CROSSFIRE
Plateaued Performance ? Check For Strategic Lag
By Herman Githinji
Somewhere in Meru , a long time ago , when I was a KBL Rep , there was a powerful and famous businessman in town . His name was Kinoti , but he was commonly known as Chuma Moto , the name of his business .
Kinoti was a prominent wholesaler and distributor of major manufactured products . He was brilliant and full of wit . Key wholesalers , at that time , were few and far apart , and he dominated them all . He grew the business from height to height using his brilliance and business acumen . As the business grew , he needed to open a new branch , which he did . He put his wife there , who now had learned her husband ’ s business skills .
As business and demand continued to grow , more and more companies begged him to distribute their products . To supply the new geographical regions , Kinoti had to open more branches . But something started to give way .
Things were quickly getting out of hand . Before , everything was within their family ’ s hands . The old structure could not hold the new business growth . New branches required off-hand controls , but the technology required for control was beyond Kinotis ’ ability . Even the ability to marry as many wives as the branches got beyond him . The business structures that had made him grow could not hold in the new business level .
The business environment in Meru changed quickly too . A new competition was coming in , and technology was also making it possible for newcomers to open more branches and centralize controls . Kinoti couldn ’ t .
Something fundamentally valuable to the customer also emerged . Retail shops could place orders on the phone , and wholesalers could deliver products the next day . Kinoti ’ s model that had made him great was different . Customers came to the shop , paid , and carried products at their own expense . So , Kinoti ’ s ground was slowly moving , and he remained put .
A time came when Kinoti couldn ’ t compete . He closed all branches and coiled back to what he knew best , controlling everything with his own hands in one shop . Kinoti , like most businesses , failed to build structures to support growth and accommodate changes in his business environment .
What do you do when the pillars and
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Structures become stale when the business environment changes . Competition and new technology may drastically shift the business topography , making the old systems ineffective and stagnant . design you depended on for a long time can no longer hold ? It could be in life or business or even in a sport . Social or business structures that made you grow and succeed could suddenly be untenable . When that happens , the growth stops and then plateaus ; if nothing happens , a downward trend follows .
Most companies may have random business structures that help them grow , but sooner or later , performance plateaus and stalls . But why do such systems become overwhelmed and ineffective ? Firstly , structures are built without the capability to scale up when required . Like Kinotis ’ case , the designs that supported one shop could not be scaled up to support the new branches . Secondly , structures become stale when the business environment changes . Competition and new technology may drastically shift the business topography , making the old systems ineffective and stagnant . Kinoti failed to adapt quickly to the new ordertaking method made possible by mobile phones .
In the construction industry , you can tell the type of building that ’ s coming up just by looking at the structures put in place at the foundation . By the depth of the excavation , the size , and the number of pillars , you can always predict how massive and tall that building will be .
When designing structures to support a business , we need to put core pillars that can hold growth up to a particular known level and those that can be scaled up . From the onset , someone should be able to tell the type and size of the business those structures can support before they get overwhelmed .
6 MAL49 / 22 ISSUE