Building systems to run your business is about more than just including process and automation, it’s about designing a system that can adapt and grow. One of the biggest decisions that you will make in regards to building operational systems is setting their goal.
Every system needs a goal… what it’s driving towards… what it’s optimizing for.
This “system goal” is what determines how we think about and design other system components like
- feedback loops
- mechanisms and
The goal of a system determines much of its design, when it is considered at risk, and when shifts need to occur.
The goal of a system sets out priorities on what is important and what is less important. These priorities then affect decisions and problem-solving outcomes.
Eventually, you can tie many daily decisions to how your overall system goal is defined and designed, and thus the direction of your company over the long run. Where you are in 1, 5, or 10+ years is a function of what you are optimizing for, what you are driving towards.
One of the main system goals set for businesses - both purposefully and implicitly - is that of profit. Make more money.
These goals tend to lead to shortcuts, drops in quality, and strained relationships with suppliers and employees. They win in the short run, but can cost in the large run through compliance, lost customers, or even bankruptcy.
Profits are good, and they are necessary for survival, effectiveness, and impact. However, profits as your number one goal can be destabilizing as pointed out in the short essay below.
Building A Business That Lasts
This brief essay is an effort to share my approach to building a business that raises the level of success for all stakeholders and prioritizes survival over growth or profits. This essay is "living", meaning that I will, from time to time, update, add, and modify different sections as my understandings of building a sustainable business evolve.
Other systems are designed around achieving growth. Growth at all cost. This tends to cut into operational excellence and the economics of the business. Smart relationships, proper product development, and unit economics are tossed aside in order to gain
- more customers
- more sales
- more employees
The result can be a star shooting so fast that it is impossible to find the fuel to keep feeding it. What results is a crash that some live through, but many don’t.
Still, other systems look to target employee satisfaction. They over-invest in workplace design and placating the desires of individual employees. These end up being fun places to work… but the real power ends there.
So what is a good goal for a business system?
Before answering this, I would need to ask myself:
What do I want my business to be?
- To provide a culture and environment in which every employee has the opportunity to develop and grow and exceed what they believed they were capable of
- The business to be both a training ground and proving ground for their learning.
- The business to give them space to develop mastery in their field, and exercise that routinely.
- To grow the industry body of knowledge
- To contribute to both the geographic and industrial communities that I belong to
- To serve customers with the highest quality option for their purchases and product needs.
- To promote community, healthy relationships, and a respect for humanity
- To make and grow profits so we can accomplish all of this on a larger scale with more people and areas of excellence
What singular goal might accomplish most or all of these? Rather than have a complex matrix of targets and goals, is there a simple, singular focus that might have these outcomes?
I believe that a business system with the goal of creating and growing a culture of mastery is one possible answer.
Benefits of Mastery
When each person
- is encouraged to develop mastery in their space,
- is recognized for the steps they take to get there, and
- is allowed to make the investments and mistakes needed to achieve it,
some wonderful things begin to happen…
A spirit of experimentation will start to emerge, leading to an organization that is continually adapting and improving.
A culture of learning will spread and become the norm as each participant looks to gain mastery.
This will result in the development of individuals far past what they thought possible for themselves, or what others allowed them to experience.
The culture would promote sharing of ideas both inside the company and outside in the industry.
The quality of the work would increase, along with the individual pride and the company pride of its products.
A reputation would develop for quality and thus loyalty, trust, and even higher margins would come from this.
A need to improve and iterate would drive small changes that resulted in mastery of not only tasks, but products, customers, techniques, and more.
Because of all of the above, the satisfaction of employees, customers, and stakeholders would all continue to grow over time.
A system designed around a goal of creating and maintainig a culture of mastery might be one that promotes a more balanced work place, while still resulting in higher profits, happier customers, and satisfied employees.