There is a moment after the new fiscal year starts when we sit back, take a deep breath, shake our heads and ask ourselves: “What were we thinking?!”‍

• ‍“Who thought that our pipeline would increase by 50% in a month?”
• “Who thought win rates would really improve by 5 percentage points?”
• “How are we ever going to add a dozen new sales reps in Q2 when the most we have ever added is 5?”

And just like in The Twilight Zone, we now see that the assumptions we used were not real but imagined. We run the math, generate projections, and quickly realize that because we are not going to drive the improvements in our fundamental assumptions built in the plan, we are not going to be close to our Q1 or first half targets.

Our responsibility in RevOps and Sales Leadership is to raise these concerns (and ultimately to address them). We are hesitant; we know that the messengers are always the most likely to take the hit and/or be accused of not believing. We know that we must field all the questions and produce the data. We will be asked why we signed off on this plan. We know that our targets will not change. And if you're the CRO, you own the plan.

So how did we get this so wrong?

There are always a combination of missteps that lead to a situation where a plan is clearly way off from reality. A scramble then takes place to make adjustments “mid-flight.” What you don’t want to do is fall into the same trappings during re-planning that brought you here in the first place – you need a better way and better data to improve your assumptions.

Here are 7 common causes of the wishful-thinking sales and GTM plan and recommendations to prevent these issues:

1. The Plan is Not Grounded in Reality.

It’s a case of “give them what they want.” Did we just find a way to make the math work in a spreadsheet in order to show we can achieve our growth targets? For example, in our planning model, we increase ASP and win rates starting in the first month and voilà – we visualize the growth we were asked to achieve!

If you do this, you are doomed. You should instead ask three questions:

• Why do we think those KPIs will improve?
• How are we going to improve them?
• Who is accountable for driving the improvements?

The answers require data, good scenario modeling, and collaborative discussions. That anchors your plan in what’s actually achievable, even with stretch performance.

2. A Specific Planning Assumption is Dictated.

Did we set a single underlying assumption from the start and then have to make all the others fit, even if they end up being unreasonable?

The only targets that should be used for planning are revenue growth and a CAC, or similar financial productivity KPI. All other assumptions in combination drive these two targets.

If specific assumptions are dictated, such as the number of sales reps, quota, or conversion rates, it removes flexibility and options on how to best get to those two main targets – and this results in a flawed plan. Sales leaders, finance, and their GTM stakeholders should start with the open-mindedness to create a plan where all KPIs can be evaluated, compared, and adjusted, assessed for risk or upside in order to reach your main objectives.

3. It’s Only Focused on One Path to the Goals.

There are many paths to get to your goals, which may be optimized for revenue growth, efficiency, or some weighted combination of those. If you’re only considering one possible scenario to reach your goals, you are missing an opportunity for strategic discussions around priorities and cost-benefit analyses.

Ideally, you should create, evaluate, and iterate on many options from the start. This effort should involve analyzing the risks and trade-offs of each option and their potential outcomes, likelihood of success, costs, resources, and effort.

A good approach is to generate a conservative plan where your baseline continues, as well as a very aggressive plan and then mix in some options that fall somewhere in the middle. This will help you analyze, evaluate and present the alternatives for the business discussion that needs to take place to settle on a final plan.

4. You Used Incorrect Start-of-the-Year Assumptions.

Planning is done months before the new fiscal year begins. It’s important to be realistic on where you will start the year, especially with headcount and pipeline.

If you underestimate your end-of-year attrition or ability to hire, that means you’re starting off the year with fewer reps and sales quota capacity than anticipated. That makes your plan wrong from Day 1.

Be conservative (without sandbagging!). You can always delay early-year hiring if needed.
If you beat conservative assumptions at the beginning of the new fiscal year, take the upside and start off in an enviable and strong position.

5. Q1 “Chaos” Was a Bigger Factor Than Expected.

A new fiscal year typically includes any number of these changes and activities: sales re-segmentation, sales territory changes, promotions, role changes, system changes, new comp plans, time off for sales club, and a sales or company-wide kick-off. These are disruptive and can negatively impact your ability to achieve your Q1 targets.

Make sure you have a plan that thinks through the costs vs. benefits of these changes and activities and what the impacts are likely to be on your outcomes and timing of your outcomes. You may decide that some of it is not worth the risk and disruption or can be adjusted in timing or scope.

6. Groupthink.

If everyone is sitting around the room thinking that pipeline and win rates are just going to keep steadily increasing, or that a new product being released in the first half of the year is going to add 50% to the average selling price, you have a problem.

It’s important that in planning you challenge the current assumptions. Use data and insights to validate and guide decisions. This ensures that goals are data driven and realistic with an acceptable risk profile, and that there’s an understanding on how to maintain momentum. Failure to do so can lead to the most aggressive plan becoming the plan.

7. There’s No Plan to Drive Improvements.

If you are assuming you will see improvements in the KPIs that drive growth and efficiency, you must have a plan to accomplish this. But too often, this is not done. “If it’s in the spreadsheet model, it will happen!” → nope.

You need to have a growth-levers plan (a plan behind your plan) that includes high-level actions, timing, expectations, milestones, KPIs to monitor progress, and ownership to drive accountability. Stakeholders across teams and departments must be consulted and aligned. No plan to actually drive the improvements in the GTM plan means you have no plan.

In Summary: “Everyone Has a Plan Until They Get Punched in the Face”

That's a quote from Mike Tyson, which essentially means that when the plan doesn’t work, you are in a losing position. If the plan is based on false assumptions and high unrealistic hopes, you will be thrown off track early in the new fiscal year. Then bad things happen. Teams tend to either panic and make quick, rash decisions or changes – or do nothing. Neither is good.

Wishful thinking doesn’t get you to your goals. A well developed, thoughtful, data driven, multi-option, analytical, risk-based plan does.

Revcast was designed and built to help mitigate the above situations through a data- and insights-driven approach to go-to-market planning and replanning for revenue team leaders. Revcast's solution helps to set valid assumptions and provides ongoing insights into how adjustments will impact outcomes. As a result, this allows you to easily generate and evaluate alternatives for risks and opportunities and drive visibility and alignment throughout the organization. All of this results in a reality-based, not a wishful-thinking, plan that increases your ability to achieve your goals.