Growth Through Flow

System Flow: The Key to Sustainable Business Growth

As seasoned business operators, we all experienced times of system dysfunction as well as periods of system flow. System flow (also referred to as business flow) is a state where all processes, resources, and teams work seamlessly together to create consistent and sustainable value. When organizations are in system flow, the “energy” of the business is self-sustaining and can be increased without direct input from the operating team. Efficiency increases, and employees are happier during system flow. However, our businesses are dynamic systems that are exposed to outside forces that can easily push them from flow to dysfunction. Even our noble business goals and objectives can result in an imbalance in our system. It is no wonder that our staff come to fear that “great new initiative” from management. Fortunately, pushing our teams into chaos is not the only way to pursue improvement and growth. Great operators use flow to achieve their goals rather than finding moments of flow between goals. This article will explore how we can accomplish Growth Through Flow.

What Makes an Organization Tick?

Organizations thrive when there is a clear purpose and processes, enabling the team members to utilize resources to obtain the organization's objective. As Jim Collins explains in his book “Good to Great,” the first step is ensuring you have the “right people on the bus”. Once leaders have the right people on the bus, they can move from focusing their energy on motivating employees and removing process friction that prevents the organization from achieving its goals. When team members have bought into the company's vision, they are naturally propelled to create value for the organization. When the system they work in seamlessly allows them to create value, they will receive greater energy from working in the system than the system drains from them. This results in a positive feedback loop, leading team members to have greater capacity and desire to help magnify the business's value creation. Once his positive feedback loop has been created, great operators can capitalize on the excess energy created in the business to obtain growth through flow.

Unused Energy is Destructive

A few weeks ago, my wife was working on a project for a volunteer group she is a part of. The project turned out to be quite successful. Her success led to another idea she wanted to implement in the organization, and she rolled up her sleeves to get to work. However, once it came time to implement the initiative into the organization's operations, the team's leadership wasn’t ready to start making the necessary changes to implement the new idea. This sucked a lot of energy from my wife and quickly turned a positive feedback loop into a negative loop. While there were definitely ways to avoid this wasted effort, the point that I want to focus on is that when an organization's energy is not used, it can have negative consequences for an organization. I have experienced this effect firsthand as someone who has had excess energy that the organization was unable to utilize, and I am also a leader who was not ready to implement the creative energy of my team. Every time resulted in friction that disrupted the team's momentum. Thoughtful leaders set up guardrails that funnel the excess organizational energy into opportunities that the business is capable of and ready to implement.

Capitalizing on Excess Business Energy

The first step to effectively utilizing excess energy in an organization is establishing and communicating a clear purpose to the team. When the team understands the purpose, they can apply the first quick filter; “will activity distract us from our purpose”? If the answer is yes, it is an easy “do not proceed”. If the answer is no or unsure, it is time to move to the next stage gate. While evaluating the opportunities will differ for each organization, the goal is to discover if there is enough excess energy in the organization to build out the opportunity/activity to a point where it can eventually be self-sustaining. For example, a sales team in a state of operational flow becomes energized as they set new sales records for the organization. This results in an energized team that is willing to find/create a new market for the organization. For an operator to capitalize on this excess energy, they want to reduce the amount of energy required to find/create the new market. There are many ways that an operator can do this, including but not limited to setting a clear vision, role optimization (assigning tasks to individuals who are energized/enjoy various activities such as discovery vs implementation), building the infrastructure for good decision-making, etc. Essentially, the leader wants to provide the infrastructure to determine “what to do”, “who should do it”, and “how it should be implemented”. If there are strong systems for determining these answers, more excess energy will be captured within the organization and put to productive use.

Creating Positive Feedback Loops

Great operators understand that there are limitations to the amount of energy and resources that founders/operators and team members can invest in an organization. In the beginning, an operator is the driver of the business. However, once the flywheel starts moving, additional drivers can be added to help propel the organization forward. The operator's goal should be to add enough energy to create the necessary monument in the business and then develop positive feedback loops that can act as additional drivers for the system (we will discuss different types of drivers more in a future article). This is an exciting part of business operations. However, it can also be scary for new operators as they experience for the first time that the organization is its own entity and can be propelled beyond the operator's influence. At this stage, the operator thinks about adding checks and balances to ensure the organization moves in the right direction. It is vital to reduce system friction to create positive feedback loops, as it reduces the energy needed to be self-sustaining. Friction is reduced when the organization is in system flow, which brings us back to the importance of obtaining system flow.

Conclusion

While setting goals that drive growth for an organization is essential for propelling an organization forward, eventually obtaining system flow can have a much greater impact on growth. System Flow results in sustainable excess value, energy, and resources. These excess resources can then be transformed into greater sustainable growth. Team members will be more engaged in value creation as their objectives often are the drivers of rather than management pushing them to work towards goals they have not bought into. Few things are as energizing as seeing the successful implantation of your own ideas. Operating is about creating an environment where flows, and growth can occur organically. Let us know how you create flow in your organization!