Business Magic: Systems and Processes

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Author Michael Gerber, in his famous “E-Myth” book series, stresses the idea of working “on” the business instead of just “in” the business. Does it ever seem like you are always “putting out fires” instead of working on the really important things that will grow your business and increase its value? Do you ever feel overwhelmed? Do you find yourself bouncing from one problem to another, as your managers delegate work to you, instead of the other way around? It may be time to implement some systems.

The most successful companies establish systems and processes to standardize their work, to enhance productivity, and to ensure consistency in all they do. Systems and processes are often best developed by those doing the work, rather than imposed from the top down.

Designing and documenting systems and processes can be a daunting activity. It is not something that can be accomplished overnight. You are attempting to “reverse engineer” and document a dynamic web of activities and interactions. The amount of detail that you decide to take on as a business owner will depend on your own strengths, the size of your business, and the size of your team. When possible it’s best to involve the people actually involved in carrying out each activity. The design and documentation of systems and processes for each business is necessarily unique, and if your business is large enough, you may want to appoint someone to work solely on this task.

The first step is to develop a timeline within which you would like to complete a framework for your systems and processes. Include some preliminary organizational and brainstorming time. Designing and describing your business systems is a detailed and time-consuming process.

Next, you will need to list all the activities in the business for which a process must be developed and documented. This exercise alone could become a system for developing processes! As the owner, you mentally have a big picture of your business. Start with a blank sheet of paper, and start drawing an overview of all the things that are taking place in your company. A process flow chart creates the visual image of how work flows through your organization and helps highlight the key communication and decision points in the process. Color coding or different shaped boxes are common ways to designate different departments or different decision points. Departments, employees, client processes, outsourcing partners, technology, or back-office systems are all things that need to be considered.

Each big-picture item will then get its own sheet of paper with which to dig deeper. When you get to the task level, you should pass the process on to the person who actually does that task if possible. The end result will be a series of pictures and lists moving from macro to micro levels of detail. Ultimately, you want to account for every activity taking place in the business, including what input comes in to enable that activity, and what output flows from that activity.

Just thinking of and listing all the possible processes in your business could take a few days. For example, consider just the receptionist position. You may have a process for answering the phone, a system for processing the mail, another process for greeting guests, another process for handling files, and so on. You should try to approach this as an ongoing exercise and something that doesn’t need to be perfect in the first draft. The value in your systems and processes will come from refining them on an ongoing basis.

Also, there are numerous places to go for advice about designing and describing your business systems. Just Google “documenting business processes” and you’ll find blogs, books, and software templates. And if you haven’t already, be sure to read the seminal business book on systems and processes mentioned above – E-Myth Revisited by Michael Gerber.

The guidelines and manuals you create are working documents that will change as the business grows. By having them in writing, you or the people involved in the actual tasks can continually improve and refine them. Using, combining, and modifying processes will increase the efficiency of every employee, and allow you to spend more of your time thinking about your business at the macro levels.

Your systems and processes will undergo constant evolution. Make a note each time you see yourself or an employee deviating from what has been documented. Ask if the document needs to be updated or if the workflow needs to be clarified so that the system is being followed.

When it’s time to review a process, there are two types of possible updates: an update of what has changed in the process since it was documented, and/or an analysis of what needs to change to improve productivity and efficiency. Process manuals should be frequently updated so that your documentation continues to be a relevant resource for you and your employees. A properly maintained process description can serve as the ideal training tool for a new employee.

You should also create a system for implementing changes to individual processes. For example, in weekly team meetings you might review small changes that have been made. Small changes may not require much discussion, so it might be sufficient to point them out and move on. The annual review could result in larger changes that impact several employees or departments. These changes will need to be reviewed and discussed in more detail. Discussion should include both what is changing and the reasons for those changes. Your team will appreciate your efforts to continuously improve the business.

When you are in the process of building your business the majority of time is spent on doing rather than documenting. During this time, the few employees you have figure out how to get the job done by asking questions, and through trial and error. But you’ve established a rhythm of sorts, and things seem to be working.

Any number of things, however, can destroy this equilibrium. The loss and replacement of one of the employees may cause you to discover that they were the only one in the company who knew how to accomplish a particular task. Documenting systems and processes will help you not only in training new employees, but also in gaining efficiency, improving consistency, and being prepared if you lose someone who knows how everything works! In addition, this documentation will add value to your business as you grow and transition. If your business is repeatable and systematized it is easier to predict results, and is therefore more valuable to a potential buyer.

If you have questions, click here to have our office call to set up a time to discuss this with you.

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