“Why Do Some Businesses Grow ” Part 1
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.
5 Growth Limiters
Through discussions with various business people we distilled the five top growth limiting factors as:
- Leadership skills on the part of the owner(s)
- Marketing skills within the business
- Available capital
- External expert support to management
While leadership skills will probably always be a regular topic in this blog, it was the Number 2 item on the list that caught my eye as I began work with an existing client who had done an excellent job in more than doubling her business over the past few years 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 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 so that the coffee machine is turned 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 achieving 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 pioneers”) do many tasks. If the business survives its infancy it’s usually because those few pioneers 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 pioneers!
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 pioneers 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 pioneers 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 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 that 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 pioneers coming under more and more load until either the business reaches its maximum size under that constraint – or until something breaks! And that “something” is often the founder!
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 performing 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 to 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 contact us.