A company without systems is a company without a compass in the jungle. Implementing business systems to help you and your employees accomplish the tasks at hand is key to ensuring that your business keeps growing.
If you want high potential company, you need to create systems on which the whole work will depend. Your company is a system that requires subsystems to operate normally.
How do you make a difference when it comes to running a business? The answer is simple. You implement systems! And, the good news is that by using a proven 8-step process, anyone can turn their organization into a machine for generating profits!
You are an entrepreneur, and one of your responsibilities is to manage the businesses if you want to grow. On the other hand, managing, in simplest words, can be presented as systematizing all business activities that your business must accomplish to ensure that your company will deliver value to the customers.
Today we will review eight of the most important steps to implement systems that will help you run your business more effectively and efficiently.
So, let’s start first by explaining what the system means, so you can start creating standard operating procedures.
What is a system?
A system is a set of interrelated and interdependent elements that function and exist to transform inputs in the system into outputs.
We can notice several things from these words:
- First, it is a set of two or more elements. We cannot say that we have a system without minimum two elements in it and these elements are subsystems.
- Second, these elements are interrelated between them. What does this mean? Elements in the system are connected between themselves so that the output from one element at the same time can be input in another element. The output from the last element is the result of the system or simply said the purpose of the existence of the system.
- Third, the elements are interdependent. Elements in the system are dependent on each other. If there are problems in one element, this easily can make disorder in other elements.
- Fourth, the purpose of the elements is to achieve the goal of the system. They must have a goal that logically is to make the desired output which can be accomplished by the functionality of all elements.
What are the Subsystems of the Businesses
For example, we can talk about continuous learning systems, competition monitoring, communication with customers, communication with potential customers, etc. All of these systems are only subsystems of your business as a whole. If you apply the systematic approach, continuous learning will be a subsystem of the business development subsystem. At the same time, the remaining three that I have mentioned here will be subsystems of marketing. In this way, all above mentioned would look like this:
- Business Development
- Continuous learning
- Competition monitoring
- Communication with customers
- Communication with potential buyers.
- Business Development
Do you now have a better picture regarding where subsystems belong and who is responsible for their application? Can we now see a bigger picture than previously? Indeed yes, because we can see which departments are responsible for implementing specific activities to achieve the particular goals.
Why You Need to Have Subsystems?
If your goal as an entrepreneur is to build a successful system that will grow, you must apply some of the laws of nature to business. This law of nature is thinking in the form of systems.
Your business will need to have different elements that will be subsystems of the business. In some cases, the problems in one of them can cause a collapse of your whole company.
Let’s take a car as an example. If there is a problem with the lubrication, this problem will bring a problem in the engine, and then your car will lose the functionality – to transport you from one place to another.
The answer is simple. Start to systematize your business. Yes, your job as an entrepreneur is to organize your own business. It is easy to answer but much harder to implement. So, I will try to simplify this with several steps of implementation.
1. What are the goals of your business?
Always start with your business goals.
Your business goals will be the basis for your business processes. It’s all about what you want to accomplish and why you want to accomplish it. Without a clear and realistic sense of your business goals, you’ll likely find yourself chasing your tail, trying to get somewhere. What is worse, in such a case, you will start building processes that will not help you achieve your business goals.
If your goal is to sell products and services to final customers, ask yourself what you need to do to achieve this goal. What do you need to do: produce or buy those products? We can already figure four possible main elements: marketing, production, research and development, and supply. Now you must ask several questions. How can I produce wanted products and services? Or, how can I use research and development? How can I supply these products and services to the final customer? These answers will start shaping all the necessary elements as subsystems of your company.
Next, what you need to do after you have a finished product is to sell it to the customers. For this purpose, you need the following elements: marketing, sales, and finances. And again, here we must answer several questions. How can I market my products? How can I sell them? Or, how can I collect payment?
2. Define all important processes for each function
This step is essential because every process needs to be defined. This includes, for example, the way orders will be processed, how you will respond to a customer, how your business will fulfill procurement, etc.
Respond to these questions:
- What are the most critical processes for each function?
- What will each function need to do in order to bring you closer to your goals?
- How does each function do the work currently?
Answers to these questions will help you define the most critical processes for each function in your company.
3. Find dependencies and relationships between process elements
The idea here is to help you find connections between elements of your processes.
Dependencies and relationships are essential aspects of any workflow. Look at how each element is connected to the others. This helps you determine where you can optimize one part of your process without negatively impacting another part of your process. For example, suppose the manufacturing department has to complete a specific step before the product can be shipped. In that case, we might have a relationship here. This is a simple example of dependency, but it illustrates a concept used in almost every process.
Place all elements that you discover in the previous step on the paper in a hierarchical order. Look at them and note all possible relationships and dependencies between them.
Process maps are helpful tools for mapping out a process step-by-step so that the interdependencies and relationships between those steps become obvious.
4. Determine the activities inside all processes
This is one of the most challenging activities you will have to do.
Determine all activities inside all processes with a brief description and place them near all identified subsystems.
One way to do this is to list the activities in a column on the left side of a piece of paper. Next, describe each activity with a sentence or two describing what you are doing or who you are doing it with.
If you get it done right, you can write about it in the documentation of the operating procedures. This is very important for the success of your business. The team members and your manager should know what is happening in all process subsystems.
5. Document all process activities in operating procedures
Operating procedures are written documents documenting all of the process activities within your business. When employees follow these operating procedures, they know what steps to take to perform a task or carry out a procedure.
It is important for all subsystems with all activities to be documented. This process will tell you precisely the responsibilities of each of your team members and what activities must be implemented. This documentation will produce working procedures for your company.
After documenting, you must test all of them to see if they bring results as planned. The purpose of testing is to find possible problems and solve them.
6. Implement your operating procedures
This is a crucial step in getting your staff to buy into and support a new initiative.
Start with a meeting, explain the process, and then go through the details. People may feel scared by the complexity of a process and the uncertainty of change. However, suppose you start by simply explaining what’s going to happen. In that case, it helps people understand the big picture, and the big picture will help them understand the detail. Once the staff is on board with your plan, put in place processes that will make your new approach work. It’s also helpful to provide a training schedule, including online materials and a hands-on training session.
If you have not implemented these systems, and they are only on paper, your effort will be for nothing.
7. Track the implementation of operating procedures
Another important principle in the operating manual is that of “tracking.” This means keeping a record of everything you are trying to instill in your employees and holding them accountable for your outlined procedures. Without tracking, it is too easy for people to decide to ignore your instructions, or worse, to decide to do the opposite of what you have instructed. When this happens, chaos ensues, and your efforts to implement business systems fail.
Something important for your business is that systems will allow you to efficiently monitor their performances to find all areas of possible improvements.
8. Improve your operating procedures
Improving operating procedures is a little-discussed tactic in direct response, but it’s actually very powerful. Operating procedures are the actions you take every day that ensures your business runs smoothly. Things like filing paperwork on time, sending email reminders, following up promptly on orders, and other “minor” tasks add up to a significant impact on your bottom line.
A key takeaway here is that you should improve your operating procedures. This is especially true if your current operating procedures are ineffective, inefficient, or outdated. You will always need to look for ways to improve your company’s operation. Whether it’s streamlining the way you do things, cutting out waste, or just making yourself more efficient and productive.
And improvement is something that is continuous, an integral part of any system.
Read more about the benefits of the implementation of the business systems.