Systemising Your Business
Systemising Your Business
Subtitle: OMG! My business is killing me!
When it comes right down to it there are only 2 functions for any business:
1) Servicing existing customers
2) Attracting new customers
You spend resources to attract and sign-up a customer to your products and/or services, and once they are a customer, you must provide those products and services to them, and support them whilst doing so. That's it. Seems easy.
Notice how both of those functions involve external parties: the customer. But dealing with customers can be somewhat chaotic because of the fact that, well, customers are human. And because customers are human, we will spend a great deal of resources supporting these customers. And that's fair, because as of above, the #1 function of a business is to service the customers. As we all know, customers who perceive a lack of support will leave.
So because dealing with customers is chaotic, we need to make sure that the activities that we can control within our business are optimised and efficient. Why? Because we never know when the next chaotic event will (notice I said 'will' not 'might') happen or how long it will take to resolve.
The answer is to create systems within our businesses with the single goal:
So because dealing with customers is chaotic, we need to make sure that the activities that we can control within our business are optimised and efficient. Why? Because we never know when the next chaotic event will (notice I said 'will' not 'might') happen or how long it will take to resolve.
The answer is to create systems within our businesses with the single goal:
The goal of a system is to create a process where each and every customer or potential gets the same class of service.
That's it. Customer X gets the exact same service as Customer Y.
I'll give you a small example of this from my own experiences. I had a relatively successful software firm previously. My pricing levels were cast in stone. The products had a certain price point with the only deviations on that price based on volume. Makes sense. The more software licenses a customer purchases, the bigger the per-unit discount applies. This was Pricing 101 and our system was simple and effective, and the customer knew that his pricing was consistent with every other customer we had. Fine.
I then sold my business to a larger software firm. Their pricing was all over the map. The sales reps would give special deals depending on how the customer negotiated, or how desperate the rep needed the sale. As you can imagine, this policy created chaos. The software company needed to 'remember' all the thousands of individual pricings. Obviously this created a tremendous amount of inefficiencies and errors, and worse of all, loss of customer goodwill. Why? Because some employee would leave company A who were paying $YY for their license, and move to company B who were paying a higher price ($YY + $ZZ) for the same software, and would get an earful from company B, and rightly so.
The answer is to create systems within our businesses by:
- Identifying what class of service you want to give your customers and potentials.
- Creating operations manuals.
- Viewing customer complaints from the bigger picture.
- Identifying those business processes which can be systemised.
- Identifying those business processes which can be within a delegation chain.
- Recognising that employee discretion to act is a bad thing.
What many business-people fail to realise is that you are not selling widgets, you are selling the business, that customers don't buy those widgets, they buy the business. Unless you have a monopoly or a rock-bottom pricing, people can purchase your products and services from other businesses, so why do they buy from you? Because they feel more comfortable with your business, than the next one.
What's Your Customer's Class of Service
• Send clients certain regulatory documents before you even sit down with customer (mortgage brokers must comply with this).
• Send a SMS reminder one day before the customer appointment to ensure they will be available.
• Send a customer agreement document 1 day after they sign-up.
• Send a thank-you letter to those prospects who decide against your services/product.
• Call them 30 days after sale to ensure they are satisfied.
• Send SMS reminders at the end of each month to perform some task.
• Send customers updated products, related news, etc in an opt-in email distribution campaign.
There are a million variations of this, but you get the picture. Before anything, you need to sit down and map-out how you want to deal with your customer at every level, both pre-sales, and post-sales. Only then can you possibly automate and systemise it. There cannot be any discretion here (more about discretion later), as customer X should get exactly the same class of service as customer Y.
The more you can systemise of this process the better for everyone: customers and employees. But the very minimum (without automation), should be a sheet which lays-out the process. Employees are tasked with their various steps in the process as outlined in their operations manual. The sheet is updated (and independently verified) with every step completion.
And this is a 'living' process, because you will tinker with it and try different things with some working, some not.
Operations Manuals
It is critical that up- to-date manuals are available within each employee's top-draw to ensure that the process that you have decided upon for your customer's is properly adhered-to.
And just like the processes themselves, this documents are 'living' documents and are updated as your business and it's processes change.
Imagine you have a finely-tuned process and an up-to-date operations manual, and unfortunately, your best employee leaves. How good would you feel, if upon hiring the replacement employee that you simply hand them this manual and confidently state: This is your job, please read it, understand it, and adhere to it.
Customer Complaints
Another way to achieve the same results here is to ask the pertinent employees: Where do most of our errors come from?
Regardless of what the complaint or error is, treat it as a problem to solve, treat it as an opportunity to further systemise since if 1 customer complains about something, chances are that other customers will have that same complaint.
In my experience, I (begrudgingly) wanted customer complaints because I can fix those. If a customer simmers in anger then cancels his subscription/service/etc without telling you, then you have no idea what the issue was. And what's seemingly unfair is that this person will tell others about the issue which can create brand perception issues. No, don't be afraid of customers complaining... you want complaints. Because customers complain when they want your product/service, but they just want it slightly better.
You want to view every complaint as an opportunity to further systemise and optimise your operations:
• Someone doesn't know how to use your product?
• Ensure your employee KPIs includes documentation production.
• Create a template from which all documentation adheres to in order to generate consistent documentation.
• Create a program of set-interval webinars that customers can (virtually) attend to educate themselves. This is of additional value since the customers will appreciate that you are in constant communication with them.
• Ensure your website has the up-to-date documentation for all your products and services, or at least links to the documentation from supplier's sites.
• No one got back to me when I called/emailed/etc. (This is one of the most infuriating issues which customers have... the feeling that they don't matter.)
• Add an area on your website for queries which goes straight into your customer-care systems.
• Create an escalation chain to respond to customer complaints/queries. If not actioned in a certain duration, the next level of management gets involved.
The goal by systemising based on customer complaints is to lessen the chance that this complaint happens again, or if it does, the systems you create today will lessen the chaos associated with that complaint. Everyone wins.
Business Processes - Automate
You need to round these employees up in a room and ask 1 question: Where is your group spending their time on?
Their answers will devolve into 2 areas, which I call 'fixed' and 'variable' tasks. The variable tasks will usually be centred around the customer, or as I said earlier, the chaos of the customer. Customers calls in with a query, a programmer needs to fix a bug found by some customer, etc. My section above covers this topic.
The fixed tasks are prime candidates for systems. Another personal example. In my previous software company, we would send out demo CDs (I know... very old-school) of our software. If someone wanted to become a paying customer, we had this largely manual process of registering them, sending them the updated database (since the CD could have been from a year ago), sending all new documentation, etc. This was done on each new customer, so we looked at this and completely changed our internal systems to automate the process. After this exercise, we would press a single Register button in our customer system, and bingo, all these once-manual processes which took time away from employees, which could result in errors, were all handled by the press of a single button. This was not an easy task, and took some time to program, test, etc. But it paid for itself in spades over the long term.
It may seem ridiculous now, and someone would say “Well, of course, you should have done this”. But we get so caught-up in working in the business that we forget to work on the business. I'm reminded here of an old joke.
Farmer has 2 buckets to bring water from the well but they both leak. So farmer spends all day hauling water from well. Someone asks “Why don't you fix the leaks?”. Farmer replies: “Too busy fetching water”.
Now it's important here to understand the laws of diminishing returns, or in other words, the areas of low-hanging fruit. If an employee is spending 5 minutes a week on a particular task, then it is not terribly smart to try to reduce that to 2 minutes. Conversely, if someone is spending 4 hours a day on a fixed task, then this is potentially an area of low-hanging fruit, and worthy of investigation.
The key is to separate what I call 'donkey-work' from creative work. The task is to eliminate as much donkey work as you can in order for the employees to free themselves to do creative work (as humans should).
And do you know what you do when you finish this process of identifying areas which can be systemised? Well, wait 2 or 3 months and start this process again because, guaranteed, there will be new candidates for systems or improvements to existing systems which will become the new low-hanging fruit. It never ends. Nor should it. Your business is changing constantly, so your processes should as well.
Business Processes – Delegation Chain
But what has happened here? 3 employees have had their hand in the resolution of that issue. Not good. The answer is to create delegation chains which are detailed in the employee operations manuals.
First-level employee has clearance to handle issues up to a certain dollar value, say $50. In this particular issue, this first- level employee could have resolved this issue immediately. You will give them not only the responsibility to address this issue, but the authority to do so. Say the blouse was $100. Then the supervisor may have authorisation up to $300, so they can handle it.
This optimises everyone's time. The supervisor and manager are not interrupted over the $30 blouse, and the first-level employee feels empowered to actually help the customer.
This process also reduces the chances that a customer matter will be left unanswered. A first-level employee may hand the issue off to a busy supervisor who then does not action it.
However, once again, these issues need to be documented and stored in order to see potential patterns, or actions by employees which are contrary to company policy (eg. Returning items based on colour differences may not be your policy, therefore you need to change the operations manuals).
Bad Discretion, Bad
You now have your processes and the associated operations manuals. There can be no discretion, because discretion causes different tasting burgers, different customer experiences (some good, some not so good), causes errors or missed steps.
Another example. Your customer computer system has no clear process as to how to complete the 'Appointment' step. So the employee(s) have the discretion to complete that step anyway they see fit. How does anyone know what the next steps are if the employees can complete the previous step anyway they like. The process of completing the appointment step will be completely arbitrary, and basically useless when it comes to giving this particular customer the same class of service as the last one.
Some people say that no discretion turns employees into nothing but robots, but nothing is further from the truth. Non-discretion allows the employees to optimise their time, to produce only what is necessary, to minimise the donkey-work, feel empowered and in control, and then use their valuable time for more creative tasks which ultimately helps the business far more.
This, by the way, does not negate the Delegation Chain mentioned above. Discretion within an established process is fine (as long as it's documented as such).
Summary
• They rid your employees of tedious, donkey work, and allow them to do what humans should be doing: using their minds creatively.
• They prepare your business for growth. Automate the order-taking process? Great. What happens if you get 200 more customers? No sweat, the process is automated.
• They reduce human errors. Result: happier customers.
• They minimise the number of required employees.
• They give each and every customer the same class of service.
One final personal story. I used to tell our customers, because of the automation capabilities within our software, that their customers would think that they were being thought-of on a constant basis... Wow, look at all the SMSs, documents, reminders, etc... this company really has their act together. But, in reality, hardly any of those actions were done by 'thought', they were all within the system and it's processes. That's the point that we all want to get to.
Eric Handbury DBUpdate www.dbupdate.net dbupdate.net@gmail.com +61417 116 425
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