Business Coach Melbourne, Business Coaching Melbourne

Key Elements of Systems and Procedures

Key Elements of Systems and Procedures


The Rules

Rule #1: follow the system

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

Rule #2: the rules are not written in stone

The system can be changed. If the system doesn’t work or if you don’t like it or if it’s too difficult, you can change the system. It’s OK. (But, in the meantime, follow the system.)

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

OK? Follow the system.


The Four Ps

The four key elements of systems are policy, procedure, process, and prop.

Policy

Policy is if you think about your business and you say, “The way we do it here is we always,” whatever. So you know how some companies provide red, yellow or green? Well, what we always do is we only provide green. As soon as you get the word ‘always’ you’re talking about a policy.

Procedure

Then you go to the next step: writing down who does what by when. This is a procedure.

Process

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

Props

Props are the physical things; the hands-on things that you need like checklists and tally sheets and forms and documents to fill in. It could also be physical things like jigs and fixtures that stop things happening.

So they are the four things that you need to think about. What are your policies? What are your procedures? How do your processes work? What props do you need? And you’ve got the basis of good systems.


where to start

Where to Start

So how do you actually get systems started?

Start working with the things that you do everyday. Don’t worry about the things that are done every week (or every month or every quarter). Start with the routine things that are done everyday. (So not exceptions to the rule, but the stuff that’s always being done.)

To begin with, all you need is just to write down what you do. Then have someone look at it and see if they could do what you do based on what’s written. If not, change it.

My wife is almost always my best benchmark. Because she’s not in business, if she can do it in business, it will work for most people. Try it. Get it written down. Get someone to try it and work them through the process. Don’t worry about if you’re not good with computers. It doesn’t matter. Write it out longhand. So get out there and write your first system. OK?

speak the language

Speak the Language

I often get asked what I like to do first. Well, I’m a business coach. So what I like to do first is all about money.

So I like to see the profit-loss report produced 7 to 10 working days from the end of every calendar month done by someone whose job it actually is (that is, not done by you, the business owner, and ideally not done by any member of your family.)

If that means you have to learn finance, then learn it: finance is the language of business!

You don’t have to be a bookkeeper or accountant, but you need to understand:

check

What is gross profit?

check

What is net profit?

check

What’s the difference between margin and mark-up?

check

How does it all work?

If you don’t speak the language of business, you can’t read the scoreboard.

If you can’t read the scoreboard, you can’t tell the winners from the losers because let’s face it: what’s the grand final without a scoreboard? It’s just a bunch of blokes playing kick to kick, isn’t it?

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

Now, it’s time for a challenge.

Have you written a system yet? Have you pulled out your systems, looked at them to see if anyone else is looking at them? Because I’ve got to tell you: if they’re not getting used, then they’re worth nothing, and if they’re more than one page, they’re probably worth nothing.

So if you’ve got a system that goes more than one page, have another look at it. Ideally, get it on to just the one page. Don’t be afraid to use flowcharts and photos. Remember the KISS acronym: Keep It Simple, Stupid.

Don’t get hung up in the content of systems. Just get the systems done and make them brutally succinct.

Occam’s Razor

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

It’s all about doing it the simplest possible way. Cut it down to absolutely nothing if you can. Get it down to just one page and then you’ve got a system you can use and then make sure everyone is using it. Because remember rule #1? You have to follow the systems.


Do I Have To?

I get a few people saying to me, “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. You know, up to I would say 20 million. I don’t need to do this, do I?”

Well, the acid test is, “Can you go away and your business still makes money when you’re not there?” and I think you will find without systems in place, the answer has to be no.

So do you need systems? Absolutely.

How many systems do you need? You need systems that control everything but start at the top level. Don’t get right down to the nitty-gritty. Get your team to do that.

Your job is to get the systems written, and ideally, the people who are going to use them should write them.

So think about who in your business could actually write down what they do. I’ve got to tell you, if they can’t write it down, are they really the right people to have in your business? Perhaps that’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 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.

Get the systems written down (and make sure that they actually work) and then go on and systemise them weekly and monthly. Humanise the exceptions, the things where you actually have to get people involved to make them work but not the other way around: don’t systemise the exceptions and humanise the routine. That 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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