As a founder or senior business leader, one of the toughest questions you face is: where should I be focusing my time and resources? With so many moving parts, it’s easy to get lost One effective way to tackle this challenge is to look at how value flows through your business from start to finish. A plumbing analogy can help visualise this process and identify where your attention is most needed.
The Flow of Value: A Plumbing Analogy
Think of your business as a series of pipes and tanks that transport water (value). At the top is a full storage tank (A), representing your sales and marketing. This indicates a steady stream of orders coming in. However, for the value to reach its destination—the bucket (H), where you collect revenue or deliver services—it must pass through other areas of the business (B, C, and D).
Each pipe represents a department or process, and their size symbolizes capacity. The problem arises when one section, such as D, becomes constricted. This bottleneck slows down the flow of value, even if everything upstream is working well.
Where Is the Bottleneck?
For example, an events company had a strong sales pipeline (A), and orders moved to planning teams (B and C). However, site planning (D) faced logistical issues with partners, causing delays. As a result, other departments (E and F) couldn’t do their work on time, affecting visitor ticket sales. Despite strong exhibitor sales, revenue trickled into the bucket because of the bottleneck at D.
What Should You Do?
Many leaders instinctively invest more in what’s already working, such as increasing sales or pushing downstream teams to work harder. But the real issue is the bottleneck at D. Leadership
needs to focus on resolving these pinch points, whether by revisiting policies, adjusting goals, or reallocating resources to ensure value flows smoothly through the business.
Mapping Your Own Flow
If this analogy resonates, try mapping out your business. Identify where the flow of value slows—whether in sales, production, finance, or delivery—and direct your efforts there. By focusing on the bottlenecks, you’ll see a greater impact than just improving areas that are already running smoothly.
Key Takeaways:
- Don’t ignore the bottlenecks: Even a small blockage can slow the entire flow of value.
- Ensure the thin pipes are full: Spare capacity here negatively affects the next stage of the process.
- Don’t invest in what’s already working smoothly if there’s a blockage down the line that’s preventing value from reaching its destination.
Join us for the “Operational Efficiency” session in the Help to Grow program to learn more about mapping your value flow effectively. https://kingstonuniversitybusinesstraining.com/
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