Entrepreneurs primarily start a business to make money- an objective that gets carried through even it becomes a multinational company. It entails streamlining processes to efficiency and optimum output at all stages. While that is the ideal, not every business follows this narrative. What they experience instead are bottlenecks. The term started in manufacturing, but the principle applies even in business processes.
How to spot a growth bottleneck
In a production line, seeing the backlog is almost immediate. However, in business, it might be harder to detect. A firm specializing in family law might be bringing in a significant number of clients. However, for some unknown reason, the bank balance does not reflect the increasing demand for their services. Knowing where the issue is isn’t as easy. It could be processing payments is low, the staff is taking too much time on cases or approvals aren’t made promptly.
The first step, therefore, is observing current operations and developing an analysis of problematic areas. You’ll soon find that bottlenecks come about for two reasons: people or processes. To get an objective view, a company requires hiring an outsider to analyze the situation.
Findings are likely to include an assessment of how owners and managers are causing bottlenecks due to their leadership styles. Factors that might cause stunted growth include lack of innovation and sticking to the old way of doing things. Another is the structure; when you don’t empower employees to make decisions, it causes an approval process that affects how fast ideas are acted upon. A team that is not aptly skilled can also cause the flow to turn into droplets. Areas that can be affected include the customer service, administrative or sales functions of a company.
The processes can also be flawed. Picking up from the previous example, having all directors signing off on documents before any project can move forward creates a bottleneck. It is likely that not everything will get approvals on time, leading to delays. Not optimizing processes is also a way to create efficiency in the business machine. Eliminating or reducing paperwork is a sure way to eliminate bottlenecks.
How to solve bottlenecks
Changing overall business operations requires formulating a reliable strategy based on recommendations of problematic areas. Here it requires outlining each department’s strategic goals, adding the skills needed and what processes need changing or tweaking. This procedure might require making drastic decisions. Be prepared for the possibility of letting go of underperforming staff or operations and spending resources on employee training and development and acquiring software that automates certain aspects of the business.
Part of this transition requires taking a hard look at what you’re doing in-house and what can be outsourced. Do you need to hire more staff in a given department to build capacity, or pay an agency a retainer to run specific business operations? If your team struggles keeping up with all the projects coming through is a tell-tale sign that there’s a blockage.
Hiring an expert to analyze your business processes is the first step in determining bottlenecks within your company. It also requires the willingness to flow through with the recommendations. Ultimately, it is the willingness to make the changes that define the company’s growth