Business Systems and Processes^.

Developing effective business systems and processes is both an art and a science. Like any discipline, there are underlying principles that govern success. Transgressing these “laws” can have grave consequences.

Consider these seven deadly sins that will sabotage your business systems and diminish the performance of your entire organization. 

1. Not Customer Focused – Your target market is the only market that matters to you! The opinions, needs, and desires of your customers should be foremost in your mind as you develop your products, services, and business processes. If your operations do not deliver high quality, prompt service, good value, and a pleasurable buying experience, patrons will go elsewhere. Effective systems leave nothing to chance and enable you to deliver consistently on your promise. Enthusiastic customers will return often, and tell their friends.
2. No System Owner – Your organization is made up of interrelated and interdependent systems. Every important business system should have a name and an owner or team leader with the authority to solve problems, make decisions, train and supervise others, and initiate improvements. When there is no system owner, there is no one accountable for results, and performance suffers. Elevate the right person to be the system owner by giving them full responsibility. Enlist their knowledge, talents, energy, and resources to improve the system and raise the bar on performance standards.
3. Inadequate System Components – Missing or poor-quality system components—the physical objects required to make a system work—cause many small-business systems to sputter. Workers lack the critical tools to get the job done properly and efficiently.  Components include such things as policies, job descriptions, checklists, scripts, forms, flow charts, reports, databases, brochures, equipment, software, supplies, tools, and even the right people. Business owners often fail to notice the missing components, do not realize their potential benefit or are not willing to spend the time or money to acquire them. Whatever the reason, inadequate components cost business owners dearly in customer satisfaction, quality, efficiency, and bottom-line profit.
4. No Measurement or Feedback – When your core business system or processes are not measured, and there is not a steady stream of performance feedback to team members, there is no learning and growth. Measurement and feedback drive all process improvements. Thomas S. Monson, business and religious leader has observed, “When performance is measured, performance improves. When performance is measured and reported, the rate of improvement accelerates.” Learn to manage by the numbers. Establish process measurements that let you know every day how you stand in relation to your company goals. Strive to better your best!
5. Ignoring Constraints – Constraints are the physical and non-physical barriers that prevent your company from reaching its full potential. Simply put, constraints reduce the output of your business and raise costs. They include such things as inadequate sales, process bottlenecks, excessive mistakes, waste and rework, delay, downtime and inefficiency, clutter, unnecessary movement, complexity, and more. Constraints can also be found in company policies, employee attitudes, poor training, faulty assumptions, procrastination or indecision, and so forth. Low-quality and slow-speed are what make business processes—and the resulting products and services—expensive (see Cost Reduction: Better, Faster, Cheaper). By removing constraints, you will elevate system performance and the output of the entire business.
6. Blaming People – Low productivity and lack-luster work performance happen when people are put into poorly designed and dysfunctional business systems. First, get the RIGHT people into the RIGHT systems. When problems do occur, look at improving the system before finding fault with people. Blaming people usually takes attention from the true cause of the problem—a flawed procedure or system component. It is the owner/leader’s job to create an environment for employees to perform at their best. If you need to blame a person, start with yourself. Then go fix the system.
7. Systems are Not in Writing – Undocumented policies and procedures are the sign of a low-grade business—one characterized by inconsistency, frustrated customers and employees, “seat-of-the-pants” solutions, and crisis management. Rudimentary systems are often invented by workers and change on impulse. Word-of-mouth training perpetuates variation and inconsistencies. Systems and processes evolve in unexpected ways as people come and go from the company. By putting systems in writing you let people know, “This is how we do it here.” Michael Gerber, business author, said, “If it’s not in writing, it’s not a system!” (E-Myth Revisited) 

Become a Systems Thinker

Your greatest challenge to creating a culture of excellence will likely come from managers or employees who have not learned the importance of developing effective business systems (see four stages of learning) or do not have the will to implement them. The deadliest sin of all is when the business owner, managers, and employees are not Systems Thinkers!

There is a right way and a wrong way to build a business. Transgressing the laws that create loyal customers, happy employees, and financial success are sins not easily forgiven or forgotten. I need to do a little repenting. How about you?