Do Look Back: Why Operating Reviews Are Critical to Expansion-Stage Companies
Editor’s Note: This article has been selected and adapted from the OpenView eBook Quarterly Operating Reviews: Moving Your Business Forward by Looking Back
When your business was started, there was a set of goals that were important to your founders. They wanted to create something exciting and meaningful that could impact or disrupt a particular market. They hoped to build a highly effective, cohesive team and they aspired to grow the company efficiently and smartly, pivoting and adjusting to respond to new opportunities or to embrace new goals. If everything worked well, the company reached a level of success that allowed it to grow.
As your company expanded, you hired more people and split the company into departments. You probably also hired new operating heads for some of your departments as they continued to grow.
Unfortunately, at this point many organizations go sideways. Managers get stuck in the day-to-day execution of the business. They become burdened with too many goals, conflicting goals, the wrong goals, or, even worse, they have no goals at all. They may also have managers or employees who aren’t performing well and don’t even realize it. These issues lead to lower market competitiveness, customer attrition, and the loss of their best employees.
Expansion-stage organizations need a new approach to ensuring that they have the right people and that they are doing the right things the right way.
That’s why instituting a quarterly operating review process — even though it takes time to assemble and conduct — is critical, regardless of your company’s maturity. Regular reviews ultimately allow you to improve, refine, and adjust executional performance, and equip you with the strategic direction and focus you need to achieve the goals you set for your business.
From a corporate perspective and that of the CEO, establishing a quarterly rhythm for operating reviews will help you realize your most important long-term goals faster and more effectively. The power of operating reviews lies in their ability to:
- Align each operating unit’s quarterly goals with the current state of your markets, other operating units, and the company’s long-term priority goals
- Focus each operating unit on the most important goals to accomplish the following quarter and minimize other activities that distract from the focal points
- Ensure that each unit is clear on its goals; has the appropriate resources, confidence, and conviction to realize those goals; and has taken responsibility for achieving those goals
- Maximize the opportunity for each unit to accomplish its most important goals
For department managers, operational reviews create an opportunity to:
- Gain a clear perspective on where the department is now and where it needs to go by stepping back from day-to-day management activities to assess the unit and its goals
- Gather ideas and perspectives from other senior managers and outside advisors to help improve the list of goals for the following quarter
- Identify your most important goals and initiatives to move them forward over the next 90 days
- Ensure that your unit’s quarterly goals are aligned with the company’s most important long-term goals
- Agree on the resource requirements and activities from outside the department (e.g., other departments, outside advisors) that will be available to help meet the goals
Simply put, a quarterly operating review process is something you must have in place if you are going to make the most of your company’s potential. As my colleague and fellow venture partner George Roberts points out, given the option of a quarterly operating review or a quarterly board meeting, the operating review wins every time. There’s no meeting that more consistently impacts the performance of a company.
Our latest eBook, Quarterly Operating Reviews: Moving Your Business Forward by Looking Back, explains quarterly operating reviews in more detail, describing why they’re beneficial, what you need to do to prepare for them, and how you should be executing and assessing each meeting. Also included is a set of checklists that should help every person involved in quarterly operating reviews ensure that they’re creating successful meetings.
For more information to help you get started on organizing your own quarterly operating review process, download the eBook here.