Growing Smart (Part II)

Posted on | May 17, 2010 | No Comments

LIMITING CONSTRAINTS

In the beginning, every start up business has an endless number of hurdles that it must overcome in order to survive.  But as growth becomes a reality, and management is able to look out beyond the next 30 days, there are always a few issues that stand out as the biggest limiting factors between current reality and true success.  There are always a few challenges that cause management to say, “We will only be successful in achieving this plan, if we do these few things well.”  These few things are what I call a company’s “limiting constraints.” 

Depending on the company, limiting constraints can include anything from finding the right people, to forming the right partnerships, to finding a source of capital.  Every company’s limiting constraints are unique based on what they are trying to achieve, who is on the team, and the circumstances in which they are operating. 

One of the most important responsibilities for any CEO is to take the time to properly identify his or her company’s limiting constraints.  A more important responsibility, and often more difficult challenge, is to make sure the company’s resources are allocated in such a way as address those limiting constraints.

While this seems fairly simple on paper, it almost always requires incredible vigilance, persistence, and, ultimately, forced behavior.  The reason is simple:  a company’s limiting constraints often represent the most difficult challenges to overcome.  It is probably one of the reasons they are on the list in the first place.  The natural tendency of people within an organization is focus their time and attention where they feel they can be successful.  If they are more likely to be successful within their own silo, then they are less likely to wander into the glare of the big company challenges.  

One way for a CEO to insure the necessary focus is to develop an organizational structure and budget that reflect corporate priorities. High level talent and a reporting hierarchy that prioritize the limiting constraints is a good start.  In addition, individual objectives should create incentive and accountability towards achieving well defined goals.   Finally, clear out the crap.  Remember, as CEO, it is just as important to take stuff off of people’s plates as it is to delegate responsibility.

Only by blocking out the noise and creating a focused organization will you be able to truly attack your limiting constraints.  And only by overcoming those limiting constraints will you be able to the achieve the long-term success that looks so good in today’s Excel spreadsheet.

Category: Board of Directors, Venture Capital

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