WHAT ARE OPERATIONS?
My definition of Operations, which I think is sound, is "the coordination of tactics over time."
It starts, actually, with philosophy -- implicit or explicit.
Philosophy: What's important and worth working towards, on the highest levels? What's worth living for?
So you decide, let's say, that "beauty" is important to you. You want to live in a beautiful world, philosophically speaking.
This is where strategy comes in.
Strategy: What are some broad ways to do what's important?
When you have a philosophical aim [and you could call this many different things, or even not speak of it explicitly], there's often many ways to get there.
For instance, if you think everyone should have a decent standard of living, you could go into private charity and relief efforts, you could become a social worker, you could lobby your local government for nicer treatment of people in difficult circumstances, you could join an organization like Big Brothers / Big Sisters... you could do a lot of things.
To pick the "beauty" example above, if you believed that beauty was philosophically important, you could go into the fine arts (EX, painting), you could go into industrial design (EX, making iPhone-like things), you could try to create a really wonderful aesthetic in a private space (design a really cool boutique hotel) or a public space (improve a local playground or park), you could put on a really beautiful festival or event, or... well, really, there's infinite options.
Any given strategy might have sub-strategies -- if you wanted to become a fine arts painter, another strategy below that might be getting into a nice fine arts school, or it might be to make one oil painting per week, or any number of things.
Sooner or later, though, you have a strategy that's broadly actionable. This is where tactics come in.
Tactics: Individual technique-and-technician-level actions.
So you've decided that a beautiful world is the most important thing to you, you've decided to become a classical fine arts painter, and you've decided the best strategy right now is to make one oil painting per week.
Tactics now include mundane things like:
-- going out to buy 4 canvases, 6 brushes, a good selection of paint, and turpentine
-- deciding to paint for three hours tomorrow morning
-- doing a quick pencil sketch right now, that you'll use as your basis for the next painting
-- creating a block on your calendar from 6AM to 11AM tomorrow morning to put your materials together and warm up, start painting, and clean up afterwards
-- buying some yogurt and fruit for breakfast tomorrow
-- setting your alarm for 5AM tomorrow
This is all well and good, and many people get to this step, make lots of progress, but then -- inexplicably and confusingly -- fall off and stop painting.
They're missing the operational level.
Operations: The coordination of tactics over time.
Ops ensures all the little tactics that make for success happen consistently, day-in and day-out, week-in and week-out.
-- putting a recurring order on Amazon or an art store so that new brushes, canvases, paint, and turpentine show up every single week; so you never run out
-- blocking your schedule for three hours every single morning for the next two weeks
-- blocking your schedule to do a quick pencil sketching every evening to help figure out what paintings you'd like to do going forwards
-- standardizing your food into meal plans, and always grocery shopping every Sunday or getting a recurring food order happening
-- setting your alarm for 5AM every day for the next two weeks
-- putting together a checklist or Lights Spreadsheet to make sure you (1) have enough materials, (2) have your schedule clear, (3) are doing your pencil sketches, (4) have enough food, (5) didn't forget to set your alarm in the evening
Rebuttal: "That's a lot of work! I just want to paint!"
Reply: That's fine. Do you think all the chores and mundane things around painting are just going to happen automatically?
That's not a flippant question. The answer might be "yes, they will" -- if so, carry on.
Some people, due to whatever style of cognition, upbringing, and whatever else -- just seem to take care of details naturally without formalizing them using technology, checklists, "hard rules", etc.
If that's you, (1) you're probably already pretty successful, and (2) you'll be able to keep being successful until you get to a level of complexity you can't handle automatically [*], and (3) by all means, if you're happy where you're at, carry on as you are.
[*] Maybe this rare person can automatically handle all the details around painting naturally enough. But if you start getting more commercially and critically successful and showing your art at galleries, interacting with art critics, selling paintings, needing to pay taxes on the paintings sold, etc etc etc, are you going to start drowning and missing the details at some point? If so: operations. If not -- and there's a few mythical-type people who just have ultra-powerful minds for this sort of thing -- well, sincere congratulations and carry on.
"Okay, fine, yeah, I probably need Operations. Now what?"
Glad you asked.
I struggled with this for a number of years.
A lot of my friends are extremely skilled in this domain. Ivan Mazour has some great organizational techniques. Kai Zau is one of the most operationally sound people I know, and it's a privilege to work with him. Taylor Pearson has elite documentation and technologic-ops type skills, he's really the master at this, and I've been privileged to learn a lot from him. Eden Full Goh has scary-good ops around her mech engineering, public speaking, inventing, and nonprofit work. What Ted Gonder and Shashin Chokshi accomplished as Moneythink is an absolute triumph of operational ability. It blows my mind.
And many more people, too. I've got a lot of acquaintances and friends performing at a high level in their domains.
But it came unnaturally to me.
I've been described a lot recently as having elite operational ability. I think that's somewhat overstated. I'm pretty good these days, but the difference between where I'm at, and where Ivan, Kai, Taylor, Eden, Ted, Shashin are at -- it's really night and day.
I'm not being modest. It doesn't come naturally to me, and I only started taking it really seriously about two years ago. Even then, I struggled and wasn't sure why.
A missing link for me was the ability to differentiate between "Sky-Down Ops" and "Ground-Up Ops."
*Looks at one small domain where success is already happening,
*Looks for obvious gains and improvements to make in that domain,
*Makes those improvements,
*Doesn't worry about having "a system" or any sort of grand overarching point to it all,
*Succeeds pretty consistently.
So, to take our painting example, it would be like if you were already painting successfully most mornings, but occasionally ran out of paint or food.
On days you had no paint, you can't paint. You lose a day or two of your morning while getting new supplies.
This, obviously, can be improved. So you create some method to ensure you don't run out of paint.
Likewise, if you run out of food, maybe you don't concentrate as well and you paint worse.
So you create some method to ensure you don't run out of food.
It's pretty simple stuff, really.
You might or might not need to get really formal around what you're doing. The Ground-Up Ops you build don't need to be logical or cohesive. It could be something very simple, like having two bottles of paint for every color you use. Then, if one bottle gets empty, you place the empty bottle right next to your keys and always grab it when you go out the door, and then you buy a new bottle of that paint color that same day.
It doesn't have to be "organized," per se. As long as it's working for you, it's fine. "Always have two bottles. If one runs out, put it by my keys. Whenever I leave the apartment, take any empty paint bottles with me to the art store to buy more paint."
That's potentially very sound operations. It doesn't need to be written down, documented, or automated. It doesn't need technology. It doesn't need to be formal. If it gets the job done -- if you don't run out of paint -- then it's getting the job done.
(Contrariwise, if your boyfriend or girlfriend or cleaner or mother randomly throws the empty paint bottles away without buying more, you might need to tweak the operations. If "empty paint bottle goes by my keys when it runs out" is not getting the job done -- and you're running out of paint -- then it's not getting the job done, and you need different or better operations.)
Now... the good and bad news is that "command flows to the worthy."
If you really nail your strategy, tactics, and get good Ground-Up Operations, you'll start getting more successful.
That's great! Nothing succeeds like success, eh?
Except, it's very possible -- again depending on the complexity of your life -- that Ground-Up Operations aren't getting it done.
You might have your artist's studio set up, and you do two-bottles-of-each-color-and-empty-paint-bottle-goes-by-keys-and-buy-more, and it works fine.
What about if you're traveling and you're on the road in a hotel?
Do you need to pack a certain way to be able to paint on the road?
Or maybe you're not going to paint on the road. But, then, do you immediately pick painting back up when you're back at your studio? Or do your routines get broken and you fall off for a couple weeks?
If you really nail a good strategy, good tactics/techniques, build good ground-up ops, and execute reliably -- you start getting more successful. Naturally, then, more people want to spend time with you. More opportunities come your way.
It's all great. Super great, even.
But complexity grows.
And then things start breaking.
Sky-Down Ops --
*Looks at the totality of life, time, resources, bandwidth, philosophy, strategy,
*Attempts to order all of them into a cohesive whole,
*Wants and seeks "a complete system",
*Looks to synthesize unrelated domains and tradeoffs,
Oh yeah, you read that right. The vast majority of attempts at making Sky-Down Ops -- don't work.
I'm not speaking in the abstract here; I'm talking about my experiences here.
I see young people, all the time, trying to design some grand overarching system for their lives -- and failing to get any traction with it.
It just... umm, it usually doesn't work.
On a corporate level too. But you've probably heard those horror stories already, so I won't rehash any.
No, instead, the most successful people I know all start by nailing Ground-Up Ops.
You'd really do well to read Ivan Mazour's site; it's full of operations gems. You don't even notice them until you start looking for them.
At the end of each year, just like any other CEO, I send an update about Ometria‘s progress to a select group of people – people who are friends of Ometria, who have helped us, who might have considered investing in us, or who just simply care about our success for no other reason. I don’t do it with a Mailchimp list – that’s too generic and “easy”. Instead I run a mail-merge which pastes the main update into an individual message for each person, direct from my personal Gmail account. I want each one of those emails to turn into a conversation – I want those people to reply, because I value their opinion and enjoy speaking with them.
That wasn't even the main gist of that blog post, which was about smarter autoresponder usage.
No, instead, Ivan just naturally builds Ground-Up Ops. He thinks that way.
You can see the components there:
*Update friends of the company
*Update people who care about the company's success
*Do it time-efficiently as a CEO
*Make it personal and warm
*Generate as many relevant reply conversations as possible
He thinks it through and designs-Ground-Up protocol around it -- written update, personal Gmail, mail merge. Presumably, he schedules this well in advance and perhaps has some semi-standard template he writes from.
And again, that's just a throwaway paragraph in a blog post about something else. Ivan thinks that way.
(If I had to guess as to why -- and I'm just guessing -- it would be due his formal training in mathematics with tough maths proofs, plus his background in real estate investing and property management, which -- in the absence of Ground-Up Ops -- turns into a potential disaster really quickly.)
I don't know if Ivan has a master control system. I would guess he probably does but I also wouldn't be surprised if he doesn't.
Another example of Ground-Up Ops (which tend to work) -- Eden Full Goh's approach to press and talks she's given.
On the Second GiveGetWin Tour, in Autumn 2015, Eden spoke for us at NYU Stern.
She was awesome, of course.
But I was most-shocked to see that when I checked the next day, the talk was up on her website.
She is systematic about noting down places she's spoken, and linking back to the organization or event.
It's really cool. I immediately appreciated it. It becomes a virtuous cycle: she does great talks, they show up right away on her website, people who are interested in her talks (which is anyone who has seen one of them, basically -- she's an ace speaker) they can see her speak again. Organizers can see where she's spoken, and can easily reach out for references if they want to vet her. (And ironically -- in a virtuous cycle-- because of her organizational ability and having all the credible things she's done on display, she probably needs to spend less time in due diligence and being vetted than most people.)
Does Eden have some "master control system", some "Sky-Down Ops" she uses to organize everything?
I don't know. I'd guess probably yes, but also wouldn't be surprised if she doesn't.
Maybe Ivan and Eden have some "master controlling system" for their lives -- or maybe they don't. But they do have clearly-working-from-ground-up operational systems consistently generating successes.
Sometimes I see people who are inundated with complexity try to build some Sky-Down "master control" -- these attempts almost always fail, in my experience.
In simple cases -- making an oil painting once per week -- Sky-Down is too heavy and unnecessary. You only need to solve the little issues and refine the basic successes at that point.
On the other side, in complex but disorganized lives -- the type I was living two years ago -- Sky-Down is the wrong way to approach things.
I designed so incredibly many attempts to unify my life and keep everything under control, all of which failed, because I was working with very flawed components.
If you're not reliably making oil paintings, a "grand unified painter's life system" probably isn't the answer.
Like -- it doesn't make sense to do some master design of navigating art supplies, automating food deliveries, having a CRM or contact database of art dealers and art critics, having a complex tax management protocol to realize gains from paintings sold -- if you're not actually painting.
So again, Sky-Down usually fails. I tried to approach Ops from a Sky-Down perspective many times. It repeatedly didn't work.
This seems to be the norm.
But Sky-Down does become necessary at some level of success and complexity.
I think a good time to build Sky-Down Ops would be when,
(1) Successes are already happening locally (you're making a painting every week),
(2) The operations around those local successes are already tightened down, reliable, very solid, with bugs and kinks worked out (you never run out of painting supplies or food, your calendar is reliably cleared during your painting times, etc),
(3) Complexity has grown to the point where the tradeoffs between unrelated Ground-Up operational systems are now competing and breaking each other (you're missing tax filing deadlines and getting a gigantic tax bill from the paintings you sold, and just getting a sheet of paper to your accountant two weeks earlier would have saved you $50,000) and finally,
(4) As late as you can possibly get away with.
The first three points are pretty obvious --
1. Don't try to build some Platonic theoretical master system when no successes are happening. It's a waste of time. Really.
2. Don't build some Platonic theoretical master system when there's still obvious gains to be tightened down in your core success area. Your core success area drives your success -- spend your ops time there first, until the gains are run out.
3. But okay, now unrelated domains that don't hook into each other naturally are competing and breaking your life (painting well, dealing with art dealers and critics, taxes -- these are rather unrelated things)... now it starts to make sense...
4. ... and yet, you still want to see if you can just temporarily solve those issues locally and Ground-Up. Empirically speaking -- not theoretically, but from actual experience -- most successful people I know in entrepreneurship really nail down delivering a great product or service and getting revenues coming in before spending heavy time optimizing taxes. There's exceptions. Many exceptions. If your mom or dad is an accountant and will do it with you for free, by all means get that Self-Directed 401k set up earlier (I recommend E-Trade for your self-directed 401k, incidentally). But I see far more companies fail because the product and market never get great, than because the entrepreneur paid too much in taxes the first year they had breakout success. Putting too much attention on "totality of everything" too early very much risks not being really really good at your one core thing from the Ground Up.
But if all that's true, you can go Sky Down -- building a theoretical operational system -- and seeing if that unifies.
Here's a screenshot of Kai's "fit all work to months and days" thing --
It's still pretty simple. But he has loosely laid out all the work that will happen in the next three months of his life.
Note it's just in Evernote with a mix of folders, shortcuts, and notes. Nothing fancy.
Kai has a few other techniques he uses -- but even when he goes "Sky Down" and tries to control his whole life, he still keeps it really simple.
And he's got, relatively speaking, a very complicated life.
Quick Thoughts on Learning From the Most Common Ops Books
A lot of people love one, and think the other is wrong and/or useless.
I have my answer.
E-Myth Revisted is Sky-Down.
After the initial allegory and context, Gerber talks about the "Turn Key Revolution" (Chapter 7) and "The Franchise Prototype" (Chapter 8). In Chapter 11, he lays out "Your Business Development Process", going through --
1. Your Primary Aim
2. Your Strategic Objective
3. Your Organizational Strategy
4. Your Management Strategy
5. Your People Strategy
6. Your Marketing Strategy
7. Your Systems Strategy
After going through the more abstract "Primary Aim" (maps to Philosophy for me) and "Strategic Objective" (maps roughly to Strategy for me), he gets right into Sky-Down Operations before tactics.
He recommends, on page 175, building an Organizational Chart before the company even gets into business.
It's thinking through and designing abstract and Platonic roles.
It can work. Really, you could approach Ops from either direction. Doing anything is better than doing nothing here.
But I would note that the original "E-Myth" was published in 1986, and "E-Myth Revisited" was first published in 1995. His examples are bakeries, hotels, restaurants. That's back in the day when lots of capital was needed to go into business. You're talking SBA loans, lines of credit, facilities, etc.
Work the System, first published 2009, is Ground-Up Operations.
After covering the de rigueur personal story, why the topic is important, and the Philosophical/Strategic Company Stuff (Carpenter advises a Strategic Objective and General Operating Principles), he gets into his way of doing things.
On page 118, he says it outright:
"Key point number one: Create a formal “bottom-up” corporate expectation whereby line staff is encouraged, and expected, to pass recommendations up to managers. And managers will do the same with their managers, and so on, right on up to the top of the management chain. Bottom-up is the key to both hyper-efficiency and staff buy-in, and yes, it’s contrary to traditional pass-down corporate/governmental thinking."
The next page, he shares what the first procedure he created was at his telecom company --
"Coming immediately after my midnight epiphany, our first Working Procedure was the Deposit Procedure, which provided our administrative staff with exact directions for processing the dozens of client payments that arrive by mail in our office each day. This involves more than the actual bank deposit. It also includes physically receiving incoming checks, crediting them to clients’ accounts in the receivables software, and cross-checking totals."
I won't lie -- it's pretty boring stuff.
But I think Carpenter's approach is more right than Gerber's in 2016. They're both good books and highly recommended, but the real magic is that Ground-Up Ops start being useful right away without overarching universal maintenance.
A "total life master control system" starts breaking quickly if it wasn't very well designed at the outset.
And a "total company master control system" is more-or-less useless if you don't have a great product/service and revenue or reliable funding.
Is this so hard? No.
It's really not.
This is a long piece, but the crux is four pretty simple points.
1. Once you know what matters to you, broadly how you're going to get there, and you're starting to have some sporadic success -- start building Ground-Up Operations.
2. Ground-Up Operations take something that's already working and makes it work better, unfolding over time with less errors, more consistency, and more quality.
3. You should probably postpone a theoretical/Platonic "Master Control System" until you have local successes working to a high degree, and have gotten the majority of easy gains out of those.
4. Once you have conflicting locally successful Ground-Up Operational Areas, then you start building the Master Control Stuff. Org charts, multi-month planning cycles, etc, etc.
My favorite books on entrepreneurship / small-business operations:
*Work the System by Sam Carpenter (2009, Ground-Up, author's background is engineer and telephone answering service company)
*E-Myth Revisited by Michael Gerber (1996, Sky-Down, author's background is consulting)
*Built to Sell by John Warrillow (2012, mixed, author's background is getting service/marketing companies acquired)
*Get Your Business to Work by George Hedley (2009, mixed, author's background is construction)
Hedley's book is actually my favorite on the topic, but I'd recommend you read it last unless you're in construction or physical goods.
The order I'd recommend is: Warrillow first (very short easy read without much technical intensity), Work the System second (very practical "go do this" type stuff), E-Myth third (sooner or later you'll need those Sky-Down Ops), and Hedley last (my favorite book on the topic, but you need mental models of non-construction non-physical-goods from the other three to maximally appreciate it, I think).
People with exceptionally good Ops to learn from --
Organizations with very good Ops --
You might also search out top-performing companies and organizations.
*Bridgewater is the top-performing hedge fund and has some excellent operations documents.
*In tech, Percolate has some excellent notes about their onboarding and coordination.
*First Round Capital publishes a lot of good blog posts and essays from very successful entrepreneurs.
*CooleyGo is a top law-firm's take on legal strategy with out-of-the-box legal documents.
*The U.S. Navy SEAL Teams and U.S. Army's Delta Force both have a number of excellent books by retired veteran soldiers and officers.
Oh, and if you're interested in what I'm up to:
Progression: My fourth book came out a few days ago. It's getting rave reviews.
The Strategic Review: Long-form deep history and strategy lessons every Thursday, 100% for free. Issue #1 of the next Series, "Temporal Control," comes out on Thursday 23rd June.
The Ultraworking Pentathlon: Have the most productive three weeks of your life in July.
GiveGetWin Summer Camp II at UChicago: Tell all the hyper-talented young people you know -- free entrepreneurship and leadership training for two weeks in August, very high quality if you're accepted into the program.
GiveGetWin Tour IV is also confirmed for November 2016, but I don't have a link for you yet.
"But I just want to paint!"
Yeah, me too. And life kept getting in the way.
But it's 11:34AM here in Tallinn, and I'm done with my work for the day.
Nothing is on fire. Everything is more-or-less ahead of schedule. I write a few thousand words each week, and the writing has been getting critical acclaim from a mix of startup founders, CEOs, military officers and enlisted soldiers, a surprisingly high number of accountants and attorneys, and a whole lot of smart and creative people.
I'm managing to grow a really cool nonprofit, connect with amazing people, and my new company is slowly but surely getting some great customers and delivering results to them.
Operations are, I day say, magical.
Start Ground-Up. Get Sky-Down when reality forces you to.
So that, when you paint, just paint.
And with that -- I'm done with my work for the day -- and off to the museum.
My best regards, always,
"Once more unto the breach, dear friends, once more; Or close the wall up with our English dead. In peace there's nothing so becomes a man As modest stillness and humility: But when the blast of war blows in our ears, Then imitate the action of the tiger"
-- Shakespeare, Henry V
INTERNAL SCORECARD #12: ONCE MORE INTO THE BREACH
I write these Internal Scorecards up, usually weekly, so that you can see the pragmatic applications of strategy, habits, operations, production, etc. The good and bad, the upsides and downs, and so on. I get a lot out of it too -- it gives me and external accountability mechanism, and good feedback.
This one covers 11 August to 17 August.
The old lady was staring at her. She knew it.
Four months ago, Julia had married the love of her life. Her husband, Mike had just been named head curator at the art museum where he was working in. She was three months pregnant with a boy they would call Joey and after Joey is born she would quit that stressful writing job of hers to be a full-time housewife. Nothing could go wrong in her perfect life.
The day it arrived, Julia and Mike were busy unpacking their luggage from their trip to Venice when the doorbell rang. Julia ran out to get the door and when she opened it and looked down, there it was.
The package was encased by a bubble wrap, with an additional layer of plastic over it. At first glance it was about two feet tall and one foot wide. Julia carried it into the living room and unwrapped it. The rectangular wooden frame in the package was old, but kept in good condition. Flakes of the golden paint that coated it were coming off but it was still a beautiful frame, with very fine carvings of flowers at its corners. But Julia didn’t notice that, her eyes were fixed on the painting in the frame.
It was a portrait of an old lady who looked almost in her eighties. She had a sharp chin and high cheekbones and her pale skin was weathered and covered in wrinkles. The old lady’s graying hair was tied up in a bun and over it she wore a white bonnet. She had a hooked nose, almost too big for her face, with a sharp tip like the beak of a hawk. Below that nose she had very thin and dry lips. The edges of her mouth slanted slightly upward, giving her a smile that looked more like a smirk to Julia.