I had the opportunity last week to meet with a really exciting business leader who is in what would appear to be, a pretty desirable position. It was the proverbial startup.

Insights & Perspectives

Thursday, October 03, 2013
Eric Collet | View Posts by Eric Collet

I had the opportunity last week to meet with a really exciting business leader who is in what would appear to be, a pretty desirable position. It was the proverbial startup.

I had the opportunity last week to meet with a really exciting business leader who is in what would appear to be, a pretty desirable position.  It was the proverbial startup.  They started out of their house, with an idea that solved a real need and aligned with a personal passion.  People were interested and started buying, and buying, and buying.

GROWTH CAN BRING COMPLEXITY...

Fast-forward 5 years to our meeting last week.  People are still buying, and buying and buying.  But, things are getting much different.  Success is bringing complexity, and along with it, challenges that are getting increasingly difficult to address with confidence. 

  • "We're outgrowing our supply chain" - Should we insource to retain control and flexibility, or try to improve or replace our outsource partnerships which have never given us confidence?  This question leads to significant implications for the next two challenges:
  • "Physical space is a risk" - Our current location was just sold, and not to us.  It may work out okay; we might work out an arrangement with the new owner...or might not.
  • "We don't know how to make our product" - If we head down the road of insourcing, which has appeal due to the custom nature of the product, we have a lot to learn about equipment and process control.
  • "A big competitor has just entered our space" - We have a very strong brand and a vision to expand it with adjacent products, but we just lost a key channel to one of the big guys.
  • "We're running the business manually" - While we have a system to keep the books, we're managing ever-increasing SKU and component variety without any formal system.  We need a Warehouse Management System but don't know how to select the best one.

THE CHALLENGE OF TIME…

While these are very real challenges that many businesses face in various ways, the most concerning challenge that I heard during that conversation was "We don't have the time to work on these things and are prioritizing opportunities on a daily basis".  Success can be defined in many ways, and the tangible accomplishment of exponential growth certainly fits the definition for many.  However, the navigation of business challenges such as the ones described above will clearly chart the course of this business for the future. 

SO, WHAT TO DO?...

Before we deal with the most pressing challenge - where the leadership is spending their time, we need to step back and ask the question - "what do we want this business to look like down the road?”  Alignment of the owners and key stakeholders around control vs. tolerance for risk, and external investment, will define the parameters within which a strategy and an operating plan should be developed.

Once those difficult decisions have been made, it’s time to align the organization’s allocation of time and talent to help them execute the plans that will bring them to that future state. It sounds simple, but clearly, even a conservative plan will require acknowledgement that the RUN activities - daily flawless execution of the business by the front line, shouldn't be the focus of the senior management team.  IMPROVE activities - both reactive (fixing things that we find are broken) and proactive (building systems that will support our business plan 2 years out, such as that critical Warehouse Management System) need to permeate the entire organization with varying degrees of focus aligned with role responsibility.  However, beyond just role definition and allocation of time during a busy week, IMPROVE activities need a robust system in which to flourish and sustain.

Finally, the critical GROW focus.  We see a consistent theme in high growth business most clearly characterized by the statement "we're really good at growing and running hard to get there".  By proactively addressing the RUN and IMPROVE, the senior leaders and "Grow Team" can seek out and capture the most desirable and challenging growth - new products, new markets, new channels, and new geographies.  Most importantly, the key leaders will have the time to ensure that this growth is aligned with the strategy and business plan, and they will be confident that the operations and execution team will successfully navigate the challenges that the business of tomorrow will present.

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