Systems: Where to start

The comedian Bob Monkhouse loved a system.

You may remember my article in August about the importance of having a sound sales and marketing strategy when I referenced his great system for preparing for shows.

But he had a system for most things and famously had two huge bound ledgers with every joke he had ever told split into sections by subject. Any time he needed a joke, he just turned to the right section and there it was. When someone stole his books, it became a national news story.

He then used the “peg system” as a way of memorising all those jokes so he could recall them when required.

But it wasn’t just jokes that he had a system for. His ledger containing details of all the places he had ever played is classic “before and after thinking” and exemplifies the critical impact they play on your business whether you’re a stockbroker or a standup comedian.

I won’t repeat the contents of my previous article on systems that was part of the 10 vital ingredients series but within your business there are four types of activities that take place:

• Activities that generate revenue and repeat regularly:
  These will be the core activities of your business. For our business that would include preparing accounts or tax returns. For you, whatever it is that your business generates most of its income from.
• Activities that don’t generate revenue (i.e. support tasks) and repeat regularly:
  Examples might include invoicing, bookkeeping, staff reviews, general admin
• Activities that generate revenue but are one-off:
  This would be some of the higher value services you offer. For us that might be strategic planning, pre year-end meetings or those things we aren’t expecting but which start with a phone call that says “I’ve got a bit of a problem”.
• Activities that don’t generate revenue but are one-off:
  These might include marketing, developing new services, recruitment of senior staff, buying other businesses etc.

The first two categories above are the ones where you are most in need of systems. The theory is that if “you systemise the 90%, you can humanise the 10%”. The 10% is of course the one-off activities whether they generate revenue or not.

Most businesses have few written systems and struggle to know where to start.

As Bob would probably tell you, the place to start is with yourself. How good are the systems you have for what you do?

Bob’s routine for each show would depend on whether he’d played that location before. If he had, then he would go back to his ledger, remind himself of the names of key people and other issues specific to that venue. When he arrived, he might ask the bar manager Ken how his wife Doris was and immediately Ken would be on his side.

He would always arrive at least an hour early so he could ask questions about characters at the club he was performing at and then adapt his routine slightly to make some in-jokes that everyone in the room would love.

In other words, he systemised the 90% so he had the time to humanise the 10%.

Of course, Bob’s systems mainly related to what he did. He must have had an employee or two and I have no idea whether he put any systems together for them although I suspect he probably did. If you are highly systemised yourself, it’s really hard working with others who are not.

When I caught the systems bug, I got it all wrong by starting with the systems themselves. I realised a few years later where I should have begun and if you have no written systems there is a quick way to get started. This is the systems before bit:

1. List out all the departments that exist in your business. Generally speaking, these are the main ones you need:
   1. Sales
   2. Marketing
   3. Admin
   4. IT
   5. Finance
   6. HR
   7. Operations (what your business does – this may be split into more than one department depending on the nature of your work)

2. List the roles that exist in each department. It’s possible that in small businesses, there may be only one role in a particular department e.g. Personnel manager may do everything in HR
3. Create a Word document for each role and draft a rough description of the role and a list of the responsibilities for that role. Don’t forget the role of Managing Director. Walk the walk as well as talking the talk.
4. Allocate each role to a person in your organisation
5. Give each member of staff a collection of role pages for each of the roles they occupy. Effectively, you have given them a job description.

Just doing the above immediately ensures that your team have a better idea of their responsibilities than they had before.

If you’ve got time, start writing systems to support those responsibilities e.g. a checklist setting out how to do that task. In fact, if you’re serious about growing your business, you should find a couple of hours to work on this every week.

That’s the before bit.

What about the after bit?

In Bob Monkhouse’s case, the morning after the show, he would return to his ledger and update the page about that venue with everything he’d learnt. He’d tweak some of the jokes that didn’t quite work as planned or get rid of them completely.

Classic marginal gains strategy long before it became in-vogue as a result of the British cycling team.

In your business things will go wrong. Or maybe could have gone better. Whichever it is, if you have the systems infrastructure above then you have somewhere to build all the improvements and changes into. Remember, there are only three reasons something goes wrong:

• Someone didn’t follow the system
• Someone didn’t understand the system
• The system wasn’t good enough

Identify the correct cause of what has gone wrong and act appropriately and your business will continue to improve and grow.

You’ll also have a structure within which to hold all those good ideas that you have which would otherwise slip away. Without Bob’s ledgers, the following classic joke may have been lost forever:

“I tend to sleep in the nude. Which isn’t a bad thing except for maybe on those long flights.”

Have a good weekend.

A review of the key processes in your business is a key element of the Breakthrough Freedom programme. Contact your Principal Adviser or email enquiries@a4g-llp.co.uk for details.