108: Improving Scaled to Productivity (w/ Amanda Ono, Resolver)

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Why Scaled to Productivity?

The metric she focused on is Scaled to Productivity: how fast they could get new hires to 70% utilization while feeling confident, and able to lead a successful implementation with the biggest customers.

As Resolver’s product matured and they started stabilizing gross margin, they started to think about scale.Specifically, the best ways to maintain their margin while adding headcount.

As a SaaS company, they were growing at 25-30% YOY in terms of revenue. They had a couple of levers to pull to achieve this:

1. Utilization: ensuring individuals have utilization targets that they’re hitting consistently. But their philosophy wasn’t to have utilization targets in the high 80s or 90s, because they don’t want to burn people out. Plus, they want people to still have time to learn, grow, and understand what the platform does.
2. Hire more people. But eventually, that would hurt gross margin (especially at a fast-growing, global organization).

So Amanda asked, “what if we could get more team members to be effective with our customers, faster?”. In other words, what if they could get employees trained and effective in 5 months, instead of the 8-9 months it typically took?

They had a strong belief that this would empower employees and increase profit. And when they looked at their services forecast model, they saw that if they improved the rate at which people hit their utilization targets, it would have an enormous impact on revenue.

So they worked to improve it, in 5 main steps.

How They Improved It

1. They got buy-in from leadership, and hired someone to own it.

Companies often make a project like this 10% of someone’s job, leading to poor results.

They knew they’d need someone fully focused on it. So they got buy-in on the 5-month goal and hired someone to own it.

2. They created an initial training plan, by reverse-engineering their goal result.

They asked, “what would need to be true, in order to get employees to 70% utilization in 5 months?” The answer to that question helped from the initial training framework.

They found there were 3 “prongs” they could focus training on:

• Product: knowing the product, and being able to configure it to client needs.
• Project: knowing how to implement a SaaS project using Revolver.
• Domain: understanding the domain of risk or corporate security.

They already try to hire team members with domain expertise. And many come with experience implementing projects at a SaaS company. So they focused the bulk of the training on the Product side.

3. They performed a “needs analysis” to learn what content was missing from the past program.

After they formed their initial framework, they also talked to all the new employees and asked them what they would’ve liked to be successful in their first, or sixth month. This provided an active feedback loop and helped fill any gaps their initial plan had left out.

To do this, they formed cohorts of employees to survey who had been hired within 30-60 days of each other. Then they batched them by role.

They analyzed cohorts on a couple of factors:

• How proficient were they when they initially joined? (e.g. were they an early, mid, or seasoned contributor when they came into the training program)
• How quickly did they ramp up?
• And how quickly did they achieve success?

Early employees could offer what education would’ve helped them be more successful. And the Resolver team would be able to further enhance the new training program to fill these gaps.

4. They implemented a mentorship program, by incorporating seasoned employees.

They took employees who had been part of the team for 12+ months and had them serve as mentors or learning coaches for new hires. These mentors would host Q&As with new team members and help them apply their new knowledge to real customer needs & situations. They also provided crucial feedback to help improve the training program based on their experience implementing successful projects with customers.

5. They added a feedback feature to the training material itself.

After all the feedback they received, they built the content for the training program. In it, they incorporated a feedback system so trainees could leave feedback in real-time as they were going through it.

Results

After the new training program was done, they ran 2 cohorts through it, and analyzed how much revenue was generated by:

An employee who scaled to productivity using the old training (in 9 months), vs one who completed the new training (in 5 months).

The results?

A 25% improvement in revenue, in the 5-month cohort. When they applied this to all the new hires they made, they found this improvement in Scaled to Productivity drove an additional $700,000 in revenue.