Janis Zech: Welcome to another episode of the RevOps Lab. We're here with Jeff Ignacio. And, actually, Jeff, you're here the second time. Welcome back.

Jeff Ignacio: I appreciate you bringing me on again. Happy to chat all things around revenue operations.

Janis Zech: Yeah. I mean, you run a fantastic Substack, which I still regularly read and sponsor. I think we sponsored it back in the days. And, yeah, also host a podcast. Right? So, I think, you know, always fantastic to, you know, see all your depth of thoughts on all things RevOps. Maybe you can give a quick introduction and then we jump in.

Jeff Ignacio: Absolutely. So first of all, for the folks that don't know me that are listening, I've been a longtime revenue operator, became stepped into revenue operations in twenty twelve as a sales operations director coming from a finance background. So when I first stepped into the role, I was managing cadences, budget and planning, annual planning, but then it taught myself the technology around the go to market stack. So you can consider me a hands on keyboard leader when you need me to be so quite dangerous in a lot of different tools, Salesforce, HubSpot, SQL backend databases. And I've been working at series a through C startups. So that journey of go to market build is going to be the core area of focus for me. You also mentioned some of the content. So I run the RevOps review podcast in partnership with Cognism, as well as the revenue operations impact Substack, which hopefully some of your listeners read.

Janis Zech: Yep. Yep. Highly recommend. Check it out. It's fantastic conversations and also great content, really in-depth. So, yeah, really, really recommend it. Today's topic is advanced pipeline management. So you wrote a piece on that, I think, sometime back. I don't even know. It's quite a while. You just wrote a piece on pipeline coverage. So let's really dive in. I mean, how do you define pipeline management and, you know, why is it critical for revenue teams today?

Jeff Ignacio: So pipeline management is going to be one of the very first things that you're pulled into as a sales operations leader. So there are two core pillars that I teach in terms of like, how do you support your sales partners? One is going to be the planning of the business. And two is going to be the operating rhythm. Once you get those operating cadences or rhythm, whatever you want to call it, there's a bunch of different sub rhythms that we manage. So the forecasting rhythm, the pipeline management rhythm, those are going to be two very near and dear to any sales leader. And so what you want to put in place is, you know, what is the right amount of rigor and my amount of analysis that's required to have one, you know, the enough sufficient pipeline to the pipeline is going to progress. And that should then leave you as a precursor to a stronger forecast, which allows you to communicate up to the rest of the organization that you're going to bring in the bookings and the revenue that, relative to your target and plan. So super important as a first practice. And then what you want to do is take a look at, okay, well, how are we conducting pipeline management and how are we doing our forecasting? Is there a better way of doing that? And sometimes you often have to think through first principles, you know, compare what you're doing today versus what would be best in class for your business. And then how do you close that gap over time?

Janis Zech: Yeah. Awesome. I mean, maybe, what's the difference between pipeline management and forecasting?

Jeff Ignacio: So forecasting is going to be, you know, the range of outcomes where you think you're going to land in terms of your revenue number. How you get there is by, it's obviously a prediction, right? So some folks will do a weighted forecast. Some folks will do a bottoms up forecast where you're taking what your sales reps give you. Some will apply judgment to it. Some managers will take a haircut or add on top of that bottoms up. So that's going to be the forecast. How you get there is examining the pipeline unto itself. And the pipeline is about the size and the shape. So the size is the deal sizes, the number of deals. The shape is going to be, you know, what stage they're in. And that should give you some ability to inspect the pipeline that it is one of high quality or low quality. And if it's on the low quality side, then obviously you want to put some of these pipeline management practices. So one goes before the other — pipeline management should ideally beget a stronger and low variance forecast.

Janis Zech: Yeah. Yeah. And, I mean, you mentioned operating cadence. Accidentally, I actually dropped an operating cadence guide today on LinkedIn. So if you're interested, ping me. But like, I mean, can you outline how a typical operating cadence looks like?

Jeff Ignacio: Yeah. So there are operating cadences all throughout the business. So for example, monthly close, you have to do it. Right? So you have to close your books, the accounting finances. That's a rhythm right there. Second rhythm would be when your team meets, you meet weekly, you meet daily, you meet monthly. That's a cadence, your monthly business review. Obviously it's monthly, quarterly business review. Obviously it's quarterly, company kickoff. It's probably annually. So there's all sorts of rhythms throughout the business. So then the question is, do you have the right rhythms? Two, are the appropriate people brought into those rhythms or cadences — I use those interchangeably. What is discussed in the cadences? Who gets to discuss? What type of feedback do you get? So I'm a huge subscriber to systems thinking. And one of the core elements of systems thinking is the feedback loop. So the feedback loop is hugely instrumental to obviously, you know, continuously improving your business. So you don't just have meetings for the sake of meetings. You have them because they have a specific purpose. So I teach this in my RevOps class. You have a number of different types of cadences. One cadence is the broadcast. You are signaling to the entire org some sort of message, right? Like, hey, we did great. We hit our number. Hey, this is a body negative one. Like, hey, we're going through a layoff. Right? So there's a broadcast, there's no action to be felt after to do so afterwards. Another type of cadence is going to be an interlocking cadence. And this is one where you bring folks from siloed departments who do not communicate with one another. And you do that because you want to avoid downstream or upstream impacts that are unintentional. You want to work together as an org. So a clear example of that would be annual planning. You don't just plan the top of funnel module and then your sales capacity model in a silo and a vacuum. You have to work on them together. So that would be an interlocking cadence. Now, another one would be the operating rhythm. And I think really important ones — that I teach this all the time — is you want to build the ones that matter the most, very first: pipeline management, forecasting, super important, win loss reviews. Okay. You don't build those first and that's going to be a secondary or tertiary operating cadence. Big deal review — you don't build that first either. Right. But that's going to be something maybe important down the road. Pipeline council, sales compensation planning councils. And those are all operating cadences that we've built up and down the business. And you start with the most important ones first. And then as your business quote unquote scales and has the ability and the luxury to take a look at second order, third order levels of importance, you do so. But very first things first, you know, focus on the fundamental building blocks.

Janis Zech: Of course, love this because this is also a typical conversation we have when we have prospects coming in who are interested in our forecasting solution. Then, you know, actually, this is one of the conversations that we need to have with them. We need to challenge them a little bit. Hey, do you actually have all the cadences set up already to actually do proper forecasting? How do you forecast today? You know, and actually do you have those, like, you know, like weekly sales meeting, monthly forecasting call, weekly forecasting call, quarterly business review, everything that you just mentioned where you actually have like the right tool set available to ask the right questions at the right time in the right cadence and kind of like bring it all together. It's like you said, like, you know, good forecasting comes from, you know, good or excellent pipeline inspection, pipeline management, which basically means you have like a real handle on which signals, which KPIs actually show you that deals are moving in the right or wrong direction. And that managers actually have like some kind of methodology or framework that they can use then to ask the right questions to inspect those deals, and then, you know, confidently actually do proper forecasting. So I think this whole ending up with a number, right, I think most of our listeners will notice, we talked about this a few times, but forecasting is really like a muscle you need to train and the number in the end, that's sort of the outcome of a long, long training cycle, exercise cycle that you went through before. So, yeah, maybe to add, like, a question here also at the end. It's a long way. Sorry. Especially for fun. But I wanted to, you know, paint the picture here a little bit and recap on what Jeff said because I, you know, I think he's so so right here. And that is, so, if pipeline management and, like, reviewing the pipeline is one of the key steps to actually end up with, like, confident forecasting, which is so important, then in your mind, like, for, like, a series A company, for example, how would you run, like, a really good pipeline review process?

Jeff Ignacio: So whenever you bring in an operating cadence, some folks mistakenly think, okay, we do forecasting and we do it once a week. It's a one hour meeting. Now that's false because you actually are burning a lot of calories throughout the entire organization. So for example, let's say your forecast call is on a Tuesday. On a Monday, you're going to have some sort of pre read or a recap that you then as a sales operations leader, take the time to review the data, take over, write down some bullets of some important things that we should discuss. Maybe you mentioned one to one or asynchronously with your sales manager, you know, what we should prepare for in the forecast call. These are the questions that we should have. So that way we maximize every single minute of the pipeline review call. We show what good looks like. Then on Friday, the week before, you might have like a pipeline snapshot lock, meaning that if you don't get your updates in by Friday at four pm, wherever your time zone is, we're not going to talk about it because you missed your chance to update. Right. So you put the pressure on the sales team to then, you know, make their changes ahead of time. So then you think about that operating cadence. It touches Thursday or Friday, a Monday, then Tuesday's the actual forecast. Then you send the recap on Wednesday to everyone, and they have to take their actions in order to get ready for the following week. Now this is a lot of time. And then you multiply that by the number of people involved — forecasting is a very expensive endeavor for the business, right? Hours times the billable rate. And then at the end of the day, what do you get out of it? Do you get a world class product and your product is a world class forecast, or do you get a mediocre product? A lot of organizations do have subpar forecasts and net, then that might be okay. Right. If you're beating it, right? Like, oh, we were wrong, we smashed our numbers though. Totally fine. But you want to dial it in. You want to try to be as accurate as possible. So you mentioned, you know, at a series A company, you don't know what you don't know at a series A company, right? You've just emerged from product market fit. So product market fit, you've started to, you're starting to get a set of use cases that could be solved by your solution. So then the next logical step is, okay, how do we find more lookalike prospects to talk to? How do we fill in that top of pipeline? And, you know, think about product market fit. You're probably talking to friendlies, investor referrals, but you haven't gone cold and you haven't applied, you know, the golden touch of spending money on marketing to bring in, you know, the late conversion type pipeline. So then you start learning as you go through, you know, having discussions and at bats and inevitably what you're going to do is a couple of things. One, define your sales process. Your sales process may not be ironclad. You might rewrite the damn thing every single year for a few years. Right. Because you're learning. You're optimizing for learning. What I mean by sales changes is you might change your stages, right? That's a cosmetic thing. You might put validation criteria in order to move from one stage to the next. That's not a — that's a real concrete, actual hard thing to put into your sales process. Right. It's not cosmetic by nature. Then you start putting in some inspection mechanisms. So there's a deal review — manager and ops is having, you know, just a dialogue with your sales reps and you're testing them, right? Some folks will use like a framework like MEDDIC, MEDDPICC, SPICE, and it's really to serve a point to really understand, you know, how well we're doing along these different parameters of the deal. And you know, our assumptions of where this deal is within the sales motion, is it true? If it's not true, then what changes do we need to make in the sales motion? So, you know, for series A, I think your sales process is a living, breathing organism. It's helpful to have a mental model. That's why a lot of companies hire experienced leaders. They want to hire someone who's quote unquote seen the movie before. But remember what they're doing is they're copying and pasting a playbook, right? Something they've done before and they're bringing it over. Does that always work? Does it sometimes work? Yes, obviously. That's why experience does matter. And you can get to, you know, the end of the movie much faster because they've already gone through that story before. So if you've had an enterprise selling motion, you bring in someone who's been an enterprise selling operator. If you're an SMB high velocity operator, you probably bring in someone who's had that type of experience as well. And that should help you one, build your sales process map, two, create the tooling, three, set up your deal reviews, four, set up your inspection mechanisms. And then you set up the flywheel of like systems thinking, that feedback loop, so that you can tighten up from one fiscal year to the other. And you should ideally have a process that works for that subset of their go to market motion. Then the company gets bigger. You start adding new motions, new products, new regions, and you have to do it all over again. Right? So you're always constantly building.

Janis Zech: Yeah. Yeah. No. Okay. That's great. That's great. I love the comment about like, changing the stages. It's just a cosmetic thing. Oh god. The number of custom fields related to forecast categories and stages I've seen the last couple of weeks was insane. So, yeah, that hit home with me. One more thing I wanna check in with you. I wanna switch gears like a little bit because we have, like, I think, like, five or six minutes left. And one big piece, I think, also from pipeline reviews, more like from, like, a higher level perspective, is also to look at coverage of a pipeline, right? So how healthy is the pipeline, not just like this quarter, but like, you know, the upcoming quarters as well. So looking into the future and like a common rule I've heard like a few times — and I mean, like, I also personally don't really believe in it — but it's like this three x pipeline coverage rule. So you need to have at least, like, three times the coverage in order to hit your revenue goals, revenue targets. Do you think that is accurate? Or do you have like a different rule around that that you'd like to apply?

Jeff Ignacio: So I'm going to build off some thinking from other peers in the industry. Right? So first off, credit to them — Jeremy Donovan at Insight Partners, Dave Kellogg runs Kellblog, Balderton Capital, right, executive entrepreneur in residence, and Hayes Davis, CEO of Gradient Works. And so I just spoke to him this week, actually. So let me go over a couple of things, right? So where does three x coverage come from? It's kind of the heuristic, right? It's the rule of thumb that may or may not be backed by science, but it's elegantly — it's like a meme, right? Like you see a simple image, but it conveys a lot of complexity behind it. So when you see three x, it tells you a couple of things. You have pipeline relative to your target gap to goal. So pipeline coverage, let's look at it real quick. It is the amount of pipeline you have divided by your, you know, gap to goal target, right? So your target minus what you've attained is the bottom, is the denominator. And then whatever you put on top is — is it all pipeline? Is it qualified pipeline? Is it parameterized by the close date? So you can do a number of different iterations of this number. Now three x tells you a couple of things. Your win rate should be like one third. That's kind of like the quick heuristic thinking. Okay. You're already panicking because maybe you're not winning at thirty three percent. I win at thirty three percent starting at stage three. So let me take it. Let me look at my pipeline coverage ratio of stage three pipeline divided by gap to goal. Oh, but some of my deals that I think will be in stage three by the time that it's relevant for the target is still in stage one, stage two. So should we add that in? So there's a lot of thinking around it. So pipeline coverage, that's a simple concept. Now how you get there is, you know, many ways to Sunday, lots of different ways of thinking about it. Now Dave Kellogg brings an interesting discussion point, which is — and he wrote this in twenty fourteen, so this is like eons ago — his thinking was, well, your pipeline coverage is kind of like light from a star. By the time you see the light, it had already traveled a great distance. Same thing with your pipeline. Your pipeline was generated cohorts ago, right? Whether it's a weekly cohort, monthly cohort, quarterly cohort. Now you can somewhat rely that some of those deals are going to win because your operating history tells you that you have a certain sales cycle. You have a certain win rate. And so therefore the expected value of that one opportunity should lead to a non zero contribution to your bookings or your top line. So yes, that's true as well. So you want to bring that kind of thinking in. Now there's another element that Jeremy Donovan brings in, which is okay, well, there is some element of your deals that are created and closed in quarter. So historically, should you remove that from your target? Because you could somewhat expect that, you know, x times out of ten, you're going to close that amount with reasonable, strong confidence every quarter. So then your pipeline coverage ratio covers the difference, which is what is my target minus what I think I'd close in quarter. And that's going to tell you about some of the movement within your deals as well. So some of your deals — like this plays out in an example. Week ten, you have twelve deals listed as commit on the first day of the next quarter. How many of those deals that were previously listed as commit ended up coming in? Now you talk to a sales leader, what's your commit? They'll tell you, well, it's ninety percent, eighty percent. And then you find out that only fifty or sixty percent of those deals won. Okay. Well, something's wrong with your commit process then. Right. That's the kind of thing you start thinking. It's a flawed process ultimately. So then you start thinking, okay, well, pipeline coverage ratio — do I need to measure it every week? Because I'm inevitably closing business every week as well. So then what's my pipeline coverage ratio by week? Should it be three x all throughout the quarter? Well, no, because you're pushing deals out in week ten, eleven. So your pipeline coverage ratio gets closer to one. Right. And then you start thinking, okay, well, do I use nominal pipeline coverage or do I use weighted pipeline coverage? So when you think about pipeline coverage ratio, think about the nuance of the number you're using, the timing of it, and what that implicates for your business. What I like to do — I like that you look at my carry in pipeline, how much pipeline I'm walking in with. Week one and week two has historically been, for me, not accurate because you're snowplowing opportunities over. Then you're cleaning them up by week two, week three. Week four is kind of the first breath of fresh air. We can say, oh, my pipeline's clean. I get a chance to look at it. You see some optimism happen throughout the quarter, week five through week nine, then in week ten, you start to see the deals push out and they slip to the next quarter. And then that's your breath of fresh air in the quarter, because it's starting to look a little clearer. Now what happens to your pipeline coverage ratio — your pipeline coverage ratio changes throughout the life of that quarter. It converges from three and it shrinks down to one. Hopefully, you're not under one because then you're in a bad spot.

Janis Zech: Yeah. I mean, it's — I think it's a very long way of saying, like, look. If you don't have good, you know, definitions on when to create an opportunity, or, you know, what stage counts for an opportunity, what's the entry criteria, right, like, when do you actually add amounts, right, because they basically push into your pipeline coverage — you know, what's the progression, and what do you do with the push deals or the store deals or kind of the in quarter created deals? Right? Like, these things all matter, and they often are not mentioned when people talk about coverage. Right? So I think that's, like, I think it's a good takeaway. Like, yeah, it's a lot more complicated than it's often being talked about. You know, I think this was the first version of, like, one of two sessions because today we only had twenty minutes. But, yeah, I think we squeezed a lot of details into these twenty minutes already. And, yeah, we're gonna continue the conversation whenever there's time. Jeff, typically, we ask a closing question. You know, what's a book you would recommend? I don't know if you can still squeeze that in, and then we'll let you go.

Jeff Ignacio: Let's see. I quite frankly haven't been reading that much recently. So, probably, shame on me one for not reading. I spent a lot of my time —

Janis Zech: Just print Jeff's newsletter. Right? Like, I give one, like, print Jeff's newsletter and read that. Right? I think that's great. I think that makes a really good book. But that's probably like, I don't know. Are you writing a book? Like, are you joining Sean Lane and, you know, Yako in writing a book?

Jeff Ignacio: I was thinking about it the other day, but I'll say this. I spent a lot of my time having conversations with peers, asynchronously or live, and I spend a lot of time writing. And the reason I do a lot of writing is because I am constantly trying to evolve and challenge my own thinking. The articles that you read in the newsletter, they're not polished by any means. Like I try to crank those things out in ninety to one hundred and twenty minutes every week. So like, is it going to be like official quality that your marketing team expects for your company level blog? No. But guess what? I'm not a company. So therefore I get to write whatever the heck I want. Right? I get to write about whatever I want. I don't know if you read marketing blogs, but I can rest assure you, quality of marketing blogs is not the right bar you should aim for.

Janis Zech: No. No. I mean, in all honesty, like, don't think — everyone knows, read the newsletter. It's pretty awesome. And I think it's exactly that kind of level of detail. And yeah. Well, I plugged it enough, I guess, but still I'm a big fan, so just like a lot. Before you go, small people, thank you, Jeff. Have a good day.

Jeff Ignacio: Alright. Catch you guys later.