Are you storing calories in your business body? Do you have a healthy metabolism for your business body? Many companies in a growth mode grow too quickly, resulting in a quick death or a long life of unhealthy habits. Remember, Food = Supply! And the Digestive System of a human body is the Operations Function of the business body.
In order to have a healthy business body with a long life, your Digestive System must be operating well.
How Your Company Gains Weight!
Our human bodies depend on calories to burn energy so we can function. Too many calories, we gain weight. Too few calories, we lose weight. If we want to grow (to gain weight purposefully, increase physical activity to participate in more activities, increase brain activity for learning new things, etc.), we must increase our calorie intake.
Our business bodies depend on supplies/inventory to create products and services. Too much inventory, the company needs more infrastructure. Not enough inventory, the company needs less infrastructure. If the company wants to grow to serve more people customers, it must increase the supply/inventory intake. But just as human bodies, there needs to be a healthy balance between intake and production. Too much inventory that you don’t burn (actual productivity of making product / providing service), will make your business body overweight.
I have a client that went through a cycle where she grew 30% one year then flattened out for the next 3 years. During this growth phase, she increased her staff and increased her office space. However, the company output was not proportionate to the increase in staff and space that she took on. She actually had the work but the work was not getting out the door fast enough, even with the increased staff. So inventory was stacking up and the company was gaining weight. She needed a jolt in her company’s metabolism to get back to the right balance of intake and production.
Your Company’s Metabolic Rate
In our human body, seventy percent of our calories that we burn (based on body size, sex and age) are used for our basic functions (breathing, circulating blood, growing/repairing cells), known as our basal metabolism. In addition to our basal metabolic rate, two other factors determine how many calories our body burns each day: food processing and physical activity. This is the other 30% of our calorie intake that we need to manage to keep us healthy.
Our business body needs a minimal amount of supply/inventory to keep our doors open to serve customers (our company’s basal metabolic needs). The inventory we manage beyond that will determine how healthy our company will be. If our operations are streamlined and working well, then we burn through our inventory and get products/services out timely. If we have bottlenecks or inefficient processes, then inventory is built up and product doesn’t go out the door, resulting in a larger infrastructure than needed. If this trend continues, layoffs are imminent.
Healthy Company Growth
There is a right way to grow your company that is sustainable. You must find your company’s basal metabolic needs (minimal production needs to keep doors open) and the right balance beyond that in regards to intake and production in order to grow in a healthy way. Imagine your business steadily growing with just the perfect balance of staff, inventory, and production! Your employees and customers are happy, leading to a long business life!
Are you growing too fast at a rate that’s not sustainable? How effective are your operations?
A tool we use in EOS to help systemize your processes so your operation is optimized and running both effectively and efficiently is the 3-Step Process Documenter. It will help build consistency and scalability in your organization so you can have sustainable growth.
To Your Business Health!