There are two ways to grow your company’s systems
You systemize your company so you can produce some sort of output in a repeatable, scalable way. Without a system the output is produced like a chef who makes great food without following a recipe. But what do you do when you need to grow? By definition, that means you need more output. Say you’re a bakery and you need more cakes. You have a system for making cakes.
Your system (like all systems) has four parts
A trigger (most likely inventory level)
Input (ingredients and equipment)
Transformation (the measuring, mixing, baking etc)
Output (the cakes)
But you need more output (more cakes) and some part of that system is at capacity. What do you do?
You have 2 choices: Bifurcate or Duplicate.
Duplicate means hire another person to run another instance of the same system. Two people making cakes = more cakes. Same inputs and transformation just more of each.
Bifurcate means break the system into subsystems where the output of one is the input to the other. So you have one person doing the baking and the another doing the decorating. The output of the first is a baked but undecorated cake. That’s the input to the second.
Which Way do You Go?
Depends on where your next constraint is likely to be.
If you duplicate you’ll need twice the equipment and possibly need twice the oven space at the same time. And two people with the same skill sets.
If you bifurcate, you’ll need two people with different skills and different sets of equipment. Each subsystem will have different trigger, input and transformation requirements. But you’d have less redundancy in workers if one got sick or was on vacation.
At What Cost?
In addition, each choice might have a different cost structure. You’d need more equipment to duplicate, but if you bifurcate perhaps the baker would be a less skilled/lower cost employee than the decorator.
Obviously this is an oversimplified example. In the real world the calculations would be more complex. (But that’s why you get paid the big bucks.) What you find in many SMBs under say $5 million in revenue is that these systems are not delineated very well. The outputs get produced, but because the “recipe” lives in people’s heads it’s hard to replicate and hard to train new people or promote experienced ones. So the companies are not able to grow.