Operations
How Business Fundamentals Can Help You Thrive
If we were to go back in time just four years ago, do you think American citizens would have voted for Donald Trump?
Obviously some would have (the gun-toting types) but plenty more would not have (as evidenced by the Biden win). What this signifies is people’s willingness to act decisively without all information available.
Four years ago, Americans were promised the political swamp would be drained and the country would be ‘great again’ but it’s arguably more unstable now than when Trump took Office.
Without knowing (or at least finding out) information about a person, event or industry the people or team tasked with making future predictions or directing the course of action are prone to making the wrong call.
While voting in (or out) a political figure differs from running a small business, you need to look at this situation and learn from it.
The message is clear: Knowing basic information in small business is what drives scalability (even in a recession).
But you’re probably thinking, what the hell do I mean by ‘information’, right?
Information can be anything like the footy scores, weather temperatures, traffic conditions etc and knowing that won’t help you in business (unless you’re a betting agency, gardener or courier).
So in this context, information refers to what actually impacts your small business – the current (and future) state of your industry, how your competitors are operating, potential new revenue streams and how your customers and staff are travelling.
Information like this enables predictability. Predictability means growth. And growth results in success as long as your systems and processes are repeatable.
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The importance of systems in small business
According to Business Enterprise Mapping (BEM), business systems can be defined as “a collection of contiguous business processes connecting workflow together to provide a value proposition that delivers the broader purpose of the business system itself.”
In Layman’s terms that means doing the same thing to achieve a consistent result (assumingly positive) everytime. Scalability can’t happen in business without approved and functional systems in place.
The BEM blog goes on to suggest there are 12 common systems that can be utilised:
- Enterprise Management
- Financial Management
- Facilities Management
- Equipment Management
- Employee Management
- Information Management
- Customer Development
- Product Development
- Supplier Development
- Operations Management
- Service Management
- Improvement Management
No doubt you can get a sense of what each does by virtue of its name, but as a small business owner the most important are systems that focus on customers, staff and workflow.
To me, systems are the backbone of any great business and are the catalyst for three things:
- Routine systems and procedures enhance profitability
- Once the system is defined, money is made when staff learn to do it correctly
- Generalised solutions, “human nature,” etc are replaced with detailed procedures, performance standards, and accountability
But having a system in place requires more than just talk. Much like above, the right system is a three step process:
First you need to identify the area of your business (or service/s) that are failing (or need improvement) and design a system that addresses the areas of concern.
Secondly, you need to be innovative and look at ways to not only address an area of concern but improve it to the point it’s no longer an issue (either for you, your customers or your staff).
Lastly, your system actually has to be deployed and used for any improvement to be felt.
But systems are only as good as the process that implements and monitors it.
The importance of processes in small business
As a small business owner I bet you’re well-versed in dealing with customers, staff and suppliers all claiming that they need your urgent attention on something.
Emails, calls, texts, snapchats and carrier pigeons will all be utilised by others to get you to drop what you’re doing and attend to their every demand.
As author Michael E. Gerber says in his book The E-Myth, behaving like this as the leader of your business is ‘working in it, not on it’ and that’s toxic for long term success.
The way you act in these circumstances comes back to the processes you have in place that define what happens.
At the first sign of customer discontent do you madly rush to offer them a discount to keep them happy? Or do you pragmatically deal with them after an internal review so you know the answers before the questions have even been asked?
If you’re the latter, you have a process in place to govern how you operate.
Kissflow, and online project management tool, suggests thats processes are important for seven reasons as they:
- Identify what tasks are important to your larger business goals
- Improve efficiency
- Streamline communication between people/functions/departments
- Set approvals to ensure accountability and an optimum use of resources
- Prevent chaos from creeping into your day-to-day operations
- Standardise a set of procedures to complete tasks that really matter to your business
A process allows you to make informed decisions about what’s important to you and your small business (and grade priority).
Systems need processes and both need to be repeatable.
The importance of repeatability in small business
Developing the most groundbreaking systems and creating high-end processes will look great, but if they’re not repeatable they won’t work. This is a critical crossroad in small business and often an area where many fall short.
A leader will be told of a problem by a staff member and the leader will devise a solution (or a system to deal with it). Then the leader will inform staff about how to act when the same thing happens again (or a process). And it works for the first few times, but then as staff get busier and aren’t truly confident working through the new process, so they fall back into bad habits.
When talking about this to a client of mine, he told me he had experience of this in his first job. Working at the layby section of a retail company, he told a customer she couldn’t pay off her layby on credit card (which for some ridiculous reason was company policy).
So my client, as a young kid, was simply sticking to the system and process, but the customer kicked up an abusive stink and demanded to speak to a manager. On arrival, the manager listened to both parties and promptly told my client to just do want the customer wanted and walked away.
What do you think my client did the next time he was dealing with an aggressive customer? Because his manager failed to implement the system and processes, my client didn’t bother repeating what was company policy.
Just like that, there’s a breakdown.
If systems and processes aren’t easy to repeat and aren’t consistently done so right across the spectrum (from the top down), it will soon result in just another thing that sounded good at the time.
Like anything in business, success comes down to a system and a process that’s achievable
Knowledge is power and you acquire that knowledge through gathering information to make informed decisions that drive you towards your goals.
From here, you need to identify beneficial systems to combat situations that take you away from your goals, develop processes to improve how you operate and make them repeatable everytime.