Surely growth is about sales, new markets, or something, what’s that got to do with a business system? Yet the business system is the very thing that determines success, the profits you make and how your business looks from the outside.
Rogan Hounsell-Roberts was a founder of a successful scale-up; has helped organisations across many sectors achieve success; a founder of KR5 Consulting; and passionate to help ambitious business leaders succeed.
What is a Business System?
What would you associate with the word system? You might think door entry system; or computer system; or education system. These are all systems. The OED defines a system as “a set of things working together as a mechanism or network”.
A business system is a collection of activities. Those activities make the business tick, working together to create value. You might not think about it, but every active firm will have a business system. Regardless of whether it’s complete, profitable, efficient, or effective, it’s still a business system.
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What does a business system do?
Let’s put that into context. What are all the activities that make a business tick? Here are a few examples of activities that make up the business system:
- Marketing for example, research, advertising, new products, and new markets.
- Sales for example prospecting, nurturing, identifying needs and proposing solutions.
- Operations for example, creating, assembling, finishing, and testing products.
Then there are supporting activities such as:
- Finance for example planning, financial decisions, payroll, and tax.
- Human resources for example to attract, develop and retain talent.
- Technology for example to improve productivity, deliver faster and improve quality.
How can you make your business better?
When you’re looking to improve performance and grow, then looking at the activities in the business is a good place to start. If you want to improve sales, then you might want to look at your sales system. If you want better products, then you might want to look at your market research and product development and so on.
Why look at the business as a whole?
As I mentioned before, the business system is a collection of activities. Many of these activities are related. For example, a problem in marketing is likely to impact sales performance; a problem in operations might impact servicing; buying poor quality materials might impact defect rates and so on.
Think about any business, you’ve got all these moving parts all linking to one another. Change one part, and it affects another. Therefore, you can’t look at any one activity without thinking about how that links to other activities.
All these activities need to work well together for the business to grow. It’s not only that, it’s also seeing how they work together to deliver value. Some parts are more valuable than others. So that begs the question, what’s going to give a competitive advantage?
The challenge is that there are a lot of moving parts. The complexity of all those moving parts makes it difficult to see the wood for the trees. It’s easy to miss opportunities to improve because you can’t keep it all in your head. The risk is that you’ll miss out on better ways to supporting staff, or improve operations, or delivery.
A solution is to model the business as a whole system. Modelling all these parts and how they depend on each other. This helps in understanding what activities deliver value, what doesn’t, and the part they play in that bigger picture.
If you want to grow and think it might help to look at your business with a fresh pair of eyes, then contact us for help. We want you to be successful.
KR5 Consulting helps senior leaders to transform & refine their business for profitable growth. We work closely with leaders to assist them in their Digital Transformation; refining their Business System; and applying Digital Technology.
If you’d like to explore the ideas in this article further or need help and advice, please contact Rogan at firstname.lastname@example.org – to arrange an informal chat.
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