How to Create an Effective Business System

Posted on: July 19, 2020

To survive and thrive in today’s dynamic marketplace, every business needs to think, see and be able to predict what will happen in the next 3-5 years.

The world is more complex than ever, and if business leaders are not changing and adapting in the face of inevitable challenges and uncertainties, they run the biggest risk of having their business fail.

These are 10 steps (adapted from E-myth) that you can take to create a proactive, effective and comprehensive business system.

1. Specify goals

Specifying business goals provides direction in your organisation. This helps you communicate and assign responsibilities to your team. If you’re unsure of how to specify your goals, you can start by using the word “To” and follow with a statement about your business’ desired outcomes.

2. Map out the system

Maps and diagrams provide structure and serve as schematic representations of your systems and processes. Create a process map using a flowchart to highlight the unique steps, processes and sequences involved in the system.

3. List steps with clarified objectives

Write down each step, adding clear descriptions and noting objectives. Also, include a timeframe for working on and completing the related tasks.

4. Assign responsibilities

Identify the tasks, positions and teams responsible (rather than the individuals) for tackling each step in the system. Doing so helps to ensure that business roles and responsibilities are transferrable.

5. Set up timeframes

The entire project as well as the relating tasks require specific timeframes to be set. Having established timeframes will help you gauge and evaluate progress and track accomplishments.

6. Identify required resources

List and prepare the resources which you will need to carry out each step. The resources needed may differ from system to system and task to task. But, generally, the resources to consider are materials, information, personnel and working areas.

7. Consider how to quantify results

Determine the metrics to be used to quantify system performance and how results will be documented.

8. Set performance standards

Performance standards should be established to measure productivity and profitability. Additionally, best practices and Standard Operating Procedures (SOPs) need to be identified and incorporated into the daily activities of the business.

9. Document and test the system

Record the entire system using a System Action Plan. This will help you outline the actions to be taken to achieve the end goal and allows you to capture results. Then, put the system to practice, measuring its effectiveness in terms of meeting your business objectives. Testing the system allows you to identify any gaps or missing links in your structures, processes and metrics.

10. Revise the system (as needed)

After testing the system, if revisions are needed, business leaders and managers should act proactively. In this fast-changing business economy, you need to produce an effective system that will facilitate leverage and growth. Be sure to update and revise the system and related documentation as needed to ensure that both optimal business results and customer expectations are being met.

Having a solid business system that can support your organisation’s needs even amid changing conditions is crucial to the survival and resilience of your business. Once you have a system in place, it allows you to work on your business, not in it. The system is the solution.

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