The Systems Thinker Blog

Six Qualities of Highly Effective Business Systems!

Posted byRon Carroll

There is only one way you can create a smooth-running and prosperous business that reaches its full potential. It is by developing effective systems and processes that enable you to continually find and keep customers.

Creating effective business systems is the art and science of "business engineering." It requires creativity and innovation (art) as well as logic and organization (science). System development is your primary task as a business owner. Please read further.

Business Systems are Art and ScienceSystems = Art and Science
Above image is "fractal art" generated by mathematical calculation


The operational systems you create must combine six important elements. They include the following:

  1. Process: Effective systems—in the store, the office, or the factory—are well designed, smooth running, evenly paced, and use standardized procedures. They seek to eliminate idle time, mistakes, downtime, unnecessary movement, bottlenecks, and inventory buildup. You make money when your systems are stable, steady and sustained.

  2. Components: A system must have all the necessary components to function properly, such as checklists, forms, reports, equipment, software, supplies, tools, equipment, people, and other resources. Missing or poor-quality system components are a major weakness of most small businesses.

  3. People: People are often the most important and most expensive system components. Put the right people in the right job with first-rate training, incentives and accountability. Effective business systems leverage ordinary people to produce extraordinary results.

  4. Quality: Good systems have minimal mistakes, waste, and rework that keep costs down. Products or services are delivered as promised and free of defects; they meet or exceed customer specifications and expectations. Any quality considerations that are critical to the customer must be critical to you, or the customer will take their business elsewhere.

  5. Speed: Efficient business systems have short lead-times and high throughput by squeezing delay, bottlenecks and "speed bumps" out of the process. They run fast enough to deliver on-schedule or by deadlines. Speed creates higher employee productivity and work satisfaction, increased capacity for sales, faster invoicing and cash flow cycles, happier customers who will buy again, and overall lower costs.

  6. Measurement: Renowned business authority Peter Drucker says, "You cannot manage what you cannot measure." Continuous measurement and feedback drive all process improvements. What measures drive the "economic engine" of your business? Establish process measurements that let you know every day how you stand in relation to your business goals. Strive to better your best!

When you carefully incorporate these six qualities into your business systems and processes, you will see remarkable results. Costs will go down. Customers will be happier. You will have an organization of excellence and be on-track to reach your full potential.

 

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Tags: People, Quality, Efficiency/Speed, Getting Started, Measurement, Systems