Nkem Arukwe

“Success often hurts and even mortally wounds small businesses.” — Daryl Wyckoff.

After a study in the 70s, Daryl observed something interesting.

There is a profitability pattern that exists in companies: The operating ratio(the ratio of expenses to revenue) varies systematically by company size.

Both small and large companies have smaller operating ratios, and are more profitable, than midsize firms. Informally managed companies do much better smaller sizes, but performance goes down as they expand.

Formally managed companies on the other hand, do much better at large sizes, and profitability is maintained if processes are well maintained.

This crossover region when a company transitions from informal to formal management is called the Bermuda triangle of management, and is a challenging path every growing business must pass through. Have a beautiful day today, and may your processes be existent, ever-evolving, and well managed.

--

--

Nkem Arukwe

Nkem Arukwe

Business Digitization & Systematization Executive. Obsessed with building business systems that last.