1 minute read
Business, Together
THE CEILING OF COMPLEXITY
As businesses experience growth, it helps to change the mindset, especially if staff and owners alike are having growing pains.
When we develop a business, we expect returns will go up. Often, in reality, returns diminish as a company gets bigger. We refer to these stages as the ‘ceiling of complexity’.
Generally, when a company grows, traditional work practices will only suit up to a point. For example, a business may go through a significant growth phase, with everyone working harder and harder to deliver. After a few months, people start experiencing burnout – the input from the team and owners is no longer sustainable. A crisis occurs, and the leadership team decides to go back to working an acceptable number of hours per week. The business keeps growing but the return drops off.
To get past the ceiling, we need to find a breakthrough – something that changes how we do business and enables us to continue to grow while still getting the return that we desire.
In this example, it could be a form of leverage, a systemisation that enables us to work smarter and not harder. Or it could mean reviewing a pricing structure.
The business may get through this growth pain and reach a new one as it continues to develop. The key is to be aware that the company as it’s currently run cannot necessarily sustain prolonged growth.
There are always ceilings, and there is always another layer of complexity needing to be broken through. We must explore what is occurring in the business that is holding us back from desired returns.
Roylance Watson is a chartered accountant and associate at Vazey Child Chartered Accountants in Hamilton. Email: roylancew@vazeychild.co.nz Phone: (07) 838 5988 Website: vazeychild.co.nz
