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SYSTEMS ARE a significantly misunderstood area of business, but one that is paramount for helping a business to run efficiently.
Systems at every level of a business empower staff. They can also dramatically increase a business’ productivity and profits and, most importantly, they allow businesses to run without a hands-on owner.
The ActionCOACH definition of a business is “a commercial, profitable enterprise that works without its owner”. It centres on the idea that building an income stream that grows independently of a business owner’s involvement is more effective and sustainable than one that isn’t. Systems allow you to extract yourself from the business so you can strategise further growth, pursue other ventures, explore hobbies or actually take a holiday!
Knowledge transfer
What are some of the scenarios that stand in the way of most business owners establishing good systems?
Almost every business owner I have met works overtime. That’s because their business doesn’t work – they do. They don’t assign new tasks to employees because they hold too much essential business information in their heads, rather than investing in knowledge transfer. This often also derives from difficulty delegating and a lack of trust in others to do work quickly and efficiently.
Business growth is also limited if a business owner personally tries to train every new employee. Without good systems, most owners can’t remember what they need to teach new employees as much business practice has become inherent to them and explanations are difficult to extrapolate. This can result in uninspired and ineffective employees being retrained, rather than having to devote time to hiring and training new people.
As a business owner, you presumably did not start a business to become a slave to it. There's only so much that you can add to your to-do list before your time and your health run out.
Establish systems
If you recognise yourself in these scenarios, then you will forever work “in” your business rather than “on” your business. The best way to overcome this is to establish systems and to divide in order to grow the business. I call this “divide to multiply”, and getting it right requires systemisation.
Business owners need to remember their initial business goals and assess the gap between what they want their business to look like and where it currently stands. This will also make a business more attractive to potential buyers – offering a finished product rather than a business that is inextricably linked to one person.
Bill Gates is a great example of this principle, he made a lot of money selling software, but he became the richest man in the world by selling shares in his functional, self-sustaining business.
It is important to identify what your business would look like without your presence. Would the business still function efficiently? Would the systems and people integrate to achieve the core goals of the business? With the proper systems in place, this can be the reality for your business.
The four major areas to systemise your business are:
- People and education systems
- Operations and distribution systems
- Improvement testing and measuring systems
- IT systems and technology
Over the years I have assisted many small businesses in introducing these systems and the results have been incredible. Start by identifying which areas to systemise, begin implementing the systems, and you will ultimately transform your business into a sustainable and growing enterprise.
All you need are the right systems to run your business and the right people to run your systems.
* Pieter Scholtz is the co-master franchisor for ActionCOACH in Southern Africa. It is the largest business coaching company globally. Pieter and his partner Harry Welby-Cooke developed ActionCOACH across South Africa, which now boasts 30 franchisees. He is also a certified, leading business and executive coach.
