3 Consistent Truths for Operations Teams and Your Reporting Structure
Sean Lane: (silence) Hey, everyone. Welcome to Operations, the show where we look under the hood of companies and hyper growth. My name is Sean Lane. A lot has been written about the different types of team models, and reporting structures and operations. And understandably, people want to find the, quote unquote, perfect model out there for them and for their company, right. Should you have a centralized, or decentralized model? Who should the operations team report to? And of course, it's important to be thoughtful about how you design your team and how each individual on the team is going to be set up for success. But, I've been a part of a number of different versions of these operations models in my career. And, I've been a part of teams that report into completely different parts of the organization. And, what I've come to believe is that the mindset you bring to your work and the mindset you instill in your team, along with a handful of other consistent truths, matter far more than who you report to. And, that's what we're going to explore on today's episode. Let's face it, in the real world you don't always have a choice, right. You might get hired into a team where the structure is already set up, or you might just be too junior to be able to make these types of decisions just yet in your career. So whether you're a first time member of an operations team, trying to feel out how to contribute to your team, or you're a VP setting up your team structure from scratch. This episode can offer some core principles around which you can build your team. All right, so to start, let's discuss two of the most common models that are out there for operations teams, and the pros and cons of each one of those models. First, you have the centralized model or what I refer to as the hub- and- spoke model. The hub- and- spoke model creates an operations team that serves, you might've guessed it, as centralized resource to the bunch of other internal partners. Each of those partners like the sales team, or the marketing team, or the customer success team are those different spokes of the wheel. This model has become increasingly popular over the last few years, largely because it can serve as the source of truth for your organization. Particularly, when it comes to things like reporting. Have you ever been in a meeting where sales brings one version of the truth and marketing brings their own version of the truth, and you spend half the meeting trying to figure out whose version is right? Yeah, me too. But in theory, and hopefully in practice, the centralized model solves for that exact problem. Another really nice perk of the centralized model is that your ops team has this really unique view of the entire customer journey from end to end. They can consider the ripple effects of a marketing decision on sales or a sales change on CS. The bigger your company gets, the more likely you're going to have silos pop up across the organization where decisions are made without maybe another part of the organization knowing about it. And, the centralized ops model is designed to prevent just that. Okay, so those all sound really nice. What could the cons of this model be? Well, there are definitely a few. First, when you have one team serving and partnering with a whole bunch of internal customers, it's inevitable that one internal customer is going to get more support than the others. And to be honest, this is usually sales. Not yet having a dedicated resource for each go- to market function can lead to a misalignment of resources or even worse, your ops team could end up becoming the bottleneck, slowing down the entire company. And lastly, a centralized team runs the risk of lacking true functional expertise. If your hub- and- spoke model leads to a team that's a mile wide and an inch deep, the team probably isn't going to be adding a lot of value to those C- level conversations or bringing helpful insights to the CRS or the CMOs that they're supposed to be supporting. Look, overall, I'm a big fan of the centralized model if you are highly aware of its shortcomings, and put specific measures in place to mitigate those shortcomings. So, that's the centralized model. Let's talk now about one of the most common alternatives, the decentralized model, or as I call it, the function model. As you might expect, the function model is where specific ops teams like sales ops, or marketing ops are aligned and report directly into their function. So, instead of having your hub and spoke, you have sales ops reporting into sales. CS ops, reporting into customer success, so on and so forth. And, you can basically reverse all the pros and cons that we talked about of the first model for this one. Unlike the hub- and- spoke model, the function model offers dedicated resources for each go to market function. And, these teams are more likely to have that domain expertise that some centralized ops teams might be lacking. On the flip side, you can imagine that the function model is a breeding ground for those silos that we're talking about, and those silos can pop up in your organization when you have this functional model in place. And, you might also create that he said, she said aspect of your reporting issues if you're not really, really careful. Over the course of my career at both Drift and elsewhere, I've honestly been a part of both of these models. And, what I've come to realize is that neither one of them is perfect. You have to intimately understand the pros and cons of each. More importantly, though, whether you're an entry- level member of your team or you're the VP running the entire thing, I've found that there is a mindset and three consistent truths you can bring to any ops model and make it better. First, the mindset. Regardless of the structure your team, you have to care what happens across the entire customer journey, not just the part that you're responsible for. If you go into your work with blinders on, or you're only focused on a very specific task, you're not going to be a very good ops teammate. If you're working in marketing ops, what will the work that you're doing mean for your counterparts and sales ops? Consider that. People have this tendency when a problem is placed in front of their face, they just SWAT away that problem. In ops though, when you SWAT that problem away, it's very likely that there's a whole bunch of ripple effects of what you just did. If you care and you look around corners to anticipate those ripple effects, who you report to really just doesn't matter. Okay, so if you're armed with that mindset, let's talk about the three consistent truths that I find you can use as guides on any ops team. Number one, put the customer at the center of everything you do. In operations, we actually have two unique sets of customers. External and internal. Our external customers, of course, are our company's customers. And, our internal ones are those internal stakeholders, and sales, and marketing, and customer success that we partner with to run our go to market motions of our companies. In ops, we have to pay attention to both. How can we make the customer journey as efficient as possible for both sets internal and external? Whenever, a new sales hire starts at Drift, what I tell them is that my job is to make them better at their job. That's the relationship you can build with those internal customers. Okay, that's number one, put the customer at the center of everything you do. Let's talk about consistent truth number two, the type of work we do. Guess what? Regardless of whether you're a centralized, decentralized, report into the CRO, CFO, chances are the type of business problems, the types of challenges your team's going to face, those aren't going to change. At drift, we divide our ops work up into three categories, planning, execution and reporting. Maybe those categories are right for your team, maybe they aren't, but you still need to see over the course of your work, build up things like funnel metrics, help your company generate pipeline and keep your customers happy. Name the type of work that your team is going to do and focus on that. All right, let's move on to consistent truth number three. Number three, in hypergrowth companies change is constant. Change is constant. Like I mentioned at the beginning of the episode, I've worked in a number of different ops models and chances are I'm going to work in a brand new one sometime in the future. If I just held on to that one specific model, and made that model itself the most important thing to me, I'd be missing out on what actually matters, which is the work. There's this gift that I absolutely love. It's a pencil rotating around drawing a circle on a page. And, the eraser just follows the tip of the pencil immediately erases what was just written down on the paper. It just keeps going around, and around, and around in a circle. And, this is what it's like to work in ops in a hypergrowth company. Some people love it, some people hate it, but change is the only constant and that truth is not going away. All right, so let's recap everything we talked about today. Two common ops models that you're going to find are the centralized model, AKA the hub- and- spoke. And the decentralized model, AKA the function model. There are pros and cons to each, but remember the model you pick matters a lot less than the mindset you instill in your team and the three consistent truth we talked about in this episode. Put the customer at the center of everything you do, the type of work we do doesn't change, and change is constant. So the next time you're thinking that if only I reported to so- and- so, or if only we had this different team structure I read about. Take a step back and assess, are you bringing the right mindset to the work you're doing? And, are you remembering those three consistent truths? If you do that, you're going to provide a lot more value to yourself, your team and your company. Thanks so much for listening to this week's episode of Operations. If you liked what you heard, please make sure you're subscribed so you get a new episode in your feed every other Friday. Also, if you learn something today, leave us a review. Leave us a six star review on Apple Podcasts, or wherever you get your podcasts. Six star reviews only. All right, thanks very much for listening. That's going to do it for me, we'll see you next time.( silence)
A lot has been written about the different types of team models and reporting structures in Operations. And, of course, it’s important to be thoughtful about how you design your team and set each individual on the team up for success.
But not everyone always has a choice about the team they are joining or where they sit in an org chart. I’ve come to believe that the mindset you instill in your team and 3 other consistent truths matter far more than who you report to.
In this episode, we explore those 3 consistent truths and the different models out there for Operations teams.
Like this episode? Be sure to leave a ⭐️⭐️⭐️⭐️⭐️⭐️ review and share the pod with your friends! You can connect with Sean on Twitter @Seany_Biz @DriftPodcasts