Is Your Business a Bottle of Wine?

GE in the 1980s was a global behemoth with a reputation for creating world-beating leaders, managers and businesses. Jack Welch, later anointed Manager of the Century by Fortune magazine, was already well into his aggressive campaign to make the company the dominant force in American – and global – industry.

Despite a growing reputation for being the gold standard in process excellence, leadership ability and operational efficiency, GE on the inside was in the throes of chaos. What Welch was attempting required a complete transformation of nearly every aspect of the company’s culture and way of working. And Welch was not known for his patience. He wanted things done his way, instantly or preferably earlier.

The story, which might be apocryphal, goes that Welch was visiting a plant in Ohio that made aircraft engines. He ranted and raved about operational inefficiencies to a group of rather embarrassed plant executives. Finally, he shouted, “Why can’t you go faster? Where are the bottlenecks?”

And a voice piped up from the back of the crowd, “Well, sir, in my extensive experience with bottles, I’ve noticed that the bottlenecks are always at the top.”

Wines may get better with age, but anyone interested in oenology will tell you that wine usually doesn’t age well once it’s bottled. If you’re thinking about expanding your business, it’s worth considering whether you’ve reached the bottle phase – and if so, what you can do about it.

Scaling a business means putting the right framework in place to enable and support growth by eliminating bottlenecks. Business plans aren’t equivalent to scaling-up plans – they include scaling-up plans. Over time, companies – like everything else – are subject to the law of entropy: complexity increases and gridlock results. It’s more and more difficult to sustain the culture that enabled growth in the first place. A good business plan, therefore, includes ideas for how to scale up the culture and the talent, not just the finance or capacity.

Plant the right varietals

Depending on the industry and business model, scaling up may require hiring more people or expanding the use of technology. Regardless, choosing the right tool for the right purpose is key to achieving the desired outcome. Steve Jobs, legendary CEO of Apple, expressed it thus: “A small team of A+ players can run circles around a giant team of B and C players.” It’s vital to invest the time and attention in making the right choice at the outset to reap the richest harvest.

Growing is what you get, not what you do

Nobody with a vineyard stands in front of the grapevines and waits for them to grow. There’s planting, pruning, pest control, fertilizer and soil management, irrigation, sunlight, sampling and a lot more. To expand a business, you need to have a clear, cohesive and conscious plan for how to sustain the culture, create the right leadership and organizational structure, and implement the right tools to realise the growth you envision. On the other hand, while capacity expansion planning has been studied extensively for several decades, many businesses still struggle to turn their attention away from the obsession with short-term results.

If it ain’t broke, fix it anyway

In today’s business world, successful scaling can’t happen in the absence of technology. Your strategy should consider how fast your company can – and should – grow, and how much technical debt it should accrue. ‘As fast as possible’ is the lazy answer and can lead to disaster up the road. Vines can grow like weeds in a jungle, but are they bearing fruit? Are they bearing the right kind of fruit? Never lose sight of the fact that the intangible foundational elements of culture, people and structure are as critical as the tangible elements of infrastructure, finance and capacity.

It’s easy to postpone technology upgrades in particular, because the current equipment and/or software meet business needs very well. But consider that what works today may not be able to deliver what your business needs tomorrow to support your anticipated growth and scale. If that isn’t convincing enough, consider that those of your competitors who made these investments earlier are now racing ahead, and playing catch-up while trying to stick to your growth plan is next to impossible.

Bottling things up

There are several elements of growth and scale that aren’t addressed here: finance, supplier relationships, marketing and sales among them. But the basic and most fundamental question is whether your business has laid the right foundation to enable growth without impediments. And when you ponder this, remember where the bottlenecks usually are.