It seems like everywhere I turn lately I hear systems, systems, systems!!! There’s a good reason for that. Most small businesses are sorely lacking in systems. Some say that in business, systems are everything. They empower employees to do their jobs efficiently and effectively while maintaining a consistent level of quality.
Why Are Processes So Difficult?
Many business owners struggle to create systems. Regardless if it’s because creating and documenting systems requires them to slow down and think things through thoroughly, write out processes in painstaking detail, or something else, it just seems to be put on the back burner…until the business owner is burning up in Contractor Prison / aka Hell.
Additionally, when business owners do get around to documenting their business systems and processes, they too often create business systems that are needlessly complex and bureaucratic. This can frustrate and demoralize employees, leading to decreased productivity and quality. Then all the time and effort given to creating all this ends up collecting dust, stuffed in a file drawer, or buried in a cloud drive…providing no value to the business.
In this blog post, we will discuss how to build simple business systems that will empower your employees rather than encumber them!
I call these business systems ABLE-Systems, and they are one of the Three Keys to escaping Contractor Prison that I teach.
Before we dive into the specifics of ABLE-Systems, let’s look at what business systems are and why they are important.
What are systems and why are they important in business?
A business system is a defined set of principles, practices, and procedures that are applied to specific activities to achieve a specific goal. Basically, it’s about creating efficiencies so you can get the same results with less effort.
In business, systems are vital because they help to create repeatable results. This is important because it helps to ensure that employees are empowered to make decisions and take action without needing to wait for direction from a manager. When systems are in place, employees know what is expected of them and can work more efficiently. Additionally, systems help to ensure consistency across different functions of your business.
Systems also help you scale your business at a faster pace, and they help business owners monitor without micromanaging.
What is the Difference Between a System and a Process?
Often used interchangeably, systems and processes are actually different. Let’s clarify:
- A system is a group of items or components that form a cohesive whole.
- Processes are all the related parts (activities) that make up the system and work together to make it function.
For example, a Sales System could be made up of different processes, like the needs analysis process, pricing process, proposal process, contract process, and paperwork approval process.
What Happens When a System is Missing
When a system or process is missing, unclear, or untrained, employees are left to do what they think is best. I call this freelancing. Many times freelancing involves the employee doing things the easy way or the fastest way…not necessarily the best way for the business or the client. Plus, even the most well-intentioned employee may not have the knowledge or experience to make the right decision…the one that’s in the best interest of the business.
Good systems consider the variables ahead of time, reducing the amount of time, expertise, and brainpower needed to make decisions in the moment.
If you don’t have your defined company way of doing things, don’t be surprised when your people freelance. If you have five or ten salespeople all pricing projects their way, selling projects their way, and documenting the scope of work their way… you’ll end up with inconsistent pricing, scoping, etc. which will lead to a mess and prevent you from scaling upward.
Good Systems Set “The Standard”
Since a good system has clear and concise documentation, there was always a measuring stick oh, the standard, by which the right way to do things is always measured against.
For instance, many years ago I paint steak and Lee went through the process of creating an employee handbook. One of the things included in this handbook is what holidays we will be closed on each year. It never fails; every year I get asked the question if we are open or closed on such-and-such day. Since I made that decision a long time ago, I always direct employees to look in the employee handbook. That eliminates my need to rethink things each and every time, and it also ensures consistency.
Good Systems Help Pinpoint the Source of Failures
One of my favorite parts of good systems is that it helps you diagnose problems and pinpoint failures rather than just pointing fingers or telling people to try harder.
If one of my gutter crews shows up at a project and doesn’t have the right parts to complete the job, then we have lost a lot of money and wasted time. The process that I developed over time allows me to pinpoint what went wrong so that I train or correct my employees.
Here are the questions I want to be answered:
- Did my Project Consultant scope it right?
- Did my Project Consultant get our client to sign off on the color selection and the schematic?
- Did my Sales Integrator compare the drawing to the parts list that was to be ordered?
- Did my Gutter Expediter order the right parts?
- Were the correct parts delivered by the vendor and checked into my warehouse by my Gutter Manager?
- Did my Gutter Manager ensure that the correct parts were loaded onto the truck in the morning before the crew hit the road?
As you can see, there are a number of opportunities for mistakes to be made and a number of different people involved. If I don’t make this process clear on W.W.W. (Who Does What When), I will always be chasing my tail, wasting time kind of losing money, and frustrating customers and employees alike.
Good Business Systems Provide Structure
Areas in your business without systems could be compared to humans with muscles but no bones. Our bones provide pivot points and direction so that our muscles move things consistently where we want them to go.
Good business systems front-load the thinking so employees can move faster and maintain accuracy.
Combatting Complexity in your Business Systems
Complexity is the enemy of your business, and keeping things simple is vital in order to keep everyone on the same page. We’ve all heard of Keep it Simple Silly(K.I.S.S).
Sometimes it takes a complex back end in order to create Simplicity for your end users. The more moving parts there are, the more opportunities there are for failure…aka inconsistency.
One of my favorite analogies is the kids’ Easy Bake Oven. By following just a few simple steps, even a child can make delicious chocolate chip cookies every single time… safely.
If a process is too complex, and only the expert(you) can run the process, then it is a Fragile System, meaning that it will break when you try to delegate it.
The optimal amount of complexity is that which creates the most simplicity.
A while back I heard Jocko Willink, U.S. Navy SEAL officer and co-author of the #1 New York Times bestseller Extreme Ownership, speak at an industry event about leadership on the battlefield when decisions and actions seriously mean life or death. One of his main points really resonated with me. He said that “The best plan is the one that every single member of his team understands.”
Although we typically don’t face life and death situations in business, I feel that his point is still relevant and true for us as well. We need things to be so clear that our employees can execute the plan over and over again with consistency.
Watch out for Complexity Creep
Complexity Creep is when a system or process becomes increasingly complex over time. Although we want to make sure our processes are thorough, when they get too complex, they take too long to learn.
- Repeat-ABLE: The process can be done time and again the same way. This starts with documentation in the form of process transcriptions, video demonstrations, screen recordings, or checklists.
- Predict-ABLE: Not only does this mean that you have the confidence that doing the process over and over again will produce the same results, but that when you scale up the input, the output will scale up linearly or even better.
- Teach-ABLE: Again, documentation is key, but you have to be able to show someone how to do, and then observe them in a safe sandbox environment until you and they have the confidence to perform on the battlefield.
- Transfer-ABLE: If you cannot delegate the process to a team member, then you need a better process or the right person. In my business, I want to train someone on how to perform a process, and then have them take ownership of the process and accountability for the results.
- Measure-ABLE: The final key to an ABLE-System is that it is measurable. If you cannot boil it down to a number, you don’t fully understand it. Some things are easier to measure than others, like contracted sales last month. That one is pretty easy to measure. How about client satisfaction? Or employee engagement? These are not so easy or obvious, but there are ways to measure them. And when you can measure… you can improve!
How to Get Started with ABLE-Systems
If you are just getting started with documenting your systems and processes, it can seem quite overwhelming. Let me help you out with some simple tips using the Pareto Rule (80/20). The top 20% of your processes will give you 80% of your results:
- Write out your processes
- Narrow them down to the most important 20% <– Start with these.
- Create a digital document for each one.
- Write out the top 20% most important steps for each process in the corresponding document. Use bullet points if possible.
- For each process, have the person responsible for performing each process improve what you created. Give them a deadline of one or two weeks. Make sure you have a definite day, time, and place on the calendar for them to present the improved version to you.
- Set a reminder to repeat step 5 every 6 or 12 months to keep processes updated with changing business needs.
Always remember that good business systems do not encumber people with surely red tape and bureaucracy.
The best way to ensure your business systems are effective is by making them simple, trainable, and repeatable. By using the Pareto Rule to narrow down your most important processes, you can focus on creating systems that produce results. Make sure you document these systems so they can be taught and transferred to other employees, then measure and improve them over time.