Delivery Excellence – Executing for success

The typical CEO in the popular media is a passionate visionary. The founder will have you believe that she had this brilliant idea or spotted an untapped opportunity, and they toiled day and night to build the product, take it to market and eventually become a roaring success. The reality is much more mundane – companies have to navigate an endless list of obstacles and challenges, and the majority of them don’t survive the journey.

In fact, the road from founding to market success (usually an IPO or a favourable acquisition) is so hard, and so fraught with risks, that over 75% of companies fail*. And only about 1% of startups eventually, truly succeed at scale.

Delivery Excellence? What’s that?

Most technology startups tend to focus on the product initially. After all, you have to first build something before you can sell it. Then a sales focus is added to go to market and actually sell the product. If there is sufficient interest and the product gains traction, the company may approach VCs for funding.

Ask a typical founder at this stage about “Operations” – and you’ll get a blank look, or an offhand response on the order of – “Oh yeah. We’ve got someone for that. He handles HR, Finance and everything else!“

Often they do not realise that their current mode of operation is not sustainable in the longer term. The small team size and a willingness (or at least an acceptance) in the early team to put in heroic hours, drives their early growth and success.

But as the business grows and teams scale, the easy and informal communication channels start breaking down, new hires are not necessarily driven by the same dedication to the mission that early team members had, and the company’s plans start stumbling.

Not just for “big” companies

Almost everyone would agree that large, successful companies need a robust operational backbone – but from a mid-sized founder’s perspective all of that is something they consider “Big Company stuff!”, and it would only slow them down.

Founders prize their agility & nimbleness (rightfully so) and are very suspicious, even dismissive of anything that smells of “Process”. But as companies start to really scale, founders realise that they need some method to the madness.

Left unchecked, the lack of operational focus will quickly become a serious liability to the company’s growth.

Ops are Not One size fits all

A good process doesn’t have to be “heavy” and slow down an organisation’s activities. In fact, well-designed processes are low overhead, and actually, help an organisation’s overall throughput – whether it’s the faster turnaround on sales proposals or accelerated time to market with new features.

The key point to remember is that processes that are appropriate to the company’s stage of growth are absolutely an enabler of growth and can provide a significant competitive advantage.

Such a process foundation can help the management of a fast-growing startup in many ways.

1. Metrics that help management understand how different parts of the organisation are performing, and early warning when going off track.
2. Structured goal setting aligned to the company’s objectives.
3. More optimal use of resources and aligning spending for maximum growth impact.
4. Greater visibility across the board, driving faster execution, more throughput and lower errors in execution.

When is the right time to start?

When should a founding team start investing in Operations? Like a parent advising their child about saving – it’s never too early.

Ideally, the best time is when the company starts adding staff regularly or is acquiring customers steadily. Usually, at this stage, the product is out, some early customer traction has been achieved and demand is driving hiring.

The relentless focus on building products and selling has paid dividends, but team bandwidth constraints limit the ability to focus on Operations.

Now as the founders start considering raising capital, setting a simple process foundation in place would not only help the company prepare for the funding event and subsequent scaling, but also help in the funding dialogue with the VCs, demonstrating a level of organisational maturity.

And if the company has already raised funding, Operations become even more critical.

How To Build An Ops Foundation

If there is sufficient funding the company may consider hiring a full-time COO, but even having a fractional COO or a consultant working directly with the founding team can make a huge difference.

It’s important the company institutes processes while maintaining the agility and adaptability that got them to this stage.

The point of investing in Operations is to increase the probability of success. But do the founders even know what success looks like? At this stage, such a sense of success is usually quite one dimensional – sales growth or funding valuation etc. But those measures are not really sufficient or even desirable to build a successful, sustainable company.

An experienced COO or consultant can help the founding team in developing the right measures and tools – not just to manage but to deliver growth across multiple dimensions – people growth, technology innovation, market leadership, revenue, customer success and profitability.

Remember, Operations is not static

As the saying goes “the only constant is change” and in your startup you also want the saying to be “the only constant is growth“! Just as a growing child needs new clothes and toys every so often, you need to review and tweak your operating processes and systems periodically.

The core principle should be “appropriate”. Don’t splurge on expensive tools when you’re a couple of million dollars in revenue but do have basic systems and reporting processes. Equally, don’t hesitate to spend on implementing a solid ERP system if you’re hitting multiple million dollars in ARR and are growing across multiple geographies. Not doing so can come back to bite you – big time!

If you have operational expertise in your founding team, and members who’ve “been there, done that” – great! If not, bringing in some level of operations expertise when you’re still fairly small can be a huge differentiator for your startup’s success.

As the data shows, startup mortality is very, very real. The challenges of product-market fit, technology variables, customer loyalty, competitive differentiation, talent retention, and just “unknown unknowns” are massive.

Not all of these factors are in your control. However, Operations rigour and execution discipline are indeed some of the factors that you can influence heavily. And you need every possible advantage in the battle to get your startup over the finish line!