Is your organization too LEAN to Grow?
Efficiency is good. In most markets you better be running an efficient operation or you won’t be able to compete and make margin.
At least that is the conventional wisdom. However, Porter taught us that all margin does not come from reducing operational costs. Margin comes from value. Cost is just part of the equation.
I have nothing against reducing costs by driving waste out of the system. Part of our firm’s practice is LEAN consulting.
That said, I’m starting to see a symptom across organizations that is going to require a shift in mindset to resolve.
When the economy tightened up at the end of the last decade, companies had to LEAN up to survive. Everyone pulled double duty for the good of the organization.
While there are times when that is necessary, you can only run your team in a sprint for so long.
How do you know if you’re too lean to grow? Here are five indicators.
- It’s a big deal when someone takes vacation. In fact, that job just doesn’t get done.
- Your existing staff are so busy doing their jobs, they do not have time to develop others. Bench strength is a huge competitive advantage. How is yours?
- What would happen to the quality of service if your marketing efforts were just 10% more effective?
- Are your key players feeling burned out?
- Are you starting to see your A-Players jump ship?
Business is about balance. A machine that is operating at 100% efficiency by definition can do no more.
If you are trying to grow revenue, make sure you aren’t too lean to do so.