89% of Execs Swear By BizOps for Advanced Decision Making in Their Org
Every 20 seconds, $1 million is wasted globally through poor investments that don’t align well with a given organization’s goals and strategy. This is according to a 2018 Pulse of Profession (PMI) report. The report also indicated that organizations waste 9.9% for every dollar invested due to poor strategic goal delivery. Yet, as a solution … Continued
Every 20 seconds, $1 million is wasted globally through poor investments that don’t align well with a given organization’s goals and strategy.
This is according to a 2018 Pulse of Profession (PMI) report. The report also indicated that organizations waste 9.9% for every dollar invested due to poor strategic goal delivery.
Yet, as a solution to these business woes, 89% of executives say BizOps could significantly improve strategic decision-making by improving collaboration between IT and business teams.
The startup bizOps buzz is reimagining older, already pioneered bizOp practices used by the likes of Yahoo, Google, and LinkedIn. Startups are using bizOps (otherwise knowns as business operations) in a more generalist role demanding rapid execution and a larger scope of responsibilities.
Tech startups such as Slack, Dropbox, Ziprecruiter, and (of course) Process Street, are recruiting for and building out their Bizop teams.
But what exactly do we mean by bizOps in this modern world, and how has the concept been reimagined for the startup culture and mentality?
In this article, you’ll learn what bizOps is, from the day-to-day operations to the core activities. We’ll then discuss the importance of bizOps, using real-world examples to display the role in action. Find out how to apply BizOps as a startup or as a large enterprise to significantly improve strategic decision-making in your business.
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BizOps, or business operations, is the synchronization of strategy and business operations. Specificities depend on the company’s maturity, the business model, team size, and other situational factors. However, there’s a core tenant that all bizOp roles operate under, that’s to drive business growth. This is achieved by either launching and scaling new initiatives or by optimizing day-to-day operations within the company.
The role offers the ability to have a major impact on all aspects of the business, and fundamentally shape the company’s future.
It must be noted that there’s a major difference between bizOp teams in larger organizations vs bizOp teams in smaller organizations. That divide is characterized by the following, which emphasizes how the bizOp role has adapted in startups:
Role ambiguity: Big companies have defined processes with revenue accounted for and minimal room for the unknown. For startups, nothing has been done before, and there are often new realities to think about. Startups often have to react to big needle movers such as a product launch and a new market.
Speed of execution: Bizop teams across startups need to move fast, with many jobs to do and too few people to do them. This requires careful management of multiple tasks, projects, and stakeholders in synchrony. For an established organization, there are too many teams, dependencies, and people involved to match the startup speed.
Learning curve: If you’re a startup, you’re learning a lot, creating business processes, defining strategies, building plans, preparing quarterly updates, devising investor meetings, and all-hands content. These jobs are present in a large corporation, however, there’s less creation and more maintenance. Plus learnings are more specific, meaning individuals can go deeper and tend to the need of several cycles at once.
Scope of responsibilities: The larger the company, the more specific the roles tend to get. For bizOp personnel working in a startup, the work is less defined. For large organizations, selected teams will be working on different aspects of the bizOps role.
What does the bizOps team do on a day-to-day basis?
“If you consider yourself good at everything, but not great at anything, this is the job for you.” – Emad ElShawa Senior Manager of Business Operations and Strategy at Fundbox
As a business expands and grows, it’ll often need someone who can work cross-functionally to steer projects, align teams and get work done. As such, the day-to-day operations for bizOps personnel are multifaceted. Meaning it’s difficult to pinpoint the exact functions of one bizOps role over another. For instance, as we’ve already discussed, role duties differ tremendously according to organizational size.
Yet, to give you some clarity, I scoured through bizop job descriptions (from a range of organizational sizes), in an attempt to nail down bizOps day-to-day responsibilities. Below are the key day-to-day tasks I found.
Analyze performance and recommend areas for improvement thinking about long-term business strategy goals.
Build business plans for product expansion and perform market mapping and research to make suggestions on new market entry points.
Collaborate with senior personnel to discuss annual strategic planning and the budgeting process.
Help define strategic priorities and OKRs in the context of the broader company strategy and measure and report on progress towards key results.
Create and maintain business dashboards to view the health of the business.
Automate daily processes across business departments.
Use big-picture thinking to connect relationships between various technologies, processes, and people that make up a business system.
Break down business silos (independent business divisions) to aid cross-departmental collaboration and coordination.
In a startup, you may have one member of the team carrying out these range of tasks. Whereas in large organizations, tasks can be distributed between different team members.
What are the top 3 jobs to be done by bizOps personnel?
The most important tasks that bizOps must do include:
Analysis of current business operations, measuring OKRs to determine business health, and identify areas for improvement.
Developing and driving strategy execution.
Optimizing business day-to-day operations across all business units and breaking down business silos.
What business metrics are used by bizOps personnel?
The bizOps goal is to optimize business functions for profitability and performance. Below I’ve detailed key metrics bizOps personnel use to do this.
North star metrics
A north star metric is a measurement that’s most predictive of a company’s long-term success. Below are north star metrics bizOps personnel will use daily.
Return on investment (ROI): The investment return (gain from investments made minus the cost of investment) divided by the investment cost. This metric evaluates the efficiency or profitability of an investment.
Earnings before interest, taxes, and amortization (EBITDA): This is an accounting measure that calculates net earnings before interest, tax, depreciation, and amortization. The metric ignores the impacts of non-operating factors such as interest expenses, taxes, or intangible assets. The resulting metric provides a true reflection of a firm’s operating profitability.
Gross margin: Net revenue minus the cost of products/services sold, divided by net revenue. Gross margin represents the portion of each dollar, or revenue the company retains, as gross profit after deducting the costs directly related to producing the goods or services sold.
Net profit margin: Net profit margin is the ratio of net profit to revenue for a company or business segment. The net profit margin is typically expressed as a percentage. The net profit margin measures the amount of net income generated as a percentage of revenue received.
A secondary metric, also known as a consequential metric, is a project metric that you don’t want to sacrifice at the expense of primary improvements in a process. These metrics are used to ensure the process is improving, and not altering one metric measure at the expense of another.
Secondary metrics include:
Average revenue per account (ARPA): The average revenue per customer measured in a defined period (months or years). This metric helps expose trends in account expansion and contraction and in evaluating pricing plans.
Net revenue retention rate (NRR): NRR is the net revenue leftover from an existing cohort of customers, less any revenue churn, plus expansion revenue from upsells, cross-sells, etc. NRR is a growth indicator that measures business performance and acts as a churn metric to give a comprehensive view of positive as well as negative changes concerning customer retention.
Gross revenue retention rate: This is the starting revenue minus revenue lost through down-sell or churn, divided by the starting revenue. This is the revenue a business can count on every single month – it’s the predictable revenue.
Annual recurring revenue (ARR) or annual run rate: This is an annual version of MRR that helps to project future revenue in the year ahead. ARR assumes no changes, e.g. no churn, no new customers, and no expansion. It’s a useful metric for determining momentum in areas such as new sales, renewals, and upgrades. And lost momentum in downgrades and lost customers.
BizOps personnel work with the senior team to determine which metrics are most important. When critical decisions need to be made, bizOps provides analytical support to help make the right call, asking questions such as:
Is this particular initiative working for us?
Should we invest more in this business process?
Key metrics are deployed to analyze these questions, strategize and set new and meet existing business goals.
Key concepts in bizOps
Working with bizOps, you need to be familiar with the following key concepts. These are jargon terms you will come across meaning need to understand their definitions.
The importance of bizOps (+ business operations examples)
Google, Amazon, LinkedIn, and many other large enterprises utilize bizOps with success, meaning the methodology is both known and proven. BizOps is also a business function used by startups, who’ve adapted the practice so it’s suited to the fast-paced nature of the startup environment.
With bizOps, team collaboration, data analysis, and reporting are changed on a fundamental level. Before bizOps, there seemed to be a lack of alignment between business departments, which operated in silos. This created barriers between departments hindering business growth, strategy execution, and day-to-day operations. This siloed nature of business locked in data and information stifling collaboration, insights, and innovation.
BizOps shook up the status quo by collecting and analyzing business data across different business functions. This data is used to obtain important insights that connect business units together to achieve the desired outcomes. As such, bizOps drives strategy execution and growth.
Using bizOps in a large organization: LinkedIn’s use of bizOps
Dan Yoo worked as a bizOps manager for LinkedIn and shares his experience from working in the field. This exemplifies the application of bizOps in larger corporations.
Using bizOps, Dan was able to grow LinkedIn’s business from millions to billions in the year 2015, with revenue reaching $1.3 billion. Despite some hiccups along the way, LinkedIn has continued along a billion-dollar revenue path, bringing in $8.05 billion in 2020.
As the bizOps manager, Dan recommended turning on the gas and built a larger hiring solutions business. Studying key metrics, Dan identified this corner of LinkedIn to have high growth potential. And Dan grew it.
The bizOps team analyzed data from LinkedIns heaviest users. These users were then segmented as per the subscription products. Different subscription products were promoted to recruiters, job seekers, and salespeople accordingly. Dan also hired more salespeople to the LinkedIn team, a bizOps decision that aided organizational growth.
Using bizOps in a startup: Process Street’s use of bizOps
Process Street is business process management software, providing a no-code solution to workflow management. What makes Process Street unique relative to other startups is Process Street’s remote-work business model. That’s right, every employee at Process Street works remotely. As such, Process Street’s bizOp teams have to cater to this unique working style.
To help Process Street achieve its remote-work goals, the organization delivers digital literacy training to employees as part of the onboarding process.
For instance, during onboarding, I received 1:1 training from my line manager, who taught me how to use remote-work tools such as Airtable, Slack, and, of course, Process Street. The business operations of Process Street (namely employee onboarding) have been adapted to align with Process Street’s strategy – to remain a successful remote-based company.
Also, as part of my onboarding experience, I worked for different business departments – such as customer support – gaining an understanding of how Process Street functions across all business units. Once more, Process Street’s operations – onboarding – have been adapted to beak-down organizational silos, a vital goal of bizOp teams.
Using bizOps in crisis management
The COVID-19 pandemic has introduced new urgency and dynamics for deploying bizOps to drive the organizational changes needed.
All eyes turn to the bizOp teams for delivering solutions rapidly. In this sense, bizOps is a key part of crisis management helping businesses leverage the COVID-19 pandemic as an opportunity. One such opportunity is the digital transformation of business.
Businesses well along the digital maturity curve have a decided advantage in the current environment relative to those that aren’t.
For bizOps personnel, this means moving business operations to the cloud where possible and augmenting data and analytics which are more important than ever.
Seen through the right lens, COVID-19 can be used as an opportunity to drive transformation in support of remote work, customer engagement and retention, digital literacy, and modernization of tools and platforms.
Identifying planned future digital transformation initiatives that can be brought forward to solve immediate (and long-term) problems and needs.
Building a case for investing in the creation of a digital enterprise. This will not only ameliorate immediate problems and concerns, but it will future-proof the business from a recurrence of COVID-19 or other emergencies and crises.
Using the need for remote work as a lever to drive digital literacy among workers and managers through training, enhanced remote support, and work from home education for the business’s digital tools and apps.
BizOps activities: Maximizing profit, performance, and growth (with free templates)
As we know, the core tenant of bizOps is to drive business growth via maximizing profit and performance. Achievement of this involves six core steps – however, the specificities of work for each step varies.
I’ve provided the relevant Process Street resources for each step that’ll give a further indication and understanding of the work scope for each step. You are also granted free access to the relevant Process Street templates for each step. To get started sign up and create your free Process Street account.
BizOps activity #1 – Strategic process
A strategic process is concerned with making business decisions. It’s the continuous assessment of a business with the aim to outdo competitors. Information is gathered from both within the organization and from outside the organization.
“We service both SMB and Enterprise teams in all departments” – Capterra Reviews
Process Street‘s templates can be edited to enhance the cross-functionality of business processes by utilizing the following features:
Stop Tasks controlling the order that your documented processes run in, preventing important tasks from being missed. This is especially important when distributing tasks between different teams.
Dynamic Due Dates allowing you to set due dates on specific tasks, safeguarding tasks from being missed. This will help employees keep to important deadlines, and meet the demands of their work, smoothing out cross-team collaboration.
Conditional Logic to create dynamic systems that have the degree of flexibility needed to support cross-functional teamwork.
Role Assignments to ease task delegation between teams, streamlining and promoting effective cross-functional teamwork.
Approvals allowing decision-makers to give the go-ahead (or rejection) on important system items. Also, the necessary comments can be provided. This streamlines feedback across teams.
Webhooks allowing you to send automated messages or information from your documented processes directly to other apps. A great feature keeping other teams notified about the status of checklists and tasks in Process Street, meaning everyone knows who is doing what and when.
Task Assignments to assign users and groups to individual tasks in your documented processes, making it easy to see who is responsible for what, aiding cross-functional teamwork.
Embed Widgets allowing you to view and interact with other apps without leaving your documented process in Process Street. Great if you want to communicate with different teams across applications.
For more information on how you can edit and create checklists in Process Street, watch the below video:
BizOps activity #5 – Change management
Change management is the application of tools, frameworks, and methodologies supporting the adoption of change within a business. Many change management techniques recognize the importance for employees to understand and commit to business change.
To drive growth, bizOps personnel will regularly have to deal with business change. Change management is therefore a vital aspect of the bizOps role.
BizOps joins departmental teams to improve an organization’s ability to optimize daily operations and grow. It’s a business function we take seriously at Process Street and have developed our software to help you do the same.
Refer to the templates and resources given in this article to provide the right guidance and support to your bizOp teams.
How do you optimize day-to-day operations in your business? How do you strategize to drive business growth? We’d love to hear from you, please comment below, who knows you may even get featured in an upcoming article!