Complexity Kills Growth

Growth Creates Complexity and Complexity Kills Growth

Almost every business owner wants to grow their business.  It is almost a universal desire.  But there is a downside to growth.  Growth creates complexity.  And in the irony of all ironies, the complexity that is created by growth can also kill that growth at the same time.  It’s an interesting cyclical conundrum.  Simply put “Growth creates complexity and complexity kills growth”.

Why Complexity Kills Growth

I first heard this quote in Craig Groeschel’s Leadership Podcast.  Craig has an interesting way of putting things and I find that his insights are very powerful.  He shared a five-step process for reducing complexity in your business.  His five steps were:

  1. Kill a rule
  2. Cut a meeting
  3. Remove a step
  4. Empower a person
  5. Repeat from the beginning

Let’s explore these ideas.

Kill a Rule

If you want to get to the point of how complexity kills growth, then start here.  The biggest way growth creates complexity is by creating rules.  Think about it.  Unexpected (or unintended) actions are the cause of almost every new rule.

Growth creates unexpected things.  If the status quo rules in your business, then you aren’t likely seeing any growth.  So, when growth occurs, you are typically going to experience new things.  For example, new customers may request new or different items or processes.  These requests may be good for business, or they may not.  If not, then you are likely to make a new rule so that your employees know not to allow it to happen again.

Another way growth leads to new rules is by bringing new team members on board.  If your business is growing, then your team is likely growing.  When you get new team members, they tend to bring their own ways of doing things.  A new salesperson offers a deal that you don’t support.  A new technician doesn’t dress according to how you want your technicians to dress.  And that new manager allows his team members to flex their schedule, while you have never allowed that in the past.

So, with this growth, comes new people.  With new people, come new personalities, styles, approaches, and philosophies.  Therefore, as the owner, you have to create a new rule.  You can’t let these new people change things too rapidly!

Killing a rule does a couple of things.  First, it eliminates a potential roadblock for your team.  Second, it validates your team member’s contributions by allowing new ideas to develop and take root.  And third, and most importantly, it eliminates the need to put processes in place to validate compliance to the rule.  Thus, eliminating complexity in your processes and your organization.

Cut a Meeting

Meetings are another outcome of growth.  As the business owner, when you were a truly small business (just you), you knew everything that was going on (we hope).  Then you grew to a few people, but you still stayed on top of everything.  You knew what your teams were doing.  You knew what salespeople were offering and what jobs were being performed.

Now you have expanded past your ability to stay on top of everything.  You cannot keep track of what everyone is doing.  So what do you do?  You probably create a new meeting so that you can stay informed.

As the business owner, you certainly have the right to stay informed.  But before you create a new meeting, you should always think about whether there are other ways to get the information.  Do they already create a status report?  Do you have a CRM or other system?  In other words, are there ways to use the existing processes in order to get the information you want?

By cutting a meeting you reduce stress (yes, your meeting creates stress, I guarantee it) and free up time for people to do more valuable things.  Most business leaders do not recognize the real cost of meetings.  I have sat in meetings where the combined wages of the participants were thousands of dollars, and the meeting was discussing items of trivial importance.  Next time, do a financial calculation on the cost of each meeting, and then determine the ROI of the meeting itself.

Remove a Step

Steps, like rules and meetings, are typically created as a knee-jerk reaction to a one-time occurrence.  I experienced this one time when a business owner was unhappy with the profit margin on some smaller orders.  In this particular business, small orders typically had smaller margins because there was less labor involved.  Therefore he put a new step in where a VP had to review every proposal that went out.  Previously, executives reviewed only proposals of a certain level.

It sounds logical, but what happened?  VPs were not available to review proposals in a timely manner.  The new step created delays.  Customers were getting frustrated because a simple order that could be fulfilled the same day sometimes took 2-3 days to fill.  Adding this step created frustration for the salespeople, dissatisfaction with the customer, and ultimately did nothing for profit margins because there was little you could do to increase profits on these types of orders.  And furthermore, the cost of the VP labor involved essentially ate up what little profit there were in these particular projects.

Empower a Person

Now, if you really want to change the game, let’s move away from eliminating something and move into the world of empowerment.  Most of your employees have ideas of making your business better.  Some have brilliant ideas.  But most are afraid to bring their ideas to the table.  Maybe their ideas have been shot down in the past.  Maybe they’ve seen someone else get in trouble for trying to implement an idea.  Whatever the case, they are not going to do it by themselves.

One of my clients had me spend some time coaching their middle management layer.  And one of the primary goals of the effort was to empower their team members to take on initiatives to improve processes and drive more business.  What was interesting to me was that most of the employees did not feel empowered to do anything.  In fact, it was quite the opposite.

What is even more interesting is that this is truly a great company with a great corporate culture.  But they have a tradition of running everything up to to the top.   But historically, the executive level drives new initiatives.  When I first started working with them, they thought I was crazy to suggest that they could tackle a business process problem on their own.  It took several months of coaching, but a few of them (not all) have taken on this new challenge and are driving remarkable change in the organization.

Empowering the right person can truly drive amazing results for your organization.  It takes courage to do it.  But companies that are growing can find ways to cut complexity simply by asking the people involved to find ways to simplify the process.

Repeat the Process

Simply put, one time isn’t enough.  Whenever you think you have simplified things, go back and do it again.  It’s amazing how many times you can do this.  The idea of “continuous improvement” is based on the first word, “continuous”.  If you truly want to drive innovation, cut complexity, and continue growth, you must continuously be driving efficiency in your organization.

Start Eliminating Complexity Today

Always remember that complexity kills growth.  Do you want to eliminate the complexity that is stifling your business?  Then get a business coach or process improvement advisor to help you do this.  I work with companies in a variety of industries to do just that.  If you are interested in learning more, contact me today.