Evaluate your systems
By the time Stream launched, Snyder and his team had spent 1,000 hours planning what needed to happen for success. But he learned some valuable lessons in what he hadn’t planned on.
“Proper planning is everything and assume from the standpoint of your various scenarios for success,” he says. “Do a lot of worst-case planning toward stress-testing what you think will be the operating performance of the business under those worst-case scenarios. Plan for the worst.”
But planning for the worst actually goes two ways. He says part of the company’s downside planning should have been asking itself what are the capital needs of the business if it has three or four times the growth that he thought it would be and how would the company could keep pace with that.
“There are two ways you can look at it,” Snyder says. “One thought is, you don’t get any customers, and then you know really what your downside is in terms of the money and the time that you’re going to put at risk. But another downside is growth that is so rapid that you are unable to keep pace with customer demand, and in a capital-intensive sector such as energy, you can be imploded by your own success.”
He hadn’t planned for the worst effectively, and a byproduct was the problems Stream had keeping its systems up to speed, as well.
“The type of customer systems and customer information service platforms that we were using may have been appropriate for 100,000 customers, but it was a much different story when you get into 300,000 customers, 400,000 customers,” he says.
All of Stream’s systems had been developed internally because there weren’t any off-the-shelf solutions at that time, so evolving them internally was a challenge since everyone was busy and the growth projections weren’t accurate.
“It’s a process where you really need to stay ahead of the curve,” Snyder says. “If you don’t have robust systems that will meet your needs for the foreseeable future, you will always be chasing solutions to major operational impediments. You need to make sure your systems are sufficiently robust to accommodate your most optimistic customer growth scenarios.”
To stay ahead of the curve, you have to do an analysis of what the future may look like for your business.
“It’s really going to be a situation-by-situation analysis,” Snyder says. “ … Perhaps take your growth expectations and stress-test it. Perhaps double it and make an assessment as to whether your systems can handle it.”
He also says that making that assessment may require using outside sources.
“You need professionals,” he says. “You need people who know what they’re doing. It’s such a highly technical area that I don’t believe that even your most sophisticated type of businesspersons are able to make critical recommendations in such regards. You need really the best outside expertise you can find.”
By not planning ahead and having scalable systems, Snyder had a couple years of playing catch-up, but he ultimately got there.
“I don’t think it affected the growth too much, and fortunately, I don’t think it affected our customer service too much, but it did create some fabulous stresses here at Stream in regard to just management attention and management energy,” he says.
