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Are You The Major Bottleneck in Your Own Company?

small-business-blogs-finance-bottleneckRecently, I was contacted by a company that I had worked with early in their history that had grown very nicely and quite profitably. However, when they reached a certain revenue level and they seemed to "stall out," and had trouble not only growing further, but making money.

The small business owner, a really smart, driven fellow was totally frustrated by it and called me back in to help him figure it out.  He complained that there seemed to be bottlenecks and problems that he couldn't uncover...

Everything seemed to take longer and cost more to do than it had previously. They were getting bigger jobs, but making much less profit on them. The company was experiencing high turnover and despite a very well-thought out quality program, their quality was suffering.

Now what I remembered about this owner...

from my previous engagement was how impressed I was with his attention to detail and his understanding of, virtually, every process in his company. This had helped the company to grow, not only profitably, but with a very loyal customer base. He was involved in every aspect of the company. But, as it turns out, what got him to success, it what was driving him to failure.

As the company grew, his obsession with detail continued...

He was involved in, virtually, every decision that the company made, from the important ones like capital equipment for the production floor, but also, to the seemingly unimportant ones (for an owner) like what color the new break room would be painted. And this slowed down every decision, often causing the company to miss key deadlines. Plus, although he hired a number of good managers, many had left in frustration with the decision-process slowed down by his insisting to be involved or, worse, countermanding their decisions. In addition, those who remained simply pushed decision-making back up to the owner, slowing things down further.

Since, initially, he created most of the tasks...

involved in getting his product out the door, when the company was in its infancy, he, probably, felt he knew how to do those tasks better than anyone in the company. While he now had a nice sized staff, he would still, periodically, get involved in helping to get product out the door. Often, changing process, on the fly, back to the way the company used to do things, causing significant discord and turnover in managers.

He had become his own major bottleneck...

Like that famous quote from the old comic strip, Pogo - "we have seen the enemy and he is us." Often what gets you there, doesn't keep you there. Sometimes the company outgrows the owner.

And this is extremely hard for folks who remember the early days, often going without salary, working long hours and weekends, living and dying on every order. They still want to be involved in every decision, every customer situation, every personnel decision. But they can't. Not if they want the company to grow. Entrepreneurs who want to truly grow their company need to constantly evolve and grow themselves. If they remain the same, so will the company. They have to look for new solutions, new managers and new ways of doing business.

"The Entrepreneur's Yoda" knows these things. He's been there. May success be with you!

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