A company with a clear structure and established systems ceases to rely on specific people to run it; instead, it runs itself. Ensuring structures and systems exist across an organisation will maximize efficiency and increase profits, therefore enabling the company’s longevity.
Femi and Jambo Home
Femi founded Jambo Home three years ago. The company is a home décor store that sells affordable trendy home furniture and decorations, with a strong African influence in their design.
Jambo began with one physical store in Lagos. Initially, there were only eight employees besides Femi, and although each had a primary responsibility area, there were no formal job descriptions, job titles or even a reporting structure. When decisions had to be made, all eight employees went directly to Femi. Because of this, Femi had not been able to take a single vacation day in the company’s first three years of operation.
Beyond Femi’s increasing exhaustion level, Jambo faced several other significant challenges in its early years. Although the store seemed to be doing well in terms of customer traffic and sales, the store rarely returned a significant profit in a month. More than once, a lack of cash flow delayed salaries. Additionally, Jambo purchased its stock from both domestic and foreign distributors, and there were often issues with incorrect or missing orders. This made advertising difficult as Femi could never confidently predict what products the store would have in stock. Finally, on a few separate occasions, Jambo lost money in a purchasing transaction as the supplier in question spoke with two different employees who each agreed to two different prices. When notified about the discrepancy, Femi had to agree to pay the higher price. Such incidents only increased Jambo’s financial strain.
Despite these challenges, thanks to Femi’s relentless marketing and networking, Jambo continued to survive and its customer base continued to grow. As Femi began to think about the next phase of her business –growth—she knew she needed advice on how to proceed.
Strengthening the Foundation
Femi’s coffee date with her mentor, a professor from business school, began with the professor asking Femi one simple question: “What would happen to your business if you were not there tomorrow?” Femi thought for a moment, but did not take long to arrive at a conclusive answer: without Femi, there was no Jambo.
The professor urged her to consider the implications of the situation and direct her attention to addressing it. While growth would remain a goal, Femi had to make achieving sustainability the primary objective of Jambo’s next phase. Without an organizational structure, documented systems, and clear procedures that everyone in the organization knew and could run if necessary, Jambo would always be reliant on Femi and its current employees. If one of them left, they would take years of valuable information and knowledge about the organization with them. Such institutional loss would devastate the company.
Back at Jambo, Femi held a meeting with her team to share her revelation and invite her staff to collaborate with her on charting a path forward. The next few months would require serious work; however, Jambo would ultimately be infinitely stronger for it.
A year later, the internal operations of Jambo were almost unrecognizable. Employees were grouped into departments, each lead by a member of the Senior Leadership Team. Each employee had a specific titles, a specific set of responsibilities, and a direct line manager. Only the four members of the Senior Leadership team reported directly to Femi
Jambi still faced financial challenges and growing pains, particularly as the company had decided to move most of its businesses online. To ameliorate the anticipated financial strain during this transition, Femi and the Head of Finance developed a set of precautionary measures. There were also significant changes within the company’s Finance team itself. The previous employee in charge of Accounts was fired after a thorough review of the company’s accounting procedures revealed that he had been systematically stealing from Jambo for months. This prompted Femi to ensure strict boundaries and controls within finance as well as redundancies across other teams so that critical figures such as sales and inventory were cross-checked multiple times.
To reduce her personal burden, Femi spent much of her time transferring her exemplary skill and knowledge of advertising to the marketing team. This process allowed for an in-depth examination of her strategies, enabling the team to refine and improve each strategy before implementing it.
Each team documented the main systems that their department required so that the company had a comprehensive operating manual. Departments also scheduled quarterly reviews of their systems and established clear benchmarks for reviewing whether the systems had been effective. Where systems were not working, the teams would engage further to improve them.
Perhaps the greatest sign of the company’s progress: Femi took her family on a vacation for the first time in four years. Jambo managed just fine without her.
Leaving a Legacy
When Femi started Jambo, she had envisioned a store that would be Nigeria’s first choice in home décor. However, her dreams did not stop there. Femi wanted to create a store that would become an enduring institution and survive hundreds of years after her. She wanted to leave a legacy behind, and Jambo’s sustainability was critical to this goal. Investing the time and energy to develop Jambo’s structures and systems proved a crucial step in this path.
An Integral Component to Business Success
Although the story of Femi and Jambo is fictional, it is based on the reality of many companies and business owners in Nigeria. There is no shortage of brilliant ideas or business strategies, yet budding entrepreneurs often neglect the nuts and bolts of a business as they are solely focused on surviving from day to day. However, the results of long term thinking can actually alleviate many of the daily pressures a business faces.
The chapters of the book “Critical Strategies for Building a Sustainable Organisation” outline the benefits of structures and systems and the specific consideration a business should take in designing the processes for various departments. As businesses differ widely in objective, industry, size and stage, this book focuses on general guidelines that must then be adapted to the specific context of a given business. After reading this book, a business owner should be convinced of the need for systematizing their company but would also have actionable guidance on how to do so.
To purchase any of our publications in Lagos and across Nigeria, please contact email@example.com or firstname.lastname@example.org or via telephone on 012706542. Visit www.leapafrica.org for details of our bookstores in Lagos.