Thinking Systems? Here’s What Every Small Business Owner Needs To Know

“I need to create some systems for my business.”

It’s one of the key needs we hear from small business owners.

Recognizing that they have something that works on some level, they’re looking to make it work better. Systems seem to be the way to do it.

But then a panic can set in. Sometimes there’s a panic over identity: “I’m not a systems person.” Other times there’s a panic over technology: “I hate project management systems.” And still other times there’s a panic over not being quite able to define how things work: “I just sort of… do it?”

I have said all of these things and more as justification for not implementing systems in my business. But at some point, I realized that I was missing the mark on what a system actually is and how systems work in (and with) my business.

So here’s what I wish every small business owner knew about systems:

Every action you take in your small business is (already) part of a system.

For all the talk of creating systems and systematizing our businesses, the reality is that the systems already exist. They might be inefficient (or not creating the results you’re looking for) but they’re there.

One of the most important parts of systems work when it comes to business-building (and systems thinking broadly applied) is recognizing the system that’s already there. Our job isn’t to create systems, it’s to recognize and work with the systems we have—the systems that, to one degree or another, are what works.

If systems already exist and we’re already using them—whether we know it or not—why the fixation on “systematizing” a business?

One reason has to do with mindset (i.e. the system we use for thinking about the business) and one has to do with a confusion of terms (i.e. “You keep using that word. I do not think it means what you think it means.”).

We’ll start with mindset.

Why are we so quick to try to construct something from nothing or adopt systems that are not our own?

We’re seeking certainty. Control. Predictability.

Because we’re part of a system that values certainty, control, and predictability. Our built world doesn’t function well when there’s volatility or unknown variables. The stock market dips. Elections swing wildly from one extreme to the other. Our spending habits shift. Our schools become reactionary.

So we’ve learned to strive for certainty—if this, then that—as our default operating mode.

We start to believe that, if only we can build a better system or adopt the system that our successful colleague is using, we can be in complete control.

But that’s just not how systems work.

Donella Meadows, scholar of environmental science and systems, warns against this mistake:

“The goal of foreseeing the future exactly and preparing for it perfectly is unrealizable. The idea of making a complex system do just what you want it to do can be achieved only temporarily, at best. We can never fully understand our world, not in the way our reductionistic science has led us to expect.”

There are lots of people out there who are glad to sell you a can’t-lose system. Maybe you’re in the market for a predictable lead generation system, a no-fail hiring system, or guaranteed social media system. And I won’t argue that there isn’t value in these pre-established systems. But because of the claims around these systems, we tend to not think critically about how they work—or whether they’re right for our particular businesses or not.

The same can even be true of the systems we build for ourselves. They make sense on paper. You’ve seen other people make it work. So you don’t take the time to experiment with and adjust the system you’ve “created.” You end up scrapping it to build another new system when it doesn’t seem to be working—or you blame yourself rather than the system.

Do you really need better systems? Or do you need better procedures?

Many business owners say “system” when what they mean is “procedure.” While there is plenty of room for these terms overlapping, the do have separate—useful—definitions.

What is a system?

“A system is a set of related components that work together in a particular environment to perform whatever functions are required to achieve the system’s objective.” — Donella Meadows

We’ll get into how to apply this definition in a bit. But the thing to remember here is that a system is an interconnected whole.

What is a procedure?

A procedure is a method for performing a task. As opposed to an interconnected whole, it’s a start-to-finish formula for achieving a particular result.

A system is complex and nonlinear. A procedure is simple and linear. When we’re defining a system, we’re not trying to reduce it to a 1-2-3 step procedure. Instead, we’re exploring the connections and relationships between the component parts, how they interact with the environment and how they contribute to the objective.

A procedure is a set of instructions. A system is a web.

A system can contain procedures—but can never be reduced to just one.

Both procedures and systems are incredibly important to how a business functions but confusing them will make things harder than they need to be. When you try to reduce a system to a linear procedure in order to document it or improve on it, it’s easy to get stuck—or miss the opportunity entirely.

Documenting procedures requires a clear scope.

Systems are wide-reaching and tangled by definition. But a procedure can be defined narrowly in a way that makes them much easier to document.

Take a lead generation system. The system itself has many related components that create ripple effects throughout (and beyond) the system as you interact with them. I’ll define this more clearly below. But a procedure within the lead generation system can be clearly defined based on the task you’re trying to do.

Create a blog post. That’s a procedure. Send a newsletter. That’s a procedure. Send out 3 networking invitations. That’s a procedure. Pitch 5 podcasts. That’s a procedure.

If you feel overwhelmed by the scope of a system, start with the procedures. Don’t invent them—simply write down how you do what you already do.

An imperfect procedure is better than no procedure. Using the procedure will allow you to improve it.

Alright, let’s take a closer look at the system itself.

Remember that the definition we’re using is: 

“a set of related components that work together in a particular environment to perform whatever functions are required to achieve the system’s objective”

Donella Meadows

We can identify systems by defining the items in those 3 categories: the objective, the environment, and the related components.

The objective is why the system exists. What is the intent behind the system?

So for instance, if what you’re trying to identify is your lead generation system. The is easy way to define the objective is “to generate leads.” But what does that mean? How do we define whether the results of the system are good or not?

“What we intend to do determines how we define words like good and bad.”

Abby Covert, How To Make Sense Of Any Mess

What’s the intent behind generating leads? Well, it’s to gain new clients or customers. To produce revenue. To improve lives.

So a better way to define the system’s objective might be: to find highly motivated potential buyers who make a purchase and experience the benefit of what we offer.

Of course, there are probably infinite variations for how you define the objective of your lead generation system, even if the basic idea remains the same. Your system’s objective might be slightly different based on your business model, offer, values, strengths, or the market your business operates in.

Once you’ve defined the intent of the system, you can make an initial assessment of whether the current system is producing good results:

  • Are the activities you’re doing to generate leads also generating new clients or customers? 
  • Are they producing revenue? 
  • Are they improving the lives of the people you come in contact with? 
  • How do other factors related to the system impact its effectiveness?

Doing that initial assessment will also help you identify what fits in the second category: the environment.

Your system doesn’t operate in a void. Your system is contingent on the larger system(s) it’s part of. 

That’s its environment.

The whole idea of systems thinking is to understand how not only the component parts of any given system work but how that system is a component part of larger systems. By analyzing the many layers of systems that interact, we can better understand the ripple effects we cause when we start messing with a system.

For instance, let’s return to the lead generation system example. What is the environment of this system? Well, it has many layers. One layer is the business model the system exists in. Another is the market you’re trying to generate leads in. Yet another layer is the channel you’re using to generate leads (social media, referrals, networking, etc…).

How do each of those layers—systems in and of themselves—influence the lead generation system? How does a change in those larger systems impact the lead gen system? How does a change in the lead gen system impact the larger systems?

For the sake of simplicity, let’s define the environment for the lead generation system as the market—the people looking to buy, the other providers in the space, the various messages at play, the way money flows, etc…

Every market (and yes, markets are interconnected systems, too) has different norms, expectations, people, and competitors. That means that each market is going to impact how a lead generation system works differently. What works beautifully in one market might be dramatically different than what works in another market!

The same is true of all different sorts of environments. After all, (most) fish can’t survive out of water.

Now that we’ve defined the objective of the system and its environment, we can look at the final category: the related components.

These are the parts of a system we’re most familiar with: the actions we take, the technology we use, the procedures we follow, the information we work with.

What are the related components of our lead generation system? They could be relationships, communication channels, messages, pieces of content, ads, events you attend, the way you track leads, etc…

Plus the lead generation system is likely to borrow related components from other systems like brand, business model, operations, or networking.

Now what?

Most likely, the easiest way to bring together the objective, environment, and related components of your system is in a mind map. Remember, the goal isn’t to document some linear progression (that’s a procedure or process) but to get a feel for how different aspects of the system influence other aspects of the system and beyond.

You’re also not turning your system mind map into a document you use on a regular basis to get work done (again, that would be a Standard Operating Procedure). But having a document that helps you think—helps you wrap your mind around how the business works at a higher level—can be incredibly valuable. 

But of course, one of the reasons we think about systems is so that we can also think about processes and procedures. So mapping out a system helps you identify the procedures that make it up. 

Returning to the lead generation system example, as you map out the related components, you might notice that there are 3 tasks you do on a regular basis as part of that system: sending newsletters, booking networking calls, and speaking at events.

Each of those 3 tasks has a procedure that should be documented. As I mentioned earlier, you’re not creating these procedures. They already exist. You’re just documenting them.

The best way to document your existing procedures is to just write down each step as you do it. It can be messy, shorthand, and incomplete! That’s more than fine.

Documenting procedures is good—but it’s not everything.

A streamlined, effective, and sustainable business runs on procedures and processes. They reduce mistakes and make hiring easier. They keep things consistent and save you time.

So why isn’t that enough? Why examine the larger systems at play?

Every step in a procedure is influenced—in some small way—by outside forces. And in turn, every step in a procedure influences other aspects of the system it’s part of.

No matter how disciplined you are at executing your procedures, you’ll always run into unexpected results.

By taking a systems approach, you can see unexpected results as the product of other components of the system. Instead of assuming that you “screwed up” or that the procedure is broken, you can see how outside forces impacted the way the procedure played out.

With a systems approach, you can (mostly) avoid overreacting and over-correcting.  When things don’t go as planned, you can see the contributing factors instead of rushing to make a change.

We’ll take a closer look at causation, correlation, and contribution in a future article.

Now, the question you might be asking yourself is…

“Okay, but do I have to?”

The truth is that you might document procedures that don’t need to be streamlined or need to be executed by anyone but you. There’s nothing wrong with not checking off every last item on a checklist every time you do that task. I know, I know—that goes against everything you’ve ever read about “doing systems,” right? Or maybe not everything you’ve read (because systems people aren’t nearly rigid as you think they are!) but everything you’ve feared.

Having those types of systems documented gives you something to work with when you do want to make a change or improvement. It doesn’t have to be something you use every day—just something that’s there when you need it.

And that brings us back to where we started.

What I want every small business owner to know is that they (you) are already interacting with systems in their (your) business every day. They’re (you’re) already executing procedures.

You can’t not be a “systems person.” We’re all systems people. It’s just that some of us are more aware of that reality than others. 

The good news is that becoming more aware of the systems around you and the procedures you’re executing isn’t a big project. It’s something that you do little by little—increasing your awareness with each task you complete and each decision you make.

Over time, systems and procedures for your business can become a natural part of how you think and how you act. And as it does, you’ll become more and more confident in the way you approach all aspects of building your business.

This is the first of a 4-part series called Thinking Systems. Here’s what’s coming up:

Part 1: Thinking Systems? Here’s What Every Small Business Owner Needs To Know (Aug 31)

Part 2: Cash Flow Is A Feminist Issue (September 9)

  • WWN Exclusive: Map Your Cash Flow (September 14)

Part 3: People Are Systems, Too (September 16)

  • WWN Exclusive: Map Your Customer, Map Yourself (September 21)

Part 4: Causation, Correlation, and Contribution (September 23)

  • WWN Exclusive: Conduct A Pre-Mortem or Post-Mortem (September 28)
Cover of What Works book by Tara McMullin

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