You’ve probably heard it before: disorganisation is bad for business. But just how bad is it? And are you really disorganised anyway? Sure, there are little things that can be addressed, but overall, everything appears to be fine. Or is it? Let’s take a look at what disorganisation actually costs your business and what you can do about it.
I challenge you to take a step back and look at your business objectively and from a high level. This means you need to put your CEO hat on – the one responsible for viability and growth – and examine how every facet of your business and every process interact with one another. This will require vulnerability on your behalf. You may be surprised, and maybe even shocked, at what is actually going on in your business.
It’s not surprising that most businesses end up becoming disorganised. Let’s face it: the majority of small or family businesses are founded by someone technically skilled in a particular field and due to no fault of their own very little or no business knowledge. For example, if you’re a plumber or a lawyer, you will have put in many years of training and education, been employed for a number of years and mastered your craft, and then you decide to go out on your own. But you’ve spent absolutely zero time in all that training and education learning how to run a business because (excuse the sarcasm here) “that’s not a handy skill to teach anyone”, and so you wing it.
You do your best, you work tirelessly, and before you know it, you’ve achieved some success. Now you’re growing, making money, and you may have even employed a few people. But between all that work, you’ve never once thought to ask yourself, “How do I get more organised?” “How do I systemise?” “How do I improve on what I’m doing?” “Are the ways we do things the best or most efficient ways to do them?” Furthermore, you’ve never thought to tell yourself, “I should document things to make it easier, and create policies and procedures so that I can leverage what I have”.
If you have thought about any of the above, you are in the minority of business owners. An even smaller portion of those who have thought about these things actually start working towards getting more organised and systemised. So I don’t blame you. Starting a business is so much work; you are always busy, and the last thing you feel like doing is addressing matters that aren’t that pressing, especially when they have to do with the future. You’re too busy fighting the 100 fires that popped up today or dealing with whatever is demanding your attention the loudest.
Common examples of disorganisation and how to prevent them
When I talk about disorganisation, some examples include no or very little systemisation, no or very little documentation, such as policies and procedures, a nonexistent or loose management structure, no formal strategy or goal-setting system in place, an ineffective HR function within the business, a lack of staff training, very little team management, and no culture of continuous improvement.
These are all good examples that I’m sure are true for most businesses, but what’s the actual damage? How much does it cost you? Let's have a deeper look at three common examples.
Wasting time. One major consideration is time, both yours and your team’s. You are losing an enormous amount of time by being disorganised. I recently had a potential client tell me that she wasted two hours looking for a document she needed to work on because she couldn’t find where her business partner saved it or even what it was called. This isn’t an isolated issue either. Did you know that research shows the typical executive or business owner wastes 150 hours a year, or almost one month, searching for lost information? Say you’re worth $200 per hour; that’s $30,000 per year you’ve just wasted looking for lost information! Now multiply that by how many people are in your management team and the number grows.
My solution is to have a structured file system that matches your company structure. If used correctly, it is impossible to waste two minutes looking for something, let alone two hours.
Ineffective communication. How often do you find yourself repeating what you’ve said to your staff because they are constantly seeking clarification? Perhaps your initial communication wasn’t effective, or you don’t have any documented policies and procedures in place, making you their only source of knowledge. Did you know that 280 hours (or seven weeks) every year are lost by staff seeking clarification due to poor communication? Say you’re paying your staff members $50 per hour; that’s $14,000 per staff member. If you have five staff, that’s $70,000 per year!
My solution is to document each role in the business. That way, everyone knows what they need to do and how to do it. You cut down on the verbal communication required and, therefore, the need for clarification and repetition. You also have the added bonus of not having a business dependent on one individual, as everything is documented, especially the tacit knowledge.
A lack of strategic direction and goal setting. This is another example that commonly leads to disorganisation. Most businesses do not truly know where they are trying to go, and even fewer set goals and have systems in place to ensure these goals are met. For most businesses, a lack of strategic direction and goal-setting represents lost growth well into the hundreds of thousands. How much is this costing you? Imagine growing at a rate of three times your current trajectory. When using my management system, my clients generally achieve their goals three times faster than they did before.
These are just three examples. Now imagine you calculated the cost of every aspect of disorganisation in your business. The dollar value that you are losing each year is enormous. This is money that could be in your and your team’s pockets, money that could be invested back into the business, or any number of other uses I’m sure you could think of. It’s definitely not doing anyone any favours by being unnecessarily wasted.
Wouldn’t it be fantastic to have a business where everything just worked? Where everything is calm internally, despite the terrain you operate in. Where everyone on your team knows what to do and what is expected of them. Where you have low staff turnover and people want to work with you. Where you fix problems before or as soon as they occur, so you’re not repeatedly dealing with the same issue. Where the business runs independently of you, and you actually have a business rather than just a job.
This business utopia is available to every business owner. You simply need to raise your awareness of what is really happening in your business and then devote the necessary time and energy to creating and implementing the systems and documentation that facilitate the change you seek. If you don’t have the time but are present to the fact that things need to change, you can always outsource it to someone who does this daily, such as myself. Remember that you, as the business owner, create your own reality. You create everything in your business, so why not create it right and make your life easier in the process?