Systems are a structured way of doing something so that it can be done the same way consistently. Most companies put business systems in place to do the “heavy lifting” in terms of performance and maintenance. Companies without business systems are generally less successful than companies that have such systems in place. No matter how many talented people are on a team, without business systems that work regularly, a business cannot gauge how it is doing in the sea of competition and in which areas of the business it needs to improve. Without business systems in place, a company is doomed to repeat mistakes and customers are forced to tolerate inconsistent quality and service.
Business systems can be a great support in businesses. But, like most things in life, they have to be monitored and nurtured, and sometimes even repaired. Poor performance and frustration within an organization is usually a sign of broken systems or processes. According to a law of physics, all things naturally tend to break down over time. That includes business systems. When they do, the business must repair, improve, or elevate the business system to a higher level of functioning in order to be successful. For example, a manufacturer might need to retool a faltering process, tune up equipment, or replace an outdated machine to increase productivity. Each step takes him to a higher level of performance.
Causes and Solutions of Business System Failures
Today, the most common business system failure is related to technology or software. An exchange server goes down. A customer relationship management system fails to operate. An operations software system overloads. Technology failure is both the most ubiquitous and most impactful business system failure. However, business systems can fail in any department or any part of the business. Customer service. Operations. Accounting.
When a business system fails, the first step is to evaluate what has gone wrong. Stand back and look at an underperforming or failing system. What appears to be the cause of the system failure? Have faulty assumptions been made? Has the problem been misdiagnosed? Is the solution the wrong solution? There may be a need to re-examine the logic or perhaps drill-down to find the root cause of the problem.
Here are possible reasons and solutions for a business system breakdown:
- Insufficient Input – The manager did not have sufficient customer or worker input during the system development process. The leadership or administration did not listen carefully to what the customer (internal or external) or employees want or need. Solution: Ask again.
- Informal Process – The business system is not formalized in writing or lacks clarity, ownership, measurement, or reporting. An informal system is haphazard and is often passed on by word of mouth. By nature it is ever changing. Solution: Formalize it.
- Poor Design – The business system is too slow or produces too many defects. Either of these can drive up costs. This is usually a sign of poor design, inadequate training, or no measurement and feedback. Solution: Improve design, provide training for users and increase measurement and communication. This eliminates defects.
- System Overload – The business system is overloaded and cannot handle the demand. In-baskets are full. Things are stacked up awaiting staff to work on it. Solution: Eliminate the bottleneck by increasing the capacity of the system.
- Fuzzy System – The business system lacks focus. It is too broad, far reaching, or complex to be effective. The system has more than one purpose or objective. Solution: Reduce and simplify the system into smaller, more manageable subsystems.
- Dependent System – The business system is dependent upon other systems that are underperforming or failing. Solution: Identify the true problem system and then fix it.
- Misdirected Management – System data and feedback are used to punish people rather than improve performance. Bad systems usually result in poor performance. Solution: Identify faulty systems, not faulty employees. Improve the system and then provide effective training.
- Poor Implementation of New System – A new system is not carefully tested before being deployed or staff is unprepared for the deployment. Solution: Test all new systems carefully before deploying. Prepare staff and operations carefully prior to deployment.
If the failing system is new and has already been deployed, withdraw or remove the new system until all the glitches are resolved and the new system has been thoroughly tested. Once it is truly ready to be deployed, then redeploy the new system again.
- System Misdiagnosis – Information about system performance is not based on facts or data, but rather ‘feelings.’ It does not reflect the true condition of the system. Feelings may sense a problem but may not be able to diagnose the problem. Solution. Gather data. Measure. Analyze. Determine if there is a real problem based on the facts.
- System Failure Rejection – Leadership refuses to face facts about a system failure. There is a willing blindness to a system failure that continues to cause staff frustration and customer complaints. Solution: Reality check. Face the truth and then repair or replace the system.
System failures usually are the most frustrating part of doing business. Ask yourself what is the most frustrating part of your business. To what system does that frustration point? Lead generation. Customer service. Collections. Operations. Accounts payable. Technology. Consider which of the reasons above may be the cause of the system failure. Then consider how to implement the solution based on the specific system. Focus your efforts there and watch your business system roar back to life.
QUOTE OF THE WEEK
“We learn wisdom more from failure than we do from successes.” Samuel Smiles
