Ray Dalio, American billionaire investor and hedge fund manager, who has served as co-chief investment officer of the world's largest hedge fund, Bridgewater Associates, in his very valuable and entertaining YouTube video How The Economic Machine Works famously said:
“Everything is a system”.
His words certainly ring true for a business.
A business consist of numerous linked activities called “processes” which must be defined, described, and managed. All your processes should interlink to form a single integrated system aimed at the same defined outcomes - everything and everyone committed to and working together to achieve a common set of goals.
What’s the definition of a process? A set of interrelated or interacting activities which transform inputs into outputs.
What is the value of a business process?
Business processes help keep your company at task, prevent errors and increase the speed with which work can be accomplished.
Without defined processes, there are no way to guarantee that anyone does a task the same way twice.
Process development challenge
Often managers and employees develop business process without a clear sense or thought or real understanding how the process fits into the larger organizational structure of the company. This creates disharmony in the system that shows up as chaos, and randomness in the products and service quality, consistency, and reliability.
All companies rely on business processes to function. They are the blueprints through which business activities are achieved. Business processes must be clear, efficient, and adaptable.
A part of the whole
Every process must also be efficiently and effectively integrated into the organizational structure.
A business must have all the processes needed to run that unique business. Any process gaps will wobble the business like a missing wheel on a motorcar, and with the same disastrous consequences – the business will soon crash.
Developing your business as a system
By developing your business as a system, it clarifies the processes you need as well as the inter-relatedness of all your business processes.
Viewing your business as a system is a strategic mindset that must be cultivated in management and your team. This strategic mindset is called being System Minded.
System Minded
Being system minded requires a clear concept of what the entire business must look like, how it functions as a whole and what individual components it is made up of.
The value of being system minded: It,
helps you and your team keep the big picture in focus when making business development decisions.
clarifies and directs the components needed to make an efficient whole.
highlights the interrelatedness of the different processes and process components.
helps to find challenges to the efficiency and effectiveness of the business.
crystalizes common or overlapping process elements within the system.
creates development clarity and cohesion and therefore employee certainty, contributing to employee satisfaction.
And it helps to define common values needed to direct the system.
Seeing your business as a system and implementing system mindedness as a strategy throughout your business is fundamental to long term business success.
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