What I learned scaling Operations from 5 to 125 people at BuzziSpace

Figure out what the biggest problem is and start a huge, multi-year project to fix it? One of the biggest mistakes I made early on at BuzziSpace…

Want to know more about these and other mistakes and findings? In this article, I will explain what my biggest failures were and what I learned subsequently as an Operations director of a multinational that grew by more than 50% year over year in a traditional, non-tech environment: Office furniture.

Perception, experience and trust

‘Everything is perception’. Many conflicts derive from not having a common or aligned understanding of the goal, action, project, or question. Simply taking the time to listen to what the other person has to say with genuine interest before judging can often clear the mist. You need to figure out where everybody is coming from in order to find a common purpose.

Early on I also made a lot of mistakes trying to implement ‘Book wisdom’. It was my personality back then to categorise things as ‘black or white’. Through experience (and lots of listening) I found that the reality is often much more complex and needs a pragmatic approach. You can gain knowledge reading books. But you will only know what technique to use when, through experience.

I also quickly learned that you should always double-check everything in every way reasonably available to you. This advice withheld me from numerous potential mistakes. It’s amazing how many pieces of work are sent out to co-workers - or even management - that have not been put through at least a ‘sanity check’ or have been proof-read by peers. The same goes for delegating trust. Trust, but verify!

The right team

Good teams are groups of people that trust and respect each other and have sufficient group intelligence to compete their goals. They are the basis for any positive change I believe. Without a good team, improvement attempts are often in vain or short lived. This is true for two reasons:

  1. Trust and respect for one another is necessary to prevent one or more ego’s to overrule the thinking of others. It’s the manager’s job to manage this on a day to day, but if one or more characters in the team are too aggressive, the rest will eventually stop contributing. If this happens there is no way back and the team needs to change to fix the issue.
  2. Group intelligence is the level on which the group can discuss issues and implement solutions. This level defaults to the least capable individual in the group and needs to be equal or higher than the type of problems the team is facing. If one or more characters have a tendency to attack people for problems instead of attacking problems with intelligence, there is only a small possibility this can be fixed through coaching. It is better to change the team than spend months or even years trying to change a single personality.

I think that contrarily to popular belief, teams are not created by ‘motivation’ or ‘team building’ activities alone. Creating a good team requires lot’s of time and energy but always starts with ‘the right people’. This usually involves changing roles, hiring, or sometimes letting go of people who do not have a ‘fit’ in the team chemistry. Don’t settle for less.

Obviously there are much, more things that influence the team dynamics and therefore determine how it should be managed and what its potential performance is. I found that these are so diverse that there is no common denominator in them, except for:

‘first seek to understand, than seek to be understood’ - Stephan Covey (Seven habits of highly effective people, 2006)

Hiring, changing roles and/or sometimes letting go of people is for the better of the group and the individual. It is the single most important thing to do when you want to have any sort of long term impact in an organisation. Whether it is for a project, a new hire or just a team that has already been there for years. Verify it is made up of the right people before going anywhere else.

How to create the right team? This is an almost impossible question to answer because it depends on so many different parameters that there are no ‘easy fixes’. The things I identified that do matter and are an absolute minimum, are:

  1. Teamplayer. If a person cannot be part of a team, there is no position in a team for them. You can sometimes tell by the the amount of ‘we’ instead of ‘I’ people use in interviews. This directly relates to ‘trust and respect’
  2. Pro-active. Also known as ‘self motivated’. Look for people who ‘do the extra thing’, they came up with this extra feature, or did this extra project next to their day job, or went the extra mile at… I prefer people who need to be ‘held back’ instead of constantly ‘motivated’.
  3. Non toxic. This one speaks for itself. If you made a mistake hiring somebody that is toxic, stop as soon as you possibly can.

Create urgency

Do not fall victim to pushing an organisation up an hill by yourself. It will only frustrate other people. I tried this on a few occasions in my early years and failed miserably. It is very hard to convince anyone to change. People need to be intrinsically motivated about a project, program or change to become convinced enough about its use. This is because people don’t like change, it means insecurity to them. We are all wired to omit insecurity, and therefore ‘change’, by design.

Before you start any initiative. Let it be a project, organisational change or anything else that requires support by others. Try to create as much urgency first. The most effective way to do this, is to figure out ‘what is in it for your stakeholders?’ and explain to them using their own language. The best way to do this is, is to first ‘ask’.

Do you have this problem? The answer might surprise you and in most of the cases, actually leads to small or even big improvements to your initial plan. There are too big advantages to this approach:

  1. Because you align with all stakeholders first, you can verify your hypothesis about ‘what is in it for them?’ and optionally change your plan to do so. It then becomes a ‘shared plan’ and your stakeholder is already invested before even proposing a solution.
  2. Because you know the answer to the question ‘do you have this problem?’, you can tailer the message about the urgency exactly to fit the needs of all the stakeholders, maximising your chances of convincing them.

Iterative (Project) management

Nothing is more exciting than making and completing big plans. But odds are there is no time, budget, or resources and by the time the project is completed the scope was ‘not exactly what we needed’. To be successful, start with the scope of things that you know will work. Celebrate success and only then move towards to more ambitious goals. This way you avoid diminishing morale and have already proven that your capable of achieving a goal.

Research ‘ERP failure’ or ‘Budget overspend project’ and you will understand what I’m talking about when I say that: Big projects fail a lot. Why is this the case? My experience is that there are a few critical things that you need to get right in project management or management in general before even starting. In fact, I would never start a job or a project without the following aspects in place:

  1. Urgency
  2. Management commitment
  3. Project leadership decision power

Note: these points can be used to reinforce each-other. Urgency leads to management commitment, management commitment can be used to get to project leadership decision power.

The problem with traditional (project) management is that, as scope (i.e. complexity) increases, the chance that the project will be completed with their goals (i.e. time, scope, and budget) becomes exponentially harder. This is because with complexity also the dependancy of tasks to other people, events, resources rises. This greatly increases the number of potential factors that can distort the outcome of the project. And believe me, they will.

I found it is better to break projects and tasks into pieces that are ‘as small as possible while still providing the minimum added value’ and executing them as fast as possible with fast iterations of improvement. This approach is also called the ‘agile development approach’ and is used a lot in software development. It works much better than traditional ‘waterfall' project management and is laid out in detail in books like ‘The lean startup (Eric Ries, 2011)’ and is at the core of agile/scrum project management.

Delegating trust

Early on at BuzziSpace, Steve Symons (founder and CEO of BuzziSpace) showed me that in order to grow you need to be able to delegate trust. If you are constantly micro-managing, you will not have sufficient time to focus on the bigger picture. This advice cannot be more accurate.

When I started my role, the company had around approximately 15 employees and was growing fast. BuzziSpace was - and still is - a product leadership company. Its culture was ‘work hard, task-oriented’ back then. Everyone knows exactly what everybody is doing, and the company owner keeps everything in check personally. I think a lot of companies are run this way, and probably most of the minor to mid size level.

To get to a bigger management scope we realised that in order to grow, you need to ‘free up time’ to look at the bigger picture. Everyone has a maximum management scope. For some this is 4 people, for others this is 25. I believe the maximum is around 8 different reports, or around 25 of reports that ‘share the same role’. Most companies and teams grow until they hit this number as a ‘glass ceiling’ because the owner is unable to delegate trust.

Daily accountability and goals

The basis for work, is accountability to a goal. It’s almost impossible to reach any goal without accountability. Accountability for your own actions, accountability by your team members, peers, managers, management… everyone. Set and measured on a daily basis.

It has always struck me that the answer to the question: ‘what is your role in the company?’, is in some cases immensely complicated and vague. If followed up by ‘what are your goals and how do you track them?’ often leads to complete silence or an even more complicated explanation.

I made this mistake as well. Making people responsible for sometimes more than 10 performance indicators and giving them ‘diverse’ roles. This lack of clarity and focus led to behaviour that I would describe as ‘all around the place but rarely hitting target’.

Only once I started inquiring into what caused this behaviour I realised that people need clear, simple targets and focus. Goals that everybody understands and that are translated or cascaded to a personal level. Obviously this sounds like logic itself, but it seems we tend to ‘overcomplicate things’ a lot. We started using ‘simple goals’ to complement our performance indicators for teams, and divided the metrics to measure if we are doing well between the team members or sub-groups.

Having individual goals and metrics makes it a lot more clear what each individual’s contribution to the whole is. This feeds transparency and accountability. I would go as far as saying that the simpler the goal and the more personal the metrics to achieve them are, the better you can expect the result to become.

For example: We changed our logistics department’s goal to ‘receiving, storing and shipping our products to our customers according to their wishes as effectively as possible within 2 business days’. The elements of which this goal is composed where divided between the group members. One person became responsible for receiving everything in by the end of the day, another became responsible for storing everything, etc.. This super simple clarity led to an extreme increase in commitment and pro-activeness.

Effective management

With accountability and goals that everybody understands in place, it becomes possible to manage effectively and timely. Ideally you want to set the management frequency (i.e. the time between reports) relative to the amount of things that can go wrong and their impact between management moments (usually standup meetings).

For example: A flight control room needs continuous monitoring. A ocean faring container ship only needs to check in with headquarters every other day when crossing the Atlantic ocean.

The ideal time and frequency of team meetings is usually at the start of the day, on a daily basis. This practice is also know as ‘the daily standup’. It is not that important whether you sit or stand up. But the goal is that you can steer the priority for all team members before they start their most productive part of the day.

Since meetings take time and that time is not spend working to solve problems they should be as short and simple as possible, with the least amount of people possible. We always used a 15 minute target for daily stand up meetings. The meeting itself should be led by the participants and overseen by the manager. Everybody should already know what is going to be discussed and have prepared themselves for the topics at hand. This format might look something like:

Daily (standup) meeting - 15 min

  1. Understand how everybody is doing on a personal level
  2. Discuss escalations of new or existing action items
  3. Report deviations to expected results (metrics, these should be the same as the ones discussed in the prior paragraph) and discuss if temporary fixes are needed
  4. Assign accountability to temporary fixes of deviations
  5. Assign accountability to perform analysis of ‘root-cause’ of deviations
  6. Report on status of prior assigned outcomes of ‘root-causes’, temporary fixes and preventive fixes
  7. Set priorities and expected results for the time period until the next meeting

This format forces you to keep to stick to the topic and discuss only what is necessary. After finishing the meeting I would know: How the team is doing, what are the most pressing issues and who is going to tackle them as well as when they are expected to be done. On top of that, you have set the priority of every team member, and they know what everybody else is working on. All within 15 minutes. I found this to be a very effective way of managing the team on a daily basis.

Note: A common habit is to start discussing a problem in detail during a meeting. This is rarely effective as usually not all the information is known and not all attendees are interested or knowledgable of the topic. It is best to stop such discussions right away. They take precious time, rarely get to any tangible result and often feed misinformation.

Work standards

Having work standards is the absolute basis for any company. It creates a ‘aligned view’ on how something is done. A basis for improvement. Only if you have work standards you can improve, if you don’t, you are just guessing. This is the reason that it is almost impossible to scale up an organisation without work standards. If you do not have work standards, create them first before doing anything else.

"If you can't describe what you are doing as a process, you don't know what you're doing.” - W. Edwards Deming

Work standards contain described processes. The better they are described, the more precise (less variance) you can expect the outcome to be. When we started at BuzziSpace, there was only a very limited amount of work standards. Our first job? Create them.

For example: Our customer service ordered the same product 3 different ways. One employee used article number A, one used article number B, and one changing the description of article C using just ‘text’. By the time the supplier delivered the products into our warehouse the people there did not have the slightest idea of how to administrate the inventory levels. To fix this issue, standard work was created describing how to order the specific product the correct way. After training, all customer service employees performed the tasks the exact same way.

The example above demonstrates a situation where there is no standard work. As a result of this, everybody creates their ‘own way of doing things’. This in turn leads to an extreme increase in workload in the upstream process at the warehouse team. Simply removing the variance in the process by creating standard work, removes the variance in the process and creates ‘one way of doing this’. It now becomes possible to ‘manage’ this process.

Standard work is a representation of the current state of the organisation. Every goal should be measured against this current state. So without standards work, sustained improvement is almost impossible.

The power of visualisation

Without visualising performance there is no way of telling if something goes ‘right’. And, there is no way to measure the outcome of the process. Only once work standards are defined, you can improve. This cannot be said enough. But once you have them, to measure and visualize performance in such a way that everybody understands it, is of utmost importance. People feel responsible if they see their result.

If you cannot measure it, you cannot improve it. - Lord Kelvin

They say to measure is to know and I believe this is true. But there are three aspects that are almost more important than measuring itself. How often you measure, how relevant the measurement is for your goal, and how you translate the measurement outcome to the stakeholders.

  1. You want to measure timely to not fall behind on data that is already outdated. If your goal is to improve service level, measure the service level of today. The shorter you can keep this feedback loop, the faster you are able to learn.
  2. The second aspect of measurement is how relevant it is for the goal you are striving towards. It is not uncommon to have a massive amount of reports floating around in an organisation. They are usually created because ‘we have the data’. But before doing any such things, ask yourself: How big is the relation between this measurement and my goal(s)? The closer it is, the better the measurement is.
  3. The last aspect is the most important one I believe. To translate and visualize a measurement is an art form. Simpler is better. Ideally you can walk into a department and immediately see how they are doing. Even if you know nothing about the type of work, the performance indicators or the goals they have. If you can achieve this, you have an ideal basis for improving performance.

Find the root cause

To reach a certain type of reliability, you need processes that produce ‘expected results’. Excellent companies produce the expected results in almost all of the cases. This is called ‘First time right’. Naturally this is the most effective way of doing business because re-work always costs money and/or time. This is true for many important measurements like quality (fault rate), delivery (on-time delivery %) as well as time (lead time).

The total performance of any company is a sum of the ‘fault rate’ or ‘first time right processing’ of the individual elements it is composed of. To calculate these, multiply the individual elements with each other. For example: Customer service (90% fault rate) x Supply chain (95% fault rate) x Shipping (90% fault rate) = Total company fault rate

This can be calculated as: 0,9 x 0.95 x 0,9 = 0,7695 = +- 77% = Total company fault rate

This calculation shows that a ‘below average’ score in two departments leads to a really bad total score. If we are able to improve the two lacking departments to the level of the supply chain department, we get: 0,95 x 0,95 x 0,95 = 0,857 = +- 85,7 % fault rate. This is an improvement of +8,7% by just only increasing each department’s score by 5%!

To improve the performance of anything you need to find what is the ‘root cause’ of the problem is. The practice of finding the ‘root cause’ of a problem is quite hard unfortunately. Many times you end up fixing the wrong thing. In order to find the root cause you need to mimic the behavior of a child that does not understand something and ask, sequently, 5-times: Why? and more importantly, check the answers yourself(!)

An example of a ’5 times why’ form:

NoQuestionAnswerCheck
1Why do we get 3 different types of purchase order lines for the same part?There are 3 different types of ordering the part in place at the moment.Purchase order X, Y, and Z
2Why are there 3 different types of ordering the part in place at the moment?Because the planners at site D are not instructed about the work procedureIndeed, after calling with Laura and Tom over there I can confirm that they are unaware of any procedure to purchase these parts.
3Why are the planners at site D not instructed about the work procedure?The team lead forgot to train the planners on this subject.Chris, the team lead of the planners confirmed that the planners have not been trained yet.
4Why has the team lead forgotten to train the planner?There is no procedure in place that checks if all the work procedures has been trained for the ‘planner’ functionChris was unaware that he had to train the planners on this specific procedure.
5Why is there not procedure in place to determine if the planners have been trained on all work procedures?This procedure does not exist.The procedure does indeed not exist.

The easy take on the above example was to stop at step 3. This is what most companies do. Actually, this means that you are missing the whole point. The primary result of this exercise is not the introduction of the procedure for training the planners at site D… It’s learning from this analysis and pro-actively checking if you can also apply these learnings in the rest of the company! I.e. also checking if a training procedure is missing on the other sites, for the other work standards, for the other departments… That is ‘pro-active learning’, that get’s you to ‘levels of excellence’.

Culture of excellence

To get to operational excellence you need to produce really good results every time, with no exceptions. This can only be achieved by sustained, focused pro-active effort. No, more rigorous... It can only be attained by a relentless focus by everyone in the organisation to eliminate waste. Ruling out possible errors one by one, preferably pro-actively. Before it happens even a single time. To get to this level is extremely hard. In fact, I can say for sure that despite the fact that we were on track to reach it in the future. We were not there yet, even after 7 years of progress.

To get a sense of where you stand at this moment in time you can find a general classification of a the most common types of company standard work levels below. The idea is that you move from one level to another.

LevelStatusResultHowtospot
There is no standard workEverything is an exception. Performance is the result of personal commitment and greatly depends on the responsibility of employees. Results vary (a lot). Usually in the negative direction.
The process of creating standard work has started.It is possible to separate processes and human failure. The operation is stable but there is no view on how to improve. Results form a base-line.
Process improvement according to the ‘Plan, Do, Check, Act’ principle (PDCA) and measurement of targets that are visible in the organisation.Leadership is able to make team members accountable for ‘targets’ and can steer upon them. Structural improvement is possible. Results are improving but are dependant on commitment of single people.
Culture of excellence - Root cause analysisEvery mistake can be prevented. Pro-active attitude towards continuous learning/improvement. Extremely high results are the outcome of the culture and not a single individual.

Moving from one level to another can be hard and often needs commitment from especially the management team to be successful. See ‘Team and Urgency’. Unless people see the problem, nobody is going to act. Another key point is that the management needs to change (if not already) from a hierarchical to a servant type of leadership. Supporting people with good idea’s goes much further than trying to be the smartest at everything by yourself.

Continuous learning

In the perceptive of business, the most popular term around is ‘continuous improvement’. There are many books about the subject that teach you about complex principles and use a lot of jargon that is unnecessary (like in many other domains). I found that the term has quite a lot of stigma around it.

Without getting into the reasons why someone could hesitate about the practice of continuous improvement I want to propose another term that I think works much better: ‘Continuous learning’.

Continuous learning, as opposed to continuous improvement, resonates with a much broader audience. It’s something everybody can understand and would naturally want to participate in.

Continuous learning, as opposed to continuous improvement, resonates with a much broader audience. It is something everybody can understand and would naturally want to participate in. And, in my point of view, describes much better the ideal that should be embedded into the culture of any company trying to grow.

Manage by example

Imagine something goes wrong. Since we have standard work, we are able to ask the question: ‘Is the work standard followed? If the answer to this question is yes, it’s easy to start an investigation into why the standard work did not produce the expected result. Logic suggests that when you find this reason you should alter the standard work to produce better results in the future. This is called a ‘preventive measure or fix’. Since our processes were bad when we first designed them (they always are) this is what we did, a lot!

A example: When I joined BuzziSpace we had a very ‘dynamic’ planning process. It could be summarised as ‘Whomever screamed the loudest or could get a management member to push a lead time forward was moved up the production planning’ Obviously when someone wins at this game, somebody else loose (usually a lot of other customers). This is because there is only so much capacity you can up-scale in a certain amount of time. Not only did this approach lead to a lot of unsatisfied customers, it also led to a completely unknown expectation of product lead-time for our customer service and sales.

To fix this issue, we introduced ‘standard lead times’. This meant that we could train our customers, sales, and customer service people to manage expectation of our lead-time. Because sometimes you only need a little extra ‘clarity’ to align expectations. Obviously we would still allow for ‘exceptions’ to change our production planning, but only after a proper vetting of the importance and impact on ‘all’ of our outstanding orders. This change alone reduced communication and performance level by an enormous amount and showed the stakeholders why we where making the decisions we made. And as an added benefit, we could now measure our performance versus standard lead-time and had a metric to improve upon!

Implementing standard work builds sustained performance in the future. Done right, you are making sure that you do not forget your learnings by creating and updating your work standards. This good practice builds examples. Examples that you can show to others to motivate them to do the same. This builds a flywheel effect into the culture of the company.

Reflection

Organizations are hard to get right. There are many (theoretical) angles you can take on improving a given organization. In this essay I tried to summarise the ground principles that I found to be true in simple terms. They come down to the following structure:

  1. Create the right team
  2. Boost urgency
  3. Take a stepped approach
  4. Create accountability and goals
  5. Determine the current status
  6. Visualize performance
  7. Find the root cause
  8. Create a culture of excellence
  9. Manage by example
  10. Never stop learning

The points that I bring up are written in the sequence of dependance. For example: There is no use in pursuing ‘continuous learning’ without already established ‘work standards’. Or start a big project without management commitment.

The language used is as ‘non-technical’ as possible. This is because I believe there is a lack of simple, ‘laymen terms’ writing about the subject of organisational management. Writing that anybody with interest in the subject should be able to follow.

I wrote this essay to share my findings with others. The process of writing forces you to think of what is important. You are filling the time of others with your thoughts. For sake of good operations this time should be used effectively ;). But most importantly I wrote this essay for myself. It’s a form of learning and reflection to feed self improvement. It has always stuck with me: If you really want to master something, try to explain it to others.

“Personal development without reflection is impossible” - The mirror

- Martijn

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