With a title like that, you may be asking, “Is this going to be an adventure story?”
Well, yes – and no. The kind of Avalanche I’m talking about doesn’t involve snow; it’s part of the life cycle of your business, but it can be nearly as overwhelming if you’re not ready for it.
You’ve started a company, gone through the growing pains, and you’ve enjoyed a boom as your product or service took off – a boom I call the Tornado. Things have moved very fast, and you’ve scaled up your business in a hurry trying to keep ahead of the whirlwind and turn product out. Everything’s being done on the fly, from staffing up to managing your operations, and at times it seems your whole day is spent putting out fires. This is typically the point at which your Tornado recedes – and you’re hit with the Avalanche. How can you tell when you hit this transition point?
- You’ll have huge revenue, while margins are lower than expected and falling.
- In the back office, you’ve got too many people doing too many things manually, over and over again. Cleaned-up, scalable automation processes have not been applied.
- Productivity is the big problem. When the production line can’t meet quotas, you end up with production outages. Meanwhile, new lines cannot come online fast enough.
- You’re also having outages in communication because your IT can’t keep up either. It wasn’t built to scale this big.
- You’re losing employees to burnout – because they want their lives back.
When it comes to cycles, though, it’s never all bad news. There’s always some good news that goes along with every phase, even the ones that seem the bleakest.
This is your opportunity to transform yourselves into something new (something better, smarter, faster for the next phase of your life as a company). The deceleration point is a call to stop and take a close look at your company. Now that you’re no longer in the Tornado, you have time to step back a little, and that will allow you to use this phase of the cycle to your advantage. This is your chance to reevaluate the technology that’s been held together with baling wire and duct tape for months while you made it through the Tornado.
But don’t just focus on the technology. There’s no sense in throwing money at technology until you figure out your people and your processes. Look at your staff and determine how much you really need now. You’ll need to ask yourself these questions:
- Which staff may need to be cut to get your productivity back?
- Do you have people doing the right things?
- Should you automate some roles and have people do productive things?
- How are you going to fix your processes so that they’ll be scalable the next time you hit a Tornado?
I worked with an oil company, Devon Energy, as they went through their Avalanche phase – and used it to remake themselves in a way that allowed them to move forward. They merged with Ocean Energy, using the merger as an opportunity to take on a company-wide transformation project across every process.
The two companies were able to blend the best of both companies. They took people from both companies from different departments, both operations and administration. At the same time, they found the best practices from both companies that would best serve the new company going forward. In the end, they had some people from Ocean, some from Devon, and some new people they brought in from outside both companies. They also used processes from both companies, streamlined to work for the new and much larger Devon, and they worked with consultants to develop their best practices. They made sure to make all their new processes scalable, so that when they had their next growth spurt, they’d be ready.
It was a long, arduous process that took a lot of work, a lot of time, and a lot of leadership in organizational change. The company was in a whole new world, and that’s always hard for people. Human beings don’t like change. They like to do things the way they’ve always done them. But Devon Energy took the time to do it right.
That kind of creative thinking can help your company to survive the Avalanche too, and get you back on track and ready for the next phase in the business cycle.
Don’t dig out from the Avalanche alone. Contact me to get started with a review of your company’s situation.