Find the constraint and choose the next move 2 of 17 in this group
SOP 184
Find the one constraint with six questions
What this page is for. Use it when the business has stopped growing, or is not growing as fast as you want, and you need to know what to work on first. It carries the idea the whole method rests on: at any moment one thing, the constraint, sets how fast the business can grow, and effort spent anywhere else changes nothing for now. It then gives six questions, asked in a fixed order, that narrow a business down to that one thing, and it says where to stop. The questions from more through model each have their own page for the how. This page gives the question, the answer that sends you off, and where to go next.
SOP-184-Find-the-one-constraint-with-six-questions.md
1. Two sides a business can be held back from
Two kinds of constraint are named:
- Demand-constrained. The capacity is there; what you need is more customers.
- Supply-constrained. You would take on more customers if you could, but other issues stop you.
Some of the businesses that stall are the first kind and some of them the second.
2. The three elements
The starting view is that three things are the core elements of a business, as they are seen here:
- The constraint. Every business has one, and the work is to deconstrain it: to remove what is holding it back.
- Leverage. It is what lets you deconstrain more effectively.
- Compounding. If you do that successfully, from the side of the business model, you reach compounding.
Do all three, it is said, and the business will go on growing. The same three come back later as the short version of what it looks like when it is right: you have a constraint, you apply leverage, and, if the business is designed properly, compounding is unlocked. That is offered as how you scale.
How leverage works, and how to put resources where they pay, has its own procedure: SOP 185 — Allocate resources to the constraint and use leverage.
3. Potential is not throughput
The first behavior change asked for, and called the most important: focus on your highest-return activity, which is what the constraint means here, and stop any work of yours that is not growing the business. Effort, it is said, goes where it will get the highest return.
Flag: which change is first. This page takes focusing on the constraint as the first change. SOP 185, section 1, numbers aiming attention at what maximizes leverage as change one. Read as one change in two wordings, nothing differs, since both send effort to its highest return; read as two, you have two firsts and no order between them. This page does not settle which reading is right.
The narrowing road. Picture a highway of four lanes that narrows to a single lane. Widen the four-lane stretch to five lanes and you have not done nothing. But you have not raised throughput either: no more dollars come out the other end. What you added is potential. That potential pays off only after the constraint is dealt with, when it lets you grow further and faster; until then, you stay where you are. Many times, it is said, the work being done is work that adds potential to the system.
4. There is only ever one
One at a time, always. One of the key points here: the constraint is singular. There is one now; six months from now there will be one; two years from now, one. Trace things back far enough and a single point of focus is what remains.
Why most people miss it. What most people fail to do, in the view here, is exactly this, and the reason, it is thought, is that finding it takes several orders of thinking. You ask what happens after that, and then what happens after that, and what is stopping you from this.
It is your job. Knowing it is called the highest-leverage thing, and the most important. Not knowing which single thing to work on is, in the view here, your own fault. That is the entrepreneur's job. Entrepreneurs are the chief allocators of resources.
Growth stops at the constraint. As it is kind of seen here, a business grows until it meets a constraint, and there it stops. It stays stopped for months, weeks, years, decades, until the constraint is worked out. What stops the growth is the constraint.
A headwind is not the constraint. A change that every competitor faces too, such as new regulation, is, in the view here, an annoyance rather than your constraint. Everyone has the same headwind, so it does not necessarily help or hurt you against them. Note it, then ask again what actually limits you from doing more.
5. The weakest link
A chain is only as strong as its weakest link, as the saying goes; some of you have probably heard it. In a lot of ways, your goals are on one side and you are on the other, pulling, and you can only pull a goal as heavy as your chain can hold. With one weak link, adding links or strengthening the other links changes nothing.
So when growth has stalled for some time, or runs slower than you would like, this may be why. The argument made goes further: it is why.
The deadlift. A deadlift means lifting a bar from the floor. Suppose your back is good for 700 pounds, but your grip gives out at 500. Strengthen the back from 700 to 800 and the bar still stops at 500. Nothing about the lift changes until you work on the grip, so the grip is where the work has to keep going. For immediate growth, effort on any link other than the weakest is wasted: it builds potential, not throughput.
That, fundamentally, is the constraint. The aim is to work in it.
6. Match the constraint, then pick the path
The ideas above are then made tactical, for the owner who answers: fine, but getting leads is my problem, so what now? The objective is to find your specific solution path by walking a decision tree for your particular problem:
- Match the constraint to the solution.
- Take the path with the highest likelihood, based on your assets, skills and resources.
This matching and picking is what individual attention adds: picking, from what has been seen and from patterns in your industry, the bet that seems to do best for most people, and adjusting it to your background. There might be six paths up the mountain; the view is that one of them is the most likely for you. Choosing it is its own page: SOP 186 — Pick the path up the mountain that fits your skills.
Where the questions come from. They are a mental checklist developed over the years, from doing this with a lot of businesses. If you write anything down, this is called the thing to write down.
7. The six questions, in order
This is called a linear approach to constraints. It rests on one piece of arithmetic about making more money: it comes from selling more units or from each unit being worth more, and nothing else.
The first question follows, one that has probably been heard asked many times: why can't we do more; what stands in the way of simply doing more? Starting from it, it is said, massively narrows what you have to think about to grow the business. One warning goes with it: sometimes the reason you cannot sell more is that what you sell is not worth enough.
Where the answer to that first question is yes, you could, you stop and go do more. The other five basically answer one thing: what keeps you from doing more. The order is said to have taken an enormous amount of time to narrow down. It is not necessarily the order of how common each reason is; it is the order in which the reasons are thought through.
| Order | The question | The answer that sends you off |
|---|---|---|
| 1 | More: why can't we do more? | Nothing is stopping you: do more |
| 2 | Metrics | You do not have the metrics: go get them |
| 3 | Market | The market really is too small: may be true, probably not |
| 4 | Model | You have your numbers, the market is big enough, and you are not sure it is worth it |
| 5 | Money | Its branches are on SOP 196 |
| 6 | Manpower | Its page is SOP 200 |
7.1 More
Why not more? Why can't we do more? It is asked first, and if you can do more, you should do more. Many times, so many times, asked why the ad spend or the outreach cannot double, the owner's answer is that it could; then the answer is to go and do it. Exhausting more is its own page: SOP 187 — Exhaust more before anything else.
7.2 Metrics
If you cannot do more, the first reason you might not is that you do not have the metrics. It might look like this: you do not know what you are spending, and you do not know what you are making. Without them, doing more is off the table: you cannot tell whether more is working, or whether any of it is. The exit is to get your numbers. The work of getting them is SOP 189 — Get the numbers and decide fast on reversible bets.
7.3 Market
With your numbers in hand, the next reason offered is a market too small for more. The answer offered: probably not, though it may be so, and for a local business it is possible. The case given is a local lounge in a town of, reportedly, 140 people, which is not going to scale to a billion dollars. Deciding from your metrics that the market is the issue is judged super, super unlikely, with one case raised against that: a tiny, tiny, tiny local market. Testing that claim is SOP 190 — Check whether the market is really too small.
7.4 Model
Suppose the numbers are in hand, the market is big enough, and more is still off the table. What is stopping it? That comes up a fair amount. The owner says they are not sure it is worth it, or not sure it will help them hit their overarching goals: the business began a few years ago, it has not turned out as they pictured, and they no longer love it. The reframe for that owner is on SOP 191 — Keep the vehicle and stretch the timeline.
7.5 Money and manpower
The fifth and sixth questions are money and manpower. They are named here in their place in the order. What money asks, and the test that sorts its answers, is SOP 196 — Answer the money question, starting with acquisition cost. Manpower is SOP 200 — Treat a supply constraint as demand for talent.
8. Get off at the first exit
In one practice here, the list is checked through as fast as possible, to reach the constraint and so grow the business or clear its bottleneck. Leave at the first exit you reach; working through all six is not the aim. If you can do more today, do it today and stop there: nothing else is needed.
It is usually one thing. This point was stressed. The question put: if one thing could double the company, what is the case for doing three? And it usually is one thing. What makes it harder is not knowing how. Or it is slower than you would like, so you let work you already know how to do, which goes quicker, distract you, and the business does not grow. That is called real. It is hard simply because the how is unknown; anything you have not yet learned to do is hard.
If you can recast hard as not knowing how yet, then, because you can work it out, you can start going after it. That idea is taken further on SOP 193 — Treat hard as a skill you lack and chunk it down.
9. Where this sits
- Also standing behind the method: SOP 188 — Apply the cost-of-change rule, and SOP 192 — Hire for the smallest skill gap.
- Asking what stops ten times your current volume, and the point that naming the blocker names the single constraint, as applied to advertising you already run: SOP 40 — Choose the next growth move.
- Picking the one step inside a funnel by arithmetic: SOP 41 — Run one test a week.
10. What this page does not decide for you
- Which question takes up an offer not worth enough. The first question warns that it can be why you cannot sell more. Not established on this page.
- How to tell which kind of constraint you have. Not established on this page.
11. The checklist
| Step | What to do |
|---|---|
| 1 | Trace back, asking what happens after that, until one point of focus is left |
| 2 | Put effort on the constraint; for immediate growth, work on any other link adds potential, not throughput |
| 3 | Match the constraint to a solution; take the most likely path given your assets, skills and resources |
| 4 | Ask why you cannot do more (a headwind every competitor shares is not the answer); if you could, do more and get off |
| 5 | If you cannot, ask in order: metrics, market, model, money, manpower; get off at the first that holds |
12. What this page does not cover
Compounding has its own page: SOP 199 — Build a compounding vehicle. Working a supply constraint through, question by question, is SOP 201 — Rerun the six questions for talent and weigh a redline.
Terms defined on this page
- Constraint
- The one thing that sets how fast the business can grow right now. There is only ever one; effort anywhere else changes nothing until it is solved, so confirm it before choosing a fix.
- Demand-constrained
- Having the capacity to serve more and needing more customers.
- Market (question)
- The third of the six questions: is the market too small for more? Possible for a local business; very unlikely for anyone selling nationally, internationally or online.
- Metrics (question)
- The second of the six questions: if you don't know what you spend and make, you can't tell whether more is working, so getting the numbers comes first.
- Model (question)
- The fourth of the six questions: the numbers are in and the market is big enough, yet the owner doubts this line of business is worth growing or will reach their goals.
- More (question)
- The first of the six questions: why can't we do more? Doing more of what already works, whether spend, creative, platforms, tools or people, is the easiest bet with the best return for its risk, and almost always the one to use up first.
- Potential (away from the constraint)
- Capacity added somewhere other than the constraint, like widening a road before the point where it narrows. It only pays off once the constraint is dealt with.
- Six questions
- A fixed-order list that narrows a business down to its constraint: more, metrics, market, model, money, manpower. Stop at the first answer that holds. The order is how to think it through, not how common each cause is.
- Supply constraint
- Customers want more than you can serve, so you would take more on if other issues didn't stop you. It bites hardest in high-volume low-wage roles, the trades and high-end professional services.
- Throughput
- What actually comes out the end of the system, such as dollars or the share of leads who end up attending. For immediate growth, only work on the constraint raises it; while you can take more customers, a gain at any step adds to it.