There’s a lot of discussion in small business and start up literature about creating a “system” that runs your business. You document your processes and hand those documents off to your people.

You script your back office. You script your sales process. You script customer support. You define your technical expectations and you script follow up. All good stuff, in my opinion.

Recently, I  heard a prominent business guru speak about this issue and he strongly urged small business people to focus on flexibility and put systems in the back seat.

He said flexibility, not systems, are your key advantage over larger companies.

Wow. I totally disagree.

Flexibility is important in competing with larger companies, but that additional flexibility comes into play a small percentage of the time when your people need to know that you trust them to use sound judgment to handle the unexpected.

That’s great and small businesses do this a lot better than large businesses, where the CYA decision is almost always the best career decision, even if it isn’t the right decision.

But in a general sense, I strongly disagree with this advice: Startup companies and small businesses desperately need systems.

Entrepreneurs and small business owners will come into the office each day and re-invent the wheel, if they’re allowed to.

We like to tweak and we don’t like to delegate. And we’re often perfectionists. So we’ll basically do the job ourselves or micro-manage the people who do it, if we’re allowed.

That urge has to be fought and one of the best ways to fight it is to create a system and hand that system off.

If you’ve got to fiddle – and every business needs the knobs fiddled in order to refine and encourage growth – Tweak the system, not the work.

Here’s where systems break down, however: You can’t systematize trust.

Many companies seek to create systems not just to provide consistent client experiences and consistent quality. They create systems in order to enforce control.

They create systems to try to check that no one is stealing, no one is cheating and everyone is pulling in the right direction. Sometimes – hopefully – these systems involve incentives.

Many of these controls are necessary, but they only catch outliers – the large fraud. They can’t save a company’s culture or its direction.

If you have people routinely gaming the system, no amount of “incentive” or “control” is going to save your business. You have to choose to work with trustworthy people. Systems are no substitute for hiring trustworthy people.

And I’m using trust in the broadest sense. In a small business, you can’t afford dead weight.  You have to be able to trust not only that your people aren’t stealing or cheating, but also that they’re not wasting their time or the company’s resources.

The margin for error is too small: In a start up you have to be able to trust that your people are making you money.

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Kraettli Lawrence Epperson

Managing Director at JumpPhase Ventures

This blog is dedicated to providing advice, tools and encouragement from one entrepreneur to another. I want to keep this practical and accessible for the new entrepreneur while also providing enough sophistication and depth to prove useful to the successful serial entrepreneur. My target rests somewhere between the garage and the board room, where the work gets done and the hockey stick emerges.

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