As you might guess, I have read numerous articles and books about various management
systems. Interestingly they all include systems and processes as one of the core components in
their management or “operating” system. Systems and processes make your organization
effective and efficient and provide the consistency needed to meet customer expectations. Of
course, some systems serve internal “customers”, others serve external customers, or both. In
either situation, reproducible results are necessary to have a sustainable and scalable business.
It is a specific accountability of senior leadership to ensure systems and processes are effective
and efficient. Therefore, they should be documented and reviewed at least annually to this end.
Employees need to be able to trust the system and therefore should avoid workarounds which
undermine the systems.

When I was given the challenge to turn-around a struggling business, I learned that the
production planning system was no longer used. Sales forecasted future expectation, but the
production department ignored the forecast because it was always overly optimistic, and
production was blamed each year for high inventories. Therefore, production made the same
quantities each year, waiting for back orders before making an adjustment. When we expanded
sales by moving into adjacent markets, I had a near disaster on my hands with widespread back

Let me restate the situation from a different perspective. Senior leadership put pressure on
sales to be optimistic about the forecast, regardless of serving only declining markets. When
the actual sales did not increase, sales missed inflated bonus targets and production missed
inventories goals. Sales hated being told to put in false forecasts each year and did not feel
committed to achieving them. Production just ignored the forecasts to avoid high inventories.
These systems were neither effective nor efficient, plus the root cause of this issue lay at the
feet of senior management.

Senior leadership is accountable to ensure systems and processes are well designed, effective,
efficient, and deliver consistent outputs. Every organization needs systems, and the systems
need to deliver to expectations.


Comments are closed