Processes turn startups into legacy companies.
So I met this young enterprising and energetic fellow in one of my design thinking classes. He walked up to me after class and asked for help with business growth. He runs a food delivery service and has been running it for 6 years but the business has been stagnant; pretty much revolving around the same customers and barely making profits. He looked really tired because he came from his office to class and he said that the business still revolves around him and the team cannot deliver as he would.
Small companies (startups) are companies at the seed-stage. During this stage, they experience a lot of learning, testing and make mistakes until they reach product-market fit then exit the startup phase. This exit is possible because the company can replicate itself and its product or service in many places as they want. It is just like recipes that enable anyone anywhere to make dishes, without the recipe nobody can produce the results expected. Startups experience some growth when they are small, but fail to sustain this growth and cannot be successful at a large scale because they don’t have processes that are easily replicable.
Before you continue to read this article, you must first get rid of the perception (that’s if you have it) that processes stifle creativity, innovation and that it is an administrative burden. Yes, most organizational processes can be nerve-wracking and frustrating, but not all are and it doesn’t mean that processes should be gotten rid of, but processes can be designed in a manner that allows innovation & creativity to thrive and it’s not burdensome.
- The first reason why you must invest in process is that it is one of the key legs your business needs to grow. Just like a table needs four legs to stand. Every business needs four legs as well: Purpose, People, Process and Metrics. Processes turn startups into legacy companies. Growth means you have attained a product-market fit and you have a business model that can be replicated to acquire more customers in more places. To do this efficiently means you will need to set standards in place so your success is easily replicated without compromising on your values and competitive advantage as you grow.
- The second reason is, and if you think about it, that without documented processes, owners must rely on employees to pass on relevant information or to carry out tasks in a particular way; and information can get lost in transmission. Documenting processes as Standard Operating Procedures in a manner that is concise, easy to understand and accessible gets everyone on the same page and makes it easy to follow.
- Thirdly, having documented processes and, starting to do this early, makes scaling easier. You can onboard new staff, therefore, saving time, energy and brainpower to rethink and communicate operational activities repeatedly. Also, it soon becomes second nature to your staff that their results and work style can be predicted in alignment with the company’s expectations.
- The fourth reason is one way to measure the success of a company is if the company can grow with or without the founder. With processes in place, the founder doesn’t need to be there all the time. The operational system of the business can work without him or her. So, the student I spoke of earlier needs help with setting up Standard Operating Procedures (SOPs) to reduce his stress and prepare him for scale. Think about the founders of legacy companies who have died and their products are the same or even better?
- It helps with decision making and problem-solving. With the right protocols and standards, you minimize the occurrence of problems and make sound decisions that assure you that circumstances don’t force your hand against your ethos. You are almost predictable in a good way. Rather than take advantage of you, your customers, partners, and investors will respect you for it and comply just as much as they expect you to comply with them.
- Lastly, it ensures that your company maintains its core values, its soul, efficiency and attains predictable results, even as it grows. Think about any globally relevant company and you will understand what I mean.
What will sustain growth are processes and they usually take the shape of Standard Operating Procedures that do not necessarily have to be long, boring documents. Processes should be clearly outlined, easy to understand, innovative, accessible, promote creativity, flexible, and most importantly inclusive to ensure ownership and compliance.
It is one thing to translate your vision into a product or service and then into a business model that makes sense. It’s another thing to translate your vision into a repeatable and teachable business process for scale. Process is as important as product development, business modeling and measuring results. Invest in it if you want to grow!