Why systems aren’t as boring as you think…

In News by Charlotte Noble0 Comments

…they are the Key to your Success…

When people think of Systems in a business, in my experience, they usually think of McDonald’s or similar Franchises as leading examples of the art…

Whilst these are good examples of a Systematised Business, there is so much more to Systems than a Burger Franchise…

Picture Credit – Nutra Vita

In my book – Your Business Rules OK – I suggest that any business should be treated as if it’s a Franchise and take readers through the 8 Rules that will help you achieve great results. You can buy your very own copy HERE
How we are taught to build systems…

Imagine that we want to build the best car in the World…

Logic dictates that we could simply take the best components available and that would be the best car in the World…
For example;

Engine – Bugatti 8.0 W16 – 1001 HP…

Gearbox – ZF 6 Speed Auto…

Transmission – Range Rover 4 wheel drive…

Body Shell – BMW 4 Series Coupe…

This is how we are taught to build our Business – get the best, benchmark against it, cobble it together and hey presto – World Class…

There are Two Reasons this Systems Approach doesn’t work

  1. The components of the System don’t fit together – they are individually great but the combination is less than the sum of the parts…
  2. The Outcome of the system was not defined – if the economy was the key objective not speed, for example, Bugatti is the wrong choice…

How do we get Systems to work for us…?

W Edwards Deming – the father of TQM – introduced Systems Theory to the Japanese in the 1950’s and they subsequently wiped out the UK car and motorbike manufacturing sector…

How…?
By implementing a new approach to systems in order to improve quality, productivity and efficiency…

  1. Fit for Purpose– When we look to build or deliver a “Quality” product or service – we need to be clear what we mean.

A “Quality” product or service is simply one that conforms to the design requirements it is intended to achieve. A Kia Picanto is the same “quality” as a “quality” Rolls-Royce, providing they both conform to the specifications and standards of their respective designs.

Picture Credit – End Gadget
What we are looking at in reality is defining the Specification first, and then building a business System of production and delivery that consistently delivers.

Decide what your OUTCOMES need to be…

  1. Forget the Numbers– Profit, Efficiency and Productivity are NOT Targets, they are Consequences.

Deming defined a “14 Point Plan for TQM” and one of the keys is to avoid “Targets for the workforce and exhortations for Zero Defects…” What Deming means is that we shouldn’t ignore the targets themselves, but that we should concentrate on managing and improving the factors that contribute towards them.

Profit is skimpy the barometer with which we measure the effectiveness of our systems of management and control…

Focus on PROCESS not TARGETS.

  1. Be Consistent– A system enables performance to be replicated. Managing a system means that the individual components have to be measured – not in isolation but in terms of the system as a whole.

    Each aspect of your system should complement and support the others – this is the only way that the whole equals more than the sum of the individual parts.

Clients like predictability, and so do Balance Sheets. Once something works well, keep it running with documented systems and training for your team. Remember, consistent mediocrity will beat occasional excellence…

Build your SYSTEM and TRAIN people to use it…

  1. Duplication– This is where the Franchising analogy gets more interesting. Once you have built a proven system – it can be duplicated. If it works in one location it will work in others.

This means that opening other branches become more straight forward. It also means that the “Intellectual Property” that you have designed in the form of a proven model is extremely valuable and can be sold – or rather rented – to other people and organisations.

Sell HOW you do it not WHAT you do.

  1. Asset Creation– Perhaps the highest form of capitalising on the systems you develop and generating income by selling assets that you didn’t have to buy in the first place.

Imagine, you have a proven system of production that works in the UK. You can sell the rights to sell that system in Germany, France, the USA to a person who will pay you for the privilege. You can sell Germany without ever having to buy it in the first place…

Sell RIGHTS to territories you NEVER bought…

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