Are you entrenching bad ways of working?05th September 2018
As CEO, one of the most important steps you can take to help your company grow is to systemetise what you do.
Instead of relying on each member of staff to work the way they want, create set ways of working and processes to follow…
…So that the work is done in a consistent way, to reliable standards.
And if a staff member leaves, anyone can pick up where they left off.
You will have heard me talk about this before. Systematising the way companies manage their finances is at the heart of what we do, here at Insight Associates.
But here’s the problem.
Implementing new systems and processes isn’t always straightforward.
In fact, there are some mistakes you can make which will unintentionally sabotage the whole project – even when you have the best of intentions.
Here’s one example.
A few years ago, I worked with a client to upgrade their accounting system.
Their old system was badly out of date, created inefficiencies and was holding them back.
I was proud of them. They could see they needed a new system in place, to function more smoothly.
They decided that on the new system, they would use the exact same nominal codes they used in the old system. (These are the codes the system uses to analyse financial transactions.)
Normally this wouldn’t be an issue – it would even make sense – but in this case, the codes were totally random and confusing.
Coming in from the outside, they had taken me months to get my head around.
I’m 100% sure that they were equally confusing for new employees, creating mistakes and inefficiencies.
This would have been the perfect opportunity to implement a more sensible, straightforward system for assigning nominal codes – a system that would save time and make everyone more productive.
Instead, they systematised something that was broken….
This is an error I see CEOs making all the time.
If you want your company to grow, you have to have in place robust financial systems that operate like clockwork.
Nobody reaches the £5+ million milestone – and sustains that level of turnover -- without financial systems that support them.
However, when starting the systematisation process, you need to plan ahead. You can’t just systematise what you’re doing already, without any thought.
The way you work now may not be the most efficient way of doing things.
Even if it did suit you when you were a smaller company, it may not be the best way of working when you’re much larger.
So take a step back, look at the systems you want to create and ask:
- Why are we doing this? Is this a task we actually need to systematise? And if so, what is most efficient system we can create to get the task done?
- What do we need in place to support our profit goals? Are there new systems we should be creating that would help us work better when our company is larger – even if they’re not systems we have in place right now? You need to think ahead, so you’re creating the systems you’ll need tomorrow – not just the ones you need today.
When it comes to systematising, proper planning is key.
But that’s just one of the factors which will determine whether your systems work properly, and help you grow – or are neglected and forgotten, while your staff work in inefficient, cumbersome ways.
I’ll highlight other barriers in my next blogs, and also discuss how you can easily overcome them.
Meanwhile, if you want help creating robust financial systems for your business, just hit ‘reply’ and let’s talk.
You need those systems in place to grow from £1 million or £2 million to £5 million, £10 million – and beyond.
Let’s get the ball rolling.