spreadsheet with a list of projects at BankCorp. “Are these new opportunities, Frank?”

Frank backpedaled some more. These projects were drawing down on the deal he’d already closed, and the head of sales continued to ask questions. He looked at Frank’s manager then intently at Frank, and the tone of his voice turned from inquisitive to impatient.

“What are you doing do build pipeline for the quarter, Frank?”

Frank tried to boast about campaigns that marketing was running, and some email sequence that his SDR was working on.

“Frank, Frank, Frank — what are YOU doing to build pipeline for the quarter?”

“Well, do you want me to focus on cold calling or on closing business?”

Silence.

The head of sales took a deep breath, looked around and banged on the table, “Pipeline generation is the [expletive] job. Pipeline generation is the [expletive] job.”

In this short if uncomfortable window, the head of sales got clear that Frank hadn’t closed any business recently and didn’t have a concrete plan to close any in the future. He found that Frank was not his doing own pipeline generation, and worse, did not believe that he should have to do it himself. If anyone was not clear on the expectations before, they were certainly clear now — own your pipeline generation. And they were clear that they would be held accountable to their results.

That was Frank’s last QBR.

It’s common for QBRs to feel like a throwaway, an all-day meeting where people go out for steak dinners the night before/after, then go back to their jobs. This can happen for a handful of reasons:

• People don’t take them seriously
• No new information surfaces
• Participants ‘juke’ the stats to make themselves look good
• No real decisions are made
• You do training, but the training is either low-quality, the participants think they know the content already, or both

I’ve had the joy of participating in plenty of these QBRs. Sometimes business was good. Sometimes it wasn’t. The QBRs didn’t do anything to help us figure out what was going on or how to get better.

I’ve also had the opportunity to participate in high quality QBRs where I’ve seen how you can use them as a tool to measure, run, and fine tune the business. This approach not only helps you grow the business, but it helps you do so predictably, quarter over quarter. And predictable, double- or triple-digit growth is much more fun than a parade of Franks with no pipeline.

This post describes what makes a good QBR. QBRs can be used for all parts of the organization, but this post will focus on sales QBRs, specifically for leaders. It is heavily influenced by my experiences under Dev Ittycheria, John McMahon and Carlos Delatorre.

When done right, sales QBRs can achieve three critical objectives:

1. Qualify the past and the forecast
2. Assess the team
3. Drive learning and leverage

Qualify the Past and the Forecast

In crappy QBRs, reps or leaders get up and deliver their best version of the past. Each presentation may look a bit different (e.g., they may not all be driven off the same metrics), or they may talk through their “best deals” or some version of “highlights and lowlights.” The problem with this approach is that it’s too easy for issues to slip under the radar or for people to hide. This is sales selling the quarter.

In a good QBR, everyone has the same template and everyone is evaluated based on the same metrics. The CEO/CRO asks the leaders to walk through their results (e.g., bookings, pipeline, recruiting — whatever is most important to the business at the time) and to explain what happened and why it happened. There are two critical elements to this process:

1. Accountability — By having each leader walk through her results in front of her peers, the CEO/CRO has the opportunity to show the team what kinds of results are acceptable on the team (and conversely, what kinds of results don’t cut it). This only works, of course, if the CEO/CRO actually applauds the overperformers and calls out underperformers, as the head of sales did in the case of Frank. It also only works if they can help underperformers get better (see #2), otherwise they are just screaming at the proverbial scoreboard.
2. Diagnosis — Talking through the results is important for both the leader and the CEO/CRO. For the leader, this could be a learning opportunity. If she doesn’t understand what went wrong or what to be doing differently, she has all the best minds in the company there to help her figure it out. By the same token, spending time digging into the results gives the CEO/CRO significant insight into what’s happening on the ground.

That covers the past.

Regarding the forecast: in crappy QBRs, reps or leaders get up and deliver their forecasts. Management collects them, and not much else happens. They may talk through some deals and use cases, but it’s too common for people to feel uncomfortable asking the meaningful questions that qualify whether the deals are real and, if they are real, when they are actually likely to close. This is a missed opportunity.

In the worst situations, leaders put on their rose-colored glasses and talk about their big deals and their lofty forecasts as though the deals were lottery tickets. In one infamous forecast review at a poolside QBR in a lovely Iberian hotel, I sat as each leader went around in a circle pounding his chest about his sky-high forecast, egging the others on to increase their calls like buddies at a craps table. We posted a massive miss that quarter.

In a good QBR, management does not just collect, but also qualifies the forecast. This means asking ‘hard,’ yet simple questions. Who is your champion? How do you know they’re a champion, i.e., that they will fight for you when you’re not they’re and that the right people will actually listen to them? Who’s the economic buyer (EB)? How do you know that if you convince them the deal actually happens, i.e., is there anyone else that needs to be on board for us to close the deal? Have you personally met the EB? What is the paper process, and when did you last qualify it?

It is important to qualify the forecast because it allows the CEO/CRO to build their own forecast, which they own, versus just collect a rollup from the team and hope that the team is right. The board doesn’t care what the rollup is. The board wants to know what’s actually going to happen at the end of the quarter.

Additionally, some organizations actually run their QBRs off Salesforce, which has three benefits: 1) by default it makes all presentations consistent, 2) it makes it much harder to hide (assuming you believe people aren’t going to try to mess with Salesforce data too much), 3) it reinforces the important of Salesforce hygiene, which is important for management to have an accurate view of the business.

Assess the Team

“Is Steve smart enough to do the job? How did he do in bootcamp?”

“Does Kelly know how to build pipeline? How does she do with cold calling?”

“Why is Dan stuck closing small deals?”

In growth software businesses, your primary path to growing NACV is adding new heads, and your primary investment in the business is the people. Talking about members of the team openly and honestly — their performance, the good and the bad characteristics — can be uncomfortable. But it’s like dental hygiene — you have to have to do it regularly to keep the team and the business healthy. If you avoid it, you end up with cavities.

In low-functioning organizations, leaders hold onto poor performers for all kinds of reasons. They’re afraid to look bad about having made a poor hiring decision. They feel bad about not giving someone enough time, even if they’ve really given that person plenty of time. Or maybe they’re afraid of the impact to team morale if they exit someone from the team. Ironically, this last reason is especially misguided — usually high performers on the team know about a poor performer long before the leader does, and they’re just waiting for the leader to take care of the issue (because high performers don’t want to be on teams with B and C players).

In a high functioning QBR, leaders speak honestly and openly about their people. This can take a lot of forms. For instance, they may stack rank the team. They may plot team members on a skill/will matrix. They may talk through weaknesses and development/action plans, or they may solicit input from the group. Everyone puts up like-for-like numbers on team performance, so it’s not just the subjective judgment that often dominates people conversations (e.g., “That guy’s a real athlete — he just needs a little more time and he’ll be a top rep”).

A great leader once told me that the only thing that gets better with time is wine. When there is a clear issue — maybe a poor performer who’s not ramping — the team needs to make a decision about what to do. This could be a ‘get well’ plan or a ‘get moving’ plan, but the key is that it’s a conscious decision. The worst thing leaders can do is let problems fester.

The QBR is not only an opportunity for the CEO/CRO to talk through their leaders’ assessments of their teams, it is also an opportunity for the CEO/CRO to assess their leaders. Who has command of their deals? Who can diagnose and communicate why some members of the team are doing well and others are not? Who is driving accountability in their teams and who is making excuses? This enables the CEO/CRO to diagnose why the business is behaving the way it is (e.g., some regions performing better than others). It also helps inform decisions about whom to promote (or to exit), and where to invest further in the business (e.g., where to add more reps).

Drive Learning and Leverage

It’s common for low-functioning QBRs to eat up a chunk of the day by bringing a parade of executives or other ‘experts’ from within the company to give trainings or updates on their parts of the business. While in some cases these presentations are useful, I have found that they typically drive me to my Twitter feed.

However, since by their very structure QBRs bring lots of people together in one place, they present a unique opportunity for training. Training is a topic that easily merits its own post, but in the context of QBRs, there is a lot of training that the CEO/CRO can do without even leading an actual training session.

One could qualify the forecast or assess the team in small or even one-on-one settings. But a key component of the value of QBRs is having these reviews and discussions as a group so that the CEO/CRO can drive learning and leverage across the org. The act of qualifying the deals in front of the team shows everyone what it means for a deal to be truly qualified, i.e., where we know that we have a real shot at closing it, so we allow it in the forecast. Diagnosing past results as a group means that everyone gets to learn from both the mistakes and the successes of everyone in the group.

Similarly, assessing the people as a group helps all the leaders in the room become better leaders. It’s likely that whatever people problems Leader A is facing — e.g., a slow-ramping rep, a bad hire, someone who thinks that he’s ready to be promoted when he’s not — are actually the same problems that multiple other leaders in the room are facing, too. By discussing the issues as a group, the leaders get to learn from each other, and the quality of the collective leadership goes up.

Furthermore, as previously discussed, reviewing results as a team and having the CEO/CRO hold one leader accountable shows all the other leaders what is expected of them. In this way, the QBR becomes a vehicle for the CEO/CRO not only to train the team, but also to instill in the team their desired culture and values.

In the example from the beginning of this post, by qualifying Frank’s pipeline during the QBR and holding him accountable — not just to his results but also to his behavior, i.e., not doing his own pipeline generation — the head of sales established for everyone what he wanted the behavior, characteristics and results of the team to look like. Everyone needs to do their own pipeline generation, to own it and, not surprisingly, to build a lot of pipeline.

Finally, in addition to making the organization better, making QBRs a learning opportunity can actually motivate and energize the team. While not all salespeople are motivated by learning, some of the most high-functioning reps and leaders are. This means that rather than being a throwaway day that people can’t wait to get over with, making QBRs a learning exercise provides a career growth opportunity for your people.

When and How to Get Started

QBRs can be valuable to the CEO/CRO from relatively early on in a company’s trajectory. In a very early-stage startup where they are personally involved in all the deals and the people, it could make sense to implement QBRs, but these will end up being more about group retrospection/introspection than anything else.

Once the business is big enough that the they aren’t personally involved in all the deals and people, it probably makes sense to implement a QBR model like the one described in this post. QBRs at a very early-stage startup, however, will look different from those at an organization with a hundreds or thousands of reps.

When the business is smaller and you’re just getting started, you won’t have enough managers to merit a sales leader QBR, but you can start with rep QBRs and apply a similar approach. At this stage, you don’t want to be too rigid. You’re still figuring out why customers are really buying, what makes deals qualified, what makes people successful, how much pipeline someone needs to make their number. The emphasis here is on learning and knowledge sharing. This is the time to keep your ears open. Be prepared to evolve the process from quarter to quarter.

As the business matures and you get a better sense for what good looks like, you can implement more process — clearly defined metrics, success criteria, rep profiles, etc. — which you can discuss, inspect, teach and reinforce at the QBR. In reality, even larger businesses that are high-growth or in dynamic markets (or both), conditions will evolve and the QBRs will need to evolve, too.

If you are thinking about how to move towards a model like the one described in this post, here are a few tactics to start with in your next QBR:

1. Qualify the Past and the Forecast. Do the QBRs out of Salesforce (or whatever CRM you use). Pick only a few metrics to review and make a single report showing those metrics that everyone on the team uses. Ask the same 3–5 questions of everyone regarding what happened last quarter and the deals they’re calling for the quarter. For the forecast, pick the questions that you believe are most likely to qualify deals out. This will reveal a lot about what is real and what the team needs to do in the next 90 days.
2. Assess the Team. Ask your leaders to stack rank the members of their teams. Have them use a combination of quantitative metrics (NACV closed and pipeline are good places to start) and qualitative inputs (e.g., product knowledge, drive). Conversations about people — especially in the beginning — will naturally be somewhat inconsistent and will feel uncomfortably subjective. Go with it. Over time you will learn more about what makes team members successful and will in turn refine the dimensions you use to assess them. If you’re still early on and only doing rep QBRs, ask the reps to assess themselves.
3. Drive Learning and Leverage. Try discussing everything as a group. No side reviews, no “let’s take this conversation offline” if it becomes uncomfortable. It’s on you as the leader to show everyone that this is not just okay, but important for the health and success of the business.

The QBR methodology proposed here may sound like it could be uncomfortable to implement. At times, it can.

But having seen a number of QBRs — the good and the not so good — my experience has been that once you adopt it, it is unbelievably refreshing. It feels transparent and healthy to talk openly about the forecast and the team. It’s energizing to hear about what’s going on elsewhere in the business and get feedback from your peers. And while there will always be problems to sort through, diagnose and solve, most importantly, a rigorous approach to QBRs helps the business perform better.