Why your startup needs an operations team
A capable operations team helps startup leaders improve the business without neglecting their core responsibilities. This way, founders don’t have to choose between improving their ways of working and their team’s primary duties. This is a broad remit that varies by company but often includes some of the following goals:
- Drive improvements to how teams work.
- Help the support team to find an efficient way to get through their customer service backlogs.
- Guide product development through structuring new teams as they grow.
- Assist sales with CRM adoption and utilisation.
- Vendor and supply chain management. Help the business choose which software tools to use. Manage procurement and logistics for hardware businesses.
- Risk, cybersecurity and compliance. Ensure the business operates responsibly in how it manages customer data, accesses software systems, and other compliances.
- Cross-team project management. Manage projects that require the input of multiple teams.
- People operations. Manage the employee lifecycle, from onboarding to off-boarding.
- Modelling and forecasting. Help teams to understand their future resourcing requirements.
- Goal setting and performance tracking. Help teams measure their performance and set goals.
Operations is a familiar role for businesses that interact with the real world. If your startup needs to hold inventory of a physical product, manage a logistics or a physical supply chain (hardware startups), manage a large workforce in the field (Uber, DoorDash), or utilise a network of physical locations (Airbnb, OpenTable), you probably already have operations managers. However, pure-play software-as-a-service companies increasingly employ operations managers too. Even some very early-stage startups embrace this trend, with some hiring operations managers before they hire product managers.
At first, the idea of a centralised operations team seemed like an anti-pattern. When you delegate responsibilities like Human Resources to a dedicated team, you take those responsibilities away from managers (at least partially). When you do this type of delegation, you make your leaders and managers worse because you give them an excuse to throw people-management problems over the fence to HR1. I assumed this same principle should apply to operations — surely, strong managers should own the operating rhythm of their teams. Having led operations at startups for some time, I know that my instincts were wrong and that operations is a necessary function for most startups.
The reality of startup leadership
All ambitious startups are resource-poor, given their goals. This means that startup leaders (people who own functions like customer service, customer success, sales, marketing, product management, and engineering) tend to be very busy people. The reality of most startups is that leaders struggle to keep up with their day-to-day responsibilities, let alone design and deliver major projects to advance the business.
For example, customer support teams in early-stage startups tend to need help with their business-as-usual responsibilities: answering the phone, responding to support tickets, troubleshooting complex issues, validate and escalating bug reports. When you ask them to roll out a new initiative on top of this, such as one to adopt live chat as an additional support channel, they may need help to take this on. They probably won’t do enough research into the best ways to deliver this or the pitfalls to avoid. They may cut corners that will be detrimental to outcomes. They might move very slowly. And capacity isn’t the only problem.
Many of the best startup leaders earned their experience in the trenches. This experience may equip them to tackle the business-as-usual responsibilities of their department but only sometimes gives them the meta-skills essential to identify and deliver operational improvements. This is another reality of early-stage startups: even experienced leaders who can run a function effectively may have knowledge gaps when it comes to project management and strategy.
For example, a customer success leader who has years of experience conducting the day-to-day tasks of their team might flounder when delivering projects. To deliver initiatives well, you need to know how to get to the heart of the problem, define a minimum-viable solution, coordinate with stakeholders, and manage rollout in a way that doesn’t disrupt other teams. For many leaders without extensive project delivery experience, this can be a challenge.
The role of operations management
It is possible for a centralised operations team to empower or oppress their colleagues. Their mandate must be to support the business, not to control it. It is easy for operations managers and big operations teams to try to control the strategy and culture of the company.
An outstanding operations team amplifies the capabilities of their colleagues. They collaborate with leaders and individuals to solve problems within the business through improvements to how everybody works and collaborates. At their best, they:
- Support team leaders who can handle the business-as-usual needs of their role but don’t have the capacity or capability to innovate
- Lean into the leaders who most need help. Teams with more capacity or capability probably need less assistance, and team autonomy should be encouraged.
- Manage complex2 and cross-team3 initiatives. If something requires people from disparate teams to collaborate, operations managers are often best positioned to facilitate this.
A small, skilled, and effective operations team presents a startup with the opportunity to allow team leaders to focus on their business-as-usual responsibilities without the need to forgo business-changing improvements to how the business runs. Many founders struggle to choose between these step-change initiatives and the core responsibilities of their teams. With an operations function, you can have both.
This is not an argument against having an HR team. HR is obviously critical. But to lead productively, managers need to retain a good amount of responsibility for people management. ↩︎
Imagine a startup that wants to move towards a model where third parties can implement their product for new customers rather than their own internal teams. This might allow them to grow more quickly or expand into new markets. If they give this initiative to their already busy professional services team, it will move along very slowly. If an operations manager can own it and call upon the expertise of the professional services team only where necessary (, e.g., writing technical documentation), things will move faster. ↩︎
Imagine a startup that wants to move from tracking customer relationships in a knowledge base like Notion towards a CRM. This could impact how the finance team reports on sales results, how the sales team tracks opportunities, how the marketing team segments prospects for campaigns, and how customer service manages support tickets. Therefore, this initiative has many stakeholders, and it is not apparent who should own it primarily. Operations managers are great at bringing together multiple teams to get things like this done. ↩︎
26 March, 2023
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