By Mehdi El Hajoui and Brian Keller, Co-Heads of Business Strategy, Dropbox
If you talk to people working in Business Operations roles at different tech companies, you’ll likely hear very different explanations about how their team is structured. The natural conclusion is that there is no “one size fits all” approach to BizOps. We agree, and would like to propose a framework to help executives decide how to best position BizOps within their organizations.
A framework for thinking about BizOps operating models
While there are myriad ways to organize a BizOps team, two critical decisions determine how the team will operate:
Scope: Should BizOps have a focused scope, zooming in on one set of topics and issues, or should it have a broad scope, operating across any and all aspects of the business? This answers the question “What should BizOps do?”
Organizational alignment: Should BizOps be a stand-alone (centralized) team or aligned (distributed) to specific parts of the organization (e.g., a functional team, a business unit)? This answers the question “How should BizOps be set up?”
This yields three distinct operating models that we see in practice, which we describe below along with some of their associated trade-offs.
Operating model 1: Stand-alone, broad
BizOps teams with this operating model are autonomous entities — usually reporting directly into an executive function — and tackle a range of issues across the organization. Their members are opportunistically deployed on critical initiatives and work cross-functionally to drive enterprise-level impact. In many ways, these BizOps teams serve internal strategy functions. Some of the associated benefits include flexibility and neutrality. The main tradeoff is a relative lack of subject matter expertise, which may translate into longer project ramp-up time.
The latest iteration of BizOps at Dropbox (which is called Business Strategy, or BizStrat) follows this model. The bulk of the team’s time and energy are spent working closely with executive leadership to set the company strategy and drive key business initiatives. BizStrat also helps the company run efficiently (e.g., by helping manage the OKR process) and develops unique insights on Dropbox’s markets, competitors and business trends in order to inform key decisions.
Operating model 2: Aligned, broad
In the second operating model, BizOps is deliberately aligned against a specific area of the business (i.e., either a function or a business unit) and works on all key issues faced by its leaders. How the alignment occurs can vary — some teams embed individual contributors in teams, while others fully embed the entire team. This allows team members to develop a more in-depth context, but it also creates a bias against company-wide or cross-functional initiatives.
LinkedIn and NerdWallet are two examples of this operating model. At LinkedIn, BizOps is embedded in other organizations in a matrix structure around business units and functions. Team members partner with a specific business unit and have a focus on a functional topic like Product, Marketing, and Operations. Collectively, the BizOps team has a broad coverage across a range of functions. While NerdWallet is currently revisiting its organizational structure, BizOps was historically aligned against either verticals (e.g., Product, Marketing, Sales…) or horizontals (Credit Cards, Banking, etc.), but had a broad mandate in the area of the business it operated.
Operating model 3: Aligned, focused
Our third operating model is characterized by focus: BizOps teams that fit this mold are not only embedded in a business or function, but their role is also clearly delineated. While this allows for a very targeted impact, it comes at the cost of lesser flexibility and a more limited perimeter of intervention
Facebook has embraced this approach. There are no centralized BizOps teams; instead, small teams of BizOps professionals are recruited directly by and operate within the Finance teams of key Business Units (Platform operations, Small & Medium Business, Emerging Business, New Revenue initiatives, Instagram, Oculus VR). Because they are ultimately accountable to the CFO, these teams are often tasked with a distinct set of topics like financial reporting, performance forecasting / benchmarking, and statistical modeling.
Theoretical model 4: Stand-alone, focused
The one quadrant without a specific example combines a stand-alone team, but with a focused scope. We haven’t seen any sizable BizOps teams that take this approach, but it could exist if the company had a need for a specific “center of excellence.” For example, a central BizOps team that worked with different teams in the company, always on projects related to pricing and go-to-market.
There are other things to keep in mind, though
While we believe this framework should help executives think more strategically about what BizOps should do and how it should be set up, we also acknowledge its limitations. In going about choosing a BizOps operating model, there are a few things to keep in mind:
The choices often aren’t binary but rather lie on an axis. For instance, a BizOps team’s mandate may work with more than one function or business unit, but not extend to the entire organization.
Companies (especially larger ones) may combine several operating models. For instance, Google has both a central BizOps team and a number of teams that are embedded within specific business units.
Operating models evolve as companies grow. This is the key learning in Dan Yoo’s How BizOps Adapts to You and Your Company: “Flexibility is one of the prime virtues of BizOps. Companies can adjust their team’s function based on their size, phase of development and inclination”. Most BizOps teams will shift operating models at least a few times as the company scales.
Several other decisions need to made, for example around team size, strategy vs. implementation focus, etc.
No Matter the Operating Model, BizOps Is Likely to Add Value to the Organization
At the end of the day, different companies will opt for different operating models when setting up a BizOps function. Because no “one-size-fits-all” approach exists, executives will need to decide what is most important to them and structure a team accordingly. Whatever their choice, we believe that the decision to charter a BizOps team is likely add value to their organization.