From time to time I get asked by people, “Why do some businesses grow?”
This is an excellent question – more people should ask it with a view to learning and applying some valuable lessons.
During the week a friend of mine, Peter Rowe of ProfiTune, shared an article with me from his February e-Newsletter on this very topic. It’s a good article and I thought it worthy of inclusion here in it’s entirety. (Thanks Peter!)
Peter says:
Some years ago we were contracted to prepare material for the launch of a state government small business accelerator program with the brief to identify key factors limiting the growth of small businesses and to prepare a presentation that would make our findings interesting, understandable and entertaining to an audience of small to medium business operators.
Five Growth Limiters
It was an interesting and enlightening exercise and out of it we distilled the five top growth limiting factors as:
1. Leadership skills on the part of the owner(s)
2. Systems
3. Marketing skills within the business
4. Available capital
5. External expert support to management
While leadership skills will probably always be a regular topic in this newsletter, it was the Number two item on the list that caught my eye last month as I began work with a new client who had done an excellent job in doubling her business last year but who then realised that she had reached the end of her personal resources. (As she put it, "I've gone about as far as I can on my own!") and came looking for "external expert support".
We were fortunate to meet, go coaching, and we're making further solid progress already, much of it due to our both recognising that at this stage of its growth it's vital that she develop and introduce systems into her business.
What are Systems?
Now some people may think of "systems" as sets of technically sophisticated interacting parts, designed to accomplish some complex result (and, in some cases, they may be all of that), but in the vast majority of cases in business, systems can be simple, little things.
For example, you might develop "systems" for answering the phone, handling emails or running meetings. So, one definition of a system might be: "A plan for achieving a desired end result in an efficient and certain way”.
You may develop a simple system for answering the phone so that you consistently create a positive impression. You might develop a more complex system for opening your office in the morning so that no time is wasted; the alarm is turned off (saving a call from the security firm); your "Open for Business" sign is switched on (saving you a half hour of lost business before someone remembers it); and the coffee machine is turned on and is up to speed when your staff feel like their first fix of the day (with a coffee break that runs to time).
In business terms, a system can be thought of as a routine proven way of maximising a desired result while minimising the resources required to achieve it.
Anything that you do (or make) more than once in the course of a business day is a candidate to have a system created to manage it.
Why bother with Systems?
Early on in the life of any business a few people (we'll call this early team "the founders") do many tasks. If the business survives its infancy it's usually because those few founders discovered efficient ways of doing those many tasks (they probably had no choice!), and were able to do lots of them, thus making a profit in the process.
At first, those "efficient ways" may look more like common sense solutions than "systems" but, as Voltaire remarked, "common sense is not all that common".
They are systems, but they are often instinctive ones, known and understood only by the founders!
As the business grows and less driven or talented or experienced people are invited on board to handle the growing workload, it's essential that what were previously instinctive systems are broken down, documented, then taught to others as routine systems, so that the quality of the product or service upon which the business was founded continues to be delivered with consistency and then constantly improved upon.
Is this the reason Systems are resisted?
As business coaches, we often see in founders resistance - and sometimes downright opposition - to the systemisation of what, to them, is instinctive, and over time we've developed a few insights into why this occurs.
One observation is that many business founders reach a level of "unconscious competence" in the key tasks upon which they build the business - they just know how to do it, usually without even thinking. The major problem with operating at this level is that it is almost impossible to teach others other than by repeated demonstration and, if others lack some of the teacher's basic talents or unconscious background knowledge and understand why things must be done in a certain way, it can be completely impossible to pass on skills in this way.
To teach effectively requires the teacher to step beyond their own level of unconscious competence and to become consciously aware of what it is they do unconsciously so that they can lay it out in pieces or steps that are understandable to followers who lack their background knowledge and experience.
This can be hard! It can be time-consuming! Rather than stopping to create systems for lesser mortals, it may be quicker and less frustrating to just put your head down and keep doing the job yourself! And that's what often happens, with the founders coming under more and more load until either the business reaches its maximum size under that constraint - or something breaks! And that "something" is often the founder! Sound familiar?
Creating Systems the easy way
Given that what I have described is a "common challenge" you should not be surprised that as Business Improvement Specialists we have devised systems to guide our clients to develop systems!
Here's the short version:
Step One: Create a form (another System)
On your form, record:
A list of recurrent tasks
The estimated time presently required to perform each task (this includes "getting ready", "thinking about or remembering how", "doing" and "cleaning up" time)
Estimate the time required to complete each task if you had everything needed to do it, and you were doing it for the tenth time
Calculate the potential time saving for each individual instance of each task
List the number of instances each task would be performed in a working month
Multiply the potential time saving by the number of instances to estimate the total potential time saving per task
Rank each task according to its total potential time saving if it were systemised
Estimate the time required to systemise each task
Order each task for systemisation
Step Two: Break the task down into its simplest steps
Henry Ford is reputed to have said, "No task is particularly difficult if you break it into sufficient steps". When you consider that he broke the building of a complex machine (the T Model Ford) into sufficient steps that it could be assembled by the farm hands and labourers who manned his production lines, he certainly demonstrated the truth of that fact millions of times over.
So, Step Two in the systemisation process is to take your first task and
break it down into as many tiny steps as you can, and to look at each step and consider how you could do it quickly, cheaply and certainly.
The Other Steps
That's all we have space for here, but if you can see that a lack of systems is a constraint on your growth - or on the quality of your life when it comes to enjoying your business - then now might be a good time to talk to me about how to develop your systems.
Date for your diary – 15 March 2008
As foreshadowed in last week’s article, Martin Smoothy, a very successful Perth based entrepreneur and multi-millionaire Christian businessman will be visiting Shellharbour on 15 March. Martin is currently the principal of http://businesssalesperth.com.au
Martin will be the guest of the OneLife Community Church Shellharbour and will be specifically speaking to business people from 10am through 12 noon on Saturday 15 March 2008. All business people are welcome to attend. There is no charge, although an offering may be taken up.
Venue: OneLife Community Church, Shellharbour, Lot 302 Shellharbour Rd.
(next to petrol station, opposite Shellharbour Workers Club)
Web: www.sccoc.org.au
Look forward to seeing you there.
If you plan on attending drop me a line and I’ll keep a friendly eye open for you. | 
