We all intuitively know that having working systems in our business is fundamental to business success. But you may have wondered why that is the case. There are three abilities that having good systems gives you, and these abilities are the keys to business growth: repeatability, testability, and improvability.
The first ability granted by having good systems in your business is repeatability. Without systems, every time you or an employee goes to do something, it gets done a different way. It might be something small, like the formatting on an invoice, or something large, such as the calculations used to quote a major project. Either way, your clients will notice, and there will be constant arguments over the correct way to do things.
An example: Fresh out of school I worked in the local computer shop to pay my way through university. There were daily arguments over the correct price to quote a customer to visit their home and business and install a new modem for them. Should we charge for travel time? Should it be charged both ways? If we visited two customers, should we charge them as if we travelled from the office? Should we have a minimum charge of one hour, or just how long the job took? Should we have a fixed price for common services? The quoted price could vary from $50 to $250 depending on who answered the phone, and there was no guarantee this would actually be the price invoiced and charged, either. All because there was no written policy.
With a written policy or procedure, clients get the same treatment every time they interact with your business, and this makes them far more satisfied with the outcome, and more likely to return.
With some basic systems in your business and a few well-chosen key performance indicators, you can begin reasoning about your business in a logical way. This testability allows you to find the areas your business is lagging, and the areas your business is doing well.
For each system and subsystem in your business, ask the following two questions:
Is the policy or procedure being followed? If not, why not?
If the policy or procedure is being followed with very few exceptions, move on to the next question. Otherwise, we need to dig a little deeper: why is it not being followed? There are a few options:
- Employees are used to having free will and will rebel against the being told what to do. This is a people problem, but we’ll discuss one option below.
- The other option (and the far more likely one too) is that the procedure needs improving before it’s ready to serve the needs of the business. By rebelling against the procedure, your employees are really telling you that it doesn’t meet the needs of the business enough of the time to be worth following.
Does this policy or procedure meet our KPIs?
Every single business has at least one KPI, whether it knows it or not: Profit. But other metrics are important to track as well, and they can help you track which areas of your business are working.
Let’s say you have a goal that your sales staff need to make ten new contacts per week so that there is sufficient work in the pipeline for the rest of your business. If this threshold isn’t being met, it’s time to figure out why. The first place to start is the systems.
The third ability granted by having systems is improvability. Having repeatable results that you can test against benchmarks allows you to improve systems and test the improvements. No system can stay static forever. In our experience, internal growth or market forces make even the best businesses change at least some of their systems every few years (it’s the business’ mission or objective that stays much more fixed).
How do you improve systems? Start by asking the people who do the work, they probably know. A healthy organisation listens to feedback from people with boots on the ground (or fingers on the keyboard) and empowers those people to improve the whole organisation.
A healthy example: We’ve built software for organisations and it’s been deployed into production, ready to be used. After a week, a staff member using the software comes back to their manager and says “We love the software, but it needs this one button”. This feedback is passed back to us, we add the button to speed up their work, and their work-life is improved – a happier employee getting more done in less time because the system was improved to work for them.
Once you have systems and KPIs in your business, then the mantra of repeatability, testability and improvability should govern the reasoning and decision-making in your business. It allows you to offer a consistent product or service to your customers, find the problem areas in your business, and improve on them to enable sustainable growth.