In this part of the anatomy of a foolproof system, I will discuss the Principles of Systemizing a Business.
• A business is a system of systems.
• To create a system – start with the end in mind.
1. Establish the results the system must produce.
2. Determine what work is needed to get those results.
3. Decide what resources are necessary to do the work.
You must know exactly what result you want to produce and you must be precise about it.
The end result is what is produced by the system. The results come from one system and their outputs and they can be the inputs to other systems.
The work is the processes. The work steps – the timing, the coordination, the standards, people, equipment, and procedures necessary to produce the required results.
The resources are the inputs. The supplies, equipment, time, information, machinery, tools, etc. for the system to operate successfully.
For the same reasons that you establish objectives for your business, you must also set up objectives for each of the systems in your business. For a system, the objective is the result that the system has to produce. It should be obvious that defining the end result before you start is going to allow you to make decisions and do the work that will produce the result you want. If you don’t define the objectives for your business, or the results for your systems, than your progress is going to be based on some vague feeling, or trial and error. Both of which are more random than intentional. Both of which generate false starts or unsatisfactory results and excessive expenditures of time, work, money and anxiety. The point is that as soon as you can, and as precisely as you can, you must define the end result that you want your system to achieve and then design a system to produce that result.
I’m sure you’ve heard of the Butterfly Effect. It goes something like this: Somewhere in Southeast Asia, a butterfly flutters its wings and the fluttering nudges a little of gust of wind and the little gust of wind gives a small boost to another larger gust and another and so on until somewhere over the Pacific a full blown typhoon howls across the water. Most of the time, when a butterfly flutters, it amounts to nothing, but every now and then, a small event influences other events until the end result is a major problem. It’s the same with systems. Something minor that occurs early in the chain of systems can knock the entire system out of whack. That’s the sort of thing you can uncover when you use the No Blame Problem Solving approach that we talked about in a previous blog.
It’s not just the end result that’s important. It’s also the details of each system. If one system in your business, or even part of the system, is poorly designed, it’s going to affect each of the systems that depend on it for input and will result in poor end product or service. Even little details can change the course of other systems in the business.
Imagine, for example, what would happen if a simple business like assembling lawn chair – you bend a few metal tubes, you put some paint on, you attach some plastic straps, drill some holes, and you screw on some nuts and bolts – what if the hole driller or the tube bender was sloppy? No problem for the hole driller, no problem for the tube bender, no problem for those who attach the plastic straps, no problem for the painters. But when all that work has been done, and it’s time to put the pieces together, five percent, or more of the chairs can’t be assembled and the work and much of the materials are wasted and have to be redone. Not only does it add the expense of wasted materials and the cost of reworking the chairs, but the whole production process is going to be delayed and delivery to the customers becomes erratic. The whole business could lose five percent, or a lot more of its profits, just because one step of one system is out of whack, and only a little bit out of whack at that. So, envision the end result and aim for it, but don’t forget the details.
Next week, I will get into the meat of things with the Six Steps to Effective Business Systems.
Until next time…
P.S. Click Here if you missed Part 1 in this series.
P.P.S. Learn more about working ON your business–talk to the coach! Click here to connect with me!