You are taking the bold risk of creating something new. You have a clear vision and early momentum with happy customers, confident investors, and engaged employees. As a leader, your focus is to accelerate this success by refining your strategy and creating a sustainable organization. Yet what often keeps you up at night are the operational aspects of your business, including managing cash, designing the organization, recruiting the team, and selecting vendors.
The temptation is to resolve these quickly because they seem to distract from your strategic focus, and this is where many leaders struggle. Some ignore the importance of operations until it’s too late. Most find quick fixes that don’t scale. Many hire a resource but not the right role. Others build infrastructure without optimizing it to support informed business decisions.
At Frame, we are focused on building operational excellence. We have found the most successful leaders make operations a core component of their strategy, and not an afterthought. They know while it appears behind the scenes, operational excellence gives you leverage as you grow and mitigates risk when challenged. Additionally, thoughtfully built operations that scale help leaders invest their time wisely, save money in the long run, alleviate single points of failure, and execute consistently.
This insight is evidenced in the Drucker Institute’s 2018 Management Top 250 Ranking*, which is an annual analysis of well run companies for customers, employees and investors. More than 50% of the top 20 companies in the ranking, including the number one ranked company, Apple, have CEOs who were previously in a CFO or COO role. It is also represented in our examples of companies known for their culture and a strong reputation for execution - Rose Marcario at Patagonia and Gary C. Kelly at Southwest Airlines. For us, this indicates a growing appreciation for leaders who have the vision to guide their business forward with operational excellence as a core component of their strategy.
Additionally, operations is gaining importance in early stage investing as venture funds offer their portfolio companies access to expertise in talent, finance, marketing, and fundraising through a ‘Platform’. This trend was pioneered by leading firms like Andressen Horowitz, Union Square Ventures, and First Round Capital. Other funds have since adopted this ‘Platform’ strategy as a way to differentiate by providing value-added operational expertise to de-risk their investment.
To use a racing analogy, operational excellence elevates performance by helping navigate the curves to accelerate down the straights.
Are you strategic?
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* https://www.drucker.institute/2018-drucker-institute-company-ranking/