The Importance of Systems, Part 1

Are you focusing enough on your business procedures? In this two-part series, you will learn about four types of systems and how understanding them can help your business run more smoothly and successfully.

Like every organization with more than 15 folks working in it, we have a lot of systems at Zingerman’s. Which is a good thing. Systems are the structure around which the other parts of our work are framed and without them, there would be chaos. But you need to have the right systems. Sloppy, flabby or silly systems can damage an otherwise beautiful organization.

One question commonly comes up in business: What’s most important—the people or the systems? My answer is, both. Certainly it’s important to have the right people in the right jobs but I would argue that it is equally important to have the right systems in place.

Imagine a set of scales with “staff/people” on one side and “systems” on the other, balancing out one another. They are the two company elements that must be equally important and equally prioritized to keep the business running. When the people and the systems are both equally strong, I’m confident that we’re going to be operating at a high level of effectiveness.

Realistically on any given day, it’s not that odd that the “scale” would be a bit out of balance. But if you get the two out of whack to the point that one is strong and the other weak, you’re headed for trouble. Great people working with poorly designed systems usually leads to burn out, or worse still, to a situation where the business fails to deliver so often that it gradually goes under despite everyone’s best efforts to keep it afloat. The opposite—great systems without good people—becomes hollow; it makes for a nice looking structure, but creates a culture in which people follow the rules so religiously that they make what, in hindsight, will seem like silly mistakes.

Create a Vision of What Your Systems Will Accomplish

Given my efforts to promote, teach and practice the idea of visioning—which we define here as starting out with the ‘end in mind’ and agreeing on a positive picture of what success looks like—it would make sense to do one here too. As I’ve already pointed out in the many essays I’ve written on the subject, if we don’t have a clear vision of what success is going to look like it’s unlikely that we’re going to get there. Which makes it a good idea to ask: What’s your organizational vision when it comes to systems? What follows is my own draft—see what you think:

“In our organization, systems are embraced with the same passion as we do so many other things—creating traditional full-flavored food, offering amazing service to guests and coworkers, committing to the community, operating with open book finance, striving for sustainability in all its elements (people, environment, soil, finance, personal energy, etc.). We’ve got well-designed systems, put together by a diverse team of smart, creative, collaborative and curious people from all levels of our organization. People actively embrace those systems across the organization; they follow them because they believe that it’s the right thing to do, and understand the value that effective use of systems brings to our customers, the quality of our work and the results that we get.

In every area of our organization our systems bring out the brainpower of the people involved, while providing effective structure and support in the interest of delivering better results. The people who use the systems understand the story behind them and why we use them.

To build an ever-stronger systems culture, we teach classes on systems design. Everyone here knows, too, that when systems are in need of improvement—as they regularly will be—each of us can and will take the lead on making that improvement. They know what good systems design means and have a working system for figuring out what’s effective and what isn’t.

In all systems, we use technology wherever it enhances the quality of the product we make, the quality of our customers’ experience or of our work environment.

As a result of all that good work, we attract better, smarter, winning people who want to do great work, and that natural energy and desire is enhanced by having better systems. And to let them know how much we value their contribution, we have regular recognition—things like “new system of the month,” “best systems improvement,” etc.

That’s just a draft but having a clear idea of the importance of systems in your organization is key to successfully implementing them.

There is No One Perfect System

Several years ago I read an essay by Edgar Schein, a professor emeritus at the MIT Sloan School of Management. His essay, “Organizational Culture and Leadership” made clear to me the silliness of the standard argument over what is the “right” style of leadership. Schein insightfully pointed out that the question should not be whether one style is “better” or more generally successful than others. The more meaningful inquiry to make, he says, is, what style of leadership is best for the organization’s particular stage of development? That for me, was a hugely helpful aha! It got me thinking of things in a new way, and realizing that most all the styles of management people espoused were effective approaches. But only if the leader’s skills are a match for the stage of development. (A leader who is perfect for startups is not necessarily the right person to lead a mature company, and vice versa.) The same to me is true of systems: The system has to be the right fit for this particular part of your business at this particular time and must evolve as the business evolves.

A similar late-in-life light bulb went off for me when I read an article in the Harvard Business Review earlier this year called “When Should a Process Be Art, Not Science?” Written by Joseph M. Hall and M. Eric Johnson, they note that both art and science are important and the key is to match the type of system with the requirements of the situation at hand. They went on to describe four types of systems including: Broken Processes; Total Industrial, Effectively Standardized Processes; Mass Customization; and Craft Systems. We will discuss Broken Processes in this article and next month you will learn more about the three functioning types of systems that much of your work will use.

Is One of Your Systems Broken?
When we have a system that isn’t working, we’re letting down our customers, our crew, our entire organization and ourselves as well. Hall and Johnson call this a Broken Process but it really is a broken promise. The longer we wait to fix broken processes, the worse it’s going to get for all involved. I’ve gone down that path and it isn’t pretty.

To evaluate whether the process is broken, ask yourself:

1. Are we as leaders doing our work? If we regularly allow people not to follow the system as we’ve all agreed upon, then we are letting the system and the employees down. For example, if the system involves managers checking other staffers’ work, and the managers aren’t doing it, then the system isn’t at fault. We, as managers, just have to do our work well, same as we’re asking everyone else to do.

2. Do we have the right people in the right jobs? For instance, someone like me who has wholly illegible handwriting would not be a smart person to put into a job that requires anything important to be written down by hand. If I were responsible for that, then the system isn’t at fault, it is the placement of me in that role. It’s our responsibility to make sure people are put into positions in which they have a reasonably good shot at being successful.

3. Does the system effectively distribute the stress? Well-designed systems usually don’t leave managers in the role of having to be the “bad guy” all the time—to the contrary, they make the management role as minimal as possible. When systems are designed so that the next step can’t occur without the previous part being done correctly, they work better because the pressure naturally occurs from the team and not just from the boss.

When evaluating your system you first must use the existing system exactly as it is meant to run. Follow it all the way through. If it works well, you don’t have a broken system, you have a problem in management, training or some other area.

When the agreed-upon process has been followed exactly and the odds of things going astray are still too high for your level of acceptance, then it’s time to redo the system. I’m not the expert on systems mapping and there is a wealth of good information on the subject. But I will give an example below of one our systems that was busted and how we improved it.

Fixing a Broken Process—An Example

At the Roadhouse, our 175-seat restaurant, we agreed that every table should be greeted by the wait staff, a host or a manager within five minutes of being seated—but we were falling short. To find out what was actually happening we tracked our successes and failures. We discovered that we had three or four “ungreeteds” a day (and an ungreeted customer feels ignored and unhappy). To make up for those early mistakes, we end up apologizing and often comping food to help in service recovery. Costs go up, sales start going down and the situation adds unneeded stress to everyone’s life.

So, we started The Greeter Game and offered $50 to each host team member if we went 50 days straight with everyone being greeted within five minutes. Things got much better. The hosts quickly found holes in the existing system and then made changes to the way the system was set up. In less than a month they had virtually no “ungreeteds.” But, a year later, the team decided to build on its success and make guests even happier by greeting within three minutes. However, no matter what they did, there were too many ungreeted guests.

We discovered that the current system depended upon too many people “trying” to get to a table to greet guests and there being too many everyday variables that could keep this from a happening (a waiter needing to serve hot food to a large table nearby, etc.). To fix it, rather than extend the time of greeting back to five minutes, the Roadhouse host crew divided the restaurant into “rooms,” and each host is now responsible for a room, keeping accountability tight and guests greeted. A great solution, and I think if we dig in further, we may find some way to make our software at the host stand alert the hosts with a color code or “alarm ring” to get their attention to go and greet a table. When they see or hear that, they’ll act. The guests get greeted in a timely manner and everyone wins.

In part two of “The Importance of Systems,” you’ll learn about the other three types of systems described in the Hall and Johnson article in the Harvard Business Review. By learning about how they operate you will better understand when and where those systems might work for you.