The Plan You Inherited

There is a version of the step up to chief executive that gets discussed a lot, which is the scope one. More functions, the full P&L, the board. There is another version that gets discussed less. You are now accountable for a plan that was probably signed off before you had the seat, written at a level of abstraction that leaves most of the commercial decisions unmade.

Two things follow from that. They are separate problems and they want different responses, so I will take them one at a time.

The plan leaves more open than it looks

Grow enterprise. Three new markets. Four points of gross margin. That is the right level of detail for a board document. It is not enough to run on.

It does not tell you the pricing structure for the enterprise tier, or whether you go direct or through partners, or which three markets and in what order, or what you stop doing to fund them. It does not tell you where the four points come from, which matters, because two of the obvious sources tend to cancel each other out.

Those choices get made anyway. Usually in the flow of the work, by whoever is nearest the immediate problem, without anyone treating them as choices.

Three that come up repeatedly:

Pricing gets extended instead of designed. The new segment goes onto the existing rate card with a discount applied, because that is the fastest route to a first deal. Eighteen months later your largest customers are your least profitable ones and nobody can reconstruct how it happened.

Sequencing follows opportunity rather than capability. Markets open in the order deals turn up. You end up covering six geographies at the depth you can properly resource for two.

Cost to serve arrives late. The plan assumed the new segment behaves like the existing one. It does not. Implementation and support load per account runs two or three times the model, and it shows up in gross margin roughly four months after the point where fixing it was cheap.

I do not think any of that is bad execution. Those decisions were never framed as decisions, so nobody had to defend them.

What counts as evidence changes

Running a commercial function, you are judged on hitting a number. In the chief executive seat you are judged on the case for the number. It is a different skill, it is not taught anywhere, and it gets learned in public.

For leaders who came up through sales or go-to-market, this is usually where the friction sits, and it is not a shortage of conviction. They are normally closer to the customer than anyone else on the executive team and their read on which segments will move is sound. The commercial hypothesis is rarely the weak part. The translation into something a board will fund is.

A sponsor or a sceptical CFO does not fund conviction. They fund a case that shows what the growth costs to acquire, what happens to margin as mix shifts, what breaks first when volume triples, and which assumptions carry the weight. That case has to survive being taken apart by someone whose job is to take it apart.

The finance team usually cannot build it for you, and that is not a criticism of them. Below a certain size, finance is set up for reporting. Close, cash, audit, covenants. Accurate, and pointed backwards. Ask what happens to contribution margin if you move upmarket and add two implementation people per enterprise client, and you will typically get a spreadsheet in three weeks that answers a slightly different question. The modelling of commercial choices before you make them is a separate job from financial control. Most mid-market businesses do not have anyone doing it, so the chief executive does it at the weekend or it does not get done.

Where the two meet

They collide around quarter three, when the plan stops describing the business. Not failing, just drifting. Two segments perform off expectation, a competitor moves, a pricing assumption turns out to have been optimistic.

At that point you either explain a variance or propose a change, and both need the same underlying work: a defensible account of what happened and what it means for the rest of the period. For sponsor-backed businesses this is the mid-hold review, where the plan built on a diligence model meets eighteen months of operating experience that nobody had at entry. Resetting it against what you now know is ordinary practice. It goes better proposed than requested.

What to do about it

Write down the decisions the plan left open before someone settles them by default. There are usually five to ten. Pricing structure, channel, sequencing and the working definition of the target segment are on the list nearly every time.

Get profitability at segment level rather than in aggregate. Company averages hide the thing you need to see, which is that one segment is subsidising another and the growth plan is weighted towards the wrong one. When this comes out it is almost never news to the sales team. It is frequently news to the board.

Instrument the assumptions that carry the weight. Retention, price realisation, cost to serve. Finding out in month four that one of them has moved is worth a lot more than finding out in month ten, and stating them openly makes a plan more credible rather than less, because whoever reviews it will find them anyway.

None of this is strategy work. It sits in the layer below the strategy, which is where the plan is either delivered or lost, and it is mostly a question of who has the time to do it properly.