Systems define your business.
If you believe your business is the product you are selling (it is), then the systems that make your business work hold all the value. The systems you use are what differentiates you from the competition. They are your unique way of doing things.
Like your brand, these systems exist whether you do anything to manage them or not. And, like your brand, leaving systems unmanaged is a bad idea.
Maybe the thought of systems (or processes, or standard operating procedures) leaves you cold. They conjure images of a bureaucratic nightmare. Images filled with miserable employees and even more miserable customers.
It doesn’t have to be that way.
When done right, systems will free you and your employees to engage with the work or the customers. Needing to focus on how to do something shifts your attention away. The system leaves you free to deliver a much more pleasant experience to the customer – and to other employees.
The many benefits of having documented systems in your business include:
- Standardization. Things get done the same way every time.
- Flexibility. With documented systems, the business is no longer captive to the one person who knows how to do something.
- Quality. Systems should be designed to result in the best result. When followed, quality is a natural outcome.
- Innovation. When procedures are standardized and consistent, it is easy to alter specific parts and measure the change in results. This makes innovation efforts more effective.
What should I create systems for?
The short answer is everything.
If every element of your business is managed by a system, you can replicate your business (or sell it to someone else to replicate). All you need to do is hand over a copy of the systems.
Sound familiar? That is exactly what people buy when they open a franchise.
Documenting every system in your business at once can be a tall order.
The more common (and more sensible) approach is to start with the important processes. Work on the less important areas as time and resources allow.
What are the important areas?
Generally speaking, you’ll want to start with systems in your business that are most critical to success. Perhaps that is a system for closing sales. Or a system that ensures perfect delivery every time.
Another way to decide what to work on first is to create systems to address problem areas. I outlined a process to identify and transform frustrations in a previous post.
What do systems look like?
There is no one perfect format for your systems. What works best will depend on your business.
I’ve seen business owners use everything from detailed step-by-step instructions to simple checklists. Let your knowledge of your business guide you here.
I’ve also seen systems collected in different ways, depending on the needs of the business. Your systems could be in any number of these formats:
- Printed in a binder
- Stored electronically in any number of programs
- Handed out to employees as laminated cards or sheets they can carry with them
- Displayed at work stations where the process will be done
How do I create a system?
No matter the format you choose, every good system needs to cover the who, what, when, where, why, and how of the process.
Use the outline below to write your systems.
1. The result
Start by describing, specifically, what result the system is supposed to produce. This is the why of your system. For example, “To order supplies for production” or “To close the previous quarter’s books.”
2. The steps
Write out a detailed list of the steps needed to complete the process. Use your judgment about how much detail is enough. This is what needs to be done.
In longer or more complex processes, it is often helpful to draw a flowchart of the steps so people can see how the steps fit together.
3. The people
For each step, decide who needs to do it. Assign a specific person to be accountable for completing it. It is a good idea to specify positions here instead of names (i.e., “Office manager” instead of “Bill”). The people will come and go, the positions will remain.
For some systems, one person will be responsible for every step. For others, many people may need to be involved.
4. The timing
For each step, specify when it needs to be done. The timing will probably be a mix of absolute (daily by 10am, every Friday, etc) and relative times (within 4 hours of receiving).
5. The resources
Create a list of any equipment, supplies, facilities, or information needed to execute the process. Some systems will have long lists of resources. Some won’t require any. This part answers the where for your system.
This list will serve as a checklist for the person using the system to make sure they have what they need to get the job done.
6. The standards
Make a list of the quantity, quality, and behavior required to execute the process. This is the how of the system.
For example, you might include the number of rooms to be cleaned for a housekeeper. Or the acceptable defect rate on a production line. Or how a sales person is to greet a customer.
Putting it into action
Once you’ve written the system, you need to introduce it to employees and decide how to measure its success.
The measurement part is important. The entire point of creating the system is to make the business work better. So you need to know whether that is happening.
Look at the standards you listed. These are probably the items you will want to measure.
Remember that these systems aren’t carved in stone. Once a system is working, experiment with changes to see if you can improve it. When you find an improvement, update the system.
I wrote about how to practice continuous improvement recently.
It can be daunting to write out systems. So, start small. Build your confidence that these systems make the business better. Then tackle increasingly bigger things. Before you know it, you will have everything in your business documented.
Email me and let me know how it goes.