In my last post, I discussed three primary ways to scale a business: organic growth, operational improvements, and strategic acquisitions. I focused on organic growth in that post.
Today, I’d like to share my observations on growing through operational improvements. As we all know, increasing revenue isn’t always the answer to growth, especially if our organizations’ operational structures aren’t prepared to handle the capacity.
To identify which area of our operations is holding us back, we first must identify bottlenecks. This might mean dealing with a recurring issue in our teams, a cumbersome workflow, outdated technology, or a lack of resources.
While this forum doesn’t allow time to plumb the depths of all the areas operational inefficiencies can occur, suffice it to say that, once we agree on the root cause, we can usually find a solution. If we fail to identify the cause, however, we’re tempted to throw money at the problem, which usually casts us into the vicious cycle of trying to outspend our inefficiencies.
Here’s one example where we discovered an operational challenge: What we thought for months was a marketing problem in one business unit, turned out to be a retention problem. By addressing the root cause, we were able to reallocate resources to retention. This not only increased efficiency but saved money, because fostering satisfaction with existing customers is less expensive than securing new ones.
Another example of operational efficiency is ensuring we have the right repeatable processes, without becoming overly bureaucratic. By standardizing workflows, we can reduce errors, save time, and help our team operate with greater precision. Proven processes also make it easier to onboard new employees and identify opportunities for further growth. In addition to helping us tackle challenges, refining our processes empowers us to deliver more predictable results—even in the face of growth and market fluctuations.
Operational improvements aren’t flashy, but they are powerful. Where do you see opportunities to improve efficiency in your organization?