The real importance of running your business as a system

So many businesses everywhere run amok because ‘anything goes’.? Often in these businesses, the leader runs everything ‘by the seat of their pants’. ?In our law practice many years ago, David Sharrock, our former Managing Principal and author of ‘Fighting for Enterprise Success: Through the Eye of the Tiger’, decided there had to be a better way – especially after hearing about W Edwards Deming.

What’s it about, in theory?

The late Prof. Deming was an American engineer, author, academic and management consultant, with considerable expertise in developing processes, initially within the manufacturing sector of Japan in the 1940s.? His philosophy was one of adopting certain principles of management in order to improve quality of product and service and to enhance efficiencies.? This was achieved by everyone in a workplace working uniformly, according to processes. Think ‘McDonald’s’ and you have got the basic idea.?

With a uniform approach to production, variation was said to be the enemy of the system and constant improvement of quality and productivity, at a reduced cost, had to be the priority. Processes involving suppliers, producers and customers of goods and services needed to be in sync. He abhorred lack of constancy of purpose, as well as any focus on short-term profits. If there were problems in production or service, then the processes were at fault and needed redressing at a systemic level, rather than necessarily targeting employees.

The benefits of a business system

Any business of any size or type and in any industry will benefit from gradually introducing a business system involving policies, processes and protocols. In adopting a systems mind-set and introducing a comprehensive system, benefits include:

-?????? reducing (if not eliminating) variability and errors

-?????? improving efficiencies

-?????? increasing productivity

-?????? reducing risk

-?????? enhancing effectiveness; and

-?????? producing much improved outcomes for the significant benefit of all stakeholders. Waste, cost of production and employee attrition improve, while customer loyalty and sales increase.

The importance of data

Helpful data is all-important for quality control – you can’t argue with data!? Intuition, hunches and gut feel are not good indicators of how things are tracking.? Data informs decision-making, and acts like the voice of the system.

Data helps you identify changes which must be made to the system, and leads to greater predictability and better outcomes. ?Without that happening, poor decisions, costly mistakes, wastage of time, money and resources, frustration, and worse, will be experienced to the major detriment of the business.

Tips

The following are some helpful tips developed by David Sharrock and our law practice for building and maintaining your own business system:

1.???? Start with customer policies, processes and protocols focusing on the overall system for delivering optimal product and service at each customer touch point

2.???? From there, build policies, processes and protocols for each technical product so that this part of the system becomes a knowledge bank for current and future team members

3.???? After that, one at a time and gradually, develop numerous policies, processes and protocols for new business opportunities, leadership, strategic planning, new employees, work performance, meetings, workplace issues, office administration, office financials, risk management, and any other matters peculiar to your business or industry

4.???? In building a system, doing it yourself with the leader and team having ‘hands on’ can sometimes be better than engaging an outside consultant (at least in the beginning), as the leader and team understand all the nuances and complexities of their own business and the requirements of the system for optimal result

5.???? The leader and team must decide what data is going to be most relevant and helpful in a given business and industry to optimise performance, service and product, with reports on such data to be produced and relied upon in the future as ?issues arise and as the system needs changing

6.???? Long-term, and for quality control purposes, minimise how many people should be able to edit changes to the system.? This avoids a free-for-all where anyone and everyone gains editorial access

7.???? For start-up businesses, it is so much easier for a system to be developed from the very outset rather than trying to do so once the business is well established

8.???? Once the system has been built, the leader and team must own the system and work on the system together, with the system being an agenda item at board, leadership and team meetings and with decisions directed at improvement to, and compliance with, the system

9.???? Once a year, perhaps at an offsite team development day, the leader and team can revisit business fundamentals and key components of the system, as well as develop fresh perspectives for improving the system. Presentations, group discussions, group exercises and brainstorming for ideas can all be included.? At Sharrock Pitman Legal, we do this at our annual ‘Summer Forum’ in January or February; and

10.? When the system is up and running, ensure that ‘everyone is always on the same tram, going in the same direction’.

Conclusion

All of this will be well worth your effort.? With such a system in place, your business will have a very strong foundation to facilitate growth and success, for the great benefit of all stakeholders.

If you are thinking about developing a systems-based approach for your business or organisation, I encourage you to consider taking a look at David’s book.? It is a must-read, chock-full of practical ideas about leadership, team-building, vision, workplace culture, customer service, planning and strategy, and a whole lot more.? Go to: www.fightingforenterprisesuccess.com.