Operations

OKRs are a goal-setting framework where ambitious Objectives (qualitative goals) are paired with 2-4 measurable Key Results that prove the objective was achieved. Intel invented them. Google adopted them at 40 employees and credits OKRs with 10x'ing their focus. The ideal OKR is 70% achievable — if you hit 100%, your goals weren't ambitious enough.

OKR Score = Actual Result ÷ Target Result (scored 0.0 to 1.0)

Lean operations systematically eliminates waste — any activity that consumes resources without creating customer value. Toyota identified 7 types of waste: overproduction, waiting, transport, over-processing, inventory, motion, and defects. Lean companies can operate at 50-70% lower cost than non-lean competitors while delivering higher quality.

Process Efficiency = Value-Adding Time ÷ Total Lead Time × 100%

Process automation replaces manual, repetitive tasks with technology-driven workflows. Every hour spent on automatable tasks costs 3-5x more than the automation itself over 12 months. Companies that automate key processes see 30-50% efficiency gains within the first year. McKinsey estimates 60% of all occupations have at least 30% automatable activities — the question isn't IF you'll automate, but WHEN.

Automation ROI = (Hours Saved × Hourly Cost − Automation Cost) ÷ Automation Cost × 100

Capacity planning is the process of determining how much work your team can handle and aligning resources to demand. The core calculation is: Available Capacity = Team Size × Working Hours × Productivity Factor (typically 0.6-0.8 after meetings, admin, and context-switching). A team of 5 engineers working 40h/week at 70% productivity has 140 productive hours/week, not 200. Companies that do capacity planning well ship 35% more features per engineering dollar by eliminating both overwork (burnout → turnover) and underutilization (idle teams → wasted salary).

Effective Capacity = Team Size × Hours × Productivity Factor × (1 − Meeting %)

The build vs buy decision determines whether you develop a capability in-house or outsource/purchase it. The core rule: build what's core to your competitive advantage, buy everything else. Building a custom CRM when your business is e-commerce wastes engineering on undifferentiated work. Slack built their messaging infra (core advantage) but bought Stripe for payments (commodity). Companies that misallocate build/buy decisions waste 20-30% of engineering capacity on projects that off-the-shelf tools handle better.

Build TCO (3-year) = Dev Cost + (Annual Maintenance × 3) + Opportunity Cost

Project management is the discipline of planning, executing, and delivering work within scope, time, and resource constraints. For startups, it's not about Gantt charts — it's about shipping the right things fast. The Standish Group's CHAOS Report found that only 31% of software projects are delivered on time and on budget. The #1 predictor of success isn't the methodology (Agile vs Waterfall) — it's having clear scope definition and stakeholder alignment. Companies using structured sprint cycles ship 40% more features per quarter than those using ad-hoc approaches.

Quality management is the systematic process of ensuring that products and services consistently meet or exceed customer expectations. In software, this means automated testing, CI/CD pipelines, code review, monitoring, and incident management — not manual QA as an afterthought. The cost of fixing a bug in production is 30x more expensive than catching it during development (IBM Systems Sciences Institute). Companies with mature quality management see 50-75% fewer production incidents, 40% faster time-to-market (fewer rework cycles), and 15-25% higher customer retention.

Escaped Defect Rate = (Bugs Found in Production ÷ Total Bugs Found) × 100

Scaling operations means growing your output (revenue, users, transactions) without proportionally growing your inputs (people, costs, complexity). True operational scale is when 10x revenue requires only 2-3x the team. The magic metric is operational leverage: revenue-per-employee. Stripe processes $1 trillion in payments annually with ~8,000 employees ($125M revenue/employee). Shopify supports millions of merchants with ~11,000 employees. A company that needs to hire linearly with growth (1 new support rep per 50 customers) will hit a wall where hiring speed can't match growth speed.

Operational Leverage = Revenue Growth Rate ÷ Headcount Growth Rate