What’s the owner’s freedom formula?
It’s very simple: Systems = Freedom.
If you as the owner of your firm go on a four week vacation, what happens to your business? What happens to the quality and quantity of activity? Some leaders have defined the strength of a small business as being directly proportionate to how much of it can continue to operate in the owner’s absence. Whether you own a large firm or a micro business, having simple and effective systems in place will make it much easier for you to step away from your office without waking up at 3 a.m.in a cold sweat.
What Is A System?
A system is a documented way of performing a task that solves a problem and ensures that the task is performed properly and consistently. Creating successful systems means having effective forms, scripts, checklists, procedures, follow up, marketing processes etc. that are used by you and your staff. In also includes an effective carrot and stick management plan that helps your staff manage themselves.
Here are some ways that systems give the owner and staff more freedom:
- Employees are freed up to be creative because they don’t have to “wing it” or reinvent the wheel.
- Everyone operates at a smoother pace because there is a proven, working process.
- Systems reduce burnout and turnover. People work the system and the system does the work.
- Recruiters don’t have to “learn the hard way,” but rather they learn what works the first time.
- The firm is no longer people dependent; it’s systems dependent. If a big biller leaves it’s not the end of the world. You have a system to “grow” a new one.
- The owner can work four days a week or take a vacation with much less stress.
The more you grow the more you need systems, and the more you will see the benefit of increased freedom.
Each owner needs to decide what percent of his or her business needs to be systematized. If you have a large firm you will need more complex systems, whereas if you’re a micro operator you just need simple systems. If you were a systems purist you might say that if an owner goes on vacation for three months and the business proceeds without a hitch then he has a fully systematized business.
Obviously for smaller operators or soloists that’s not going to be practical or realistic. So if you can’t systematize your entire business then choose a percent as a goal. Try to systematize 25% of your business. You may use automation, technology, contractors or support staff to do this if you’re small. So what that means is that if you go on vacation, 25% of your business functions continue without you. Be sure to consider your firm’s size when deciding what level of systemization is relevant for you.
Examples of Systems
Let’s take Starbucks as an example.
Article Continues Below
Explore the Role of Incentives in Performance Management
What happens when you walk into a Starbucks? Usually you have the feeling that you’ve just walked into a friend’s living room: there’s jazz playing, people are relaxed and talking, some of them are having business conversations, someone may be typing on a laptop, there’s a cool ambiance and decor, the colors are warm and rich and there is a smell of robust coffee in the air. The menu even has its own system: short, tall, grande, and venti. None of this is an accident — all of it is a perfectly integrated system.
Every time you walk into the Starbucks it’s the same experience; same quality of coffee, same uniforms, same ambiance. They’ve been able to kill their competition due to their precision. The subtle message to you as a customer is: We offer a consistently good service and you can trust us. Consistency makes people feel comfortable with your service.
Here’s an example from professional football. One of the most popular offensive systems in professional football for the last 30 years has been “The West Coast offense.” This system was perfected by Bill Walsh and the 49ers. Joe Montana is considered by many to be the best quarterback to have ever played the game and he worked in this system. The West Coast offense is a system with unique characteristics; lots of passing, screen passes, fast receivers etc. It is a system that started in San Francisco and has now been successfully duplicated in many other cities. So systems apply to business and they also apply in many other contexts as well.
The Franchise Prototype
Michael Gerber suggests that owners pretend their business will be the prototype for 1,000 other businesses exactly like it. Pretend someone is going to walk in your door next month with the intention of buying your business — but only if it works without a lot of work for the owner. Imagine that your prospective buyer will need to see your formula on paper.
Could you explain to a prospective buyer how your firm ticks and hums and makes a solid profit each month? Is there a documented “operating system” you could hand to that person? If not, then you may want to start to think of your business in a new way. It doesn’t matter if you will ever open a second office or sell your firm because it’s the process of thinking this way that will give you the payoff.
So, if you want more freedom and peace of mind then you need to systematize and “bottle” your very own proprietary freedom formula. Once you have these systems in place you will be able to enjoy much more freedom whether you decide to grow or stay small because you will be able to trust in your formula.