They say there are only two certainties in life: death and taxes.
Now, what’s worse than taxes? Stealth taxes!
Yet that’s exactly what 99% of startups pay without ever realising it.
And what is this insidious tax you’ve not realised you’re paying?
As surely as the sun rises and sets, each day and each week as your scaleup grows, your teams get just marginally less aligned.
Like the proverbial frog being slowly simmered from a pan of cold water, it’s hard to notice, until suddenly there’s an emergency trigger.
The tax you pay for this gradual misalignment is typically in the form of lower performance, particularly across your different GTM teams.
It will usually manifest itself in just slightly degrading conversion rates and worsening unit economics, but there are several other signs to be aware of.
The signs of gradual misalignment
What are the signs that this misalignment tax is starting to weigh on your GTM acceleration?
- Worsening conversion rates
- Slower ramp times
- Uneven performance across your sales reps
- Teams using different language
- Team rancour (particular at leadership level)
Let’s take a look at each.
Conversion Rates
A tell-tale sign that your teams have started to drift apart is the conversion rates between one team and the next begin to deteriorate, and so even though one team hits their target, the others may not.
A classic example of this is where the marketing team smash their MQL target, only for the sales number to be missed.
While there may be multiple reasons for this, a prevalent cause I’ve come across and spoken to other revenue leaders and founders about is the marketing team realise it’s easier to get particular types of leads in (e.g. SMB versus Enterprise); or perhaps a particular industry (e.g. agencies) are a great source of MQLs…yet at the same time, the sales team are realising they don’t convert particularly well OR they’ll hit their quota faster by selling to larger businesses or a different industry.
Either way, they may be broadly aligned, but their interpretation of how they get to the results is beginning to diverge, and so conversion rates suffer.
Ramp Times
Slower ramp times can also signal issues with team alignment to your GTM playbook.
If people joining the GTM team (marketers, SDRs, sales, CS etc.) start to take longer to ramp, this can be down to the fact they’re actually doing more learning on the job than adopting the existing best practice.
And this can occur because your functional leaders are looking to evolve and reinterpret how they execute your GTM (see above)…but this leaves new starters without a genuine, canonical source of truth…and so instead they try and just figure it out themselves.
Uneven Results
Just as new starters may ramp more slowly due to the misalignment tax, your existing team (and particularly the sales org) can start to deliver uneven results.
Again, this may well be down to them drifting from the existing orthodoxy of your GTM to find new opportunities. It’s a natural urge, particularly for the sales team, to find that path of least resistance and to sell to whoever they can.
Some reps will be brilliant at it, others less so. It’s going to come down to their natural talent…and as such performance becomes less even and much harder to replicate.
Langauge
“Let’s remember our OKR goals – to drive penetration of our key persona, Entertainment Ed (EMEA). That means we have to focus on delivering high quality leads from our core market, which is mid-market businesses based in the UK across the entertainment and hospitality sectors,” say the marketing team in their monthly strategic review.
Meanwhile across the hallway in the sales monthly planning session…”Let’s nail our OKR to win more accounts with our key persona, Entertainment Ed (EMEA). To hit our goals we’ll need to double down on moving further up market with UK and EMEA businesses, with a focus on entertainment and experiential prospects.”
There’s a definite cross-over here, but while they’re using (broadly) the same language they’re going to focus in different areas with marketing looking at mid-market and sales trying to go upmarket.
So they’re using similar words to do different things. Other times you have the opposite, where your teams mean the same thing but use different words and phrases to describe it…which is of course just confusing!
Rancour
Finally, the clearest signal of all that you’ve started paying a very high misalignment tax – infighting.
When you’ve got members of different teams – and particularly at a leadership level – blaming each other for poor performance or not doing their jobs effectively, you know things are in a bad state and they’re now no longer on the same page.
How does it happen?
There are many ways, but let’s touch on 4 of the main culprits:
1. GTM becomes a game of Chinese whispers.
This happens when your business has a GTM playbook, but it’s not effectively and consistently communicated across the team.
It’s particularly true with new starters…if your onboarding programme relies heavily on shadowing others then they’ll learn their subtly different view on what your GTM means and how it should be executed. Which they then pass onto the next person…with their own bias now added. And so on. It means every new joiner has a marginally different idea of your GTM, which quickly compounds over time, particularly when you’re scaling rapidly.
However it’s not just with new starters…if it’s not consistently reinforced across your existing team they’ll also forget it exists and over time, rely on speaking to their peers versus re-engaging with the actual GTM playbook.
2. Old documentation = less credibility
The above scenario is exacerbated if your GTM documentation is old and unrevised for extended periods of time.
Startups count time in dog years, so every quarter it’s likely your GTM plans are adjusting to market feedback. If that’s not reflected in your documentation…or worse, you end up with a spaghetti junction of confusing versions that your team can’t navigate, then you’ll struggle to get the buy-in you need.
And instead, they’ll start to create their own versions (the vicious cycle) or simply do what they feel is best, with no documentation at all…
3. There’s no systematic way to test and improve your GTM
Which leads to the third reason so many scale-ups pay a misalignment tax…well meaning, smart and ambitious employees want to break new ground and continuously improve your performance.
However if they’re doing this in a vacuum, without any clear structure and processes for rigorously testing and then feeding back the results of their GTM experiments, instead of rapid innovation you have absolute chaos.
4. OKRs and goals are too broad
Last but not least, many startups conflate OKRs (or goal setting more broadly) with operationalising their GTM.
While it’s certainly an important aspect of it, it’s not the whole story.
It’s easy for teams to ostensibly have the same objectives (maybe even the same key results)…e.g. X market penetration of Y persona and still have entirely different approaches that don’t work well together.
Sometimes understanding the ‘how’ as well as the ‘what’ is important to ensure there’s alignment.
How do you rectify it?
Instead of paying a horrible, hidden tax that gives you no benefit…the solution is to make a small alignment deposit every week and month.
How do you do this?
The best bet is to follow these steps to ensure team alignment…and these to operationalise your GTM playbook effectively.
The above are links to two in-depth posts I’ve already written on those topics, so I won’t repeat the details here.
But the essence of both is: you have to be very deliberate with your approach to team alignment. There’s a natural centrifugal force at work in rapidly scaling businesses.
To counteract it, you need to exert an equal effort on keeping teams on the same page, which should ideally be the one that documents and communicates your go-to-market strategy.
That’s the path to faster growth, less ‘misalignment tax’, happier teams and the holy grail of repeatable, predictable and scalable revenue.