If you’re growing a business, Strategy, Process, and Systems are critical.
- It’s critical that you understand what they are.
- It’s critical that you understand the relationship between them.
Definitions
- Strategy refers to
- the need you satisfy in the marketplace
- who you fill it for, and
- the big idea of how you meet that need, and what makes your business different to other businesses that meet that need.
- Process refers to
- The steps that should be followed and the order in which they should be completed for every function in your business
- A process can be defined on a piece of paper.
- Systems refer to the tools you use to manage your processes.
- Systems most typically are software applications.
- Your choices are
- Purchase an ‘off the shelf’ application
- Purchase an application that can be customized to what you need
- Build an application from the ground up.
The Challenges
Not having a cleary defined strategy
If you do not have a strategy, you find that you jump from opportunity to opportunity not knowing which ones to say yes to, and which ones to say no to.
Not having clearly defined processes
If you don’t define your processes, the systems you purchase or build define your process for you, often at the cost of not being true to your strategy.
As your business grows, this becomes more and more frustrating as there is not sufficient coherency between your processes and your strategy, so you end up conforming your strategy to the systems you have purchased.
Defining your processes is critical for at least 2 reasons.
- You use your processes to go shopping for systems.
- Because your processes are written down, you can
- Evaluate from time to time on whether your processes are helping or hindering the implemention of your strategy.
- You can change them in a disciplined manner.
When shopping for systems, you should evaluate them against your clearly defined processes to see if they will deliver on your process and strategy.
Not prioritizing Strategy and Process over Systems
The longer you discount this order of
- Clearly defining and refining your strategy
- Formalizing your processes
- Then purchasing, building, and improving your systems,
The more complicated it becomes to control the delivery of your strategy.
Some comments on purchasing and building your systems.
Always weigh up the cost of getting the right system against the cost of not getting the right system.
If you are growing your business, weigh up the cost of investments in the options of systems against the revenue and profit you are working towards achieving, and not just against the cost of the systems that you are evaluating.
Often the best option is to invest in custom built systems because they allow you to implement your processes in your way.
In the short term, this will be more expensive, but in the long term, it will make the difference between growing your company your way, versus using what your competitors are using and therefore, implementing the same strategy that they are implementing, because you’re all doing business the same way!
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