Are you ready for your Big Hairy Audacious Goals (BHAGs)?
Most businesses aren’t.
Kickstarter is a great source for horror stories that sound like big wins at first, like a campaign going viral and hitting 1000% of its funding goal. These campaigns are usually individuals or startups with a great idea and passable business infrastructure. They were barely ready to ship 100 widgets, and now their fledgling business’ reputation depends on them efficiently shipping 1000.
Moments like these put an ugly spotlight on business constraints – the processes and/or infrastructure that prevent businesses from gracefully handling significant growth. Constraints are usually manual processes that are either prone to error, or dependent on knowledge held by certain employees.
I was told in 1994 by Steve Rowe, one of the first 50 or so employees ever to work at Microsoft, that every time a business doubles in size they have to change the way they do business, both inside and outside their four walls. At the time I had no context in which to place this statement. But it stuck with me. And now after helping so many businesses increase revenues by millions since then, I have learned that it is universally true – give or take a few percentage points. And now that we have a stable of clients that have been partnering with us for up to 16 years, we have seen first-hand how the process of going from well-oiled machine to one that is twice as big with a dozen major constraints occurs. Luckily, our job is not only to watch, but to evaluate, predict and fix these problems, either before they arise or quickly after they do.
To be clear, all constraints that we have watched appear, arise from employees doing good work. If you hire well, you will have those folks who encounter significant problems and know how to put their heads down and work through it. Unfortunately, sometimes the best solution is to lift your head up, look across your departments, and ask for help. Especially if you are growing or have grown significantly over a long period of time without assessing the systems you have in place. For instance…
Error-prone processes
For example, let’s imagine you have a system in place for processing new orders. You log into your webstore, and for each new order, you:
- Print an invoice and place it in your records.
- Send an email to the customer, thanking them for choosing your product and asking them where they heard about you.
- Create a pick list PDF.
- Send an email with the pick list to Manufacturing, telling them to inform Shipping when it is ready to ship.
- When Shipping lets you know that it has been shipped, add the tracking number to the order and set it to “Completed”.
All in all, this takes about 3 minutes per order. This is fine at 20 orders a day – you get an hour of low-brainpower tasks that you can sprinkle throughout your day when you need a bit of a break.
Then 200 orders come in, and you’re cursing the marketing department’s success for the next 10 hours. You might get a bit sloppy on hour 7, and forget to send an email to manufacturing for two orders. That’s two customers who will end up with great reasons to distrust the company that took their money but never delivered. If 200 orders a day becomes the new normal, you’ll need to hire more people so you can get back to the rest of your job. Is that even an option?
Employee-dependent Processes
Sticking with the same example, you might want to hire someone else to take care of this. After all, you have more income coming in and you may as well invest in someone being available to handle things for you.
But creating a pick list is only fast for you because you know how to work the ERP just so – it’s why you were assigned to process orders in the first place. Someone new would take 10-15 minutes per order to start, and this is no time for a growing backlog.
Beyond that, you’re currently putting the invoices into a locked room full of sensitive company records, and you would have to give a new employee a key to that room on day 1 to keep the same process in place. What could go wrong?
At 20 orders/day, this process is fine (1 hour). At 200 orders/day, it’s a problem (10 hours). At 2000 orders/day, it’s unthinkable (100 hours). We know this is a constraint because it limits the amount of growth the company can sustain. So what’s a business to do?
Eliminating Constraints
If the example’s company hired Dotcomjungle, we would likely:
- Train staff on retrieving invoice data digitally, removing the need to print out paper invoices at all
- Set up marketing automation for the thank you email & survey
- Set up an automated feed of new order pick lists, and train Manufacturing on how to use that instead of opening emails for each order
- Automatically send an email to the customer with a tracking link when Shipping prints the shipping label
This setup brings the time spent in the original process down to 0, freeing our example person up to do the job they were originally hired no matter how many orders come in. Bonus – both Manufacturing and Shipping are more efficient now too, no longer having to depend on manual emails for each order!
Constraint Hunting with Dotcomjungle
Many of our partnerships have started with companies experiencing the equivalent of the 200 orders/day situation above. At that point it is usually clear what processes are already buckling under the strain of success. It’s less clear how to remove them, and what the next constraints will be.
We start each new relationship with a walk-through of our potential client’s facilities in order to learn how their business works first-hand. We also interview staff in different departments to get a feel for the company’s culture, priorities, and processes. These perspectives help us understand how things got to where they are today, and how to remove constraints without creating bigger problems.
Schedule your walk-through today
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