9 minutes

Why Quarterly Business Reviews are Outdated and Needs an Upgrade

Having run more than 200 quarterly business reviews (QBRs), we know a thing or two about the power of QBRs.

There’s a reason we hit 12 quarters in a row at Falcon.io (Brandwatch today) – we used QBRs.

But there’s a problem with QBRs: They’re really good at identifying problems that happened 90 days ago. And since you can’t go back in time, congrats, you’ve lost 90 days to fix the problem.

As technology has evolved, it’s time for QBRs to evolve. And boy do they need to.

After all, Ford is making cars of any color today, as opposed to their old adage “you can have any color you want, as long as it’s black”.

That’s why we’re introducing a framework for Quarterly Business Reviews 2.0.

But before we get ahead of ourselves, let’s establish what a QBR is today.

QBRs as we know them today

A QBR is a quarterly performance review. In the review you identify areas of success, failure and improvement. These translate into goals and action plans for the next quarter. During a QBR, stakeholders share their insights and review KPIs. 

The purpose of a QBR is to create a shared understanding of performance, goals and priorities. In simpler terms, QBRs lets you respond to changes in the market, identify challenges, and define solutions.

There are usually two reviews happening, a monthly and a quarterly – and there’s a reason for that.

  • Monthly review: Focused on tactics and volume metrics (opportunity to target, forecast etc)
  • Quarterly review: A deeper look at performance including processing metrics (ACV, CVRs)

In the case of QBRs, you can include more important metrics such as ACVs and CVRs. The reason is simple, these metrics don’t move as fast as leads and opportunities. But they’re critical to performance and efficiency.

A 5% change in ACV creates a 5% impact on your gap to target next quarter.

Why everyone should run quarterly business reviews

It’s not a secret, here at Growblocks we admire product folks. They’ve figured a lot of things out already.

And when it comes to reviewing performance and work, they’ve simply built a great process called “cycle reviews” (albeit within a shorter time frame).

Much like cycle reviews, running quarterly business reviews provide a structured approach to continuously manage and improve performance. In the case of QBRs, the focus is on revenue.

If there’s one reason to run QBRs that I want you to remember, it’s this:

If you improve just one thing every quarter, it has a compounding effect. As you continuously improve, you’ll see outsized performance across your revenue engine.

And with compounding interest, you’re on the path to see exponential growth.

But there are other reasons you should run QBRs:

  • Systematically improve revenue performance
  • Creates accountability within the organization
  • Establishes a shared focus of what’s important
  • Identify continuous improvement areas

The most important thing you need to do to establish a QBR is getting everyone to believe this is important to run the business. 

They need to believe that the numbers are of importance, and that the actions defined from the findings are carried out.

To get there, determine the key metrics around your GTM that you’ll measure, and put them into the QBR format.

The main focus will be on revenue, acquisition cost, churn, upsell – but there’s more to dig into. You want to start with the top to understand how it affects your business – and that’s what the CEO & CFO care about. ARR, NRR and CAC are important because ultimately that’s how the business will be evaluated by investors. 

But the problem is that these metrics aren’t actionable, they’re a part of the scorecard. Can you really find any actionable insights from “ARR was missed by 5%”? No. They don’t help you arbitrate.

To unlock actions and make the right decisions, you’ll need to dig deeper. And one step is realizing that your business will consist of multiple funnels.

You’ll have different: 

  • Motions (PLG, outbound, inbound etc) 
  • Sizes (mid market, enterprise)
  • Segments (agencies, retail)
  • Markets (DACH, US, etc)

And within all those, behavior will be different. ACVs, CVRs, volume, you name it.

This is where you’ll move from fx. a blended CAC to a CAC for outbound in DACH vs US. You’ll slice your data in multiple ways to surface insight.

And ultimately, it is your job in the QBR to…

Find 1 thing to improve

To find actionable insight that’ll make an impact on revenue, you need to:

  1. Identify the most important issues
  2. Identify root-causes
  3. Identify the revenue gap it’ll cause
A simple process to identify and fix important problems

From here, a conversation ensues to discuss next steps.

While the data is very unemotional – it doesn’t tell the full story, so the conversation is critical. Data will give you clues, but more often than not the reasons behind a problem sits outside of what data can tell you.

Sure, there’ll be external factors that can influence performance. Today we’re seeing extended sales cycles, lower win-rates and lower ACVs. But the QBR will focus on what is in your control.

There’s usually two causes of a problem, either it’s a result of volume (did we generate enough opportunities?) or quality (are we processing leads fast enough?).

Here’s an example:

We didn’t hit our revenue target in DACH (issue), because we didn’t produce enough marketing opportunities.

At this point you understand the issue is, but not the root cause.

There can be a lot of reasons why this is happening, your job is to consider whether it’s a problem that resides in marketing, sales or both.

The clearer you are on the root-cause the better you can make decisions around solving that problem.

If the problem is the time it takes for sales to process an inbound, the solution is not going to be fixed by marketing sending more leads.

Conversely, if the issue is with the quality of the MQLs being passed, a faster processing time by sales will only give you more disqualified leads – not more opportunities.

Once you know the most important issue and understand the root-cause, you can calculate the revenue gap it’s creating. 

As you present these findings, it’ll help create buy-in and establish a sense of urgency. At the same time, this will be something that can clearly be taken action on.

But there’s a reason why we said that QBRs need to evolve.

QBRs are broken, here’s how to fix them

From the example, you can imagine that someone is about to get hit with some bad news.

While QBRs are intended to be actionable, provide direction and create a shared sense of purpose to influence revenue – this is what happens:

  • People know they missed target
  • They get told 3 months later why they missed
  • With no chance to implement a solution proactively

Already now people aren’t very happy about the unique insight.

While they might not know the exact root-cause, it often leads to people dreading QBRs, thinking “how will I get fucked now?”.

Quickly everyone gets defensive – making any progress impossible. Classic objections are:

  • Where did you get that number from?
  • That’s not the number I have!

In effect, the meeting is over at this stage.

All you’ve done up until this point is perform an autopsy telling your team how the patient died.

And this is exactly why QBRs must change. And I’m telling you, there’s a better way.

Introducing QBR 2.0: The next generation of quarterly business reviews

Imagine a QBR where people look forward to the next business review.

They already knew how the quarter went.

If there was a problem, they had already identified the root-cause and taken action before the QBR.

The conversation changes completely and is focused on next quarter, and what you as a team must do in order to reach your goal.

In a simple view, this is how we see it:

There’s an old way to do QBRs, and a new way

I believe technology has evolved to a point where we can change how we operate our revenue engine, and as part of that QBRs.

If you tell the team what is happening now, why and here’s what you can do, you’ll build trust. A VP of Sales hates hearing “you missed, here’s why”, they are much more focused on what they can do to hit their target now.

Very quickly the conversation is focused on what actions should be taken. 

How big is the gap to target, and what can be done to impact revenue. What if we hire more?

And this is where it gets incredibly difficult. 

The most advanced teams today have a stack that will give them a snapshot of current performance, they’ll have a revenue model in a spreadsheet and BI with a solid data science team.

The problem with this setup: Identifying the root-cause, defining the revenue impact and modeling scenarios.. That takes forever, and the reason is quite simple 👇

Using BI, SQL and spreadsheets to do this takes forever

It’ll require a series of custom drills in a BI tool, extracting data, modeling & manipulating it in a sheet – followed by iterations upon iterations to prescribe the best solution.

To make matters worse, the team becomes dependent on a variety of resources within revenue operations.

Building this instrumentation of proactive alerts, root-cause analysis, defining revenue impact and modeling what-if scenarios is incredibly complex.

It’s the equivalent of building your own CRM.

Imagine if there was a solution that sent you proactive pings when something went wrong.

A solution that lets you identify root causes and determine the revenue impact in minutes.

A solution where anyone on your team could test different “what-if” scenarios against how your revenue engine is actually performing.

Well, such a solution exists. We call it a Revenue Planning & Execution Platform (RP&E), and that’s exactly what we’ve built here at Growblocks.

And if you’d like to learn more, we’d be happy to show you how we can help.