Most CEOs I know want their company to grow. It’s a measure of success. But I often ask if they’ve thought about whether they are properly positioned to grow. The following are basic prerequisites to growth.
- Capital: In order to grow, a business needs capital to add employees, buy new equipment, acquire more space, and finance receivables, to name a few. Too often, I see business owners who are pulling money out of the business to support their lifestyle without leaving sufficient capital in place to support growth (and in some cases even to properly maintain the status quo).
- Human Capacity: While I think it’s important that people be busy, there needs to be sufficient slack to pursue growth opportunities. There is a difference between busy and people walking out on a Friday night completely out of gas. It’s also unproductive if people are regularly using the weekends to catch-up. Your people need time to recharge so they’re at their best when facing new challenges.
- Intelligence: The organization, through its people, needs the ability to deal with unique situations. Business is dynamic and one can’t just robotically do today what they did yesterday as the circumstances may be different. The organization needs the ability to think so that it can respond to various situations and do what is right, not whatever was done in the past or what might be written down but no longer applicable.
- Processes: Processes need to be in place so that the business can be replicated. While this might sound contrary to the above, I distinguish between developing a smooth flow of operations and doing things efficiently as opposed to dealing with exceptions, unique or changing circumstances. The former requires well developed processes while the latter requires intelligence.
- Systems Architecture: Systems (specifically information technology) are comprised of hardware, software, and the network that ties it all together. A company needs a systems architecture that is more than adequate for its current level of business and expandable to the next level. If your team is constantly fixing your system or has developed numerous “work-around” processes to accomplish tasks that can’t be automated, then your systems need an upgrade at a minimum or perhaps need to be completely replaced.
When I started writing this, I didn’t intend to turn my thoughts into the acronym CHIPS, but since I did, I hope you’ll think CHIPS when you start to think about growth and refer back to this newsletter (as opposed to that late-70’s, early-80’s TV show about two motorcycle police officers in California).
If your business could benefit from fractional CFO services, I would welcome the chance to speak with you. Please give me a call at (314) 863-6637 or send an email to [email protected]
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