Creating A Systems-Based Business
One of the business philosophies I’ve adopted for a number of years is that to be ultra-successful, your business must be SYSTEMISED. Even before I read Michael Gerber’s brilliant ‘E-Myth Revisited’ (if you haven’t read it, you need to—it is required reading) I realized the importance of systemization and what it can do for a business.
As Gerber rightly states, even if you are NOT going to franchise your business, you should set it up as if it’s a franchise. In other words, create a business model that can be easily replicated.
There are many, many reasons why you would want to create a system for everything you do in your business; for example…
- It helps to create a ‘perfect’ business and significantly reduces mistakes (note I said ‘reduces’ – nothing can be totally perfect when people are involved)
- Because, figuratively speaking, you have a ‘peg in the ground’ for every aspect of your business, meaning you can quickly improve each part of the overall system thereby creating an ever-evolving business
- It makes the recruiting, training (new staff can be ‘up to speed’ very quickly) and development of staff far easier
- It helps create a world-class business (without systems this is virtually impossible)
- It reduces the reliance on ‘staff’ and having to recruit and rely on ‘brilliant people’
- The system drives the business—not the people
- It helps you shape the business the way YOU want it
- Frees up your time, enabling you to work on your business, not in it!
- When you come to exit (however that may be) you’ll sell it for a high-end multiple. A systemized business is worth considerably more than a non-systemized business
These are just a few of the key benefits of systemizing every aspect of your business. When you see these written down, it makes you wonder why more people don’t take the time to create a ‘business on autopilot’.
But it does take time and effort. However, you don’t have to do everything at once. Start with one aspect of your business, systemize it, and then move on to the next part.
Plus, as long as your team is fully aware of what your standards are, then getting them to create the systems and procedures makes your task far easier, gives them buy-in and ownership, and, believe it or not, makes their jobs more satisfying.
When they know they have a major part to play in the business, they are much more likely to play a bigger role in improving it (the ultimate benefit of systemizing any business).
Better still, if you think about it, you have no way of knowing how to do everything in your business. Nor do you know how ‘best’ to do everything in your business. But guess who does? That’s right—your staff. As business owners, we often neglect staff in terms of asking them how to do things more efficiently and better.
The process I’m going to take you through automatically includes them in this ever-evolving process.
So how do you do it? How do you create a fully systems-based firm? There are 4 key stages you need to follow to systemize your firm…
STAGE #1: List all the high-level tasks in the business that need to get done (everything!)
This is the most important part. You won’t believe how comforting and liberating this is once you’ve carried out this first step.
Include absolutely everything required to run your business, right down to the bins being emptied!
Ideally, do it by department (sales and marketing, finance, customer service, IT, etc.).
Getting buy-in from staff, as I’ve already said, is critical to all of this, and getting them involved in creating their own systems and procedures is key to this.
STAGE #2: What does perfect ‘look like?
This is important. For each high-level task, you need to write down what ‘perfect’ looks like. In other words, what is the optimal final result you’re seeking from each particular high-level task?
Again, this is how you, your department heads, and staff keep control of the output and delivery of each task, and it’s very comforting!
Notice how this is very ‘team’-orientated.
STAGE #3: Break each task down into precise steps
Now take each high-level task and break this down into individual steps. Again you’ll find this liberating.
This is the ‘nuts and bolts. This is the step-by-step ‘system’ of doing each individual task. Use screenshots, diagrams, checklists, even videos. The easier you make this—the better.
It’s this stage that takes the longest, and it does require serious thought without interruption.
You have to create the steps so a person who has never done the task before can do it the first time at the required high level of delivery you want.
Let’s use a very simple example as an illustration. The Task is ‘To Sharpen A Pencil’.
Now, clearly, this is not something you would need to break down like this (you do have to use your common sense) but it serves as a good example of the detail required to ensure ‘perfect’ output.
Here are the steps…
STEP #1: Take a blunt pencil and insert it into a pencil sharpener (the sharpener is located in the top right-hand drawer of John Smith’s desk).
STEP #2: Turn the pencil clockwise whilst applying pressure on the pencil so the end of the pencil is pushed against the sharpener blade.
STEP #3: After 6 or 7 turns remove the pencil and check to see if it has been sharpened fully.
If not, repeat tasks 1 and 2 above until you’re happy with their sharpness.
STEP #4: Replace pencil sharpener back in the top right-hand drawer of John Smith’s desk.
As long as you include each step in detail, then this will be easy to accomplish.
STAGE #4: Systemise then automate
Now look through each step and decide which steps can be automated and which steps need manual intervention.
That’s what it takes to create a systems-based business.
One thing you must-do if you are involving staff (and, as I’ve said, you should) is to explain to them exactly ‘HOW’ you want them to create their systems and procedures (take them through these steps). Ideally, you should create a manual for HOW to create the systems and procedures.
Then I suggest you meet with your staff every month for 15 minutes to check on their progress. You have to manage the process closely and carefully. Make sure they allocate time each week to focus on their systems, otherwise they won’t get done.