Recently, I heard of a large conglomerate who had adopted a unique strategy for managing it’s growth. The company was comprised of many regional satellite organizations, each managed by an individual President who reported to the head office.
Twice annually, the Presidents of all the satellite offices convened for a meeting at the corporate office. At the end of each meeting, a bag of marbles was passed around and each President was required to dip deeply into the cloth bag and draw out a marble. The marbles were all equal in size and weight and all but one were the same color.
At each meeting, the President who drew the uniquely colored marble was immediately required to take a 6 month paid leave of absence. His communications with his division were strictly limited.
If his organization survived the sabbatical, he returned to his position with a bonus. If his organization did not survive the sabbatical, he was fired and the head office absorbed his division until a new President was found to take over the division. A risky or brilliant management strategy?
The brilliance lies in the over all context of the strategy – that not one part of the company could rely on any one individual. Rather, it had to rely on the processes and quantification within the organization.
When a business relies on individuals within the company, the business has a limited ability to grow beyond the demands placed upon that individual. This may be fine for a short period of time for a new, growing business with a young owner full of passion and energy. If, on the other hand, you’ve owned your business for 7 or 8 years, you know that passion and energy fade. The demands of a growing business become burdensome and if you have key people that quit, things can get hugely disruptive.
Most of the businesses we see are people dependent. They tend to grow to a certain level and then shrink back, grow again and shrink back. They bump up against this virtual wall beyond which the owner never seems to be able to get. Many fail and others just ‘get by’ until they eventually close much to the dissatisfaction of the founder. The stresses placed on a dependent owner can be exhilarating at the beginning, but debilitating for both the owner and the business as they grow and mature.
On the other hand, a company that depends on its processes and the tracking and quantification of those processes is unlimited in its potential. Growth does not overwhelm. Rather, it is planned for, calculated and controlled. Developing a ‘Process dependent’ business is not a complicated task. It is simply a task that must be done gradually and with perseverance by any owner who desires to increase his or her chances of success. And all of the company’s employees can and must be enrolled in the task.
There are three key steps. The first is to craft a systemic picture of your organization. A graphic representation of all the systems that comprise your business.
Any business, and every business, has four key functions; Getting the Business (the Marketing, Lead Generation and Sales tasks), Doing the Business (Client Fulfillment, Client Satisfaction and Front End Operations), Running the Business (the Administrative & Financial tasks and the Back-end Operations) and Guiding the Business (the Key Management Strategies, the Key Business Strategies and all the planning, tracking and quantification reporting).
Every activity in your business, whether you know it or not, is a system and can be named as a system, then categorized in one of the four basic functions listed above.
Begin by thinking of any task in your business. For example, you might think; “Creating an invoice”. Name the system for that task – an Invoicing System. And finally, ask yourself, in which quadrant would it reside? – Running the Business.
To complete the first step, think of every task in your business, name it as a system and write it down in one of the four quadrants. You may find that you are left with a hundred or more systems.
The second step is to develop a strategy for documenting these systems. I recommend what I might call a ‘Stephen Covey’ approach. Consider each system and ask yourself whether or not it is a key system, one that the business really depends on. Give each of these system names the letter ‘A’. If a system doesn’t seem very important, that the business wouldn’t be impacted if the system was never documented, give the system the letter ‘C’. Give all the other’s a ‘B’.
Then take the entire ‘A’ list and give them numbers depending on the importance and/or urgency of getting them implemented. You’ll have a numbered list; A1, A2, A3 etc.
The final step is to enroll your employees in the importance and the need to document these processes. It truly is in everyone’s benefit to have a documented process to fall back on when needed. Once enrolled, assign processes and provide the time to specific individuals in the company to get them documented. Provide guidelines and time frames.
Once a task is being done consistently, the results become meaningful. The results represent the quantification of the system. And once you have meaningful results, you can establish expectations. You can orchestrate a consistent process throughout the organization and you can make little changes or innovations to the system to see if you can produce even better results. It’s that simple.
Committing just a few hours each week to this task will reward you with exponential benefits – a business that can provide for you and serve you and everyone it touches rather than depending on you and overwhelming everyone it touches.
And who knows, maybe then you can decide to take a six month paid leave of absence knowing full well that when you return things will still be running smoothly and profitably.