I remember attending a weekly sales meeting years ago. All the reps were going through their funnels. “This one has a 80% likelihood of closing. This one is 75. Next one? About 50%”

Rep after rep went through their opportunities, giving the same overly optimistic forecasts. The mood was jubilant. I was pumped. How could you not feel the energy with close rates like this? Week after week was the same thing. Lots of enthusiasm, little actual sales.

It was aspirational fantasy talk. The numbers told a different story. I started analyzing the funnel stats. The average close rate was between 25-30%. Which was good. Not spectacular. Good. Problem was, we were being sold on being sold.

I remember going to the president (who was at the time leading the sales team) and shared this insight. Basically, how can none of the opportunities in the funnel have less than 50% chance of closing, yet our actual sales over total funnel opportunities be around 25%? It just doesn’t add up.

Overly optimistic, self-reported close rates are just one sign of sales denial. There are others. Not moving prospects out of the funnel and marking them as “lost” (this one stings for some people). Offering big discounts. Promising to add that additional feature (+1 sales as I call it).

Look, nobody likes to fail. Or appear like they’re failing. And no one wants to be performing at a level apparently beneath their peers. So when you let one person get away with make-believe numbers, well, you have to expect others will follow. It’s the arms race of sales optimism.

Dispassionately Engaged

The only way to set up a revenue function properly is to operate with a dispassionate, unemotional view of activity. There’s no other way. Now, I do submit that we were naive in our sales management, asking executives to “give your best guess as to the chance of closing”. We learned and moved on. 

But being disconnected from the appearance of underperforming is hard. Especially in sales. No matter who you are, you want to do well. Like it or not, though, there’s no escaping the numbers.

That’s where having a culture of integrity is key. How can you improve when you don’t accept where you actually are? How can you determine what is holding sales back when you aren’t honest about every aspect of the sales process?

Is it product? Is it messaging? Is it a lack of demonstrable value? Is it taking any prospect down the buying journey? 

There is no foundation without brutal honesty. 

Start-ups and scale-ups sometimes lose the stomach for brutal honesty. Why? Maybe we don’t want to admit to ourselves that we’re underperforming against some perceived target. Of course, the demands of running a business means you need sales. Covering payroll and rent is of course a must. But these are going to be realities regardless of what your funnel and sales numbers look like.

Brutal honesty is simply accepting what is. The numbers. The reality. It’s a dispassionate appraisal of the situation. No judgments. And it continues over-and-over, in real-time. 

Brutal honesty is having the courage to look at your entire offering (which gets relayed through your revenue process) and determine where the weaknesses are. It’s removing the self from the process of evaluating the results. It’s not finger-pointing. Or blaming. That’s just weak behaviour that comes from fragile egos. 

When you have the courage to see things for what they are, you can start to improve. Otherwise, you’re window-dressing your own insecurities and passing the blame. 

And it can’t be 4 out of 5 functions acting with brutal honesty. It has to be everyone. Because one executive’s, or team’s, delusions will bring everyone else down. 

What are ways to start evaluating your revenue process? 

First, you have to be strong enough to take the feedback. If you get defensive or can’t handle someone shooting straight with you, then work on yourself first. Don’t ask for others to be brutally honest if you can’t handle the truth. At least their truth. So don’t lie to me or to yourself. 

If you have the courage to accept brutal honesty, then you can follow what’s next.

Accept what is. Start with your CFO, accountant, bookkeeper, or whoever compiles your financials. Numbers don’t lie. Get them to give you the goods. Then sit with the numbers. If you have historical data, analyze it. Map out your trailing 3 and 12 month numbers.

Apply the “5 Why’s”. It’s simply a tool that keeps you asking, “Why?” to any response you think of.

This is the kind of exercise that forces a more in-depth conversation about the effects rather than the outcomes. Don’t settle for simple explanations.

Act like a consultant. If someone in your peer group, say another tech founder, brought you in to give an assessment of their business, you’d give it to them straight. Most likely because you have no emotional connection to their business. Behave this way with your own. Respectful, but straight to the point. Ruthless even.

Ask your team to give their appraisal. Now, this will be along a scale because politics are often involved. If you’ve been a defensive founder in the past, then you’re likely not going to get the straight goods. But if your team can trust that you won’t weaponize their feedback, then ask them to give you their perspective on why things aren’t going as well as you’d like. You’re hoping, praying, that they see something you don’t.

Hire a consultant. It feels like the world has a collective bit of consultant fatigue right now. But there’s no better way to get honest feedback than someone who is completely disconnected from you and your business. The caveat here is, give them very clear boundaries and expectations. They shouldn’t be worried about future projects or getting hired. 

Of course, the feedback you get is only as good as your willingness to accept it. This comes back to intellectual courage. Having the ability to detach yourself from the outcome or feedback.

I know you know that building a systematic, scalable revenue system is more than simply showing up and doing a demo to whoever says “yes”. There is an intentionality that has to exist from product positioning to ideal customer to buying journey and customer engagement. This isn’t possible without the courage to be brutally honest.

Final takeaway: brutal honesty isn’t easy. If it stings, it means you’re on the right track. Keep leaning into it.