I’m a nerd. But not so much of a nerd that when I was told that the only subject I could do to finish off my masters degree to fit in to my tight schedule was “Systems Thinking” I failed to get excited. That was 2009. I’m not exaggerating when I say that subject ended up changing my perspective on life. The 30K I blew on that degree was justified on that subject alone and much more useful than the 30K my mate wasted on an MBA (his words!)
I’m working with startups these days and I’m always surprised at the lack of simple systems in place even in start-ups that are scaling to the next level of growth. Just to be clear – when I’m referring to systems in this article, I’m talking both technical and non-technical systems (as in humans…)
Most Startups (and often scale-ups) do not have systems. Zero. Zip. Zilch. Nada. They are not even sure what a ‘system’ is. That’s not unusual or unexpected because in our ‘daily life stuff’ we aren’t necessarily aware of how systems fit into our existence. That is a little strange when one considers that systems underpin our entire individual and universal existence.
So what is a system and why is it important to know about it for your startup? (Hopefully you aren’t falling asleep at your desk right now……….)
A system is generally defined as a group of “interrelated or interacting elements”. This is a bit too simplistic and the extended definition of a system is how these elements interact and behave that is most important. Behaviour is a whole other blog post for another day and a genuine passion of mine.
It’s important that you get simple systems in place before you even think about scaling and building the culture (the “vibe”….) of your startup. Many established large organisations around the world still use the McKinsey 7-S Model to build systems (to me “model/framework” and “systems” are interchangeable terms)
I generally don’t like conforming so I’m not a fan of overusing old models/ tools that the Human Resources world is so fond of. But lets not throw the baby out with the bathwater as they say and the McKinsey 7-S model is still a good place to begin. I have modified and changed the wording of the model to be relevant for startups because I generally don’t like being told what to do and models should always evolve.
When you go through the model, think of yourself as a ‘Startup Producer” (as in the entertainment industry definition of producer) and consider these simple system steps …
Strategy– many startups (and established businesses for that matter) are missing a strategic plan (not even a one-pager!) Strategy is just a wanky word for “way forward”. This can absolutely change at any given time and probably will but get it down on paper /beer coaster anyway at the beginning.
Strategy tells your ‘people’ and the world where you are now and where you want to be. The plan should clearly state how your crew (even if you don’t have one yet) contribute to that. People need to know why they are turning up for work everyday and dedicating their valuable time to your business dream.
Structure– who is making the decisions? What is each person’s job? How does your start-up function? Who talks to whom?
Systems– hmmm well in a purist sense, good systems should drive innovation and good function. However in Australia, one of the most regulated counties on earth, ‘systems’ means polices, procedures and legislation. Play the game because accessing government (and university) grants without this stuff can stifle cash opportunity for your start-up (i.e a good system will alert you to any tax incentives you can claim for your startup)
(Stated)Shared Values– I’m changing the word shared to stated. I don’t think it’s reasonable or practical to expect your staff to ‘share’ your values. You might value thinking and talking about your startup ideas 200 hours a week. I’m betting there are some great people out there that don’t. State your values, know that everyone values different things (great for diversity!) and focus instead on shared behaviours. You, the founder (and any board directors you have) model behaviour (good and bad)
Behaviour stuff is a whole other blog post.
Skills– What skills are you needing or lacking in your startup? (Here is my 2 cents – it is almost always leadership / people/ communication skills
Are you providing adequate training for your staff? Do they feel valued and appreciated by your commitment as CEO/founder to ensure that they have the appropriate skills to achieve the vision of the organisation?
Style – Does the CEO/founder behave like a despot or dream-driver? (Go back to my “2 cents comment” on skills)
Staff– all I can say is if you are about to get your first staff member/s on deck, you are at a very vulnerable and critical stage of your startup journey. This one is huge and you stand on the cliff of success or failure without a good team.
There is so much more to ‘flesh’ out in this story but this blog will get you started if you don’t know where to begin. And if you got this far in the article, well done for getting past the words “Systems Thinking……”
Mckinsey 7-S and me.