Note: If you didn’t read my previous post on Growth Accelerators, you may want to read that first and then come back here to read about constraint eliminators.
That said, my question to you today is simple.
“Why isn’t your business two times (or five times or ten times or fifty times or a thousand times) your current size?
The answer is, “Because you don’t currently have the capacity to be that larger size (whatever that multiple that you want to be is). In other words, your business is the size it is because of who you are and because of the capacity of your business (in terms of people, capabilities, knowledge, resources, finances, technology, systems, connections, etc.).
Or to put it another way, you could be leading a bigger, better, faster and more profitable business (or organization), but you can’t until you deal with what’s keeping you at your current capacity level—which are your constraints.
I. What Is Constraint Theory and Why Care?
Constraint Theory (in laymen’s terms) is a management theorem popularized by Eliyahu M. Goldratt in his 1984 book simply entitled, “The Goal.” The basic idea is similar to the old adage, “An organization is only as strong as its weakest link.” In other words, there is one constraint above every other one than holds everything else back from achieving its (the organization’s) goal.
If you can identify and then reduce the greatest constraint you can, by definition, have the greatest impact on helping your business achieve its goal.
So how can Constraint Theory help you? By helping you realize that if you want to grow your business faster, you can’t just focus on growth accelerators. There is a reason why you’re stuck where you are. So, if you just focus on growth accelerators, the reality is you won’t get as far as you’d like because until you eliminate or reduce the effects of your current constraints, your constraints will hold you back—which leads us to our discussion today about constraint eliminators.
II. What Are Constraint Eliminators?
Whenever I work with businesses these days on constructing their strategic or growth plans, I always encourage them to pick their top three to five constraints that they want to eliminate/reduce. And then we turn them into a constraint eliminator (the positive side of the constraint).
For example, I’ve worked with a number of companies where they had a core system (could be a CRM system or an accounting system, etc.) that couldn’t produce the kind of data they needed for marketing and selling purposes, or that wasted too much staff time, or that negatively impacted customer service, or that couldn’t deliver the kind of data the executive team needed for decision-making, etc. In these cases, replacing the “old” core system with a “new” core system that could produce the kind of data needed, would be a constraint eliminator (i.e. it eliminates a constraint)
Or, I’ve worked with a number of businesses where analysis paralysis rules the day and nothing gets done (or at least not within the first 90-180 days :-). Those businesses can come up with all kinds of ideas for growth accelerators, but until they adopt a mindset and practice of speed, none of those ideas will ever come to fruition. In this case, the constraint eliminator would be, “We will be known for our speed of execution.”
I’ve also worked with a number of companies where the owner or top executives were doing way too much of their own admin work. This makes no sense. Why would you want a highly paid executive doing work that someone at a much lower dollar rate could be doing? Having a business owner who “can’t find time to work on their business” or a service professional (like an attorney) who can’t find time to do “business development” because they’re doing admin work is a huge constraint. In these cases, hiring an admin. assistant (or multiple assistants) would be a constraint eliminator.
One last example. I’ve also worked with a lot of business where everything is random and “by the seat of their pants.” Now, while that might work when a company is made up of one or two people, it’s not so great at 10 or 30 or 100. An “unsystemized” or random business is a major constraint. In this case, a constraint eliminator might be, “Each department will systematize at least 30 workflows this year.”
Whether you or I like it or not, all of the above is true. You could be leading a business that is five, ten, or twenty times larger that you currently are. But you can’t, until you deal with what’s holding your business back (i.e. your constraints).
So, what are the top three to five constraints that you need to eliminate (or significantly reduce) over the next twelve months?
Once you pick your top three to five, keep those in front of you until they’re reduced or eliminated. It does you no good to identify them without doing something about them. So write them into your plan and then eliminate them ASAP!
To your accelerated success!
P.S. And if you haven’t picked up my course entitled, “Double It: How to Create a Killer Growth Plan to Double Your Business in the Next 6, 12 or 24 Months.” you’ll definitely want to do so immediately. Why? Because it’s the ultimate growth planning tool that actually walks you through the entire process from start to finish (plus the Double It course includes over four hours of video and audio, handbooks, 23+ templates and samples, a Q&A session and a copy of my Make it Remarkable talk). What a deal!