This year, AK Operations has emerged as a high growth private company, with it recently being named the 28th fastest-growing company in the Midwest. We owe a lot of our success to our strategic discussions, ability to adapt, and disciplined execution. The journey is marked by valuable insights and strategies that have fueled our growth. As the CFO, I am going to share some of the areas of focus for AK Ops and explore their significance in detail.
My Journey Into AK Ops
Before I dive in, let's take a moment to paint the picture of the landscape when I initially came on board full-time.
2018/2019: Amy had just started AK Operations in the fall of 2018 and I was working at Enterprise Fleet Management. Two wildly different environments.
I was watching her bust her ass every day from sunup to sundown, trying to earn the trust of her prospects and turn them into clients. But once a client signed, the real challenge set in. I watched her struggle internally and externally to make sure she kept the clients she earned, which, at the time, meant doing any project necessary, just to gain credibility. Trying to compare the scope of today to what it was in 2018 and 2019 is impossible.
2020: Two SharpChicks are hired on Jan 1 and another in March. AK Ops is growing and gaining credibility in the market. The only issue? The first four SharpChicks of AK Ops didn’t realize their worth yet and the struggle to wrap their head around the value AK Ops provided was multiplied by 4. I was beginning to get involved with the organization in a small administrative way and was witnessing the 'hustle culture' of a startup out in full force. Then COVID hit, everyone was WFH, and I was seeing the chaos firsthand. There was no comparison of retainer vs effort, no uniformity of scope, no scaling discipline...and no ability to train. There was just no time to stop and invest in the future...it was heads down, yes, yes, yes to any request. It truly was the Wild Wild West as a business at this point.
This was the breaking point. Amy was burning the candle at both ends...pouring every ounce of energy she had into the business and her new team. It was not sustainable - she was literally running on Starbucks, candy or chips, and forgetting to invoice she was so inundated into the work. At one point, I had to ask Amy if she knew what I did every day at Enterprise. I had 4 supervisors and 40 employees reporting to me, I was responsible for creating windows into teams to ensure efficiency and effectiveness and had managed multiple projects with the sole goal of creating organization, structure, and discipline. This was my wheelhouse and it was clear that something had to change to continue to grow AK Ops and create a place that clients wanted to work with and employees wanted to work for.
I had no choice but to voice my curiosity to her and the rest of the team...asking questions, looking for insights, and inserting an outside perspective into the conversation. Cue the business operations pivots we’ve implemented to keep the momentum of AK Operations going.
- Scaling Discipline: Focus is Key
- Metric Health: The Pulse of our Business
- Churn: The Good, the Bad, and the Ugly
- The Power of Saying “No”
- Leadership Team Alignment
- Standards: The Backbone of our Organization
Each of these have power in not only what we implemented, but how. Dive into the first three below and be on the lookout for part two coming soon.
Scaling Discipline: Focus is Key
In the early days of AK Ops, the business faced a common challenge encountered by most young companies - the temptation to pursue numerous opportunities simultaneously. In other words, we had to get over the common feeling of ‘imposter syndrome’ that can run rampant. Are we going to have another sale? Is this client going to sign? Oh shit, we have three contracts expiring in the next 60 days!
Over time, we realized that trying to do everything for everyone would result in going 6 inches deep and a mile wide. This isn’t our bread and butter, we are truly a partner to you and your organization, side by side in the trenches with you. We had to focus on what we do best and be conscious of how we were scaling.
Scaling discipline involves concentrating resources on the most impactful areas of the business. We identified our strengths and capitalized on them while acknowledging the areas in which we were not serving our clients best. By taking the time to understand the market and tailoring the strategies accordingly, we achieved a clear strategic focus. This disciplined approach has played a pivotal role in our consistent growth.
When you read ‘Scaling Discipline’, I am sure you are thinking about building out an internal team. And yes, it is a part of it, but it isn’t the only area of the business that we must show discipline in. As a services business, we must have discipline in how we grow our Success Manager team and also, how we are growing our client base.
We have consistent meetings with our leadership team and this is a staple topic in every meeting.
- What does our pipeline look like? Do we have any client churn? What new clients do we have signed?
- Where is everyone’s capacity? Do we have time to train? Do we have an opening? Will we have an opening?
- For our current clients…do we have any concerns? Is the scope changing? Does it need to?
- For our new clients…who is best suited to serve them? Who has knowledge of the industry? What does the relationship look like? What are our goals?
By focusing our resources, AK Ops was able to allocate our time, and energy in areas that would yield the highest returns. We recognized that a scattered approach to growth could result in spreading ourselves too thin, making it difficult to achieve significant progress in any particular area. By honing in on our core offerings and capitalizing on what we do best - a GTM partner that deploys a sales efficiency model utilizing demand gen, lead gen, and sales enablement -we were able to establish a strong foundation for sustained growth.
We had to focus on specific areas that allowed AK Ops to streamline our operations and optimize our processes. By doing this exercise, we have created three new positions over the past 12 months that have allowed us to continue to provide more offerings to our clients.
Additionally, by having a clear strategic focus and constant communication, we were able to make informed decisions and prioritize our initiatives effectively. We could assess the potential impact of various opportunities and align them with our long-term goals. This helped us avoid distractions and ensure that our actions were aligned with our overarching vision. By remaining disciplined in our scaling efforts, we were able to demonstrate the power of focus in achieving accelerated growth.
Metric Health: The Pulse of Our Business
In the world of business, metrics serve as a compass, guiding us toward success. You can’t improve what you don’t measure. We understand the significance of highlighting specific metrics that truly reflect the health of our operations. We go beyond surface-level figures like revenue and profits, focusing on key indicators that provide a window into the business's sustainability.
If you have worked with AK Ops at all, you know that we take a completely data-driven approach to the RevOps services that we provide our clients. The approach to our own metrics is no different. I am constantly reviewing the service offerings, net profitability, customer lifetime value (CLV), labor costs, churn rate, client tenure, and managed revenue by position. This is the norm here. This data-driven approach allows me to gain invaluable insights into our business performance, spot trends, and pinpoint areas for enhancement. I am then able to bring this analysis to the leadership team to make informed, strategic decisions and allocate our resources optimally.
One notable example is our scrutiny of unit economics, where we assess the profitability of each service offering. This allows us to shed light on the most efficient aspects of our business and guides us in optimizing profitability. Similarly, by closely monitoring overall net profitability, I am able to consider all aspects of the business to gauge the health of the organization. We also have a strong compensation model which allows us to retain top talent and maintain affordable market rates for our clients. Comparatively, we are considered ‘low’ in the market.
AK Ops places a strong emphasis on customer lifetime value (CLV) - the value each customer brings throughout their tenure with us. Recognizing the long-term benefits of fostering customer loyalty, we prioritize retention initiatives, building relationships that maximize the value we extract from each customer interaction. After all, we prioritize our referrals and take pride in the reputation that we have built in the industry.
By continually monitoring and fine-tuning these key metrics, we ensure sustainable growth and our business on an upward trajectory.
Churn: The Good, the Bad, and the Ugly
While churn is often viewed negatively, we understand that it can be a valuable source of feedback. Analyzing churn helps us gain insights into why customers are leaving and identify areas for improvement.
Churn occurs when customers discontinue their relationship with a business. High churn rates can be detrimental to a company's growth and profitability. However, we recognize that churn is not always a reflection of failure. It can be an opportunity to learn and enhance our offerings. It can be an opportunity to help share our knowledge and expertise with a member of the client's team to keep the program running long-term.
By examining the reasons for customer churn, we gain valuable feedback on our process, services, or customer experience. This helps us identify pain points and areas that need improvement. Armed with these insights, we can refine our strategies, address customer concerns, and make necessary adjustments to reduce churn.
Furthermore, some level of churn is expected in a fast-growing company like AK Ops, where we constantly innovate and target new market segments. As we looked to refine our target market and ensure the clients that we were serving were the right fit, we encountered customers who were no longer the ideal fit for our offerings. In such cases, churn can be a natural outcome of our growth and evolution.
With all of that said, we do not take churn lightly. We work to reduce churn whenever possible. By mitigating churn, we ensure that our growth is sustainable and that we can retain a loyal customer base.
Achieving Continuous Growth
The first three pillars highlight the importance of focus, discipline, and leaning into the uncomfortable conversations and decisions to achieve continuous growth. Stay tuned for more on how AK Operations became one of the fastest-growing private companies in the Midwest by pairing these with saying “no” strategically, fostering leadership alignment, and upholding high standards. These valuable insights and strategies can serve as guiding principles for aspiring entrepreneurs and business operators aiming to achieve sustained growth and success in our respective industries.