The only way you are going to have success is to have lots of failures first." – Sergey Brin, co-founder, Google
Scaling a business is understanding that once a set of problems and pain points are resolved, there is another set behind that standing between you and further growth.
If these problems are not solved quickly enough, the business naturally becomes less efficient over time, less scalable, and less profitable. For example, you may notice that as you grow your customer base, you require more customer service agents, but those customer service agents are able to service a decreasing revenue per agent as the your business scales.
As Stephen Covey articulates in Seven Habits of Highly Effective People, if we spend all our time firefighting, and invest no time fixing the things which create the fires, we’ll always be firefighting.
In your business, these indicators likely create a measurable decrease in revenue. To help you identify the causes of these issue as they arise, we’ve listed below the most common we see & mitigate across our clients.
1. Slow, manual and error prone processes rely heavily on paper or spreadsheet software
Probably the most identifiable issue. It is common for a business to build their own process/tools using paper or Excel, as it’s an easy DIY approach. This may seem great in the early stages, as it’s quick, easy and cheap to do.
However, as you scale, you will hit natural limitations:
- Reporting is difficult, time will be spent pulling data from lots of paper files or Excel sheets
- Reporting on this data is inaccurate if data captured is low quality, suffering from Garbage in, Garbage Out
- Data lost/destroyed by accident, people overwrite each other’s work or there are competing versions of the same files
- It becomes more manual and time consuming as you grow
- Understand which key processes use paper/Excel, and improve the process to use process driven software instead
- If these processes are not documented, document them
- Understand which steps of the process create risk, and use software & automation to force the correct completion of a process (e.g. a user cannot move onto the next step of a process until they’ve completed the last step)
2. Reports are not accurate, not trusted and are slow/manual to create
Bad reporting is usually caused by either bad input data, or the process to collect data being slow and manual. For example, if you manage projects from Excel spreadsheets, this will be error prone in itself, and aggregating data from many sheets to generate one report is slow. This means that:
- When these reports are scrutinised, you notice errors, such as it does not line up with data in accounting software
- Reported data is not trusted, and leads to surprises
- Time is wasted collecting this data to generate the reports
- This increases stress, as reports are seen as inaccurate, and can sometime provide data at odds with other sources. It’s not known what to believe
- Identify and resolve key issues which enable the collection of bad data, e.g.:
- If data can be validated on input, make sure it is (like a postcode, or a date)
- If data collection is slow or involves slow manual steps, automate it
- If data is collected from lots of sources and merged (like suppliers), provide an easy way to collect that data from them, and automate validation of the data
- Automate report generation by implementing a Business Intelligence dashboard like Metabase, Alteryx or Microsoft Power BI
3. Data is not used to make evidence-based decisions, key decisions are made on assumption and not evidence
Without accurate reports, we are not able to make evidence-based decisions. When decisions made are not based on evidence, it is not possible to assess whether they had a positive impact over the situation you are attempting to influence.
A common situation is intuitively knowing that a process consumes more time/money than it should, or noticing direct costs occurring because of mistakes, but not knowing exactly how to better the situation.
Having the capability to measure the situation before and after a change gives clarity on whether the decision created a positive or negative result.
This means that:
- KPIs may exist for high level objectives such as net margin, or revenue, but it is not clear exactly what actions contribute to that goal, positively or negatively
- It is not known which improvements will lead to the highest Return on Investment if completed, or the order to best implement improvements
- When changes in process are immortalised, it is not clear to all involved exactly why this change is required – this could lead to lower buy in
- Understand what contributes to a KPI, e.g. for Revenue and Net Profit:
- A service-based business may measure their sales pipeline and over servicing
- A product-based business may measure the ROI on ad spend, and Life Time Value for a customer
- From these, what metrics/data do you need to analyse to move the needle in the right direction?
- A service business may measure project budget Vs spend, and record/forecast when and why a project goes over budget
- A product business may measure each ad campaign, and measure conversion rates and ROI for each. Poor performing campaigns could then be dropped
- Automate report generation by implementing a Business Intelligence dashboard like Metabase, Alteryx or Microsoft Power BI
- Run experiments, “If we fix this, we estimate we’ll save £XX,XXX per week” – measure the impact
4. Adding more people just makes things slower
In software, there is an observation called Brook’s law, which is that adding more resource to a project actually further delays it, as it creates extra overhead in terms of communication and collaboration which also decreases the efficiency of those already on the project, leading to a net loss in productivity.
Similar issues can occur when scaling a business, where adding more people creates an organisational wide drop in productivity. Common reasons for this are:
- Lack of process documentation, meaning more mistakes occur, and a high level of time investment from veteran staff required to train newcomers
- Lack of software which enforces the ‘right’ process, allowing mistakes to occur, creating friction in the existing team
- Using non-scalable methods to manage workload, e.g. paper or Excel, which increases in complexity as more people are added to the process
- This can create a negative feedback loop if not addressed. If the people with knowledge trapped in their head leave the business before it is documented, new staff have even less to work with
- Identify key processes, and document them (We have a handy guide to document processes as part of a digital transformation here), allowing others with minimal training to follow them
- Identify business critical knowledge which is only held in people’s heads, document that, and ensure others may now complete this process
- Implement scalable software which enforces the correct process. Do you have key steps, or documentation/information which must be collected? Ensure a user cannot proceed unless they complete this correctly
- Identify and log issues which happen over and over, and then adjust the process/software to prevent these occurring again
5. Manual admin work leads to repeated mistakes
When a process is not enforced via software, it’s possible to deviate from the process, and make mistakes in doing so. Manual repetitive tasks such as data entry or report generation are error prone, and may create mistakes which are hard to spot.
If data is moved around manually, or there is a reliance on data entry, there is likely room for automation.
Common reasons for this are:
- It’s boring!
- We get complacent. As workload increases, less time may be spent per repetitive task just to get through them all quicker. There isn’t the time to be thorough
- Shortcuts are possible because it’s not enforced, “I don’t have the postcode? I’ll just write ‘N/A’”
6. Data is not validated when inputted, leading to 'garbage in, garbage out'
Paper forms and Excel spreadsheets generally have a poor capability to validate the data recorded within them. For example, what is stopping an invalid postcode being recorded, or someone recording a date in the future for a date of birth?
When data is not recorded correctly, this creates friction in several areas:
- If this activity is audited later, especially by a 3rd party. This creates stress, especially if work must be re-done
- This creates issues when reporting on data. If this data itself is low quality, the reports based on this will also be unreliable
- If the data is important, you’ll have to rectify it later on
- Without this enforcement, staff will have their own way of doing things, and the data will be ‘inconsistently inconsistent’, where it’s not even predictable what inconsistencies will occur
- Use software to validate data on input, against your validation criteria. For example, a form which collects email addresses would validate that the field is a valid email address before allowing the form to be saved
- If data is submitted by 3rd parties (e.g. suppliers, customers etc), provide an online portal to allow them to do this securely, and validate the data on input
7. Reacting to surprises, rather than proactively course correcting, & there is no technical strategy/plan/roadmap in place to resolve these issues as they occur
An inability to use data to forecast creates a situation where you’re mostly firefighting rather than tackling issues before they manifest into larger problems. An extreme example of this would be to generate financial reports only at year end, meaning you have no information on revenue/profit until the end of the year.
This can create a negative feedback loop where firefighting is the only thing you have time for, reducing the time spent on long term development which solves the underlying issues. 7 Habits of Highly Effective People details this prioritisation as First things first.
Typical examples here might be a report showing an overspend or a loss after it has occurred, so that it is now not preventable. This means:
- There is increased stress
- The time firefighting this issue reduces the time you may spend on longer term growth
- Unless the underlying issue is resolved (e.g. regular reporting), it will likely happen again
- Firefighting usually requires a larger time investment than minor course corrections, and is normally performed under duress
If this problem is not done, typical issues involve:
- Seeing the same problems occur over and over
- Reduced profitability due to decreased efficiency over time
- A high degree of frustration amongst the team
- Time spent firefighting increases over time
- You will not immortalise these learnings into process/nor software, making it highly likely to reoccur
You may have ideas how you would improve aspects of the business, especially when those surprises which keep reoccurring. It’s important to capture these issues, understand the cost when they occur, and then perform a Root Cause Analysis to understand all the factors which allowed this to happen.
Once this is complete, you will have a priority list (which you can order by Return on Investment if resolved), and an understanding how to churn through these.
- Begin tracking reoccurring problems in a tool like Trello, and quantify the cost per occurrence in time & money, every time it occurs
- Prioritise this list of reoccurring issues, and understand if solutions exist for these in this blog post
8. Duplicate of effort across many systems, and they all say different things
It’s common to use different methods/software to track the various stages involved when you deliver your product/service. E.g., you may use accounts software like Xero to track finance, but use Excel spreadsheets, or project management software to track service delivery.
When this data is moved around manually, it’s common for data entry issues to occur, leading to inconsistencies in reporting between the two. Which do you trust?
This leads to the following:
- Distrust in the data
- Time spent ‘learning the truth’
- Increased stress. You could be looking at a large cash discrepancy, and you need to learn ASAP how that has happened and why, only to learn an invoice was recorded twice by accident
- Friction in the team and increased stress
- Competing, and/or inaccurate reporting
- Document the process so that it is understood how, and why you move data in this way
- Ensure each key step is managed by a competent and fit for purpose piece of software (e.g. Xero for accounting)
- Create automated integrations between the software you use, to ensure that data flows manually, mitigating the need to manually move data
9. Lack of process documentation, not improvement/automation of processes based on documentation
A business naturally starts out with no documentation, and arguably, needs very little in the early stages. As a business scales, lack of documentation will create inefficiency and mistakes which build up over time. This creates inconsistency & confusion as more people are added, and when key people leave and take that knowledge with them.
When there is no documentation, it is also not easy to understand how to automate or make this more efficient. When we are evaluating this from a development point of view, one of our first tasks is to work with the client to document the process for this reason.
Without this, there are several key issues which usually occur:
- It’s hard to hold someone to account when they’ve done something wrong, if it’s not clear what the right way is
- It’s not easy to understand how a process could be improved if it’s not documented, how do you evaluate a process and tweak it for the better?
- Different staff do it in different ways, creating unpredictability
- Onboarding new staff is harder, and they are less likely to be able to work autonomously, as they cannot follow a documented approach
- As you scale, it’s harder to sub-designate your responsibilities as they are probably stored in your head
- It’s harder to understand how to use software or automation to make the process more efficient/effective, as there are no documented processes to evaluate the software against to be sure it caters for the existing process, or an improved version of the process
10. People have their own way of doing things, a process is not enforced through software
When a completely new activity is to be undertaken within a business, it’s reasonable to allow someone stewardship over this, in that you only care about the results, not how the task is completed.
However, when scaling an existing process, or sub designating one, it would be wasteful and messy to not develop a consistent and repeatable process for all to follow.
Typically, when this happens the following problems occur:
- Recurring problems you thought you’d solved are now reappearing, as that knowledge was not documented and is not available to newcomers
- The results are unpredictable
- The unpredictability creates friction and frustration “Why was it done like that?”
- If you output a product/service for your clients, the outputted quality may vary, causing friction with your clients
- If software is not enforcing this process, key steps/deliverables may be accidently missed. g., what would happen if you delivered a service/product to a client without first signing a contract?
- Document the key processes so that it’s understood how and why activities are undertaken
- Enforce the process via software to ensure that the process is followed correctly
11. A physical presence is required to complete certain tasks, whereas theoretically, that could be done remotely (e.g. collecting a wet signature)
COVID-19 is a great example of this. Suddenly, many businesses who theoretically could operate remotely were either forced to do so (albeit with difficultly), or faced increased difficultly operating at a physical location.
If this involves a non-fixed location (e.g. client offices), at best it is inefficient, and at worst, the process is completely blocked as you are not permitted to visit a client’s office.
For one business, we recently worked out with them that visiting client locations with paperwork carried a chunky 6-figure cost over 3 years, whereas it was possible to deliver this automatically and remotely with custom software – a fantastic return on investment for software!
This usually carries several other problems:
- Remote working is likely to become the norm, businesses not allowing this may be at a recruitment disadvantage
- There is a time penalty when travel is involved, if these activities could be done remotely (or better, completely automated), there is likely a high ROI by doing so
- A physical location required may indicate that other risks are present. For example, does the process require access to a physical server or paperwork located in the office? What would happen if these were destroyed in a fire?
- Document the key processes, understanding which elements currently require a fixed location, and redesign to remove a physical location as a requirement
- Identify steps in a process which rely on paper/excel and wet signatures, and understand how these could be replaced
- Where possible, utilise off the shelf software to replace physical alternatives (e.g. Adobe Sign for digital signatures, or Teams and Miro for online consultations)
12. It has not been assessed how much a key process costs in terms of staff time & money, so it is not understood how to prioritise future improvement
Where the cost of key activities are not known, it can not be known the benefit of improving these, nor if the cost is increasing over time. If you intuitively know that a process is inefficient, you will benefit from understanding the true cost to back up your assumption with evidence.
The best way to assess this is to simply add up the time required in hours, and multiply it by your employee’s hourly salary cost, and add in any direct costs with this. Simply multiple this cost with the number of times this occurs per year to understand the yearly cost of this process.
This may surprise you, some manual processes will consume thousands of hours per year, which could be automated, equating to the salary of several people.
In a business of 20 people, we often see that the equivalent of 1-2 roles per year are automatable, allowing those businesses to scale more efficiently and allow current staff to deliver more value with their time.
Without this, the following become apparent:
- You may have lots of ideas on how to improve efficiency, but no measurable way to understand how to do this, or the order in which to tackle these problems
- It’s not known which elements of a process profit are generating. Is an activity costing more than it generates in revenue?
- It is harder to forecast future revenue as you scale. If you want to grow revenue by 50%, what does that mean in terms of required resource, and also net profit?
- Collect data which allows for the evaluation of the cost of sale and the cost of delivery of a service/product
- If possible, collect this in a more granular way, using a time tracking tool like HarvestApp. Understanding the time tasks/projects takes in aggregate allows you to quickly see what the biggest time sinks are
- Use this data to unveil surprises, and assess what would generate the biggest ROI if improved and completely automated
13. Processes/software is 'not easy', and is a source of frustration
It’s usually self-evident when a process is inefficient, it likely has lots of manual steps, and mistakes are made which create frustration across all level of the business. The process may also have lots of work arounds which make sense to people who’ve been in the business for some time, but are strange to newcomers who see it as a strange way to work.
Sometimes it may appear that a particular person is the source of these problems (which may be the case), but the root cause could also be that the process is weak and not documented correctly. This creates differing expectations between yourself as a manager/director, and the person who is executing the process.
The one Minute Manager articulates that “Good performance begins with clear goals and expectations”. When expectations differ, friction occurs.
Common causes for this are:
- No/weak documentation
- There is no documented expectation of what the successful outcome of a process is
- No easy way to measure a KPI, and thus, no easy way to measure success
- Using paper, excel or software which has not been updated for some time to run the process
- There are many work arounds, and the experience when completing the task feel disjointed
- Lots of multi-tasking “I need to open this, and this, then go back to that, then into this” etc
- The software/process was created some time ago, people say “We don’t know what that is/does so we don’t touch it”
- Improve documentation to state for the processes in question, why it is done, what a successful outcome looks like and what the next steps/actions are
- Ensure that KPIs linked to a process are easily exposed/calculated, so that it’s obvious quite quickly if the process has gone off track
- Where there is lots of multi-tasking, assess how to implement software which is capable of handling the whole process, or use automation/integration to connect multiple pieces of software
- Ensure that software is either actively maintained, or replaced if it is no longer fit for purpose (e.g. sage 50 met end of life in 2013, but still used by many organisations)
14. The leadership team/directors are wasting valuable time firefighting or manually piecing together information, e.g. reports in excel
The director’s time is arguably the most valuable and sort after time in the organisation – it’s a commodity which must be protected.
However, when scaling an organisation, you will likely find yourself tackling new sets of problems, or generating different types of reports as you grow.
Because of this, it’s crucial to fix underlying issues to problems, and automate report generation as it becomes known what is useful.
On the reporting front, it’s useful for you to be able to easily ask questions and generate reports without a high manual time penalty. This becomes possible if you connect your key software with Business Intelligence tools such as Microsoft Power BI or Metabase. If reporting is not automated, the following issues generally occur:
- Reports generated have a high time penalty sourcing data
- Manually managing and merging data creates risk of mangling the data, and making the report inaccurate
- If you believe there is an inaccuracy, it can be difficult to know why. You may spend longer understanding what has caused the inaccuracy than it did to create the report
15. You are scaling your team proportionately faster than your customer base/revenue, leading to a reduced net profit over time
Non-revenue generating elements of this are natural and justified, for example, a management structure or an accounts/HR element are required once certain milestones are reached.
However, when assessing the revenue per head of those directly in delivery, if this is decreasing over time it could indicate that the business as a whole is less efficient when discounting the new required business functions.
When this happens, it’s important to assess:
- Is the true cost to deliver the product/service understood? Is it possible to identify directly the causes of the reduced efficiency?
- Are the correct reports/metrics generated automatically and monitored in a way to tackle issues proactively rather than reactively?
- Are the root causes for issues tackled, with permanent solutions created and enforced via software and strong documented process?
- Is automation leveraged correctly?
16. Spot checking is constantly revealing issues, or quality lower than expected. Audits are stressful because confidence in previous work is low
This creates stress as spot checking leads to an exercise of frustratingly seeing the same issues reoccur, and direct reports being held to account on this.
This is an even more stressful issue when you must submit yourself to an external audit (e.g. as a part of a contracted delivery), and they then raise the issues which you must resolve. In this case, not only are you reacting to fix issues, there may also be an element of reputational damage control.
Although other issues may be at play, it’s also worth assessing whether the following are contributing to this:
- Are expected outcomes for a process documented in a way which identifies pitfalls and success factors, so it’s understood what the correct outcome is?
- Are Root Cause Analysis’ performed on reoccurring issues, with fixes identified and implemented for these issues?
- When a root cause is identified, is a change of process made and followed to prevent this from happening?
- Are these changes in process enforced via software, with the correct safeguards in place to prevent harmful deviations in process?
- Is the correct reporting in place in an automated way to ensure your direct reports are able to see for themselves when something is going off track, so they are able to proactively course correct before it’s an issue for you?
17. Customers require a high level of management via phone/email, often with staff responding manually to the same queries across the customer base
If your services/products evolve to become more complex, and you also grow your customer base & staff count, your customer service requirement becomes exponentially more complicated. Providing high quality customer service will become more difficult over time without the capability to adapt to this.
Common issues are:
- An agent is not easily able to see a single source of truth on a customer, containing all of their information and history
- An agent is manually calling/emailing a customer to provide updates, when these could be easily automated
- Key parts of the customer journey are not automated, which create a high manual time requirement for your business (e.g. customer submits information in a Word document, and one of your team manually transcribes that into some other software)
- Customers cannot easily solve their own problems through an online helpdesk
- Customer service management software like ZenDesk or FreshDesk may mitigate this, unless your requirements are more complex and require a very unique process. In such a situation, you’d approach a custom software provider like Wubbleyou to help.
18. Culturally, people within the business prefer to 'do it the way we always have', there is apprehension to exploring or using new technology
Apprehension around changing something which works is understandable, and it’s important to understand and address these concerns. Change creates risk for that particular person and may push them outside of their comfort zone.
It’s important to work with these stakeholders to alleviate their legitimate concerns, and help them buy into an improved way of working.
However, if not addressed, lack of change or continuous improvement leads to stagnation, and stagnation is falling behind if your competition is marching on.
If this involves a core system in your business, this may now form a chokepoint which holds hostage potential improvement across other areas. For example, older businesses may still use Sage 50 as accounting software, which has not been supported since 2013, and is also very difficult to integrate with. Because you can’t integrate with it, you’re likely manually moving data in/out of the software, creating risk and inefficiency.
In reality, migrating to cloud accounting software like Xero or FreeAgent will make everyone’s lives easier, and it means that the integration capability opens automation possibilities which weren’t on the table before.
Common problems caused by this are:
- A mindset of ‘we cannot do that’, vs ‘what if we did that?’
- A fear by staff that increased efficiency might lead to reduced opportunity or redundancy
- Lack of sustained continuous improvement, leading the business being outpaced by competition over time
- Other areas of the organisation which could be improved by automation & efficiency are held hostage by this
- Technology does not keep pace with the growth of the business, causing it to become less efficient over time
- Start with ‘early adopters’ within your business, find the people who are excited and motivated by this positive change, and start by empowering them to achieve it
- Work with the team to understand how this creates win-win situations for the business, and them as people. What is boring/stress for them? Is there cross over between those activities and a positive ROI for the business if changed?
19. Data is 'siloed’, software is not connected so we move data around manually which is slow and error prone
As you scale your business, it’s natural to find software to fulfil particular business functions. For example, you may use Xero for accounting, Microsoft 365 for email & an office suite, and then project management software (or excel) to manage your day to day workflows.
You may then find that ‘nothing talks to each other’, and that your team are spending a lot of time moving this data around manually, creating some of the problems mentioned earlier in this article around this.
It also means that reporting is more difficult, as data must be pulled from several sources to get a complete picture, and generate the reports you require.
Common problems with this are:
- Pressing ahead with new software without assessing how this will work in the longer-term plan creates risk if it needs to be replaced later
- Moving data around manually creates risk and inefficiency, and makes reporting harder
- Zapier is a good off the shelf tool to connect various apps and begin to automate workflows. However, you may notice that this has limitations and may not achieve exactly what you need.
- Further to this, connecting these apps to a business intelligence solution may help reporting requirements, but may also be a complex process.
- Creating a wider digital strategy will help you avoid these issues in the future, as once you’ve set out the problems you want to solve (inline with your wider strategic objectives), it becomes clearer what software you require to solve these problems. It’s then easier to assess this as a part of a wider roadmap, and understand how you want this to all connect in the future. Understanding this will allow you to disqualify software which does not align with this in the future.
- Wubbleyou are integration & automation experts, and are able to assist with this strategy if required.
20. You don't know what you don't know, how do you fix these issues?
Sometimes we aren’t even aware that an issue exists until someone points it out to us, hopefully this article has helped you with that!
Setting out a roadmap and turning this into a technical strategy which supports your business objectives will help unearth the intricate issues which are reducing scalability, that could be solved by technology.
Problems if this is not done:
- Problems/solutions may be short sighted and not consider the longer-term objectives.
- There may be opportunity cost by not solving issues simply because nobody has identified that they exist in the first place
- Hopefully, this blog post has helped a little!
- Engage with a business like us to further unearth problems. A business like ours which is good at what it does, will likely unearth items during a consultation which would generate a positive ROI when resolved
21. There is a vision, but it's not known how to turn that into a technical strategy to achieve the vision
Turning a ‘why’ and a ‘what’ into a ‘how’ can be difficult, especially if it is an area like tech, which is not in your area of expertise.
This may mean that progress is sporadic and inefficient, especially if you have to back track as projects completed in isolation do not work together.
We have detailed how to DIY a digital transformation plan as a white paper
We are also able to assist you directly with this, and work with you to identify problem areas in your business which could generate a positive Return on Investment by developing scalable software to solve these problems to empower customer growth, automation and efficiency.
These issues can be categorised into 4 main areas (detailed in our DIY a digital transformation plan):
- Adoption of technology & automation of processes
- Use of data to drive decision making
- Continuous Digital Improvement
- Process documentation
Levelling up your business in these areas will allow you to resolve problems faster, and increase profitability over time through automation and efficiency.
How many of these resonate with you? Do you feel that some of these are slowing your growth?
We’re here to help! Get in touch to talk these through and discuss how you could solve these problems.