“Your company has a viral moment before its possible closure.”
Yes, you’re not mistaken.
Imagine that your company has the privilege of appearing for a few minutes on a national TV show with millions of viewers. You can hardly suppress your excitement. All eyes are on you. There is no turning back.
However, when you realize that your company is not ready to accept this attention, your excitement can quickly turn into fear. Suddenly, traffic to your company’s website surged and the site crashed. Team members withdraw from the pressure of performance under pressure. The supplier threatens to sue you for late payment. The customer is angry because their order is either incorrect or not delivered on time.
What you spent years building was destroyed overnight.
How can a successful organization gain a coveted position in a TV show, and how can it succumb so quickly? The answer lies in marketing and operations.
The paradigm has changed from not enough customers to too many
When an organization officially opens its doors to business, marketing-related activities are often the main focus. This makes sense. After all, if no one knows about your products or services, your business will not last long. These activities can include sales strategy, public relations and social media activities, as well as promotion of digital advertising from start-ups to growth stages.
Ultimately, if you have the quality products or services your customers want, you will see the return on investment of these marketing activities. At this point, as the organization develops from the growth phase to the emerging and expanding phase of the business, the need for operations becomes critical.
The reason is that this transition is usually accompanied by a period of rapid growth that is difficult to control-customer demand is greater than your company’s supply capacity. It is at this point that operations-related activities (such as establishing the right team, recording and standardizing processes, and upgrading equipment and digital technology) become more important.
If operations are critical to expansion, why are more companies not paying attention to it?
The answer depends. In terms of operations, small business leaders fall into one of three categories:
- do not know: They either don’t understand operation and maintenance, or they have never touched it.
- not interested: They think that operations are not “sexy”.
- Not found: When they tried to search for information to expand the size of the organization, they found that the largest share was reserved for large enterprises or manufacturing companies.
Let’s take apart each of them.
1. don’t know
Not surprisingly, many founders and leaders (regardless of business acumen and technical acumen) largely do not understand operations-what it is and how it applies to their business.
Since customers and cash are the lifeblood of any organization, special attention is paid to customer-oriented activities to ensure their satisfaction. This is the anchor point where we can define operations.
As shown in the figure below, marketing represents a highly visible activity that customers tend to interact with directly. It involves making certain promises or guarantees to customers who purchase your products or services.
On the contrary, operations are like the hidden cousins of marketing. It represents those activities that ensure that customer orders are completed on time, within budget, and within specifications.
As the heartbeat of the organization, daily operations may not necessarily be seen by your customers, but they will definitely experience its results.
The operations team works behind the scenes to ensure that the company can deliver on its promises.
A frustrated customer in charge of operations once told me after talking to a sales manager, “They sell dreams, and we deal with nightmares!” This is a humorous interpretation of the historical differences between marketing and operations teams.
This is why Revenue operation Movement is very important-it breaks down these silos, encourages transparency, and at the same time strives to achieve the common goal of customer satisfaction and profitability.
2. Not interested
The founders and CEOs are known for their overall view and strategic vision. Ideas troubled by details are not necessarily their strength or interest. This is part of the reason why the operations department can take a back seat in the more conspicuous measures offered by the marketing department.
But there is another culprit-small business event planners. Attend any small business seminar, webinar, or conference, and you have very little chance of seeing the operational topics contained in it. This omission creates a knowledge gap for small business leaders and leads to disinterest.
Through personal conversations and informal surveys, I learned that an astonishingly high percentage of these event planners think that “operations are boring.” I also have many people who tell me, “No one is interested.” Perhaps the most shocking thing is that pant, “Operation is not sexy.” This kind of thinking is dangerous and harmful to those seeking resources to expand to the next level.
Consider these statistics from the U.S. Small Business Administration:
I often argue that if you have a better understanding of operations, more companies can graduate from sole proprietorships. This means that job creation has a net positive impact on the local community and economy.
I also believe that more companies can avoid failure if they have a solid operating foundation. Yes, there are many reasons for business failure. However, the reasons for their failures in the first five years and the fifth to ten years may be very different.
Some companies fail not because of lack of customers or poor cash flow, but because they have too many customers.
When small business leaders actively seek resources to expand, they often find that these resources did not take them into account when they were written or formulated. In addition, if they are lucky enough to find resources for small businesses, it is usually for those who sell tangible goods.
Where can service-based companies get guidance on scaling without fail?
Learning frameworks like Lean and Six Sigma can be intimidating and sometimes too “corporate” for the needs of small businesses. Fortunately, more and more factions in the operating community are actively working to make this information accessible to small businesses.
Dr. Jeffrey K. Liker is one of them, who carefully increased inclusiveness in the second edition of his critically acclaimed book. Toyota Way.
Listen to my interview with Dr. Liker to learn more:
Ignore operations at your own risk: a cautionary tale
Perhaps HubSpot’s senior inbound sales professor Kyle Jepsen put it best: “Operational failure is dramatic and visible. Operational success is intangible.”
He is right. There is no shortage of companies that choose to ignore the due diligence and rigor required for sustainable operations and continue to focus on the appearance that excellent marketing provides them, which is not good for them.
An example is Ample Hills Creamery. This local ice cream shop in New York, once known as the “Most Popular in Brooklyn”, attracted the attention of the Disney CEO. Soon, they signed a contract with Disney World, but after a few years they lost everything. Although they enjoyed a steady flow of customers, their money was bleeding.
One of their investors, Greg O’Connell famous, “This is a fairy tale. They kind of live in a fantasy world because their marketing is great.” Their failure led to bankruptcy, but other more serious failures put leaders in jail.
Elizabeth Holmes (Seranos), Adam Neumann (We work), Billy McFarlane (Fire festival) And Trevor Milton (Nicholas) Is a very obvious example. Although they received warnings, they continued to mislead and deceive investors and customers, only to find that they were either imprisoned or facing serious charges.
Check the back office of any very successful company, and you will find an ironclad operation: a solid team supported by standardized, streamlined and efficient processes and technologies. Combining operations and innovation, both are integrated into a company structure that is both profitable and sustainable.
Achieving this balance with marketing is essential.This is where the marketing expert Andrea D. Smith and I Business Infrastructure Podcast:
The business is complicated. It not only needs to constantly balance marketing and operations, but also needs to constantly balance all aspects of the business. Don’t isolate or sacrifice one group for the sake of another. Unless you can also guarantee customer satisfaction, attracting a steady stream of customers is futile.
Join the ranks of seeking to change the narrative about background activities. The operation is shrewd, complex and intelligent. And very sexy!