Growth is great, but not when unchecked growth sprouts weeds in your company’s halls, cubicles and production space.
I recently worked with the CEO (Rob) of a company (ServiceCo) that provides outsourced business transaction services to large corporations. Rob should have been ecstatic with his record level order backlog. Carefree, happy days were ahead!
But Rob wasn’t happy. He was pretty glum and for good reason. Two factors created the huge backlog:
- lots of new orders (great)
- the company’s collection of clogged operational practices worked against timely order completion/shipping. It was taking forever to get an order out (not great).
ServiceCo was infested with weeds; they were Stuck in the Rough. Why?
A ‘get the sale’ mindset
In my initial meetings with a company’s senior team, I always ask a variation of the question: What group drives the company – sales or manufacturing/engineering/operations? The answer is often a good indicator of how a company is organized and what internal functions are emphasized (or not).
ServiceCo was run by people with strong sales backgrounds. They had a ‘get the sale and worry about shipping later’ mindset. The word ‘process’ was not on the tip of their tongue! Their dominant ‘get the sale’ attitude was ok until their continued success finally outstripped the capabilities of the company’s production/operations group.
You might argue that “The big backlog is a good problem to have, why make a big deal of this?” Strong customer demand and a continued increase in sales is great, but only if the internal weed collection does not continue to grow unchecked. Customers who become frustrated and take their business elsewhere are really hard to win back in the future. Lost customers take their cash with them.
Company weeds pop up in many varieties and different treatments are needed to eliminate them. Rob decided it was time to get out the weed killer. Here’s what he and his team did:
Filled people gaps and moved people out of the wrong roles
Once Rob realized he had multiple needs regarding his team, he took action to plug the gaps:
- He hired a new general manager to run all operations (the new hire was not another person with a strong sales background!)
- The former production lead was strong technically but not a good manager. Rob made him an individual contributor and special projects lead. He ego was bruised but he continues to be a valuable resource to the company.
- The GM hired new business analysts to support the customers. Customer satisfaction improved immediately.
Clarified undefined processes
Being ‘loosy-goosey’ was no longer acceptable. Companies need rules and clearly defined processes as they expand. The new GM brought clarity to the key operational processes.
Eliminated inconsistent business practices
Not only do key processes have to be defined, they need to be consistently applied with high quality. ServiceCo’s customers required error-free transaction processing. Mistakes were no longer tolerated. They went from ‘loosy-goosey’ and inconsistent to clearly defined and predictable. Boring can be exciting.
Trained undisciplined customers and fired some that remained uncooperative
If you give some customers an inch, they will take a mile. A handful of major customers had grown accustomed to forcing their specific ways on little ServiceCo. ServiceCo met with a number of their ‘problem’ customers and reviewed their new procedures and processes. The end result was a new set of expectations for the overall business relationship. In some cases, the decision was made to fire some customers (Stuck in a Rut: Is It Time to Fire Your Customers (Part 1)?) that ServiceCo concluded were either unprofitable or did not respond well to the new business practices.
In the garden, my wife Susan is fond of saying: “Today’s weeds are tomorrow’s perennials.”
Has your company been Stuck in the Rough? Share some ideas on what you did to clean out your weeds.