The Systems Thinker Blog

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

Problem Solving: Zero In on the Root Cause and the Vital Few

Posted byRon Carroll

Success in any business depends a great deal on how well you manage the details. I like to say the "dollars are in the details."  However, many business owners and managers are overwhelmed by the minutiae of daily business life. They haven't discovered where to focus attention to accomplish the most good for the least amount of time, effort and cost.

Focus on most important details

 
So, what details in your business operation are most critical to success? The simple answer: those that propel you to achieve your business goals and those that obstruct you from reaching your business goals. Let's focus on the latter.

Most operational details causing frustration and hindering results are not obvious; if they were, you could quickly fix them. So how do you uncover the obstacles, weak links, bottlenecks, waste and delay buried in your daily business processes? More importantly, how can you spend your valuable time solving the most important problems—the ones with the greatest impact on customer satisfaction and your bottom-line profit?

The Root Cause

With business problems, we often tend to focus on symptoms such as excessive product returns or unproductive employees, and fail to discover the true source of the problem—the "root cause."

By definition, a root cause "is the most basic cause that can reasonably be identified, and that management has control to fix. The fix will prevent (or significantly reduce the likelihood of) the problem’s recurrence" (Mark Paradies, TapRoot).

In a business setting, the job of the Systems Thinker is to drill-down and pinpoint the exact step within a business process that is under-performing and preventing expected results. Drilling-down is like looking through a microscope to examine the details and discover the underlying cause.

Keep in mind, however, that a symptom may have more than one cause. For example, lack of sales conversions from a website (symptom) may be from an overpriced product, a confusing sales message, or too many "hoops" for the customer to jump through in the buying process (causes). In addition, a single cause can create more than one symptom. An untrained worker could cause customer complaints and frustrated co-workers.

Finding the root cause of business problems is a skill that must be mastered by all business owners and managers. Understanding the Theory of Constraints will help you do just that. Once the true cause—the root cause—of a business problem is identified and fixed, all other dependent systems and processes are simultaneously improved.

Vital Few vs Trivial Many

When picking business improvement projects, it is important to prioritize and focus efforts where they will do the best good and help you achieve fast results. A few targeted improvements can be leveraged to create significant benefits to your organization.

In their book, "Six Sigma for Dummies," the authors write:

"The law of the 'vital few versus the trivial many' comes from the work of early 20th century Italian sociologist and economist Vilfredo Pareto. You may also know his law as the 80-20 Rule, where twenty percent of the inputs in any system account for eighty percent of the influence on that system.

"Pareto determined mathematically that, while a great number of factors are connected to a given outcome, only a few carry the weight to change that outcome in a significant way. In a business, system, or process, a few key variables are the cause of most performance problems. When you look for leverage in business, you search for the minority of variables that provide the majority of power in solving problems in manufacturing, assembly, distribution, accounting, finance, customer service and so on.

"There are more factors, contingencies, and dynamics to manage than possible when trying to break through to new levels of performance and success. The natural tendency is to try and manage and control every detail, but this is a slippery slope. The trivial many will bury you in a pile of unnecessary cost, trouble, worries, wasted energy and valueless action. No one, and no company, has the luxury or reason to manage all the details. Instead, the right path is to manage only those that are critical to producing the outcomes you desire. Focus on the inputs that really matter. All the rest, leave alone unless they become significant" (Craig Gygi, Neil DeCarlo, Bruce Williams, 39).

Getting to Work

Focus on the vital few details that will provide the biggest bang for your buck. What systems and processes can you improve that will help you reach company goals? What can you fix to eliminate road blocks, waste and inefficiency? What improvements will provide the largest financial payoff? How can you reduce frustration for customers or employees? What tweaks can you make quickly and inexpensively? 

Once you pinpoint the vital few areas to focus on—your priorities—the best way to drill down to the root cause is by asking the right questions to the right people—a 5-Whys Analysis. 

And please don't forget, The Box Theory™ Way—software and methodology—is also the best tool around to help you identify the root cause of problems and elevate your business systems and processes for high-performance results.
 

The Next Step...

Tags: Systems Thinker, Improvement, Laws/Principles

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

Business Improvement: Systemize Everything!

Posted byRon Carroll

In the Zone you are flooded with inspiration and ideas to improve your business. You have a vision of what the business is going to look like when it is "finished." You have written down specific goals. You are now ready to take steps to grow the perfect business. This is where the real fun begins.

As you look at your business through a microscope, you see it is made up of systems and subsystems. You realize that smooth-running systems create a smooth-running business. You conclude that your business will operate best when there is harmonious and orderly interaction between its vital systems. Business systems are the building blocks for creating the perfect business, one that runs itself efficiently and profitably. Let's explore this further.

Smooth-running business systems

Systems are the solution to problems

All businesses have challenges that can create frustration for business owners and customers. A frustrating condition exists when there is a specific, recurring problem over which the business owner feels little or no control. Have you ever thought:

  • "My cash flow is stressing me out."
  • "I can't seem to hire good people."
  • "Our quality needs improvement."
  • "Employees are wasting time."
  • "I don't get enough sales leads."
  • "Profits are down."

These undesirable patterns can be eliminated by simply installing effective business systems. Systems are the logical and practical solutions to your business problems and they are just waiting to be discovered.

What exactly is a system? An effective system is a procedure, process, method, or course of action that produces a consistent and measurable result.

Every business has informal systems but that informality is the reason for much of the inefficiency and frustration. Pricing systems, hiring systems, lead generation systems, quality control systems, and every other loosey-goosey, informal system can change with the whims of people and will not consistently produce the desired outcome. When systems are set up properly and well documented, they remove all of the guesswork and deliver a specific, measurable result every time.

Effective systems also enable the business to run itself profitably without the hands-on involvement of the business owner.

Systems are the “Magic formula” for success

Businesses often struggle with profit margins when there is continuous change in the delivery of products or services. Routine systems and procedures enhance profitability. Once the system is defined, money is made when ordinary people learn to do it fast and do it well. Generalized solutions, seat-of-the-pants operations, "human nature," and everything left to chance is replaced with detailed procedures, performance standards, and accountability. Technology, as painful as it often is, can be a great ally.

The organization chart, which visually describes the structure, leadership, and relationships within the organization, is the most fundamental business system. All other systems fall somewhere within the specified job functions on this organizational chart. For example, a lead generation system would fall under the job function of "marketing."

Good business systems increase efficiency, accomplish objectives, and give customers what they want every single time. They are the solution to frustrations, wasted resources, poor performance, and other business problems. While the right people are critical to an organization, a mature business has fully-developed systems and is systems-dependent rather than people-dependent. The time and cost to create a system is repaid many times over. Systems must be simple, in writing, and easily understood by operators to be effective.

Start creating systems today

Many systems are no more than a form or a checklist. Some are more complex. Systems are often modified and improved, but always provide the best-known way of getting the job done. Remember, all new systems require owners and employees to have the "will" to implement change and stick with the new method of doing things.

There are three stages to developing an effective system.

Stage 1 - Design the System. Identify from business information, personal frustration, or customer dissatisfaction the areas of the business that need improvement. Defining the problem and its causes will often point to the system solution. Describe what the new system will look like and what effect it will have on the organization. Estimate the costs and benefits of the new system and decide if you have the "will" (time, financial resources, and determination) to see the development process through to completion.

Stage 2 - Develop the System. Innovate new procedures, processes, or methods to solve problems and accomplish objectives. Innovations are the "best-known way of doing things" and should be simple, repeatable, and customer-driven. The completed system should contain all definitions, policies, detailed procedures, forms, management reports, and every component necessary for an employee to operate the system with exactness. For a business system to be effective, it must be documented!

Stage 3 - Deploy the System. Implement the documented system. Eliminate employee discretion, "the enemy of order, standardization and quality" (Theodore Levitt, Marketing For Business Growth). Perform the task or procedure the same way every time, or until innovation improves it. Measure the impact of each system innovation on your business and its effectiveness over time. Assign clear responsibility and accountability for the performance of the system.

This sounds like a lot of work. It is! But it is the essential process for growing the perfect business. Some systems will take hours, some days, and some weeks to implement. You'll have a dozen or so critical systems and many small subsystems. Accounting and marketing are the two granddaddy systems that drive the business. If you spend regular time in the Zone, you will get the task accomplished sooner than you might imagine.

When you think about it, this is why you got into business in the first place — to build a business that you could sell, franchise, or hire someone to run for you. A business built on systems is the only way to do it. Each system in place is one more step toward a business that works profitably and leads you to financial and personal freedom.

Become a Systems Thinker. Step back and look at your business as a world of integrated systems. Identify weaknesses. Get in the Zone and start designing new or improved systems today! Once you begin Systems Thinking, ideas will flow into your mind 24/7. Have a notebook to write them down.

Take a look at your accounting system first. It plays a critical role in your business. Its importance cannot be overstated. Your next step is to get in control of the “numbers.”

Step 3: Manage by the Numbers
Back to Table of Contents: 10 Easy Steps to Grow the Perfect Business

 

 

 

 

The Next Step...

Tags: Systems Thinker, Business Systems, Innovation

Improve Your Business Systems: 7 Ways Naming Gives Power!

Posted byRon Carroll

In the “Harry Potter” series, no witch or wizard dared to speak the name of evil Lord Voldemort. Why? Speaking his name gives him power.

Likewise, give a lamb or calf a name, and it becomes a pet. Give a group of ball players a name and they become a team. Give a good movie or piece of music a name and it will be remembered by millions of people through generations of time.
 
Naming something gives it identity, purpose and importance. Naming gives it POWER!

The Value of a Name

In a business, the name of a company, product, or even a web page URL can create great financial value. Some names become brands so powerful they take on a life of their own, such as the Hershey bar, Kleenex, Xerox copies and the iPhone.
 
In the accounting business of my former life, I “productized” an accounting service with a registered trademark name—the Profit Acceleration System®. Giving an imaginative, compelling, and unforgettable name to a business service immediately elevates its perceived value.

Name Your Business Systems

In the typical small and midsize business, there is a lot of hustle-and-bustle as people scurry around getting work done. They are engaged in a variety of business activities that have grown out of a need to accomplish essential tasks—marketing and sales, customer service, hiring, order fulfillment, and so forth.

However, as you become a Systems Thinker, you begin to see your business activities as interrelated systems and subsystems—the essential building blocks of your business. Each business system has a specific purpose and is of greater or lesser importance to the goals of your organization. (Your lead generation system is probably more important than your custodial system.) In addition, each system or process is either performing as expected, or not producing the desired results.

The simple point: W. Edwards Deming (Total Quality Management) remarked, “If you can’t describe a process, you don’t know anything about it." Giving a name to a business system or process is the first step to describing it.

Naming Gives Power

The moment you see your business activities as specific systems—AND THE MOMENT YOU NAME THEM—they become more powerful.  Here’s why.

Name Tag for Business System

Once you name a system, you can:

  1. Distinguish it as a unique business function with a specific identity and purpose.
  2. Give it an owner, someone who is accountable for its results.
  3. Create a team around it that takes delight in its achievements.
  4. Measure it to determine if it is producing as expected.
  5. Improve it by removing bottlenecks and weak links.
  6. Celebrate its success with recognition and rewards.
  7. Value it as a true business asset.

What are Your Core Business Systems?

Do you and your employees recognize your important business systems by name? For example, do you talk about how you can improve your Sales-Lead Follow-up System, your New-Customer Intake or Onboarding System, or your Employee Incentive System? Have you even thought about these types of activities as business systems?

Does everyone in your company know which business systems they are part of or responsible for? Do they know every day how well their systems are performing, and what they might do to improve?

If your people aren’t connected to the performance of named business systems or processes, I guarantee you are not tapping into the potential power and profit these systems can generate..

So, go put a name on each of your core business systems. This simple act will raise consciousness, elevate performance, and give you a better-run company.

And Remember: “Names have power” (Rick Riordan, “The Lightning Thief”).

 

The Next Step...

Tags: Systems Thinker, Business Systems, Improvement

Create Better Business Systems: 4 BIG IDEAS!

Posted byRon Carroll

“All wealth is based upon systems” (Dan Kennedy, author and marketing coach).

Becoming an expert at developing effective business systems and processes will put more money in your pocket than anything else you can do—PERIOD!” Let me share with you four BIG IDEAS that will greatly improve your business performance, including customer loyalty, profitability, and growth.

Business Systems and Processes: 4 BIG IDEAS

BIG IDEA #1: Systems are the Building Blocks of Your Business

Business systems and processes are the essential building blocks of your organization—the better your systems the better your business. In fact, there is no other way to build a remarkable company!

Systems are the means to carry out every business function, including lead generation, sales, customer care, order-fulfillment, hiring, and many others unique to your company.

The primary purpose of these business systems is to help you find and keep customers, eliminate inefficiency and waste, and make you stand out in your target market like “a purple cow in a field of brown cows” (Seth Godin). Your business will prosper to the degree you become an expert at creating effective systems and processes.


BIG IDEA #2: Systems Thinking Will Increase Your Business Intelligence

Systems Thinking will empower you to see the world and your business in a profoundly different way. It will raise your business I.Q. by 80 points—OVERNIGHT!

As a Systems Thinker, you will get a vividly clear view of the “nuts and bolts” of your organization—what’s working and what’s not. By focusing on Cause and Effect, Systems Thinking will magnify the details of your operation, revealing the root-cause of problems and transparent solutions. Your business frustrations will be viewed through a logical lens rather than an emotional lens. You will learn to resolve problems and make decisions systematically.

When you begin Systems Thinking, you’re going to have an Ah-Ha Moment. From that point on, you’ll never look at your business the same way again.

BIG IDEA #3: System Building is the Master Skill of the Entrepreneur

Creating high-performance business systems and processes is the Master Skill of the entrepreneur. No other endeavor will remove more problems and pain, or put more money in your pocket.

Good business systems are the solution to all your operational challenges—weak sales growth, dissatisfied customers, waste and inefficiency, under-performing employees, poor cash flow, and low profit margins. Whether in the store, the workshop or the office, you can manage and improve your business processes by applying correct principles.

Now, here comes a rather bold statement. The ability to create effective business systems and processes is the most important skill you can acquire. Every business function—marketing, finance, and operations—requires this expertise. And the real value of your business comes when your systems consistently get good results—when they make your company money day-in and day-out, even when you’re not around.

BIG IDEA #4: The Box Theory™ Way is the Best Way to Build Business Systems

OK, I’ll admit it, there’s a little self-interest in the final BIG IDEA, so bear with me.  The Box Theory™ Way is a ground-breaking system for you to create growth-producing, customer-pleasing, waste-removing, profit-boosting business systems and processes. Just imagine having a business culture of discipline and excellence that runs on autopilot.

The Box Theory™ Way is a method that breaks your business functions down to manageable systems or “boxes.” The method is easy, intuitive, and even fun. It includes some amazing principles of business process management (BPM) such as Six Sigma, Lean Thinking, and the Theory of Constraints.

What’s more, The Box Theory™ Way is incorporated into a ground-breaking software tool that empowers you to design, create, manage, document, store and print everything pertaining to your business systems and processes—sort of like a QuickBooks, but for business systems. Box Theory™ Software was created specifically for owners and managers of small to mid-sized businesses
—YOU!


Work in an Extraordinary Manner

A few years ago, I was in the lobby of a hospital waiting for a grandchild to be born. I noticed a sign on the wall that read: "The major work of the world is not done by geniuses. It is done by ordinary people who have learned to work in an extraordinary manner" (American Fork Hospital, 3/29/2008).

Well, I’m not a genius. Most of us aren’t. And much of what we do is pretty ordinary. However, learning the art and science of Systems Thinking and how to build effective business systems will enable you to “work in an extraordinary manner.” As I said before, it will put more money in your pocket than anything else you can do.

 

The Next Step...

Tags: Systems Thinker, Business Systems, Business Startup

Process Improvement: The Rules of Engagement!

Posted byRon Carroll

President Woodrow Wilson said, “If you want to make enemies, try to change something.” Or it could be said, “Try to improve something,” which often has the same consequence.

Process Improvement - Change Ahead

Challenging the Status Quo

Creating a results-driven business culture—with discipline, measurement and accountability—can be a new way of doing things for many small-business owners and their employees. Care must be taken that these elements do not discourage or even become threatening. When people work together—solving problems and sharing ideas—the exchange should always be positive and motivating.

Developing or improving business systems and processes challenges the status quo. It puts the organization under a microscope and exposes ugly blemishes. It questions long established traditions. It recognizes no “sacred cows.” The only goal is to find the best way of doing something. This scrutiny sometimes makes people feel nervous, threatened, frustrated, or even angry.

When seeking truth, you must be prepared to face the brutal facts and emotions surrounding your current business practices and proposed solutions.

Look for the Best in People

Most people involved in improvement projects want to make a positive contribution and arrive at the best solutions. So be careful not to put people under the microscope or blame them for performance problems, especially in an open meeting. Instead, focus on faulty systems or processes that prevent people from doing their best.

In his book, "Results Rule!," Randy Pennington describes a Positive Performance™ management process based on the following core beliefs:

  • "Individuals need to be treated with dignity and respect.

  • Most people want to do a good job and will do so if given the opportunity and ability.

  • The leader’s job is to create the environment for employees to succeed as individuals and as a group.

  • Everyone is responsible for performing in a manner that helps the organization achieve results and build strong relationships.

  • Treating individuals responsibly means that we earn the right to expect them to act responsibly."

During brainstorming and discussion, allow open dialog, inquiry, and free expression from all participants. Say to the group, "I am open to other points of view." Then listen carefully as employees or customers contribute ideas. When you convey appreciation for shared thoughts and feelings, people are more comfortable in expressing their views. Those who are passionate about their opinions (advocates) should not be stifled if they are communicating appropriately. In the end, business owners, leaders, or voting team members make the final decision.

The process is this: Listen-Thank-Consider-Decide.

Build Trust and Hope

Ann Bruce and James Pepitone give us "12 Cornerstones for Building Trust and Hope in an Organization”:

  • Respect your followers.
  • Watch how you say things.
  • Communicate openly.
  • Listen and don’t argue.
  • Avoid zingers, digs and putdowns.
  • Point out the positive.
  • Appreciate what others have to say.
  • Acknowledge that trust is a mutual exchange.
  • Increase trust gradually.
  • Be truthful with yourself.
  • Show your human side"

I once worked with a business owner who communicated to his workers the attitude: “It’s my way or the highway.” His strong opinions shut down communication and the valuable suggestions and ideas of others.

It is best to arrive at system solutions based upon facts and not personal opinions. Be objective and unbiased; seek evidence, including business statistics, reports, surveys, and other forms of measurement. There is not a right or wrong solution until proven with results—hard data whenever possible. Listen to those with the “eyes of experience” (insiders) as well as those with the “fresh eyes of objectivity" (outsiders).

Encourage Continuous Learning and Improvement

By introducing change, you may be greeted with resistance, but more often, there is a sense of relief that improvement is coming. Don’t be afraid of change, but implement new business systems with care and patience. Your employees will appreciate it.

Remember: when you include employees in the system development process, you get greater buy-in and support.

So, get all of your people to become Systems Thinkers. Set stretch goals based on your Balanced Scorecard objectives. Aim for tangible financial results. Assign accountability. Handle conflict. Involve team members in the decision-making process. Put your faith in data.
Encourage continuous learning and improvement. Hold effective system improvement workshops. Unleash everyone’s potential. And celebrate success.

 

The Next Step...

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

Voice of the Customer: Four Things That Will Earn You an “A”!

Posted byRon Carroll

After all my children left the nest, my wife and I decided to build a smaller home at Thanksgiving Point, Utah. Everyone knows that building a house can be a painful process. Like all customers, I was primarily interested in four things—quality, speed, value, and a pleasurable buying experience.

Voice of the Customer - Home Construction

Following our move-in, I had a casual conversation with some of my new neighbors. We talked about our home-building experience. The consensus was that the builder deserved a grade of “B.” He could have easily gotten an “A” (and also put more money in his pocket), if he just applied a little Systems Thinking.

I tried to offer some constructive ideas along the way. However, the builder always gave me a polite nod and continued doing things as before. He was not interested in listening to the “voice of the customer"—ME!

Quality, Speed, Value and Buying Experience

The builder’s major weakness was related to quality issues. Below are a few examples of needless waste that could have been eliminated with some simple system improvements. 

  • The builder ordered the wrong size door for a closet. It was returned. The replacement door was the right size but opened the wrong direction. It was returned again. The third door had the wrong style hinges. Finally, the right door arrived. The carpenter, of course, had to make a special trip back to hang the door, and the painter had to come again to paint it.

  • The subcontractor who poured the driveway forgot to lay a sprinkler pipe under the concrete. The landscape company had to run two pipes and electrical wire three-hundred feet around the house to get to the other side of the driveway, just twenty-five feet away.

  • The builder buys kitchen cabinets from Missouri (high humidity), where I assume he gets a better deal. The cabinets were installed in the very dry climate of Utah. Five of the cabinet doors warped in the first week. The builder said, “Don’t worry. It happens all the time. They are under warranty, and the manufacturer will replace them.” (Do you see anything wrong with this picture?)

After the footings and foundation walls were poured, Eric, the project foreman, told us we were on a thirty-nine-day schedule to completion and move-in. I calculated the date in my mind and thought he could never do it. To my surprise, the house was finished exactly on time. He gets an “A” for speed!

My wife and I shopped around before buying the house, so we felt it was a good value. The overall buying experience also met our expectations except for the frequent mistakes—most of which were fixed. The problems that couldn’t be fixed, we will have to live with. (I will probably murmur for a while and then forget about them.)

Our real estate agent was great, and Eric the foreman was a gem. He did everything possible to solve problems and keep us happy. He was patient, diligent, accessible, and easy to work with. Eric made all the difference!

A Simple Checklist

So, you can see, the builder did a pretty good job. His quality problems—with the accompanying waste of time and materials—could largely be eliminated if he were to provide a specific “builder’s checklist” to each of the twenty or so subcontractors hired to work on the house.

For example, the checklist for the concrete subcontractor might include: 1) Put expansion joints every ten feet, 2) Lay three-quarter inch sprinkler pipe under the driveway before pouring, and 3) Clean concrete splatter from house siding, door threshold, etc.

A signed checklist submitted with the vendor invoice keeps everyone informed that the task was completed as expected. This simple but important step added to the process will also prevent subcontractors from being victims of their own slip-ups. Everyone comes out ahead!

Let's be honest. Not all mistakes can be eliminated. However, good business systems will avoid the most common and repeated ones. You should strive to be at least a 4 Sigma company, as well as better, faster and cheaper than your competition.

How Would Customer's Grade Your Company?

Eric didn’t ask, but I am going to write him a letter of reference. He was an outstanding foreman and a great asset to his employer.

Good things happen when companies listen and build upon the voice of the customer to create a culture of excellence. Are you listening? What grade would your customers give you? If you don't know, maybe you should ask them!

 

The Next Step...

Tags: Systems Thinker, Business Systems, Customer Retention, Quality, Efficiency/Speed, System Example

Business Owners: Your Role in Creating Remarkable Business Systems

Posted byRon Carroll

The occupation of “business owner” might more correctly be described as “business engineer”—one who plans, constructs, or shrewdly manages an enterprise" (Online Dictionary).

Business Engineer

Your primary engineering responsibility is to oversee the creation of effective business systems and processes that work in harmony to achieve customer loyalty, profitability and growth. I call this most important engineering feat, the Master Skill.

Some company owners like to roll up their sleeves and delve into the details of their business operations (the business systems and processes). However, many are too busy or not wired to perform this mission-critical task. They need help, and that’s OK.

Even though you may delegate system-development work to others, you still play a vital role in creating a culture of excellence. Your faithful commitment to the following six responsibilities is essential to success:

  1. Become a Systems Thinker and raise your business I.Q. by 80 points—overnight! (Lead by example.)
     
  2. Provide oversight to the system-development activities going on within your company. (Be the visionary and driving force.)
     
  3. Frequently monitor the results of your core systems and processes and seek continuous improvement. (Know the key numbers (KPI's) that drive your business outcomes.)
     
  4. Participate in company or team business-improvement workshops. (Teach, offer insights, and turn employees into enthusiastic Systems Thinkers.)
     
  5. Provide employees the means for implementing new and better business systems and processes. (Approve projects and allocate company resources to get the work done.)
     
  6. Become a champion of "business improvement" by offering continual encouragement and celebrating accomplishments. (Become your organization’s biggest cheerleader.)

Chief Business Engineer

As a business owner, you have many demands for your time and attention. You can be most effective by being at the crossroads of important business activities. No responsibility is more critical than your role as “chief business engineer.”

Now go put on your hard hat and get those systems and processes humming!

 

The Next Step...

Tags: Systems Thinker, Business Systems, Business Leader