In summary
- Organizing work in Systems brings greater benefits than organizing it by Teams
- Teams are made up of individuals with similar skills and are vertical and therefore have reduced overall visibility.
- The systems unite different skills for a common goal, ensure efficiency and high standards.
- The systems avoid workload imbalances, ensure stability in results and quick decisions.
- Key business systems include Awareness, Lead Generation, Sales, Operations, Fulfillment, Return/Upsell/Refer, Finance, HR, Product Design, and IT.
- 10 effective metrics, one for each system, to use in your OKRs.
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What is a Business System?
In English they say “Teamwork makes the dream work,” but that is true until you experience the potential of having well-designed Enterprise Systems in your business instead of teams with well-defined perimeters.
A business system is a strategic component of the company, interconnected with others, designed to achieve specific goals efficiently and consistently.
By component I mean a set of People, Processes, Tools, Projects, and especially Metrics. A System to exist must have its representation in the way of working.
So many companies rely only on the talent and motivation of their teams, and this makes them fragile.
Business systems are containers of principles, practices and procedures applied to specific activities to achieve specific results. They offer several benefits:
- Increased efficiency by automating routine and repetitive tasks, saving time and money.
- Stable results by ensuring that tasks are done the same way every time.
- Clear expectations for staff regarding behavior and performance.
- Faster growth through improved efficiency and productivity.
- Replicability of what works for other lines of business or even other companies in different markets but with the same business model (this is my favorite).
- Streamlining processes by identifying and eliminating unnecessary steps or double handling.
- Control without micromanagement, monitoring key aspects through easily identifiable metrics
Why is it better to work in Systems than in Teams?
A team is generally composed of individuals with similar skills. Each component is strong in its own area, but their focus tends to be narrow. It is like putting together a room full of carpenters, all of whom are excellent at hammering nails, but lack the overall vision to build a house. They work, but do not necessarily move toward a unified goal, but to feed their own passion.
A system involves a diverse group of people, each bringing different skills, but all united by a common goal. It is more like a film production crew, where directors, actors, and camera operators work together to create a particular sequence of the film. The skills of each contribute to the final product, ensuring that it is produced efficiently and meets high standards. The system integrates these diverse talents to achieve a collective goal efficiently and effectively.
First, let’s address the issue of having an equitable distribution of effort. In a traditional team, workload imbalances are common. Often some individuals shoulder the burden while others contribute little, causing frustration and inefficiency. A well-structured system, on the other hand, outlines specific roles and responsibilities. Everyone knows their role and responsibility is built into the process. This ensures that each employee does his or her part and adds value consistently.
Consistency of outcome is another critical factor for any business. Especially if turnover is high, members come and go, bringing different levels of expertise and motivation. This flow can disrupt progress on projects and stability of results. In contrast, a system remains stable. It is designed to function independently of personnel changes, ensuring that processes are followed and goals are achieved consistently.
Then there is the issue of speed. Teams can get bogged down in endless discussions and debates, slowing down decision making and execution because they are in love with their own professionalism. A system, with clear procedures and defined steps, eliminates unnecessary debates. It is like following a GPS: no need to argue about directions, just follow the route and reach the destination on time and on budget.
Finally, consider the capacity for constant improvement. Identifying problems within a team can be difficult because individual methods and approaches vary widely. In a system, on the other hand, inefficiencies are easier to identify. Standardized processes make it clear where changes need to be made, allowing for continuous improvement and optimization, much like tuning an engine. It is easier to be a mechanic than a judge.
It is the strength of a system that truly drives success. Systems bring equity, consistency, speed, and the capacity for continuous improvement. One of the first major positive developments that occurs with teams working with STRTGY within the strategic acceleration program MAKE PROGRESS is the building of robust systems that harness the collective strengths of people, moving from the team-type concept of collaboration to one that is natural for those working in a system.
What are the main systems of a company?
Let’s talk about the most important systems that every company needs. Now, I know what you must be thinking, “Teams are everything!” But the reality is this: without solid systems, even the best teams can’t do much. Systems are the backbone of the business. They bring order, efficiency and consistency. In my book MAKE PROGRESS with OKRs I delve into this topic, but I would like to give you a snapshot.
The first is the Awareness system. This system is the megaphone that tells the world that a product exists and what problem it solves. Without this, it is really hard for anyone to come into contact with your fantastic product or service except by accident. If people don’t know you, they will solve their problem with a competitor. A solid system of awareness and made up of PR, advertising and social media and whatever amplifies the surface of contacting your audience.
Then there is lead generation. Once people know about you, you need to capture their interest by turning a stranger into someone who has a first name, last name, and most importantly a contact. This system gathers potential customers who might be interested in what you offer. Imagine having a filing cabinet on which you record people who raise their hands and want to know more. The more efficient your lead generation system is, the more potential customers you will have in your pipeline.
Then there is the sale. Now that you have leads, you need to convert them into paying customers. This system is your sales engine. It takes leads and turns them into signed contracts and then into money. A weak sales system means you are leaving money on the table and people disappointed. Make sure your sales process is smooth, persuasive and customer-centered on the progress they want to make.
Operations is the next key system. This is where the magic happens. It is how you create customer orders that look forward to results and your team. If your operations are a disaster, it doesn’t matter how many sales you make. You will end up with unhappy customers and wasted resources.
Once operations are defined, you will need a system to manage fulfillment-that is, the delivery of the product or service. This is where promises are kept. A fulfillment system ensures repeat business at the standards you aspire to, customer satisfaction, and most importantly high margins.
Another critical-and often underestimated-system is the Return/Upsell/Refer system. The first sale is just the beginning of everything. This system manages that customers buy the next product or service only when they are ready to do so. It is about prolonging the relationship and maximizing customer lifetime value. A good return/sale/referral system turns one-time buyers into loyal advocates.
We then talk about Finance. This system keeps track of money, what comes in and what goes out. It is essential for distributing resources and ensuring profitability. It allows you to keep the books in order, manage cash flow, and plan for the future.
The HR (human resources) system is also critical. This system manages your most important resource: people. It ensures that you have the right team and quality of skills within it. Happy, motivated and well-trained employees are more productive and contribute more to the company’s success.
Product Design is another key system. This is where new products are developed or existing products are improved. It is about innovating to stay ahead of the competition. A good product design system keeps the offering relevant over time because it anticipates customer needs.
Finally, there is IT (information technology). Every company is first and foremost a software company. This system supports all other systems, ensuring their smooth and secure operation. From data management to IT security, from integration to automation, the IT system gives everyone the tools to work.
These are the basic systems, but there may be others depending on the business model. The structure and sequence of these systems may vary, but the essence remains the same.
In MAKE PROGRESS with OKRs, I explore these systems in detail, show how to implement them effectively, and more sophisticated concepts to gain a System Designer mindset.
The most important metric for any system
I have collected 10 effective but underutilized metrics that the best teams I work with use in their OKRs to measure the impact of strategy in the 10 systems I presented to you:
Full disclaimer: these teams have implemented MAKE PROGRESS with OKRs and this precision in defining metrics is a unique feature of our certified method.
Choosing the wrong metrics can lead to exhausting efforts, missed goals, and embarrassment in meetings.
Save this post to return to later or send this note to your colleagues.
Do you want to track these metrics in our KPI Book? The same one that companies working with us in strategic acceleration pathways use MAKE PROGRESS? Download it for free
- Awareness
- Metric: Total Organic Reach
- Why it matters: It measures the effectiveness of organic marketing strategies and the ability to generate visibility without paid advertising.
- How to calculate it: Total unique views or impressions across all channels.
- Lead Generation
- Metrics: Total Lead Quality
- Why it matters: Evaluate the quality of leads generated to improve acquisition strategy and increase ROI.
- How to calculate it: (Qualified leads/total leads) * 100
- Sales
- Metric: Length of sales cycle
- Why it is important: It indicates the efficiency of the sales process, helping to identify areas for improvement to accelerate sales.
- How to calculate it: Average time from first contact to concluded agreement
- Operations
- Metrics: Onboarding Speed
- Why it is important: Measures the efficiency of the process of integrating new customers or employees, affecting initial productivity.
- How to calculate it: Time from contract signing to Kickoff
- Fulfillment
- Metric: Customer Satisfaction Score (CSAT)
- Why it’s important: It detects the level of customer satisfaction, contributing to customer loyalty and positive word of mouth.
- How to calculate it: (Number of satisfied customers (4 and 5) / Number of survey responses) x 100
- Upsell
- Metrics: upsell rate
- Why it is important: Measures the ability to increase sales through existing customers, indicating opportunities for growth.
- How to calculate it: (Upsell transactions / Total transactions) * 100
- Finance
- Metric: Turnover growth rate
- Why it’s important: It assesses the company’s financial growth over time, suggesting the effectiveness of the business strategy.
- How to calculate it: ((Turnover this period – Turnover previous period) / Turnover previous period) * 100
- HR
- Metrics: Time to hire
- Why it matters: Measures the effectiveness of the recruitment process, influencing the ability to attract and hire talent quickly.
- How to calculate it: Average time from job posting to accepted offer
- Product Design
- Metric: User Satisfaction Score
- Why it matters: It assesses users’ acceptance and satisfaction with the product, contributing to loyalty and positive word of mouth.
- How to calculate it: Average Score from product surveys (depends on collection technique)
- EN
- Metric: Incident response time
- Why it is important: It indicates the effectiveness and efficiency of the IT team in solving critical problems, improving service continuity.
- How to calculate it: Average time from ticket arrival to resolution confirmation
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