One of the most common challenges for entrepreneurs, CEO’s and other executives is the age-old dilemma: how much time should you spend working “on” your business instead of “in” it. Companies of all sizes, industries and geographies tend to struggle with finding the right balance.
Michael Gerber was one of the first to articulate this common challenge in his book The E-Myth Revisited. To summarize the general dilemma: executives at organizations often get consumed with “doing” the work rather than “building” a business that enables the work to get done. Although the book focuses more on this challenge in the context of startups and small businesses – where this potential pitfall is especially prevalent – it is something that companies and organizations of all sizes face.
For example, if a business hasn’t built appropriate business processes, defined organizational roles and responsibilities – along with other aspects of business infrastructure required to scale a business – the organization is more likely to experience stress associated with lack of business process clarity. In this type of environment, executives spend more of their time putting out fires, handling crises and managing exceptions instead of spending their time on the strategic aspect of “building” their business.
On the other hand, executives that spend more of their time working on their businesses tend to experience less organizational crises, stress and confusion. In addition, their business operations tend to run more smoothly and predictably. Perhaps most importantly – at least to most of our clients – is that these types of businesses are highly scalable and enable faster growth than their less effective counterparts. In short, these executives have taken the time to build a well-oiled machine, and as a result they spend less of their time managing problems and struggling with scalability.
This philosophy is especially important when considering how to manage your operations and IT infrastructure. Implementing a more effective ERP system is a way of working on the business and creating that consistency, predictability and scalability that successful organizations are vying for. Many executives have solved the struggle with the “fires” caused by outdated legacy systems and broken business processes by installing ERP software; however, simply implementing new enterprise systems isn’t enough for those that really want to work on their businesses. Too often, executives think that the ERP software itself will be the silver bullet for improving their business operations.
In addition to addressing their enterprise software, executives must also facilitate business process reengineering as a way to optimize their operations, deliver better results and create a foundation for future growth. The more successful organizations devote the time, energy and resources required to thoroughly improve their businesses – often times before they implement new ERP software. If they move too quickly they run a high risk of “paving the cow paths” or implementing software that simply automates their already broken, inefficient and non-scalable business operations.
Finally, effective organizational change management is crucial when working on your business, whether as part of or independent of an ERP implementation. Clearly defined roles and responsibilities, clear communication and understanding along with performance measures are all critical success factors while building a scalable business. Again, too often we see executives under the impression that simply implementing a new ERP system will fix those problems, but if anything, they exacerbate those organizational “people” issues while simultaneously undermining effectiveness and scalability along the way.
While it may sound easier said than done, working on your business rather than in it will determine your organization’s success and growth in the future. However, once you get your ducks in a row, life becomes quite a bit easier, less stressful and more effective for you, your employees and your customers.
Learn more about how to save time and money with proper planning by registering for our webinar, The Path to ERP Implementation Planning.