Business owners can view their business many ways. One way is to look at it as a wheel in perpetual motion. To ensure your wheel keeps turning and to increase your business’s long-term success, it is important to focus on the three spokes of the wheel: strategy, people, and systems and processes. When these three spokes are in balance, your business wheel rolls forward easily. When the spokes are out of balance, your wheel is either clunky or slow, or it can stop rolling altogether. As a business owner, you will require more energy and resources to keep it turning.
Having the right balance among strategy, people, and systems and processes will ensure your business continues rolling down the road of success.
Let’s examine what can go wrong if a business lacks focus on a particular spoke or if a spoke is out of balance with the other two.
To be sustainable, a business must develop a clear business strategy that enables the entire organization to envision where the company will be in the future and provides a road map for getting there. At times, owners can be caught in a trap where they are working more in the business than on the business, and no one is looking ahead to see where the business is going and how
it’s going to get there. Typically, if your strategy spoke lacks focus you might notice one or more of the following red flags:
- Frequent shifts or U-turns in the business
- Lack of meaningful long-term planning and focus
- Owners and/or management have a long list of things to do (tasks that are interpreted as strategy)
- Pie-in-the-sky goals that are too lofty or that no one knows how to reach
- “Flavour of the month” goals
- People doing mostly short-term tasks
- Many conflicts within teams in the use of resources
- Silos operating in the business
If your strategy spoke is out of balance you might see a fire-fighting mentality, wherein your employees wait for an issue or problem to appear and then respond. They may be great problem-solvers, but they don’t have a clear direction to focus their attention. Any issue that arises becomes the focus – until the next one comes up.
Another symptom you may notice is that your people seem to be overwhelmed with tasks, or they never complete tasks. They are not committed because they know the direction will change – they view tasks as part of a “flavour of the month” culture, knowing that next month, a new initiative will probably require their attention, and their current project will be forgotten.
Without long-term goals and planning, your team will be busy working on tasks they perceive as important, but not necessarily working on projects that will make a difference for the business.
A third symptom that manifests when your strategy spoke is out of balance is problems with processes and systems. Weak or lacking systems or processes become apparent in the extended time
it takes to accomplish tasks or when duplication of resources is needed to get tasks completed.
You often hear business owners say, “Our people are our greatest asset.” Yet this spoke can be a challenge for business owners to get right because they often prefer to focus on more tangible outcomes related to the other two spokes. Without a focus on the people spoke, a business could see the following problems:
- People who are not the right fit for their roles
- Staff being promoted beyond their capability
- Lack of required leadership and management skills
- Compensation that is not transparent or is inconsistent across the organization
- Lack of succession planning or workforce planning
- High turnover
- Complacent or undefined work culture
- Knowledge loss as good employees leave
If your people spoke is out of balance with the other two spokes you may notice that your good employees leave – they may be frustrated with the lack of capability to deliver on strategy or unclear on their roles and responsibilities. Another symptom is that employees may be working solo, rather than as part of a team, to achieve objectives.
Systems and Processes
Systems and processes refer to what people do in your business. Systems and processes are how activity flows throughout a company to attain results that are consistent, measurable, and ultimately benefit your customers. Systems and processes include all the little things that must get done to achieve results, as well as the larger infrastructure that supports all the information your business collects and uses.
If a business lacks the systems or processes it requires, the owner may notice one or more of the following problems:
- Data or information that is unreliable or insufficient for decision-making
- Cost increases due to errors and duplication of work
- Inefficiencies and inconsistencies in delivery, outcomes, or customer service
- High levels of waste in manufacturing processes
- Too many systems that are not communicating with each other and require intervention by employees to make it all work
When your systems and processes spoke is out of balance, you will notice that employees need extra time to get things done. Another symptom is inconsistency in how things get done – without clear business processes, each employee figures out their own way to do things. In both cases, your employees will expend more energy trying to get things done. They will be more internally focused and therefore may miss changes in the external environment that will affect the business.
Once an owner understands the relationship among strategy, people, and systems and processes, it becomes clearer where your current concerns are and where you need to focus.
If your business has identified sales growth in a defined market as a strategic goal, systems and processes are necessary to track this growth. Without a tracking system, such as a customer relationship management platform, it becomes difficult to know which potential customers have been contacted and their place in the sales funnel. It is also difficult to manage those
customer relationships as the company grows.
The inability to properly measure key performance indicators (KPIs) is another indicator that this spoke it out of alignment and could result in a business not meeting its goals. For example, if a business has a KPI related to reliability, but does not have a system in place to measure the manufacturing of a part, how does the company track deficiencies to specifications? Does the part ship to a customer and then the customer complains that it doesn’t work? This lack of process also affects customer satisfaction.
Being unbalanced in systems and processes means you depend more on your people’s experience, skills, capability, and capacity. This reliance leads to variation in outcomes: customer experience varies depending on who your customer deals with. Lastly, the lack of automation will make it hard for a business to attract and retain a younger workforce.
As you can see from the examples above, when one spoke is out of balance, the wheel does not turn easily. The longer a business’s wheel is unbalanced, the greater the risk that it will stall or stop. It is important for business owners to develop a balanced approach to strategy, people, and systems and processes. As the business evolves, it is important to address all three.
Once an owner understands the relationship among strategy, people, and systems and processes, it becomes clearer where your current concerns are and where you need to focus your time to ensure that your business’s wheel is balanced so that your company can continue on the road to success.
First published in the December 2018 edition of The Business Advisor.