How to really maximize throughput in your business

Michael White, founder of MashTank | Giving leaders the data and tools they need to chart their team’s success.

To speak more clearly on the subject of real business throughput (unobserved, subjective throughput), allow me to run through a hypothetical scenario first.

You are driving on a four-lane highway when you see red brake lights on the horizon. Everyone across all lanes starts slowing down, gathering and creeping into…ah, a construction zone. Everyone is reduced to one lane, people merge and get impatient and you all creep past the orange colored team, which is probably to feel the irritation in the air.

But finally you see the end is near: one lane becomes two, then three, then four and you all accelerate to make up for lost time. Around you, the highway is much less crowded than before because many are still trapped in the single lane in your rear-view mirror. What is seen as speed, openness and ability is really just an illusion – you can’t really perform better now than if you hadn’t gotten stuck in traffic.

In this situation, although the highway starts and ends with four lanes, transit is only one, because everyone has to jam through that one-lane zone. As a leader of a BI diagnosis and analytics company, I see this exact situation in many companies, regardless of industry, when it comes to their operational processes.

When it comes to operations and optimization, 4-to-1-to-4 is still just 1.

While most teams or stages of operations can have a four-lane throughput, in my experience there is: always a one-lane zone that slows everyone down. The actual throughput of that company, or that operating branch of a company, is just one. Or, if you prefer another metaphor, remember the familiar adage, “A chain is only as strong as its weakest link.”

This is my favorite metaphor for showing the raw capacity of a team (four or more lanes) versus how they operate realistically (one lane) and how almost no company performs at maximum capacity or full potential.

So how do you solve this?

First you measure. There are dozens and dozens of proven operational models that can be applied to your company’s core processes. The core processes keep your business running and can be divided into two groups.

1. Core Customer Delivery Processes

These are the processes that create output that goes directly to the customers. For example, a customer support chat team, a UX team rolling out app updates, a design team creating a Product 2.0 – anything teams work on results in end-user (customer) satisfaction.

2. “Run the Business” Core Processes

These are the processes that are part of the supporting framework for the customer delivery processes. Take, for example, the quarterly financial meetings that determine the capacity for new hires, the retreat that gives the design team a creative boost, the market research that fuels the marketing team, the administrative tasks that HR and payroll perform regularly, the strategy meetings COOs hold with managers and Lake. These are all operations that, before they hit the end user, go through another user: the employees in different teams who help keep the business running.

There are many proven operational models ranging from superstars such as Six Sigma or Slim—both principles of quality control and benchmarking — for the powerful but lesser known Theory of Constraints, which means identifying the most impactful constraint or bottleneck and systematically addressing it until it is eliminated or optimized. Choosing one (or a combination) depends on many factors, such as team size and industry. Think of them as many summarized and proprietary ways of pursuing the same ultimate goal: improving productivity, profitability and/or throughput by looking at core processes and how they can be improved.

There is no one perfect model, and a process will never be 100% controlled by one model, but using no model at all to help organize and execute a core process is a recipe for disaster. It limits what is possible for the operator and the end user and causes the organization to spend more time working on throughput and quality than on the ultimate customer experience.

And as leaders know, anything that takes time away from the ultimate customer experience is a loss of value and profitability.

These operational models can resemble academia out of touch with factory or field operations and reality. But the math applied in these models makes it possible to measure and improve throughput, maximize quality, and free up bandwidth to focus on the customer journey. These models have the power to improve a process through all series of phases, transfers, teams, etc., and when combined with reliable performance data, they can turn missed opportunities and underutilized assets into high-performing systems.

Are you working at full power? Have you applied the right models to your operations to keep your teams productive and happy? Do you have a way to measure so that you can improve over time?

I ask these questions because many talented leaders shy away from tackling something that doesn’t seem measurable. But only by addressing these nebulous issues — such as perceived versus actual throughput — can you begin to discover how to measure and thus improve them. By using proven optimization tactics, you can work with higher capacity, higher productivity, higher profitability and greater team happiness. Business Council is the leading growth and networking organization for entrepreneurs and leaders. Am I eligible?