On Accounts - Start owning your systems

Philippa O’Mara reminds us that systems need to be documented so that everyone involved can deliver a product or service efficiently.

I’ve talked at length about the sales equation to grow your business in previous columns.

The only other way to grow your business and improve profit is to make sure that you have systems that are consistently applied in your key activities. Here I’m referring to the systems and procedures that you use to make and deliver your core products or services.

The objective is to increase the effectiveness of each key business process so that the ‘cost per unit’ is at an optimal rate. This isn’t necessarily about doing this cheaper. It’s more about doing it the same way each and every time, which gets the right result for the business whatever it does. Think of that fast food customer service question “would you like fries with that?” Or the workflow to purchase an airline ticket online.

Michael Gerber said “Every great business in the world is systems dependent, whereas every small business in the world is people dependent.”

Here are some more good reasons to have systems:

Anyone can operate the system. This will enable you to step back from working in the business and concentrate on working on it.
The business is less dependent on any individual or group. So you will be able to operate despite staff illness, retirement, defection and industrial disputes!
The business is easier to grow since others using the system can replicate it.
The systems can be tested and improved in a systematic and scientific way. As a result, everyone ends up using the same optimal processes rather than doing things in their own (often sub-optimal) way. This means a happier team and happier customers.
What you do, how you do it and the results you get all become more consistent and predictable. So you can relax, secure in the knowledge that everything works.
For all the reasons above, your business becomes more profitable, valuable and saleable.

Systems are what a business does; they describe exactly how a business operates. Systems can take many forms – procedures manuals, written scripts, standard forms, checklists, standard letters. These systems might be in hard copy, saved on a computer or server for viewing and using, or embedded in external and internal websites to populate business databases. The challenge for businesses is to capture them in some written-down format.

Well-designed and documented systems can be the greatest asset a business has. But what I do see is that few businesses have documented systems. The problem with not documenting systems is three-fold:

If you don’t write it down you don’t own the system.
If you don’t own it you can’t change/improve it.
If you don’t own it the way it’s done will change continuously and eat into your margin.

Some systems are quite difficult to document in a standard way and you may need to think innovatively. A system might only require a photograph to represent the outcome – for example, the place setting in a restaurant before a customer is seated. Other systems will lend themselves to step-by-step descriptions of commands combined with scripts, standard letters and forms to be used. You don’t have to document everything that the business does (there could be thousands of processes) but you do have to make sure that the critical processes are documented and understood by your team.

Whatever your business makes and sells, there are critical systems that need to be documented so that everyone involved can deliver the product or service efficiently.
So start owning your systems!