A flood zone is an apt description for those periods where there is an abundance of work and not enough staff to get it all done. A wind tunnel describes those periods where proven management methods and tools are no longer effective.
According to James Fischer’s book, Navigating the Growth Curve, these situations typically occur as growing companies approach the 10, 19, 34, 57, 95 and 160 employee mark.
The need to invest in new management or supervisor roles occurs precisely when the company is at its busiest and most productive – in a flood zone. Management often waits too long, makes hasty decisions and puts people into roles they are not properly prepared for. The way to avoid the costs associated with those mistakes is to have talented individuals identified BEFORE the flood hits. It is key to also have them prepared for their new role before they assume it.
We recommend companies track productivity in ways that tell the most accurate story (rev and/or profit per employee, rev and/or profit per labor hour, etc.). A good productivity graph that shows historical results can also be projected into the future allowing for some analysis. This allows companies to consider the following crucial questions.
- “What happens if our business grows faster than we expect?”
- “What happens if we lose a key customer and shrink by 10%?”
- “When will we need to add people or when must we cut?”
Without a productivity target, owners and managers may get addicted to artificially high productivity numbers and ignore the risks associated with working the team too hard, for too long.
Managers have similar responses to a wind tunnel. These typically occur during periods of growth, which is the hardest time to reorganize the company or implement new technologies. It takes a lot of discipline – and confidence – to reorganize or invest in new technologies when business is flat. It is a lot easier to execute a plan in a wind tunnel if that plan was well-designed during less turbulent times.
Contact the Davidson Group to ensure your organization is equipped for business peaks and valleys.
