Platt Perspective on Business and Technology

Building a business for resilience 5 – growth-emergent bottlenecks and smoothly managing scalability 1

Posted in strategy and planning by Timothy Platt on October 1, 2015

This is my fifth installment to a series on building flexibility and resiliency into a business in its routine day-to-day decisions and follow-through, so it can more adaptively anticipate and respond to an ongoing low-level but with time, significant flow of change and its cumulative consequences, that every business faces in its normal course of operation (see Business Strategy and Operations – 3, postings 542 and loosely following for Parts 1-4.)

I have been discussing business bottlenecks over the course of the last several installments to this series, and how they can arise, and both from outside of and from within a business. But I have primarily discussed these resource allocation, delivery and shipping, and related problems without regard to the stage of development of the businesses involved, and without consideration of business growth per se or of building for smooth and ongoing-effective scalability. I turn here in this installment to at least begin to add these factors into this overall series discussion. And I begin doing so from the fundamentals and from a lean and agile business model perspective.

• A lean and agile business is not simply an organization with a limited and simplified operational and strategic structure. It is one that has precisely the process and systems resources that it would need in order to meet its core value creating and sustaining goals, and without any less-relevant and dispensable complications.

It might be argued that an optimally efficient lean and agile business would essentially never encounter bottlenecks of the type I have been discussing here, and particularly in Part 3 and Part 4 – at least where these problems would arise entirely within that business. That, at least is the ideal. Such a system might assiduously seek to trim back the non-essentials in its operational processes and procedures, and in its business practices. But it would hold in place and maintain all of the processes and procedures and the understanding of priorities needed for its effectively addressing at least all of the more readily predictable and expectable contingencies that it might encounter. But no business, and in fact no organization of any type is or can be perfect, and even when operating in a stable and fundamentally predictable context and when not seeking to grow or expand. And along with addressing more internal considerations here it is also necessary to acknowledge that contexts external to the business change, and even unpredictably – and at unpredictable times and in unexpected directions, where stability had been assumed. A key point in all of this, is that a business and its managers and staff can never have perfect knowledge or communications and cannot reasonably expect to.

Effective scalability and the striving for scalability best practices include within them some of the most complex long-term challenges that a business can face.

• Long-term scalability as considered over a significant span of time for a business, means being able to effectively address a progression of new challenges
• That only successively arise as a business reaches a point in its development where the issues that they raise begin to take on meaning.
• And planning for effective long-term scalability means systematically building for robustness in the face of imperfect knowledge and of delayed and challenged communications.

I refer at this point in this posting, and in this series to an earlier and I add much longer series that I wrote to this blog, that still only briefly addresses a few of the issues that scalability brings forth: Moving Past Early Stage and the Challenge of Scalability (see Startups and Early Stage Businesses, postings 96 and loosely following for its Parts 1-35.) I initially posted that series in that directory as I see effective scalability as a long-term success requirement that would best be planned and built towards from the very beginning. But its basic issues, and in fact much of that series applies to more mature and developed businesses too.

• Effective scalability is an iterative process, and given the inevitable unexpected, it is also in practice the fruit of an ongoing iterative learning curve process too – where some lessons might be more generic and commonly faced but many are going to be more idiosyncratic. and individual to that specific business in its better addressing its specific needs and its specific context details.

Up to here I have been discussing all of this, at least in this posting, in fairly abstract terms. I am going to continue this discussion in a next series installment where I will focus in on purchases and resource acquisition in a business, and starting from early in its startup stage through to when it has to manage these issues as a large and diverse, organizationally mature business. And this means addressing the purchasing and acquisition process itself but this of necessity also means addressing business finance, and budgeting and payments for goods and services received.

I will, as just noted, focus on this one functionally interconnected process area of a business and its overall operations. But I note in order to put that into a more proper context, that any business that significantly scales up will come to see pressing need for fundamental process expansion and change, and fundamental reconsideration of the assumptions that underlie them in essentially every area and aspect of its operations, and of its strategy too and at least as that connects to and systematically organizes operations.

Meanwhile, you can find this and related postings at Business Strategy and Operations – 3 and also at Page 1 and Page 2 of that directory.

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