The Systems Thinker Blog

What is a Process Improvement Manager and Why You Need One?

Posted byRon Carroll

It is essential that someone in your company is responsible for sales. Somebody needs to do the accounting or bookkeeping. Someone oversees hiring, customer service, and order fulfillment. No matter what industry you are in, or the size of company you have, YOU—or assigned employees—perform these and other basic business functions.

However, there is one essential job position that is rarely talked about and almost always ignored by entrepreneurs and small-business owners.

Laura’s Bad Experience

Consider this email—and cry for help—I received from a frustrated newsletter subscriber. Laura was the only person in her company to recognize this rarely thought about but important job responsibility. Could she be one of your employees?

Help is Needed for Bad Business Processes

Laura wrote:

“I can't take it anymore! Chaos, pure unadulterated chaos. You could imagine myself (with the personality of a dragon) sitting down to convince owners we have to sort out all the tasks that people do into a logical workflow!  So I created a Business Systems Department with the understanding they would know what it meant... uhmmmm no. I thought I was absolutely alone in the world until my assistant found your web site. Ahhhhh ...  there are people out there that actually think the way I do! I work for a company that is in denial. I want to work for a company that believes in having good systems. 

“I am honestly tired of trying to convince this company that they should invest in their Business Systems, Best Practices, etc. If chaos is not enough to make them reconsider, if poor employee morale is not enough to make them reconsider... Well, you can quote me as a crazy lady who thought she could make a difference and become an asset to the company because I love this crazy world of Business Systems thinking... Anyhow, sorry for the long winded email but BOY that felt good to get it off my chest!” (This was about 25% of the actual email.)

The Invisible Job

Whether you have thought about it or not, your entire business operation is carried out with the help of systems and processes that come about formally or haphazardly through the years. These business systems are the way in which work gets done, and they are the building blocks of your organization. Their effectiveness determines your profitability and success.

Your systems and processes might include lead generation, sales conversion, production, order fulfillment, customer service, accounting, purchasing, hiring, and many others unique to your company.

So, what is a business system or process? Consider this down-to-earth definition:

A business system is a “recipe” for consistently getting a predetermined and desired result. The ingredients of a good business recipe may include materials, people, data, forms, checklists, tools, equipment, software, and so forth. The precisely followed step-by-step instructions, or procedure, ensure that the expected result is achieved every single time.  Great recipes for getting routine work done in an efficient and effective way increase customer loyalty, employee performance, profitability, and growth.

 Create Favorite Business Recipes

So, who in your company is responsible for developing, monitoring, and maintaining the business processes that make your company run smoothly and profitably—even when you’re not around? Who in your company understands the underlying principles for creating effective systems and processes? Who in your company wears the hat of the “Process Improvement Manager”? Is it YOU, or someone else?

Wait, What? A Process Improvement Manager?

In a small business, the owner is the first “Systems Czar” (Philip Beyer) and usually begins documenting processes so that he or she fully understands how the business operates from start to finish.

Whether it is YOU, a manager or employee (full or part-time, and not necessarily a new hire), someone in your company needs to fill the essential role of a “Process Improvement Manager.” This person’s responsibility is to maintain efficiency and quality in the workplace. They evaluate current business practices, looking for ways to improve productivity and customer service, reduce costs, and make the best use of company resources.

Specifically, the process-improvement person develops, monitors, and elevates the performance of the company’s vital business systems and processes. Ongoing system development is the key to continuous learning, growth, and improvement of individuals and organizations.

A Process Improvement Manager is something of a “business engineer.” He or she is both logical and creative, able to identify and diagnose problems and find low-cost and innovative solutions. As you implement effective systems and processes, your company will stand out in a competitive marketplace, give customers a great buying experience, and improve operational quality and efficiency for a healthy profit margin.

Become a Business Engineer

So, What Exactly Does A Process Improvement Manager Do?

1. Develop and Reinforce “Best Practices”

While most people in a company see the business operation in terms of departments, functions, and activities, the Process Improvement Manager is focused on how efficiently and effectively the work is being completed. This person sees the details beneath the surface, where dollars are earned or lost, and operational success is determined. The Process Improvement Manager has a vested interest in:

Best practices
Cause and effect
Root-cause of problems
Performance standards and goals
Measured results and data
Employee motivation, training, teamwork, and incentives
Improvement and innovation
Getting the right people in jobs
Promoting growth and development of workers
Increasing quality and efficiency of business processes
Eliminating bottlenecks, mistakes, delay and rework
Lowering costs

 Persue Best Practices

The Process Improvement Manager is always asking “WHY?”  Why do we do this task at all? Why do we do it this way? Why are things not getting done on time? Why are there excessive mistakes or rework? Why are customers or employees unhappy?  Why are we not reaching our goals?

“A relentless barrage of ‘why’s’ is the best way to pierce the clouded veil of thinking caused by the status quo. Use it often” (Shigeo Shingo, Toyota Lean Manufacturing).

The Process Improvement Manager seeks to find the best way to get the work of the organization accomplished with the highest quality and the lowest possible cost.

(“Management is doing things right; leadership is doing the right things” — Peter Drucker, renowned business consultant and author).

2. Apply the Master Skill

"If you can't describe what you are doing as a process, you don't know what you're doing" (W. Edwards Deming, Total Quality Management).

All best-practices are arrived at by refining and improving daily operations, the company’s core business systems and processes. This is the primary focus of the Process Improvement Manager. His or her mandate is to create a smooth-running and profitable organization by taking the unwanted deviation, defects, and delay out of work processes. It is to ensure that customers are happy and desired results are consistently achieved. 

W. Edwards Deming also said, “94% of all failure is a result of the system ... not people. A manager of people needs to understand … that the performance of anyone is governed largely by the system that he works in, the responsibility of management” (Total Quality Management).

 Create Effective Business Systems

Effective business processes significantly reduce sub-standard performance, wasted resources, customer dissatisfaction, employee turnover, excessive costs, weak sales growth, inadequate cash flow, low profit margins, and daily frustration.

Your ability to create and refine the vital systems and processes of your organization is what I call the “Master Skill.” All business functions—marketing, finance, and operations—fall within the scope of this single skill mastery.

Most companies have one or two exceptional business systems that separate it from the competition. What innovative and remarkable business process makes your company stand out "like a purple cow in a field of brown cows"? (Seth Godin, Purple Cow)

(“No institution can possibly survive if it needs geniuses or supermen to [run] it. It must be organized in such a way [with effective systems and processes] as to be able to get along [with] average human beings” — Peter Drucker).


3. Recognize and Solve Problems

A two-word definition for “business” is “problem solving.” The Process Improvement Manager asks, “What problems do we need to address? What parts of our organization could improve? What obstacles do we need to overcome? What invisible termites are eating away at our customer loyalty or profit? Any core business activity that is falling short of its purpose or goals is a problem to be solved.

Business problems are usually observed up-close as mistakes, scrap or rework, delay or missed deadlines, excessive costs, and people having an unpleasant working or buying experience. Repetitive problems are made apparent by financial statements, performance reports, customer or worker feedback, and expressed complaints, frustration, or even opposing viewpoints.

Systems Thinking makes problems more transparent and solutions more obvious. A well-framed statement of the problem by the Process Improvement Manager will often provide immediate ideas for change. Data—the brutal facts—influence and direct all improvement efforts.

 Seek Ideas for Improvement

The Process Improvement Manager is always looking for the simplest and least-expensive way to solve a problem or improve a process—to take waste out of the business. Any problem-solving efforts may include prioritizing projects, budgeting for upfront costs (e.g., a new piece of equipment), and determining the ongoing operational costs of the new or improved system. It is often helpful to calculate the return on investment (ROI) by completing a cost-benefit analysis.

The Process Improvement Manager chooses the system-improvement projects that are the easiest to implement, or have the greatest financial impact, or that support company goals, or that will remove a weak-link, bottleneck, or frustration from business operations. They target a completion date and get buy-in, authorization, and financial support of decision makers before beginning a project. Focus plus prioritization equal fast results.

Care must also be taken when deploying any new system or process and training the people involved. Good preparation will reduce resistance to change. Workers who do not recognize the better way of doing things will produce a new set of problems.

(“If you want something good, you have to stop doing something bad” — Peter Drucker).

4. Encourage Learning and Growth in People

The best Process Improvement Managers are constantly learning, and they promote learning and growth in others. Whether by experience, mentors, books, performance reports, or feedback from customers or workers, they are always looking for clues, evidence, data, ideas, and strategies to get work done in a more efficient and effective way. They continually seek excellence in business operations.

Although change is constant, the Process Improvement Manager always has an eye fixed on the long-term mission and goals of the organization.

 Inspire Learning and Growth

Knowledge is fleeting unless it is incorporated into behavior, into “best practices.” It is said that knowledge is power, but the real power to improve a business only comes when knowledge is applied to a specific system or process. The Process Improvement Manager tinkers with the procedure or the system components until the people and the process are getting acceptable results. Patience and persistence through obstacles and challenges yield a big payoff.

While workers do the “cooking and serving," the Process Improvement Manager’s job is to step back, study, ponder, analyze, evaluate, plan, test, and keep improving the company’s unique and valuable business “recipes.”

(“The purpose of information is not knowledge. It is being able to take the right action” — Peter Drucker).

5. Hold Business Improvement Workshops                 

The Process Improvement Manager is on the move, working with others to elevate business operations. He or she does not try to solve every problem independently, but to become immersed in business processes, observe what is working and what is not, learn from those who have hands-on knowledge, and consider what improvements would yield better results.

The best way to benefit from the collective wisdom and experience of those involved in day-to-day operations is to “work ON the business” (Michael Gerber, “E-Myth”) in a weekly business improvement workshop.

During this one-hour meeting, the Process Improvement Manager, team leader, or other manager guides a discussion on specific business activities, systems, processes, or policies that need improvement. They whiteboard the process and consider each step along with the components or “ingredients” required for its success (e.g., materials, tools, checklists, etc.).

Hold Business Improvement Workshops

Those attending the workshop counsel together to achieve consensus on best solutions and practices. The leader reinforces the vision, strategy and goals of the organization, and gets buy-in and support for doing things in a new and better way.

Keep in mind that deployment of a changed system or process requires careful orchestration of people, resources, and timing. It is important to get a new system off to a good start.

Every little improvement uncovered in a business improvement workshop will serve to transform your company into a smooth-running, customer-pleasing, money-making business system! One-hour a week is all it takes!

(“Most discussions or decision making assume that only senior executives make decisions or that only senior executives' decisions matter. This is a dangerous mistake” — Peter Drucker).

6. Document “the Way We Do Things Here"

I repeat W. Edwards Deming: “If you can’t describe what you are doing as a process, you don’t know what you are doing.” To which Michael Gerber adds: “If it’s not in writing, it’s not a system!” (“E-Myth Revisited”).

The Process Improvement Manager oversees the documentation of core business systems and processes and keeps them updated when changes and innovation occur. His or her job is to understand and describe in writing the best way to accomplish the routine work of the organization. However, documentation must be better than just a dust-gathering operations manual.

Write Policies and Procedures

Preparing written systems and processes is the proper way to establish desirable work patterns and habits. These detailed “recipes” are of value to train new employees, and as ongoing references for experienced workers. They describe the required system components (ingredients) and the best procedure to follow.

This important “how-to” information remains constant, not haphazardly passed along by word-of-mouth or changed as people come and go from the job.

When processes are written and accessible to workers, less supervision is required. If a business is replicated or sold, documented business operations are of immense worth to those starting new.

(“Unless commitment is made [in writing], there are only promises and hopes... but no [action] plans” — (Peter Drucker).


7. Get the Right People, Leaders, and Teams

The Process Improvement Manager is not the Human-Resource Manager. However, he or she recognizes that people are the most important (and expensive) component of most business operations.

Therefore, the Process Improvement Manager is concerned with 1) how jobs are defined (job descriptions), 2) company policies that affect workers, 3) fitting the right person to the job, 4) making sure people understand their responsibilities and are properly trained, 5) establishing team leaders and teamwork for increased productivity, 6) meeting performance standards and goals, and 7) promoting accountability and work incentives. All of these items affect performance—the quality, efficiency, and cost of doing business.

Get the Right People

Though often unnoticed, workers possess a variety of experience, talent, insights, and creative ideas that are just waiting for the right opportunity to be shared. A good Process Improvement Manager cultivates relationships and is always listening for useful suggestions and bold ideas to improve business processes. They love to give credit, recognize contributions and exceptional achievement, and celebrate success. Getting thought-leaders and exemplary workers behind a new idea will encourage others to follow.

Continuous and unrelenting effort to improve systems and processes is the only way to develop excellence in people and organizations.

“Reward those who Do, Train those who Can’t, Replace those who Won’t” (Henn’s Creed). The Process Improvement Manager is interested in two major factors that affect how workers perform—Desire and Capability. They find ways to elevate both.

(“Only three things happen naturally in organizations: friction, confusion, and under-performance. Everything else requires leadership. … The key [is] to … look for people's potential and spend time developing it” — Peter Drucker).


8. Speak Numbers, the Language of Improvement

“Without data, you're just another person with an opinion” (W. Edwards Deming).

The Process Improvement Manager relies heavily on data or numbers in their pursuit of truth and best practices. Their personal success is largely determined by the company’s ability to show measurable improvement of its core business activities. Numbers are the language of improvement.

However, the daily work of the Process Improvement Manager is not just to focus on outcomes, but instead to improve the behaviors and processes that lead to better outcomes or numbers.

Many operational problems are revealed in performance reports or financial statements such as the balance sheet or the profit and loss statement. These numerical indicators will point to weak or faulty business processes.

The Process Improvement Manager is interested in common business measures, including performance standards and goals, break-even points, and the key numbers that drive the success of the organization. Knowing the sometimes-dreadful facts is essential to making effective changes.

Workers also excel when they receive frequent performance feedback, and by always knowing where they stand in relation to established goals or standards. Properly viewed, numbers provide the critical foundation for all business intelligence.

Speak Numbers, the Language of Improvement

"You cannot manage what you cannot measure" (Peter Drucker). "Anything that can be measured can be improved" (Michael Dell, Dell Computers). When performance is measured and reported, the rate of improvement accelerates" (Thomas S. Monson, business and religious leader).

The time and effort of the Process Improvement Manager is a financial investment that must have a beneficial return. This is accomplished by focusing on the systems and processes that improve the customer experience and reduce costs (waste). The larger the company, the greater the opportunity there is for financial gains.

Before beginning any improvement project, the Process Improvement Manager determines the initial cost of implementation as well as the annual recurring costs. A preliminary analysis may include a budget, expected savings or earnings, and the estimated payback period.

Owners or managers approve new projects before proceeding and receive regular status updates, especially the good news of financial gains. Well-designed and executed business systems pay for themselves many times over.

(“Leadership is defined by results not attributes. … Checking the results of a decision against its expectations shows executives what their strengths are, where they need to improve, and where they lack knowledge or information” — Peter Drucker).


9. Never Stop Improving and Innovating

Kaizen, a Japanese term for continuous improvement, is the ongoing, systematic, incremental improvement in the way things are done. It is a relentless attempt to eliminate the unnecessary business activities, delay, waste, and variation within processes that add cost without adding value. Kaizen results in improved lead-time, efficiency, quality, productivity and customer loyalty. 

Every organization has unlimited possibilities for improvements that lead to happier customers and higher profits. The Process Improvement Manager is focused on bettering people, products and processes, turning problems into opportunities, and achieving operational excellence in a never-ending quest for perfection.

Most improvements in an organization come from ongoing innovation to its internal systems and processes (e.g., reducing errors or cycle time). Some improvements are incremental—tweaking what already works. However, breakthrough improvements can dramatically elevate the customer or worker experience and reduce operational costs in a BIG WAY.

Seek Continuous Improvement

“The goals of a Process Improvement Manager are simple: 1) make things easier 2) better 3) faster and 4) cheaper” (Shigeo Shingo, pioneer of Lean Thinking). They continually ask, “How can we do this better? How can we raise the standard?”

Daily improvement is accomplished by measuring and monitoring core business activities and providing constant feedback to workers and managers. Suggestion boxes, done the right way, and business improvement workshops (discussed above), are also sources for new ideas and input from workers.

Improvement methodologies such as Six Sigma, Lean Thinking, and the Theory of Constraints provide big-league principles and strategies for even the smallest of companies (see “Four Improvements Methods You Should Know About"). Small daily improvements—hundreds each year—are the key to extraordinary long-term results.

(“Knowledge has to be improved, challenged, and increased constantly, or it vanishes. … Not to innovate is the single largest reason for the decline of existing organizations” — Peter Drucker). 


10. Inspire a Culture of Excellence

The Process Improvement Manager has great influence on the culture of the business, and culture drives results more than any other factor.

Develop a Culture of Excellence

"An organization's purpose and goals set the direction. Measures focus the energy on the outcomes. Processes create habits, and habits drive the culture. You can teach skills and concepts. You can even create momentum (and a few smiles) through inspiration. But investing in skills and inspiration is a waste of money if there are not processes to reinforce your purpose and principles. The creation and continuous refinement of work processes is a mandatory practice in the Results Rule! organization, regardless of the industry" (Randy Pennington, “Results Rule!”).

The Process Improvement Manager—owner or employee—is responsible to help the company break through to a high-performance culture, a culture of discipline, a culture of excellence. This is the natural consequence of creating effective business systems and processes. There is no other way!

 (“Culture eats strategy for breakfast” — Peter Drucker).

 Nate’s Amazing Experience

Ten years ago, a young man sat quietly in one of my workshops. He was an entry-level employee of an attending customer. Little did I know how much he was paying attention, and that he caught the vision far beyond the business owner he was working for. Years later, and unexpectedly, I received an email from Nate. In part, he wrote:

"I am now working for a fortune 1,000 company and am currently in the business intelligence sector, and I am a Business Process Engineer. I go in, evaluate, look for waste, streamline processes and identify projects. I am then tasked with implementation, setting up control reports, forecasting results, and mapping out potential financial gains. I have been in the job for four months now and things are going so well they are throwing all kinds of projects at me that span many departments. I gained trust quickly and pretty much have a free rein. I have already identified over $10 million in gains from process improvements that I am putting in place.”

The Process Improvement Manager

Nate made a career of process improvement and landed a great job with a big company. However, the principles that guide his work are much the same for companies of every size. YOU CAN AND SHOULD DO THIS FOR YOUR COMPANY! As with Nate, the payoff can be quite substantial.

Laura (quoted above) and Nate, have had very different experiences in the companies they work for. All customers and employees, including yours, have similar feelings, one way or the other. Is your company organized, systemized, smooth-running, efficient, and profitable, or is it seat-of-the-pants, frustrating to do business with, and struggling to make money? Perhaps it is in between, but could it use some improvements?

Again, Who is Your "Business Systems Czar”?

The primary purpose of a Process Improvement Manager is to help engineer a remarkable business operation. This person has proven leadership and communication skills (oral and written), is a problem-solver with sound business understanding, works well with people and teams, and is performance driven.

The Process Improvement Manager spends most of their day designing, developing, overseeing, monitoring and evaluating the systems and processes that help an organization effectively find and keep customers, run an efficient and profitable operation, and differentiate itself in a crowded marketplace. 

Workers run the systems, and systems run the business. People may come and go, but the systems and processes remain constant. (see Michael Gerber, “E-Myth Revisited”). Like a fine restaurant, the key to success is developing and executing the precise and proven “recipes.”

(Oh, and by the way, the Process Improvement Manager should also document the “recipe” for their own role and improvement activities.)


Why Should People Want to Do Business with You?

Customers and employees alike want to work for or do business with the best companies. In a competitive marketplace, expectations are rising.

“Customers … are demanding from companies in many industries a radical overhaul of business processes. Intuitive interfaces, around-the-clock availability, real-time fulfillment, personalized treatment, consistency [across locations], and zero errors—this is the world to which customers have become increasingly accustomed. It’s more than a superior user [or buying] experience, however; when companies get it right, they can also offer more competitive prices because of lower costs, better operational controls, and less risk.” (Shahar Markovitch and Paul Willmott, McKinsey & Company).

So, just like sales, accounting, and customer service—essential business functions—you also need someone to develop and refine the business processes that are humming along every day in your large or small organization.

Incremental and occasionally breakthrough improvements will dramatically increase your customer loyalty, employee performance, profitability, and growth. There is no other way!

(“The best way to predict the future is to create it” — Peter Drucker).

P.S. - Download and print this article for your reference or to give your designated Process Improvement Manager. Go through the article and highlight everything your company can and should do. (Owners of small businesses will be surprised by the possibilities.) These ten principles will get you off to a great start! (Click Here to Download Printable PDF File)

The Next Step...

Tags: Business Leader, Culture, Improvement, Business Systems, People

Business Systems: 10 Vital Things You Need to Know

Posted byRon Carroll

Recently, I visited a customer in Houston Texas who owns a chain of ten auto repair stores. By every measure, Shane has a very well-run and prosperous company. He is no longer involved in the daily routines because he has excellent and trusted managers, and first-class business operations. However, Shane wants his company to become even better; he wants to improve on his success.

Auto Repair Company with Great Business Ssystems

After visiting some of Shane’s busy stores, I was reminded of a statement made by a marketing professional a few years ago. He said:

"One of our favorite clients is an auto repair shop that regularly puts three to four competitors out of business every year. His business operations are run so flawlessly, his marketing is so compelling, and his customer satisfaction is so high, customers are irresistibly drawn in and drawn back time after time. They are helpless. In their minds (and in reality), they would be STUPID to go anywhere else to get their cars fixed" (Rick Harshaw, Monopolize Your Marketplace).

Shane was eager to refine his company's daily operations, but new to my Box Theory™ Way. As I began to explain, he had a sudden epiphany and shouted, “YOU’RE TELLING ME THAT I CAN CREATE A SCHEMATIC OF MY BUSINESS, AND LIKE MY AUTO TECHNICIANS, I CAN VIEW THE DETAILS OF MY PROCEDURES AND PROCESSES TO PINPOINT AND SOLVE PROBLEMS.” “Uh, yes,” I responded. “I suppose you could look at it that way.” He actually had a brilliant insight that I had never thought about before.

What is a Business System?

I was inspired by Shane’ observation and now want to tell you why I am such a zealot about creating carefully designed and implemented business systems and processes. I hope you too will want to develop a business model so compelling that customers would think themselves “STUPID” to go anywhere else.

Before we start, keep in mind this helpful definition:

A business system is a procedure, process, method, or course of action designed to achieve a specific and predetermined result. Like a recipe, its component parts and interrelated steps work together for a desired outcome. Creating effective business systems is the only way to attain results that are consistent, measurable, benefit customers and workers, and yield an expected profit.

We are speaking now of people systems, not mechanical or electrical systems. For example, they might include lead generation, customer service, production, order fulfillment, purchasing, inventory management, hiring, training, and many others unique to your company. These systems are the daily hum of business activities that determine the success and profitability of your company.

Good Business Systems Run By Good People


10 Things to Ponder

Will you take a moment to consider ten vital principles that may help you and your staff run a more trouble-free, results-driven, and prosperous enterprise?

  1. Good systems are needed in EVERY ORGANIZATION, including YOURS.

    Effective business systems and processes are vital to product-based, service-based, and non-profit companies of every size and in every industry. They are important to the office, the workshop, the factory or the retail store. The critical purposes of your business systems are not just to get organized or systemized, but to consistently attract and retain customers, eliminate waste and inefficiency, and set your company apart in a crowded marketplace. (The only enduring businesses are those with awesome systems and processes! How would you grade yours?)

  2. Business systems are the essential BUILDING BLOCKS of your company.

    Systems and processes are how your employees get routine work done. Unfortunately, in many small businesses, they are improvised as people come and go. Every business owner and entrepreneur can become a “business engineer,” and learn the Master Skill of developing powerful systems and processes. All business functions—marketing, finance, and operations—fall within the scope of this single skill mastery. As Michael Gerber (E-Myth) said, “the business owner must work ON the business, not just IN the business.” Whether by hands-on or overseeing others, you can work ON your business in an intelligent and systematic way by creating valuable systems that continually please customers and accomplish objectives. This is one of your key responsibilities and a best-use of your time. (Decide today to build your business on a foundation of remarkable systems and processes. There is no other way!)

    Business Systems are Your Building Blocks
  1. Cost-effective systems LOWER COSTS and enable you to give customers the BEST DEAL.

    Competition can be formidable. The customer is always looking for the “best deal,” which is sometimes the lowest price, but is always acceptable quality, promptness, value, and a good buying experience. The quality and efficiency of your business processes will largely determine your operating costs and your ability to profitably compete. You can count on exceptional business systems to give you the marketing advantage of being better, faster, cheaper and smarter than rival companies. (With regard to business processes, Quality + Speed = Low Cost. Do not forget that formula!)

  2. System building is the ART AND SCIENCE of developing “BEST PRACTICES” for your company.

    The art of system design comes from your unique vision, creative approach to problem solving, and desire to differentiate yourself in the marketplace. The science comes by applying the Law of Cause and Effect and the simple but amazing improvement methods found in Six Sigma, Lean Thinking, and The Theory of Constraints. A systemized approach to running a business includes a focus on process, system components, people, quality, speed, and measurement. (Business systems are literally the “recipes” for best practices to get work done throughout your organization.)

Creating Business Systems is Both an Art and a Science

  1. Quality systems and processes SOLVE PROBLEMS and foster a CULTURE OF EXCELLENCE.

    Systems Thinking will literally make your business transparent, allowing you to clearly see the root-cause of problems and their obvious solutions. Quickly eliminate customer complaints, operational waste, mediocre performance, worker turnover, unnecessary costs, poor cash flow, slow sales growth, small profit margins, and daily frustration. You can establish a culture of discipline and excellence with smooth-running business systems, performance feedback to workers, and the empowering motivation of accountability. (Documented business processes provide a “visual schematic” for problem solving, innovating, and creating a result-driven culture. And, it is soooo easy to do!)

  2. Good business systems turn ORDINARY PEOPLE into EXTRAORDINARY PERFORMERS.

    Established systems and processes are your most valuable business asset when they can continually produce the results you seek. People are the most important components within those working processes. As people come and go, the systems remain constant. Ordinary people can produce results far above their pay grade if they operate in well-designed and effective systems. Good business systems reduce mistakes, waste, and rework, and allow workers to capably perform higher-level tasks. (When problems do happen, blame the system before blaming people, and perhaps blame yourself for the faulty system.)

Good Business Systems Help People Perform Better

  1. Achieve CONTINUOUS IMPROVEMENT with a PROCESS IMPROVEMENT MANAGER.

    Whether it is you, a manager or employee (full or part time, and not necessarily a new hire), someone needs to wear the hat of a “Process Improvement Manager.” This person’s role within the company is to maintain efficiency and quality in the work setting. They evaluate current business practices, looking for ways to improve customer service and productivity, reduce costs, and make the best use of the business's resources. Specifically, the process improvement person will develop, refine, and monitor the performance of the company’s vital systems and processes. Ongoing system development promotes continuous learning, growth, and improvement of individuals and organizations. (Innovation at the system level drives all business progress. The primary vehicle for innovation and improvement is the weekly Business Improvement Workshop.)

  2. SYSTEMS THINKING and BUSINESS IMPROVEMENT WORKSHOPS elevate people, products, and processes.

    The Business Improvement Workshop is a one hour per week meeting focused on solving identified problems, refining business practices, and advancing the organization. This brief council meeting improves people, products and processes by encouraging critical thinking, problem solving, innovation, engagement, buy-in, and team spirit. For busy owners, the weekly workshop is an important crossroad for relationship building and steady business improvement; there is no better use of time for managers or staff. (Small weekly improvements throughout the year add up to happier customers and employees, and incrementally larger profit.)

Hold Regular Business Improvement Workshops

  1. Exceptional business systems and processes are necessary to START, GROW, FIX, REPLICATE, or RETIRE.

    Start - Effective business systems are the only way to plan, organize, and structure a new business that runs smoothly and impresses customers right from the start.

    Grow – Well-executed systems and processes provide a methodical and consistent way—the best way—to dramatically grow your business and to skillfully manage the special challenges of growth and expansion.

    Fix – Improved business systems cut the waste, inefficiencies, and fat out of your organization (e.g., mistakes, lost time, and rework). Your well-oiled and cost-efficient business operation will delight customers and employees, and put more money into the pockets of stakeholders, including YOU!

    Replicate - Once you create your moneymaking “system”—and document the successful way you do things—it is easy to franchise or replicate your business model in other market locations (especially with Box Theory™ Software).

    Retire – Become free of the daily grind. Turn your entire business into a self-running system that provides consistent results day after day, even when you’re not around. Let someone manage the business for you or sell it for top dollar. The true value and selling potential of your company is found in the maturity of its systems and processes—their ability to consistently produce desired results.

    (No matter what stage of business you are at, or what you want to do to get better, creating quality systems and processes is the only solution. There is no other way!)

  2. Effective business systems PAY FOR THEMSELVES over and over again.

    "If you need a new process and don't install it, you pay for it without getting it." (Ken Stork, former president Association of Manufacturing Excellence). Please believe me when I say, “Good Systems are worth it!” And the larger your company, the greater the potential benefit. The question is not whether you should create business systems, but what new system or process improvements will have the most immediate financial impact. YOU have your hand on the lever of cash flow and profit, so go ahead and turn it up! A small investment to upgrade your operational processes is “the gift to customers, employees, and owners that keeps on giving.” (The financial benefit of high-performance business systems far exceeds their cost of development, and the payoff is often immediate and dramatic.)

A Systematized Business is a Money Making Machine

  1. BONUS TIP: BOX THEORY™ Software will BENEFIT YOU in FOUR WAYS.

    Look, I’m not big on sales hype, but I’ve spent a lot of time and money to create a powerful software program for building remarkable business systems and processes. (It is like the QuickBooks of business systems.) This low-cost product will 1) turn you into an effective Systems Thinker and developer, 2) provide all the tools you need to accomplish this mission-critical task, 3) cut your system development time and cost in half, and 4) trust me, it will raise your business IQ by 80 points—OVERNIGHT! (Learning the Box Theory™ Way could be one of the most important decisions of your business career!)

“Systems are the Solution” (AT&T)

Shortly after returning home from my trip to Texas, I needed to get new tires on my Toyota Highlander. While waiting for the installation, I learned that Discount Tires has opened over nine-hundred stores in the United States since 1960. Now that’s a pretty impressive example of a business operation “run so flawlessly, with marketing systems so compelling, and customer satisfaction so high,” that it could be replicated—and profits multiplied—without end.

I think I would be STUPID to build a business any other way! How about you?

Business systems are the most misunderstood and undervalued tools of entrepreneurs, small-business owners, and managers. If you are not giving up close and personal attention to the processes that drive the day-in and day-out results of your company, I invite you to take the next step to learn more about this most fundamental and indispensable business activity.

Just complete the short form on this page and you’ll be on your way—no money required, nor strings attached. I promise: this eye-opening and free information will get your juices flowing. If I can help you in any way, call me on my cell phone, Ron Carroll, at 801-225-9140, or email me at BoxTheoryGold@gmail.com.

The Next Step...

Tags: Business Systems, Getting Started, Culture, Improvement, Systems Thinker

My Out-of-Body Experience at Café Zupas, a Case Study in Systems Thinking

Posted byRon Carroll

My wife and I recently stopped for lunch at Café Zupas, part of an exploding chain of “fast-casual” restaurants that started in Provo, Utah in 2004. While my wife enjoyed the tasty cuisine and carried on a one-sided conversation, I drifted into another dimension (a place familiar to the Systems Thinker) where motion slows and details become crystal clear, a place where you see things not visible to others. With the amplified power of Systems Thinking, I observed the intricate “ecosystem” of Café Zupas’ business operation.

Cafe Zupas Store Exterior

This out-of-body experience began as I read a sign on the restaurant wall that read:

“We’re obsessed with Soup, Salads, Sandwiches and Desserts. We’ve searched the world for just the right recipes, with just the right ingredients. It’s all about culture, tradition and ancestry. And it’s about artistry. Perfection is made from scratch; it’s fresh, homemade and unique. Let our passion for taste and texture be your invitation to join the Zupas obsession."

Systems Thinkers from the Get-Go

The restaurant chain was the idea of two former “software guys.”  During an interview, partner Dustin Schulties said, “Our background in software helped us in creating systems for how we order, prep and use ingredients.“

The sign on the wall also reveals that these budding restaurateurs began by “searching the world over for just the right recipes, with just the right ingredients.” The concept of recipes is profoundly important for everyone trying to start and grow a successful business enterprise, including YOU!

Each recipe they found in their search is a unique system of ingredients and instructions for preparing or processing the food. Every dish is made with exactness, and the end-result is a culinary sensation. Combined, these distinctive and exclusive recipes are the basis for a winning business model.

For example, you might enjoy a Wisconsin Cauliflower soup, a Glazed Chicken Chipotle salad, or a Turkey Spinach Artichoke sandwich. For desert, you’ll die for the Triberry Cheesecake or the Chocolate Hazelnut Crème Brûlée.

Cafe Zupas Food

What is Your Recipe for Success?

A recipe is nothing more than a formula for creating something wonderful—repeatedly—with the same customer-pleasing result. (People are lined up at Café Zupas every time we go).

I once worked with a large import retailer who did flower arranging. They had “recipes” that included specific flowers, greens, and vases organized for a certain look that customers loved. I did work for a social media company that produced Facebook posts according to a recipe that earned lots of “Likes.”

When music artists develop their own sound, and people buy their songs, they have a winning recipe that can last for decades. The same goes for movie themes such as Marvel Comics or James Bond. In our free-market system, recipes that aren’t popular, will not endure.

Recipes to Riches.jpg
Photo from "Recipe to Riches" Australian Television

 

So, maybe you don’t think that creating popular recipes applies to your business. Think again!

A local landscaper has a package deal for lawn maintenance, and he installs a water feature his customers love—both recipes. A sign maker displays her unique recipe for signage (style, color, fonts, etc.) that generates a stack of orders and referrals.

A home builder shows eight floor plans in his catalog. He keeps the best sellers, drops the slow sellers, and adds new floor-plan “recipes" each year. Like pizza toppings, or sandwich fillings, customers choose the “ingredients” they want for their new home—paint color, carpet, counter tops, and so forth.

When I was young, my family had a business that manufactured framed art. We created a design theme called “Silhouettes” that featured black trees, sail boats, or other illustrations printed on glass and set against a beautiful sunset background that was recessed in the wood picture frame. The phone rang non-stop for two years. Our retail customers couldn’t keep them in the stores. As a product, it was a winning recipe, eventually copied by some of our competitors.

Your Business is Like a Chocolate Cake

Recipes are all about your ability to create a remarkable product or service that folks will line up for.  It’s the combination of ingredients and process (e.g., message, presentation, pricing, guarantee, return merchandise policy, courtesy and knowledge of employees, store cleanliness, delivery time, and so forth) that make the recipe unique and better than your competition.

When you follow the precise instructions to make a chocolate cake, you get the same result every time. However, we probably agree that not all chocolate cakes are alike. Have you tried “Death by Chocolate” or ”Chocolate Thunder?”  A simple recipe enhancement can make all the difference.

The same holds true with your recipe for generating sales leads, hiring the best people, delivering customer service, or fulfilling orders. A little change in ingredients or procedure can give a far-superior result. 

 (And be sure to give your recipe—your exceptional business system—a great name.)

The Law of Cause and Effect

A business system or process—whether in the store, the office, or the workshop—is merely a proven recipe to get things done in a specific, pre-determined and consistent way. Systems are governed by the Law of Cause and Effect; things happen for a reason. The effect or result of a business process is determined by the ingredients used, and the procedure followed.

Correctly designed, your business systems support the mission, strategy, and goals of your organization. While people may come and go, the successful recipes you have created remain constant. Furthermore, the better your recipes, the more customer loyalty, profitability, and growth you will enjoy!

In short, your entire business is made up of systems and processes—recipes—that can be managed and improved. By applying correct principles, which include just the right ingredients and precise steps, your systems will produce desired results every time. There is no other way!

A Franchise Prototype

Your entire business is a book of recipes that people will love—OR NOT. It contains your products, services and internal systems and processes. It includes your recipes for finding exceptional people, training workers, wowing customers, attracting attention in a crowded marketplace, and so forth. It is the unique way you do things in your business operation. (I might add, Box Theory™ Software is perfectly suited to create and store all your favorite business recipes.)

Favorite Business Recipes

Cubby’s, Costa Vida, Arby’s, Subway, Studio Pizza, Smash Burger, Zaxby’s, McDonald’s, Del Taco and a dozen other fast-food restaurants are close to my home. Each developed their own recipes for remarkable business systems and processes that began as a “franchise prototype” (Michael Gerber, E-Myth Revisited).

Whether you replicate your business or not, a systemized operation will put more money in your pocket, enable others to run the company when you’re not around, and prepare you to one day sell the business for top dollar—all the things you expect from your financial investment and hard work.

What Sets Café Zupas Apart?

Let’s go back to Café Zupas. They have attractive, well-run, and efficient stores, but there is more to the story.

From their website, store signs, and printed menu, the System Thinker gets a glimpse into the underlying cause of their excellent reputation and popularity. Below are some phrases I see in their marketing copy. I have italicized elements of their strategy, business model, and distinctive recipe for success.

  • “Our delicious recipes are derived from gourmet kitchens around the world.”
  • “We begin with fresh produce; the best quality ingredients delivered to our door each morning from local suppliers.”

Cafe Zupas Ingredients

  • “We’re passionate about creating kitchen-fresh food the old-fashioned way, and we know you can taste the difference.”

  • “Join us every spring and fall as we explore the flavors of the world with our World Tour of Soup.”

  • “The complimentary chocolate-dipped strawberry we give each of our guests is our unique way of saying thank you. It's a symbol of the extra care we give to everything we do.”
Cafe Zupas Chocolate Strawberries.jpg
  • “We strive to cheerfully serve our guests in such a way they feel at home and cared for.”

  • “We love to provide a place that is fun, inviting, and unique. Our relationship with our guests, our employees, and our local suppliers is what makes Café Zupas great.”

  • As we expand with new locations every year, we stay committed to making our food the same way, offering our guests fresh, delicious, artisan meals.”

Have you thought about your offering in this kind of detail? Are you communicating it well? What is your “sensory package” to attract and retain customers—words, colors, logo, printed materials, signage, sound, touch, smell, or taste?

(My wife recently took the car for an oil change and found a silk rose left on the dashboard—an unexpected gesture from an auto repair shop.)

Do you see how every repeated thing you do is a recipe or system to get a consistently desirable result?  Café Zupas’ website, store layout, menu, and thank-you chocolate strawberry, are all elements of their business systems and processes. YOUR company should promote similar features and benefits!

A Brief Time Out

In my continued out-of-body experience, I’m hovering over my wife as she tries to engage with my empty shell. Looking around, I observe dozens of smiling patrons and engaged workers. I wonder what they are really thinking about their experience at Café Zupas. I wonder if things are as rosy as they appear.

Cafe Zupas View from Above

Clues from Customer Reviews

We have peeked into Zupas’ business strategy and their recipe for a business model, but let’s dig a little deeper to see how they are doing with their other business systems and processesthose you may have in common. Consider with me what patrons are saying online.

Cafe Zupas Customers

Most of the hundred customer reviews I read were very positive—4 to 5 star ratings. The owners should be very gratified. I have noted below some suggestions that point to the company’s business systems, followed by my comments as a Systems Thinker (italics added for emphasis).

  • “We were greeted at the door (yes, there is a greeter) as an employee passed out menus to view while waiting in line. They were very helpful in letting me know how to order and how to navigate the menu. I like the bright, customer-friendly menu. Makes it easy to read.” (Ron’s comment: A door greeter in this type of restaurant is unusual but makes the experience memorable (that little extra the company brags about). However, handing out and explaining the menu in advance also makes the line move faster, perhaps a more important reason.)

  • “I have never seen a restaurant be so stingy with portions. Geez! They get out an exact measuring device for each and every ingredient. I'm surprised they didn't weigh the salad at the end to be 100% certain it was 5.7897 ounces. They are a little short on the portion size.” (Ron’s comment: If a lot of people felt the same, I would consider adjusting my portion size and pricing. However, portion control is a significant factor in the restaurant business. Keeping servings precise and predictable makes for a predictable profit. Another customer said, “The only place I leave feeling just right after a meal.” That’s what you hope the majority of your guests will experience.)

  • “This place earns its stars from me because of its many options and great value! The other thing I appreciate about this place is its well thought out, they even have a charging station with USB inputs so you can charge your phone. WHY DONT ALL PLACES HAVE THIS!?!?" (Ron’s comment: There are lots of menu options to please everyone; unlimited food combinations from a limited number of ingredients keep customer satisfaction up and cost down; USB ports for charging show they care about the little things (like the “thank you” chocolate-covered strawberry).

Cafe Zupas Menu 

  • “This establishment said they are too busy to take a phone order, yet they have a person opening the front door for guests? They responded to my inquiry, “she is not trained for phone orders"??!!! I am now going to be too busy to give my hard-earned money for undertrained staff!!” (Ron’s comment: Never be too busy to take an order or serve a customer. Due to frustration, this customer discontinued buying catered meals for his business meetings. On the other hand, an untrained person should not take complicated phone orders. Which business system is to blame, training, scheduling staff, or something else?)

  • “They tell you, when you are through eating to just leave your dishes, they will clean it all up for you. Then they say, please no tipping. The rest rooms are very clean. Thinking of how many people are in and out of there during the lunch rush, I was impressed!” (Ron’s comment: Notice three great elements to their customer-service system—staff cleans the tables, open refusal to take tips, and very clean restrooms, even during busy hours.)

  • “The food is pretty good, but they need to work on the ordering process. You have to walk through a hurried line where every person asks you what you ordered or if you want what they have to offer.  At the end of the line there is a disorganized pile of prepared dishes and you are expected to remember the names of everything you ordered to figure out which combination of soup, salad or sandwich is yours.” (Ron’s comment: I’ve had the same difficulty. This system would be easy to improve. What would you do to make it easy for customers to recognize their order at the end of the line?)

Cafe Zupas Serving Line 

  • “I was told the corporate office ‘didn't have a phone number. Of course anyone with any sense knows that a corporate office HAS a phone number. So that means that they just don't want to speak with their ACTUAL CUSTOMERS! Ahh… that's a wonderful business model.. NOT! And.. what do you know.. . with a little bit of extra research.. I found that indeed they do have a phone number. Surprise! I posted it for others, even though they prefer to hide and remain out of touch.” (Ron’s comment: A lot of companies today make it difficult for customers to contact them; they prefer email and online methods. However, when a large company does not have a posted phone number, I often shop elsewhere to insure I can get a problem resolved if necessary. This is a company decision and a business system I think Zupas could improve upon. Some companies promote their phone number. They want to know what customers think.)

  • “I thought this place was going to be obnoxious and/or complicated on first site, but once I actually got my butt inside, and looked at the menu, it was evident that it's not that complicated, expensive, obnoxious atmosphere, or stingy on the servings. Pretty much whatever you order will be delicious and I'm a total sucker for those chocolate covered strawberries. These guys just totally nailed it. It's really different from pretty much any other place, like a combination of Pita Jungle and Panera, but way better than both combined.” (Ron’s comment: This review reflects what the owners are striving for—the kind of 5-star rating that makes us smile!)

Every customer YOU have could write reviews like those above. Your customers or clients have very specific feelings about the way you do business, about the way you treat them, and about your unique business “recipes.” Some customers don’t return, and you’ll never know why. Other customers come back often, and you should know why. To be successful, systemize every good thing you want to have happen—what you want your employees to do, what you want your customers to experience. There is no other way!

 What Employees Are Saying

Now let’s get some insight based upon what employees of Café Zupas have to say. Keep in mind that the comments made below often reflect a single store. However, when you see repeated issues, there may be a good reason to evaluate one or more business practices—your systems or processes (italics added for emphasis).

Cafe Zupas Employees

  • “Tons of coworkers all around the same age (Ron: a result of the hiring system) makes for a fun work environment (the company culture). Half off food discount. Decent pay 8.50 starting (compensation system). Before opening there is a meeting daily where you can discuss anything. It is great to keep things running smoothly (communication and business improvement system).

  • “There are a lot of nit-picky rules and checklists that, while being helpful, can sometimes limit the efficiency of the employees.” (Ron’s comment: The company uses checklists to ensure quality and consistency, which comes before efficiency if you want customers to return.)

  • “Zupas pushes customers through the line so quickly. It is ridiculous, unnecessarily fast, and not human. I remember getting so stressed and frustrated, I wanted to just walk away and never come back.” (Ron’s comment: The serving line moves fast. It is the nature of similar restaurants with high demand. This is probably why the company hands out menus at the door during busy times. Furthermore, arriving customers who see the line moving fast are less likely to go elsewhere.)
Cafe-Zupas-Line-2.jpg
  • “The training they give you (if done correctly) is awesome. It really goes in depth and will teach you good customer service skills that can be used in future jobs. You'll gain a sense of urgency and learn incredible customer service.” (Ron’s comment: From numerous employee reviews, Zupas’ training system is very thorough. The workers learn to execute with exactness.)

  • “Please update the manuals and training books. Especially keep the Line Servers updated on changes in procedures.” (Ron’s Comment: I do believe this person is a Systems Thinker. Updating processes is important, followed by updated training. Yes, it is a lot of work, but if you want a customer-pleasing, waste-removing, profit-boosting business enterprise, it is necessary, and will pay dividends. This is why franchising is so popular; successful systems and processes can be easily repeated in multiple locations.)

  • “Give raises to your Line Servers especially if they have been working for you for more than three months! It is a constant struggle to keep employees, if you paid us more, fewer people would look for another job. You demand perfection and we work so hard for just being paid minimum wage. Why not invest more money in your current employees?” (Ron’s comment: Low wages and hard work are characteristic of many fast-food restaurants. That said, turnover of people is also expensive. The media would have the public believe that a benevolent business owner could easily raise wages from say $8 to $15 per hour without consequence. However, the ability to do so actually depends on the customer’s expectation of pricing. Costs in most restaurants are roughly one-third for food, one-third for labor, and one-third for overhead (e.g. rent, insurance). The average fast-food restaurant makes about 3% net profit. While you could re-evaluate your pricing system and other business efficiencies—and a price increase might be possible—there may not be a lot of wiggle room. Too much increase could drive customers to your competitors, reduce sales volume, and send your break-even point to a later day of the month (not good). Truthfully, these young people are getting an experience with value beyond current wages that will pay off in the future.)

  • Employee comments about managers: “managers need to care more about the employees working for them; management is scattered and unorganized; the upper management dress so sloppy it is embarrassing; secretive meetings are held among managers, leaving lots of room for gossip among staff; they need more open communication and transparency; managers tell you there are opportunities to advance, but they will never give you a raise or any benefit.” (Ron’s comment: Managers’ style and skills will vary from store to store. I assume the Zupas’ training system includes managers. Poor management can be costly to a company—frustration, low morale, high turnover. Remember, employees are customers, too (see Five Customer Types). If this was my business, I may try a web-based system where employees can rate their managers and overall work experience with 1-5 stars regarding a variety of topics. I would then use the information in training to help managers improve.  How would you, or do you, ensure first-rate managers in your business?)

  • "I have never worked for such a wonderful company. Every member of corporate cares and they keep people focused on the right things in the restaurant, training, consistency in the food and a fun, friendly, and clean restaurant. Keep up the great work!" (Ron’s comment: One of many 5-star ratings.)

Do YOUR employees enjoy coming to work or do they dread the thought? Do managers or workers experience frequent frustration?  Are some, even now, looking for another job? As previously mentioned, it’s not easy to keep people happy, but you can develop enthusiasm, productivity, and loyalty by incorporating the right principles into your business systems and processes (see eCourse).

Cafe-Zupas-Manager.jpg

The Takeaway

So what do we learn from Café Zupas that can be applied to your business operation. Here are a few ideas:

  1. Every business has an ecosystem that supports the life and success of the enterprise. Is your ecosystem like Earth or like Mars?

  2. Your business as a whole is a recipe, a “franchise prototype” as Michael Gerber refers to it (E-Myth Revisited). Have you learned the Master Skill for creating a winning business model that works well even when you’re not around, or that can be replicated in other markets?

  3. Every business has “recipes”—systems and processes—for pleasing customers and delivering products and services. Those recipes can be unique, wonderful, and attention-getting, or they can be lackluster, commonplace, and uninspiring. Do you have a world-class recipe for attracting new customers, hiring the best people, or providing “killer customer care”?

  4. What is your “sensory package” to draw people like a magnet? What would patrons say about the look and feel of your operation? Is it inviting, clean, and organized? Does it shine? What are you doing to WOW customers? What is your unique business advantage and value proposition? Do your customers know it? Is there a buzz in the marketplace about your company?

  5. Are the ingredients—the component parts—of your recipes the best you can make them? Many businesses have missing or poor-quality ingredients (e.g., forms, checklists, ad copy, signage, websites, software, equipment, people, and so forth).

  6. In today’s business environment, many companies are rated online. The brutal facts are in plain sight. Out of curiosity, how many items do YOU buy that are 3 stars? A 4-star rating is pretty much my bottom; 4 1/2 to 5 stars is preferred. I care about what other customers say, especially if there is a pattern. What could I read online about your business? Are you using the feedback to drill-down on faulty busy systems and processes and make the necessary course corrections?

  7. If business processes frustrate customers or employees, they will eventually go somewhere else. Improve your processes if you can. If you can’t change some of the things you are doing, listen and carefully explain the reasons why (e.g., compensation limits, work schedules, product return policies). Invite suggestions, and treat people with respect. Knowing that you value their opinion is 90% of the battle.

  8. The business culture you create is significant. Business guru Peter Drucker said that “culture trumps strategy every time. Is your business culture helping you succeed?

  9. Some little things that matter a lot: Keep the restrooms clean. Make payroll on time. Recognize and reward value given. Keep promises. Resolve problems quickly. Offer good training. Listen to your customers, including employees. Manage by the numbers. Lead with humility, respect and kindness (You could name others).

  10. System Thinking raises the details of your business operation from the sub-conscience to the conscious, making problems crystal clear and solutions apparent. Once you go there, you will never go back. Attention to details and low-cost improvements can make your business remarkable.

Return to the Present

“Ron, are you listening to me. Have you heard a word I’ve said,” my beautiful, sweet, awesome companion blurts out while waving her hand to get my attention? 

"Oh, sure, honey,” I instinctively reply as I do a soft landing back to reality. “I was just thinking about…. Oh, never mind."

 

Afterthought: Just before posting this article (10/5/2015), I googled Café Zupas. To my surprise, a Zupas display ad appeared on the top-right with a 3.2-stars rating from 16 reviews. Three visible reviews said:

"I use to love Zupas but now I feel like I am paying for barely any food."
"I ordered two (full) BBQ chicken salads today it was terrible!"
"I ended up getting two half salads with nothing but lettuce and sauce."

Oopsie! Could this be the sign of a system breakdown (at least at one store)? Trust me. It can happen to anyone—even YOU (Learn how to fix a system breakdown, and 10 reasons why business systems fail).

 

The Next Step...

Tags: Systems Thinker, Business Systems, Culture, Customer Retention

Customer Care: A Business System I'm Rather Proud Of

Posted byRon Carroll

As most of you know, I once had an accounting practice that also specialized in business coaching. As my interest grew in business systems and processes, I began to apply the principles to my own organization—Carroll and Company. Even I, your humble Systems Thinker, was impressed as I recently read some of the things we did back then to deliver first-rate customer service.

Below is an overview document written in 2004 describing our business system for providing “killer-customer-care.” It may be a little outdated, but good customer service is based upon true and enduring principles, so adapt it to your modern-day methods and technologies. (Also, please forgive my frequent use of the term “she.” Our receptionist and customer-care person was female, so I wasn’t as gender-neutral as I would be if writing today.)

Keep in mind, this system overview refers to a number of other component documents that were an important part of our customer-care system. (Component documents, like those italicized below, are now an integral part of creating systems and processes using Box Theory™ Software.

This article is a little longer than usual, and probably more information than you need. However, it contains many useful ideas; even one could lead to an important improvement for your business. More than anything, I hope it gives you a vision of what goes into creating a high-performance business system. If you give your customer-service system the attention it deserves, (not like the cartoon below), your company can become remarkable. Enjoy!

Bad Customer Service
Photo credit: Wordpress.com

 

Carroll and Company Customer-Care System Overview

The Customer Advocate

The Customer Advocate is a Carroll and Company employee assigned to view all customer contacts and customer-care activities from the customer’s point of view. This person continually assists customers, monitors the customer experience, reports problems to management, and recommends ways of improving customer care. 

The Customer Advocate performs the duties defined in the document Customer Advocate Responsibilities. These duties include new client intake and orientation, the customer relationship management (CRM) database, customer surveys, monthly customer email contacts, the customer-care calendar and budget, and special customer events or activities.

Customer-care Contacts

A customer-care contact takes place any time a client or one of their employees enters the physical space of Carroll and Company. A customer enters the space by walking in the front door or by calling over the telephone. Whenever a customer enters this space and interacts with Carroll and Company employees, they are given utmost courtesy and prompt attention to their needs. The employee “puts on their best face” as described in the killer-customer-care philosophy.

While on duty, the Customer Advocate/receptionist for Carroll and Company has stewardship for all customer contacts that take place. The person is sensitive to customer comfort, waiting times, fulfillment of commitments, and meeting or exceeding customer expectations. 

All management and staff employees practice the killer-customer-care philosophy during any engagement with clients, including those at the client’s workplace. All outgoing email communications from Carroll and Company use the prescribed logo and signature. Email communications are always courteous and professional (see document Email Etiquette). 

The Carroll and Company Customer-Care System includes the following guidelines. 

Carroll And Company “Sensation”

When clients visit Carroll and Company, they will have an overall feeling or “sensation” about the experience. Our goal is to make the experience as pleasant as possible. This begins with a clean and organized office. The temperature is set at a comfortable level (70-74 degrees). The person is greeted with a smile, addressed by their first name, and quickly served in a polite and professional manner. The client leaves Carroll and Company feeling that they accomplished their purpose. Sometimes they leave thinking, “WOW!”

Client Visits

When a client or their employee enters the reception area of Carroll and Company, they get immediate attention. If the receptionist is on the phone, she motions the person to have a seat. Addressing the client by name—when possible—she seeks to know who they have an appointment with, or what they have come to drop off or pick up. (By asking, “Do you have an appointment?” customers are trained to prearrange their visits to the office.) The receptionist immediately notifies the appropriate manager or staff that the client has arrived. If not already sitting, she invites the guest to take a seat and offers them a bottle of water. Wrapped candies also fill a bowl on the waiting-room table.

The receptionist continues to monitor people in the waiting area and strives to be interested and helpful, chatting with them if they would like to talk. The receptionist may also conduct a brief Client Survey (see below) while the customer is waiting.

The receptionist is sensitive to the length of time the client has been waiting. Response from Carroll managers or staff should be prompt, no more than three to five minutes. The receptionist contacts the Carroll employee if their response time is longer and informs the waiting person what they can expect. Most meetings with clients should take place in the conference rooms. Clients are discouraged from going into other parts of the building. Conference rooms are scheduled when possible.

Client Inbound Calls

When customers call the office, they are greeted by a smile (even though they can’t see it) and the statement “Good Morning, Carroll and Company, this is [Mary].” During the conversation, the greeter finds out the first name of the caller and the company they represent. The greeter also gets the phone number if the person wishes to be called back.

The receptionist/greeter works for the caller until his or her needs are met. She listens, takes action, and follows up as necessary to ensure the caller has a positive experience. The receptionist’s duty ends only when a call is successfully transferred, the customer leaves a voice mail, or the customer chooses to call back later.

If the client wants to be called later by a manager or staff, or if the call is urgent, the receptionist gives a detailed post-it to the manager or staff upon their return. If the client needs to be reached immediately, the receptionist should facilitate a mobile-phone contact.

The receptionist monitors a caller who is on hold and speaks with them every thirty seconds until the call is taken by staff. If the customer is anxious or frustrated, they are assisted in every way to resolve their problem. The Carroll and Company on-hold music/information/light advertising CD should be checked daily to make sure it is working properly. The receptionist also monitors and updates the after-hours voice message.

Customer Service - Gandhi Quote
View 50 more enlightening customer-service quotes


Remember: exceptional customer service is everyone’s job. Make a good impression. You may be the first and only contact a caller has with our company. Their feelings about the experience will stay with them long after the call is completed. Use phrases such as “please” and “thank you.” Apply the Golden Rule to treat them the way you would like to be treated. Keep your promises. If you say you are going to call them back within a certain time, do it! Every contact strengthens or weakens the customer relationship.

All telephone activities should follow the guidelines contained in the document Telephone Etiquette, and in the section “Put on Your Best Face” in the killer-customer-care philosophy.

Finally, receptionists/greeters are trained to excel at telephone etiquette. They should take phone calls most of the time. However, all employees should have should have basic customer-service and telephone-etiquette skills. Every person who has contact with clients represents Carroll and Company, their team, and themselves. Let’s be at our very best!

Internal Communication and Commitments

Clients must receive excellent customer care at all times during the day. Because some part-time employees come and go from Carroll and Company, it is extremely important that there is good communication at every level. This is particularly consequential when commitments made to the client must be filled by another employee.

Employees check-in with the receptionist when they arrive for work. They check-out when they depart the building. This lets the receptionist know who is available to work with customers. When employees leave, they also indicate the next time they will be back in the office. If it is anticipated that the client will have any needs while the employee is away from the office, a co-worker or the receptionist is informed so that the client can continue to receive service. The coming and going of staff should not adversely affect clients, causing them to feel frustrated with their outsourced accounting solution.

New Client Intake

When a new client hires Carroll and Company, a variety of internal tasks are performed to get the client setup and ready for service. As soon as possible, the Customer Advocate completes all tasks detailed in the New Client Intake Checklist.

New Client Orientation

The Customer Advocate holds a brief 20-30-minute orientation meeting with all new clients (except payroll only clients). This is usually held in a Carroll and Company conference room at a time convenient to the client and within a week of signing the Client Agreement. The Customer Advocate follows the New Client Orientation Checklist.

Client Database and Pictures

The Customer Relations Management (CRM) software contains the records of all sales prospects and customers. Current clients should be flagged in the software in order to exclude or include them in advertising pieces. At the new client orientation meeting, relevant company and contact information is obtained using the New Client Information form. This is later entered on the CRM database along with pictures taken of managers or key employees. A primary purpose of pictures is to allow Carroll staff to become familiar with clients, and so they can address them by their first name.

Client Feedback and Surveys

It is very important for Carroll and Company employees to understand the feelings and expectations of valued clients. This is done by listening to their spontaneous remarks, complaints, or suggestions during a contact or at a monthly client meeting. It is also accomplished by asking the client through a formal feedback system such as a customer survey. Client feedback must be routinely captured, forwarded to management, analyzed, and acted upon.

The Carroll and Company Client Survey is conducted on a continuous basis—twice a year with each client. It is administered to 5% of clients per week over a twenty-week period. It can be conducted by phone, during client visits, or at monthly client meetings. Survey results, along with customer suggestions and complaints, are analyzed and discussed during weekly management meetings or at a business improvement workshop. They are also compiled in a final report at the end of the six-month survey period.

Customer Service Rating

Client Comments Request Form

It is important for Carroll and Company and our accounting teams to recognize all significant accomplishments in working with clients. This increases motivation, strengthens relationships, and creates valuable good will. Many clients have become more profitable and successful using the Carroll and Company outsourcing model. We would like to capture some of those feelings as written testimonials.

To make this a simple task, we have created the Client Comments Request Form that lists common phrases used by our clients in the past. Clients can check any that represent their feelings and add comments if they desire. We will write a brief statement that reflects their thoughts and seek permission to use the statement in our sales process. 

The best time to get a testimonial is:

  • After a successful business evaluation
  • After early success in getting the company financially on track
  • After a major financial turn-around
  • After a significant year of profitability
  • After a single important financial accomplishment
  • Anytime an owner speaks verbal praises of the company, accounting team, or service

As a “Thank You,” Carroll and Company provides the client two $20 gift certificates for dinner at the Outback Steakhouse.

Website and Newsletter

Carroll and Company provides valuable information to customers through a monthly newsletter called Profitable Times. This newsletter is designed for busy entrepreneurs who need timely and specific information to manage their company more effectively and profitably. The newsletter offers advice from industry experts in accounting, tax, personal financial planning, sales and marketing, customer service, and human resource. The Profitable Times Newsletter is distributed the middle Tuesday of each month to clients and prospects of Carroll and Company. All articles are archived for future reference in the website Library. The Customer Advocate manages the subscription list.

Client Email Contacts

Carroll and Company maintains a Customer Email Distribution List in Microsoft Outlook and sends a general email to all clients and their key employees once or twice a month. This email may include a thought-of-the-day, tax deposit dates, office close dates, client promotions, or other useful information. The email uses Carroll and Company authorized logos and artwork and is approved by Ron prior to sending.

Client “WOW” Activities

Carroll and Company has a limited budget for doing special activities to “surprise and delight” clients. These activities may recognize an important accomplishment of the client, or they may be general activities targeted to all clients. Events or activities could include sponsoring a client’s office pizza party, giving away a free business book, having a summer picnic, or taking clients to a seminar. These “WOW” activities are targeted to an approved list of clients. Creative ideas are welcomed.

WOW Customers

Customer-care Calendar and Budget

Carroll and Company produces a Three-Month Calendar of employee events, customer care, and marketing activities. The Customer Advocate is responsible for updating the company calendar with all scheduled customer-care activities. They include client surveys, WOW activities, new client orientations, monthly customer emails, birthday wishes, and so forth. Calendar activities for each quarter are completed two weeks prior to the end of the current quarter. A budget is also submitted to fund the proposed activities.

Client Nurturing Activities

CFOs and controllers are encouraged to develop friendships with their clients by taking them to lunch, playing golf, or other relationship-building activities. Because of the cost and time involved, nurturing activities should be occasional and serve a specific purpose. These activities are at the discretion of the manager and require a personal, out-of-pocket expense.

Customer-care Training and System Improvement

At Carroll and Company, customer care is everyone’s job, regardless of other responsibilities. All employees should seek to create a company culture committed to the sincere caring, guidance, and protection of our clients. To achieve end-to-end killer-customer-care requires teamwork and shared goals, which means all business systems and incentives must reward customer care and never conflict with it.

The principles of remarkable customer service are taught at new employee orientations, weekly management meetings, team meetings, business improvement workshops, and through customer-care stories (see below). Killer-customer-care must be talked about often. Client Survey results are shared. Success and horror stories are told. Information is analyzed, and improvements are made to the customer-care system.

Email Stories to Staff

The Customer Advocate and receptionist monitor customer experiences at all times. Once a week, the Customer Advocate emails to all employees of Carroll and Company a customer experience story. The story can be a success story, or it can be an experience to learn from. The purpose of these stories is to teach the principles of killer-customer-care and to remind employees that customer care is everyone’s job.

Monthly Client Meetings

The monthly client meeting and delivery of the Profit Acceleration System™ is the most important face-to-face contact with the client. An outstanding and productive meeting is killer-customer-care at its best. The customer binder, with vision statement, business blueprint, monthly agendas, financial summaries, analysis and forecasting, and goal sheet, should WOW the customer every time. This is what separates us from the competition and is at the heart of the Carroll and Company Customer-Care System.

Well, That’s It

I’m exhausted just thinking about this business system, and the work it took to get it going. Retirement feels pretty good right about now.

However, you should know this: it took me several weeks of full-time work—free from distraction—to develop this system and all the component documents that were mentioned in italics. Once going—and a few kinks worked out—the system ran on auto-pilot, and a lot of great things happened with our clients and our employees. (Completing this system also moved me one more step toward retirement.)

You may have a different type of business, or this may be more than you want to tackle right now. But, remember this: 1) customer care is everyone’s job and essential to having a culture of excellence, 2) customer service must be systemized to consistently meet and exceed customer expectations, and 3) customer feedback is the key to achieving continuous improvement.

Your answer to three questions will determine if you are on track. Are your customers loyal? Do they refer others? Would you be a satisfied customer of your own company?

And one last thing, I didn’t have Box Theory™ Software back then. Now, I could create this business system in half the time. Your cost savings with this tool will be more than good. However, the amazing skill you learn will be even better, and the remarkable business you become will make you the best in your target market! So, don’t wait any longer. Get going today.

Footnote:

Consider the following terms (italicized above) as you contemplate your new and improved customer-care system:

Killer-customer-care philosophy and business system
Customer advocate
The customer contact
The customer sensation
New customer orientation
Customer intake
WOW Activities
Customer-care calendar and budget
Customer feedback/survey
Customer testimonials
Monthly newsletter or email communications
Business Improvement workshop for customer care

Related Articles:

Create a Symphony of Business Systems to Delight Customers!
The Business System that can Make or Break a Company!
Voice of the Customer: Four Things That Will Earn You an “A”!
How To Become the "Best Deal" for Your Target Customer!
Customer Service: Best Practices for an Awesome Customer Care System (slideshow)!

 

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Tags: Business Systems, Culture, Customer Retention, System Example

Business Systems: Your TOOLS for Greater Productivity and Profit

Posted byRon Carroll

When I was a little fellow, my father was a carpenter. To apply his craft, he wore a tool belt that contained an assortment of tools for hammering, cutting, fastening, and so forth. The right tools made his job easier and faster, and he kept them in good repair to get the maximum benefit. By making hard tasks easy, he could be more productive and earn more money for our family. As a little boy, he would occasionally let me wear his tool belt. Throughout my life—including in business—I have always appreciated having the right tools to get work done as efficiently and effectively as possible.

Wikipedia describes a tool as “any physical item that can be used to achieve a goal. . . .  Informally, the word is also used to describe a procedure or process with a specific purpose” (http://en.wikipedia.org/wiki/Tool).

Smart Creatures Use Tools

“For years there was a running debate concerning whether humans are the only animals that use tools. When scientists watched chimpanzees sit next to an anthill and place a stick in the entrance hole as a way to gathering ants—without having to dig—they decided that these creatures, with whom we share almost 95 percent of our DNA, were also using tools. So we now have our answer. Smart creatures, including Homo sapiens, use tools. Why? Because smart creatures do their best to find a way to make hard things easier” (Influencer, Joseph Grenny, 275; italics added).

Monkey Using a Tool

We all know that much of the work people do is boring, tedious, stressful, unpleasant, and for some even dangerous.  However, like the chimpanzee, we can make tasks easier, faster, and more enjoyable for workers by providing them the right tools.

Have you ever tried to do something difficult without a tool, like removing a staple without a staple remover? Or performing a task with the wrong tool, like trying to dig a hole with a square-point shovel? Or how about using a tool that hasn’t been maintained, such as cutting with a dull blade? Wouldn’t you agree that not having good tools can be very unproductive and frustrating?

We often hire professionals to work on our home or vehicle because they have the right tools, even specialized tools. In your target market, YOU are the professional. Your job Mr. or Ms. Business Owner is to provide the most effective tools (systems and processes) for  employees to get work done better, faster, and cheaper than your competition.

Business Systems and Processes are Tools

Business systems—lead generation, hiring, order fulfillment, customer service, and many others unique to your company—are the customized tools you create to get things done in an easier and more excellent way. Consider some of the advantages of having the right system tools.

  • Business systems incorporate the skills, behaviors, or tasks that you need done the right way every time (less oversight and supervision required).

  • Good Systems ensure that quality is achieved in products and services (happier customers).

  • Effective systems increase efficiency and productivity, and lower costs (more profit).

  • Exceptional business systems and processes make you a remarkable company (a standout, and the obvious choice of your target market).

  • Well-designed systems make work easier and more pleasant (higher employee morale, better performance, and less turnover).

  • Effective business systems and processes allow for measurement and frequent feedback to workers (the key to continuous improvement).

Sales-generating, customer-pleasing, waste-removing, profit-boosting business systems and processes are your tools to create an outstanding company. There is no other way!

And one final thought, the component parts used in your business systems are also tools: the checklist, the brochure, the contract, the order form, and so forth. Each of these tools has an important purpose, and the “sharper” the tools, the better your result.

Get the Right Tool

In my humble opinion, Box Theory™ Software is the best tool devised for owners and managers of small to mid-sized businesses. With this amazing desktop tool, you can plan, create, document, manage, store, and print everything pertaining to your company’s systems and processes—sort of like a QuickBooks accounting tool, but for business systems.

Last weekend, I purchased a tool chest at COSTCO to store the many hard-to-find tools scattered around my house. What a difference this handy organizer makes; I should have bought it years ago. I think you will have the same feelings about Box Theory™ Software. You’ll wonder how you ever got along without it.

Related Article:
Systems Thinking: What We Can Learn From the Legendary MacGyver!

 

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Tags: Business Systems, Laws/Principles

Business Systems: I love It When a Plan Comes Together!

Posted byRon Carroll

Colonel John "Hannibal" Smith is a fictional television and movie character and one of four ex-Army Special Forces. Near the end of the Vietnam War, the four soldiers were convicted of a crime they did not commit and managed to escape from the military police. As fugitives, this group, known as the A-Team, worked as soldiers of fortune, using their military training to fight oppression or injustice.

Hannibal, the oldest and most experienced of the group, frequently came up with a strategic plan to accomplish the team’s objectives and win the day. At each moment of victory, Hannibal was heard to say, “I love it when a plan comes together.“

  

    

There’s a Plan in Everything

I, too, love it when a plan comes together. Every time I complete a business system or process that performs as expected, I feel exhilarated, and a great sense of accomplishment.  You can, too!

And we’re not necessarily talking about big plans (BHAGS). Small improvements carried out each day have a significant cumulative effect. Below is an example of a quick little plan or system created by a client during the busy holiday season.

“I walked into one of my retail stores unexpectedly on a Saturday during the Christmas rush and was shocked by the deplorable appearance of the store, inside and out. Shopping carts were scattered throughout the parking lot. Restrooms were filthy. The front of the store was a disorganized mess. Having been exposed to Systems Thinking, I avoided confronting employees on the spot. (It took everything I could muster to smile and remain calm). However, on Monday morning, I brought the staff together, and we created a checklist to solve the problem. Now, on busy days when normal custodial service isn't adequate, the store workers complete the five-minute cleaning checklist every two hours. The store always looks tip-top, and I don’t have to worry about it anymore.”

An Amazing Plan That Came Together Perfectly

After years of preparation and seven months of space travel, a NASA team successfully landed the robotic rover “Spirit” on the surface of Mars, January 4, 2004. Over time, Spirit accomplished far more than its expected mission and became one of the most successful space projects ever.

The incredible video below is an illustration of what can happen “when a plan comes together”—when a system is designed and executed with such precision that it generates astonishing results.

    

    

What We Learn from This Video

  • Ordinary people can do extraordinary things with a good plan and attention to detail.
     
  • Business systems that consistently deliver on their promise are what create world-class organizations.
     
  • The unique business systems and processes YOU create reflect ingenuity, hard work, and desire for excellence... AND THEY TOO CAN BE REMARKABLE!


You may not have a budget like NASA, but you can create business systems that will cause people to stand up and cheer. (The last scenes of the video could be YOUR customers!)

Like Hannibal Smith, you may occasionally be heard declaring, "I LOVE IT WHEN A PLAN COMES TOGETHER!"

 

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Tags: Business Systems, Video, Business Leader

What Is a Business Process, and Why Should You Care (A Lot)!

Posted byRon Carroll

A business is made up of people, products, and processes organized to profitably find and keep customers. Many companies fail because owners and managers are unable to create effective business processes that accomplish this fundamental objective. 

So, what exactly is a business process? And how can you create processes that will help your company achieve greater customer loyalty, profitability, and growth?

Business Process

Simple Definitions

There are business process experts who get deep in the weeds when defining a business process or trying to distinguish it from a business procedure or a business system. However, for entrepreneurs and owners of small to midsize businesses, a few simple definitions will suffice for our discussion.

  • Business Procedure – a sequence of actions taken to accomplish a task (emphasis on following steps in a specified order).
     
  • Business Process – a series of ordered activities that transform inputs into higher-value outputs (emphasis on transforming materials or information into a product or service).
     
  • Business System – a group of interacting, interrelated, or interdependent elements forming a unified whole (emphasis on related parts working together for a desired outcome).

A Process is Just a Recipe

As a business owner or manager, you may use these terms interchangeably. They are all business activities designed to produce a specific, pre-determined, and consistent result. They include your processes for marketing and sales, hiring and training employees, customer service, production, order fulfillment, accounting, and many more, some unique to your industry or company.

Business systems and processes—whether in the store, the office or the workshop—are your unique recipes for getting work done. They are governed by the Law of Cause and Effect. The result (effect) of a business process is determined by the ingredients used (e.g., forms, checklists, materials, supplies, equipment, software, people, and so forth) and the procedure followed (cause). The only way to get a better process result is to improve the ingredients or the procedure of the recipe.

For example, when you carefully follow the detailed instructions of a chocolate cake recipe, you get the same result every time. However, we all agree there are chocolate cakes and then there are CHOCOLATE CAKES!  (e.g., Chocolate Thunder). They may go by the same name, but the unique recipe makes all the difference.

The same is true with your recipe for generating sales leads or hiring the best people. A little change in ingredients or procedure can give you far superior results!  

Correctly designed, your business systems and processes support the mission, strategy and goals of your organization. While people may come and go, the successful recipes you have created remain constant. Furthermore, the better your recipes are, the greater the customer loyalty, profitability and growth you will enjoy!

Simply put, 100% of your business is made up of systems and processes (recipes) that can be managed and improved by applying correct principles to fine-tune 1) the ingredients or 2) the procedures. There is no other way!

Three Types of Business Processes

Effective systems and processes are the essential building blocks of your company. There are three general types to consider:

  1. Management processes include planning, organizing, controlling, and leading—the activities for governing your business (e.g., developing strategy, management meetings, and board of directors or advisors).
     
  2. Operational Processes constitute your core business functions and create the primary value stream for customers (e.g., lead generation, sales, purchasing, production, order-fulfillment, shipping, and customer service).
     
  3. Supporting processes uphold and sustain the core processes (e.g., accounting, hiring, information systems, safety, and custodial).

Most business systems and processes are unique to your company (like fingerprints) and differentiate you from all other companies, unless you are a franchise. They include sub-systems or sub-processes that focus on the details of your business activities. For example, a marketing process has a sub-process called lead generation, which has sub-processes such as print advertising, radio, social media, or a website. It is in the details—the sub-systems and processes—that profit dollars are made or lost!

Good business systems and processes have three primary purposes: 1) to attract customers, exceed their expectations, and transform them into loyal fans, 2) to eliminate operational waste and inefficiencies that rob profit, and 3) to create differentiation and domination in your target market.

Michael Gerber, author of E-Myth Revisited, teaches, "Organize around business functions, not people. Build systems [and processes] within each business function. Let systems run the business and people run the systems. People come and go but the systems [and processes] remain constant.”

Describing a Process: Procedure vs. Checklist

When the steps of a task are performed in a specific order, the term “sequential steps” or “procedure” is used. For example, in a furniture shop, you first cut the wood, then sand the wood, and finally paint the wood. Doing these three things in the right order is essential. Your finished product would be unacceptable if you painted the wood before you sanded and prepared it.

A flowchart diagram with boxes and arrows—indicating steps, decision points, branches, and loops—sometimes makes it easier to describe a multi-path process than does a written procedure. Using the furniture example, if the wood has a rough edge when it arrives at painting, your decision is to reject the wood and send it back to the preparation stage. There it is re-sanded and returned to painting. After painting, a branch in the process might also send different colors of wood to separate pallets for storage. 

Business Flowchart Example

When the steps in a process can be performed in any order, a simple "checklist" is all that is needed. For example, your office custodian might empty the trash, dust the furniture, and vacuum the floor. However, it doesn't really matter in what order the tasks are completed. Checklists are easy business systems that do not require flowcharts and can usually be created rather quickly.

Remember: While much thought, planning, and experimentation may go into developing a high-performance business system or process (see Your First Business Improvement Workshop), everything learned is eventually reduced to a single procedure or checklist that is used by the people who operate the system. Their responsibility is to follow that procedure with exactness until the system is improved. If you encourage and reward innovation, system operators will also drive the improvement process.

Processes Are for Customers

A primary purpose of your business processes is to provide value for customers—to transform information or material into something that customers want, and which meets their specifications and expectations. Customers can be those who ultimately buy your products or services; however, business processes also serve the similar needs of your internal customers (see Your Five Different Customers).

For example, in your business operations, the next step in a business process is the customer of the previous step in that process. In an assembly line, station two is the internal customer of station one. The order-fulfillment department is the customer of the order-processing department. The sales team is a customer of the advertising or lead generation team. Each “customer” in a chain of business activities looks for added value, and also wants their specifications and expectations to be met.

In addition, employees are important customers of the business. They too have specifications (e.g. work hours, wages, and benefits) and expectations (e.g., rewarding assignments and opportunities for advancement). Whether spoken or not, if you fail to meet their requirements, they will eventually go somewhere else. Good business processes support the learning and growth of your people and inspire their loyalty.

All of your business processes must deliver four basic things to its external and internal customers: 1) quality—low defects, does what is supposed to do, 2) speed—on schedule, meets deadlines, no delay, 3) low cost—high perceived value, competitively priced, and 4) pleasurable buying experience—no hassle, “killer customer care.”

Business Process Development

Learning how to develop good business processes is the Master Skill of the entrepreneur. All business functions—marketing, finance, and operations—fall within the scope of this single skill mastery. What’s more, the true value of your business is found in the maturity of its business processes—their ability to produce desired results consistently.  (How would you and others grade your current business systems and processes?)

Systems Thinking in Business

Below are ten characteristics of an effective, efficient, and even exceptional business system or process:

  1. The process is built with the customer in mind. (Does this business system or process help turn your customers into loyal followers by meeting or exceeding their expectations? Does it help your workers perform at their best and get top results, even when you're not around?)
     
  2. The process represents “best practices” or your best-known way of doing something. (Are you getting less than 1% errors? Is the process as fast as it could be? Be honest. Is this the best you can do, or could you make the process better?)
     
  3. The business process is designed with one primary purpose (more than one purpose usually means that processes are wrongly combined).  In addition, the process has no unnecessary steps and little or no idle time between steps.  (Is the process stable, steady, and paced with sales orders and fulfillment? Are the process goals aligned with your company goals?)
     
  4. The system or process has an owner or team leader. (Who is accountable for and reports the results of the process? Is the person rewarded for exceeding performance standards or making improvements?)
     
  5. There is ongoing and updated documentation on how to execute the process properly, including the handling of details and exceptions. (Do workers fully understand the process and can easily repeat it with consistent results? Have you created a winning recipe?)
     
  6. The process is as simple as possible to get the job done, but not simpler. (Can you lesson complexity, customization, and exceptions in products and services? Can you reduce the physical path, clutter, barriers and distractions? Can you drop unprofitable product-lines or services?)
     
  7. There is a sufficient focus on system details to eliminate most bottlenecks, inefficiencies, delay, mistakes, defects, and rework. (Every process has waste. Have you reduced it to a minimum? Do you accumulate defects for later handling or do you properly fix problems in the process as they occur?)
     
  8. The business system is not hampered by poor planning (lack of materials or labor) or stop-start work-flow as people switch between processes. (Are your workers losing productivity or making excessive errors caused by shifting assignments, multitasking, being "spread too thin," or "wearing too many hats”?)
     
  9. The system has performance standards, and results are measured. (Are you "managing by the numbers" for maximum profit? Do you celebrate success?)
     
  10. Workers get ongoing feedback about system-performance and are recognized or rewarded for exceptional results. (Do people always know how they are performing in relation to the goal? Is feedback self-administered, and in real time like a sporting event? Simple tip: To improve performance, increase the frequency of the feedback.)

Quality + Speed = Low Cost

By creating business processes that have minimal mistakes, defects, and rework (quality), you will reduce waste and increases process speed. By eliminating delay, downtime, and other speed bumps, you will boost sales throughput. This powerful one-two punch of quality and speed will give you the lowest possible operational costs and provide your customers the greatest value.

Outstanding business systems and processes are the "magic formula" for success! Superior quality and speed are the “secret sauce” that will wow customers, boost profit, blow the competition away, and make your company remarkable!

Wrapping Up

Well-designed business systems and processes increase efficiency, accomplish objectives, and give customers what they want every single time. They are your answer to weak sales growth, customer dissatisfaction, poor performance/productivity, waste of resources, employee turnover, excessive costs, slow cash flow, low profit margins, daily frustration, and every other business problem.

Whether in the store, the office or the workshop, developing effective business systems and processes begins with good system design. After creating a flowchart or checklist, and acquiring the components necessary to operate the system, you now focus on improving its quality and speed. Measuring system-performance provides the feedback for making adjustments and improvements.

More specifically, each step in the process flowchart contributes value to the customer. The process generates output that meets quality standards, with no accumulation of rejects or rework. The workload is level, uses standardized tasks, and is paced with the input of sales orders. Bottlenecks that delay order completion are eliminated. "Speed bumps" such as clutter, poor layout, and downtime are minimized. Employees are well-trained and incentivized when possible. People and systems learn and improve from the ongoing feedback of process results.

So, what exactly is a business process, and why should you care (a lot)?

In the game of work, good systems and processes embody your distinctive business strategy. They are your means to increase customer value and product demand. They enable you to differentiate yourself in a crowded marketplace. They help you maximize efficiency for greater profit, more personal income, and the ability to share financial rewards with others. In addition to people and products, processes give your company a unique identity and place in the world.

Is it worth it to learn the Master Skill of system development? A thousand times, “YES”!

There is an art and a science to creating exceptional business systems and processes and growing a remarkable business enterprise. I invite you to check out the Box Theory™ Way today and discover our eCourse and breakthrough business-process software, especially designed for small to mid-size businesses.

If This Article Got You Thinking...

I have some other great information that will give you new insights, powerful tips, and proven strategies to dramatically improve your business operation.

You will learn how to create customer-pleasing, waste-removing, profit-boosting business systems and processes. The application of Box Theory™ strategies has proven to be worth THOUSANDS OF DOLLARS for many business owners. Put me to the test!

If you haven't had a chance, sign up in the top-right column for 5 Free hand-picked items that will guide you to an immediate financial payoff. You will learn the following, and much more:

  • How Systems Thinking can raise your business I.Q. by 80 points—INSTANTLY?
  • What six essential ingredients are found in every great business process?
  • Ten low-cost things you can do to remove waste and inefficiency, and build a results-driven organization?
  • How effective systems and processes will help you start, grow, fix or franchise (replicate) your business.

 

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Tags: Business Systems

Great Customer Service: 50 Quotes From People Who Know! (slideshow)

Posted byRon Carroll

We can't learn too much about our customers—who they are, where they hang out, how they think, and what they want. Most of us don't have enough customers and would like to get more.

Stating the obvious: Happy customers translate to more sales. Increased sales enable your business to hit the break-even point earlier in the month. After reaching the sales break-even point, profit margins go up dramatically. With more profit, everything gets better, and you have a prosperous enterprise.

Are your customers as happy as they could be? Do you have "killer customer care?"

Four Things Customers Want

Customers all want the same thing—the best deal they can get on desired products and services. They want high-quality. They want it fast or on time. They want it at a good price. And they want a pleasurable buying experience.

Bad Customer Service

Photo credit: Wordpress.com  

Learn from the Experts

Many lessons have been learned over the years about how to serve customers well. The slideshow below will provide you with some great insights. These profound statements are from people who truly understand the principles of customer care:

Walt Disney
Sam Walton (Walmart)
Mother Teresa
Ray Kroc (McDonald's)
Bill Gates
Mahatma Ghandi
Zig Zigglar
Steve Jobs
J. C. Penny
Benjamin Franklin
Dale Carnegie
Aristotle
Stephen Covey
John F. Kennedy
Albert Einstein
and others

Your Customer Care System

Keep in mind, the informative statements you are about to read won't help your business one bit unless you incorporate them into a business system or process. There is no other way!

Review the slideshow. Make notes. Then, go apply some of these profound principles to elevate your customer-service systems today.


 

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Tags: Business Systems, Laws/Principles, Customer Retention

Business Startup: Your First Business Systems and Processes

Posted byRon Carroll

Starting a new business is both exhilarating and downright scary. Every new business owner has a story to tell about the early days.

When I was a young man, my father sadly passed away of cancer at age forty-one. He had a life-insurance policy of $30,000. My mother felt he would want my brother and me to have this money for a new business venture we were considering. Craig and I were pretty naïve back then and did not realize how likely it was we would lose it all. Fortunately, our startup manufacturing business landed a big customer and could leverage that income to get the ball rolling.

However, Craig and I were not only youthful and naive about the perils of starting a new business, but we were clueless about how to create a fully-functioning and profitable business operation. We jumped in, started making and shipping products, and enjoyed a short honeymoon. Then the harsh day-to-day business realities began to settle in.

Danger Ahead for Business Startups

The Game of Business

We discovered it was not so easy to keep customers, employees, vendors, bankers and landlords happy all the time. We realized that the more we sold, the more our accounts receivable and inventory grew, keeping us cash-poor. We learned that we needed to make a high-quality product every time and all the time, and that we had to watch every penny in the process. Given the many variables, unexpected costs, and things that went wrong, making a profit turned out to be a tricky proposition.  At the end of the month, we took home a meager paycheck and wondered, “Where has all the profit gone?”

Craig and I didn’t understand the importance of creating business systems, or the underlying principles for making them efficient and effective (8 Characteristics of Good Business Systems). We spent our day putting out fires and stumbling around to improve the operation. Eventually, some rudimentary systems emerged, and we began to learn how to play the “game of business” (see Grade Your Business Systems).

As a new enterprise—one that expects to have people, products and processes—you must give attention to creating fundamental business systems and processes such as those described below. Some should be developed before the business roll-out, while others can be created and refined during the first year. 

  1. Systems to Acquire New Customers:  marketing, lead generation/advertising, sales, website/SEO/social media

  2. Systems to Get Good Workers and Teams:  hiring, training, compensation/incentives, safety, employee policies, performance evaluations/recognition

  3. Systems to Make and Deliver Products and Services:  production, order fulfillment, shipping and receiving, customer service, inventory management

  4. Systems to Manage Money:  accounting, payroll, purchasing, credit/collections, tax/compliance, cash management

  5. Systems to Support the Above Systems:  facility management, computers (IT), housekeeping, security, maintenance, office management

  6. Systems to Improve the Business:  product/service development, business systems development, business improvement workshops.

Good Business Systems Make All the Difference

Getting off to a good start with effective business systems and processes will produce consistency, confidence, and accelerated sales growth; it will put you on the fast-track to earning your first profit.

New customers will love you because good systems:

  • Help you meet and exceed their expectations
  • Provide a great buying experience
  • Give customers the “best deal”
  • Increase consistency, quality, speed and reliability
  • Help you become a standout in your target market

(Customers will see you as organized, credible, and professional.)

Employees will thank you because good systems:

  • Make job expectations clear
  • Reduce training and supervision
  • Improve productivity, quality, safety and cleanliness
  • Elevate job satisfaction
  • Reduce employee turnover

(Employees will see you as a great company to work for.)

Your business will reward you because good systems:

  • Maximize your income and ROI to make a profit sooner
  • Eliminate chronic frustration and excessive costs
  • Reduce dependency on people who come and go
  • Build long-term value into your business
  • Enable you to eventually sell, replicate, or have others run it for you

(Stakeholders will have confidence in your Leadership.)

Don't Do What I Did

Starting and running a new business is high-risk. You have to work on the business as much as you work in the business (Michel Gerber, “E-Myth Revisited”). That means creating effective, efficient and even exceptional business systems and processes.

Don’t do it like I did. Do it right, and right from the beginning.

Quite frankly, the Box Theory™ Way—the methodology and software—is the best tool available for business startups. It will get you organized, develop your Systems Thinking skills, and help you learn the Master Skill for creating growth-producing, customer-pleasing, waste-removing, profit-boosting business systems and processes. And, it will pay for itself almost immediately!

Please take a minute and check out the Box Theory™ Products. It may be the most important thing you do today.

And One More Thing:  Don’t become one of the dismal statistics that describe the failure of most business startups. Even good business systems and processes won’t save a company with low market demand, insufficient working capital or profit margins, superior competition, an undifferentiated strategy or value proposition, difficulty reaching the target market, or ineffective management. These conditions—if not remedied—can kill a new business, so proceed with caution!

 

The Next Step...

Tags: Systems Thinker, Business Systems, Business Startup

Solve Problems and Prosper with Exceptional Business Systems

Posted byRon Carroll

The essential task of every business owner or entrepreneur is to overcome daily problems, obstacles and challenges in the quest to serve customers better and make a profit. I want to discuss some of the specific challenges faced by small-business owners, and then drill down to the underlying causes of those problems. This will also lay a foundation for understanding the solutions offered by the Box Theory™ methodology.

Solve Problems with Better Business Systems

 

The Small Business Challenge

The Small Business Administration reports that over 500,000 businesses are born every year and about the same number die. Of startups, 33% are no longer in business after two years, and 50% are gone by four years. (SBA Frequently Asked Questions).

The Box Theory™ Way can prevent you from becoming one of these dismal statistics, behind which are broken dreams and financial devastation.

As entrepreneurs, we all start with a similar vision. We want to be independent and earn more income than we might earn by working for others. We have an idea, talent or product we hope the marketplace will demand. Sometimes we borrow money from family, mortgage the house, or risk everything to “live the dream.” Then, like every other entrepreneur, we discover that owning a business requires all the intelligence, discipline and hard work we can muster. To start, grow and sustain a successful company is likely to be the most difficult thing we ever attempt.

From day one, unrelenting forces begin to work against us. We face slumping economies, cost increases from vendors, customers who pay slow or not at all, government regulations, increasing taxes, unproductive employees, stiff competition, insufficient sales, obsolete inventory, cash flow headaches, never-ending demand for new and better products, and many other challenges.

If you haven't had some of these brutal experiences yet, it's only a matter of time. They will come with changing market conditions, government leadership, and business cycles. So be prepared.

I believe it takes as much skill to be a business owner as it does to be a medical doctor. The difference is this: Doctors prepare for ten to twelve years before starting their medical practice. Most entrepreneurs learn on the fly, resulting in critical errors and frequent casualties. The requirements of continuous learning, self-discipline and long hours are no less for a budding entrepreneur than they are for a doctor. Are you willing to pay that kind of price?

Your Primary Purpose

A business enterprise is made up of people, products and processes organized to profitably find and keep customers. Companies are in trouble from the get-go when they face superior competition, low market demand, under-capitalization, difficulty reaching their target market, undifferentiated strategy, ineffective management, or a weak revenue model. Assuming those things are in order, the most likely reason for failure is that owners do not create business systems and processes that effectively carry out the mission, strategy and goals of their organization.

As an entrepreneur, your primary purpose is not to sell, make products or provide a service, but to be the chief architect of your entire business enterprise.

On a typical day, you design, develop, oversee, monitor and evaluate the systems and processes that make your organization run efficiently, create value for customers, and produce a healthy profit. If you want to be an artist, machine operator, sales agent or technician, you should get a steady nine-to-five job. Building a business is a different vocation altogether. If you don't have the personality, skill-set, or desire to do this, you should get a partner or hire someone who does.

Your primary role as a business owner is to get the best people you can on the team, create innovative products for your target market, and develop operational excellence (systems and processes) that will attract and keep customers. When you can do this profitably, you will have the foundation for a lasting company.

Customers buy from companies that serve them best. Without concern, they allow all others to fail. It is how the customer feels about your business as a whole that matters most. Everything about your operation—advertising, cleanliness, courtesy and knowledge of employees, return merchandise policy, product selection, location, delivery time, price, and so forth—is what they are choosing. As chief architect, your entire business is your product, and it must be exceptional throughout. When it is, YOU become the “best deal!” Creating effective business systems and processes will make your organization exceptional, and keep your customers coming back again and again!

Problem Solving

Let's dig a little deeper. Do you run a perfect business? If not, what problems would you like to eliminate? What parts of your organization need to improve? What obstacles must you overcome? What is eating away at your profit or preventing you for reaching your full potential?

Your business weaknesses and problems will surface from three primary sources:

  1. Customer or worker feedback/complaints   
  2. Financial reports and performance data/brutal facts
  3. Personal frustration/symptoms of deeper problems

You will experience frustration when there are recurring events over which you feel little or no control—problems that can often be eliminated by installing an effective system.

How many of the business problems, obstacles or frustrations below do you have?

Customer or Worker Dissatisfaction
    * Our customers complain about quality or timely delivery.
    * Our customer service is not as good as it could be.
    * We don’t have customer loyalty or get the re-orders we expect.
    * Our competitors are taking business from us.
    * Orders are processed incorrectly; too many returns.
    * We can’t seem to hire or keep good people.
    * Our people aren’t productive or motivated.

Financial Indicators
    * We don’t have accurate or timely financial information.
    * We don’t know our true costs.
    * Profit is lower than it should be.
    * Accounts receivable collections are too slow.
    * The company has missed filing deadlines or tax deposits.
    * Cash flow is poor, hard to manage, and stressful.
    * Labor costs are high.
    * We don't have enough working capital for needed people, equipment or inventory.

Other Frustrations
    * We don’t have enough sales.
    * Our advertising isn't working.
    * The business is unorganized and chaotic.
    * I'm the only one who can do some of the work.
    * There is too much waste and inefficiency.

Every day, these and other frustrating business problems take hard-earned money out of your pocket. Amazingly, they all reflect the same underlying problem—a problem that you can easily fix!

Start, Grow, Fix or Franchise

Each business is unique and at a different stage of development, with different goals. However, every business owner is either trying to start, grow, fix, or replicate their business. Effective business systems and processes play a major role in each of these endeavors. Box Theory™ methodology and software can also help you in the following ways.

When you start a new business, you build everything from the ground up. You create and organize all your business systems and processes to produce sales, deliver products and services, and accomplish your mission, strategy and goals. The Box Theory™ Way is a unique "system" to help you lay that critical foundation and get results that will impress customers right from the start.

If your company is growing, you face hazards of a different kind. Many organizations fail because they grow too fast. The primary problem is that existing systems and processes cannot meet the increasing demands. They begin to break down. Customers become unhappy. Cash flow dries up. Frustration begins to dominate daily life. An organization experiencing rapid growth can be at risk of collapse unless it re-orders itself to a higher level of performance. Box Theory™ enables you to elevate your systems and processes to accommodate the otherwise exciting increase in demand for your products or services.

The majority of business organizations have a great deal of hidden waste, most of which can be prevented. Half-baked business systems and processes rob business owners and stakeholders of thousands of dollars every year. Box Theory™ methods enable managers to fix broken or ineffective business systems, getting them to run smoothly and profitably.

Finally, if you have any ideas about franchising your business or replicating it in other markets, the most important thing you can do is systemize it like a McDonald's Restaurant. When you buy a franchise, you are primarily buying tested and proven business systems. Systemizing is the essential requirement to replicate any organization. Box Theory™ software will enable you to create a business model that can be used repeatedly to multiply your financial opportunities.

By now, I hope my point is crystal clear. Business owners frequently fail because they do not create effective systems and processes that profitably find and keep customers. Additionally, most do not realize the underlying waste of time and materials that seriously erode profit and prevent them from meeting the high expectations of their customers.

By understanding that effective business processes are the essential building blocks of a successful and profitable organization, you can now embark upon a journey of systematic improvement.

The Box Theory™ Way will enable you to eliminate the most common problems that small and mid-size business owners face:

  •  Weak sales and growth
  •  Customer dissatisfaction
  •  Waste and inefficiencies
  •  Underperformance and turnover of people
  •  Poor cash flow
  •  Low profit
  •  Over-dependence on owners

Systems Thinking is a concept that will change the way you run your business. Effective business systems are the logical and practical solutions to your daily problems, and they are just waiting to be discovered!

The Next Step...

Tags: Business Systems, General Business, Business Leader