Signs your business’ growing pains may require attention now
When you were young, you probably experienced various pains as you grew. Sometimes the pain was slight, other times greater, but chances are you did not address every pain by going to the doctor, you simply pushed through the pain. They did not appear to be serious. Your business has many similarities to the human body. It matures as it ages, gets smarter, is fragile, reacts to how you treat it, etc. No middle market business immediately address every growing pain either, you just push through them thinking they aren’t so serious.
With any personal pain or feeling, at some point, you realize it’s time to see a doctor. The same goes for your business. It’s important to watch for signals of real issues that are disguised as growing pains so you can address them and not let them get out of hand. Here are a few of these signals and some tips for addressing early or preventing in the first place.
- Revenue is up but profitability is growing at a slower pace or worse
- You’re adding more new staff to back office/administrative functions than front office/customer-facing functions
- When you ask for information, data, or reports in order to make a decision, it takes a long time
- Your people value Microsoft Excel or Access more than your core platform systems
- Your policies and standards are regularly skirted and you know it but keep letting it happening
You’re probably experiencing one or more of these right now and you’ve simply been pushing through. They span across your enterprise, involving your people, process, technology, and controls. These are the kinds of things you need to root-cause and address or ideally prevent and here are a few tactics to do so:
- Develop an ongoing roadmap with planned analysis and improvements by area on an annual frequency
- Leverage leading key performance indicators using a balanced approach that goes beyond business unit or departmental outcomes incorporating measures about people, process and controls efficiency, use of technology, etc.
- Keep core system upgrade current
- Build a continuous improvement capability at the corporate level – Identify a person or team with Lean and Six Sigma skills to work across the enterprise
- Analyze direct and indirect costs (perform annually as a preventative measure)
- Use lagging key performance indicators with identified thresholds and take improvement action when surpassed
- If you’ve had any core system for five years and haven’t evaluated is effectiveness, it’s time. Determine if additional or upgraded modules could be added or if a different system could provide significant improvements
- Evaluate and revise your policies and standards by area (every two years as a preventative measure)