What Entrepreneurs Can Learn From Amazon. Part 4 : Don’t build bigger teams. Build processes and systems that scale.

The fourth in my six-part series where I dive into the most valuable things I learned after several years at Amazon, and what this can teach entrepreneurs, CEOs, start-ups and new businesses.

Part 4: Don’t build bigger teams. Build processes and systems that scale.

Following on from my previous post on Root Cause Analysis, I want to talk about what I’ve learned about the value of building a process that scales versus more headcount.

The first thing I want to do is bust a myth you might have about a business the size of Amazon. Yes, it’s big, mammoth, a behemoth. That takes a lot of people which is true. However, most teams within Amazon are lean. Really lean. There are a few reasons for this (the ongoing focus the business has on frugality for example), but a key one is the resistance to using headcount instead of implementing a process or system for the long-term. Can this be frustrating and time consuming? Hell yes. Does it work all the time? Hell no. However, understanding that the work of an individual isn’t scalable (even with the best will in the world and all the hours in a day) has given me a greater ability to determine when we should increase headcount and when we need to fix the root cause of a problem. The long-term benefit of fixing your systems and processes is going to better set you up for long-term success and that will make you truly scalable.

1) Do a root cause analysis first.

If you feel you need to increase headcount, do the Five Whys to see if that’s definitely what you need. Be honest.

2) Think about what’s scalable.

The harsh reality is that continuing to put more money into your payroll without spending time on building solutions isn’t going to set you up for long-term success. If you want to grow quickly, get the things in place which enable you to do that efficiently. Increasing headcount at a rapid rate could leave you with a big commitment on your P&L if your growth doesn’t match it.

3) Assess the impact your processes are having on efficiency.

If you think you need another person (or 10) in the team because the workload has increased, what systems aren’t keeping up? What things are things taking too long? If your team of 1 is spending 50% of their time on manual processes, your best solution is to fix that process first. Otherwise you hire someone else and sure enough you now have two people spending 50% of their time on things which could be automated, instead of 100% of their time driving your business forward.

4) Think clearly about where you need headcount.

If you don’t have anyone who can turn time and attention to fixing the inefficiencies, maybe that’s where you need to allocate headcount. The long-term benefit of hiring a person or a team focused on making system improvements is going to be greater than hiring people to undertake the manual work.

NB: This all doesn’t mean you don’t need to grow your team at all – when you’re growing, and growing fast, of course you’re going to need more good people on board. This is about focusing on what is going to be of the highest value to you.

Strategic thinker. Brand builder. Creator. Collaborator. Working with start-ups and entrepreneurs to build brands, create marketing plans and find their point of difference. Get in touch to find out how I can help your brilliant ideas meet their potential.

lpaton.com | lauren@lpaton.com