Growth in any organization requires increased capacity. When capacity goes up, a business can provide more products or services to its customers.
In the 1990s, increased demand caused many organizations to increase capacity, often without regard to the associated increase in operating costs. We all know what happened next.
As the economy recovers, demand will increase again, and businesses must once more increase capacity. But this time, it would be wise to build capacity without increasing operating costs.
The easiest, most cost-effective way to increase capacity is to do more of what you do best. By understanding your company’s competencies, you can develop strategies designed to maintain your focus on doing more of what you do well and less of what you don’t. Letting the organization’s focus widen beyond its true competencies into areas where it cannot perform as well or as efficiently is an expensive proposition.
But you also must understand the three major components of your company that dictate your ability to increase capacity — people, money and time.
Here are some ways to get the most out of each.
* People may be the most important and perhaps the most straightforward. There is only one strategy for the people component that can result in increased capacity at the least cost — have the right people positioned within your business where they can produce the most impact. The more right people you have doing the right things, the greater the opportunity to increase capacity without increasing costs.
* Money ties directly to the need to focus on what your company does best. By implementing strategies to play to your strengths and eliminate the things you don’t do well, you can do more with less. This is the only alternative when funds are tight, and is still the best alternative when funds are more plentiful.
* Time is finite. You can’t snap your fingers and produce more time to do more work. The only way to create more time is to develop strategies that promote the best efficiencies. Improved systems, procedures and processes can help accomplish this.
Increasing organizational capacity on a budget can be done, but it requires a strategy that is focused and doesn’t waste its most precious commodities — time, money or people. Managing and monitoring these components of capacity will ensure the maximum utilization of your organization’s resources. Joel Strom ([email protected]) is director of Joel Strom Associates LLC, the growth management practice of C&P Advisors LLC. The firm works exclusively with closely held businesses and their ownership, helping them set and achieve growth objectives while maximizing their profitability and value. Reach him at (216) 831-2663.
