Strategic Discipline Blog

What is preventing your business from growing?  Why do only .3% of the nearly 30 Million US businesses every get beyond $10 Million dollars?

Here’s a quick review of the three barriers to growth:

1. The need for the executive team to grow as leaders in their abilities to delegate and predict.
2. The need for systems and structures to handle the complexity that comes with growth.
3. The need to navigate the increasingly tricky market dynamics that mark arrival in a larger marketplace.

We explored People/Leadership in Three Barriers to Business Growth - #1 People.  Today we’ll look at the second barrier to growth Process.

2.       The need for systems and structures to handle the complexity that comes with growth.

As your organization grows it becomes more complex.  What most of us don’t realize is how quickly communication complexity expands just by adding an additional employee, location, or product.  Look at the chart on the right.  Notice how complexity increases.

• A simple two-point relationship where the two points represent the number of employees, number of product lines, or number of offices within an organization
• When you grow 50%, the interrelationships dramatically increase from 2 to 6…
• Or by a factor of 300%

To avoid getting buried your organization requires appropriate systems and structures.  If you grow from 2 to ten you need a better phone system or more space.  Grow to 50 employees you need still more space, phone systems and possibly a better accounting system to determine which projects, customers or products are making money.  Beyond 50 employees typically you need to replace or upgrade your IT system. 

Here are some scary numbers that show most employees may not understand how to link their performance to company goals.  Up to 95% of people don’t know what their true job is. A mere 7% of employees today fully understand their company’s business strategies and what’s expected of them in order to help achieve company goals.  50% waste massive amounts of time on nonproductive work

As you grow you need a structure to identify your organizational positions, work flow, and accountability. Without clear accountability your business and people will get stuck or experience a lot of miscommunication as balls get dropped when no one accepts responsibility.  Ultimately all projects and line items on the income statement, priorities, and processes should be owned by a single person. 

One of the critical resources/tools we use in the Rockefeller Habits is a People/Organizational structure that not only identifies the positions within your organization but also the leading and lagging indicators that each person is accountable for.  Four crucial questions need to be answered as you walk through this exercise:

1. Where are there more than one person occupying a seat?
2. Where is one person occupying more than one seat
3. Where are there empty seats?
4. Would you enthusiastically rehire those that are currently occupying these seats?

Because this Accountability chart can’t capture all interactions required to run a company we recommend identifying 4-9 workflow charts to determine the critical systems that flow through your business.  We’ve discussed the value of work process flow charts several times in the past. The key here is to recognize the systems that provide your competitive advantages, Key Performance Indicators that measure their performance and who is ultimately accountable for them producing.  

As an E-Myth Coach for ten years Positioning Systems learned the subtle nuances and intricacies of system development at the ground level.  In addition Gazelles coaching certification expanded upon the depth and knowledge of system development to help provide your business with execution excellence.  System Innovation, lean technology and human behavioral understanding lead to improved system performance.  Furthermore the ability to focus on the right priorities, establish metrics to measure incremental improvement and develop quarterly themes to unify your team and provide accountability will shoot your business forward to significant growth.

Positioning Systems is uniquely qualified to help your business with systems and structure.  Positioning Systems’ Strategic Discipline (priorities, metrics, and meetings) is an important first step in developing high levels of execution in your business. Gaining alignment throughout your organization requires a consistent disciplined approach.  Establishing priorities, consistently measuring performance, and developing a meeting structure that produces a cadence of accountability generates exceptional execution, communication, and growth.  

We’ve explored two of the three barriers to growth.  Next blog we’ll look at #3 - Market Dynamics.  Happy Thanksgiving!