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Divide And Conquer

27 July 2009 No Comment

In a small entrepreneurial company, everyone pitches in to do some of everything. With a small staff and limited resources it’s a necessity for young companies. As the level of activity increases you add more employees. Ultimately though you arrive at a point of diminishing returns.

With too many people doing the same tasks there is no consistency. With such a diffusion of responsibility there is no single source of the latest information and no real accountability. When everyone is accountable, no one is accountable. You end up playing traffic cop, coordinating everyone else’s activity, and fireman, constantly responding to emergencies (often the same ones).

Ironically, sometimes the perceived solution is more growth. The knee jerk reaction to ‘everyone is too busy and stretched too thin’ is often ‘we need to get more people’. At this point, adding employees just means more chaos. Sometimes the obvious answer is not the best one.

Everyone needs to start doing less.

No, this doesn’t mean that everybody starts taking long lunches and leaving early. It’s possible to be more productive with less effort when you change the way you’ve been doing things.

Differentiate jobs
Instead of spreading all the workloads among multiple people, reduce the number of tasks each person does in favour of doing more of the same types of tasks. Efficiency and productivity will increase and errors and costs will decline. There is a basic principle of economics that says specializing the workers increases production both by person and across the organization. With the work now concentrated all the extra overhead for tracking, transmitting, and coordination is eliminated. By focusing on fewer tasks each employee can become increasingly knowledgeable, aware, and productive. In addition it is easier to find employees when you can give a more specific job description. They are also more likely to stay when you have a well defined career path that lays out opportunities for development and advancement.

Reduce the number of ways to do things
Often times CEOs are frustrated when they try to standardize their processes while there are still too many people involved. Don’t try and do this until you have begun to differentiate the jobs. Just as job differentiation makes people more efficient, standardizing procedures makes the processes more efficient. The other benefit to this exercise is that the work process becomes simpler, quicker, and less prone to error. Having a standard way of doing things makes it easier to begin each project, keep track of it, coordinate between departments, and provide a superior customer experience. Defining and documenting the processes should be the job of the person who is accountable for it.

Start from customer and work your way in
Where to start is always one of the questions. Everything is connected so wherever you start you will eventually cover it all. Unless here is a pressing need elsewhere it’s a good idea to start with the most customer-facing part of the operation. Current customers, and prospects even more so, will experience a degree of comfort in working with your company. The easier it is to business with you and the less perceived risk the more likely you will be able to increase your customer count and project size.

You need to begin operating as a larger company before you can become one. Business growth is usually not smooth and making these and other changes will reduce the limits to your growth, allowing you to make the next big step. Most of this work can be done without major disruption of your business; it does take commitment and concentration.

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