Business Growth Strategies… Operational Experience – Why You Need It On Your Team
December 9, 2010
Anyone who follows some of the blog posts the OpenView team writes understands that while we are a Boston based Venture Capital firm that invests growth capital in expansion stage software companies in North America and Europe, as a firm we believe it is not about the money. Our beliefs center on how CEO’s and/or Founders and their management teams leverage expansion capital to scale their business and economic model. This model works to maximize their business within the market segment on which they focus through operational execution and continuous process improvement.
Great companies like FedEx, UPS, GE and Amazon are built on strong economic models and they focus on operational execution and process improvement across all operational areas of their businesses. The software industry is not any different.
During my weekly reading I found a Harvard Business Review Blog titled “The Right CEO Personality for Process Improvement” and I wanted to share with you.
In the blog, Brad Power, the writer, uses some input from a consultant friend Susaan Strauss to categorize how people prefer to think:
- Conceptual: Reads signs of coming change; sees the “big picture”; recognizes new possibilities; tolerates ambiguity; integrates ideas and concepts; communicates through analogy and metaphor; inspires with visions of the future.
- Analytical: Gathers facts; focuses on the bottom line; maintains emotional distance; argues rationally; measures precisely; considers financial aspects.
- People: Recognizes interpersonal difficulties; intuitively understands how others feel; picks up non-verbal cues; empathetic; persuades, teaches, influences. According to John Reed, this was Sandy Weill’s thinking preference.
- Operations: Approaches problems practically; stands firm on issues, perseveres; maintains a standard of consistency and quality; provides stable leadership and supervision; develops detailed plans and procedures; implements projects in a timely manner; keeps financial records straight. This is the preferred style of proficient process improvers.
Here is the essence of the blog: If process improvement is a strategic imperative, the board should continually seek Xe’s or CEO candidates with operational backgrounds and a track record displaying process improvement.
My belief is that most Xe’s and/or founders of early and expansion stage software companies do not come from an operational background or even think in those terms. They tend to be “Conceptual” or “People” oriented in their thinking. Because of this and our belief that process improvement should always be a strategic imperative, we always work with the Xe’s and/or Founders and the Board to make sure that operational skills exist in the management teams surrounding them.
All the best!