The Shocking Discovery About Problems, People, and Systems

Spoiler alert: The staggering majority of business obstacles will not be solved by changing your team.

At high-school, during a few summers, I worked in a local firm in my town. They had an insanely high employee turnover — that meaning the proportion of workers who leave during a certain period expressed as a percentage of total workforce numbers. Between two different summers, their team got almost completely renewed, except for few managers.

One time I questioned the director of the company why they changed their personnel so frequently, and he said that he needed to find people suitable for the job, and that was often not the case. Underperformance was not good both for the business and for the employee himself since commissions were a large part of the salary.

Years later, as a hospitality entrepreneur, I was looking for ways to improve my business. That is when I found the writings of John Seddon. A world-renowned service industry expert, Mr. Seddon developed a revolutionary process to discover the source of a business struggle. His process-assessment formula corrects the idea that most problems can be solved by changing people.

Systems are the engines of your enterprise

A system encompasses the elements operating together to generate the results you require. It is the interaction between components like:

• Policies and procedures
• Infrastructure
• Procurement
• Investments
• Human activities
• Behavioral drivers like trust, goodwill, etc.

If each of these elements is a gear, the system is the entire engine. A systems-problem is a malfunction in this engine, in the interaction between the gears.

Now I bet you get why the subtitle of this article states that most business problems are not solvable by changing your team. You cannot solve all the engine problems by only changing one single gear.

The most groundbreaking thing about Mr. Seddon’s process is that it is not made of complex workflows or complicated blueprints. It is entirely built on questions. Questions that you will answer only yes or no.

When I applied this to my business, I realized that my problems were systems-related. The same for that local firm that hired me as a teenager. Try applying it in your enterprise if, at any moment, you thought you have a staff-related problem. It may surprise you.

The process to discover the source of your problems

The questions from 1 to 5 are related to how information is propagated in your company. If you answer yes to any of them, you have an information problem, which is a type of systems-problem.

1 — Does the individual knows what is expected and what “Good” looks like?

2 — Are the right things being measured? Are the measures related to the purpose of the system? Are all the targets assessed with transparency?

3 — Are the measures related to performance over which the individual has genuine control?

4 — Do the measures tell the individual in respect to what he is not performing well?

5 — Are there adequate guides or job aids to exemplary performance? Are they simple?

If you answer no to the five questions above, you may or may not have a people-problem, so advance to question 6.

6 — Is the system — the way the work works — designed in an optimal, waste-free way?

7 — Could these things be better designed to support optimal performance?

If you answer no either to 6 or 7, you don’t have a people-problem but a method problem, which is also a subset of your system. If you answered yes to both of them, then keep answering the questions below

8 — Are there extrinsic motivators (incentives, etc) distracting from adequate performance, encouraging people to get the reward rather than “do the job”?

If you answered yes to this question, you have a motivational issue and it is time to redesign the incentives and rewards of your system. If your answer is no, advance to 9.

9 — Would the individual fail to perform to exemplary standard if their life depended on it — even when they have adequate information, method and motivation?

10 — Does the exemplary performer seems to know something that other people don’t know?

The answer yes to any of the questions above means you have a knowledge-related issue. This means that your obstacle is derived from the lack of training. It can also mean that your training is badly designed. Remember that you don’t train your team only in what you think they should know, but also — and more important - in what the customers want them to know.

If your answer was no, maybe there is a people-problem, but to discover, advance to the next question.

11 — Does the person should have special aptitudes, skills and so on to perform the task in an acceptable, if not exemplary, manner?

Answering yes here means that you have a problem with your selection, and this is very close to having a people-problem. Still, the selection process is also a systems component, and it should be fixed if this is the case.

If your answer is no, advance to the last question.

12 — Is it impossible or uneconomic to redesign the job to achieve sufficiently productive fit between performance and what the individual is willing to do?

If you answered no to everything from 1 to 11, and the answer to question number 12 is yes, it means that you have a people-problem, and this is probably the wrong person for this position.

By following this process, you will realize that an overwhelming amount of obstacles faced in the entrepreneurial journey are not about people, but about systems.

From my experience, more than 90% of the problems are not related to people, but systems. In this case, a yes answer will emerge at some point between questions 1 to 11. In fact, during my 4 years as an entrepreneur, only one time I went all the way to the number 12.

By using this method, you will reduce employee turnover abysmally, and enter into a fast-track to identify problems in your system. Once identified, I highly recommend the ideas from Andrew Grove, the legendary CEO from Intel, to optimize it.

Levi Borba is the CEO of expatriateconsultancy.com and a best-selling author. You can check his books here. This article was inspired by the content of his new book, Starting Your Own Business Far From Home: What (Not) to Do When Opening a Company in Another State, Country, or Galaxy.

This article is for informational purposes only. It should not be considered Financial or Legal Advice. Not all information will be accurate. Consult a financial professional before making any major financial decisions.