Business owners who know how to take advantage of growth are those who keep their eyes wide open.
The excitement of recruiting new superstar team members, and learning how to manage those teams, building the right culture, and choosing the right kind of environment, can often distract business owners from noticing the rising the levels of complexity creeping into their business. And if you aren’t paying attention, it can suddenly become difficult to maintain.
In this blog, I highlight a formula that keeps your optics clear, so you can be totally aware of exactly how complex your business is becoming as it grows.
As you can see, even the smallest amount of growth comes with exponential increases in complexity. However, the first step in coping with this is being hyper-aware that it’s happening.
You can only tackle problems when you know the nature and magnitude of the issue. With this formula, you can become aware of the complexity you’re facing, and then we can take a look at how to ensure it doesn’t cripple your business.
Prefer to read rather than watch and listen? No problem – here’s everything I said in the video as text:
What I want to talk about today is a very common misunderstanding which business owners have when they are busy growing their businesses.
The Complexity Ceiling
Generally speaking, when the business is growing there is an increase in the team’s size. And with that increase in team size the complexity increases. And what I have seen very commonly is that business owners hit their complexity ceiling. They’re not able to go beyond a certain growth level, beyond a certain size of the team because there’s just so much to do.
So let’s just take an example. A business starts and there’s only a business owner who is trying to manage everything and do everything and then the business starts doing well.
Another team member comes on board and now there are two team members. The business keeps on doing better such that there are now 4 team members and then say 10 and then 20 and then 40. Now the business owner is thinking that the business size has been doubling in terms of the team members, right? From 2 we have gone to 4 and then obviously from 4 to 10 (so more than double!) then 10 to 20 and so on and so forth.
The team is just doubling, right?
In their mind, it’s just doubling. And while the team size is doubling, it is actually really important for you to truly understand the scale of complexity. The complexity is not doubling. Actually, that complexity is growing exponentially and for you to really understand that, the formula that you need to focus on is:
n x (n – 1) / 2
And what “n” stands for is the number of team members, number of employees that you have in your business, including yourself.
Two-person team = 1 relationship, 20-person team…
OK so let me show you what I mean when I say that the complexity actually increases at an exponential level.
When there is, say, one person, then as you do the calculation the number of relationships which are there in the business is zero, right? It’s just a sole business owner/operator who is managing everything.
Then the size of the team doubles. As you can see, now there is one relationship – because there are two people.
Now let’s say the business is growing and now it has a total of 4 team members. So, 4 x 3 / 2 – you’re looking at 6 relationships. So although the business side has doubled, as you can see the complexity here has gone six times higher!
Quite a bit more than double complexity!
Now imagine the business size has actually gone up to 10, so more than doubled, and here what are we looking at? 10 x 9 / 2 = 45!
Do you see what I’m saying? All of a sudden here it is slightly more than double, but look at what’s happening here. It’s slightly more than seven times, that’s the complexity we ‘re talking about. And imagine if you have 20 team members, we’re really talking about 20 x 19 / 2 – we’re talking about 190 relationships which exist here.
Pay attention to this because it’s quite staggering as far as I’m concerned because when you’re thinking about the growth and saying, yeah, it’s another two team members, but actually the complexity is now six times. We think, “Oh yeah, it’s just another 6 team members,” but look at the number of relationships which are there and you could do this calculation for yourself and for your business.
What’s your team’s complexity?
How many team members do you have in your business, including yourself? Apply this formula and you will truly understand the level of complexity that you’re dealing with.
So, at the end of the day when you feel, “Oh my God there’s so much that I’m doing!” or, “There’s so much I’m trying to deal with,” it’s understandable.
But just understanding the level of complexity is the first step and doing something about it is the second one, which I will talk about later on in a different blog.
But my purpose today is to make you really understand the scale of complexity that you’re dealing with, because for every change to happen in your organization and your business, it has to start with the awareness of the right problem, at the right level.
Need to break through your complexity ceiling?
It is right at the point of bringing on new team members and realising this relationship complexity that business coaching has helped our clients. We can give you systems and tools that will smooth your growth to the next level and ensure you sustain that level.
Book a free sit-down with us. We will find out a bit about your business beforehand, and then at our meeting show you the kinds of strategies we use to help businesses like yours grow.