We have all heard "rules of thumb" about how to improve the way we do business. In some circumstances these seem to work quite well, but not always.  A rule of thumb is really a formula someone has worked out for their business that seems to deliver results for them, most of the time.  We hear them from acquaintances, from golfing partners, and sometimes from business consultants who offer them as a panacea or cure for business ills.

When we say "formula" we include rules, templates, best practices, and other "cookie cutter" methods, which are simply attempts to transplant methods that worked in one business into other businesses. 

Formulas make sense, don't they? Only if your business is exactly the same as the one where the formula was developed. The problem with formulas is not that they don't work. The problem arises because your business isn't the same as any other business, not even other businesses offering the same products and services to the same markets. 

You're not like other leaders. You have your own strengths and weaknesses, and they're not like anyone else's strengths and weaknesses. And your specific situation isn't exactly like the situation for any other business. 

A business principle is an underlying business reality. Principles are fundamental laws.  You cannot change them.  However by knowing and understanding them you can build these principles into the design of your business.  You get to have them powerfully working for you rather than against you. 

A business principle is deeper, more fundamental than a formula. A formula is a generalized attempt to solve a general business problem. But your problems - and opportunities - aren't general. They're specific. What you need are specific solutions to your specific problems and opportunities. 

You don't want "approximately" or "good enough." You want "exactly right" for your business, and "outstanding" for your customers, investors, employees, and others.

The previous four posts to this blog highlight a number of key principles that you can use in your business. In case you missed them they are:

1. The customer must be paramount

2. Systems are the solution to business frustrations

3. Deliver Full Spectrum value

4. The 80/20 Rule

The next few posts will bring some additional principles for you to consider. Using them as a basis for you business development thinking, you will begin to develop some ideas about how your business might become different.  Now that's a thought!

Leverage yourself and your resources

Effective people know to focus their attention and their resources on the small number of tasks that get the greatest results. It's called the eighty-twenty rule - eighty percent of the results produced by a person or a business are produced by twenty percent of the work. 

There's nothing magic about the "eighty percent" number. Just remember that smart people know to leverage themselves and their impact by putting their attention and their resources where they'll get the greatest results. 

The trick is in knowing which work and resources will get the results they want.

What are the driving forces in the business? That's where you put your attention.

What elements of value drive the customer's purchase decision? That's where you put your attention.

What business systems are the ones that get the most important results? That's where you put your attention.

What are the highest priorities for work to be done? That's where... well, you know.

This basic principle of business development asks you to figure out what "drives" your business, your customers, your employees, and to focus your attention on those drivers.

Value is one of those words that means what you think it means, depending on your point of view. In business, value is anything you provide that someone wants. If you provide it and they don't want it, it's valueless. If they want it and don't get it, it's valueless. If they want it and get all of it, that's full spectrum value.

What might this mean to the people your business touches?

To the owner, value is wealth, profits, satisfaction, making a contribution, status ... and much more.

To customers, value is a good price for the products and services they buy, a good experience of the product and the provider they get it from, status, emotional satisfaction ... and much more.

To an employee, value is a paycheque, job satisfaction, a good working environment, respectful treatment... and much more.

To the community, value is a business that pays its taxes, provides jobs for its citizens, contributes to the positive energy and the economics of the community ... and much more.

The bottom line is this: 

Value is whatever satisfies the needs of anyone having anything to do with the business.

Unless your business can deliver full spectrum value that can be recognised by everyone that it touches then there is nothing that will differentiate it from all the other businesses in the community that are its competitors.  The less it is undifferentiated, the less reason there will be for prospective customers to visit and existing customers to stay, employees to remain loyal, suppliers to offer special deals, lenders to lend, and investors to continue their investment.  The choice is yours.

A business is a system of systems within systems. That may sound like gobbledygook, but it's not. Systems are the foundation of business excellence and the best way to make simplicity out of complexity.

Systemizing your business is the surest way to getting the reliable, consistent, high quality, and cost-effective results that are necessary for success. Systems are the primary tool for building a business that delivers value for everyone.

At the heart of most business frustrations are one of three causes:

• Lack of written policies or procedures
• Faulty documented policies or procedures
• Documented policies or procedures that work if they are complied with, but are not being followed.

A basic principle of business development is the documentation of key policies and procedures to ensure that important aspects of your business are performed the same way every time. This provides everyone that has an experience of your business with consistent outcomes and certainty about what to expect.

Where most small businesses have trouble is knowing how to document their policies and procedures and having the time to undertake a task that seems overwhelming in its scale.

Like all big projects, having a plan and the right tools allows the job to be broken down into smaller tasks that can more easily be accomplished.

The key to success with policies, procedures and systems is simplicity. Some points to consider when documenting policies and procedures in your business are:

• Clearly define expected outcomes or results on every document
• State which position in your organisation is resposible for producing the outcome or result 
• Keep policy documents short and to the point
• Don't mix several policies into one document
• Consider whether a checklist, form, flowchart, diagram etc can replace a narative document
• Keep work steps in action plans or work plans short and to the point
• Number work steps
• Identify resources required to produce the expected result
• Clearly identify expected performance standards and key performance indicators, where necessary.

There are a number of software tools that are now available to help make your business documentation easier.  These include TKO Business Modeller and Touchstone Business System.

These types of tool allow you to:

• Organize your whole business and all its key work into Systems & Procedures
• Produce your own fully customized Operating Manual
• Create a Dynamic Organizational Chart with integrated Job Descriptions
• Develop & Control your business with Action Plans, Checklists, Forms & Policies
• Produce the framework for your professional management system.

No matter whether you use a software tool as described above, or you document and organise your policies and procedures in some other way, the key message is to get started. If necessary, seek help to get it done

Your customers are by far the most important people interested in your business. They are more important than yourself, your investors and your employees.

Unless you serve your customers and fully satisfy their needs, your investors, employees, and even yourself, will not be served, because your business will be nothing without its customers.

Customers vote with their feet and their wallets. The primary goal of your business is to deliver an experience every time your customers visit so that they have no reason to move their affections elsewhere. The experience must be relevant, timely, suitably personal, of value to the customer, and meet or exceed expectations.

And that must be the number one goal of your business, or it wont survive and no-one will be satisfied.