Let’s face it – many businesses will fail. Others will stop growing well before they reach Stage 4 of Business Success. This article is for the fabled 1 percent who grow and grow and reach a stage in which they have a team of people doing the work, producing goods, and providing services. These top-achieving businesses are pretty rare. In fact, only the top 1 percent of all companies will ever reach Stage Four of business success – the systems stage.
Stage 4 = Implementing Systems
Stage 1 focuses on Strategic Planning. Stage 2 is the time to specialize and build a reputation. Stage 3 is about synergy – finding smart people to run every part of your business. Once that is all in place, it’s time to create systems. The hard truth is that there’s no room for winging it in Stage 4. It takes focus, discipline, and organization to master Stage 4. Maybe that’s why so many businesses never make it this far.
Not Sure What Business Systems are?
In the beginning, business owners tend to do everything. But by Stage 4, the business is set up, so the owner doesn’t HAVE to do much. In fact, in Stage 4, the owner can take off for a week or a month, and the business runs just fine without them. That’s because, with sound systems in place, a BOE no longer has to be there to ensure things get done. Because they created systems, every part of their business runs predictably, consistently and reliably. Systems assign responsibilities, establish checks and balances, and produce predictable outcomes.
Ready to Tackle Stage 4?
Yes, creating systems sounds great, but every BOE knows how much time and effort it takes to get them into place. It takes an extraordinary commitment. And it takes patience because few people, at any level, can change their routines and adapt to new systems without skipping a beat. Your team will stumble a few times as they adapt, but that’s normal.
As you optimize your systems, you must look at every process and think about ways to automate it, schedule it, digitize it, or even outsource it. A great example is a new payroll system. Many companies have gone through the uncomfortable process of transitioning payroll into a cloud-based system.When this happens, employees must be trained to go online to check remaining vacation days, sick days, or request time off. Accounting must enter data into a new system. Managers must report sick days. Everyone complains. But once everything is up and running, suddenly, a cumbersome process becomes easy. HR spends much less time tracking employee time off. Managers feel more confident granting vacation time. Once the system is up and running, it automates several time-consuming tasks and makes review and analysis quick and easy. For example, if you’re sending someone to the office supply store every week, get the office store to deliver to you. If your breakroom and vending machines are a mess, get a food service company to run it for you. In many cases, you’ll find that outsourcing to a specialist is cheaper, more consistent, and requires less input from you or your employees. Should you outsource payroll, HR, accounting, marketing, sales, customer service, warehousing, mailrooms, transportation, legal services, and more? Think about your specialty and what your business is known for and focus on that work. If you manufacture hardware, it makes sense to keep most of your manufacturing in-house, but why not source out HR? If you’re a gym, instructors and equipment are part of your core value, but you may be able to outsource the juice bar and find a specialist to handle marketing.
Monitor and Optimize
Once systems are in place, BOEs must measure and monitor. I often advise starting a system by trying to make every business area just a little better, and then measure and watch to see if your improvements are working. In the earlier example, I recommend doing deliveries of office supplies. Let’s say it took your staff six hours a week to create an office supply list, go to the store, return, and unpack everything. When you transition to deliveries, you’re looking for an incremental improvement. So maybe your new system still takes five hours a week ordering and unpacking. Your employees may tell you it’s just as much trouble to order it as it is to go and get it. But when you monitor and measure, you’ll know you’re saving an hour a week. It doesn’t sound like much, but what if you saved an hour a week for every employee? For every task? Even small efficiencies add up quickly.
How Systems Helped My Own Business
Like many companies, when my 7 Stages Advisors office brought in a new employee, we used to scramble a bit. We hurried to find a “buddy” to show the new hire around, slapped together some training sessions, and passed the employee around in a desperate attempt to get them up to speed without disrupting everyone’s day. It wasn’t ideal.We took a dose of our own medicine and created a system. Now we have a new employee how-to manual for each of our training programs. We eliminated the last-minute drama that had been part of training and instead developed a well-thought-out process, with predictable steps, that everyone understood. And best of all, once we did the work upfront, we saved a lot of time during the training process. Honestly, some people resisted the system approach. They insisted that each employee and training should be completely customized for each person and each job. Others said that creating a system took more time than preparing on the fly. Of course, they were wrong. We no longer have to rely on one person to lead orientations—instead, several people in our office onboard new employees. The process is methodical, measured, and easy to repeat again and again. Did it take effort upfront to set it up? You bet it did. But the last-minute panic has disappeared, and training is just another thing we do over and over—no big deal.
Are You Ready to Join the 1 Percent?
With systems in place, your company can run like clockwork. Once you see some successes, you’ll want to return to improving the quality of your offerings. That doesn’t mean looking over everyone’s shoulders, but you should keep an eye out to make sure systems are working. Good systems are more than time-savers; they improve quality and consistency. That’s why Stage 4 businesses are in the 1 percent.