Imagine you run a factory that makes lamps. A complete lamp needs three parts, each made by a different machine. Two of the machines make 30 parts an hour, but the other one only makes 15. If you want to make more lamps per hour which machine should you improve?

Obviously the one that only makes 15. Improving the other two won’t make any difference because they aren’t the constraint that limits your throughput.

Now let’s imagine you run a business and what you’re trying to grow is revenue. There are many "machines" involved: advertising, sales, customer service, product development, etc.

Should we spend more advertising a product that nobody wants? Should we improve customer service if nobody has heard of us? Should we drive more customers into the top of the funnel if they drop straight out of the bottom?

The analogy is imperfect but the basic point remains — not all opportunities have an equal payoff. Just because we can do something doesn’t mean we should. We should also be extremely wary of specialists who know only one thing. Those inside a particular machine usually don't know if they’re the constraint or not.

As Buffett says, don’t ask a barber if you need a haircut. Instead try to see the system as a whole, determine the biggest constraint, and attack it!

See this post on LinkedIn