As I throw myself into this management role at Oracle, I’ve been devouring this podcast from Kleiner Perkins interviewing the top Chief Revenue Officers and sales leaders in the world.
One recent episode with LinkedIn Chief Operating Officer, Dan Shapero, discussed three traits all sales leaders must have:
- The ability to sell
- Recruit
- Maintain operational rigor or excellence.
Operational rigor or excellence is often mocked as a skill by salespeople everywhere, but it is a skill I must learn to grow in my career.
These are my findings on the “how to” and value of operational excellence for sales leaders. My research started with the founder of America’s most valuable private company, Stripe CEO, Patrick Collison.
Stripe has a valuation of $95 Billion and is slated to be the biggest IPO of 2022. Its hard to overestimate the company’s influence on our economy and silicon valley. Collison recently recommended a Harvard Business Review article that seems to be the leading guidepost on the importance of managerial, operational excellence and what it actually is: Why Do We Undervalue Competent Management? Neither great leadership nor brilliant strategy matters without operational excellence.
The article argues that MBA programs today are bent on teaching the importance of gaining the competitive advantage rather than on doing things that are important but easily replicated such as operational excellence. This thought is influenced by Michael Porter’s seminal Harvard Business Review article, “What is Strategy Again?”
The Why Do We Undervalue Competent Management? article defines operational excellence and fundamental management practices as:
- Data Analytics
- Evidence-based Decision Making
- Cross-functional Communications
The article summarized a study across thousands of firms, large and small, and argued that operational excellence is especially important in uncertain, volatile industries.
The study found that 11% of firms were on the low end of operational excellence and expressed attributes such as:
- Weak monitoring.
- Little effort to identify and fix problems within the organization.
- Almost no targets for employees.
- Promotions and rewards based on tenure or family connections.
6% of firms stood out on the high end and showed attributes such as:
- Rigorous performance monitoring.
- Systems geared to optimize the flow of information across and within functions.
- Continuous improvement programs that supported short-and-long-term targets.
- Performance systems that reward and advanced great employees and helped underperformers turn around or move on.
This list is the gold standard of what is and isn’t operational excellence is in a company. Operational excellence is a way to serve my employees as well as my organization.
The organizations that performed the best in the study had executives that communicated constantly helping to reinforce their message.
If a leader is going to bring in a new strategy, operational excellence must be present to scale the message.
Only 10% of leaders think their leadership initiatives drive clear business impact, according to a recent Mckinsey study. Leaders must understand how the big picture vision they communicate can be broken down into the smallest, most granular components.
In the enterprise software business, success is measured by retention of current customers, orders from new customers, and engagement and usage with the product.
The McKinsey article recommends pinpointing the 3-5 behaviors that matter the most and focus on communicating those throughout the organization.
Here is my checklist for operational excellence at the first-line manager level:
- Constant and consistent communication: Weekly team meetings and 1:1s. Daily team slack channel posting about something I’m learning relative to our strategy.
- Reinforcement of the most important behaviors to give me the power to reward my top performers and help the underperformers improve or move along. Weekly AMP (Activities, Meetings, and Pipeline) reviews.
- Scale the High Standards I Expect from Myself: Always be willing to do the hard work I’m expecting of my reps and reporting to them the work I’m doing.
- Cross- Team Collaboration: Invite other teams to our team meetings. Create a culture of learning from others.
Operational excellence is a way to treat team members fairly and scale leadership and values. It helps companies compete and outpace the market as much as sales and recruiting skills.
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Joshua Ballantine 