Ep 24: Mastering the Art and Science of Forecasting with Mike Saxton

Timestamps:

00:41 Understanding the Forecaster's Goal

01:22 The Feedback Loop – Accuracy, Consistency, and Growth

05:43 The Crucial Building Blocks of Forecasting 

08:23 Building Trust Inside Your Team

10:15 The Value of Shared Ownership and Collaboration

14:47 Challenges in Forecasting and How to Overcome Them

22:19 Key Takeaways for Sales Leaders

31:16: Conclusion: A Mini Masterclass in Forecasting

About Mike Saxton:

Mike Saxton is a Senior Vice President and has worked with SoftwareAG, Tibco and OpenText. He scaled the APAC region from $40M to $100M, built a direct organisation of 140 employees and reported to the CRO. With 120 quarters of forecasting experience, he is going to share his wins and learnings over the years.

The Strategic Goal of Forecasting

Understanding the primary objective of forecasting is crucial. According to Mike, the main goal is to provide visibility and forecast accuracy to key stakeholders, such as the Chief Revenue Officer (CRO) and the board. Accuracy and visibility have a significant impact on public companies, influencing share prices and organisational performance. Achieving a good quarter involves hitting 95-105% of the forecasted numbers. However, Mike emphasises the importance of considering not only the financial impact but also the political impact of forecasts, especially when seeking investments for business growth.

The Three Pillars – Accuracy, Consistency, and Growth

Mike highlights the three essential elements in the forecasting process: accuracy, consistency, and growth. Accuracy ensures that the forecast reflects the true state of the business, providing a reliable basis for decision-making. Consistency, however, sets apart exceptional sales leaders from the rest, as delivering consistent results quarter after quarter is a true mark of success. Finally, growth is the ultimate goal, requiring a combination of accuracy and consistency to secure investments and propel the business forward.

Data Discipline as the Foundation

Digging into the building blocks of forecasting, Mike emphasises the critical role of data discipline. He stresses the importance of clean and consistent data in CRM systems, using the classic adage "garbage in, garbage out." Establishing clear data definitions and enforcing them regularly ensures a common understanding of forecast deals, stages, and criteria. Mike also shares insights on dealing with reps who may lose focus on data discipline, advocating for decisive actions like moving deals between reps to maintain accuracy.

Shared Ownership and Collaboration

Mike emphasises the value of shared ownership of the forecasting process. While sales owns the forecast, collaboration with marketing, pre-sales, and even customers is crucial. He highlights the need for aligning with marketing on lead definitions and qualification processes, emphasising that creating a joint understanding, regardless of formal rules, leads to more genuine pipelines. Additionally, involving customers in the forecasting process, particularly in the sign-off stage, can enhance accuracy and commitment.

Building Trust within the Team

Trust is the cornerstone of a high-performing team. Mike shares practical strategies, including regular one-on-one meetings where forecasting is temporarily set aside to focus on building personal connections. Trust within the team is reciprocal – leaders must trust their team, and team members must trust that leaders will support them. Mike also suggests sharing ownership of forecast numbers with pre-sales, product managers, and other stakeholders, fostering a collaborative and trust-based approach to achieving accurate forecasts.

Challenges in Forecasting and How to Overcome Them

Reflecting on more than 120 quarter ends, Mike discusses the persistent challenges in forecasting. He highlights the pressure for plan attainment and the need for leaders to communicate early if achieving the plan is unlikely. Pipeline management, maintaining a realistic pipeline size, and adopting a mixed cadence for forecast calls help overcome forecast burnout. Mike also stresses the importance of learning from bad news early, encouraging open communication within the team and with external stakeholders.

Key Takeaways for Sales Leaders

In this section, we distil the key takeaways from Mike's extensive experience. Understanding the forecasting styles of team members, from overly optimistic to overly conservative, is crucial for leaders. Communication is a linchpin, with transparency about why forecasting matters and constant communication about progress and challenges. Embracing a mindset of continuous improvement, learning from losses, and staying resilient in the face of setbacks are essential attributes for success in the challenging landscape of sales forecasting.

Conclusion

Mastering the art and science of forecasting requires a strategic mindset, data discipline, collaboration, trust-building, and the ability to navigate challenges. Mike Saxton's insights provide a roadmap for sales leaders and professionals to enhance their forecasting processes, achieve greater accuracy, consistency, and ultimately drive sustained business growth. As the landscape of sales continues to evolve, the lessons shared by Mike serve as a valuable guide for those navigating the intricate world of forecasting.

Hiring or replacing someone in the next 90 days?

We partner with tech sales leaders who are time-poor, and under-pressure and introduce them to top performers without wasting time or risking average hires, so that they can build winning teams and careers.

Message [email protected] today