When a business is small, everyone knows everything about how it operates.
A team doesn’t need to document what they do, because they just ‘know’ how to do it. And they work so closely together, they can always adapt and improvise to meet new challenges. But as a business grows it becomes more difficult, in fact, impossible to work like this.
As teams expand, change and disperse, so valuable knowledge and experience can ebb away. At the same time, old mistakes can be replicated and inefficiencies amplified.
There is a tipping point, where it isn’t enough anymore to just ‘know’ best practice, you need to start formally documenting and sharing it, or you risk losing these insights altogether and having to start from scratch all over again.
Adopting a Business Management System isn’t about imposing a new layer of bureaucracy on a growing company, it is about creating a dynamic knowledge base upon which all future success can be built.
The Scale-up Process Gap - Getting Started
It has been said before that if your company doubles in size, you'll end up re-designing every process you have. Which tools and processes can be implemented to ensure the business is adaptable and agile, How can tackle the inevitable scale-up process gap?
The challenge of moving from start-up to scale-up
Traditionally, there has been a low success rate in companies going from small start-up to scale-up status. As Sherry Coutu, Chair of the ScaleUp Institute has pointed out
"...only a small group of start-ups achieve significant growth in revenues – just one per cent have sales of more than £1 million six years after they start"
For those companies who have delivered a successful product to market and are in a period of growth - the challenge will be expanding your offering and customer base while delivering the same level of quality to your clients, time and time again.
But this may not be so easy to achieve.
As you embark on new and complex projects you may find it more difficult to replicate quality at scale. This may be because you’ve never had the time to really think about or manage the way your business ‘does things’.
Without a well understood set of business processes governing the delivery of your end product, a sudden spurt of growth might cause systems developed in an ad hoc way to be overwhelmed.
Timescales may start to slip, fulfilment may become increasingly chaotic and confusion may reign.
Why Business Management Systems Exist
And that’s why formal Business Management Systems exist, to help companies find ways to define, document and implement best practice in everything they do.
They are designed to help you document the way you do business while identifying inefficiencies, improving business performance and increasing staff effectiveness as you grow.
A Business Management System can be implemented by external consultants or internal teams, using standard office software or specialist, proprietary solutions. These solutions vary in their degree of cost and complexity, some requiring the installation of applications and others offering a more lightweight approach.
But however you choose to do it, adopting a BMS is an important step in your business evolution. It means you are starting to develop a shared understanding of everything you do as a company. It means you are developing a common ‘language’ or ‘system’ for delivering quality across your organisation.
And, don’t forget, developing just this kind of Quality System is a key requirement for ISO 9001, ISO 13485 and many other standards.
Documenting Business Processes
One of the primary functions of a good BMS is to give you the tools to record, analyse and continually optimise your business processes.
In practical terms this means defining and documenting precisely what each business task is, and how it should be carried out.
Whether through flow diagrams or long form documents, your BMS should help you record the necessary inputs and expected outputs of every process in your business. It should help you document the requirements and dependencies of every part of your operation. It should help you define the way you do things.
The diagrams and documents you create will let new joiners grasp more quickly how you work. They will help current staff understand and optimise existing procedures to secure greater quality. They will allow you to identify the gaps and omissions in your processes that lead to mistakes and waste. They will help reduce the risk of things going wrong and improve efficiencies across your business.
In the long run, they should save you money and make your company more productive.
Creating a Quality System
The aim is for your Business Management System to become, a ‘bible’ for delivering operational excellence that everyone in your business can follow and contribute to.
In other words, it should be the system through which you guarantee the consistent delivery of quality products and services to your customers. A mechanism for managing and continuously improving core processes to achieve maximum customer satisfaction in the most efficient way possible.
But the truth is, no matter how painstakingly it is put together, such a system will be of no value to your company unless everyone in your company actually uses it.
Why most Business Management Systems fail
The problem is, all too often, Business Management Systems end up being neither accessible or useful to a business as a whole.
Many BMS are cumbersome and over engineered. They are proscriptive in the way they operate and difficult to change or update. Too often they convey process and procedures in a dense and text heavy format that is difficult to follow. Sometimes they even require the wholesale installation of new software across a company, which is never a quick fix. Indeed, according to Forrester Research, the industry average for installing such applications is 14.5 months, an unacceptable wait time for most start-ups and SMEs.
In some cases, installing a BMS will simply introduce new and unwanted layers of development and bureaucracy into a growing organisation.
If a Business Management System is over-complicated and difficult to use your team will inevitably try to find ways to avoid using it. And, of course, if procedures are not properly observed, there is a greater risk of mistakes happening, timelines slipping and quality suffering.
All this, in turn, increases the chances of regulatory non-compliance and raises the risk of your business failing a quality audit. And if that happens, it defeats the object of implementing the solution in the first place.