Rapid, uncoordinated growth of the company Article
We don’t have to talk about bankruptcy that will grow the company quickly, but often, especially at the end of the year, many companies face the dilemma of how many applications must be accepted “so we can do it all.” Rickety “less is more”. why?
You will suffer a reputation, the delivery date will be delayed, and there is a problem with the order quality. These are not currencies that a successful company would like to show off. Is the lack of ability just a matter of poor planning and an overestimation of your strengths? What do entrepreneurs make the most common mistakes?
In my opinion, poor planning and overestimating one’s strength are only superficial consequences of something wrong with the process within the company. If an entrepreneur has a firmly established commercial, production or logistical system throughout the company, it cannot happen that he receives orders over which he does not have the capacity. If this system is not set up or is wrong, it often goes intuitively to commands that could break its neck. Regardless of a damaged reputation, a bad name, or a negative advertisement. If a company can’t say “no” to new and new orders in time, frantic and confusing planning follows “how to do it all.” The wedge is clogged and the company enters into chaos and crisis from overload or growth. The problem is that entrepreneurs often rely on their employees, employees who are convinced that they will keep and withdraw the company, especially in critical times, but especially in times of crisis and times of stress and chaos, that is, of the employees has what capabilities and performance are often, in the most difficult moments For a company, the entrepreneur or manager discovers that they were wrong in their judgment of specific people. In short, he had a bad sense of smell in people. People you can count on, you are able to handle temporary overload in the form of surge orders. The burden of the situation is spreading among more people and more “bosses” who can find a solution. New challenges, such as the huge influx of contracts, no doubt. So poor company management and system set-up, poor judgment of people and employees, are, in my opinion, the primary mistakes that I most often encounter in practice. With a well-prepared system and a group of capable enthusiasts, rapid growth can be managed. Without this, every major growth of the company is a downward spiral, in which the level of stress, chaos, burnout and burnout increases, and in the worst case everything ends in failure. At its best, the company will return to the level it was “in” condition.
But how do we avoid the risks of congestion and rapid / temporary growth?
In part, the answer is given in the previous paragraph. From the location of the owner, it is important to work for a long time to improve the operations and the overall management system within the company. In short, everything works like a well-greased and tuned machine in-house. Everyone needs to know what to do, what are their competencies, and the performance that is required of them. It is essential to help people manage their work better, faster and with better results (training system) and well-established control mechanisms (control, reporting, meetings, etc.) are essential. This is a long-term and systematic work, where from the employer’s site I systematically take confusion, chaos and repeated mistakes out of the business. I create system, harmony, and system solutions to prevent recurring errors. This increases overall productivity, performance, and of course the professionalism of the company and individuals. At the same time, it is important to keep in mind that people are really the most important component of any business. This is a well-known management lesson – people are the most valuable capital. In practice, however, this lesson is somehow seen as a bad ending. For me, this means, among other things, moving people who are interested in the company to the company, they don’t just want to work on their own and “see you”. Appointing the right people within the company and correcting the wrong ones or dismissing them from the company. A good team is key. A good team isn’t 20, 30, or 50% qualified employees. A good team is when you have people next to each other put your hand on fire for them. And the absolute key is to have a team of key people around you stand out a little more than that. This can be seen in their performance, efficiency, and commitment to the company. Last but not least, “big eyes” should be avoided. In one company, we have taken action when we have gone from about 300 million CZK in sales volume thanks to a choice of orders to approximately. The volume of trade is 200 million CZK. But the profit was the same in both years. Achieving more or less with less effort is a reasonable business. Doing things better, smarter, and more profitable. They don’t work for the highest turnover possible and are often without profit. Unfortunately, now is the time. Banks are interested in the highest possible turnover and the vanity of entrepreneurs or management is often deafening. Many are chasing the highest turnover possible. This is not a wise method in my opinion, I am missing common sense somewhere. I recommend not having such big eyes, and instead stick to common sense.
If the company already has a chance to win more orders than it can handle, how should it handle the situation?
Certainly not to overtake new people. First, it takes time to find and teach them. So you are still not sure whether choosing a person is the right choice. In other words, it takes time to find that you can count on them and they are trustworthy. Overemployment is not a short-term solution. I recommend working in the long term and strategically on the points I mentioned above. After that, the company is able to handle a temporary increase in orders. This is why I claim that building a high-quality team of people in the company takes 3-5 years! I also recommend looking for new or other technologies that always increase the company’s productivity, and hence performance and capacity. With one shovel I can dig a small field per day, with one tractor I can dig up the entire field. This is an example of more efficient technology. In other words, as demands increase, albeit cautiously, for the sake of financial reasoning, I recommend investing in technologies that allow for a significant increase in company capacity rather than existing capabilities in new employees. Moreover, cooperation is available in many cases, when the company cooperates with other companies externally. Last but not least, I recommend working according to priorities. Clarify which orders are strategically essential in the long run, and which are most profitable, determine which company will produce at a given moment and prioritize. I will put others in cooperation. I try to agree with the customer on the terms that he wants to wait for or in the worst case under which he wants to withdraw from the order.