Every business has systems of some sort, but the difference between a good business and a poor one is how they are implemented.
When most business owners think of systems, they think of procedure manuals and don’t realise that this is a very small part of a larger puzzle. In many ways, business is like a jigsaw, but having the correct pieces jumbled up in the box doesn’t make sense. You need to get them out in the open and arrange them in the right way to see the full and complete picture.
Here are seven tips for a profitable, systemised business:
1. Have an overall plan
The importance of a plan cannot be overstated. Whether building a house or a business, planning where you are and where you are going is critical to success. It should include all the important aspects of your business such as management structure, roles, responsibilities, measurement criteria and what the business is trying to achieve. Once finished, the plan should be widely available to your staff so they can get an understanding of the scope of your business.
2. Set policies to explain why
People are often happy to follow rules once they know why the rules are in place. As an example, in Australia we stop on red lights and go on green lights. People know the consequences of not following these rules. It should be the same in business. Set the rules and explain why they need to be followed.
3. Use multimedia to document
Modern technology is a powerful tool for teaching and can be employed to help train your people much more effectively than written procedure manuals. Video, audio and screen capture technology such as Camtasia can all be used to enhance the learning experience and get your people up to speed in the shortest time and for the lowest cost. In addition, staff will be more willing to review training if it is available in an easily accessible format.
4. Test and measure
All critical aspects of your business should be tested and measured. Most business owners look at their financial statements but they are the end result of many other processes in your business. For example, where are your sales leads coming from, what percentage are converted, how many projects are finished on time and on budget, how much is it costing you to recover from mistakes and errors? All of these are important so you know what can be improved. If you are not measuring it, you cannot improve it.
5. Base rewards on outcomes
Incentive plans are an important part of keeping employees motivated and happy. I once heard a story about a business owner who called all the partners (mostly wives) of his sales team into the office and promised them an all-expenses paid holiday for them and their families if sales targets were met. From that point on, the wives were asking their husband why they were home so early each day and why they weren’t on the golf course on the weekends selling more!
6. Get it right first
Many people thing that the remedy for bad systems is to computerise, in the mistaken belief that computers make them more efficient. The computer industry has a term for this: GIGO – garbage in, garbage out. The fix for inefficient processes is not to make them faster using computers, it is to make them correct, and then make them faster.
7. Ingrain in your culture
Good business systems will encompass every aspect of your business and become ingrained in your culture. From your paper filing to document management, to statistics that measure success and even your accounting software, the business systems you put in place should be ever present and every staff member should be constantly aware of them. It is then that your business becomes a system and your people work the system.
Implementing systems does not come naturally to most people, but the investment in time will increase efficiency and free up the business owner’s time, while making the organisation stronger and more profitable. Just a few hours a week over a year or so can be all it takes to go from one of the pack to a standout in your field.
– Steven Thomasz is the Business Development Manager for Kolbe Systems, a Perth based company offering an education program to train business owners and managers to systemise their business using the proven Kolbe Systems process.