Business Systems, Part 1: Relevance

Monday, April 26th, 2010

Some common business sense: every system and process in your organization should exist to support your business purpose and keep you in business.  Common sense says that there should be no self justifying system or process.  Every product, service, division, department, function, team, position, activity, task, and report, should exist for a reason found within your philosophy, purpose, or strategy and described in your business plan.

Business systems and processes, taken collectively, are one of five key drivers of performance in any organization, along with your people, structure, strategy, and foundation.  Any extraneous process takes valuable time and resources away from your primary purpose and negatively impacts performance.  If you want to run your organization on LEAN principles, even if you know nothing about LEAN, start here and eliminate any process that doesn’t support your purpose.

Use your business plan as your guide; if the plan doesn’t mention it, maybe you shouldn’t be doing it.  If it still seems like you need it, refer back to your business philosophy.  If it doesn’t relate to being purpose driven, people centered, values focused, servant led, community friendly, or environmentally responsible, maybe you shouldn’t be doing it.  If it still seems like you need it, you’re probably grasping at straws or you’re a bit of a packrat; get over it and get rid of it!

Those of you who are just starting your own business are blessed with a clean slate so resist the temptation to clutter it up with personal preferences, likes and dislikes. Stick with the basics we’ve been talking about since day one: build your foundation, define your strategy, then define, build and resource your systems and processes to deliver on your strategy.

Are there exceptions to this rule?  One; and it may not be truly an exception.  Depending on your industry there may be international, federal, state, or local laws and regulations you must comply with or suffer consequences.  Or you may have agreed to some local requirements to gain certain benefits such as tax abatement, requirements which often have consequences for failure to uphold the agreement. 

Consequences usually take the form of loss of desired benefit, fines, legal fees, or jail time.  A business basics tip: invest in whatever process is necessary to comply with the law or the agreement; it’s not worth the alternative.  Consider it a cost of being “community friendly” or “environmentally responsible”, and make it a marketing advantage or selling point if you can.  You’ll build credibility and your business reputation as a principled organization.

Remember, design your organization to be lean and focused on results.  Purge those self justifying extraneous processes and systems.  You’ll save resources and time, improving your performance and your probability of success!