Systematization brings high efficiency

During an international sales meeting, the national sales manager of a major pharmaceutical company boasted to colleagues that he had six regional sales managers and more than 100 business development managers (sales representatives). He told his colleagues about his rise in company status.

"It must be difficult to manage so many subordinates," said a colleague. "Which sales system are you using?"

"This is a sensitive topic." The national sales manager replied, "Before joining this company, , I spent a few years as a sales rep for another pharma company and visited doctors a lot. That company had too many systems and I didn't like it. I swore to myself that if I were a manager, I would only hire the best people and let them Let go of business. Salespeople don't like to be boxed, they don't like to do things under instructions -- that's why they want to sell. They want to do things their own way, and I don't care how or how they do it as long as it doesn't break the law. business."

Because he has suffered from a top-down system, his solution is to let his subordinates let go and do what they want to do.

The next day, I learned through internet research that the $10,000 invested in his company five years ago was only worth $6,200 now, while the average return on a $10,000 investment in the pharmaceutical industry was $18,500. If he also said that he didn't need a system, he would have to heal his stupidity.

This case proves two indisputable facts: with systems, processes can be improved; without systems, a business where everyone goes their own way is not far from a lunatic asylum run by the mentally ill.

A system is a mechanism by which the sequence of work elements is efficiently organized and followed repeatedly by team members. The sequence of work that people follow represents the "best practices" needed to get the job done. The goal of the system is to reduce deviations into the process, thereby eliminating waste and achieving high performance.

An important feature of the system is that everyone does things the same way every time. Businesses determine the best way to complete each step of a task. The goal is to complete the task without bias. The way tasks are accomplished becomes the baseline for continuous improvement.

Businesses that successfully build systems ensure the following six things are done:

They turn every aspect of their operations into systems; they use systems to eliminate inefficiencies and increase output; they take systems out of the production floor and into their operations domain; they have a strong determination to implement change; they fight back against resistance to the system; they build mutual trust and respect.

1. Systematize all workflows

A high-performance business virtually transforms all aspects of its operations into systems. Businesses must be systematized, with standardized processes for paying bills, handling supplier and customer relationships, selling goods, creating products, and making decisions, or increasing productivity is just a fantasy.

See how World Savings Bank manages its budget. Like most businesses, the bank has a rigorous budgeting process, forecasting sales targets and costs for the coming year, and asking "what's a good business reason for doing this?" for each proposed expense, but the couple runs the financial institution together "No matter how precise a budget is, there will always be situations where off-budget spending is necessary," says Marion Sandler of .

Department managers may have some leeway or set aside a sum for off-budget spending. Unforeseen circumstances. But what should a business do when it encounters a proposed expense that exceeds the set mobile payment or exceeds the emergency fund? Someone eventually needs to make a "spend or not" decision. This decision usually falls to the business owner, CEO or very senior executive who has the right to sign off. The World Savings Bank does not.

"Once the budget is passed, our system handles off-budget expenditures by handing them over to the Budget Review Committee item by item," Sandler said. One might immediately associate the committee members with gray-haired, seasoned seniors, nodding high to listen to complaints and griefs of budget misalignments and requests for funding.

Not so with the World Savings Bank. Unique to its budget review committee, the bank uses committee membership to instill corporate culture in staff and supervisors. Sandler describes committees as rotating organizations, which are seen as an excellent way to learn how businesses think and operate. "By moving members, we give more employees the opportunity to experience and understand our culture," she explained.

The most surprising thing about the World Savings Bank's budget review committee is that none of the company's co-CEOs, the Sandlers, were on the committee.

"Herb and I were members before," recalls Marion, "but you have to understand that we are a family. We have a lot of very talented people and we trust them." Reviewing proposed extrabudgetary spending is building the system, not the decision to fall into the hands of some "important" person.

2. Eliminate inefficiencies with a system

Organizations must recognize that productivity cannot be increased without a standardized system. One Fortune 500 company, Yellow Freight, knows why. CEO Bill Zollars decided the company needed to implement a system to link its hundreds of freight terminals. "As soon as I arrived, I found the company was full of great people trying to do the right thing, but the workflows were different from terminal to terminal," Zollers said.

Yellow Freight engages workers to find best practices from the ground up. They study each process and system individually to determine the best way to accomplish each task.

Zollers selected the company's large cargo terminal in Cleveland as the first location for implementation. At first, employees resisted the new systems, seeing them as nothing more than a means for management to monitor them. But Cleveland's yard manager, Rick Brenneman, persevered and finally got everyone to embrace the system, making it a huge success and a miraculous increase in productivity.

Next, Zollers instructed the company's largest 100 cargo terminals to implement a new system for receiving and shipping. Cargo terminals that have implemented these systems will receive silver certificates and begin to strive for gold certificates, the latter covering terminal processes and operating systems for land transportation. To make sure each yard understood that they had to be involved, the company sent teams of regional general managers, freight terminal managers and industrial engineers to each yard to spend seven weeks coaching them through the certification process.

The results were expected. With freight terminals earning silver and gold qualifications, hundreds of millions of dollars in cost to the company from inefficiencies have been eliminated, and capacity has ramped up rapidly.

Imagine what it would be like to perform the same task or function in the same way over and over again, but each time trying to do it faster, better, and more economically, and listening to everyone involved. Not only do you have a system, but the system will ultimately lead to increased productivity.

3. Systematization of all business areas

Have you ever wondered why most companies only introduce systems in the production workshop and let other parts of the company do their own thing?

"It is completely unfounded that the system cannot be applied in every field of business." Pat Lancaster, Chairman of Lantech Corporation, the world's leading manufacturer of stretch packaging films, stackers and conveying systems ) points out, "It seems like the world is accustomed to believing that shop floor workers can take care of things while other departments don't."

Bruce Thompson and Ed Constantine, Simpler Consulting Group Constantine) agree that all areas of business should be systematic, encouraging a natural and reliable way of handling work. Thompson and Constantine also argue that people generally act according to rules set by management, such as they might use a lazy approach decided in a process reengineering exercise.

"Most companies have fallen into a 'rules culture': For example, 10 years ago, someone made a mistake in a purchase order, and they instituted a process where the purchase order had to be approved twice," Thompson said. Years ago, the new technology added by the company made this mistake impossible to repeat, but the company personnel were busy re-approving purchase orders."

While the situation is constantly changing, Constantine commented that most of the Businesses do not change their processes to reflect the new situation. "The end result is that all departments are working on things because they've always done it. And the staff are fighting to defend what they're doing because they don't want to lose their jobs," he said.

Pat Lancass "You'd better be prepared when you walk into a department other than the shop floor and try to implement a system, because the first thing you hear is probably 'You're going to interfere with my work, and I'm not going to do it,'" warns T. Now.'"

Jim Womack of the Lean Enterprise Institute is even more specific about the real reason people resist the system: "One of the big problems you're going to face is that someone puts their own See them as 'experts' and think that their job is to make big one-time decisions all day long. That is, they think their job is to make themselves important and start over again every day."

Four. Determination to Implement Change

Leaders of high-performing businesses are strong men who have clear determinations about how to run the business. By contrast, many other business managers seem to be afraid of making trouble, offending someone, or encroaching on someone's territory, and as a result, fails to produce powerful change, scribbling over and over again.

There is a real event to prove it. A large corporation hired a consultant to help it overhaul its clunky sales department. On the first day the consultant team arrived, one of the company's senior sales executives blocked the door and wouldn't let them in.

"I know what you guys do," she shouted. "You use systems to turn everyone into machines. Not here. We don't want systems. If you walk in the door, the entire sales department will resign en masse. , so that the company has no business to do."

After several colleagues persuaded her, she calmed down. Eventually, she was taken away. After a while, the CEO who hired a team of consultants appeared at the door. He took the consultants to the parking lot and said nervously, "I'm sorry. Remember, I told you that there would be some resistance. You go back to the hotel first. I'll try my best, and we'll be back at your quarters today. Let's meet."

That night, the CEO started the meeting by saying, "I apologize again for the lady who caused you so much trouble today. She's been with the company for a long time and doesn't like change. But the performance is still there. Yes, we'd still like to keep her if possible."

He explains that she's been a hassle, but he doesn't want her to diminish the consultant's chances of success. So he came up with a compromise: "We'll separate her and a few of her comrades from the rest, give them their own office, and let them do things the way they used to. One more thing. Most of the others know that. We're in bad shape, need help, and are willing to try, but on one condition: if any of them don't want to do what you're suggesting, they have the right not to implement that part of the advice."

As you can imagine, that company How is it in the end. The CEO tries too much to please some people and compromises in the best interests of the company, and as a result, the more loopholes are dug, the deeper the trouble.

5. Countering resistance to the system

As a manager, you must be prepared for resistance to the implementation of the system for three reasons: some employees are very dissatisfied with the added system and will stop at nothing ; some people think that their educational or professional background can transcend the constraints of the system; and some people just don't want anything to measure their output.

No matter how long they work, most employees have experienced their work being disrupted by ill-considered measures that then fail, disappear, and do the same for the novelty measures that take their place. No wonder employees are always suspicious of managers' latest plans. They mumbled to themselves and their colleagues that bosses should "get real." For the "latest, most recent, best" efficiency plan, they always go against the grain. Pushing the system from the top down is telling employees explicitly that management thinks they're too clueless to think of a better way to get things done. If employees were told that layoffs are always the result of a combination of management failures and improved efficiency, the tension would be almost instantaneous.

On the other hand, investors, banks, analysts, stock markets and financial media are constantly watching the financial performance of most companies. Every mistake can spell a career disaster for a manager or a public relations nightmare for the company. Many managers and business owners are so afraid of disrupting the "workable" way of doing things that they passively hand over control of the business to their employees.

Instead of standardizing systems and processes, many managers, business owners, and supervisors jump to the other extreme, claiming that their organizations have "empowered" their employees. "Team" is used so often that it becomes a cliché. Productivity experts believe the word "team" has been overused, and the result is often a mess that is difficult to control or measure.

In high-performing organizations, the definition of "empowerment" best fits its purpose: employees play an equal role with management in deciding which systematic strategy to adopt. These employees are empowered to:

act in accordance with best practices identified by them and their colleagues; continuously improve best practices; and guide their behavior in accordance with the values and norms of the corporate culture.

6. Build mutual trust and respect

Many companies attribute the difficulty of introducing the system to two words, "trust" and "respect". In fact, they are the foundation of any valuable relationship.

If management doesn't trust and respect employees, and employees don't trust and respect management, it's impossible for a business to be truly efficient. Supervisors, business owners or CEOs must understand how to address this issue, or any productivity gains the business experiences are likely to be short-term.

A management praising how important its workforce is while making massive layoffs has no trust and respect. Leaders who squander corporate money and enjoy privileges don't bring trust and respect. If businesses don't have the same high level of trust and respect that exists at World Savings Bank, Yellow Freight, and Lantech, they're in serious trouble.

The heads of business units demonstrate genuine respect and trust in their employees by actively soliciting ideas and opinions. If they do, they are rewarded with employees willing to contribute ideas and work harder, smarter, faster, and more efficiently toward the goal of making the business successful.

If mutual trust and respect are not reflected in the enterprise, the best result is an awkward deadlock. The situation remains the same: the same business every day; too many meetings; too many urgent decisions to make; lack of effective performance metrics. Of course, there will be no major capacity improvements and management will not relentlessly pursue the perfect solution and the latest management theory.

Building trust and respect relies on interpersonal skills. These skills are well worth learning if you want to maintain satisfying relationships and, most importantly, successfully manage a high-performance business.

The original text is excerpted from Less Is More with permission. The author is copyrighted in 2002. Published by Portfolio, a member of the Penguin Group (USA). Translated by Lian Qingsong.

Jason Jennings is a consultant and author, and has been selected as one of the top 25 speakers in the world. His previous writings on the world's fastest growing companies were global bestsellers and have been translated into 23 languages.