Like every entrepreneur, I love being spontaneous. I love pursuing new ideas. We jump from one idea to the other and never really settle and optimize any. It’s hard to pin an entrepreneur to one thing or hold them down to do routine work. We continually evolving and creating new things.
I brought that spontaneity into how I handled those I employed. Years back when I employed people to work with me, I wrote a beautifully crafted job description (borrowed from the Internet) for someone I employed as my manager. Even though I wrote those job descriptions, I never knew how it will fit into the day-to-day running of the office. I was expecting him to do what he knows nothing about. So I end up doing the work while he slept and get paid.
Yes, I mean he slept during work hours. One of such days I even came around to his office and took away his phones while he slept. He woke up searching everywhere for his phone. Since I have nothing for him to do, he gravitated to sleeping as the defacto job description. Can you imagine? And I still had to pay him for sleeping. I had to fire him.
I didn’t understand what the problem was then. But now I did. I wished I did understand this then. I still find most SMEs and startups having the same problem. We employ people without telling them the expected results and how to go about producing the results. It is more like employing people to do what we cannot do.
You should never employ people to do what you cannot do. Most of the frustration with employees is based on this. Without a system to guide their work, A players will only produce E results. But with a system, E players can produce A results. Before you scale, make sure you have systemized all the activities you performed. That way you are sure that whoever you employ will produce predictable results.
If the way you acquire customers before you scale works, turn it into a system. Test it and make sure it is proven to produce results at any time. Then turn it into a process, a step-by-step action, that anyone can take to produce the results you desire. I employed someone who knows nothing about marketing and sales to handle sales. I didn’t even have a system on how to sell and get results. You can imagine the confusion we all faced in the office.
Employment should not be like writing an examination. Just as entrepreneurs try to make it easy and convenient for their customers, they should also make things easy and convenient for their employees. A system is the best way to make things easy for your employees. It’s the steps they need to take to get the minimum results. It frees them to think about ways of adding value and doing more.
When I studied startups, what I found is really amazing. Most don’t have systems that were produced from the experience of their founders. They brought in a consultant to create systems for them that aren’t aligned with the DNA of the founders and the organization. Everything you need to succeed in business is in that business. If you can’t turn what you have done into a system, then get a consultant who will understudy you and make it a system.
I became interested in a system when I got to know that it’s the best way to multiply myself, do more, leverage people’s time, and create bigger and better results. A system enhances the focus of everyone in an organization. It makes ordinary people do extraordinary work and produce amazing results. Systems promote consistency. It produces results consistently, repeatedly, and predictably. A company without a system will face every task and challenge from the scratch.
The growth and profitability of a business will come easily when you have a system. John C. Maxwell defined a system as “a process for predictably achieving a goal based on specific, orderly, repeatable principles and practices.” When you want to apply leverage to your business, systemize every activity that produces results. Systems leverage your time, money, and people.
A system gives your people the daily practice of doing the right things over and over again to produce the results that you expect. You will never scale your business successfully when your people are doing guesswork, trial, and error, to get results. The time wasted doing guesswork could have been used productively. Test everything and make sure it produces results, then turn it into a system. That way your business will not be dependent on people but on a system. Anyone who joins the team can produce similar results.
I once worked in an organization without a system. I created my own system and produced the best results for the company and got them out of the hole they were in. The business collapsed after I left because no one knew what I did to produce the results I had. Founders should create the systems.
There are four major systems a startup needs to have before scaling:
- Customer Acquisition System: This includes your marketing and sales system combined. It’s a step-by-step process for acquiring a customer for your business. The first employees you need to employ after scaling are salespeople. You need them to follow a system to continually oil the wheel of your organization by getting more customers.
- Customer Service System: This system includes how they will fulfill the orders of the customer, deliver happiness through service, and wow the customer through experience.
- People Development System: This system includes how you are going to onboard new hires and then develop them into leaders. It should be a continual process.
- Innovation System: This system enables you to continually listen and observe your customer and iterate your product to best meet their needs.
You don’t need an HR system, Financial System, Operation System, and Accounting System until you have gotten up to 50 employees. When you get to that milestone, you can add to the other systems. With 50 employees bringing in revenue, you can pay for the cost of having accountants, HR personnel, operations people, facility management, and so on.
Before you scale, focus on what brings you more money than what take from you. Build a system that serves the customer better and make them happy. If you focus on employing accounts, HR, and operations before you scale, you will end up with more cost than revenue. What that means is that you will push your startup into debt or bankruptcy.