I’ve recently been introduced to the concept of being a good “operator” in business. I’d heard the word before, but never really understood what it meant. I’ve thought a lot about leadership and management in the past, but being an operator is a bit of a unique concept.
When it comes to being a good operator – there are two things that matter most:
- Keeping a firm view on the high-level business metrics (KPIs) that drive your business.
These are the same metrics that an investor or an analyst would look at to determine the health of your business. For example – revenue, cost of revenue, gross margin, employee turnover %, # of deals in the pipeline, days sales outstanding, revenue per employee, etc.
- Deeply understanding the industry trends, resources, people, processes and values that drive each of those high-level business metrics.
What levers can you pull, incentives can you change, projects you can start that will actually impact your high-level business metrics. Which of those high-level business metrics are easy to change and which are hard? Which can be impacted quickly and which ones take a very long time to change?
The key to being a good operator is maintaining a firm view of the high-level business metrics that are driving your business, while at the same time deeply understanding the activities, trends and people who are driving each of those numbers.
Further, a good operator understands what the high-level numbers need to look like in order for their business to be successful and they understand what needs to happen in order for those numbers to look the way they want.
Most people can only do one or the other.
There are people who can define the high-level metrics that matter, and there are other people who know how to manipulate the business to change the numbers.
It’s a very rare person, a true operator, who can really do both.