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Food Safety as Business Infrastructure Series (Article 3 of 5): Can your system absorb growth without losing control?

By Azure Edwards, M.S.
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Can Your System Absorb Growth Without Losing Control?

Growth is one of those business “problems” that arrives looking like a reward. Purchase orders get larger, customers become steadier, and a team that once stretched to meet demand grows into one carrying a level of production that gives the business real momentum. It also changes the load. Growing success brings more decisions, handoffs, documentation, requirements, and moments where delay or ambiguity has larger consequences. When those demands land on a structure designed for a less complex operation, the company can keep performing while it begins spending more to do the work—more time, more money, and more management attention than the same work used to require.

That is where growth can become instructive. It shows whether the business is carrying its recurring demands as a known condition, or absorbing them through people, margin, and momentum. At first, the signs point one way: a rising number of data findings suggests sharper detection, a corrective action log full of closed items implies responsiveness, and a team consistently delivering product looks like proof the system is working. All may be true; the question is what else the record is saying at the same time. This is where familiar responses like more training, reminders, and supervision warrant a closer look. Those interventions may be needed, but when the same type of issue keeps returning across a range of people, shifts, and locations, the question shifts from whether people know what to do, to what the system is requiring them to carry.

At one level of complexity, proximity can appear to function like infrastructure. Leaders close to the floor know which decision needs to move. Quality understands the history behind repeat holds for the same or similar products; operations knows where the procedure and the actual work performed have parted ways and which one is keeping the product moving. Growth changes that geometry. More shifts, products, customers, interfaces, and pressure on the same decision pathways create distance the earlier structure did not have to span. Knowledge that once moved because everyone was in the room now has to travel through a structure not yet equipped to carry it, much less deliver it to the decision-makers intact.

Food safety is one of the clearest places to see these pressures surface because so much of the work is explicit. Expectations are set by regulation and customer requirements. Outcomes are measured. Performance is documented. The record shows not only what happened, but what the system is repeatedly being asked to absorb. In one operation I worked with, deviations in a single control area multiplied roughly sevenfold between the second year and the fourth. The team read that increase as evidence they were catching more, recording more, and staying ahead of the work. They weren’t wrong; however, reading it in context made it clear that the same people, with the same hours and resources, were now identifying, investigating, and documenting several times the volume of administrative work to keep pace with the recurrence rather than resolving what produces it. The detection was accurate. What it cost to sustain the load is what remained unseen.

That cost is paid either way, counted or not. Whether the increase reflects more events, better capture, or both, the operation is spending more attention to keep the same part of the system from giving way. That attention has a cost before it ever shows up as failure: time, rework, decision delay, management bandwidth, compressed verification windows, and the effort people put into making the system appear smoother than it feels from inside the work.

Under that pressure, workarounds emerge as the relief valve. When allowed to persist long enough, the workaround stops being a workaround and becomes the informal procedure. At first, the escalation may be visible in the record. Left unaddressed, it can drop out of it — handled on the floor and no longer reported to the people who would need to act on it. That is the danger in normalizing deviations between work-as-done and work-as-imagined: the record stops registering the strain because the strain stopped being surfaced. Absorbed strain finds a harborage, a place to settle, concentrate, and integrate into the environment until it reads as part of normal operation. It behaves like a biofilm: not a single problem, but a network bonded to the operation, fed by the conditions around it, and protected by them. A pass with the sanitizer clears what shows on the surface and the verification comes back clean, while the network underneath is never reached, and keeps compounding. A schedule can flex and a customer conversation can buy time, but a food safety control cannot bend to the pace of growth without cost — to the operation, to the business, and to the people the product reaches.

The same system strain looks different depending on where it is read. On the floor, it may appear as variation, delay, or rework. In the governance structure, it may appear as authority that stalls, escalation that depends on relationships, or roles that have not caught up to scale. At the business level, it may appear as margin pressure, capacity uncertainty, customer strain, or the question of whether the next stage can be supported without exhausting the system that made the growth possible. Food safety gives the organization something concrete to organize around. When those three perspectives can step into the same room, growth strain stops looking like separate fires and becomes a map of what the next stage requires.

That is the distinction between a system that performs and a system that can bear the weight of its own expansion. Performance under familiar conditions proves less than it appears to. Growth tests something harder: whether the structure beneath that performance is coherent enough to carry what comes next — at a greater scale, with global supply-chain challenges, increased consumer demands, and perpetually shifting regulatory requirements. That capacity is the ability to carry the next demand without making people the permanent bridge between what the system requires and what the structure has been designed to support: expectations clear enough to travel, authority distributed enough that decisions move instead of stacking up, escalation that works because the pathway exists before pressure arrives, and knowledge that once lived in a few experienced heads becoming something the organization owns. Asking that structure to take on more than it can carry is not just ambition; it is the initiation of a series of hidden risks that won’t show up in any projection, P&L, or return, because it is a weight carried by the people, on the system’s behalf, until something eventually gives.

The operations that scale without losing control treat that infrastructure work as part of growth itself, by developing governance alongside expansion, rather than reacting to growth after the fact. Concentrated strain that no one is addressing does not stay contained. It surfaces as a recall, a headline, sometimes as harm reaching the person who trusted the label, and traces back, almost always, to a control that was normalized. These are not new failures. Read across any timeline of recalls, the causes are overwhelmingly ones already understood and already preventable: known hazards, met by known controls, allowed to recur. That is the plainest evidence that the systems are not learning from the record they already hold.

This is what the technology is for, and where its potential most often goes unrealized. The monitoring platforms, the scheduling systems, the real-time alerts, the data collection, the dashboards — the advances are real, and detection and data management have come a remarkable distance. But better instruments read through the same frame return more of the same, in finer detail. The data does its best work when the organization is willing to shift how it reads what it already sees, and has the authority, clarity, and will to act on it. That is the level of transparency this work asks for — a kind of self-sight most systems do not yet have, and it has to start with the business looking honestly at itself. Not to cut cost for its own sake, but to free the resources to fix what is actually breaking, and then to grow on a foundation that can hold the next thing rather than bolting another pillar onto one already straining under the load it already carries.

The real question is whether the system can keep growing without asking people to absorb what structure should be carrying — because people are the first place growth strain becomes visible, and they are the last place it should be allowed to stay. Read for what else they hold, a company’s own records show more than events. They show what the organization is asking its people, its controls, and its business model to carry, and for how long it has been asking. Inside the company, that reading shapes how decisions get made under ordinary pressure. Outside it, external parties such as regulators, auditors, and customers evaluate a system based on the evidence it generates, regardless of whether the organization is paying attention. When internal governance is coherent, it creates external legibility that fosters trust well before a crisis tests the brand. The true risk is not expansion itself, but scaling upon a foundation that is already overextended — a condition the system’s own records have likely been signaling all along.

Editors Note: the author Azure Edwards is presenting “You’ve Been Collecting Food Safety Data for Years. Why Isn’t It Making You Better?” at the Food Safety Consortium Conference, October 21-23. Washington DC

More info at Food Safety Consortium Agenda  

Heather Madland, Huron Capital

Accelerating Growth Through Acquisition

By Heather Madland
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Heather Madland, Huron Capital

Developing a plan for meaningful growth can be a challenge many business owners face. With Gross Domestic Product growth currently at three percent, if you aren’t launching new products or services, adding new customers, or increasing sales to existing customers, the road to continued growth may not be clear. However, a careful and strategic purchase of a company – an acquisition – is one approach that could help you in meeting your company’s growth goals in less time with potentially less uncertainty than relying on only organic growth to get you there.

The advantages of acquisition

While acquisition may come at a significantly higher cost than certain organic growth initiatives like expanding your manufacturing facility or solidifying a new customer relationship, it’s potentially faster to execute. Of course, no substantial business move is without its risk, acquisitions included, but an effective acquisition strategy can be worth considering particularly for a small or middle market company looking to accelerate revenue and earnings. Advantages may include:

  • Access to new markets both regionally and globally
  • A new, built-in customer base
  • An established product line
  • A larger pool of talent
  • New technology and physical assets

Through acquisition, your company may be able to remain a step ahead in existing markets while plotting expansion into new cities, states, regions or even countries. An acquisition strategy has the potential to expand your geographic reach and may even help improve or expand market share.

Other advantages may include expanding your existing customer and/or product base, while potentially introducing new products or customers. Absorbing existing customer relationships of the acquired company may reduce costs in one area of the business while allowing you to re-allocate costs and resources to other things like technology and talent.

Increasing your pool of qualified and experienced employees can be invaluable. Resources earmarked for training could possibly be allocated elsewhere. Meanwhile, diversification of talent may improve the performance of your existing workforce by leveraging best practices across the combined employee base.

Increase your profit margins

Acquisition has the potential to increase revenue and earnings if the right strategies and tactics are implemented. However, the devil is in the details, and it’s important to make sure you have a solid execution and integration plan in place. Assuming that’s the case, there are a few key reasons why earnings might grow after an acquisition, including:

  • Overhead optimization
  • More efficient use of assets
  • Improved purchasing power and economies of scale

Sales, marketing and administration can be some of the largest expenses companies bear. By eliminating redundant operating and administrative functions, you may be able to accelerate margin improvement post acquisition. The challenge comes in identifying where redundancies exist while making sure to retain critical institutional knowledge and relationships.

Asset efficiency or asset turnover means generating more revenue per dollar of assets. Improvements come from consolidating manufacturing and distribution locations, leveraging better manufacturing practices of the target, or automating inventory and ordering systems. With greater asset efficiency, you may be able to free up more working capital to invest elsewhere in the business.

You may also benefit from improved purchasing power and economies of scale. Whether it’s in office supplies or industrial equipment, larger companies with more purchases often benefit from greater spending volumes which can lead to discounted or lower cost purchases from vendors.

Where does the capital come from?

Sources of capital to support an acquisition are plenty and varied, though each comes with a unique set of pluses and minuses. One of the most common and well-known sources of capital is bank debt, which many companies use as “standard practice.” It’s generally the cheapest form of capital, though requires regular interest and principal payments that will impact your cash flow. However, seller financing and third-party equity investment are both potential alternatives.

Seller financing is a good option for business owners who lack the cash to pay for an acquisition and who may not qualify for traditional bank debt. In these situations, the seller acts as a lender, with similar terms to a bank, though securing this type of financing is generally faster than through a bank. A business owner should be aware, however, that when sellers offer this option, they are usually looking for a buyer with experience in the industry, a well thought out acquisition strategy and a solid business plan.

An equity investor, such as a private equity firm, specializes in buying a company or share of a company with the intention of selling at a later time. While there are typically no required cash interest or principal payments associated with equity financing, depending on the arrangement and terms negotiated, an equity investor may end up with either a majority or minority ownership stake. However, there may be more to what equity partners can offer beyond just a check, including certain operational, strategic and financial resources to help your company grow. For example, an equity partner with other investments in a similar industry as yours may be able to help you expand existing customer relationships and/or introduce you to new ones. An equity firm may also be able to help you build a formal sales team and business development process, train new managers and find and execute the acquisition you are contemplating.

Overall, it may be possible to accelerate growth through acquisition; and a thoughtfully considered and carefully executed acquisition strategy certainly has its advantages. While the expense of doing an acquisition can be a factor, there are a variety of worthwhile capital options to help you get your deal done. Besides, if you can meet your financial goals in less time through acquisition than you otherwise would by pursuing an organic growth strategy only, it’s certainly worth assessing the feasibility of such a strategy for your own business.