How often have we heard? “We missed our revenue goal because of the market.” “We shuttered the company because of the market.” “We screwed up blah blah blah … because of the market.” It’s easy for the leaders of companies large and small to blame the market for their woes, even though so many can’t tell you what “the market” actually is. But it’s time for them to stop blaming this nebulous, external thing that’s out of their control and focus on the internal stuff that’s really the problem: their business operations, also known as “BizOps.”
As critical as BizOps is, it’s just not an attractive part of the business world, at least when compared to the belle of the ball, strategic management. And that’s a shame because any comprehensive strategy is useless without especially good operations. But isn’t this obvious? Unfortunately not. If it were, CEOs and their management teams wouldn’t be blaming the market. Or maybe they’re just lying or delusional. Regardless, it’s time for companies to bring BizOps to the forefront. Too bad most just don’t know what to do.
For more than two decades, I’ve worked with and for companies that ranged from single-person startups to global Fortune 500 firms. As both an executive and a manager, I ran engineering, product management, business strategy, corporate development, customer service, sales, and marketing. I understood that something needed to tie all the functions and departments together. My teams and I had wild market success when everything was operationally integrated. When they weren’t, we missed the market, disappointed that the proverbial wheels came off a rather good cart. I’ll elect the former scenario any day. What did I learn along this journey?
All functional companies are alike; each dysfunctional company is dysfunctional in its own way.
Please forgive my vandalism of Leo Tolstoy’s famous opening line from Anna Karenina, but it really hits the mark. So, what makes some companies succeed while so many others – the majority – struggle to make it? Excellent operations is the foundation for functional companies. Such organizations will not only adapt to constantly-changing market conditions, but also achieve productivity levels that eclipse their peers and excite their customers, partners, employees, and shareholders.
My interest in operational excellence began during my first startup venture as a young programmer. When two management consultants came in to take a look at our small tech business, I saw for the first time how all the business parts fit together. Fortunately, we were an operationally well-run company subsequently acquired by a larger competitor nearly 18-months later. Ironically, that bigger company had some serious operational challenges and was unable to grow the business it obtained, a common (and inexcusable) occurrence in the M&A world.
From that point forward, I began constructing operational business models that allowed me to diagnose corporate performance and helped me verify that all the right business components, such as people, processes, tech, and ecosystem, were aligned. What these models continued to demonstrate was that gaps in operations could be caught early enough, before the wheels fell off. Though financial measures, such as operating revenue, net profit margin, etc., are valuable, they measure outcomes, and they’re often too late; the wheel is already off.
BizOps and everything around it is a big deal, and it’s broken in most companies, so it’s time to fix it. I used business operations modeling to validate my assertion that ops is indeed a problem – a big one. Now I look forward to a broader discussion among business leaders, investors, academics and everyone else in the operations equation.
When looking for a metaphor to overcome the BizOps problem, I thought of my friend Joe who owns a local garage where I take my older cars. Joe and his main guy Steve always manage to fix the problems, no matter how ugly they are. I grew up working on cars, but these guys are good. When I asked them their secret, Joe and Steve replied.
We know how all the components fit together and influence one another. That’s the only way to fix problems and achieve the best performance.
Amen. Now that’s operations wisdom. Too bad they just focus on cars. We need a garage for ops.