Why Systemise a Business?
In this blog item, we’ll cover the main reasons why systemising a business is important and what we actually mean when we use the term ‘systemise’. Future blog items will cover what an effectively systemised business looks like and how to go about systemising and implementing our ideas in your business.
Firstly, it’s important to define what we mean when we say ‘systemise’. Commonly, most people think about IT and online ‘apps’ when we use the work ‘systemise’. At Fortis, we firmly believe that IT is only part of the answer and well systemised businesses display the following traits:
- A relentless focus on the customer experience of your business and services – the entire business system must be focussed on delivering the best experience to your customers.
- A focus on the big picture – 80%-90% of the work in a systemised business is part of the ‘core’ activities of the business that deliver your offer to the customer. Leaders of systemised businesses understand that areas of their businesses interact with each other and the whole system must be understood first in order to deliver the best customer experience and streamlined business.
- People are the most important factor in the success of a system – people make systems work, not just processes or IT. Hiring the right people and engaging them in the systemisation of the business is critical for success. Processes, procedures and IT should be set up to support your teams to deliver a high quality experience to your customers.
So, how does this help a busy entrepreneur? There are several key benefits to systemising a business:
- Freedom! Running a business is challenging and as businesses grow, typically, they consume the entrepreneur’s time at an exponential rate. Systemising delivers documented, repeatable processes, procedures and IT that are operated by staff who know their job and know what doing a good job looks like. As a result, the entrepreneur can delegate, safe in the knowledge that their high standards will be maintained. The aim should be to have a business that operates without the entrepreneur. At Fortis, we believe that you should work once and benefit forever! An entrepreneur should be working on what adds value to their business, not the day to day repeatable processes that can be systemised.
- Improved results! Focussing on the customer, the big picture and supporting the team improves the quality of the customer experience and a reduces operating costs, therefore improving the performance of the business. Most people believe that improved quality means more cost to the business, when in actual fact the opposite is true. Designing a business around the customer and creating processes, procedures and IT to truly deliver a first class experience to the customer reduces cost and increases profit. Customers today demand a slick customer experience and don’t expect to be handed from one person to another to receive a service or to resolve an issue. Customer focussed businesses therefore create simple and repeatable processes that are highly cost effective to best serve customer needs.
- The possibility to scale or sale! Clear processes, procedures, roles and a motivated team means that a business can be scaled simply as new additions to the team can hit the ground running. Furthermore, businesses are sold based on their system as well as perceived value. The value of many businesses is in their system and these business are seen as valuable and can be easily franchised. Think about Subway, the franchisee is purchasing a cutting edge system that is captured in their operations manual. Obviously, the brand is important, which is why we always start with the customer, as creating a streamlined process for a product or service that nobody wants is pointless. If a great product is combined with an amazing system, you have a brand and valuable asset that could be sold in the future.
- Improve chances of success! It is estimated that between 70%-80% of businesses fail in the first 18 months of operation. Commonly, this is attributed to a lack of understanding of the customer, a lack of leadership, a lack of working capital, a lack of engagement with the operational teams and a lack of systems (https://www.entrepreneur.com/article/299522). Furthermore, systemsisation is often cited as one of the pillars of successful start-up companies (https://www.entrepreneur.com/article/83764).
Any great business is a mix of creativity and freedom to identify and respond to customer needs and highly organised and streamlined systems. This is a challenging line to tread, however, it’s one that is actually underpinned by having a well systemised business. If, as suggested above, the aim is for the entrepreneur to have a business that runs without them, then the entrepreneur has the time and headspace to innovate, rather than dealing with the day to day operation of the business.
Systemising a business can be a challenge for the busy entrepreneur. Ironically, when you are at your most busy is when you need to free up time to work on systemising your business. We call this ‘the irony of systemisation’:
However, there is no better time than now to start on your systemising journey because the sooner you start, the sooner you’ll reap the rewards. Here are some of the challenges associated with systemising your business:
- Time – as outlined above, when you are most busy it is the most important time to start systemising. There are several solutions this is conundrum:
a) Prioritise – in order to move up the level of systemisation curve you should focus on areas where you’ll get the ‘most bang for your buck’. We suggest using the ‘Action Priority Matrix’ as a great tool to help you decide what to focus on first:
Quick wins are the priority here as they give you the most ‘bang for your buck’. Next, major projects are beneficial to complete, but require additional effort, so should be tackled as the next priority. Fill ins are worth doing, but only if you have time or can delegate them to someone else. Finally, thankless tasks should be dropped!
This is a simple exercise and the term ‘impact’ can be used contextually as you need it. In the short term, time is the priority, so the impact you are looking for is ‘which activities can I systemise to free up as much of my time as possible’? Simply list out all of the activities you are undertaking over a week, how much time you are spending on them and categorise them into one of the four boxes. Prioritise working on the quick wins to free your time up for major projects. At Fortis, we believe that the customer and team are key factors in a well systemised business, so future prioritisation exercises could be completed where the impact you are looking for are the positive benefits of systemisation on your customers and teams, which may identify a different set of priorities. Once you work through your quick wins, you’ll have more time to work on other systemisation projects.
b) External help – at times, it may be necessary to get help with systemising your business. From years of experience of working with large organisations, we know that the help you should be looking for is help to implement, to actually work with you to deliver a working business system. We call this an ‘over the shoulder’ experience i.e. learning by doing with an expert. Make sure that the external help you get actually gets you a system, not just the theory.
- Knowledge and experience – systemising a business can be daunting and it’s often hard to know where to start. Using the prioritisation matrix above is a great starting point to understand where you need to begin. Other methods include identifying your pain points and using the ‘5 why’s’ technique to understand the root cause of the issue and using a fishbone diagram to understand multiple factors that are causing a particular issue. Of particular concern to most entrepreneurs is how to set up IT applications to support the team and the processes. There are so many apps available today that can talk to each other (integrate) with easy, it’s easy to become overwhelmed. We will shortly post a blog about recommended apps and their use. However, sometimes, depending upon what’s needed, some expert implementation help may be needed. Once again, be sure that the help you get actually delivers a working system in parallel with teaching you how it’s done. We believe that the best way to understand IT is to see it in action and to see how it’s configured.
- Letting go – many entrepreneurs have a fear of letting go of the day to day work in the business because they are worried that the work won’t get done to their standards. Fear not, for it’s the entrepreneur that sets up the system and it’s the entrepreneur that sets the standards (processes, procedures and soft systems such as staff behavioural standards). Letting go does not mean no control over the work or how the work is done. Great systemised businesses work on performance measures (from the IT) that show how well processes are operating and this is how the entrepreneur keeps in touch with the work. Process measures provide the early warning system that something isn’t going as planned and the entrepreneur can work with the team to improve the process.
Hopefully this blog has provided you with a useful introduction to systemisation and some of the challenges.