Elements to Increase Your Company Value: Strategically Part IV -Systems vs. Tribal Knowledge

Systems vs. Tribal Knowledge

What is a system or process?? A series of steps that detail the process for any area.? Sales, Marketing, Production, Customer Service, Accounting and any department can have a system. Systems increase efficiency, effectiveness, scalability and reduce risk.

Systemizing turns tribal knowledge into systems. Many think that their company may have large value because they have many seasoned managers that have been with the company for many years.? BUT this tribal knowledge is actually a negative in a merger unless the tribal knowledge has been turned into systems.

Most companies do not have quality systems until they are near $75 to $100 million in revenue. If a smaller company has systems in place they will have a significantly higher value in the marketplace.

The systemization process is long and usually hard to have staff members complete.? If you break up the task into small pieces and then have the employee use their phone to talk into on a specific topic. The resultant information can then be emailed to the office.? Then a college student can be hired to format the information and make the recordings into a system.

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A system is not of value if it is not managed against performance metrics. The system should have performance metrics defined and then compared to performance to achieve the greatest advantage from systems.

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Dale S. Richards specializes in management, marketing, operation optimization & business valuation consulting and is a 30+ year turnaround expert.?He has implemented success concepts into results in 150+ companies. Dale is a Certified Valuation Analyst (CVA) with NACVA, Eight-Year Vistage Chair & International Speaker.?Visit www.successbiznow.com to learn more about Dale.

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