Forbes Innovation Why Operational Transparency Is Key To Business Growth Mike Carpenter Forbes Councils Member Forbes Technology Council COUNCIL POST Expertise from Forbes Councils members, operated under license. Opinions expressed are those of the author. | Membership (fee-based) Mar 17, 2023, 06:45am EDT | Share to
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Twitter Share to Linkedin Founder and co-CEO of Xfactor.io . getty Enterprise companies face a host of challenges to maintain growth and continue scaling. With rapid innovation increasing, efficiency and agility remain top of mind for business leaders and decision makers. The path to growth is guided by go-to-market (GTM) and annual operations planning (AOP)—which have both traditionally served as the processes for making critical business decisions. The underlying problem, however, is that these plans have historically been executed in a siloed
fashion based on misaligned priorities, outdated data or insufficient intelligence, and subjective perspectives across departments. As such, many enterprises have experienced the cost of relying on these tenets—poor decision making and missed growth opportunities. The traditional approach to AOP and GTM activities will no longer suffice for enterprises in today's constantly evolving tech landscape. Instead, business leaders will prioritize operational transparency as the key to business growth. Here's why. Growth Requires An Always-On Approach In order for enterprises to build their operations plans for growth and scale, they must constantly evolve. In other words, it will need to shift from "annual" to "always." Organizations that are able to pivot GTM strategies with agility are in the best position to continuously meet and exceed business goals, regardless of changing internal and external conditions. This requires constant communication with various departments and stakeholders as critical decisions are being made—especially when macroeconomics creates the need for fundamental reform. MORE FOR YOU Meet The Unknown
immigrant Billionaire Betting Her Fortune To Take On Musk In Space Daniel Suarez, Fresh Off A Contract Extension With Trackhouse Racing, Is Ready For His Breakout Season Done-For-You E-Commerce And How To Find The Right Partner As we're witnessing across the tech industry today, two paths are forming—one where companies with financial and/or model issues are forced to correct and another where companies that are successful leverage the opportunity to "weed the garden." This is what we see with the wave of massive layoffs we've seen in tech. Essentially, they are investing in market share shifts as a result of the macroeconomic times and are cycling through contraction to prepare for expansion when the
economy recovers. However, without operational transparency from the start—right when things can be projected to look grim—and frequently to mitigate surprises, this approach can result in cultural uncertainties that aren't positive for any form of growth. Consistent Data Leave Little Room For Debate At the core of any successful operations plan, there must be consistent and reliable data. Having benchmarks to reference throughout the year is part of the approach, but if your benchmarks are outdated in relation to current business conditions and other market indicators, they lose their purpose. In my experience, business leaders spend an average of nine months developing an operations plan that becomes obsolete in the first two months of the year. Metaphorically speaking, they are flying the plane using old flight data. In fact, recent data indicates that only 54% of companies have a regularly scheduled meeting between sales and marketing leaders to review pipeline and revenue performance against plans to identify and address challenges. What's more, these plans typically use the current year's actuals as the basis for the next year—leaving business leaders to finalize their budgets as late in the year as possible in an effort to rely on the most recent numbers. Instead, these benchmarks should be established with historical data and real-time intelligence to inform the most holistic GTM and always operating strategies and ensure decisions are being made objectively based on factual information. For example, in the unfortunate case where a particular budget needs to be cut, operational transparency allows internal departments to have an unfiltered look into the data that informs such decisions—eliminating "fuzzy math" and leaving little room for debate. Moreover, consistent data also enables and encourages your operations planning team to pivot with the market, assess competitive threats and capitalize on new opportunities to drive growth. A Healthy Company Culture Relies On Transparency A healthy company culture is at the center of any business success, and a big part of that is operational transparency. Organizations can begin the transition internally by shifting company culture and leadership to align with processes and policies rooted in transparency. This means leaders actively fighting against the “CYA'' mentality and the value of personal recognition being less than finding value in the overall mission and success of the business. In order to do this, recognition should be controlled at an individual level to ensure politics are not in play. In other words, recognition for employees—that take successful or unsuccessful risk, initiative and contribute with high integrity—should be the only way individuals are celebrated publically. As it is natural for individuals to be personally recognized for their contributions, shifting focus to their role within a team enables a healthier environment and further promotes a collective growth mentality. Moreover, ensuring team leaders are trained to think of feedback as a two-way street enables open lines of communication and further promotes accountability. This sort of culture has a variety of benefits across the board, from employee retention to public perception. But ultimately, it's crucial to uphold operational transparency on a day-to-day basis. Transparency Drives Unification The complexities and challenges of operations planning make it prone to the worst kind of politics—silos and unneeded tensions that slow down GTM activities and take away from the goal of growth. With different departments fighting for their piece of the pie, the result is typically business leaders arguing their own personal truths based on self-serving objectives and analysis. The key to growth lies in establishing a single source of truth, which is the entire organization's "North Star," and unifying teams around it. Revolutionizing the operations planning process is a must for today's enterprises to grow and scale. Not only must plans be amenable to changes in industry and market, but they must also mitigate misaligned priorities within the organization through transparency. Exercising operational transparency drives unification for teams in the planning process based on a shared vision and promotes confidence that every decision is the right one for that vision. Forbes Technology Council is an invitation-only community for world-class CIOs, CTOs and technology executives. Do I qualify? Follow me on LinkedIn . Check out my website . Mike Carpenter Editorial Standards Print Reprints & Permissions