Demystifying Business Operations — A Radio Talk with Maitreyee and Honey on KZSU Stanford
This week, I got the opportunity to talk about business operations with Maitreyee as part of her SoftBiz radio show. I really enjoyed the conversation because we discussed business operations in a lot of detail!
You can find the full recording on Sound Cloud here and below is a quick outline of key concepts I shared.
What Exactly Is Business Operations
Varies in organizations, industries, scope, but in my experience it has a lot of these ten components:
- Cross-functional Collaboration between teams and this is a lot of just relationship development, understanding who is working on work and facilitating alignment.
- Dashboards, Metrics, KPIs, Reporting. This is a lot of working with teams to understand their goals, how they are tracking to them, metrics, and then consolidating at business level for executives to drive decision making.
- Strategic Planning Cadence. People mistake this for doing this once a year. But in this fast changing environment that we live in, organizations have to plan annually, quarterly, monthly to ensure that everyone is working on same focus areas.
- Process Development and Implementation. This is almost like being an internal consultant to all teams to help with operational efficiencies.
- Go To Market Launch. In many cases, Business Operations is responsible for facilitating strategy and execution for a new product.
- Financial and Budget Management. In working with finance/accounting, Business Operations usually facilitates the reporting, conversation, and most importantly providing insight and meaning to numbers.
- PMO Function. This is managing programs and projects that are function specific or cross-functional for a business.
- Special Projects and Communications. I think of special projects as something that does not squarely fit in any other function, like it’s part marketing, part engineering, etc. than it lands in Business Ops. Examples are business transformation efforts like moving from a services organization to a product company.
- Data Analytics. Modes of source data, collecting it, managing it.
- People Aspects. Business Ops tends to work a lot with people in term of coaching, guidance, but also working with HR on onboarding new employees, training efforts across the board, and people related programs.
A Day in life of Business Ops
No day is alike! Doing so much and hands are in so many things that it varies.
Qualities required for business ops
A lot of qualities, but here is my list of ten qualities:
- One, laser focused on execution
- Second, being a relentless leader
- Third, being a problem solver
- Forth, being a structured thinker. A lot of times you are simply helping people think structurally.
- Fifth, being a great communicator and influencer. Your building a lot of bridges.
- Sixth, being an advisor and counselor for initiatives, projects, people,
- Seventh, having a strategic mind set.
- But Eight, being result oriented
- Ninth, probably one of the most important ones is being a fast learner. Your involved and doing so many things that you can to pick up on things fast.
- Tenth, being flexible and embracing change.
Roles similar to Business Operations or launch pads
- Program/Project Management
- Corporate Strategy and Development
- Expanding from a functional operations roles like Marketing Operations, Sales Operations, Product Operations, etc.
Let’s say you are the head of business operations at a retail company. And earlier you were at a software product company. What are the similarities between the two? Also could you name the key differences in the two roles?
The business models of the two are different, but a lot of times what they are trying to achieve is very similar. In both companies, you have a marketing and sales function. Inherently, it’s essential for these two organizations to align to make sure sales benefits from all the marketing efforts, and marketing is using sales input and data to drive all marketing efforts. This is a perfect example of cross-functional alignment. Business operations serves as an independent party and facilitator between these two functions to look at their strategies, their reports and metrics, where they are aligned and where is there a gap that needs to be filled.
A company plans to record all activities — like hiring, bug tracking, expenses..everything using a project tracking software. What all functions will get affected and how does the business ops manager handle them?
Business Operations would usually spearhead this whole thing in term of process, structure, people involved and pretty much ‘program managing’ this. In a lot of cases, there are different tools that are being used by different functions like HR uses one thing, engineering uses another, etc. Business Operations takes the responsibility in collaborating with these different functions in understanding the tools, what is being recorded and measured and most importantly WHY is it important. Ideally, a good Business Operations person is connecting the dots between one function and one metric to another and provide a business level view of all these metrics and what they mean. Then, they work closely with leaders to drive decision making based on these metrics.
Assume that you are the business ops person for a semiconductor company. And then comes the memo from the government “strongly” encouraging the company to make in USA. What roles does Business Operations person play in this?
Shifting your entire product development to another country impacts product, manufacturing in this case, HR, legal, facilities. So many functions are involved in making this change. Business operations would work as the glue between all these teams to drive the strategy for how to transition manufacturing to US, and then work with each of the teams to execute on everything that needs to happens and help resolve any issues and risks that may come up.
When a company is in the initial stages, very few of them bother to have an operations manager. What would you say is the best time in the life span of the company to hire someone to look at the business ops?
I would suggest in the first year of when the business is generating sufficient revenue and is on a path to become profitable. Ideally, sooner the better. I say this for two reasons.
First, business operations person can and should be able to handle a lot of things to offload the founders to let them focus on the product development and sales. As a business operations person, I have managed many functions like marketing, UX, training, finance, business development and so on. Therefore, in initial stages a company can lean a lot on business operations to just handle everything that is not core to what the founders need to focus on.
Second, a business operations person is generally a very good leader. And as all leadership learnings suggest, a good leader should be able to lead anything. So in early stages of company, a business operations person even just as leader can help drive setting a good foundation for the company to grow and scale. This speaks to the number ten thing I listed when you asked about what does business operations do which is help with the people and culture aspect of the organization.
What percent of revenue is usually allocated to biz ops? Business ops touches all functions in a company. How do you decide the boundaries ..where does biz op end and hiring begin or where does finance begin and biz ops end?
This is an excellent question, and business ops touches all the functions so it’s hard to allocate a piece of revenue to just business operations. Rather, I would like to spend a little time talking about an organization model for business operations to be successful. Most organizations these days are organized in a very functional and matrixed model. In order for business operations to be successful, it has to be a centralized function with a team that is embedded into different parts of the organization.
For example, I would suggest having a business operations team report directly into the CEO or one of the C-level executives, and that team is composed of a Business Operations person that supports all the major functions in the organization like marketing and sales, product and engineering, etc. This way, the functions get specialized support and partnership from business operations, but when the business operations team comes together, they have a holistic view of the business.
What are major challenges that businesses generally face that business operations can help with?
I would say there are three major challenges that most organization face these days that are in the business operations wheelhouse to lead:
- One is the silo effect. This is especially true as the organization is growing exponentially. Organizations at even like 300–500 people get siloed and one function or team doesn’t know what another is doing because they are keeping up with demands of their role. The problem point here is there can be redundancy of efforts and work. Business operations usually has bird’s eye view into what is going on in all parts of the organizations, so they can help achieve operational efficiency by reducing duplicate efforts.
- Second is a holistic view of the business. It’s similar to silo effect, but goes one step further. Once you have visibility into the functions and teams, someone has to provide a holistic view of the picture. There are marketing metrics, and sales metrics, and HR metrics, and so on, but how do you pull all those together and measure the health of the overall business. That is more valuable to investors and customers rather than just how HR is doing or how marketing is doing.
- Third is balance of strategy and execution. This is not to say businesses are not strategic, they are or can’t execute, then can! However, the market changes, a major customer demands something, or like your said earlier, the government strongly recommends building in the US. The best laid out strategies and plans change, so how do you at scale respond to these changes effectively. There is where the magic of business operations comes in to help all teams be aware, so communications, but then realign so that everyone is marching in the same direction at the same time. This is combination of communications, planning, executing, helping de risk situations and much more.
An important part of business ops is defining the KPIs and measuring success of various teams. Could you talk a little about that?
Yeah, this is the of the important most structured aspect of business operations. Most functions already have KPIs based on industry standards. Marketing and Sales uses tools likes Marketo and Saleforce to track their campaigns, how much they cost, how effective they are in terms of leads that are generated from the campaigns. Then, sales takes those leads and tries to convert them into customers and there is an array of metrics that go int that.
Once you have those customers, delivering and managing those customers has to quantifiable so there are also many industry driven metrics for that. Same for product, engineering, and other functions.
From a business standpoint, your typical eCommerce company would care about ‘basket size’ which is how much is in your cart.. Equal to revenue. However, there are still a lot of functions/industries. where metrics are still being defined, so Business Operations plays a role in researching, understanding, and evaluating what should a functions key metrics be. Especially in emerging markets that we have not had before like IoT, virtual reality, etc. In that, it’s a trial and error game and being attuned to what people are talking about, care about, etc.
Business operations is the invisible and unglamorous function in any company, and yet it is the backbone of the entire company. Focus on business operations can clearly eliminate wastage and inefficiencies and in surprising ways increase your profits. Executives who embrace business operations management. Muhammad Ali once said, it isn’t the mountain ahead that wears you out but it’s the pebble in your shoe. Business operations management is not only dealing with the mountains ahead, but also with the pebbles in the shoes.