The concept of bottlenecks is useful in business and comes from production and project management. Bottlenecks occur when a process has only a limited amount of capacity, and this limitation causes the overall chain of production to have a lower capability. Picture a factory that can produce 100 pens in a day. The materials must go through assembly process A, then B, and then C to make a pen. Suppose step A can produce 100 pens in a day, B does as well, but C can only handle 90. Process C becomes the bottleneck in this scenario, and until more capacity is added to that machine or more people are added to that team, the entire factory will eventually only be able to produce 90 pens in a day.
Bottlenecks in Companies
Bottlenecks can also happen in companies, though they may be harder to detect compared to a linear process like manufacturing. I have seen it in different instances in my company, Celaque. When a person has too much work because someone on the team left or that specific area of business is growing, this person’s overwhelming workload can delay the overall workflow for all the teams involved. This member of your team will not have enough room to address projects or may not be able to operate as he or she would typically be able to and starts to turn in the work late to the next person, slowing down the entire chain of operation.
I have also been a bottleneck at different times in the company. When we were operating in a simple structure (see “Your Company’s Structure and How to Establish the Best Organization”), I had to oversee everything that happened in the company. I approved every expense and supervised all transactions. I could do that initially because, during that time, we were much smaller.
As the company started growing, I realized I was slowing the operations down. If I did not have the time to review a project or a transaction, it would have to wait. The company needed to move at a faster speed, but I could not keep up because the work had become too much. That was when we started to transition into a functional configuration in which each manager is responsible for his or her area. We have different departments, including Finance, Corporate, and Properties.
Each of the managers responds for his or her area and manages that team. I only get involved in operations when we need to solve a problem or approve a high-level transaction. I also like to take an active role in our innovations. Even though I am no longer the bottleneck, I still want to increase the capabilities within the firm because of our growth.
Managing the Teams
When I spot a bottleneck, I first try to understand it. I rule out other possible reasons for the slow-down, such as a process that is unnecessarily convoluted, or the need to move a role that might fit better in a different part of the company. If this is not the case, then I look at the workload.
I find that in a growing company, bottlenecks crop up often. You may be operating at what a year ago would have been high capacity, but now it is no longer enough. Frequently, there is too much work. If the amount of work is enough that it makes sense to hire a new person, we do. However, there may be bottlenecks everywhere in a growing company, and then it is time to increase all the company’s capabilities.
Other times, the workload might not justify a new hire. If that is the case, we try to figure out if a different department can take over the responsibilities or if we can move workaround. In some cases, we prioritize the most critical work and defer projects that are not urgent. Finally, sometimes, you may not have the budget or the resources to get rid of the bottleneck, and you just have to wait until you are ready.
By default, where there is growth, bottlenecks will crop up. What is essential is to identify the problem and to keep trying to find ways to address it so that the company can move forward and keep growing.