Operational excellence SLAYS

Sam Chakraborty
Andreas Farge
March 5, 2024

SLAYS framework (Stay Lean As You Scale)

Scaling a business is an exciting journey, but it comes with the risk of losing key factors that contributed to its initial success. As companies grow, there's a tendency to become less detail oriented, less cost conscious, and more complacent. However, maintaining a laser focus on these aspects is crucial for sustainable, profitable growth. This article explores how businesses can scale efficiently while staying true to their core operational principles.

 

Maintain a detail-oriented approach

As your company expands, maintaining a detail-oriented approach is crucial. This means keeping sight of the granular aspects of your operations, customer service, and product quality. Implementing robust systems and processes that scale with your business is essential to margin optimization. Regular reviews can ensure that these systems are consistently applied and that the output quality remains high. Have frequent touchpoints with direct reports and others that can materially impact your cost structure and hold them accountable for results.

Cost consciousness at scale

Cost consciousness should continue to be top of mind as your business grows. It arguably becomes more critical as the stakes increase through top-line growth. To prevent costs from spiraling:

  1. Implement an apprenticeship model. As an entrepreneur or business line leader, spending more time with customers and employees leads to less frequency in reviewing KPIs. Make sure to identify someone who will allow you to operate at your highest and best use with customers and employees without sacrificing margin. Make sure to hold your apprentice accountable for results.
  2. Do not plan for sunk costs. There is a tendency to use the sunk cost concept as an excuse just to move forward and not look back. Remember: All sunk costs are fixed costs, but not all fixed costs are sunk costs. Refusing to deviate from original plans when those original plans do not come to fruition brings forth the sunk cost fallacy. The sunk cost fallacy causes irrational decision-making, leading to an unnecessarily expensive cost structure.
  3. Encourage a culture of cost awareness. Create a culture where every team member is aware of costs and is empowered to suggest improvements. As a leader, remember that you must lead by example. Legendary management consultant Peter Drucker is credited with the phrase: “Culture eats strategy for breakfast.” While not dismissing the criticality of strategy, a certain company culture needs to be present to embrace strategy. Implementing operational excellence programs based on approaches such as Lean Six Sigma can help in this endeavor. As your company grows and executes on its strategy, ensuring a cost-conscious culture is in place goes a long way.

Avoid complacency

Complacency can be the Achilles heel of a growing business. To combat this, foster a culture of Kaizen. The Kaizen philosophy, which focuses on continuous, incremental improvement, is a powerful tool for businesses aiming to scale without losing their operational edge. Kaizen encourages all employees to contribute ideas for improvement, fostering a collective responsibility for the company's success. By implementing Kaizen, you can ensure that your business continuously evolves and adapts, improving efficiency, reducing waste, and enhancing quality in every aspect of the operation.

So what?

Scaling a business doesn't mean losing cost consciousness or attention to detail, nor does it mean being complacent. By focusing on the principles outlined in this article and implementing continuous improvement methodologies like Kaizen, companies can grow without compromising efficiency and quality.

Our team can help ensure your company SLAYS! Contact us to see how we can help.

Sam Chakraborty
Managing Director
schakraborty@socorropartners.com
+1.917.914.2784
Andreas Farge
Manager
afarge@socorropartners.com
+1.305.703.9834
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