Biz Ops 101: Why it’s so crucial to an org

Business Operations — a familiar but mysterious function, operating quietly across departments but sitting just outside standard functional areas. If you search “business operations” on LinkedIn, over 200k jobs show up vs. 125k for “product manager.” Yet it remains a slightly misunderstood function, which also means it can sometimes be overlooked as a critical business function for early-stage businesses. My friends Dan Yoo, Matt Heist and I have been living in the world of business operations, or ‘biz ops’ for years now, at multiple companies like Yahoo!, LinkedIn, NerdWallet, Coinbase, Slack and Pinterest. The three of us sat down recently to chat about biz ops and its pivotal role in any growing organization.

Eugene: Let me introduce you to Dan Yoo and Matt Heist, who I think are some of the “OGs” of a team and topic that’s near and dear to my heart — biz ops.

Dan started the biz ops team at LinkedIn, grew that team to ~120, moved onto become COO of Nerdwallet and started biz ops there, as well as doing the same most recently at Coinbase. He’s helped pioneer the creation of these teams as well as written several articles, such as BizOps the Connective Tissue in Tech Companies and Want in on BizOps? Here’s How.

Matt ran the original biz ops team at Yahoo! under Andrew Braccia (Partner at Accel) and Jeff Weiner (former CEO of LinkedIn) and then started the biz ops team at Slack, under another former Yahoo biz ops colleague, Allen Shim, the CFO of Slack. I’ve known Matt for more than 15 years (and worked for him almost half that time!).

Ok gents, thanks for joining me on this topic! Let’s start off by defining biz ops. It’s a nebulous function that’s not widely understood, so let’s talk a little bit about what it is and why it’s important.

Matt: I see it as the nexus between FP&A and strategy. When we were building this out under Jeff Weiner at Yahoo, he needed someone to start connecting the dots between how we get from key performance indicators to revenue. In other words, how do you translate and understand operating metrics in order to find out what drives the financial performance? The role can either stay in that spot or expand from there to get more involved with data and the role it plays between opportunity and operations.

Dan: At LinkedIn, we obviously modeled it off what Jeff had built there already. We started with driving the operating cadence of the business, so, creating dashboard and key metrics. It quickly expanded to strategic products and focusing on what the right metrics were to create outsized value for the company. Lastly, we focused on the white space strategy — where should we be in two to three years, and what do we need to do to get there.

Eugene Lee: When do you think is the right time to build a biz ops team? You’ve both mentioned different use cases from data to strategy to finance, but when should companies think about bringing on that first biz ops hire?

Matt: I joined Slack at probably the perfect time, to be honest. I started under Allen as one of his first hires, and we were roughly about 100 people. At that point, it was very much FP&A — get to know the budget, build the top line model. That ultimately enabled us to start doing other projects and strategic planning. Plus, with this model you get a seat at the table to share forecasts and relevant data points to other teams across the organization so that data can help operationalize other areas as well. Our biz ops team is now sitting at 50, across sales, marketing, and customer success.

Eugene: That’s a great point — when I started the biz ops team at Pinterest, the model was what got me that ‘seat at the table,’ because everyone wanted to know the forecast, or the topline executive-facing data where everyone wants input. We probably started the team a little later at Pinterest, at around 300 people, but you need to figure what’s in your toolset to help foster collaboration and provide influence.

Dan: I’ve also seen a different model where biz ops is more of a catch-all role, similar to what Brian Sze did at Stripe. He was doing anything and everything non-coding and product related when it was a team of about 40 people. This generalist strategy works well when you’re starting off with 1 or 2 people to help prove the value in certain areas of the business. Sometimes that person has driven so much value in an area they end up being pulled out of biz ops and onto that particular team. That’s actually a good thing. CFOs love this model as it forces resource trade-offs among teams, and proves the value of biz ops. Aside from that, I absolutely echo your sentiments that you have to own that model in order to get that seat at the table.

Eugene Lee: Pushing further on this topic, how does biz ops originate within an organization? How do you even get it started?

Matt Heist: How it usually starts is when the CEO is having a hard time getting the board meeting pulled together, raising money, or just getting the story distilled down, all while working with high potential folks in sales and marketing who are equally as busy. So it’s really born out of the real challenges that a CEO has around connecting the dots and creating that connective tissue.

Sometimes biz ops can be seen as a luxury and I think that’s fair from a sequencing perspective, maybe it needs to come after some of those first hires, like sales, product, etc. But the sooner the better, because it’s much easier to scale together than bringing someone on who then has to get up to speed. So again, I would say that, from a sequencing perspective I understand it might come after a few hires, but I think it should be really early on more for seamless business continuity and efficiency than anything.

Dan Yoo: Totally. My recommendation is to get the right level of seniority that could flex between just being hands-on and getting the work done themselves and somebody who could also scale. So obviously somebody like Matt was an incredible hire for Allen to be able to help Slack go thru incredible scale. It’s hiring a senior enough person that can act a little bit in you know bit of a CEO capacity, a bit of a catch-all capacity, like Dan said, and can help with the advice and how to deal with some of these issues. That’s a huge deal within early companies.

Eugene: Do you think you need executive-level support or biz ops to be successful?

Dan: Absolutely. If the goal of a biz ops team is to work on the most impactful things or to try to be a massively leveraged group in terms of what one biz ops person would bring to an organization, then you do need that executive-level sponsorship from the top. In a matrixed organization, you may not have direct authority over any of the different functions, like marketing or product or sales. So you need to lead by that influence given by the executives in the organization.

Matt Heist: To add to what Dan said, a lot depends on the personal relationships you’re able to foster and maintain but building trust is the most important thing among the team. Knowing someone has an eye on the whole company and not just one area is beneficial.

Eugene Lee: What are some skill sets that you need to be successful in deploying a biz ops function? Sometimes there is a lot of tension among the teams and this can make it tricky to navigate cross-functionally.

Matt Heist: I think it definitely starts with a generalist, maybe someone from consulting or banking, who is just a strong athlete and really can build a model and connect dots across operating metrics and what drives the business. As the company evolves, you can start hiring people with direct experience, sales ops for example, and move on from a generalist to specialization.

Eugene Lee: I always tell the teams I run in biz ops that we’re in a services business our job is to help our business partners (other functional teams) look good. We’re a resource for them. So the soft skills are equally important because when you’re in these dashboard meetings, you’re often talking about metrics that are going the wrong way. Being able to identify the issues and potential solutions without creating friction can be a delicate task. Being able to maintain a sense of productivity and positivity while still acknowledging operational improvements is paramount to success in this role.

Matt Heist: I agree — there is some nuance there. I think if you’re seen as someone who just comes in and points fingers at problems, you’re just going to not be part of the conversation very long. But if you identify something that’s gone from green to red, and do some quiet due diligence to understand how and why it’s happening, and come up with a mitigation plan, it creates a sense that you’re in it together, and motivated to help solve the problem.

Dan Yoo: I think with that approach, you’ll have earned trust which then allows for tough conversations down the line. The biggest thing is to reinforce this idea that you’re here to help them out. You’re not there to point fingers, but to be partners in the challenges, as well as the successes.

Eugene Lee: What are your thoughts on the role helping to build alignment?

Matt Heist: I do think organizational alignment starts with the biz ops team demonstrating a clear understanding of the business as a whole — where there are some strengths and where we’re maybe falling down a little bit. One idea to build alignment is to show the common threads across the business — whether you build a product, you market a product, or you sell a product, where can you show cause and effect, and how can the numbers help you create more efficiencies and greater success.

Dan Yoo: Yeah, you got to respect the data. I think alignment is probably one of the most critical issues for operating a company in hyper-growth mode, whether it’s a Coinbase or Slack, or Pinterest. Jeff used to call it the ‘connective tissue’ in the organization and I think that’s true in a lot of ways. Biz ops, I have found has a very, very good read on what’s going on in an organization and if a CEO or CFO could use that information to get the right inputs and make the right decisions, it’s a very powerful function.

Matt Heist: One last topic I think is crucial to biz ops is people — where to find them, and then where they go from biz ops.

Many times, people come into the biz ops world as generalists, come in with a fresh perspective and take a very broad-based look at things. As the role progresses, you naturally become specialized in one area (or a few), say sales or marketing. That’s often a jumping off point for people who’ve found the area that they’re passionate about, and it can be a great gateway into that functional area.

What you don’t want to do is stay in biz ops and become frustrated by thinking you could do the job better than the teams doing it now. A biz ops role is not to run a marketing team but to be a partner to the marketing team, providing insight and access to information that they may not have had on their own, that “inside baseball” type information. If what you’d rather do is run marketing, then you shouldn’t stay in biz ops. That’s what’s so cool about the role, in my opinion, it’s one of the great training grounds for heading out and doing other things.

Dan Yoo: I totally echo that. If you look at a lot of LinkedIn profiles of folks that have been biz ops alums, you have the VP of Product at LinkedIn who’s ex- biz ops, Christian Sutherland-Wong was early biz ops and is now the CEO of Glassdoor. The list goes on and on. At Coinbase, we had such a good talent bench for the rest of the company that it was a struggle to keep getting that momentum of scaling the biz ops org. But you have to be ok with it because if you’re hiring a great generalist program, training them, and getting to what Matt called that “inside baseball” thought processes in each of the verticals or functional roles, then those folks will eventually make great functional leaders.

Eugene Lee: I don’t know how many countless conversations I’ve had with Matt about this exact topic of what I could do next post-biz ops career, but now I’m in venture so something went wrong there.

That wraps it up for us, but I wanted to thank Matt and Dan again for sharing their thoughts on the biz ops function.