Business Systems and Processes.

The Systems Thinker Blog

Numbers are the Language of Business Improvement!

Ron Carroll

It is my experience that most small-business owners don’t fully understand the importance of numbers in running their business. Many do not carefully review their financial statements or even know exactly what the numbers mean. It is common for accountants to provide monthly financial information long after the reporting period. By that time, the numbers are cold and of little value.

If this describes your situation, it’s time to make changes!

Business consultant Peter Drucker says, “You cannot manage what you cannot measure.” To which, Michael Dell of Dell Computers adds, “Anything that can be measured can be improved.”

Lagging Indicators

Financial outcomes, such as a Profit and Loss Statement, provide “lagging” indicators of organization performance because they report past results that cannot be changed. They include such things as revenue, expenses, cash flow, profit, return on investment, and other measures. These numbers reveal strengths and weaknesses, performance trends, break-even points, and other intelligence for decision-making and problem-solving.

This historical data is a valuable “report card” of overall business performance; it is important to owners, shareholders, investors, and bankers.Crunch the Numbers

Leading Indicators

“Leading” indicators are the measures of your internal systems and processes that lead to financial results. They are happening in real-time, and you can change or improve them as you go. For example, they might include the number of sales leads generated by marketing campaigns, the number of orders processed or services performed in a day, and so forth.

Here are five types of business measures that are important to you, with some questions to get you thinking:

  1. Efficiency Measures – How many person-hours does it take to make a product? How long is the lead-time between receipt of an order and shipping? How many deliveries do you make in a day? How many customers do you get per advertising dollars spent?
  2. Quality Measures – What is the rate of returned merchandise or service callbacks? How many defects are there per total items produced? What is the average cost to service your product warranties?
  3. Customer Satisfaction Measures – How many new customers do you add per week? What is the frequency of repeat orders, complaints, or referrals? What do satisfaction survey results tell you?
  4. Employee Skills and Satisfaction Measures – How many hours of employee training are performed per month? What percent of employees are certified? What is your rate of absenteeism, or employee turnover?
  5. Innovation and Improvement Measures – What percent of the budget goes to developing new products or services? What percent of sales come from new products? How many suggestions for improvement do employees submit each month? How many are implemented?

Leading indicators are important because the earlier your measurement system reveals a problem or diminished performance, the sooner corrections can be made.

Speak “Numbers”

In summary, measure your core business systems and constantly improve them for better results. At the end of the month, you will get a financial statement telling you the outcome of your effort. Next month, try to do even better!

Don’t get bogged down with all the possibilities for business measurement. Focus on the few key numbers that drive the “economic engine” of your company.

Ultimately, you want to create an organizational culture where everyone speaks “numbers”–the language of improvement. In the best businesses, “Results Rule!” (Randy Pennington).

Related Article:
Manage By the Numbers

The Upside of a Business System Breakdown!

Ron Carroll

You can’t turn on the news without hearing the word “system” thrown around, mostly related to the breakdown of systems in business and government.

Vehicles are recalled due to faulty component parts. Oil and chemical spills damage the ecosystem. Terrorists get through airport security even when their name is on a no-fly list. Financial systems around the world are in crisis.

When will it ever end? … IT WON”T.

If left alone, systems are in a constant state of breaking down; they decline, decay, and deteriorate. It is Nature’s way.

Natural forest fires rid the land of dead trees and wood on the forest floor. The heat from fire immediately germinates buried seeds, and soon a new forest begins to fill the land.

Forest Fire
The cycle of life—birth to death—not only occurs in nature but there are similar patterns in business, including yours.

In the first few months of the 2008 U.S. financial crisis, sixty-eight banks failed and many small businesses closed their doors. As harsh as it sounds, this is a natural purging of the weakest elements of our economic system.

Companies with inferior products, policies, processes, or management cannot withstand the financial stresses. Companies with better business processes (or who get a bailout because they are “too big to fail”) are able to weather the storms.

In tough times, only the fittest survive, those companies that work daily on building strong and durable business systems and processes.

System Breakdowns Can Be Good

The upside of a system breakdown is that before the system fails completely, innovation can elevate it to a new and better way, a higher level of performance.

In the future, we expect to see vehicles of better quality, policies, technologies, and processes that prevent man-caused disasters, terrorists who are unable to breach security, and economic disasters that are averted. (This assumes that we learn from our mistakes—governments don’t always seem to.)

In your company, customer complaints, low employee morale, poor cash flow, and so forth can always be traced to the breakdown of established business systems.

A crisis, in fact, is a system change trying to take place. It is a scream for help. Reorganizing and reordering the system to a higher level is the only solution to prevent an eventual crash.

Caution: It is human nature when things are generally going well not to notice a breakdown that is occurring by small degrees.

Business systems and processes that are continuously monitored, measured, and improved break down much less often. When they do, the cause is usually beyond the business owner’s control.

The System Thinker’s Edge

Systems Thinkers have a distinct advantage. They understand how things work at the detail level. They see trouble in the early stages. They make timely course corrections. While they can’t prevent every problem, they can minimize harm and overcome setbacks more effectively and faster than most everyone else.

Do you have any broken business systems or processes that are causing you to lose customers and money? Fix them while in the early stages, and save yourself a lot of grief later on!

The 80-20 Rule is a System Thinker’s Tool!

Ron Carroll

People frequently refer to the 80-20 Rule in casual conversation. But did you know this law comes from the work of an early 20th-century Italian sociologist and economist, Vilfredo Pareto?

Pareto determined mathematically that, while a great number of factors contribute to a given outcome, only a few carry the weight to change that outcome in a significant way. Roughly 80% of effects or outputs come from 20% of the causes or inputs.

Stated simply, a few things are responsible for the majority of results in a given situation, system, or organization.

Pareto Chart - Reasons fo Lateness

For example, you might observe that 20% of the food you eat packs on 80% of the calories. Twenty percent of your monthly bills consume 80% of your income. I’ll even bet you wear 20% of your clothes 80% of the time?

According to Woody Allen (comedian/movie producer), 80% of success is showing up.

Focus Your Improvement Efforts

The 80-20 Rule is extremely helpful in bringing clarity to complex situations and problems, especially when deciding where to concentrate effort and resources. The following are a few examples of the Pareto Principle. They would tend to be true across a range of mature businesses.

  • 20% of customers account for 80% of sales.
  • 20% of products account for 80% of profit.
  • 20% of advertising campaigns produce 80% of the sales leads.
  • 20% of the products or services cause 80% of customer complaints.
  • 20% of a person’s work consumes 80% of their time.

You get the idea.

When looking for the root cause of errors, mistakes, and defects in your business operation, you will often discover that 80% of the problems come from 20% of identified causes, as illustrated by the graph below. Remedy the few problems that happen most frequently (highest number of occurrences), and you will see a significant improvement in the business process.

Pareto Chart Website Problems

Keep in mind that Pareto observations are not necessarily good or bad. For example, if only 20% of the roads in a town handle 80% of the traffic, that could be good for a maintenance crew who can concentrate on fewer roads. However, it could be bad for commuters who travel across the busy roads. City planners may use this information in a strategy to redirect traffic to less-used roads.

You can also utilize the 80-20 disproportions to your advantage. For example, stores like Wal-Mart and COSTCO only carry books that are best sellers—the 20% of book titles responsible for 80% of national book sales.

The Vital Few vs. the Trivial Many

In your business, a few activities exert the greatest influence on achieving organizational goals. Give your attention to the business processes that matter most, those responsible for finding and keeping customers, and that provide the biggest financial payoff.

Remember: The management of details is critical to success—but not all details are of equal importance. Within a specific system or process, Pareto teaches us to recognize the difference between the vital few (20%) variables or details, and the trivial many (80%). Give the most attention to improving your weak links and removing bottlenecks!

The Pareto Principle is sometimes known as the Law of Least Effort. Prioritize and focus your effort for fast results. A few targeted improvements can be leveraged to create significant benefits within your operation.

What business process or activity could you elevate today that would help your company leap to the next plateau?

And if you have a second, take a quick look at the quality improvement tools—including Pareto Analysis (scroll down page)—in Box Theory™ Software.

9 Tips to Boost Your Marketing Systems

Ron Carroll

For many small business owners, marketing and sales systems are the most important and the most challenging. The market place is highly competitive. Customers are naturally guarded. There is a myriad of marketing methods to consider. Testing can be time-consuming and expensive. Marketing is often a painstaking effort, and always a high priority.

However, a good marketing plan will create a magnetic field that continually pulls new leads and sales opportunities.

Customer Magnet

Marketing Best Practices

Here are nine principles I’ve learned over the years that can elevate your marketing and sales systems:

  1. Be Customer Driven. The best companies listen to the voice of their customers. They uncover facts about their marketplace. They know who their ideal customers are, where they are, what they buy, and why they buy. They don’t design a product and then find a market. Instead, they fit their products to the needs of their current customers and target market.
  2. Appeal to Emotions. Your customers are emotional beings. They are not going to buy anything that doesn’t add something positive to their life or take away something negative. In some way, they want you to remove fear, stress, and pain; they want you to make their life better and happier. Focus on the emotional needs and wants of the prospect (benefits) and use logic (features) to support it.
  3. Target Your Market. You can’t be all things to all people. Focus selling activities on the market segment that has the highest probability of purchasing your product or service. Fit your product exactly to what those people are hungry to buy. Position your message with laser precision so that you are clearly the best option they have. Your target market is the only market that matters to you. Seek to dominate it!
  4. Offer the Best Value. Develop a passion to be the best at what you do. Your business is your real product, and it has to become remarkable. Your inside reality (products, services, and processes) must match the outside perception of your business (brochures and sales claims). Deliver on your promise. Everyone wants the best deal, the best value, and to buy from the best company. Your unique and remarkable business package (quality, warranty, customer service, convenience, etc.), not just pricing, is what makes you the best
  5. Communicate a Powerful Message. Your marketing message–the “value proposition” and the “sensory package” (words, colors, logos, printed materials, etc.)—must explain how your remarkable offering will take away pain or improve their lives better than anyone else can. Communicate a clear and powerful message that shows why you are unbeatable. There is great power in specifics. Quantify, compare, or demonstrate your advantage or claims. Avoid the mindless fluff. Get real! Business philosopher Jim Rohn describes a three-step process to be a master communicator. “First, have something good to say. Second, say it well. And third, say it often.”
  6. Find Cost-Effective Channels. Discover the most cost-effective marketing channels (print, broadcast, trade shows, etc.) to get your message in front of your target customer. The most effective marketing campaigns are multi-faceted, combining two or more strategies (e.g., print, the Internet, telemarketing, etc.). Don’t look at marketing dollars as a disposable cost but rather as an investment in a customized and effective marketing system that will pay handsome dividends in the future. To avoid a ton of wasted money, consult experts (books or consultants), test ideas, and seek inspiration while in “The Zone.”

  7. Sell with a Compelling Story. After your message generates interest (lead generation system), you must have a powerful way to convince the prospect that they would be crazy to buy from anyone else but you (lead conversion system). Your story must be the most compelling in your marketplace. It must also be true. And, of course, you need to tell the story often. “This I know and I know it well, the more doors you open, the more you sell.”
  8. Systemize Your Marketing. Continue refining your systems with the above principles until they produce measurable and consistent results. Over time, you will know more about what works and what doesn’t. Never stop marketing. With good business systems, you will know how to turn sales volume up or down as needed. You will be in control of your marketplace!
  9. Become an Obsessed Marketer. Muster the “will” to be a successful marketer. Allocate time, effort, and financial resources over a sustained period. Don’t expect big results immediately. The momentum will build. Consistent advertising equates with familiarity. Customer familiarity equates with confidence. Confidence equates with sales. Your marketing launch will only hit the moon with a lot of thrust upfront and a series of small course corrections along the way. Stick with it and be patient!

It’s Up to You!

“Marketing is the act of inventing the product. The effort of designing it. The craft of producing it. The art of pricing it. The technique of selling it. How can a [great] company not be run by a marketer?” (Seth Godin, The Purple Cow).

Take a personal interest in your marketing until you have an effective system. Marketing, after all, is the heart and soul of the business you are trying to grow. Carefully study the principles above and find ways to improve your current marketing systems and processes. A tweak here and there can make all the difference!

Lessons from 14-Year-Old Systems Thinkers!

Ron Carroll

Recently, I drove I-15 north to Salt Lake City with a group of Boy Scouts to attend one of their high school hockey games. During the hour-long ride, I decided to have a teaching moment about business systems (I can’t help myself). I asked the boys to look at the billboard ads along the way and tell me what they thought. In a matter of seconds, they were saying things like:

“I couldn’t read the ad because the words were too small.”
“I only had time to read half the billboard before we passed it.”
“I didn’t understand what the ad was trying to say.”
“I read the ad but missed the name of the company doing the advertising.”

Billboard Ad© Some Photo rights reserved by Woodlands Ad Agency

The responses from the boys would be typical of most drivers and potential customers encountering the same ads. Some billboards were effective, but most fell short of their intended purpose. Try this simple observation at sometime when you’re on the highway.

Don’t Waste Your Money

A few years ago, I was sitting in a marketing meeting with a group of people who were planning a billboard advertisement. The owner of the business looked up and said, “There are a lot of rules that apply to billboard ads; for example, you should use no more than eight words.” Then he added, “But I can’t say what I want to say in eight words, so we’re using about fifteen.”

He might just as well have said, “We’ve decided to break the rules and waste our money.”

A billboard is a business system for attracting new customers. If it is done properly, the results will follow. If not, there is a colossal waste of money. The same applies to every system or process in your business operation.

I don’t know what billboards cost these days, but years ago they were about $1000-$2000 per month in our area. As I drove down the highway with the boys, it was obvious that many thousands of dollars were being thrown away because people didn’t make sure that every component of their billboard system—message, font, colors, image—was doing its job.

If you are going to break the rules, there will be a consequence (cause and effect), and you will have an under-performing system. I ask you, what value is there in an ad than can’t be read or understood? And by the way, if you don’t measure how many leads the ad generates, how will you ever know if you have a problem?

Become a Systems Thinker

In a matter of a few minutes, the boys began making suggestions to improve the billboard ads—larger or more legible fonts, fewer words, more contrast, catchy images, keeping it simple, night lighting, and so forth. Without realizing it, these boys were becoming Systems Thinkers. Imagine—at age fourteen!

I did a quick search on the Internet and found numerous articles on the “best practices” for billboard advertising. You may not use this form of lead generation. You may not even care about this topic at all, but there is something you should care about.

The Systems Thinker sees the world in terms of functional or dysfunctional systems; they see things with clarity and in detail. They understand that applying true principles and best practices—the rules—is the surest way to get good results. They know that every step and component of a process has some effect on the outcome. Creating effective business systems—using best-known principles and practices—is the secret to success in all business endeavors.

So take it from a group of Teenage Ninja System Thinkers. Follow the rules. Pay attention to the details. Do it right. And don’t waste your money.

The Two Critical Purposes of Your Business Systems!

Ron Carroll

Many people believe that creating business systems means getting organized and doing things in a methodical way. If you believe this, well, you’re right… sort of. However, you are probably not yet a converted, transformed, and even obsessed Systems Thinker. You’re still looking at systems like most of the world. If you want to tap into the real power of effective business systems and processes, then you need to see them through a different lens.

Systmes Thinker Lens

Let’s take a look at the TWO critical purposes of your operational systems.

Critical Purpose 1: Create Loyal Customers

First, business systems exist to help you find and keep customers. They do this by making you:

  • Better than the competition (You have fewer mistakes, defects, and disappointments that turn customers away.)
  • Faster than the competition (You have better response time, and consistently meet schedules or deadlines.)
  • Cheaper than the competition (You’re able to provide lower prices and more value, precisely because you are better and faster—the primary means of lowering cost).

Your well-run operation—with effective business systems and processes—will give you a competitive edge by attracting more customers and enabling you to consistently meet and exceed customer expectations. Your company will “stand out like a purple cow in a field of brown cows” (Seth Godin, Purple Cow). People would be crazy to buy from anyone else!

You become the best in Your target market because you have the BEST BUSINESS SYSTEMS!

Critical Purpose 2: Eliminate Defects and Delay

Second, business systems exist to squeeze waste out of your operations. They do this by helping you become:

  • Better than before (You have fewer mistakes, errors, and defects to throw away or rework—money down the drain.)
  • Faster than before (You have a less delay, downtime, and inefficiencies that waste time—a costly and unrecoverable resource.)
  • Cheaper than before (Quality and speed reduce cost, making you more competitive and more profitable.)

Your well-run operation—with effective business systems and processes—will create a culture of discipline and excellence, where Results Rule! (Randy Pennington). Employees are happier, productivity increases, costs go down, and profit and cash flow are greatly improved.

You become exceedingly prosperous because you have REMARKABLE BUSINESS SYSTEMS!

Better, Faster, Cheaper

Did you notice that the two critical purposes of your business systems and processes are fulfilled in the same way? When you are better, faster, and cheaper, everyone benefits—customers, employees, and stakeholders.

Good business systems help you rise above the ordinary; they make you extraordinary! There is no other way!

A Small Business Built By Adversity!

Ron Carroll

After forty-five years, I can say the life of an entrepreneur—the life you and I chose—is rarely easy.

The moment we begin our enterprise, unrelenting forces start into motion to drive us out of business. We face slumping economies, cost increases, customers who don’t pay their bills, government red tape, high taxes, unproductive employees, competition, obsolete inventory, cash-flow headaches, constant demand for new and better products, and a myriad of other challenges.

If this doesn’t describe your business, and things are going pretty well now, just wait! Changing business cycles guarantee that you too will one day have most of these “character-building” experiences. Adversity will likely become your constant companion!

Overcoming Adversity - Wheelchair Climber

The Greatest Challenge for Many

In a slumping economy—or even when the economy is good—one of the great challenges of small-business owners is acquiring and retaining loyal customers. The statement in the movie Field of Dreams, “If you build it, they will come,” just ain’t so for most of us.

The brutal reality is that most people don’t want your product or service, don’t have the money to buy it, or aren’t even interested in hearing about it. If they won’t pay the price you need to sell it for, you don’t have a market. If they won’t take the time to listen to your pitch, you are invisible to them. If they listen but aren’t impressed, you can say good-bye to that sale.

Among those few who might consider your product or service, most will never have your offer enter their conscious mind. The advertising noise is so loud, the communication barriers so high, the competition so stiff, and the choices so many, that the odds of you getting the business are pretty unfavorable!

However, you must learn how to weather the storms of hardship, misfortune, and adversity, because they never end—thankfully. Yes, thankfully! You see, the very process of overcoming hard times is the process that will enable you to build a lasting enterprise. It is a process that will help you discover the extraordinary character that is within you!

J.C. Penny said, “I would never have amounted to anything were it not for adversity. I was forced to come up the hard way.”

Three Important Truths

Truth #1: Small-business owners who persist with courage and determination are a class of heroes in this country—providing wealth and opportunities for millions. I, for one, feel that we should give all the support we can to these unsung heroes—AND THAT INCLUDES YOU!

Truth #2: The entrepreneurial endeavor takes vision, discipline, and perseverance. It is plain hard work, and precious few things come easily. Growing a successful business is like the movie star who becomes “an overnight success” after twenty years. A favorite quote of mine from Jim Collins, author of Good to Great, describes the way it happens for most of us.

“The best companies never transform to greatness in ‘one fell swoop.’ There is no single defining action, no grand program, no one killer innovation, no solitary lucky break, no miracle moment. Sustainable transformations [to greatness] follow a predictable pattern of build-up and breakthrough. Like pushing on a giant heavy flywheel, it takes a lot of effort to get the thing moving at all, but with persistent pushing in a consistent direction over a long period of time, the flywheel builds momentum, eventually hitting a point of breakthrough.”

Truth #3: This transformation to greatness requires steady dedication to the development of effective business systems and processes. These same systems also help you withstand setbacks, pull out of slumps, and endure never-ending adversity on your upward climb to success.

Systems Thinkers are quick to adapt to changing and challenging circumstances. Why? Because they have a better understanding of how things work, and why they stopped working. They know how to zero-in on a problem with laser precision, and then fix it.

A Business That Lasts

The best-run companies are always in demand—even during difficult times. Marginal companies—those without good business systems and processes (including marketing and sales systems)—come and go. During rapid growth periods, seat-of-the-pants operations and jerry-rigged business systems fail under stress. This is an underlying reason many small businesses fail!

I want to help you develop a company that will endure. The application of true principles—system-building principles—is the best way, and the only way, to do it right.

Begin today to build a business that not only survives but is healthy and prosperous during challenging days ahead!

8 Characteristics of Good Business Systems!

Ron Carroll

How do you know when you have good business systems such as lead generation, customer care, hiring, order fulfillment, and many others unique to your organization?

Well, the best answer to that question is whether your business systems are hitting their mark, whether they’re getting the intended results. Stakeholders, customers, and employees are also feeling pretty good about your operation. And, you don’t kick the dog when you go home at night. But let’s be a little more specific.

Good Business Systems Hit the Mark

Hitting the Target

Does your business system or process include the following eight characteristics?

  1. The system is designed with the customer in mind. (Does this system help turn your customers into loyal fans?)
  2. The system represents your best-known way of doing something. (Be honest. Is this the best you can do, or could you make the process better?)
  3. The system has one primary purpose. (What is the single objective of this business system, and does it help you accomplish your company objectives?)
  4. The system has an owner. (Who is accountable for, and reports on system results?)
  5. The system is as simple as possible, documented, understood by workers, and repeatable. (Is your system in writing? Are your people motivated and capable?)
  6. The system has performance standards, and results are measured. (Improvement requires measurement. Are you “managing by the numbers”?)
  7. Workers get ongoing feedback about system performance and are recognized for good results. (The more frequently people get feedback, the better they perform. Do you celebrate victories?)
  8. There is a sufficient focus on system details to eliminate most bottlenecks, inefficiencies, waste, and rework. (Every process has waste. Have you reduced it to a minimum?)

Never Stop Improving

Your small business can become a great business if you have a never-ending desire to improve. Do you have the will, the pig-headed determination to create business systems and processes with the characteristics described above?

You’ll know you have arrived after you go on a month-long vacation and find the business running smoothly when you return? Now, that’s a goal worth working towards! Wouldn’t you agree?

Polish one or two systems at a time. Before you know it, your whole business will shine. And keep in mind, Box Theory™ Software will enable you to create exceptional business systems and processes with all eight of the essential characteristics—AND IN HALF THE TIME. Let’s get going!

Bad Days Happen, Even with Good Business Systems!

Ron Carroll

Have you ever had one of those days when “a series of unfortunate events” collides with a “perfect storm”… and you’re in the middle?

Perfect Storm

Even the best-run companies in the world have things go wrong. Trouble is a life-time companion for all of us.

Ouch, That Hurts!

Maybe you’ve had a day like one unlucky gentleman who worked for an English company. The company owned a piece of property in the West Indies that was damaged by a violent storm. The man was sent to repair a building and wrote to his manager of the experience.

“Respected Sir,

“When I got to the building, I found that the hurricane had knocked some bricks off the top. So I rigged up a beam with a pulley at the top of the building and hoisted up a couple of barrels full of bricks. When I had fixed the building, there were a lot of bricks at the top left over.

“I hoisted the empty barrel back up again and secured the line at the bottom, and then went up and filled the barrel with the extra bricks. Then I went to the bottom and cast off the line.

“Unfortunately, the barrel of bricks was heavier than I was, and before I knew what was happening the barrel started down, jerking me off the ground. I decided to hang on, and halfway up met the barrel coming down and received a severe blow on the shoulder.

“I then continued to the top, banging my head against the beam and getting my finger jammed in the pulley. When the barrel hit the ground, it burst its bottom, allowing all the bricks to spill out.

“I was now heavier than the barrel and so started down again at high speed. Halfway down, I met the empty barrel coming up and received severe injuries to my shins. When I hit the ground, I landed on the bricks, getting several painful cuts from the sharp edges.

“At this point, I must have lost my presence of mind, because I let go of the line. The barrel then came down, giving me another heavy blow on the head and putting me in the hospital.

I respectfully request sick leave” (Clipped from an English newspaper).

Better Days Ahead!

As they say, “some days you get the bear and some days the bear gets you.” So what does a Systems Thinker do when things—that normally run smoothly—go terribly wrong?

Probably nothing! Life is tough. Stuff happens. People make mistakes. Systems fail. Storms come and go.

But gratefully, the sun comes up another day. And the future is always bright for those who apply the Master Skill to build better business systems and processes.

Eliminate 8 “System Busters” from Your Business Systems!

Ron Carroll

Sir Walter Scott said, “It is more than probable that the average man could, with no injury to his health, increase his efficiency fifty percent.”

While that may be true, your people don’t intend to be inefficient; they just do what comes naturally in the work environment YOU provide. If they have to jump over hurdles, most won’t complain, but you’ll pay extra for each jump. Let me explain.

Business Obstacle

In every business system or process, there is the potential for “system busters,” “speed bumps,” or “time traps” that drag down system performance, add to human error, reduce quality, and increase labor costs. You need to put on your System Thinker’s hat, identify these termites that are eating away profit, and exterminate them.

Below are eight such system busters to look for:

  1. Physical impediments create a waste of time and effort (e.g., an obstructed aisle; clutter; things hard to find; piles; messes; unsafe or uncomfortable work conditions; general disorganization).
  2. Extra movement from a poor layout of work areas and walking distance adds time to complete a task. When this is multiplied by many people over the course of a year, it can be very costly (e.g., printer at the far end of an office; poorly laid-out production area or warehouse; unnecessary steps in a process).
  3. Distractions are small interruptions that cause people to lose focus on the task at hand. Continuity and momentum are disrupted. These can be big time-wasters and the source of mistakes (e.g., workers look up to see people coming and going; personal telephone calls; excessive talking with co-workers; surfing the Internet).
  4. Mistakes and rework require a duplication of effort and lost time that could be spent more productively (e.g., handling rejects on an assembly line; processing returned merchandise; researching data entry errors; returning to a job site to fix a problem).
  5. Downtime is a major interruption to system flow. A system or process stops because another system is dependent upon breaks down (e.g., needed supplies don’t arrive on time; power outage; corrupted or lost computer file; work stalled at a bottleneck). Every in-basket or pallet of materials waiting to be worked on is in a state of downtime!
  6. Start-stop workflow occurs when people work more than one system or process (job function) and switch between them. This decreases concentration and momentum, increases the risk of operator error, and makes it difficult to measure performance (e.g., shifting production schedules; “multitasking,” “wearing multiple hats,” or being “spread too thin”).
  7. Complexity, incompetence, or confusion can make it difficult for people to follow through on instruction or direction given (e.g., poor documentation; inadequate training; multiple bosses; conflicting priorities; too many choices/options). Keep it Simple!
  8. Unfinished items are a mental and emotional drain, and decrease efficiency (e.g., back-orders, accumulation of tasks, half-finished projects; long to-do lists). The more incomplete items there, the longer the completion time stretches out for each of them. Stay focused on a few things and be a finisher!

Wasted Time is Never Recovered

You can’t eliminate all the speed bumps, time traps, and system busters. However, with the eye of a Systems Thinker, you can cut a lot of wasted time from your operation.

Fix your faulty systems or processes before trying to fix people. The cause of inefficiency is usually because YOU didn’t implement a good business system. Blaming people will often prevent you from uncovering the true source of the problem.

Take a look around your business today. Can you improve the layout, working conditions, or get more organized? Can you reduce rework, downtime, distractions, and complexity? Can you get those half-finished jobs completed? For increased profit, find ways now to reduce and simplify your business operations.

Just Retired
Gone Fishing
Your Lucky Day

It's time for me to focus on other things. Many hours and dollars have gone into my software and written materials over the last fourteen years. Now it's time to give back. This is not a gimmick. There is nothing to buy. I give it all to you for free. If you use the software and apply the principles, you can create a remarkable company. See Below. Have fun!

Turn Your Business Into Money-Making Systems!

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Quotes about Business Systems

So, What Exactly is a Business System?

Video: "All Wealth is Based Upon Systems"

Michael Gerber, "E-Myth"

Michael Gerber

"Organize around business functions, not people. Build systems within each business function. Let systems run the business and people run the systems. People come and go but the systems remain constant."

All wealth is based upon systems - 4 Big Ideas 1 Short Video

W. Edwards Deming, Total Quality Management

W. Edwards Deming

"If you can't describe what you are doing as a process, you don't know what you're doing. . . . 94% of all failure is a result of the system, not people."

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