Have you hit a ceiling in your business? Things were finally going well but suddenly things got stuck. You’ve tried several solutions but nothing is sticking or getting you to the next level. You feel you have the right People, Processes, & Infrastructure but it’s taking a lot more effort to get mediocre results. If so, then it’s time to look at Business System Truth #4.
Business System Truth #4 (BST 4) states that “Peak Performance happens when the proper equilibrium is achieved across these components.” The components referenced are the Core Components of any business: People, Process, & Infrastructure.
When these are imbalanced, you hit a ceiling!
Outgrowing Your People!
I have a client that was growing steadily at 12% in annual revenues, then suddenly grew 25% in one year. However, they shrunk 13% the following year. In addition, as they were growing they were continually losing margin . . . working harder with less profit. After the high growth year, they went back to their typical trajectory of 12% annual growth. This is a case of their Core Components being imbalanced, becoming too heavy on Infrastructure while not developing their People and Processes to keep up with the growth. They moved into more space to increase their production, however, they did not invest in more training or improved processes to handle the increased production. Therefore, their costs went up and efficiencies went down . . . lower profits.
Fortunately, the owner realized she can’t continue this trend and shifted her teams’ focus on developing their people and processes, utilizing EOS. She is now getting back to her proper equilibrium of the Core Components and is on track to have record profits, with sustainable growth.
Much like our human bodies when we’re experiencing growth spurts as children, we need to keep the balance of People (our brain development), Process (how we’re processing information and nutrients), and Infrastructure (our body). When our body grows too fast and we haven’t developed the skills to handle it, we feel clumsy and ineffective. My son is an example since he’s very tall for his age. Boys his age are more agile and athletic while he’s clumsy and doesn’t know how to leverage his size. It takes more effort on his part to get the most out of his body. Eventually, his brain development will catch up to his body development and he’ll be an all-star basketball player . . . if that’s his Unique Ability.
Our bodies have the natural ability to keep the right equilibrium to get past the growing pains and continue with our growth spurt. Unfortunately, businesses are not naturally inclined to do so.
Growing with the Right Equilibrium
Picture your business with the right equilibrium of People, Process & Infrastructure! You have the right people in the right seats. Your processes are creating the culture of discipline and accountability in your organization. And your Infrastructure is accelerating your growth. What would that look like? Of course, every business is different in that proper mix of these Core Components. Some industries are more People dependent (professional services). Some are more Process dependent (distribution). Some are more Infrastructure dependent (manufacturing). You have to find the right equilibrium for your business so you can achieve peak performance.
Steps for Sustainable Growth
Have you neglected a Core Component and have become imbalanced? Do the following and get back on track:
1) Determine what is the proper equilibrium you need in your business with the Core Components of People, Process, & Infrastructure.
2) Take the Organizational Checkup to gauge the health of your company!
3) Create a plan to address where you are imbalanced to get back to your proper equilibrium.
For more information on creating a healthy business lifestyle, read about the Entrepreneurial Operating System (EOS).
My next blog will be about my most popular blogs – Culture. How to create that winning Culture!
To Your Business Health!