System components are the physical ingredients that go into your business processes. They include forms, checklists, reports, software, equipment, tools, websites, people, and so forth. As I work with small-business owners, I find that many essential system components are missing or of poor quality, seriously degrading overall business performance.
For example, a worker lacks a checklist; the wording of a website offer isn’t clear or compelling; a completed form has errors due to vague instructions; needed supplies aren’t ordered on time; a frequently-used tool has to be shared by two departments. In each case, a weak or missing system component is reducing potential profit.
In a warehouse I recently visited, a single pallet jack was shared by receiving area employees and shipping area employees who worked at opposite sides of the building. A worker walked across the building several times a day to borrow the jack. The calculated labor cost of the walking was a mere $7 dollars a day—not a big deal you may think. However, this downtime adds up to an annual expense of about $1800. The purchase of a second pallet jack—system component—would have paid for itself in a few months, and added nearly $2000 per year in profit after that.
Little things can make a big difference over time, and often go unnoticed by business owners. Inadequate or missing system components increase costs and reduce customer satisfaction. Do you need to add or improve any components in your business processes?
Details Matter!
A single word on a vendor door-hanger (system component) totally changed one of my days during the winter holidays. Let me explain.
Rocky Mountain Power has a system for informing its customers when power will be shut off for repair work. Part of the system is to place a door-hanger at the homes of affected customers several days before the work is scheduled.
The notice on my door read, “We are working on the electric facilities in your area. A planned interruption is scheduled for Thursday, 12/29/2016 between 8:00 a.m. and 3:00 p.m.”
On that day, we turned up our heater to 78 degrees to get the house warm before the power was turned off. I went to the local library to work on my computer, and my wife rearranged her day to accommodate the outage.
When I returned home in the late afternoon, my wife said, “The power was only off for fifteen minutes.” “Are you kidding,” I replied.
I went back and looked at the door-hanger. Go read it again (in bold above). It sounds like the power is going to be turned off for about seven hours. On the other hand, it could mean the power would be off “some time” between 8:00 a.m. and 3:00 p.m.—like fifteen minutes! Adding the word “sometime” would have made all the difference.” (Better yet, they could have said something like, “the power will be off for thirty minutes to an hour sometime between 8:00 a.m. and 3:00 p.m.”)
Are You Paying Attention?
Glitches in system components like the one just described are very common. They cause frustration, lower productivity, annoy customers, and cost you money. More than you may realize!
Employees usually don’t complain more than once about a missing or faulty system component. They simply invent a work-around and try to make the most of the situation. Customers don’t voice their frustration as much as we’d like; they just take their business elsewhere.
I could call Rocky Mountain Power and tell them about this problem. I politely tell many companies I do business with how they might improve their systems (the burden of a Systems Thinker). Sadly, I get blown off by 90% of company representatives. They are too busy to deal with my silly issues.
Rocky Mountain Power has a monopoly and doesn’t have to listen. BUT YOU DO! Pay attention to the little details that bother employees and customers. Fix the piece of equipment. Upgrade your website. Create a checklist. Improve the wording on a form. Buy a second tool. You will benefit more than you can imagine, and the loose change you save from little improvements will add up to big dollars!
Pick one system in your company today, and carefully evaluate each component part. You’ll be surprised by the number of small and low-cost innovations that can make your business processes better, faster, and more profitable.
Footnote: After posting this article—and to my great surprise—I got a call from a very nice woman at Rocky Mountain Power who apologized for the inconvenience caused. I was very impressed! Some companies are not too big to listen to their customers, and Rocky Mountain Power is one of them.
