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- Business Systemization | Advantages for your Business
Business Systemization | Advantages for your Business
While it is common knowledge that systematizing a business/entity is crucial to its growth and survival in the current world of technology we live in, it is imperative to remind those who have not adopted business systematization that this is no longer an option but a necessity.
Business systemization gained notoriety from the bestselling book by Michael E. Gerber, published in 1986, The E-Myth – Why most businesses don’t work and what to do about it. In 2011 this groundbreaking book was named the number 1 business book of all time by The Wall Street Journal. In The E-Myth(Entrepreneurial Myth) Gerber explains how businesses are usually started by those who know the content of a business – so-called “Technicians”, people who know how to do the technical work involved in an enterprise – rather than by those who know business itself – so-called “Entrepreneurs” – and why start-ups are therefore by definition prone to failing.
In order for a company or business to thrive, it must move beyond relying on the so-called “Technician” who is now also the company owner. Gerber uses the franchise model to demonstrate how a business does this: Franchises are prototype businesses that are operated in terms of well-documented systems, i.e., there are manuals describing in minute detail how to run the business. Gerber argues that the entrepreneur should spend time creating a business that can run by itself, without the presence of the entrepreneur, and this is achieved through business systemisation.
Importance of Business Systematization
Gerber outlines the three systems that are important for businesses, by making the business processes ever more predictable and consistent: Hard systems are the physical tools that make a company more efficient; soft systems are the methods and practices employed by staff to get the job done; and information systems are those IT processes that gather data about the business and its operations in order to allow for comparison and selection of best practices.
The most often quoted example of successful business systematization is the international McDonalds franchise operation, which has over 34 000 restaurants in 119 countries, and where every individual franchise is able to replicate the same standards in products and service offered, regardless of where in the world it is located or who the manager might be. McDonalds and other fast-food franchises have provided a model for successful businesses run according to systems that eliminate the possibility of variance. When you buy a McDonalds franchise, you attend the company’s training program and you are taught how to run a McDonalds restaurant using an operations manual.
The successful entrepreneur or business owner should approach his or her business in the same way: As if it were a franchise. As demonstrated by the franchise model, systemisation essentially means that you are replacing yourself with a system. While the system is running your business, you are free to expand the brand or build a second branch, in the same manner as a franchiser.
Today systematization makes more sense than ever
In the more than 25 years since Gerber wrote The E-Myth, there have been great advances in technological development and IT – software programs are today at the center of most business operations such as budgeting, procurement, human resources and performance management. This is why systematizing your business makes even more sense today than it did back in 1986.
Business systemisation will enable you to create repeatable systems to manage the operations of your business, to continuously streamline and improve your business processes, and ultimately to allow your business to thrive and grow.
Would you like a business that is systemised and runs without you? The first thing to do is make the commitment to build your business into something amazing. Systemising a business the right way does take time, the end results are however “Life changing” for you and your business.
Below are some of the benefits to having systems and processes in place for all your employees’ responsibilities:
If an employee is absent, another member of staff will be able to follow the system relating to the absent employee’s job role, ensuring your business will continue to run smoothly
Having systems in place will aid staff training and/or new starter training
Having systems in place will ensure a role is always carried out to a precise standard
Customers or Clients will receive the same level of service, time and time again
You will be able to manage your employees more effectively and monitor that all tasks are being performed
Apart from setting and assigning employees responsibilities these are the additional reasons for systemising a business process
Prevents Job Knowledge Loss. Too often, an employee leaves a position and their replacements are stuck “reinventing the wheel” of how to perform their new job function. By disregarding the need to systemize their business processes, companies run the risk of knowledge attrition and loss of a valuable company resource.
Improves Efficiency. When an employee needs to find an answer to a job-related question, they can quickly access the information from the system. This especially applies to situations where employee are confronted with more obscure, non-routine tasks that they may not remember how to handle.
Promotes Consistency. Capturing process information in a reliable system ensures that all employees are working with the same information that’s stated in concrete terms. They aren’t relying on their perception of how a process should operate. It also prevents them from working with outdated instructions that could lead to job errors.
Inspires Team Collaboration. Process team members are better able to collaborate on issues since everyone is kept up to speed with the latest information. This saves time and improves teamwork so that employees can implement process reviews and changes more quickly.
Facilitates Process Improvement. Systematizing business processes allows managers to be better prepared for the next set of process improvement initiatives. The “as is” current process is already recorded and they can more easily assess the impact of their proposed “to be” process. Managers can also delegate more of their tasks to employees since processes and procedures are organized in a standard system.