Growing a smaller company’s sales to that of a mid-size company has many challenges. The additional staffing and departmental growth can face unexpected roadblocks. Two key fundamental areas present themselves in unexpected ways.
- Communication – Communication is the act of conveying information through any form, such as verbal, written, or any other means.
- Delegation – Proper delegation entails empowering others with authority to carry out employee management tasks.
Everyone understands that a group of people must be able to effectively communicate all information about a company’s daily activities. But we often do not understand why some of this communication becomes a problem. Some things fail to be conveyed to the proper individuals or departments. The excuses, “I was not told about that” or “No one informed me that it was changed,” become a greater problem as the volume of sales increases. But what about delegation? How does this become a problem as sales volume increases? Here are three examples according to sales volume.
Small companies with sales less than $5 million
Small companies normally have a predisposition of being very effective with good communication. Everyone understands who to talk to for resolving issues and who needs to be aware of anything critical. But the needed trait of delegation is normally very poor in practice. The owner or general manager makes all of the decisions for all of the given areas. Very little delegation or empowering of other people within the company to make critical decisions is allowed. The owner/GM feels that he or she must stay on top of everything, and, given the size of the company, this is usually not a problem.
Large companies with sales greater than $15 million
Delegation is certainly not an issue for the larger companies. Departments are formed, and managers have defined roles and responsibilities. It is impossible for one person to keep track of every task being completed, so all larger companies must learn to delegate and assign supervisors and managers to make critical decisions within their defined roles. What often does become a problem and must effectively be resolved is communication. Systems of communication are implemented to convey all of the daily activities of the company and handle the critical daily needs of all communication. However, whenever something falls outside of the normal communication needs, very often large companies fail miserably with communication.
Mid-size companies with sales of $5 to $15 million
Very often, when companies are transitioning from smaller to mid-size, their net profits suffer for years until they learn hard lessons. Too many owners/GMs fail to understand why they are struggling as they grow from a smaller company to a larger one. They feel that they should be healthier because the sales volume is at a rate that should denote stability. Too often, what is common is that they are buying more equipment and increasing staff. All of this investment does not seem to be paying off as they had expected. Why is this?
Here is a simple exercise to perform. What are the defined company optimization standards for designing within your company? Now, go and ask at least three different designers specific optimization standards they should know and adhere. Did they give you the same answers you stated, or did they vary quite a bit? Why is this? If you are having problems, it is because the communication has always been verbal and was never clearly defined within your company. Just to drive this point home, most companies are throwing away tens of thousands of dollars every year because their design team is not properly optimizing the components.
Here is another exercise to try: without asking anyone via phone or email, you have a new work order, and it needs to be processed in the design room. What does the design schedule display for any new work order process time showing you? Do you have to ask someone because there is no shared, displayed design schedule? If they have a schedule, are they guessing, or do they have a reliable means to gauge the design workload? If you have a design schedule, is it displayed so that anyone with proper access rights can easily access it via the internet using a cell phone? Now, how much time and money do you think your company is wasting on poor communications? More than likely, whatever number you can come up with, multiply that by three to come close to understanding the real cost of communication failures. My studies have shown on average most salespeople waste at least one to two hours every day because of poor communication systems. Effective communication is much easier than most people think if you know how to do it right. People are shocked at how easy it can be after I have trained them in how to do this properly. And to answer your question, no, I am not talking about always implementing a software communication fix. Effective communication takes many forms, and most do not cost you a dime, except a little bit of time.
Second, delegation within a company may be causing headaches. Many cannot get people to take ownership of problems, and their people will not make decisions, even though they oversee their given departments. Why is this? How effective is management training before putting them in charge? How clearly are job duties and responsibilities defined? How often did upper management step into their area and decide for them after putting them in charge? Just maybe, they were not properly trained, did not have clearly defined responsibilities, or were not allowed to make decisions with properly delegated authority. Here is a dirty secret many are unaware. These same people who are unwilling to make decisions and take responsibility know all about the many problems that are causing the company wasted money. They just feel powerless to fix them either because they do not have the skills or they have yet to be properly empowered with a true delegation of authority.
If your company is ready to address this topic with a healthy and professional process, give me a call. Maybe it is time to go beyond the typical truss plate and equipment vendor recommendations for your operations and do what so many others have dared to do. (100+ paid consultations) TDC does not receive any equipment or plate vendor royalties. If your company is planning on any equipment investment, let TDC recommend your company the best and unbiased solution.
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