Sometimes the growth of a business plateaus …
Sometimes, despite a stellar product or service, excellent marketing, and a solid team of employees and managers—things just get stuck.
Maybe there’s too much business. Maybe you’ve fallen behind on the speed of your deliverables. Maybe the quality of your product is suffering as you struggle to keep pace with demand. Maybe your unit costs are preventing growth. Or maybe too much of the success of your company depends on a better-than-expected or better-than-normal performance by a key individual or two. Whatever the specific expression of it, these kinds of structural problems in business represent bottlenecks—systematic problems that will prevent a business from thriving.
Learning to identify bottlenecks in your business will make you a better leader and your business better.
What’s a bottleneck?
Know your enemy.
To identify bottlenecks or any other operational inefficiencies (and thus, areas of potential improvement) you have to first look. We’re continually amazed at how many seemingly successful small to medium-sized businesses (SMB’s) operate without regular audits of their operations and processes.
First, make the conscious & motivated decision to look. Second, search for the bottleneck in tasks that are repetitive and labor-intensive. What are you doing a lot of? And where do things tend to get stuck? Is there something that you do that continually delays the rest of it? Are certain employees (or customers) frequently waiting on one person to accomplish one task, so they can make their contribution and get their work done? Does too much responsibility for the quality (and quantity) of the end-product lie in the hands of one person?
Are you a potential problem here?
YOU are a bottleneck
Many founders and business leaders of SMB’s are themselves, bottlenecks. They prevent a business from scaling by maintaining control of too much, by doing too much and by building an organization that depends on them and may not be able to grow (or even exist) without them. Do you consider yourself to be irreplaceable? If so, this is an impediment to real growth — a bottleneck.
Your aces are bottlenecks
In much the same way as you, yourself, can be a factor in scalability and stagnation, so can your best people. This might sound counter-intuitive. But, if the success of your business, or its growth potential depends solely on a small number of exceedingly high-performing individuals, is it real; is that growth potential sustainable? What happens when that super-star steps out of the office and gets hit by a bus tomorrow? Or (perhaps more realistically) recognizes their real worth and goes shopping for another job paying more than you can?
Having exceptional people working for you isn’t a bad thing, to be sure. But again, if the business absolutely depends on exceptional people, perhaps people working below their real market value, this could be a problem. The reality here is exacerbated by a tight labor market—one that we in the US have been experiencing for years. If a really good person leaves, they’re probably going to be exceedingly difficult to replace.
Where’s the system in this?
“I try to invest in businesses that are so wonderful that an idiot can run them. Because sooner or later, one will.”
― Warren Buffett
Are you a job owner, or a business owner? If you’re a business owner you probably see yourself as a creator, a parent to something self-sustaining—a living thing—one that can live without you, if necessary. The parent metaphor is one that we like to frequently employ, because it’s so accurate. Up until late adolescence, a child (your business) needs you, is dependent on you, and can benefit from as many helpful factors as possible — like your exceptional team members that might be giving you more than you realize. But there comes a time when it needs to step out on its own, when it needs to sink or swim on its own merits. What does this mean, really?
The strength, the maturity, the validity of a business’ systems, its structures, its processes, its products — not you or your top people, who may ultimately leave or change or get tired or get sick — will determine its market viability. If you aren’t already, start thinking in terms of systems. Build the systems, improve the systems, automate the systems.
Channel your best energies and the energies of your best people (before they leave) …
Evolve toward a culture of systems. Create systems and structures, that operate independently of the individuals within. The best systems can even do more than that — they can empower those individuals to be more effective than they would be without; they can multiply the most effective people in an organization. As part of this transition to a systems culture, you can empower your best people, your aces, to design these systems and processes.
We’re obviously a software company designing systems for businesses. We create automated systems that reduce or remove bottlenecks — but the process can be the same, with or without software. When a business transitions from more analog ways of thinking (and growing) toward thinking and developing its systems, its structures, its processes — growth happens. Do more of that.