The Ultimate Operations & Strategy Guide for Your Startup.

Starting a new business can be an exhilarating experience, but it can also be overwhelming. As a founder, you are responsible for developing a winning strategy and executing it flawlessly. This is where operations and strategy come into play. By implementing the right tactics and developing a clear roadmap, you can set your Startup up for success.

In this article, we’ll dive into the ultimate operations and strategy guide for startups. We’ll cover everything from defining your vision and goals to building a strong team, creating efficient processes, and scaling your business. Whether you’re just starting or looking to take your business to the next level, this guide will provide the insights and tools you need to achieve your goals.

As someone with ten years of experience in operations, strategy, and growth, I am thrilled to share my expertise and insights in this article. Through years of working with high-growth startups, I have gained valuable knowledge and expertise that I believe can be incredibly helpful for anyone looking to build a successful business.

So, let’s get started!

1. Building Systems: the waste of time that isn’t one:

A good Startup should think through and establish systems and make sure they are effectively implemented every day. Whenever I talk to a startup founder who mentions growth issues, I ask them what systems and processes they have in place. I find it astonishing that most do not have any. Developing systems is often perceived as a waste of time and something that can be delayed to a later date when things are calmer. But systems are at a macro level what habits and frameworks are for an individual. Sure, they take time to create and even more time to implement. But as Aristotle said, “We are what we repeatedly do. Excellence is not an act, but a habit.”

This is also true for organizations such as startups. I believe in systems and processes, especially when a company is in growth mode, which is when its foundations are built. Systems and processes clarify expectations, ensure consistency, and facilitate seamless transitions when new team members are onboarded. Creating systems is far more time-consuming than people think, but the output is impressive.

In concrete terms, this process starts with the creation of a well-defined organizational chart. This ensures that everyone knows who does what. Every position on the chart should have a highly detailed job description. For each “requirement” in the job description, a step-by-step explanation of the tasks should be drafted. This may seem as if it would only be significant for repetitive tasks and “lower-level” employees. However, it can be surprising how many tasks can be streamlined when thought is put into how best to perform them, even at higher levels. Finally, for each position, KPIs and OKRs must be added to establish appropriate expectations (more about that later). These documents should play an important role in the onboarding process, and new hires should be given time to absorb them. I have helped create these systems at every level of a company, and they have led to less stress, more consistency, less micromanagement, and increased happiness overall.

If a department is not running smoothly, it is often because of two things: a management issue or a system issue (which arises when tasks and company demands are unclear). Both issues can exist at the same time, and they often do. And a manager who chooses chaos over order is probably not a good fit for any organization. But there is no excuse for the absence of systems.

One book helped me to understand the importance of systems and how to build them: The E-Myth Revisited by Michael Gerber. In his book, Gerber explains that you should try to run your business like a franchise. The best model for building a successful business is to view your operation as the prototype, which a large number of franchise or turn-key operations will later duplicate. And to build a successful franchise around your business, you need to obey these rules:

1. Your model must deliver value that consistently exceeds the expectations of customers, employees, suppliers, and lenders. Unless close attention is paid to the creation of added value and regularly exceeding expectations, it is unlikely there will be any long-term business to build.

2. Your model must be capable of being operated successfully by people that have lower skill levels than you. Only if systems can be put in place so people without specialist skills can become involved will the model ever become replicable. Or, to put it another way — if each franchise requires a clone of yourself to succeed, you’ve got a definitive expansion limitation built-in. This requires you to build a franchise model that is systems-dependent rather than personality- or expert-dependent. You have to build a system where ordinary people can produce extraordinary results.

3. Your model must be totally orderly — with a system for everything so that customers, employees, managers, and owners all know what’s going on. In short, a business structure must be in place around which everything else can be added.

4. All systems must be documented in a formal, written Operations Manual. Without documentation, everything becomes a one-off process. With documentation, work steps can be articulated, and standards of performance can be specified. The absence of a written systems manual is the key indicator that what you are building is a one-off business rather than a model for others to duplicate.

5. The model must deliver service that is uniform and predictable. Good businesses are totally and completely consistent in the experience they deliver to customers or clients. Doing the same things the same way each time the customer has anything to do with the business is a hallmark of quality.

6. The model must have a totally consistent color, dress, and facilities code. Great business builders pay close attention to all the little details — even obsessing over seemingly minor points like color choices and how they will emotionally influence prospective customers and clients. The same applies to shapes, logos, displays, and so forth. In essence, if your business is truly to be a prototype for future mass duplication, make certain all the little things have been properly handled.

Everything is a system!

2. Strategy: How to get what you want.

“Ideas are easy. Execution is everything” John Doerr

In the late 90s, Google imported OKRs from Intel. This management tool would change everything. Indeed, it turned out that the methodology of articulating your objectives (WHAT is to be achieved) and linking them to the key results you want to measure (HOW do we achieve them) is something of a management “super tool.”

OKRs force people to get specific. Results are measurable and verifiable — you either achieve them or you don’t. Google is pretty much the most data-driven company on the planet, and Google’s management team has used OKRs to run the company ever since. OKRs are now also widely used in companies like AOL, Dropbox, LinkedIn, Oracle, Slack, Spotify, and Twitter to name a few. In sum, OKRs are the Swiss Army knives of structured goal setting. They provide a shared language for the execution of ordinary or bold and audacious goals. OKRs are an incredibly useful collaborative goal-setting protocol that works. “Objectives and key results” drive clarity, accountability, and the uninhibited pursuit of greatness. Take it from former Google CEO Eric Schmidt, who credits OKRs with “changing the course of the company forever.”

There are four superpowers that OKRs can offer to your strategic planning sessions.

Superpower #1 — Focus & commit to priorities. High-performance organizations and people have a knack for focusing on what’s important and letting everything else go. OKRs force leaders and individuals to make hard choices. That makes OKRs a great way to communicate within and between departments, teams, and individuals. OKRs reduce the fog and give the focus that’s required to win.

Superpower #2 — Align & connect for teamwork OKRs provide incredible transparency. Everyone’s goals, from the CEO to an entry-level employee, can be openly shared using OKRs. Individuals can link their objectives to the company’s goal plan and then figure out ways to work together. Bottom-up OKRs foster engagement, drive innovation, and brings meaning to work.

Superpower #3 — Track & discuss for accountability: The defining feature of OKRs is they are data-driven. You illuminate and animate your OKRs with periodic check-ins, gradings, and assessments. When a key result looks unlikely to be achieved, OKRs will trigger everyone to get into action to get things back on track. They engender an impressive level of personal accountability.

Superpower #4 — Stretch & disrupt for amazing results: Pure and straightforward OKRs motivate you to stretch and excel. They force you to test your limits while at the same time permitting you to fail while attempting something impressive. In practical terms, OKRs give you permission to unleash your most creative, ambitious self. That’s not a bad thing.

If you want to know more about OKRs I recommend reading Measure What Matters: How Google, Bono, and the Gates Foundation Rock the World with OKR by John Doerr.

3. Hiring and retaining great talents: You Need A Mess Of Help To Stand Alone.

My favorite song that I have never heard is You Need A Mess Of Help To Stand Alone. Indeed, having a solid support system is essential to build your company. And contrary to popular belief, hiring top talents is more of a science than most people think.

So, let’s dive deeper into how to approach the hiring process and how to keep top talents within your organization.

People use four basic techniques to interview candidates; the artist, the sponge, the airline pilot, and the prosecutor. Only one should be used.

The artist:

Let’s take a closer look at the first hiring style, which is the artist approach. This style is characterized by individuals who don’t rely on data to make hiring decisions. Instead, they believe in their own intuition and ability to judge character. They function like an art critic, making judgments on a more subjective level.

However, this approach is not particularly effective. The artist’s approach is based on gut feelings, and it doesn’t take into account objective data or feedback from others.

As a result, it’s difficult to ensure that the best possible candidates are selected for the job. While some people may be naturally talented at assessing people based on intuition, it’s not reliable. We’re not particularly skilled at making conceptual judgments about people. Therefore, it’s best to avoid this hiring style and focus on more data-driven and objective methods to make informed hiring decisions.

The sponge:

Moving on to the second technique, we have the sponge approach. Those who adopt this style seek out as much data as possible through various means, such as candidate testing, work samples, hypothetical questions, and reference checks. However, they don’t necessarily have a plan for how they will use this information.

Despite this extensive search for data, the sponge approach is not particularly effective. Simply gathering data without a clear purpose or plan doesn’t provide valuable insights into what kind of outcomes can be expected from the hiring process.

While it’s important to collect relevant data during the hiring process, it’s crucial to have a clear plan and purpose for how that data will be used. Blindly collecting data without a clear goal in mind is unlikely to lead to positive outcomes in the hiring process.

The prosecutor:

Then, we have the prosecutor approach. Those who adopt this style aggressively question candidates, interrupting them and putting them under stress to see how they perform and react. Essentially, they try to get candidates to “break on the stand” like a lawyer would in a courtroom.

Fortunately, this approach is out of fashion. This may be the worst of the approaches. The idea of throwing candidates into a stressful situation to see how they respond simply doesn’t work very well.

It’s important to remember that while it’s essential to challenge candidates during the hiring process, doing so in an aggressive and confrontational way is unlikely to yield positive results.

The airline pilot:

The most effective approach to hiring is the checklist-based method. This approach involves setting expectations in advance and checking off specific characteristics during the interview process. This technique is similar to how airline pilots use checklists to ensure they accomplish everything they need during their flights.

By having a set list of criteria and sticking to them, hiring managers can more easily and accurately assess candidates.

If you want to use the airline pilot approach for hiring, you should start by creating a scorecard or a checklist that includes all the features you need for the job. This scorecard should be specific, and you should coordinate with other interviewers to create it and establish a formal approach to use across all candidates. You should also think about a screening question or pre-work to gather basic information and insights into how the candidate works. However, you should be careful of homophily, which is the tendency to like and hire people who are like you. To avoid this, you should be aware of your biases and not let them blind you to the characteristics you’re looking for in an employee. Finally, if you decide to assign pre-work, make sure it’s meaningful and useful so that the candidate gets a good sense of the job and you get actual information about how they work.

In the interview itself, you will need 3- 5 people to conduct a set of interviews; you need multiple points of view. When you actually do the interview, the most powerful predictor of future performance is past performance. I recommend avoiding doing clever questions like asking how many golf balls can fit in a car. Those are not predictive of future success, and they are a waste of everyone’s time.

Instead, you want to think about historical questions. Ask people to walk through every job. Ask them about a time in each job when they did something that interests you (ex: tell me about a time you showed leadership under pressure). Make it interactive. It should be a conversation where you start asking them follow-up questions about what they did. What did their boss do? How do people react to them being a leader? What worked and what did not work? You are probing to get real answers, and that way, even if people have prepared speeches that they give, you are going to push past that and get real details on what they did in their prior work.

You potentially want to ask hypothetical questions or behavioral questions, things like “what company do you admire?” And then, “how would you compete against that company?” You might want to ask them how they would handle a situation in the future that you think they will encounter.

One last word on interviewing. You need to make the experience as great and fair as possible. What you ideally want is for everybody who has interviewed with you to want to work for your company and be disappointed but understanding why they didn’t get that job.

Once you’ve interviewed everybody, your job then is to go through the checklist and objectively decide whether or not you want to hire someone. Do NOT hire someone who is the least bad. Continue the process until you find the perfect match. Sometimes, it takes months to find the right person. If this is the case, ask yourself if you have created the right environment to attract the best talents (do you offer competitive compensations, do you have any perks in line or above industry standards, do you or your hiring team come across too aggressive or unfriendly which could deter talents in high demands).

Performance reviews: Regarding performance review, it is essential to keep in mind that it should not just be a once-a-year exercise. Conducting ongoing feedback sessions and documenting them throughout the year is crucial. Relying only on a yearly review can result in a skewed perspective. We may only remember an employee’s performance during their last project or the time leading to the review. This approach is not fair to the employee, nor is it helpful for the company’s growth. By consistently documenting and discussing performance, employees, and employers can better understand where improvements can be made and where strengths lie.

To make it simple, remember the four Fs regarding feedback: It should be frequent, formal, forward-looking, and filed.

Firing: Finally, if you’re going to need to fire someone, and you probably will, you want to fire as quickly as possible. Remember to hire slow and fire fast. But keep some formalities, especially around the feedback you will give the employee you want to fire. You need to express your dissatisfaction formally and file it in advance (it’s always good to send your employee a quick email to summarize what you discussed). You will also need to give them enough time to course correct. Finally, you need to also be clear in your feedback, do not share general appreciations but concrete issues with this person’s work. Again, you must document all these processes to ensure consistency and operational excellence.

4. Managing a remote team.

Years before the pandemic, I had the opportunity to manage remote teams. While managing 120 employees, mostly located in three different cities (Los Angeles, Barcelona, and Montreal), I actively sought ways to ensure my team’s success.

This is where “REMOTE Office Not Required” by Jason Fried became my go-to resource. Through this experience, I have learned two critical components to establish a successful remote company: the right mindset and a set of appropriate operating rules.

· Mindset: To establish a successful remote workforce, it is essential to begin with a shared mindset. It is crucial to ensure that everyone is on the same page regarding the goals and objectives of remote work. Therefore, taking the time to get the right mindset in place should be a priority. If everyone is aligned and agrees that the time is right for remote work, you’ll be in a better position to make it happen.

· Operating Rules: Once you get your mindset right, to make working remotely productive, there are tools and techniques which help. Call these your operating rules and adopt and adapt as required. Here again, system are indispensable!

5. Finance and legal

Other considerations, such as legal and financial excellence, are beyond the scope of this article. But I have seen entrepreneurs fail due to their lack of care for these crucial matters. So let me share a few rules always to follow:

• Know your numbers, from how much money you have in the bank to your future tax burden and current runway. DO NOT just rely on your bookkeeper/CPA; this is your company and, therefore, YOUR responsibility.
• Follow HR best practices, they are burdensome and annoying to follow, but they will save you money and potential legal trouble in the future. Ideally, it would help if you had an external consultant come once a year to audit your methods.
• Have a calendar reminder for end-of-contracts to make sure they don’t auto-renew without your consent.
• Finally, have a versatile lawyer on retainer that could help you navigate basic legal issues. You do not need to go to fancy law firms as long as you find someone reliable and available. Unless you are a trained lawyer (like I am), do not try to save some money by drafting contracts yourself. Focus on your business and let the lawyers handle that part (but always double-check their work, you must be able to understand what they did).

In conclusion, developing a winning operations and strategic plan is crucial for the success of any startup. It requires a clear understanding of the market, the competition, and the resources available to you. By leveraging the insights and tools shared in this article, you can develop a comprehensive plan that enables you to efficiently execute your strategies and drive growth. Remember, it’s important to stay flexible and adapt your plan as you go based on market feedback and changing circumstances. By doing so, you can keep your startup on the path to success. Starting a new business can be challenging, but with the right operations and strategy plan in place, you can navigate the challenges and achieve your goals. I hope that this article has been helpful in providing you with the guidance and inspiration you need to build a successful business. Good luck on your entrepreneurial journey!

I hope this guide has been helpful. If you have any questions, please email me at john.delfau@gmail.com or on LinkedIn.