Importance of systems in business

Think of them as scaffolding. It is a support structure that helps you climb up to the top, extending your reach and strengthening your foundations (for a reflection on why it’s essential to have a firm footing in business, I invite you to my recent article, Feet of Clay).

A quick search will reveal various methodologies and scholarly articles on types and numbers of systems essential for business. I recently came across an article naming as many as twelve systems found in most organisations. It does depend on the size of the enterprise; however, in my experience, there are three categories no business can do without, irrespective of their size and age.

Let me rephrase that – in my experience, there are three categories businesses in every stage of development will do well to nurture if they wish to grow in a sustainable, strategic way.

And these are:

  • Lead generation
  • Cash flow
  • Time management

Lead generation

Lead generation is a broad category, and what I want to highlight here is the value of authentic leads. We are entering a space of quality over quantity, as the latter can actually cost you money rather than bring revenue. How much time are you spending on generating each lead?

How long does it take to process them? Are you aware of the number of touchpoints involved in this process? How much does your time cost? What is the overall value of the client?

The questions I am listing here are not new, in fact, they are quite basic when it comes to lead generation, whatever the source. Knowing those answers is crucial to assessing whether your process works and brings you money, otherwise, you are merely spending and generating cost. And it always surprises me how easy it is to forget about them and just dive into ‘getting leads’ without doing the background work.

Cash flow

Spending less than you are bringing into the business is an apparent thought, but again easily overlooked. A simple thing: multiple suppliers with various payment terms can easily catch you out.

Again – a basic aspect of any business and potentially deadly. Especially in this uncertain economic climate. When times are tough, our first thought is often to cut overheads; however, this may hinder the business’s potential as you may be restricting your resources too much.

Perhaps there are options of saving somewhere: considering tariffs, subscriptions, and renegotiating contracts may be a way of freeing cash without limiting your business potential—just a thought.

You will only think about it when you can visualise your finances when you have your transactions mapped out and metrics established. The more transparent you are, the better chances you have to stay on the right side of the balancing sheet.

Time management

Time is a funny thing – we cannot be in two places at once, we cannot devote more time to our activities without taking it from somewhere else. And yet we can multiply it – by delegating. I’ve noticed that initially, many business founders have a love-hate relationship with this area.

In my experience, this happens when the notion of abdication overshadows the idea of delegation, and smart delegation has nothing to do with abandonment and disempowerment. You are to stay in the loop, sharing the responsibility of a task in a way that strengthens your leadership, not undermines it. It is a very useful team-building tool, one that frees up resources, multiplies outcomes and generates revenue (even though delegation may be linked with an initial investment).

The Pareto principle (perhaps better known as the 80/20 rule) teaches us that 80% of our results stem from 20% of our efforts. There are times when you need to a wider perspective to recognise which is which. The right systems in place can greatly help with that.

Systems support action

I am a great advocate of systemising business efforts. I believe they are the backbone of an enterprise, strengthening it, an aide to reducing waste and improving efficiency. They are the framework supporting common-sense decisions in times of strain and economic change. They make businesses more transparent and robust, attract the right talent, and speed up the process of bringing them on board and up to speed with your operations.

And they even help to communicate with your clients and react to the changing market. All in all, easier to manage on a day to day basis and grow in the long term. They make it easier to put business ideas into action. And, it is action that changes things.