Business Mentor Insights - Key Elements of Systems and Procedures
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Key Elements of Systems and Procedures

Key Elements of Systems and Procedures


The Rules

Rule #1: follow the system

If you don’t stick it, what’s the point of having a system?

Rule #2: the rules are not written in stone

The system can be changed. It’s okay to change the system if:

  • doesn’t work
  • you don’t like it
  • it’s too difficult

Rule #3: anything that you don’t write down, you will get to do again

If you don’t follow the system, what’s the point?

Rule #4: for changes and exceptions to the rules, see rule #1

Yes, that’s right! And follow the system.


The Four Ps

There are four key elements of systems. In order, they are:

1. Policy

Policy is when you think about your business in these ways:

  • “We always do it here this way…”
  • “The way we do it her is we always…”

As soon as you start saying the word “always”, you know you are talking about policy.

2. Procedure

The next step is procedure – have you figured out who does what and by when?

Id you answered yes, then you have established procedure.

3. Process

A process involves a set of step-by-step instructions.

4. Props

Props are the hands-on things that you need to fill in such as:

  • checklists
  • tally sheets
  • forms
  • documents

They could also be physical that stop things from happening like:

  • jigs
  • fixtures

For a basis of good systems, there are four things you need to think about

  • What are your policies?
  • What are your procedures?
  • How do you processes work?
  • What props do you need?

Where to Start

So how do you actually get systems started?

  • Start working with the routine things that you do everyday. Remember to not worry about the things that are done:
    • every week
    • every month
    • every quarter
  • Write down what you do.
  • Have someone look at it and see if they could do what you do based on what’s written. If not, then change it.

In my case, my wife is almost always my best benchmark. She’s actually not in business. That’s why if she can do it in business, it will work for most people.

Try it. Get your routines written down. Type it if it makes you feel more comfortable. Get someone to try it and work through what you’ve identified. However you do it, get out there and write your first system.

Speak the Language

As a business coach, I am often asked what i like to do first.
And what I usually say is it’s all about money!

Your finances are one of the most important things in business. Finance is the language of the business. So if you have to learn it, then by all means you have to.

You don’t have to be a bookkeeper or accountant. You don’t even need to be exceptional at mathematics. But you need to understand the following:

  • What is gross profit?
  • What is net profit?
  • What’s the difference between margin and mark-up?
  • How does it all work?

If you don’t speak language of business, you won’t know how to read the scoreboard.

And if you can’t read the scoreboard, you can’t tell the winners from the losers. Let’s face it: What’s the grand final without a score?

You have to know how to read the scoreboard, which means you have to understand the finance of business. If you don’t understand, find someone to teach you. If you’re struggling with that, give me a call: 0419 352 540


KISS

Are you ready for a challenge?

If yes, then ask yourself the following:

  • Have you written a system yet?
  • Is anyone else looking at or using them?

Because if a system is not getting used, then they’re worth anything! And if they’re more than one page, they’re probably worth nothing.

If you’ve got a system that goes more than one page, have another look at it. The ideal system involves just one page:

  • Don’t be afraid to resort to flowcharts and photos.
  • Don’t get hung up in the content of systems.
  • Get the systems done and make them short and concise.

And remember above all else when constructing systems the KISS principle:
Keep It Simple, Stupid.

Occam’s Razor

There’s a very old law called Occam’s Razor.

It’s all about doing things the simplest possible way. When it comes to systems, remember:

  • Cut it down to absolutely nothing if you can
  • Get it down to just one page
  • If you’ve got a system you can use, make sure everyone is using it.

And don’t forget the number one rule: You have to follow the systems.


KISS

“Do I really have to do these system things? You know, I don’t want to go down on the ISO 9000 path and mine is a relatively small business. I don’t need to do this, do I?”

When it comes to system, absolutely yes! My go to question whenever some people ask if they really have to these system things is this: “Can you go away and trust your business to keep making money when you’re not there?”

Id you don’t have the right systems in place, the answer has to be no.
So do you need systems? Absolutely. But how many you need? You need systems that control everything but start at the top level. Don’t get bogged down in the nitty-gritty – get your team to do that.

The responsibility to get systems written is with:

  • YOU
  • And ideally, the people who are goint to use them

So think about who is your business could actually write down what they do. If the can’t write it down, are they really the right people to have in your business? Now there’s another question for another day.

Tips

Now I’ll share my two most important tips on how to make sure that your systems and process is going to work the way you want. These tips come from two separate companies.

Federal Express

At Federal Express, the guy who started it, Fred Smith, said, “Systemise the routine. Humanise the exceptions.”

So remember to:

  • Look at your business.
  • Work out everything that’s done everyday, every week, every month
  • And start with the things that are done everyday and systemise those first.

And when it come to systems:

  • Get the systems written down (and make sure that they actually work)
  • Go and systemise them weekly and monthly.
  • Humanise the exceptions – You have to get the people involved to make them work but not the other way around
  • Don’t systemise the exceptions and humanise the routine. Or else this will kill you.

Nike

The second lesson comes to us from Nike and it’s a lot simpler: Just Do It.

Examples

Read this blog post to learn about some examples of systems and procedures from some of my very own clients.

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