There is a version of business growth that looks great on paper. Your team is expanding while income is climbing. And yet somehow, at the end of every quarter, the numbers don't quite reflect all that activity. Margins are thinner than expected. The owner is working eighty-hour weeks. Something is wrong, but what is it?
In most cases, the problem is foundational. Your company is operating at high speed on a rocky foundation, with few (if any) systems in place. Because of this, you are dumping money into a crack in your company’s foundation, and those are dollars you’ll never see again.
The Expensive Illusion of “Busy”
One of the most common traps growing businesses fall into is mistaking activity for progress. Everyone is so busy!
Teams are having meetings. Marketing is producing content. Sales is making calls. Operations is juggling projects.
But when each department operates without documented processes or overall alignment, they might be working at cross-purposes without anyone realizing it.
This is a key point where money quietly drains from a business. It’s not an easy-to-identify, catastrophic failure that spells disaster. No. Money is frittered away on dozens of small inefficiencies that compound over time.
Business Consulting Group CEO Adi Klevit recently encountered an example that perfectly illustrates this problem. There was a construction company that grew from making $10 million to over $50 million. An exponential growth! Demand was strong for this company, so they were doing something right, and they rode that momentum until operations began to break down. Projects started running behind schedule. Job costs were climbing, with some costing the company money while others were highly profitable.
What happened here? The owner went into problem-solving mode. They formed a bottleneck at the top, solving one issue after another and believing they needed to be involved in every project. Which, with so many clients coming in, was simply impossible.
Fortunately, Adi helped the owner take a step back. The staff were the same excellent people the owner had been working with for years, so that wasn’t the issue. They were working with many of the subcontractors whom they’d relied on for years. So, what was the issue?
It was all that growth placed on top of a shaky foundation. The company lacked core processes and systems. Each project manager ran each project completely differently from one another. They had different estimating methods, different handoffs from sales to operations to production, and the subcontractor expectations depended on who was running them. Each project was being run as if it were a single project, rather than part of a whole system.
This wasn’t a huge problem when the company was smaller, but as it grew, the inconsistencies multiplied, causing operational friction. Fortunately, the solution for this was simple. Adi and her team worked with the business owner and his team to make everything consistent. They defined a consistent estimating process, standardized project kickoff and handoff procedures, created job management checklists, and clarified roles. Once the systems were clear, execution became consistent, and the owner was no longer a bottleneck.
Establishing systems not only made day-to-day operations easier but also provided a firm foundation for business growth.
When Marketing Spending Becomes a Money Pit
The construction company's problems were largely internal. But the same dynamic plays out on the go-to-market side of a business, and it's just as expensive.
During a recent interview, Adi spoke with Natalie Nathanson, founder of Magnitude Consulting. Natalie shared the story of a cybersecurity consulting firm of about eighty people that had grown significantly through word of mouth and technical reputation alone. When growth plateaued, leadership did what many companies do in such situations: they looked at the pipeline and concluded they had a marketing problem.
Management came up with various solutions. They spent money on a digital marketing firm. They spent money on an internal marketer. Neither worked for them.
When Natalie’s company came in, they returned the marketing department to basics. They established foundational essentials such as lead hand-off process, market segmentation, tracking and reporting, marketing automation, and more.
Instead of getting involved in the turmoil of what wasn’t working, they stepped back, stripped everything down, and established systems for the marketing strategies that truly worked. This gave them a place from which to build a real, solid strategy and help the company grow.
At the end of the day, they found that the problem wasn't the agency or the marketer. It was that the company simply told the people they hired to “do digital marketing” without establishing the strategic foundations that would make their marketing spend productive.
This is a common and expensive pattern often found in businesses. A business owner or executive team gets ahead of their skis and invests in execution before the strategy is set. A marketing agency, no matter how good, cannot generate meaningful results for a company that hasn't decided who it's targeting or how the sales team will handle leads.
The Hidden Cost of Misaligned Departments
Both examples point to the same underlying issue. That is, departments working without systems in place will have friction with one another - and that friction costs money.
This kind of misalignment is particularly costly because it's invisible on the income statement. You can see what you spent on the marketing agency or a subcontractor. What you can't easily see is the revenue that didn't close because the lead was not properly handed off, or the project that lost margin because two project managers calculated costs differently, or the owner hours spent mediating problems that a documented process would have prevented.
When income is growing, these costs are easy to overlook. The business feels like it's working. But profitability tells a different story, and eventually, the operational cracks become too wide to paper over with revenue.
The good news is that fixing the foundation doesn't require starting over. It requires a structured approach to mapping what already exists, documenting it, standardizing it, and then building a culture of using those documented systems. If you’re ready to fill the cracks in your foundation and start building from a place of stability, get in touch today. We offer a free initial consultation.
