A number of years ago I did some work for a company that had introduced a blockbuster product into the market; then experiencing exponential growth for a period of about 2 years. It soon became apparent that the rapid growth was seriously impacting the company’s operational capabilities. I worked with the company for a year, and during that time we were able to improve those capabilities in order to increase productivity by thousands of hours a month.
The company I speak of entered the growth period with around 500 employees and wound up being over 3,000 thousand. Somehow, they muddled through. For smaller companies and entrepreneurs, being caught without proper business processes in place when you hit the home run could have a seriously negative impact on your business, and even be its death knell. Fortunately, there is a model for successful growth: it consists of business processes that are repeatable, scaleable, integrated and agile.
Repeatable processes are standard and documented so that everybody uses the same process all the time. This does not mean simply imposing a single process on everyone, but by consulting with all to create a process that is as simple as possible and that will fit most occasions. In particular, you must ensure that the process can be automated later on. If you are automating, then it is best to go with the flow of the tool that you are going to use; customizing software tools are a vendor’s dream, and a company’s nightmare! If there are exceptions, then determine a good manual process and stick to it.
Scaleable processes possess the quality of being repeatable multiple times without causing a strain. When you are creating processes, you must ask yourself the question, “Can this process still be used if our business volume is double what it is now, or 10 times or 100 times or 1,000 times that it is now?” Non-scaleable processes can cause a bottleneck that can kill your company. For example, if you are selling a product over the Internet and handling shipping yourself, what will you do if you suddenly have 1,000 orders to fulfill, or 10,000? If the business process that is problematic is not part of your core competencies, you may want to seriously consider outsourcing the process.
Integrated processes allow for easy transition from one process to the next and minimize complexity. A great exercise that you can use to combat the complexity problem is to take the group in question (or if it is a very large group, take representatives of each sub-process) and form a circle. Using a ball of string, begin with the first step in the process and have the person describe the step. When you move on to the next person, toss them the ball of string. You will be amazed at how quickly you will have a complex design between everyone. Here’s a hint: before putting the string away, start solving the complexity problem in the circle!
Agile incorporates processes into three loops: the first loop is your existing optimized business processes that are producing your business’ success. The second loop consists of processes that are put in place to scan the horizon, so to speak. These processes keep track on what is going on in your market, your geographical area and business in general. As long as the inputs are what you expect, business moves on.
The third loop of agile consists of the processes that you use when you find out information from the second loop that are not what you expect; changes in your own results, changes in your market or other environmental changes. The unexpected results trigger the third loop to investigate and if necessary mandate changes to the first loop so that your business can quickly respond to the changes discovered. For more information on Agile, see my Blog “Is your Business Truly Agile?”
Last piece of advice: don’t wait to start implement this model for successful growth. By the time that you realize that you really need it, it may be too late!