The Remarkable Importance of Systems

Hand drawing empty diagram

I’m fanatical about systems.  I wrote about this topic on another blog post, and today I want to give this important topic some more attention.  I recently returned from a trip to Rochester (Mn)in the US, where I was visiting my father in the Mayo Clinic.  I have to say this is one well-run organisation!  There’s a reason why it’s considered by many to be the number one clinic in the world.

Firstly, you can see that all their staff are very highly trained.  And they are all so friendly; from the receptionists, to the nurses, to the doctors, the cleaners, and on and on.  It’s certainly on a par with Disney or any 5-star resort when it comes to staff training and especially friendliness.  It’s really quite amazing.

Second, they use the latest technology.  Every room has a computer terminal where all daily observations, measurements, medications etc. are entered.  Also, the terminal has a bar-code scanner, so they just scan in the medications, IV fluid bags and so on.  Like I said, it’s fascinating to behold how well organised these people are.

Third, they have an excellent internal communication system.  I admit I didn’t find out that much about it, but from what I can see it’s a mixture of beeper messages (yes they still exist) and some sort of other internal system (as far as I know it’s not email).  The nurses and doctors seem to be up to date on everything that is going on.  You might think that that’s normal and that’s the way it should be.  You’re right it should be like that but it’s certainly not normal.  You’d be surprised how bad the internal communication is in most hospitals – not to mention most businesses.

Fourth, they use checklists and mistake-avoidance procedures.  I noticed whenever a person came in that was not part of the nursing team, they’d make sure they have the right patient.  Say the specialist nurse came to find a new IV point on the arm, she’d check my father’s name tag, and ask him to confirm his name and date of birth.  This process was repeated in the x-ray department, and all other departments.  Last thing they want is for the wrong patient to get the wrong procedure.  You have to keep in mind that the Mayo Clinic has tens of thousands of employees and thousands of patients.

“So Why The Heck Should I Care?”

I can almost hear your brain asking this question, and it’s a good question to ask.  In order for your business to grow and become successful, it has to be based on solid systems – unless you enjoy being the type of business owner who has to do everything himself.  When I first read about the importance of this concept in Michael Gerber’s The E-Myth, I thought to myself yeah this is all fine and good, but I got well trained staff that know how to do everything, why bother?.  I had two great people working in Zen-Do at the time.  Well, I was shocked to find that my “loyal” staff that I spent so much time training, and whom I treated like family, both left me within a few weeks of each other.

It was one of the darkest periods of my life.  Not just because of the time, effort and cost I put in training them, but I treated them like family.  I naively thought they’d never leave me.  The point is, a lot of powerful knowledge left with them, because the training was not formalised and done on an ad-hoc basis.  Our knowledge and processes were not formalised or procedurised.

This was a nasty wake up call and I decided to make sure that when this happens again -and it has a couple of times since- that at least our knowledge and processes are not affected.  I began writing a manual on everything we do, from how to answer the phone to teaching classes, to filing, to handling angry customers.  I created our first operations manual.  It was one of the best things I’ve ever done, and I suggest you do the same if you’ve not done so already.  I know it seems like a pain, but trust me you’ll thank me for it later.

As If You Franchise

In his book, Gerber says that you should run your business as it you’re going to franchise it, even if you have no intention of franchising it. He says you should still create systems and write a manual.  I couldn’t agree with him more (you really should read the book).

The Benefits of Having Systems:

1) They help create consistency in your business:
Think of the consistency you get at McDonald’s.  When you order a Big Mac in Riyadh, Frankfurt, Tokyo or LA, they all taste the same.  That’s no easy task to accomplish.  Remember that most stores are owned by independent franchisees and pretty much run by low-skilled staff and/or teenagers.  Now that’s a system! It’s worth noting that it takes over nine months of training to become a McDonald’s franchisee!  The reason they are head and shoulders above all other fast food franchises is because of the power of their systems.  Don’t you want consistency in your business?

2) Prevent “knowledge erosion”:
I touched on this above.  If you have good systems it prevents your knowledge from draining every time a member of your staff leaves.  The worse thing that can happen is having a highly efficient employee that you depend on very much leave, leaving you clueless and helpless.  Having good systems will minimise the pain greatly.

3) Allow you to focus on higher value activities:
Now you as the entrepreneur can focus on the stuff that you’re supposed to do, like leadership, marketing and whatever else you enjoy doing.  You can then focus on working “on” your business and not “in” your business.  Having good systems allows you to delegate the operations to your staff.

4) Make staff training a lot easier:
Well if you have an operations manual, then you automatically have a training manual!  Now you can train newcomers much more easily and efficiently.

5) Systems help your business grow and expand:
The reason a lot of people can’t or don’t know how to grow their business is because they are too busy working in the business.  They are so busy fire-fighting and doing the day-to-day operations stuff, that they cannot even contemplate opening a new location or new business.  Having solid systems can really help you overcome these problems.

6) Systems liberate you!
I don’t know about you, but my biggest goal in life is to be free.  I love what I do and love my businesses to death, but they are not an end in their own right, they are a means to an end.  My goal is to be free to do the things I love; spend time with my family and friends, to see the world, read hundreds of books and help change the lives of millions of people.  I hate being tied down to a “job” per se.  You might have your own dreams.  Say, for example, you were a golf lover, then having good systems in your business – run by well-trained and motivated employees – can liberate you for several hours a week or even a day to play golf.  Get my point?  Try to have the business run itself as much as possible so that you can liberate yourself.

A Passion For Systems

As I mentioned before, I’m now at a stage in my life where I am fanatical about systems.  I can’t help but ask myself how the place is run when I go into a new business, store or organisation.  A couple of months ago I had to take a family member to the emergency room in a hospital here in Bahrain.  And as they were having some tests conducted on them in one of the rooms, I walked around the emergency ward and looked at their notice boards.  I read their flow charts and procedures that were hanging there.  I noticed the colour codes and action points.  I also noticed the clipboards and checklists that members of staff were carrying (I’m weird I know, you have no idea how obsessive I can get), and how they were communicating with each other.  I also tried to gauge their level of training, motivation and communication processes (like I said, I’m fanatical like that).  It’s amazing how much you learn that way.

The Summer of 2007

This is something I’m very proud of.  We opened the DreamBody Centre in December 2007, and I actually wrote the whole manual before we opened!  We didn’t even have a business yet!  My wife and kids went to the South of France on holiday and I stayed behind and wrote the whole manual A to Z.  We then started training Team Members using this manual.  This allowed us to open a second location about a year later.  Are you beginning to realise how important this is?

Learn From The Best

I’m rarely satisfied with how things are.  And even though we had good systems and operations, I wanted to improve them.  I called an acquaintance of mine who has the Bahrain rights to one of the best franchises in the world, and asked him if we can have a behind-the-scenes visit to one of his stores.  And he agreed! (Big Radical Entrepreneur Secret: just ask, you have nothing to lose).  I took my leadership Team with me and we spent half a day there seeing how they operate and asked tons of questions.  We met with two of their managers and they had no qualms answering our questions.  We learnt so much from the visit and immediately made changes to our manuals.

How To Create Systems:

Step one: Create a flowchart for your business.
See an example of a flow chart below.  This is a flow chart for the hiring process we have at Falak Enterprises.

The Falak Enterprises Team Member hiring process.

The Falak Enterprises Team Member hiring process.

Step Two: Document all processes.
Once you’ve done the flow chart, write down what is done in each section.  Each step you see in our hiring flow chart has a section explaining the process in detail (who, what , where, when, how etc.)

Step Three: Create an Operations Manual.
Once everything is documented you add it all up in an OM.  The hiring process we have is bound in a 40-page + hiring manual (obsessive I know I know…)

Step Four: Train others and delegate.
Like I said earlier, once you have an Operations Manual, you also have a Training Manual.  Now you can train your staff on the manual and then delegate operations to them.  Continuing with the Falak example, all our managers are trained on our strict hiring process.

Step Five: Review (on an on-going basis).
No matter how good your systems are, you need to review them from time to time.  One of our company values is “we believe in constant and never-ending improvement”, which means we try to improve our systems on an ongoing basis.  We try to improve on everything we do, all the time.  I would say a serious review of your business at least once a year.

Who Should Create The Systems?

I’m sorry to say, but the answer is you.  There are firms that you can hire to do this, and I don’t necessarily discourage you from using them, but I doubt they’ll do a better job than you.  You know your business best and you know how you want it to be operated, so I suggest that at least in the beginning you create the systems and write the manual.  Over time you can delegate more of the writing to others that have been with you for a while and understand the system well enough.

It Doesn’t Have To Be Big

Listen, if your first manual is only 10 pages that’s okay.  It will grow from there.  Another thing, you don’t need any special training to do this, nor do you need the fancy degrees.  I’m completely self-taught.  We’re not talking about designing rocket-launch systems that require half-a-dozen engineering degrees.  So get over yourself and start creating systems – Today!

I hope you found this useful and sorry for making it so long.  Remember to sign up for my FREE weekly marketing e-course for entrepreneurs here.

Thanks for taking the time to read this and talk to you soon.

16 Responses to The Remarkable Importance of Systems

  1. Nyyef Gosaibi 6 January 2010 at 4:47 am #

    I actually found out about the importance of a manual 3 years after opening. YOU SHOULD HAVE WRITTEN THIS 5 YEARS AGO!! 🙂

    • Suhail 6 January 2010 at 5:09 am #

      What can I say cuz, better late than never!

  2. Gary Clark 6 January 2010 at 1:06 pm #

    Suhail, you could not be more correct on all points. Business systems documented in operations manuals are as critcal to long-term success as sales and marketing. The E-Myth is indeed the bible of systemization. And systemizing yields the six benefits you listed.

    Despite the benefits, it’s odd how few companies will map out and document their processes. Usually procedures are passed from employee to employee like tribal rituals. As long as there are elders to teach everyone else, it works. But it creates the “irreplaceable employee” situation, a weakness that can injure companies in numerous ways. Plus you can’t truly hold employees accountable when procedures are not written down.

    • Suhail 6 January 2010 at 8:24 pm #

      I couldn’t agree with you more Gary. Thanks for visiting.

  3. Mahmood Al-Yousif 7 January 2010 at 1:17 am #

    I think a previous article inspired me to start thinking of systemising my company. I met with two HR consultants who could do this process for me but I hesitate to hire them. Apart from the cost – which is a non-issue, because if they are good, they would save me a lot of money and effort in the long run – but I agree with you that the business owner should make a serious attempt at writing the first manual, then if not expert in the field, should seek advice to fine-tune it.

    I’ve delegated the technical aspect of the manual to individual staff who are expert in their own areas but I shall retain the main points to do my self and collaborate with the small team we have built to come up with a document.

    Would you share your hiring manual?

    • Suhail 7 January 2010 at 12:51 pm #

      Thanks for sharing your thoughts guy. Good luck with the systematisation. As for sharing the hiring manual, I’ll be int ouch with you privately regarding that 😉

  4. reem 7 January 2010 at 4:48 am #

    Hi Suhail!

    I’m not sure if i want to comment on systems or synchronicity or mayo clinic….!

    Got directed to your website through Mahmood’s Den (I’m glad I found another interesting blog to follow!)

    I’m currently working on creating a system for a client.. (yes.. i’m one of those corporate slaves… hopefully not for much longer!)

    my mom calls synchronicity ‘law of attraction’…. and i’m a strong believer … (whether i choose to direct my attention to it or not varies with how optimistic I am…)

    More importantly.. I wanted to wish you and your family good health, not just for 2010, but for years to come. Is your dad still at Mayo? One of my best friend is a doctor there and she can pass by, see if he needs anything .. 🙂

  5. Ice 9 January 2010 at 1:39 am #

    Praise to God Alimghty,

    Every time i learn something new from your mails as well as from the above article.

    I like your way of explaining things in different plus attractive manner that makes reading more interesting

    Thankyou.

  6. Anonny 9 January 2010 at 4:23 pm #

    Good enough, but a couple of points:

    I don’t get on well with over-systematization. I’ve suffered in the past because my work is creative and systems have hurt me.

    I think the dehumanizing effects of overly powerful systems are exemplified by places like macdonalds. No individuality or individualism. Horribly homogenous product. Bad externalities. I don’t eat there and I wish others wouldn’t.

    Systems don’t liberate the majority. They can be used to suppress individuality, initiative, creativity and, yes, basic humanity (I don’t think I’m exaggerating – how does the military work?). They can suppress the urge to greatness.

  7. reem 10 January 2010 at 4:23 am #

    i saw the the aqar magazine today while at a client meeting! LOL! synchronicity !

  8. dougie 11 January 2010 at 9:56 pm #

    If the discussion is systems then on must distinguish between open and closed systems. Open systems refer to systems that interact with other systems or the outside environment, whereas closed systems refer to systems having relatively little interaction with other systems or the outside environment.

    Closed systems work in isolation from the external environment and are usually the first casualty in any external environmental shifts.

    Open systems are aware of their place within the external environment and shift as needed.

    I just returned to Bahrain and by most measures the place I work at has PEOPLE in positions, not SYSTEMS. The main problem here is that you almost have to pander to certain individuals because if they ever left your business would be in the lurch!

  9. Will Newman 22 January 2010 at 7:43 pm #

    Suhail, in my experience good systems yield standard operating procedures (SOPs)that allow staff to handle routine issues routinely SO THAT they have the time to handle non-routine issues with common sense and sensitivity, which is where their humanity and creativity and other important traits and values can shine forth. You are so very right to stress systems. Great job of explaining things.

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