Last week I began this series of posts discussing strategy. I talked about considering and crafting your plan. What's important to building value in your business, how will you prioritize what's important, and then how will you implement those prioritized value drivers. You can view my last post here. This week I discuss PROCESS documentation and SYSTEMIZATION... elements that should be high priority on your strategic plan and here's why.
To maximize business value, your company must be transferable; someone else needs to be able to step into your business. BUT, a new owner does not want to buy a JOB. The business needs to be owner independent; the new owner needs to be “jobless” - systemization is key to making it so.In his book, You Don’t Know What You Don’t Know: Everything You Need to Know to Buy or Sell a Business, Terry Lammers explains many of the key considerations to buying/selling a business – one of which is how to maximize the value of your company. Terry says, to maximize value you need to be organized (in fact his direct quote is, “Get your sh*t together!”) and in this context it means having documented processes and systemization implemented across functional areas. Terry goes on to ask, “Do you need to be there to run the day-to-day operations? If not, your company has intrinsically higher value."
As part of executing your strategy you should begin by identifying all the work that gets done in their business, from new customer onboarding to invoicing to servicing existing clients (and some things that aren’t being done that should be, like customer recovery and retargeting). With a menu of the work, prioritize the key functions and begin to document how the work gets done. You should create flow charts and descriptions of each step within each process. We assign roles to each step (not people, but roles). We estimate a duration of each step in the process. Know the prerequisites for specific tasks and those tasks that are dependent upon “this one.” With an outline of the processes, test them, refine them, and look for ways to improve each step within each process… using technology, reducing rework, minimizing waste, outsourcing, or even eliminating non-value-added steps altogether. Putting all these processes together you are creating systemization across your business, making it easier to manage as a whole, and adding value.
Once a process has been defined and maximized for value, it becomes repeatable, it can be done by “anyone” and that is the aim in making your business owner independent. We add value to your business by making it easy to transition the work that is done. Someone new can more easily step into the role of owner because how the work is done successfully is documented; the new owner does not need to reinvent the wheel - you've implemented systemization. A bi-product of this effort also discovers were efficiencies can be gained, costs can be reduced, and delivery can be improved to benefit your customers.Finally, having systemization through process documentation is just a great idea whether you’re planning to sell your business or not. Crafting the steps and expectations required to get things done just makes your business function better and minimizes the risk that one or two people hold all the knowledge in their head; work becomes less stressful and provides for the all-to-elusive work-life balance. It also allows for analysis and improvement; it can help mitigate the “because we’ve always done it that way” mentality that can create inefficiencies over time.
Why it’s important: Drafting a process and implementing systems make what you and your team do repeatable and independent of the few people that do it. Knowing the steps and expectations of the work that needs to be done allows “anyone” to pick-up the process documentation and do it the same way an expert might. Process development also allows for identification of bottlenecks, points of failure, where rework may be needed, etc... documentation allows you to make improvements.
I have been in project management and process improvement for over 15 years working for large and small for-profit companies, associations, and not-for-profit organizations. After working in hospitality management for over 10 years, I underwent a career change moving into technology, working for GE. It was there I began working in project management and process improvement; training with GE's Six Sigma program. Later my career had me working with Constellation Energy in Baltimore, Caesars Entertainment in Las Vegas, and eventual transitioning into consulting working for federal agencies and most recently an industry association in the utility sector. I enjoy working with and helping small and medium-sized organizations build value in their business through strategy, project execution, systemization, and marketing.