Business school students generally head in one of two directions almost from their first day of school: finance or operations. The all important question is which one to pursue because it makes all the difference.
The allure of finance is working with money to buy and sell companies. Success is when a small stake in a large transaction generates a healthy payday in a short time.
The attraction of operations is working with people to build and run something of value that is eventually realized through a sale, financing, or public offering.
Finance looks like the fast track to great wealth and has attracted the best students for decades. Operations looks like a long, hard road with a massive payday only for the few with enough dedication, talent, time, and luck to pull off a successful start-up from scratch. While the economy needs both financiers and operators, the promise of quick and large returns has left the world short of the talent it needs to drive growth and scale of quality organizations.
Top operators get clear about what they seek to accomplish, build and align a team to achieve specific goals, and provide governance and drive over a sustained period to accomplish them. Those who master the art have a high probability of creating wealth for investors, founders, and top teams responsible for the success.
The operations path should be of interest to more top students but it may not be because few understand how it works and where the payoff comes from.
Financiers make a lot of bets hoping one will pay-off big. Whether one does or does not, the odds of an eventual success are good relative to those who start their own ventures and essentially put all their chips on one bet.
A clever and capable operator can have her/his cake and eat it too by throwing in with:
- An early-stage venture that is ready to get past the squirrel-cage of a startup and positioned to grow.
- An ongoing concern that is under-performing relative to its potential (which is most organizations!).
Both are opportunities to drive improvements that increase value in which they and their teams participate as explained, for example, in the video linked to the figure below.
Successful operators take an equity stake in ventures in which they know they can add value and where there does not have to be a grand-slam to get a decent payday for those who helped make it happen.
While the payoff will not be as glamorous or fast, it will have a much higher odds of happening for operators who love to build organizations that reliably grow and perform over the long haul.
The best and brightest should pursue operations to help the world, and to help themselves, get on a fast-track to generating value by building organizations and people to perform and grow to their full potential.