What slows down your organization from making decisions and implementing changes? Imagine a fast race car with a canoe on top pulling a large RV trailer behind it and trying to win a race against cars that are not weighted down. Formula 1 and IndyCars are fast, because they have eliminated large roofs and anything that is not necessary for racing in their circuits. Implementing agile business practices requires you to eliminate the unnecessary people, process, and products slowing down your business.
The Growth Paradox
Growing companies need more people, process, and products to sustain their growth and provide value to their customers and investors. However, adding more people, process, and products increases complexity and operating costs, which slows down the company. Craig Groeschel sums up the growth paradox as, “growth creates complexity, and complexity kills growth.”
Small businesses are often lean and fast because they cannot afford to carry excess baggage. As these small businesses grow they add complexity, which burdens and slows down the business. The art of creating sustainable growth is learning how to reduce complexity by eliminating low value and unnecessary people, process, and products.
Eliminating People
This is not a Terminator movie or termination process where you eliminate people from your organization. Instead, this is about eliminating unnecessary people from decisions and activities. One of the greatest challenges in larger organizations is the number of people you must work with to make a decision or to get work done. This is frequently called politics or bureaucracy, especially when the people get in the way of progress.
The bureaucracy of a large organization creates more work by requiring multiple meetings with different people. To avoid meeting separately with multiple stakeholders, sometimes committees are formed to bring people together to review and approve ideas. “Death by committee” is a phrase used to describe the slow and painful death of an idea or project as it goes through committees.
The more people you add to the decision process the slower the decision will be made. Small companies move fast because they have less people and therefore less objections from people.
Build small teams with an empowered leader.
If you want your organization to move faster, then you need to build smaller teams with a single leader who is empowered to make decisions. Avoid making the mistake of having too many leaders. According to McKinsey research, “small, independent teams are the lifeblood of the agile organization.”
Eliminating Process
Once a business process becomes routine, it becomes difficult to remove it. People are often afraid to stop performing a process, because “that’s the way we have always done it.” A poll of 5,000 employees revealed that on average 42 minutes per day was wasted on needless administrations tasks.
As companies grow, they add new procedures, which can be valuable. Well defined business process is essential for scaling and growing a business. But each process takes time to perform and slows down an employee. Therefore, for each new process that is added, you should consider removing an old process.
Evaluate New and Old Procedures
Business and customer needs change over time, which requires all procedures to periodically be evaluated. When a process is no longer adding more value than it costs, then it should be stopped.
- How much value does the process create for the customer?
- Is the process legally required?
- Is the process relevant to the current goals and objectives of the company?
- Does the process create a bottleneck that hurts overall company performance?
One of the biggest dangers to most organizations is a mindset of maintaining status quo. Bob Iger, past CEO of Walt Disney, said “The riskiest thing we can do is just maintain the status quo.”
Outdated business procedures generate bad data and guides employees the wrong direction. Moving fast the wrong direction is bad for business. Sometimes, we need to slow down and challenge assumptions before moving fast to build new things.
Eliminating Products and Services
Growing companies often need to add new products and services to meet the growing needs of their customers. Once again, the growth paradox comes into play. As you add new products and services you increase complexity for your employees to acquire and deliver these new products and services.
Entrepreneurs and innovators are often good at coming up with new ideas. But too many good ideas combined with a lack of priority creates confusion. Employee get spread thin working on too many things at the same time. When people are given too many choices, they experience what is known as choice overload.
Growing companies often face an overload of work created by an overload of choices. According to researchers at the Decision Lab, “While we tend to assume that more choice is a good thing, in many cases, research has shown that we have a harder time choosing from a larger array of options.” This creates choice paralysis, where people slow down or freeze up.
One of the core ideas of lean methodologies is working to eliminate waste or anything that does not add value from your customer’s perspective. Providing your customers with too many products and services creates choice overload for them. Choice paralysis can prevent a customer from making a purchase. Offering too many products and services can hurt your business.
Eliminating Waste
Likewise, adding features and services that the customer does not value increases your cost and decreases your value proposition. Whatever the customer does not value becomes waste. If your employees spend hundreds of hours working on a new product that your customers will not buy, then not only is the product a waste but also the hours of time invested in the product.
Learning to hit the “stop button” to avoid costly mistakes.
Modern lean principles grew out of the automotive industry and specifically the Toyota Production System (TPS). One of the key success factors was the ability for anyone in the production system to “stop the line” once a defect was detected. Ultimately, this saved money and increased the quality by quickly addressing problems.
In the business world, most employees do not have the same opportunity to hit a virtual stop button. Therefore, projects and work continue to move forward even when people suspect problems. In most organizations, it is easier to add a new project than to stop a failing one. Implementing lean business principles requires you to empower employees to hit the “stop button” and then investigate potential problems.
Change Quickly
Back to the race car example, races are won or lost based on how quick a team can change a tire or how quick a driver can change lanes to avoid a crash. Agile companies move fast because they have mastered the art of making quick decisions and changing faster than their competitors.
What slows down change in your organization? Becoming an agile business requires you to eliminate the complexity in your organization that slows down your ability to change. It requires you to eliminate the people, products, and procedures that are not adding value to your customers. Your business cannot move quickly if it is carrying excess baggage and weight that slows you down.