Here’s my hypothesis:
“A company can’t grow beyond its internal growth capability, as there is a point when the people, processes and/or the service can’t either withstand the company growth rate (causing things to fall apart) or effectively lift growth bottlenecks (causing growth to stagnate).”
Internal growth capability is:
- the quality of internal processes,
- the capacity to carry out those processes, and
- the complexity of the service,
- where increases in process quality and/or capacity grows overall capability, and increase in complexity decreases it
Internal growth capability = Process quality + Team capacity - Complexity
Below you’ll find some areas that I’ve found beneficial to concentrate on when trying to increase internal growth capability.
- people’s domain expertise (skills)
- headcount (brute force)
Note: When capacity grows beyond what your processes can withstand, its effect starts to be negative (think about hiring 20 customer support representatives at once and putting them to work on day one with no written customer support manual).
- number of processes (spanning from fully automated to manual)
- % of processes documented
- number of people required per process
- working time required per process
- growth rate of complexity < business growth rate (if complexity grows faster than your business, shit eventually hits the fan)
- Speed and quality of decisions
- Team alignment around strategy and tactics
- Internal communications
- “Uninterrupted working time to Total working time” ratio
- Clearly defined responsibilites and expectations
- Continuous improvement (“Are we working better than last month?”)
How does the concept of internal growth capability sound to you? Have you experienced its effects in your company?
Let me know via email.