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Wednesday, July 15, 2020

CEO Insider

To Overcome Bottlenecks, Consider Why You Want to Grow

Most executives think of bottlenecks as obstacles. But I think of them as inflection points.

Throughout my career, I’ve encountered bottlenecks in many forms. When I was a chemical engineering student, they appeared in my fluid mechanics equations. Later, when I worked in the oil and gas industry, bottlenecks appeared as geological obstacles to extraction. In the most classic sense, my time as a geomarket manager showed me how downtimes or delays in the supply chain affected operations worldwide. Now, on a more psychological level, I’m aware of the bottlenecks in my own mindset.

Though we tend to think of all of these circumstances in the negative, that’s a misconception. While bottlenecks certainly create friction, they also expose a company’s true weaknesses — which is the only way to get stronger.

Companies need to start thinking of bottlenecks as opportunities to grow rather than persistent or insurmountable challenges. Once companies remove the hurdles that inhibit output, innovation, sales, and revenue, they create the conditions that make meaningful growth possible. But by that same logic, companies that don’t systematically remove bottlenecks won’t grow as fast or fully as they have the potential to.

That being said, unleashing growth isn’t as simple as optimizing everything. There’s never been a perfect company, after all, and trying to become one is a fool’s errand. The more practical strategy is to target the bottlenecks that inhibit the growth strategy the most. However, identifying those bottlenecks and executing that strategy can’t happen until CEOs answer a simple question: Why do we want to grow? If you haven’t asked this question yet, here are three reasons you need to start:

  1. To set realistic expectations
    Today’s startup companies have a growth-at-all-costs mentality that would have seemed insane 30 years ago. Silicon Valley is full of startups eager to acquire as many users as possible even if means losing money or charging forward without a clear revenue model. When CEOs outside Silicon Valley hear about these companies getting large checks from venture capitalists and earning the coveted unicorn status, it’s tempting to want to maximize growth in the same way. But it’s also foolish: Unicorns are rare for a reason.
    Most companies’ systems prevent them from even attempting to scale, let alone at unprecedented throughput. Some companies just don’t target large enough markets to be trillion-dollar companies. In short, if you don’t have the processes and culture to scale like Amazon, you can’t scale like Amazon.
    It’s better to be realistic about how quickly and expansively your company can grow, not only because it helps to set realistic expectations, but also because it highlights the specific bottlenecks making those expectations harder to meet. When you ask why you want to grow, you stop trying to follow the lead of others and begin charting your own course.
  2. To include multiple perspectives
    The CEO may be the leader of the company, but he or she is not the first and only authority on growth. Just the opposite, in fact. Perched atop the C-suite, the CEO has a big-picture perspective that may obscure the true factors helping or hurting growth.
    One reason to question the motives behind growth is to bring in outside voices that can offer fresh insights and new perspectives. Everyone in the organization has important observations to make about where a company could or could not grow and what sorts of bottlenecks exist along the way.
    Once those bottlenecks are understood, the C-suite can create plans to get the organization to a better state. The alignment of the road map and the system means growth becomes a matter of culture and perseverance.
    By asking hard question about growth, leaders are forced to leave their bubble to get the answers — and that’s always a good thing.
  3. To critique the culture
    When the stakeholders ask why the company wants to grow, they are also implicitly asking why they can’t grow. Every organization wants growth, of course, but only some are prepared for it.
    While preparation depends on time, talent, and other resources, it’s primarily a function of the company culture. Take the New England Patriots, for example. You could attribute their success to their coach, their quarterback, or their front office. But the truth is they have a culture of winning, one that systematically turns weaknesses into strengths at all levels.
    When companies are aligned with growth — meaning the culture prioritizes improvement, innovation, excellence, and expansion — they’re poised to achieve almost anything. And as part of that tenacious commitment, bottlenecks get exposed and resolved instead of ignored.

It’s time CEOs took a new view of bottlenecks: as a necessary part of the journey rather than unwanted or unexpected setbacks. Once CEOs start to see bottlenecks for what they truly are — golden opportunities to learn and get stronger — growth starts to look well within reach.


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Ali Hasan Raza
Ali Hasan Raza is the co-founder and CEO of ThroughPut Inc., the artificial intelligence supply chain pioneer that enables companies to detect, prioritize, and alleviate dynamic operational bottlenecks. Ali Hasan Raza is an opinion columnist for the CEOWORLD magazine. Follow him on LinkedIn.