Operational Excellence and Systems: The Backbone of Scalable Growth

Why Operational Excellence Matters for Scaling

a Small-Medium Enterprise/Business

For CEOs, founders, and senior executives of small and medium-sized businesses (SMEs/SMBs), operational excellence isn't just a buzzword—it's the foundation for sustainable growth. Without efficient systems, even the most promising businesses can struggle under the weight of inefficiencies, miscommunication, and resource waste. Scaling successfully requires streamlining processes, leveraging technology, and building a culture of continuous improvement. As part of our series on The Five Focuses for Agile Growth, let’s explore operational excellence and systems further.

The Cost of Inefficiency in Growing Businesses

Inefficient operations can drain an SME’s profitability and limit its ability to scale. According to a McKinsey report, businesses that prioritize operational excellence improve productivity by 20-30%, leading to higher profits and better customer satisfaction. For smaller businesses, where resources are tighter, these efficiencies can make or break long-term success. Here’s a couple of examples:

BrewDog, a craft beer company founded in Scotland in 2007, started as a small business with two employees brewing beer in a garage. Today, it has grown into a global craft beer brand with over 100 bars worldwide. Their ability to scale wasn’t just due to great beer—it was their commitment to operational excellence that enabled them to grow without losing quality.

Take McDonald's, for example, who in 1948 took a risk by streamlining their operations and introducing their Speedee Service System featuring 15 cent hamburgers. The company’s ability to scale globally isn’t just due to its brand—it’s built on exceptional operational systems. From standardized cooking procedures to supply chain management and franchisee training, McDonald's ensures that a customer can walk into any location and receive the same experience. By focusing on efficiency and consistency, McDonald's has built a billion-dollar empire that thrives on well-executed systems.

Common Operational Challenges for SMEs/SMBs

1.Over-Reliance on Manual Processes – Many SMEs operate with outdated methods, increasing errors and inefficiencies. For example, many SMEs start with manual, spreadsheet-driven operations. While this works for small teams, it becomes a bottleneck as you grow. Whether it’s inventory tracking, financial reporting, or customer management, relying on human input increases the risk of errors and inefficiencies.

2.Fragmented Systems – Disconnected tools and software slow down operations and lead to data silos. SMEs often outgrow their initial software tools, leading to fragmented systems that don’t communicate well. Different teams may use separate accounting, project management, and sales tools, causing data silos and inefficiencies.

3.Resistance to Change – Employees and leadership often hesitate to adopt new processes. Many small and mid-sized businesses operate on the principle of "we've always done it this way." Employees (and even leaders) resist new systems due to a lack of training, fear of technology, or concerns about job security.

4.Scaling Too Quickly – Growth without scalable systems can overwhelm resources and teams. Many SMEs experience growth spurts—whether due to a new product launch, a big client win, or market demand. However, without proper systems, rapid scaling can overwhelm teams and break internal processes.

5.Lack of Process Documentation – Without clear SOPs, knowledge loss occurs as teams grow and change. As SMEs grow, lack of documented processes leads to inconsistencies in customer service, product quality, and internal operations. Without SOPs, new employees struggle to onboard efficiently, and existing teams work with tribal knowledge.

Reflective Questions for CEOs and Founders

• Are your current processes scalable for the next stage of growth?

• Which repetitive tasks could be automated to free up leadership and staff time?

• How clear and accessible are your workflows to new and existing employees?

• What bottlenecks are currently slowing down your operations?

  
  

Actionable Steps to Enhance Operational Excellence

1. Audit Your Systems

Begin with a comprehensive review of existing workflows, identifying inefficiencies and areas for improvement. Engage employees at all levels to gain insights into day-to-day operational bottlenecks.

2. Invest in the Right Technology

SMEs should leverage tools that improve communication, automation, and data analysis. Consider:

• CRM Systems (e.g., HubSpot, Zoho) for customer management.

• Project Management Tools (e.g., Asana, Trello) for team collaboration.

• Accounting Software (e.g., QuickBooks, Xero) for financial tracking.

  
  

3. Standardize and Document Processes

Developing Standard Operating Procedures (SOPs) ensures consistency and efficiency. SMEs with well-documented processes onboard employees faster and reduce operational disruptions.

➡️ Create SOPs for Critical Processes: Document how tasks should be done, who is responsible, and expected outcomes.

➡️ Use Video Training & Checklists: Tools like Loom, Trainual, or Notion can help standardize knowledge-sharing.

➡️ Regularly Update SOPs: Assign someone to review and refine SOPs quarterly as your business evolves.

4. Train Your Team

Operational excellence isn’t just about systems—it’s about people. Provide ongoing training so employees can effectively use new tools and follow standardized processes.

➡️ Involve Employees in the Change Process: Get buy-in by explaining why the change is happening and how it benefits them.

➡️ Provide Hands-On Training: Offer workshops and create step-by-step guides to ease the transition.

➡️ Introduce Changes Gradually: Implement new systems in phases rather than all at once to reduce overwhelm.

5. Monitor and Continuously Improve

Establish Key Performance Indicators (KPIs) such as process completion times, customer satisfaction, and cost savings. Use data-driven decision-making to refine and improve operations over time.

Real-World Example: Implementing Systems for Growth

Here’s how BrewDog used systems and processes to scale:

✅ Standardized Brewing Process: To maintain quality across multiple brewing facilities, BrewDog implemented detailed SOPs (Standard Operating Procedures) for brewing, packaging, and quality control.

✅ Automated Inventory Management: As demand grew, they introduced an automated supply chain system to track ingredients, production, and distribution, ensuring they never ran out of stock while keeping waste minimal.

✅ Tech-Enabled Sales & Marketing: They leveraged e-commerce and direct-to-consumer sales early on, using CRM tools to track customer data and optimize their marketing efforts.

✅ Scaling Culture & Training: To maintain their brand identity while opening new locations, BrewDog developed structured employee training programs so every bar followed the same customer service and beer-handling standards.

📌 Lesson for SMEs/SMBs: Even small businesses can scale rapidly when they implement repeatable systems and automate processes. If BrewDog had relied on manual tracking and informal processes, they wouldn’t have been able to expand efficiently without compromising quality.

Exercises for CEOs and Leadership Teams

Process Mapping Exercise

Gather your executive team and outline the workflows for your most critical operations. Identify inefficiencies and brainstorm solutions.

Time-Tracking Challenge

Have your leadership team track their activities for a week. Analyze the data to pinpoint time-wasters and opportunities for automation.

Scenario Testing

Simulate a scaling scenario—like doubling your customer base—and test whether your current systems could handle the load. Identify weak points and solutions before rapid growth exposes them.

Key Takeaway for CEOs & Founders of SMEs

• Operational excellence starts at the top—if leadership isn’t driving it, it won’t happen.

• Investing in systems early prevents growth bottlenecks later.

• A scalable business needs both the right technology and a culture of continuous improvement.

Operational excellence isn’t a one-time initiative—it’s an ongoing commitment. By creating systems that evolve with your business, you lay the groundwork for scalable, sustainable growth. Start today by identifying one process to improve and build momentum from there.

📌 Take Action Today: Pick one process in your business and improve it this month. Small improvements compound into massive growth over time.

Jerome Dickey, MA (Leadership), PCC