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Monday, June 15, 2009

Organization: Can you do more with less?

Don't let money or panic tempt you to lose the opportunity to do things more efficiently.
With new tasks surfacing every day, entrepreneurs may be tempted to just add bodies. However, more bodies means more managing. Someone has to train and manage each new recruit. Do you have time for that? Less time spent training new employees means more time ensuring that the current employees are able to execute the business model successfully. Many founders make this mistake by prematurely building out their sales force rather than ensuring that a small sales force can successfully turn leads into profitable sales. Instead of adding significant burn and an entire branch to your org chart, look for ways to use your current staff to train and utilize people outside of your organization. Like the Gordian Knot, the most complex problems often demand the simplest of solutions.
Rather than add headcount, try to do more with less like Andrew Smith, CEO of Advanced Transit Dynamics. When looking into adjacent markets, Andrew asked his engineers how long it would take them to customize their current product for a new customer with unique needs. They responded, "At least six man months." Andrew was faced with a dilemma. Should he hire a new engineering resource to customize the product or pull an engineer away from his current work for six months to serve this customer? Backed up against the wall, Andrew asked a simple but clever question: Could the current design be simplified to make it more universal? The initial tests came back positive and shortly thereafter the problem was solved. With the current product streamlined for new customers, the firms existing engineers could focus on adding new products to the pipeline.
Performance Management Self-Assessment:
Can you leverage resources outside of your organization?
Can you solve a complex problem by making things simpler?
Where are your labor costs rising fastest? Is that sustainable?
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