I have heard many business experts say that business, at its core, is nothing but a collection of systems.  I suspect there is some truth to that statement.  But what is a “System” and why is it such a critical part of business? In my business trainings I have often asked that question to entrepreneurs who are struggling to make their business grow.  I am always amazed at how little most of these business owners understand with regard to systemization.  Explaining that concept is the goal of my blog today.

What is a system?

A system is a procedure or process designed to accomplish a goal.  Systems have various purposes.  They provide an efficient methodology in business.  They bring order and simplicity to business vs inviting chaos and confusion.  They allow duplication.  They also provide structure which is critical to productivity.  In my opinion, there are 4 key components to any system.  They are as follows:

1.  An outcome, purpose or goal.  As I noted above, all systems are based on an outcome.  In other words, they are designed for a purpose to accomplish some goal.  It is critical that this outcome is both clear and measurable.

2. Ownership.  Someone has to be in charge of fulfilling the outcome.  In my opinion, if more than one person has ownership of fulfilling the outcome, then you do not have a system.  While others might be involved in the process, someone has to have the final responsibility to achieve the desired outcome of the system.

3. Consistent Results – Once the system is in place, the task and procedure must be able to produce a consistent result.  If not, then the system is more subjective (influenced by an individual’s skills) than objective.  It is critical that results are both measured and communicated to whoever set the original outcome. 

4. Duplicatable – All systems must be duplicatable.  In other words, even if I change who has ownership of the system, I can still produce the same results.  If they are not duplicatable, then the individual is the system.  That means that person will always have to be part of creating the outcome of the system.  While this is OK if they remain part of a business culture, it can create major challenges if they leave an organization.  In addition, duplication is necessary in order to grow any organization beyond the skills, experience or influence of one individual. 

Recommendations on Systemization

Below are some key recommendations I would make to anyone who wants to improve momentum in their business and their life as it relates to “Systemization”.

1.  Keep systems simple – Too often systems become too complex.  Instead of creating order, the complication of systems often leads to complexity and chaos.

2. Focus on YOUR key systems first – There is an old adage in life – focus on what you can control.  Start by looking at the key systems that run your life and business – time management (a good DMO), communication, finances, relationship management and health.  These are the “Foundational Areas of Life”.  If you can manage them effectively then your chance of consistent growth and happiness is much higher.

3. Take a look at areas of your life where you are micromanaging others – This is a key place to look in order to determine where systemization is needed.  Examine where others are responsible for some outcome in your life.  Determine if the outcome is clear to that person and that the communication is in place for them to let you know how they are doing in managing that outcome.

4. Implement the most important momentum system of all right now -  I have kept my life in a state of momentum for many reasons.  However, the foundation of the momentum process for me evolves around 4 words – growth, contribution, fun and gratitude.  When every day of your life is defined by these words, I can assure you that your life will remain in a constant state of momentum and fulfillment.  I believe that if those who read this blog would begin to analyze how to build or improve any of those areas, they would understand how powerful it is to integrate this type of thinking into their life.

 I hope this blog provides you with a better understanding of “Systemization” and an initial path to implementing this concept into your business and your life.

I know that many of my readers have home-based businesses so I wanted to share some information I read last week about this segment of the business world.  Home-based businesses have become a major part of the business landscape and are now being referred to as “Homepreneurs”.  There has always been a perception that home-based businesses are small.  For many they are almost viewed like a hobby vs. a business.  However, the data seems to indicate that home-based businesses are growing and are a big part of the business community.  Today, about 50% of all homepreneurs have employees.  As you can see from the chart below, home-based businesses are often as competitive and successful as non home-based businesses.

According to the Network Solutions Small Business Success Index (SBSI), their recent survey indicated that home-based businesses are important contributors to employment and the overall U.S. economy.  Here are the basic components of society that are driving the trends. 

1.  The lower costs and risk associated with starting a home-based business – As I have noted in other blogs, access to capital is limited.  The businesses that will grow in the New Economy will be those that can be started and managed with very little capital.  Until investors and lenders change their current positions, low initial and fixed costs will continue to be a major tenant of small business opportunities in the future.

2. Demographics and social shifts – Aging baby boomers, women, and Gen Y business owners are all seeing the value of a home-based business as a means to (1) take control of their financial future, (2) provide an income to support their families.  People today are interested in a work/life balance and time flexibility which is something that home based businesses can provide.

3. A lack of corporate jobs – Large companies are battered by the Economic Winter.  Large businesses tend to require access to capital (investors and lenders) which are both on the sidelines these days.  Remember, almost 95% of the S&P 500 companies have debt.  Most large companies are part of the Global Economic landscape.  As much of the global economy struggles, US company sales are compromised by a Global Economy that is going through a massive de-leveraging process (it seems like everyone has too much debt these days).  Even people with good corporate jobs are looking at part-time, home based business as a means for additional income and a future for their family.  Too many have learned the costs of leaving their economic future in the hands of others, and are passionate about changing that reality in the future.

Below are the key findings from the SBSI report.  As you can see, the home-based business model is growing and should continue to grow in the future.

The Nutrition Business Journal recently released their 2010 Global Nutrition Report.  It is a 265 page research report on the Global Nutrition market.  The research is rather expensive but gives a lot of great insight on the Global Nutrition industry and where it is headed in the future.  Since I know a number of my webpage subscribers are in the nutritional business I wanted to share some of the basic points.  Remember, one of the easiest ways to succeed in business is to get positioned in an industry that (1) is driven by real demand and (2) is forecasted to be in a long-term uptrend.  Below is a picture of the current and forecasted global market and a summary of the key factors driving the Global Nutrition Market. 

Highlight #1 – The Global Nutrition Industry is Stable and Growing

Even in a tough economic climate, the nutrition industry is growing around the world.  As you can see from the chartbelow, the industry is forecasted to have continued growth, although they do expect the pace of growth to level off around 6% through 2014. 

Highlight #2 – The Factors Driving Nutrition Are Real Problems Facing Society

There are 3 primary factors driving the Global Nutrition Market:

1.  An Aging Population – In most of the industrialized world, society is getting older.  This is especially true in Japan and throughout Europe.  Even the US baby boomers are heading into their “retirement stage”.  What do we know about this older population?  First, health is a major factor in their life.  They want to stay healthy so they can sustain their quality of life.  In addition, health costs have a major impact on their finances.  More and more of this group of society is looking for ways to avoid being sick and incurring the massive healthcare costs that in turn impacts so many other areas of their lifestyle.  This group is a “momentum driver” for the Global Nutrition Industry.  Equally, for those who market opportunities in the nutrition area, you might find this group to be a great source for expanding your business.  Most of them are looking to make money in retirement and they have relationships with others who share their concerns and needs.

2. Continued Bad Health – Continued growth in diabetes, heart disease, cancer and other chronic health ailments linked to poor nutritional habits are a major problem around the world.  As consumers worldwide become more educated on Wellness and Prevention, they will look for solutions that will enable them to stay out of the healthcare systems.  Part of this education will be the realization that spending money to stay healthy is a better economic choice than the costs associated with being sick.

3. Changing Economics – Around the world, more and more people are moving toward the middle class.  The research indicates that people who spend on nutrition can afford to do it.  Countries like Brazil, China and India are examples of major global markets where there is a growing middle class.  As the masses have more money and become more educated on the value of health and wellness, they will drive the Global Nutrition Market.

Highlight #3 – The Regulatory Climate

There is a worldwide movement toward more regulation as it pertains to Global Nutrition.  Without having to explain the specific regulatory issues in each country, I wanted to summarize two basic issues that are going to change in the future.  The regulators are focused on these two areas because they feel these factors are critical to oversight of the Global Economic market.  For some, this news might seem a bit scary.  For others who are well ahead of the direction of the regulatory climate, this news will seem like a breath of fresh air.

Focus #1 – What is in your product?    There is a lot of controversy surrounding  what is being put into products.  In particular there is a major focus on botanicals and herbs.  There seems to be concern over products that could potentially damage health vs. promote it.  Therefore, the  more mainstream and proven the components of your products are, the better off you will be as the regulatory climate increases.

Focus #2 – What claims are you making about your product?    I think it is safe to say that regulators are moving toward science and away from salesmanship.  Regulators want scientific proof that your products work.  Some of the old sales tactics used to promote the value of a product are under great scrutinization by regulators around the world.  The level of scientific proof could go as far as to include the standards that are currently expected from pharmaceutical companies with their drug testing.  To give you a perspective on what that could mean, let’s look at Canada.  The new regulations in Canada resulted in a 33% loss of the nutritional players in that market, simply because they could not meet the new regulatory requirements.

Of course there are many, many highlights that could be extracted from this extensive report.  However, I felt it important to note a couple key features that can help those of you in the nutrition business understand the road that lies ahead for your industry.