The importance of systems
No business can thrive without having various systems in place. They allow you to identify the most efficient way of performing a task and ensure team members follow an agreed approach.
Not only does this deliver cost efficiencies by eliminating the waste of re-learning an optimum way of doing something, but it also ensures outcomes remain consistent.
Take a fast food restaurant, for example. Every single meal comes out the same. Not only does this minimise waste associated with the ingredients used and time taken, but it also ensures the end product is always the same and exactly how the customer expected it.
Benefits of business systems
- Organisational efficiency – A system helps ensure that tasks are completed efficiently and effectively, as everyone knows what needs to be done and how it should be done. This can help to save time and money.
- Improved communication – A system can help improve communication between teams, as everyone will be aware of the procedures that must be followed. This can lead to fewer mistakes being made and a smoother overall operation.
- Increased productivity – When tasks are organised and streamlined, it can lead to increased productivity as workers can focus on their jobs. This can, in turn, lead to higher profits for the business.
- Customer satisfaction – Ultimately, having a system in place can help to improve customer satisfaction as they will receive a better product or service. This can help to build up repeat business and attract new customers.
My business is too creative/unique/bespoke/niche/complex for systems and processes
We have to disagree here. While you business might not run in the same way a fast food restaurant might make a burger, or a car manufacturer makes a car, every business can employ some processes.
For example, how and when do you raise invoices? How do you qualify good sales opportunities from bad ones? How do you deal with customer complaints? How do you extract any needed information from a client? How does work move from one team to another?
Think of systems as not a way of stifling creativity and spontaneity but of minimising the time spent on humdrum tasks so team member brain power is freed up to be spent on more impactful activities.
Signs systems need implementing or improving
You can quickly tell if systems need reviewing whenever you spot the following.
Customer complaints and/or returns: When you receive negative feedback, treat it as a gift. It is one of the clearest indicators that there is an opportunity to improve your systems.
Waste: Are you seeing a lot of wasted time, money, materials, expertise, or effort? How can your systems be changed to reduce this waste?
Actions that add no value: In this instance, value is defined as an action or feature that a customer is willing to pay for. If actions are being undertaken that a customer won’t pay for, do you need them?
Re-doing work: Does a team keep getting work sent back for changes or modifications? If they do, it’s a key area to investigate and optimise.
Duplication of effort: Are multiple people doing the same thing without adding value? This is another sign systems are not working, as teams are not communicating effectively.
Asking why: A strategy for process implementation and improvement
In the 1930s, Japanese inventor Sakichi Toyoda came up with the 5 Why technique to get to the root cause of a problem. The method is genius in its simplicity. Whenever a problem occurs, just ask ‘why’ 5 times. For example,
‘Why did the client complain?’
‘Because the product broke.’
‘Why did the product break?’
‘Because the hinge snapped.’
‘Why did the hinge snap?’
‘Because it was too small.’
‘Why did we use a hinge that was too small?’
‘Because we had none of the right sizes.’
‘Why did we have none of the right sizes?’
‘Because procurement won’t sign off the cost for the larger hinges.’
The above illustrates that if we’d stopped asking ‘why’ when we found out the product broke, we’d not have known that another team was preventing manufacturing from getting the needed materials. But maybe procurement has budget restrictions dictating their purchasing ability and the sales team needs to actually increase their fees.
Asking ‘why’ doesn’t need to stop at the 5th ‘why’; it’s just a way of encouraging deeper investigation.
Not all problems manifest in this way, however. Sometimes there will be no apparent problem, but a process improvement might still be possible. The five whys can still be used by asking the question in the following way;
- Purpose – Why is it necessary?
- Location – Why is it done at the location?
- Who – Why does that person/machine do it?
- When – Why is it done then?
- How – Why is it done that way?
These types of ‘why’ help you kickstart the process of finding out if the current way of doing things are the best.
And remember, ‘because we’ve always done it that way’ is never a satisfactory answer but a huge red flag there are efficiencies to be made.
Unlock the power of effective delegation
Systems make it far easier to delegate tasks, meaning you can get on with working ON the business rather than IN it – that is a major principle of Michael Gerber’s book, The E-Myth Revisited (1995).
If you are beavering away doing all the tasks required to keep your business running, then you are working IN the business. That’s all well and good, but it doesn’t necessarily get you very far.
If, however, you free yourself up to work ON the business, then you are able to take a step back, and start planning and strategising, and building your business to be the best it can be. How do you free yourself up? By delegating as many of those everyday tasks as possible. How do you ensure quality? Through systemisation.
If you want to explore how to improve your results, get in touch. Start here by booking your call with Chris > Book your call