According to a survey by Bank of America, 60% of small businesses plan to grow their business over the next five years. This is fabulous news about the state of our economy and should have business owners and entrepreneurs feeling good. I know that this means great things for my consulting practice since an often overlooked piece of business growth is how to avoid or deal with growing pains.
If you have been in business for more than a few years, you might remember back to when you grew from your very first customer to your twentieth. What were those lessons and structures that had to be put in place to ensure you delivered a dependable product and created a positive buying experience for your prospects and your customer base?
For example, what kinds of controls needed to be instituted to ensure profit margins? How did you handle the hiring of all those new employees to fulfill orders and take care of the business? What kind of time went into managing that growth?
To help you avoid some of the headaches and sleepless nights during your growth spurt, I have compiled a list of the most frequent obstacles and challenges most small business owners will face during an uptick in business. It is never easy or cost effective to try and fix a problem while you are in the middle of it, so anticipate these changes and to get out ahead of them.
I know this first hand. Many times I am hired on by a company to identify issues and implement changes when they are already in the midst of chaos. But those clients who engage with us in anticipation of concerns spend less time and money and have easier transitions with their staff.
Common Barriers in Scaling a Small Business
So what are the most common barriers to scale? Let’s start with one I am sure you experience currently: Not Enough Hours in the Day.
But what are the real impacts?
- Miscommunication is common when you are rushing through an email or a meeting.
- Poor quality of work output is one that is easy for others to spot and is a symptom of being time-challenged.
- Task slippage is an impact that signifies that you are so time-challenged that you have stopped doing all of the tasks that are required for your position.
- The meeting shuffle is the symptom I experience the most. I know my executive coaching clients have too much on their plate when they are spending their precious time rescheduling appointments.
If you think all of these items don’t add up, you could not be more wrong. The impact of not enough hours in the day shows itself in unhappy clients, missed opportunities, frustrated colleagues, wasted time, and unnecessary costs.
What are we to do when we just have too much going on and there never seems to be enough time in a day? According to industry leaders, McKinsey & Company’s Aaron De Smet and Frankki Bevins tell us that “time management is an organizational issue whose root causes are deeply embedded in corporate structures and cultures.” Their advice is to devise a system for checks and balances so individual leaders have the tools and incentives to manage their time effectively. An idea they throw out is to create a leadership budget. I have used this with clients to understand the management team’s tasks and the estimated time needed to fulfill each specific task. This allows visibility to know when a manager is at or near capacity.
Another tool I have used is Parkinson’s law. It was originally derived as a mathematical equation to describe how bureaucracies expand over time. However, today it is often used to describe how the demand upon a resource tends to expand to match the supply of the resource.
If a meeting is scheduled for 60 minutes, the discussion would normally ensue until the resource matched the supply even if items had been fully fleshed. Cutting the meeting time by ten minutes does not affect the quality of the meeting since the attendees would all know that ten minutes before the end all items should have been covered and now be looking for consensus. Time is therefore managed. In a day where you could have as many as six meetings, that equates to one hour found. What could you get done with another full hour in every day?
Firefighting Mode as a Management Strategy
Another common barrier to scale is always being in firefighting mode. The areas in your business that take the most time and attention are those that are on fire. It is often the same areas over and over again. Can you guess why?
Just like a real physical fire, the fire at hand takes precedence over anything else. It draws our attention to it, taking away focus from the things we are supposed to be doing. Just like a physical fire, it is unpredictable. It can change direction or spread. Furthermore, fires can create vicious cycles. Processes that need to be written or followed take backseat to a fire. The more fires in your company, the less you are in control of its operation.
What are the real impacts on your business? Lack of focus. When you are focusing on problems, you are not focusing on your planned actions. Under the pressure of the fire, you do not have the time to institute a well thought-out strategy, so you risk executing poorly. The solutions are often temporary and therefore incomplete. The urgency of a fire creates a distorted level of importance to the business problem. This alone can misguide staff and undermine reaching the company goals.
When I am called into a company where firefighting is the normal modus operandi, I have to create a strategy to get them out of that volatile mode before we can even begin to build a program for long-range growth.
Getting Out of Firefighting Mode
A temporary plan for the short term is the best way to control a fire. The fact that the plan is temporary should be well communicated with the staff. The plan must identify current and recurring fires, and you must prioritize them all. Not all fires require all of the time and attention that they receive.
Know that some fires will eventually burn themselves out on their own. This frees up resources that you can use elsewhere. Determining where to put your focus is the first step in getting out of firefighting mode. Once extinguished, ensure that it does not reignite at a later date by asking yourself and your staff one simple question: “How can we prevent that from ever happening again?”
Working in Silos Can Be an Impediment to Business Growth
The third most common barrier to scale that I find is people working in silos. Sometimes tunneling-in is appropriate. There are times when we need to concentrate and really pull together our thoughts. However, communication is a key building block for a business.
When I think of great business communication, my mind takes me to a symphony. Like a business, the performance has a purpose. Its objective is to entertain an audience. Its sheet music is the Statement of Procedure. Its conductor, as the business leader, must be able to anticipate and direct their movements. Each group of instrument types is a well-defined business unit. Each instrument is the proper tool for the musician to be able to contribute to the objective.
To be successful, every musician, including the conductor, must be in constant communication. Each musician is talented and can play beautifully on their own, but for us to hear the true beauty of the orchestral piece, we need to recognize that they are greater together than the sum of their parts. So why should your business be any different?
When we sequester our employees into only knowing the environment in which they live, we ensure that each employee will only grow as big as their fishbowl allows. No one can help anyone else with a task because it takes too long to explain how to do the task.
When management teams keep people in silos, the employees do not grow and develop or mentor others. That translates into a lack of growth for your company. Inc Magazine’s article titled 5 Critical Reasons to Cross-Train Employees points out that cross-training is essential. Not just because of the obvious benefits like filling in for vacations, but for overall business growth. Cross-training employees has deeper impacts on the overall success of a company. When employees understand each other’s roles, it helps them understand how their role fits into the company structure. This understanding actually leads to idea creation for operational streamlining and more.
No one understood the importance of cross training better than Engineer, Statistician, Professor, Author, Lecturer, and Management Consultant, W. Edwards Demming. According to Wikipedia, he is best known for his work in Japan after WWII; particularly his work with the leaders of Japanese industry. Many in Japan credit Deming as one of the inspirations for what had become known as the Japanese post-war economic miracle of 1950 to 1960. In that time, Japan rose from the ashes of war on the road to becoming the second-largest economy in the world. And it was accomplished through processes partially influenced by the ideas Deming taught. The late, great quality guru, W. Edwards Deming, often described his belief that managers could not properly understand a business unless they had been exposed to working in all areas of the organization. He described a Japanese meat packaging company that required future managers to work every aspect of the operations for up to one year, including the messy processing work and the early morning delivery work. It was his belief that only through deep immersion in the many areas of the business could an individual hope to competently manage the business.
Today, effective managers and top-performing organizations readily apply Deming’s thinking to their work of cultivating future managers.
What are the possibilities for your business if you apply the cross-training methodology and took employees out of their silos? Change can be difficult in the beginning, so using an outside resource like a consulting firm is advised when you take on any kind of change. But, the rewards can be greater than you ever dreamed possible.
Delegation is a Key to Business Growth
The next most common barrier to scale starts with the “F” word: FAILURE. Failure to delegate is one of the most difficult to overcome. NC State Leadership Training Program looked at why people don’t delegate, and they site items like losing control, thinking you can do the task better, losing tasks that you enjoy, or lack of confidence in the person you can delegate to.
What are the impacts on a company?
- Overworked Leaders: Leaders who have become task-driven are no longer leading, which is a lost opportunity for growth and development of team members.
- Unrealistic Client expectations: Imagine if every little thing a client needed they expected to come from you versus another staff member?
- Unchallenged Staff: If the staff is not given challenging projects they may become complacent and look for an employer that will invest in their development.
So what are the keys to begin to let go? How do you get comfortable passing that torch?
- Make sure you can clearly articulate the desired outcome.
- Don’t over delegate to someone who does not have the authority to complete the task. Match the responsibility accordingly with authority.
- Stay Focused on the end result. Remember there is more than a single way to get something done.
- Be patient, because the person completing the new task has not done it a million times like you.
- Have agreed upon check-ins and benchmarks for success so you can instill confidence in you both.
Lack of Direction Can Stifle Business Growth
The last barrier to scale that we will discuss today may be very personal to you, the business leader, but it is vital to your company being able to reach its full potential. The barrier that we need to discuss is lack of direction. Ask yourself, “Am I helping the people in my company understand where we are headed together?” What do they understand the big picture to be? What are the benchmarks that they can use to know how the company as a whole is doing? Are we hitting the mark?
Some leaders think that just sharing sales numbers is enough to tell everyone the full story and while these numbers are very important to growth, they are not the only thing that your employees need to hear about.
When no one knows the direction, each will set their own compass. As you can imagine, that will result in every person going in a different direction, creating nothing but chaos.
When you have a clear vision and path, you must share that with others in order to get every member of the team rowing the boat in the same direction. Unite everyone around your firm’s objectives. Once you get them in motion, you can work on a strategy to keep them in motion by ensuring they a motivated and enthused.
Steve Jobs was a leader who clearly set the direction for his company, and Convergency Partners wrote this for a Think Big article, “Steve Jobs got it right. His leadership style, which involved, engaged and motivated so many Apple executives and employees, helped increase his company’s shareholder equity by nearly 600 percent between 2007 and 2011, a period punctuated by one of the greatest financial meltdowns we’ve ever seen in this country.” So how did he do this?
In the podcast, The Best Ways to Communicate Your Organization’s Vision, The Center for Creative Leadership tells us to do the following
- Tell a Story about your vision, don’t just read some lofty written statement. People need stories to be able to recall information.
- Perfect your elevator speech so that your vision is clearly stated to everyone.
- Use multiple forms of media to tell your vision story. Use email, video, and posters. And use them internally, not just at a conference.
- Have one-on-one conversations with people, so they get the info first hand.
- Draw a crowd internally. Get people excited about your vision by having a celebration for announcements of milestones, etc.
- Go outside the company and communicate the vision with clients.
- Set the expectations that it is everyone in the firm’s job to create that same experience to the firm’s clients.
- Guide the vision and back up what you talk about – “Walk your talk.”
- Make sure employees know how their role connects with the company vision.
If you are feeling a bit overwhelmed that your company is not perfect, just know most are not. What is important is to pick the area for improvement that can have the single-most profound impact on your business and focus on it. If you’re thinking you have a lot of work to do in order to capitalize on the next five years of growth, you are correct. Just know the difference in being a two-million-dollar company versus a ten-million-dollar company can be found in the details that we just discussed in this article.
Don’t want to do this alone? Our guidance and experience in these areas will lead you through prioritizing, time management for you and your staff, getting out of firefighting mode, and creating long-term processes, delegation, and sharing the vision. We can help.