The power of systems.
Systematic business practices have been improving productivity for generations. Innovative minds have been coming up with new ways to maximise efficiency since the invention of the abacus. In today's modern business environment it is vital to be able to track key performance indicators (KPI) with a comprehensive system that will streamline workflow. Here are the top 7 reasons why systems are key in assisting entrepreneurs, managers and eam members to grow their companies and assist with personal growth.
Systems create routines and habits
We are all driven by some type of routine. We get up in the morning, brush our teeth, drink coffee, eat breakfast, etc. in that order or some variation thereof. It’s a system we are using to get ready for the day. Let’s face it – we all like some type of routine; things we do automatically, things which become habits. The key to success is to ensure that the routine or habits which we have formed are driving our personal lives and our businesses (or organisations) forward. Stephen Covey’s famous book and seminars deal with the 7 habits of effective people/organisations. In his book he highlights the habits that successful people and organisations develop under three imperatives; independence, interdependence and continuous improvements. An effective business system similarly focuses on these 3 areas.
Systems create an environment of predictability
We all like to know what’s going to happen next. Surprises are fun once in awhile, like a surprise birthday party or celebration. However, most of us, especially when it comes to our professional lives, prefer to know that if I do X the outcome is most likely going to be Y. Having good systems in place creates predictability. Not just for staff, but for customers and suppliers as well.
Systems assist with control
As a manager or leader, you cannot be at all places in your businesses at the same time. Be that as it may, you would still like to know that the staff working for you are being productive and efficient. In order to ensure you are implementing a good business system a few good questions to ask yourself are; What percentage of my time am I spending managing the people vs managing the systems which manage my people? Am I facilitating in creating the right habits/routines and using systems to create an environment of predictability or am I spending a lot of my time managing people.
Systems create the potential for scalability
Without writing standard operating procedures (SOP), which should be clearly articulated and position specific, it is difficult to build scalable operations. Franchises are statistically the most successful businesses with a success rate far higher than non-franchised businesses. It’s no co-incidence that franchised businesses are also highly systemised. The iconic business book, ‘The E-Myth’ (Or Entrepreneur Myth) deals with the subject of systemisation of businesses in great detail. Even if you are a non-franchised business, by building more robust systems that drive productivity and efficiency you can position your business for growth.
Systems focus on the business or organisation and not the person
If you are a business owner reading this article; a good question to ask yourself is ‘Am I the magic of this business?’ If you didn’t show up at work for a couple of days or weeks even, what would happen to the business? Systemisation ensures that a business becomes completely independent of any individual person. Not discounting the importance of the visionary and initiator of that business nor any of the employees that subsequently work there, but if the business cannot operate without one specific person there is a flaw in the system.
Systems allow us to increase productivity and efficiency
The story of Toyota; founded by Mr Toyoda; is an interesting one. The Japanese could not compete with American car manufacturers due to the sheer difference in scale. American car manufacturing companies were producing cars in batches of 7 000 units; whereas the Japanese were only producing batches of 700. The Japanese car manufacturers, more specifically Toyota, then developed the Lean manufacturing system of car production. This system, which drives constant improvement; has resulted in Japanese car manufacturers making up 3 of the top 10 car manufacturers in the world; after being fairly late entrants to the market.
Here are the top 10 according to Forbes 2013 Global 2000 list:
These numbers were based on a combination of four factors: sales, profits, assets and market value.
- Volkswagen Group- Volkswagen Group
- Toyota Motor- Japan
- Daimler- Germany
- Ford Motor- U.S.
- BMW Group- Germany
- General Motors- U.S.
- Nissan Motor- Japan
- Honda Motor- Japan
- Hyundai Motor- South Korea
- SAIC Motor- China
Systems create safety
According to Maslow, after Physiological needs as humans our next level of need is that of safety. We all want to feel secure, and that includes all the role players involved in your business. Employees want to know; if I follow the rules/systems my job will be secure or there will be opportunities for growth.Suppliers want to know, if I follow the company’s guidelines/systems I will be paid by a certain date. Consumers want to know what systems the company has in place to ensure that they receive value for money and are treated fairly. Owners and Managers of businesses want to know that systems will assist in the creating and sustaining a viable business.
Ultimately, we are not saying that people are not important in driving our businesses and organisations, quite the contrary, they are the most valuable part of any business or organisation. However, by focusing on the power of systems we are able to maximise the potential of our people which should ultimately be the strategic aim of every business that wants to succeed in the current environment.