Operating Groups Layer Management

Andrew Wilkinson shares how he structures his portfolio of 40 companies through operating groups, allowing him to effectively manage multiple businesses without direct involvement in day-to-day operations.

Key Structure:

• Create operating groups that cluster similar businesses together
• Each operating group has its own CEO who oversees multiple portfolio companies
• Operating group CEOs report directly to ownership
• Example: Digital services businesses are grouped under one operating head who oversees 6 companies

Benefits:

• Reduces number of direct reports to ownership
• Creates manageable spans of control
• Allows scaling beyond 5-6 direct CEO reports
• Enables hands-off ownership while maintaining oversight
• Meetings with operating heads occur biweekly/monthly as needed

Communication Flow:

• Portfolio Company CEOs → Operating Group CEO → Owner
• Some CEOs haven't spoken to owner in 2-3 years
• Operating heads handle regular oversight and management
• Owner only needs to meet with operating group leaders periodically

This structure evolved from initially having 5 direct CEO reports to now managing 40 companies through operating group layers, making the portfolio more scalable and manageable.