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How to Grow your business…Starting with Diagnosis

By Dennis Keay

A lot of the articles I write are in response to questions I receive, and this week I was asked a common question, “How do you help businesses grow?”. Here’s the short answer:

I start with the Problem, NOT the Solution, the same as a doctor starts with a diagnosis, not a prescription!

Too often, people jump to solutions and try to solve the problem the wrong way, solve a poorly defined problem, or even solve the wrong problem!

An example I see often: 

A business is suffering from cashflow issues and low profits, and they think more sales (their assumed solution) will fix that, so they put a load of effort into getting more orders, only to find that their problem hasn’t gone away…it’s compounded.

This can be due to a few reasons, but one of them is that they’ve got hidden costs that they haven’t recognised or planned for (e.g. rework and overtime) and hence they’re selling below cost. They end up making themselves busier and wonder why they’ve still got the same (or bigger) problems.

What’s the Objective?

When someone asks, “Can you help me grow my business?”, I first need to get clarity on their underlying objectives. Let’s ask:

“What do you mean by ‘grow your business’, and why do you want to grow it?
Are you after greater market share? Greater revenue? More employees? Greater profits?  Or something else, such as status?” (Ouch!)

It may seem a silly question at first, but too often people assume that greater revenue means greater profit. It’s NOT that simple! They’re NOT the same thing. You may have heard the saying “Revenue Vanity, Profit Sanity”.  There’s no point growing in revenue or size unless profits are growing at the same time.

How I Help Businesses Grow, PROFITABLY

I can’t go into too much detail here, but I start by diagnosing what’s holding the business back from faster profitable growth.

There may be several things ‘constraining’ their growth. So first I do an assessment, looking at the health of various aspects and practices within the business. I think it’s much like a doctor in Emergency, assessing a patient that has just been brought in.

No point trying to fix a patient’s broken leg before stopping a less obvious but potentially lethal internal bleed. The broken leg won’t kill them, but loss of blood will. (Typically cashflow to a business is like blood-flow to a body.)

I do a root cause analysis to find the causes (rather than just trying to tackle symptoms), then prioritise which causes need to be tackled first. A form of ‘triage’ in a medical sense.

I don’t start with the ‘tools’, but rather, I start by clearly identifying the problems or constraints. Later (through experience), I choose the appropriate range of tools and processes and apply them within the business to improve the situation.

Typically I initially aim to create ‘stability’ and predictability in the business (getting it right-first-time). Then I continue to monitor the business’ progress and tweak the treatment plan based on where they’re at.  As we remove one constraint or bottleneck, a different (but smaller one) will surface to become the limiting factor to growth. That’s the nature of all processes, including business. In our analogy, stopping our patient’s internal bleed doesn’t fix their broken leg. That requires a different form of treatment than stopping the bleed.

The Point

The main point is that to grow the business you need to clearly identify the root cause(s) of what’s holding it back, then systematically address those causes, using appropriate experience and know-how.

Business insights

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