It’s really hitting home now, for the last three years you’ve been running hard, the plant has been full, and you’ve been doing some great work. The issue though is that you haven’t grown – you’re staying at the same level in spite of all the efforts. The account acquisition and retention is a push, meaning no new net growth. It just seems stuck.
You haven’t done anything wrong, but the business probably hasn’t done anything remarkable either. One of the areas to look at is the way you do business, your business model. It was designed for a time when you were a certain size or had certain product offerings and types of clients. As things have changed, and in many cases become far more complex, it may no longer be as relevant as it once was. It could in fact, be holding you back from the growth that you’re trying to achieve.
Potential Bottlenecks
Sometimes it’s the owner or key leader, who has built the business and is still having everything flow through them. They can become a true bottleneck. Other times it’s the leadership team that is good, but not exceptional. And something I see often is the workflow within the carpeted areas of the building. Except for those projects that are truly automated, where you have a pipe connected to your client for them to transfer files to you all day long, the way many shops process orders today is not that much different than how it was done 10 or 15 or 20 years ago. Yet, the expectations of your clients, the number of transactions, and the dollar value of each transaction has changed considerable.
Three Areas To Examine
Three areas that I would look at would be strategic drift, operational constraints, and leadership and organizational issues. When the business stops making intentional choices about where to compete, and it tries to serve everyone and chases everything, it begins acting like a public utility. If that is part of the overall strategy, OK. But typically, it’s not even close. Jim Collins might approach this by applying his hedgehog concept to the matter.
Single points of failure begin popping up when processes that were designed to be efficient at $X revenue levels are now trying to keep up at $3X revenue levels. These processes were designed for a time that once was, but not for today. We see the constraints in several areas such as estimating, client relationships, and decision-making processes. We also tap-out on efficiency gains. Why? Because no one has actually defined what good performance looks like, so every job becomes a judgement call.
Look In The Mirror
The owner who runs everything becomes the ceiling in how much the company can handle. They are usually the core of the ceiling of complexity. This isn’t done intentionally, but just a continuation of how things have gone over the years. Decisions become more reactive and less strategic. And the org chart is still pretty informal because it never to have structured before. When you examine “right people, right seats and right reasons,” you find that many of the folks were the right fit for where the company was, not where it is today.
What You Can Do – Just Five Things
Owners who breakthrough this ceiling first spend time understanding where their stall was before trying to actually solve it. They often will bring an outside perspective, whether it be an advisor, talk to their peer group, or a trusted board member. While the issue may be right in front of them, they’re so close to it that they can’t see it.
They stop trying to say yes to everything. They’ve made their mind up that they will not act as a public utility. Rather, they want to be the best choice for specific types of customers. To add clarity to what they do, they’ve segmented, specialized and focused on what they can be the best at.
Standardization becomes more of the norm. Yes, I know it’s hard to not just wing it on this job so that you can save a few hours, but those are the jobs that often come back to haunt you. Instead of being the process, the owner focuses on building a process – one that works great even if he’s not in the building.
Create a leadership team that brings in new ideas and challenges the status quo. While they may be proficient at carrying out the tasks that you’ve assigned them, you need them to be telling you what initiatives they’re working on –over and above getting the work out and keeping the trains running on time.
Finally, as I know you want to fix this fast, it does take time. It’s much more than developing and sharing new SOPs and aligning individuals to the work they can be successful in accomplishing – this is really a habit change for the organization. And we all know that habits don’t change overnight. Be intentional and be direct but also throw in a sprinkle of patience too.
Mike Philie helps owners and CEOs in the Graphic communications industry validate what’s working, identify what needs to change, and create a practical path forward.
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