Janis Zech: Hello, and welcome to another episode of the RevOps Lab. I'm here with Seth London, who's actually not based in London. I guess you get that joke all the time. But, yeah, welcome, Seth. Thanks for being here.

Seth London: Thanks, Janis. Appreciate it. Excited for the conversation.

Janis Zech: Yeah. Same here. We're gonna talk about how to drive alignment between RevOps and FP&A. I think it's one of those discussions that are close and dear to my heart. It's super crucial and often very strategic conversations. But before we dive in, I mean, who are you? What do you do? Why can you talk about this topic? Yeah. Maybe give us some background.

Seth London: Yeah. Absolutely. So as I said, I'm Seth. I'm a revenue operations leader for a global B2B SaaS company called Meltwater, which traditionally is a media monitoring company. Over the last few years, they've entered the social analytics, social listening space. So our target buyers are PR comms and marketing leaders. My role is to lead go to market planning and analytics. So that encompasses a few things. From a planning standpoint, my team leads the annual planning motion, which is an integrated process across all of the go to market functions. So taking more level targets, translating those into functional targets for the different leaders, and also weaving in the go to market strategy to make sure that there's good alignment across the orgs. For a company of our size, it's really of any size, but especially the scale, it's really imperative to make sure that everybody's on the same page with respect to what the strategy is. And from that, once it's landed, we'll produce plan versus actuals reporting with a narrative around where we're performing well against plan, where we aren't, and recommendations or action items that we'd suggest around how to address any of the shortfalls. My team also owns the, we'll call it day to day analytics foundations where the functional teams are self serving on a lot of the dashboards and reporting that RevOps produces. This covers things like pipeline generation, funnel conversions, productivity, customer journey analytics, stuff like that. And then we also produce some analysis on go to market strategy. Part of this gets covered during the annual planning process, but we also do a refresh partway through the year. And that covers questions like, you know, what market should we be prioritizing, within those markets what's our segment strategy, which channels do we want to invest in given historical performance and our assessment of the TAM. Things like that.

Janis Zech: Yeah. Fantastic. I mean, just for context, according to LinkedIn, Meltwater has around two and a half thousand people. Not sure if that's super accurate, but, like—

Seth London: It's approximate.

Janis Zech: Yeah. Yeah. It's a scaled organization, and you actually spent quite some time as a VP of RevOps. Right? And you have a finance background. So you actually worked in FP&A as well at Meltwater. So I thought it's actually really interesting to bring those two perspectives together. And maybe, you know, like, let me tell a quick story. I remember January of last year, I had a dinner with twenty five CROs, Sam Jacobs from Pavilion hosted here in Berlin. And pretty much, you know, the story was like this. Everybody, you know, had goals that they felt were unachievable and that were dictated by the board through the finance team into the go to market organisation. And it felt a bit like very consistently something that is basically how not to do it. So I think today what we want to go through is how to do it better, right? How to actually align the FP&A and go to market function through RevOps, or the entire revenue function, right, like through RevOps in a better way than what I at least witnessed there. That's why I'm actually so excited about this conversation. And in our pre conversation, I think we already went into a bunch of things. So with that, you know, short intro, I mean, maybe let's start with, you know, some common challenges when it comes to the alignment piece. Like, what have you lived through, or what were some of the challenges you experienced firsthand?

Seth London: Yeah. So it's a great question. The example you gave — I've lived through that. So as you mentioned, I spent six or seven years in FP&A. Led the FP&A function for a smaller SaaS company that was actually acquired. In 2018 was in FP&A for a few years after that and then moved to RevOps a couple years ago. But my experience is very similar to what you sort of described where historically or traditionally the way that the annual planning process would work is that there's some discussion between the executive team and the board on top line margin and profitability targets that they want to put a plan together around for the following year. And in some cases, could be step one of a longer term plan. And then those targets are handed to the business. And there ends up being iterations around that. And once you try to think through how to actually execute on a plan that would achieve something close to those, in some cases you realize that pieces of it aren't really feasible. But at the end of the day, it's a relatively inefficient process because there's not a lot of cohesion between the factory floor and the front office, so to say. And so one of the transitions that Meltwater has gone through over the past few years, which I've played a part in — there's obviously a large supporting cast that helps lead the business through this kind of a transition — but we've gone to the point where the annual planning process is relatively integrated where the go to market organization and the executive team and board start from a place where there's alignment on what the goals are for the business. And then from there, there's some planning and strategy that takes place, but at the end of the day we have open lines of communication to make sure that from both sides any revelations or discussion points that need to be further hashed out are kind of brought to the table and covered early so that we're always in sync and have a relatively aligned process. One thing that's also been probably a byproduct of that change is that our planning exercise starts in June, May or June. In the past when it was sort of a top down process where FP&A would get targets and build a financial plan, usually the planning would start in kind of early Q4. And then it'd be quite a sprint to figure out where the nuances were and quickly land a plan that the board would sign off on. But starting early and investing more time in the planning and being more open about some of the challenging conversations that you really want to have a well aligned strategy around has made a big impact.

Janis Zech: Yeah, yeah, that's actually a great point, right? Like how do you bring the top down and bottom up plan together, but then also leave enough time to actually go into the discussion and really identify the key gaps that you might have within the different models and ideally integrating them with kind of cohesive assumptions. What are some other challenges you've been seeing with the alignment between FP&A and RevOps?

Seth London: Yeah. So another one would be consistency in how the results are presented or how they're narrated. So RevOps and FP&A, I think, at least in my experience, generally have good alignment on the key metrics that sort of form the narrative around business results. But in some cases are presented differently and it can create confusion. So for example, at Meltwater, RevOps is very steeped in the core go to market metrics like bookings, gross net retention, pipeline generation, things like that. FP&A produces some versions of those same metrics, but through the lens of an ARR waterfall. Which is good in some ways because the ARR waterfall is very inflexible to some of the noise in the business. It's just like a good clean metric. If you have a consistent way of measuring it, but it can also mean that if you're talking about things like growth bookings in a quarter, a RevOps view of that and the related sales productivity and things like that can be a little bit different than what the ARR waterfall suggests. So we're very careful about having a cohesive narrative to the executive team and the board, but sometimes there can be some differences in interpretation that we need to spend time working through. And then I think generally speaking, the process of taking a go to market plan and translating it into ultimately a financial model that is what the board is going to sign off on can be complicated. Making sure that the go to market plan has the right level of detail — for a business like ours, it's not enough to make a play around investing in enterprise and growing headcount by X. Like we need to be very specific around what markets that's going to be in because the pay rates vary a lot between countries. If you're talking about Singapore versus the United States versus the Nordics, you need to be very clear about delineating the plan. And then there's a lot of other things that go into that, like commissions and any changes in comp plans translate to different expectations around how much comp and bonuses you're going to pay folks. That in and of itself is challenging and you want to make sure that the quality of the translation is high so that when the FP&A team produces their own version of budget versus actuals, which is a little bit more based on the P&L and working capital and things like that, some of the variance doesn't have to be explained by a mistake in translating the go to market plan to a financial plan. So we need to make sure that, or in general, I'd recommend that folks make sure that enough time is put into that exercise.

Janis Zech: Yeah. I mean, I think when I hear you speak, right, it's this typical, like the CFO looks at the business with different metrics than the CRO. And then the board has their own set of metrics to measure enterprise value and health of the overall company. And those are different things that I think if you understand them in RevOps, it helps tremendously to have a seat at the table, be part of that discussion. But if you don't, it's basically very hard to message correctly. And so, I think bookings versus ARR waterfall is a fantastic example because I think most forecasts are booking forecasts, but then the CFO doesn't look at the bookings. I mean, they do look at it, right? But they actually look at kind of what's net new ARR and revenue recognition. So obviously being able to know the different metrics, know why you look at these different metrics and how they differ, I think is something that, yeah, it's definitely beneficial to know when you're in RevOps, especially once you hit more on the leadership track, I would assume.

Seth London: Yeah, I agree. Maybe something I have a little confirmation bias around, but in line with what you just said, I think that one of the reasons why we have a relatively aligned RevOps and FP&A team at Meltwater is because some of the RevOps team has an FP&A background. So we have a few folks that have produced a more finance-y version of a board deck or executive reporting and things like that. Have done M&A, like understand the idea of enterprise valuation, things like that. So when we have our go to market planning head on, in the back of our mind we're also still thinking about enterprise value and how this plan translates to the perspective that the board is likely to have. When we think about Meltwater being PE backed, there's an exit timeframe. It all kind of has to piece together in a cohesive way.

Janis Zech: Yeah, this is so important. And PE backed versus VC backed and what this means for the business and what the expectations are. And those expectations are actually fairly similar, I'd say, but you need to know what bucket you're playing, what timeframes you're playing. And that then dictates a lot of the strategy and the way you actually run the business. And I think knowing that will help anyone in any leadership position. And I think that it doesn't stop with the RevOps or FP&A. Obviously, it's the CRO, it's the CFO, it's the COO. It's also true for the product leaders. So I think it is really important to understand because I think it dictates a lot of what the CEO and the board is thinking about and ideally how you set strategy and goals. And yeah, I think it's something to remember for everyone. Maybe, I don't know if everybody's super familiar with the roles and responsibilities of FP&A — maybe you can just quickly go through, like, you know, what are those roles and responsibilities typically? Just like a short summary maybe.

Seth London: Yeah. So I'd say at a high level, it's almost like a bit of a barbell idea where FP&A is very close to the strategy and some of the top down guidance from the board, and they'll take ideas and help provide some context on how that would impact the P&L going forward. So generally speaking, FP&A owns a lot of the board reporting and some of the reporting to the executive team. Tactically, they would own the monthly budget versus actuals review and a refresh of the forecast. And they're re-forecasting ultimately the P&L, working capital, cash flow. They'll provide feedback on forecast versus things like debt covenants if you have any leverage. At Meltwater anyway, FP&A owns the ARR number. So they roll that out on a monthly basis and provide an ARR waterfall. And then some other — I would call it administrative, but very important — responsibilities like administration of commissions and bonuses, not just for the go to market org but for the rest of the business as well. Yeah, I think that's a pretty — at least that's a coverage that I've seen in my past roles and how it works at Meltwater.

Janis Zech: Yeah. Great. And then, you know, I mean, you've basically been on both sides now. Like, what would you say are the biggest levers to pull to drive alignment between FP&A and RevOps?

Seth London: Yeah, it's a great question. I actually think the perspective I have on this applies to really any two teams, not just RevOps and FP&A. But the way that I think of it is, pillar one is you need to prioritize building a strong relationship. And the way to do that, partly, is to try to develop a mental model of how the other team — or the folks on the other team that you work with — think. Like what are their priorities? How are they evaluating the business? What are they concerned about? So if I translate that to some tangible examples: FP&A doesn't like to be surprised. They really like predictability in results. And that translates back to the annual planning process and how involved they are. If there's things that happen in a quarter that have some sort of a top line or P&L impact, just being mindful of those things enables you to help look around corners for them. And again, could go for any team — RevOps in marketing, RevOps in biz dev, etc. And the other important piece I think is just to have a good recurring cadence with the FP&A team. So at Meltwater we touch base at least once a week with the FP&A team and make sure that they're across all of the key things we're working on that are known or could have some impact on the things that they care about. Make sure that they're well informed on the go to market narrative. So when we produce our monthly reporting package for the CRO and for some of the board members, we make sure that FP&A gets a copy of that and we translate the key items and how some of the recent insights are then influencing how we think about next quarter, rest of year, things like that. So in short, invest in relationship, develop a mental model on how they think about the business and what they care about, and then make sure that you have a good recurring cadence with them to stay aligned.

Janis Zech: So in this cadence, I mean, said you meet weekly. Who meets? How long do you meet? What do you talk about?

Seth London: Yes, it depends a little bit on where we are in the quarter. I think closer to the end of the quarter tends to be a few times a week and it would be generally speaking, you know, myself, a couple of other folks on my team, like RevOps managers that are close to go to market analytics typically. And then like manager director of the folks in FP&A. And there's also a weekly forecasting cadence that has both RevOps and FP&A on the call. Typically, RevOps is running point on the narrative. So providing the tale of the tape, providing some input on some of the pipeline inspection that we've done to color the forecast that's being rolled up from the field. And then FP&A can sort of take those inputs and use that to update their own expectations of how we're gonna close the quarter. And then there's lots of ad hoc stuff that comes up, whether it's related to commissions and bonuses on large deals or some changes in business rules that we're contemplating that have an impact on comp, those tend to happen a little more ad hoc. But we always make sure to keep them close to the conversation.

Janis Zech: Yeah. Yeah. Yeah. Great. I mean, I think that's actually really good to know. When you think about the kind of — right, like, there's kind of an annual cadence. There's probably a quarterly cadence. There's, like, a weekly cadence. Like, how do you go into the annual planning process and then, you know, yeah, how is that typically run?

Seth London: Yeah. So at Meltwater, FP&A I think is probably closest to the conversations that are happening at the board, given that the starting point is really around value maximization for the enterprise. So early in the planning cycle, once the board meeting has happened where they've sort of informally kicked off the annual planning process, we'll debrief with the CRO and then we'll debrief with FP&A and make sure that we're clear on the topics that are on the board that are gonna require some work over the next couple of months. So for us, you know, it's the beginning of July right now. We're basically updating like an annual market analysis to make sure we have a clear understanding of what markets we wanna invest in, what the resource mix should be, things like that. As some of the work is completed on those bigger picture topics, then we'll, you know, put it together in a presentation and schedule time, sort of ad hoc or piecemeal, with FP&A, walk them through the work that we've done, our findings, and ultimately CC them as a key stakeholder in the process of getting alignment. It's like getting approval really, on the way to then recommending that to the CRO, CEO, board, etc. As the planning process goes on and we start to think about translating the go to market plan into a financial plan, the frequency of our touch points definitely increases. So it becomes more like a workshopping type structure where we're working on things together. Maybe we can say RevOps and FP&A vibing, to use an LLM term. And then, yeah, as you approach the singularity or the event horizon of the board signing off on the plan, it could be as frequently as, you know, two times a day, at least once a day, to connect and just update where we are, what's been done, what's left to do, any key questions that need alignment or need further work done to sort of land the conclusion on. And it seems to work pretty well.

Janis Zech: Yeah. And you mentioned approval, which I find really interesting because that's also the reality. Right? There's a budget that needs to be approved by the board. Right? And there's basically resource allocation that needs to be decided on. And so I would say the FP&A part probably owns more of the, okay, this is something we can actually present to the budget or we can include in the budget. How is that decision made? Because obviously they're not as close to the go to market motion. So for them, it's really hard to, you know, know what are the right things to decide on. Right? So, like, kind of just curious, like, how do you have that conversation? Is that mostly happening between your group and the FP&A group? How much are the sales leaders or the CRO, the CFO, how much are they involved in that process?

Seth London: So generally speaking, I think we start from a fairly aligned position on the different options that are on the table from a go to market planning perspective. And usually where things would sort of peak their interest or maybe start to go outside of what we discuss is if there's topics around investing headcount or resources in a channel or a region that is maybe not new. Generally speaking, I think we're pretty aligned from the get go. But at the end of the day, the FP&A team can either be a champion or they can be a detractor. And they're going to be one or two. There's no in between. Because as you pointed out, there needs to be a sign off on the plan. They're going to be responsible for translating that to a financial plan and they also are great stewards of capital for the business. So part of their perspective is to make sure that the go to market org is doing the same thing. You know, Meltwater spends forty percent of revenue on sales and marketing. So there's a big cost envelope being planned out. And in my experience, I've found that if you invest the time upfront to get feedback from FP&A, often they'll have some good suggestions that you end up incorporating in your own thinking. It just makes the downstream process much smoother. I think what tends to kill the velocity of a planning motion is when there's unnecessary iterations on an idea. And so to the extent that you can get alignment on those with the right stakeholders early on and help make sure that they're bought in and can help champion some of those ideas, or at least get to a point where there's an understanding of the trade offs between opportunity and cost — so we may not be fully aligned, but at least we've had a good discussion and said, okay, these are the things we agree on, these are the things that need to be decided by someone above our pay grade, but at least we're able to spell it out and be on the same page.

Janis Zech: Yeah. Yeah. Yeah. I mean, so insightful. And it's, you know, the way I — when listening to you speak about this, right, it really starts with sitting in one room, listening to each other, understanding what the different sides have to say, and then coming to a conclusion or agreeing to disagree, and then going back and coming back together to find common ground. But, yeah, you have to give yourself the time and probably data to look at it and come to some conclusions. Maybe, you know, switch gears a bit, like, you know, in your experience, right, like, what metrics should FP&A own? Which ones should RevOps own? Like, what's the typical setup here?

Seth London: Yeah. So I think simply RevOps should own the core go to market metrics. So anything around pipeline, funnel, conversion rates, productivity, things like that. FP&A traditionally owns anything that's considered a financial metric — revenue, bookings, billings. I guess billings is kind of a shared metric. But billings, cash flow, working capital, gross margin, profitability, things like that. ARR is interesting. I think generally speaking, I would classify it as a financial metric. And at Meltwater, it's something that's owned by the FP&A team, which I think makes sense. There could be a world where it's a metric that the RevOps team is responsible for producing, but it probably varies a little bit company to company, which team is a little more equipped, or just what the setup is. It's probably debatable.

Janis Zech: I mean, there's a big debate about ARR in general right now on LinkedIn at least, you know, is ARR dead? And, I mean, everything is dead on LinkedIn always. And then for many companies, it actually works better than before. But, obviously, with all the consumption and, you know, like volume based pricing models or outcome based pricing models, really the question is, you know, is the typical idea of recurring revenue — is that still it? But it's so funny because, you know, I grew up — my second company I founded was actually an advertising technology. And, I mean, you basically only have consumption based models, and it's just very different to model and calculate. So it's just not an ARR model, different gross margins, different financial profile overall. Yeah. But, yeah, I mean, I think SaaS is — you know, this is a very SaaS-y conversation, I feel. But I think it's very interesting to hear, right, like, where should it live? And then, obviously, what's kind of your North Star metrics, right, like, for operating the business? And again, I think what the — I think listening to this conversation, right, I think the reality is that there's probably not one, but it really depends on what teams you're running. And then from a board perspective, there are probably two, three, four metrics that typically make the most sense, but it's not necessarily a good metric to measure whether a regional team performs very well. Right. And so I think this is the whole idea of like, different layers of metrics that then essentially are important for different stakeholders. I mean, we did a cheat sheet on it. I think Jacco had that in his book, Revenue Architecture. We have go from the volume metrics to kind of layout metrics, and I think it's always a great way to think about metrics in my mind.

Seth London: Yeah. ARR is interesting because in some respects, it's a lead metric when you think about ARR then becomes revenue, or it's a compound metric, a common metric that's basically a statement about the go forward revenue of a business. But under the hood, it's a lag metric. ARR is a result of process around generating pipeline, converting deals, top funnel activity, retaining customers, renewing them early. So it's an interesting one. And you made an interesting comment about LinkedIn. I've seen a lot of posts recently around how gross net retention are measured for some relatively well known public SaaS companies. And it's interesting. Sometimes it can be a bit of an eyebrow raiser. And maybe a way to think of who should own some of those metrics — like the CFO, of the executive team members, I think the CFO generally speaking is gonna be the most objective, maybe the most balanced, and thoughtful about presenting some of these things. And because ARR and retention have such an impact on company valuation, if they aren't owned by the CFO, at least they need to understand the approach at a very fundamental level and cosign on that approach. I'd say if I put my shareholder hat on and think about, you know, fiduciary responsibility, that's maybe another way to think about it.

Janis Zech: Yeah, one hundred percent. I think we could probably do another episode on kind of financial metrics and the relationship to enterprise value. Also very interesting topic for sure. Challenging one also for sure. Yeah, I think my previous company, we were public for a while. So yeah, I would say there's definitely a lot of different definitions that might have some impact on the way companies are valued. So I think that's typically something that — yeah, I think you put it really nicely with like — I mean, on the financial side, you want as little surprises as possible and as much stability and reliability. And I think this is often also a huge conflict between the revenue teams and the finance teams, because the reality is that in revenue, a lot of things are — it's very hard to have no surprises. It's just really, really hard. And in finance, you typically live in spreadsheets and the numbers are the numbers and you cannot fake the numbers, right? And so I think bringing that together can be challenging. But yeah, look, I think I really appreciate you sharing all this. Personally, learned a lot and exactly, you know, like this was exactly what I wanted to do — is basically have somebody who has seen both sides, share some learnings, share, you know, how you align two teams. And, yeah, thank you so much for coming on.

Seth London: Yeah. Of course. Thanks for having me. That's appreciated. It's a great discussion.