"Where Do I Get Started?"
When a business is sinking, the stakes are high and the moment is brief. Leaders know something needs to be done, but figuring out where and how to begin can be daunting. Here's the playbook I use.
The journey from rock bottom to rock solid results can feel like an impossible mountain to climb. Business operators can find themselves thrashing all day (every day) to keep the lights on. This leaves zero time to identify the root causes, much less resolve them. By the time I get into these conversations with founders on the brink of burnout, I only get a short window of time and attention to help turn this around. So we must act quickly, lest the next emergency takes them away and drown them for good.
Situations like these can feel like a visit to the ER after a disaster. There are a lot of patients to process, and you gotta act quick. The metaphor of triage is appropriate. While everyone needs attention, only a few are critical, while others can wait their turn.
Step 1: Ruthless Elimination and Focus
During the triage phase of a company turnaround (or transformation), the key ingredients are time and space. Without a ruthless elimination of lesser tasks, there is no time to focus on the root cause of the problem.
This was one of the most significant insights I learned from reading the book, The Phoenix Project. The story tells a tale as old as time. An organization filled with intelligent people that are overworked and yet achieve subpar results. Sound familiar? Everything is urgent. Everything is important. Yet nothing gets done.
Why? Let’s look at this graph comparing utilization (i.e., the percentage of time you’re busy) vs. lead time (i.e., the time it takes to deliver).
Suppose your work day is 90% full. In that case, you still have 45 minutes of buffer to deal with unexpected items or opportunities to catch/correct errors. Minor issues can be addressed almost immediately.
If your day is 99% full, you have 5 minutes of wiggle room in the entire day. This means you might have to wait for the drive home before responding to a simple text message.
And if you’re over 100% utilization, then even the simple task of answering a phone call might take you days or weeks to get to. So often, it gets ignored or forgotten.
This was the central message of the book. The answer to fixing a broken system isn’t to double down and take on everything at once. Instead, it’s to immediately stop everything that isn’t tied to the critical path. Then and only then could the traffic jam get unblocked.
Step 2: Identify & Break Bottleneck
If you had the courage to make the time and space, congratulations. You have made the painful decision to ignore fires and problems that will keep trying to distract you. Don’t let them.
Now that you have created boundaries around what’s urgent vs. important, you can identify the bottleneck.
What’s the bottleneck? It’s the one place in your organization where, if improved, speeds up everything else.
What’s the opposite? Doing lots of other things that have no bearing on the end result. What does that mean? You’ve heard the phrase “re-arranging the deck chairs on the Titanic.” You could put every man, woman, and child to work on re-arranging them, and you’d be no closer to plugging the hole in the ship OR getting into the rescue boats.
This seems like an extreme example, but businesses do this all the time to varying degrees. For instance, they have a cashflow problem but spend excessive time planning a website refresh. Unfortunately, this project will take 3+ months without any guarantees of generating new leads. Meanwhile, they could dedicate a small fraction of that time and money towards reaching out to previous customers to see if there are new opportunities for repeat business.
The bottleneck need not be cash flow. Sometimes the issue is you have so much demand for a product and can’t get customers onboarded fast enough. While this sounds like a good problem to have, it can be a nightmare trying to set expectations and rapidly hiring or trying to get a bank loan to pay for the inventory or for servers to scale up as fast as possible.
The good news is that you typically only have one bottleneck. So if you’ve done an excellent job in freeing up time and space, you can apply that focus to the one area of the company with the highest leverage.
“So, Where Do I Get Started?”
When clients ask me this, I work them through this process. We can’t do anything until we make the time and space to attack the root cause. Once we can breathe, we spend time determining which constraint is the most important one holding back progress. Then and only then can we swarm and create the strategies and tactics to fix the root cause.
Once you fix one bottleneck, it shifts. For example, fix a cash flow issue by getting more business, and now you might have a capacity problem. You may need to hire more people. Ok, you do that. Now you might have an onboarding and quality control problem. Fix that, and now your team may be under capacity. That’s a good problem to have because your team is more efficient! But it still means you need to bring in more business.
Decide this matters enough to make the tough decisions.
Ruthlessly cut what you can.
Determine the bottleneck (it’s not always obvious)
Focus as much of your effort on breaking the bottleneck.
Celebrate! And go back to 3.
And if you’re having trouble figuring this out, contact me!