How will systems and automation reduce costs in your business?
The biggest overhead in business walks on two legs.
If you want to build and grow your business, you can not do it alone. You need people.
A problem for many, if not most businesses is they hire people who are overqualified for the majority of the work they are required to do. The employees obviously still have to be paid in accordance with their experience and qualifications.
The right systems, processes and automation will help you to get the highest value from the team members in your business. This has nothing to do with getting everyone to work as much as possible and longer hours than they should.
Your focus should be to maximise your return from every person in your business, by designing a business where everyone spends as much time as possible, focussed on their unique ability and delivering their highest value.
Systems and Automation can reduce your headcount.
At the right time and in the right situations, implementing the right systems and automation will create the opportunity to reduce the number of people in the business. Whilst it may not be your main motivation, the reality is that an operationally efficient business needs fewer human beings in order to get the same work done.
You can then choose to either use this increased capacity to serve a larger market, or to reduce the number of people in the business.
Additionally, with well-designed systems and processes in place, you’ll find you need less-qualified people to do the work required.
Take McDonald’s for example.
They are the poster child of systems and processes, and rightly so.
McDonald’s have created a business driven by systems and processes, and this means they can run a global, multi-billion dollar empire, where the majority of the workforce are minimum wage kids.
And I don’t mean that negatively. The amount of training and development McDonald’s offers to their employees has great value.
McDonald’s doesn’t employ Michelin starred chefs to cook their burgers. They don’t even employ ordinary chefs. Their systems and processes allow them to train someone quickly to be a strong and contributing member of the team.
Get to profit faster.
If you are able to hire and train someone in half the time it normally takes for them to get up to speed, they should, all things being equal, be a profitable member of your team in half the time.
It is difficult to train new employees when there are no real systems and processes in place, because everything depends on someone else stopping what they’re doing (reduced productivity with increased cost) in order to show the new person how to do their job (no real structure or framework).
You won’t see McDonald’s waiting 6 weeks, let alone 6 months for someone to become proficient in their job at a restaurant.
With the right systems and processes in place, and the help of automation, you’ll be able to let new employees focus on the job they need to do, because the process and systems tell them what to do and how.
- Spend some time observing your team. Identify the team members who are overqualified for the work they spend most of their time on. (I once worked in an office where a very highly skilled and experienced team member spent hours printing out and putting together name badges and lanyards for an event, because she liked doing it. Every minute she spent doing this cost the business money, right on the bottom line.)
- Work out how you can systemise or automate some of what they do, so they can spend the majority of their time performing to their highest contribution, and doing the work you really hired them for in the first place.
Remember, this is not just a cost cutting exercise or a means to get rid of people in your business. This will allow you to utilise the skills in your business to the maximum, and your team will have more fulfilling jobs.
I challenge you to really think about how you can do this in your business.
If you get stuck and think ‘my business is different’, let me know and we can chat about how this 100% not the case.
Author: Pieter De Villiers
Pieter K de Villiers is slightly obsessed with systems. The systems and process automation he builds for small businesses are transformative, to say the least. Pieter is a Co-Founder of Blue Peg Group and the Amazon best-selling author of “Barefoot Business: 3 key systems to attract more leads, win more sales and delight more customers without your business killing you”.