Can Your Company Keep Up When You Hit a Home Run?

During a breakfast networking meeting this week, the person I was meeting and I were hit by the “small world” syndrome. A colleague at his company was a person that I had worked with at another company some nine years ago. What made the connection more interesting is that our mutual colleague and the company she worked for were the subject of a success story in my first book, The Essentials of Strategic Project Management.

As the story went, her former company, a pharmaceutical firm, discovered a blockbuster drug and as a result, the company grew at a rapid pace for several years; the company had hit their “home run”. Not long after, the rapid growth that their success lead to began to cause internal problems because the growth outpaced the ability of their internal business processes to keep up.

Many of the entrepreneurs that I have contact with place themselves in a similar situation. While working hard to hit the “home run”, they are not putting in place the business processes necessary to deal with the situation when they smack the ball out of the park. If you are in that situation, whether a starting entrepreneur or growing company, here are some questions that can help you out.

1. What would happen if your business multiplied by XXX%? (You fill in the blank). When your business is small, or relatively smaller, informal processes will work. Everyone knows their job and goes about doing it. Quite often, the entrepreneur themself does most of the work. So ask yourself, “If my business were to multiply by 200%, would the current team be able to run the business?” If the answer is no, you need to work on process.

2. What would happen if Steve (or Marianne, or Joe) left the company? If you depend on a particular individual to get certain things done, you could be left with a catastrophic problem if they left the company. Early on, you need to document the work that each person does in detail so that someone else can pick up the work without that person’s help.

3. Are their any holes in your processes? Do you have areas of friction or frustration now? If something is not working well now, imagine what will happen if the volume of work you are doing increases rapidly. You need to fix those problems now before it is too late. Often, part of this problem could be described as the “over the wall” syndrome; in other words, one person does a piece of process then throws it over the wall to the next person, without any regard for what the next person is going to do. Continuity in process is vital.

4. Are your processes scaleable? What works for a small operation may not work for a larger operation. For example, tracking invoices with a spreadsheet may work for a small volume, but you would be surprised how quickly the process can become a confused mess (believe me, I’ve been there and done that on this one!).

5. Can you outsource what is not your core competency? For example, if your expertise is sourcing products and selling them over the Internet, you may be able to handle a small volume of shipping. But, if you hit a hot product, you may not have the warehouses and other infrastructure to deal with shipping all of the products. Better to be ready to have a logistics company take over before that moment arrives.

6. Are your processes teachable? This is related to question 2 above. Are your processes documented in such a way as they are easily learned by some else. Self-study documents (on paper or online) are more efficient than training courses, but either way, do you have something in place that trains new people efficiently?

7. Who is making decisions about process? Imagine a situation where data entry people received job application material to enter into a system. The system required a social security number to register a person, but that information was not on the materials the data entry people received. Without guidance, the data entry people decided that they would make the social security numbers up, and that they could be changed when the person was hired. When it turned out that the SSN could not be changed, they re-entered the new hire again with their real SSN. Imagine what this system looked like after a couple of years (true story)!

Some planning in advance can avert a great deal of pain later on!

3 thoughts on “Can Your Company Keep Up When You Hit a Home Run?

  1. You hit on many key points that many entrepreneurs, especially new ones, don’t even consider in planning their business. Most people don’t recognize a broken process unless they’ve been there before and even then when in the weeds, it’s hard to pull back and assess.

    Execution is the outcome of a strategy. Overseeing execution during rapid growth is fundamental to achieving a successful business. Success is not necessarily being successful. To gain the successful state, organizations require constant improvement programs, business continuity strategies, commodity services are outsourced, performance is monitored and so on.

    Speaking from experience: any business needs a board of advisors or directors who come from the outside and are part of successful growth organizations. Cross functional and cross-industry brings the most diverse and critical support and directions.

    • Kevin R Callahan

      Jon,

      I agree in particular with your last point, the importance of having a diversified group of directors working with the entrepreneur. The earlier in a new enterprise’s life that the group is brought into existence the better!

      Kevin

  2. every fasat growing comp[ant needs a pain, the guy wjo watches to be sure the wheels stay on the train, whiler the companby grows at record levels. whjo can anticiupate the problems ahead, the big turn in thr tracks, the soft tire. if you don’t think so ask toytota

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