How To Unbottleneck Your Business

 

Sole Driver Syndrome

Personal productivity is first and foremost concerned with efficiency: how to get more done within the time you have.

Entrepreneurs have a strong affinity to personal productivity, some even becoming devoted fans of the book Getting Things Done by David Allen.  One of the side effects of this devotion to personal productivity I’ve seen with entrepreneurs in the startup phase or stage 1 of their business is that they hire to increase their own productivity instead of the productivity of the company.

Entrepreneurs mistakenly assume that they are the main, or even sole, driver of activity in their business.  This belief colors their hiring.  They immediately look for jobs to fill in their business that will give themselves extra time to do the important work.

This error, which is commonly given as sage advice by other entrepreneurs, immediately turns the entrepreneur into a bottleneck for every single job in the company.  In the effort to gain early personal productivity, the entrepreneur sacrifices future efficiency and effectiveness.

In my executive coaching work I hear this question over and over, “How do I stop being a bottleneck?”

The answer I wish to give them is, “Don’t start being a bottleneck and you won’t have to stop.”  However, this isn’t helpful to them now.  It really isn’t their fault that they followed mainstream advice about how to grow their business.  Everywhere they look, really smart and successful entrepreneurs and advisors tell future generations of entrepreneurs to do the same thing they did — get more productive.

The problem is these successful people never mention how focusing on their personal productivity made them into bottlenecks, nor how they eventually removed themselves from constraining the growth of their businesses.

Upstart entrepreneurs see these successes and rightly want to follow suit.  They read all the books on personal productivity and even take expensive courses.  All the while not realizing that the entrepreneurs are designing systems in their business that will require their personal attention.

The reason they don’t notice that they are turning themselves into bottlenecks is twofold:

  1. The entrepreneurs get early gains from being more productive which gives them a positive feedback loop so their mind ignores all the signs of bottlenecking.
  2. The entrepreneurs are only managing a handful of people in the beginning so it feels like they can handle growth and management simultaneously.

Then the entrepreneurs start hitting diminishing returns.

They work harder.  They manage more people.  Yet growth is slowing.  Maybe growth has even stopped.

These hardworking entrepreneurs start wondering, “How is it I’m still working startup hours three years later?”

The Venture Capital Secret Sauce

Have you ever wondered how a young startup founder can go from zero revenue to a $1 billion dollar company in just a few years?

If you have, I bet you said they had the right product at the right time.  Or maybe you guessed they were just really smart and could figure out how to grow and run a big company really fast.

In comparison, few, if any, bootstrapped or self-funded companies grow that fast.

What’s the key difference?

If you said, “More money,” then you’re only partially correct.

What is the first thing done with that additional money?

It isn’t getting office space or throwing lavish parties.  The VCs surround the young entrepreneurs with talented executives.  That’s how a dorm room developer such as Mark Zuckerberg can go from college dropout to leader of a $104 billion dollar company when Facebook IPO’d 8 years later (current market cap is $436B).  Zuckerberg wasn’t born knowing how to run a global social network.  He was guided by others until he could mature into the position.

Don’t believe my outsider speculation?  Watch interviews and public appearances today versus the early days.  Look out how clumsily he handled all the privacy scandals compared to today with Facebook’s censorship deals they have with governments around the world.  The former had huge uproars and the latter a whisper.  Zuckerberg has become a very capable leader.

Had he stayed self-funded, Facebook might have remained The Facebook helping college students hook up and Zuckerberg probably would have stayed in school and gotten advanced computer engineering degrees.

Why do I think that he wouldn’t have grown a successful global social network?  I believe his developer nature coupled with standard personal productivity advice toward management would have created a massive bottleneck.

I see it all the time with self-funded entrepreneurs.

When I explain the difference between the self-funded and VC-funded companies, the self-funded entrepreneurs immediately focus on the money.  “Sure, I could hire amazing executives, too, if I had a few million dollars handed to me.”

The answer isn’t in replicating the VC-backed executive hires, but to model it.

Be A Farmer

What kind of leadership team can you hire if you don’t hire for your own personal productivity, but for the effectiveness of your company to attract customers?

I ask you this question to get you to think about and hopefully acknowledge that there is another way to get efficiency and effectiveness out of your company besides your labor.

The labor you should be doing is farming.  Not the planting and harvesting crops kind, but the entrepreneurial kind: planting seeds of leadership, and cultivating your team to grow your company.

Who in your company is ambitious and seems to have leadership potential?  Cultivate their talents and drive into a higher-impact position.  That new position could be as a manager, or in charge of a growth center such as head of lead generation.

If you look around your company and can’t find someone, then you must plant leadership seeds inside your network.  You may find that you or a friend knows someone who would be a good fit for your fledgling leadership team.

A friend of mine did this a few times.  He found people within his network to get to know (cultivating) them and their talents and ambition, and then hired (harvesting) them when he could afford them and/or they were ready to make the move to his company.

Many times you’ll find that your competitors have just the people you need.  Your competitors are unlikely to be cultivating their employees for bigger and better roles.  If the employees of your competition aren’t in your network, then you need to start planting some seeds in their fields.

One other objection I’ll tackle about hiring for leadership roles: “I can’t afford to hire people to sit around and manage other people especially when there isn’t anyone else.”

When your company is small, under 15 to 25 people, your ‘managers’ are more like team leads.  They must be able and willing to do the job that their team is responsible for completing.

Everyone in a small company must pitch in on multiple jobs.  Eventually, some roles define themselves so well that you have to make sure the team member doesn’t do other jobs even if they would like to help their team mates.

Some Job Specialization Shows Early — The Rest Stays Fuzzy Longer

One example of this was with a client who had a team of 5 full time employees plus a few contractors.  The customer support person was frequently brought in to help with administrative tasks and random other non-customer support tasks.

As the company grew, customer support was taking more time and the rep was getting overworked.  My client didn’t know why because it didn’t seem like there was that many support tickets.  I had my client work with his support person to do an Optimal Activity Audit and they “discovered” she was spending a lot of time on the random tasks that had become a part of her unofficial job.

They moved all the administrative and random tasks to the admin they had hired for jobs just like these and customer support became dramatically more efficient with happier customers (effective).

Until a role is clearly defined through process and/or the team size grows sufficiently to allow for greater specialization, all team members must be able to handle the chaotic nature of doing multiple jobs with little to no direction.

Culture of Capability

To not be a bottleneck, founders should prevent it before it happens.  The problem is this goes against most human’s nature.  Many jobs have to be learned and done well enough by the founder to create the company and keep it running long enough to hire help.

But human nature tricks our minds by making us think that “well enough” is the same as being the best at it in the company.  Even if founders don’t make their people do a job just like they did it, they frequently force their employees to ask for approval whether the founders are conscious of this requirement or not.

Odds are, you dear reader, have already made yourself a bottleneck for most, if not all, the jobs in your business.  If that’s the case, then you need to drop your ego and let your team members shine.

A question I frequently ask bottlenecking founders is, “Are your people incompetent?”

I’ve not had any say yes, thankfully.

I then ask them why they treat their employees as if they were.  This line of questioning usually wakes the founders up allowing them to see more clearly that if they would let their people do their jobs the business would grow faster.

Founders need to cultivate a culture of capability.  They need to treat their employees like the adults they are.  The founders need to make sure their team members are properly trained (not necessarily doing the training themselves).  The founders also need to remove the approval process from employees that have shown their capability in handling their job.

Treating people who are capable as capable produces amazing results.  Efficiency and effectiveness in each job inside the company improves.

As the company grows, your team members will become more capable.  They’ll become leaders within the business and train and groom new employees to be highly capable team members, too.