Working In vs. On the System: The Critical Distinction That Determines Business Success

The Operational Trap: Working "In" the System

Working "in" the system means focusing on day-to-day operations—executing established processes, responding to immediate demands, and solving current problems. It's the necessary work of keeping the business running:

• Fulfilling customer orders
• Responding to emails and inquiries
• Troubleshooting operational issues
• Meeting immediate deadlines
• Managing existing staff and resources

This work is essential. Without it, businesses quickly falter. However, when leaders and organizations become exclusively trapped in this operational mode, they face significant limitations:

The Limitations of System Immersion

When you're solely working "in" the system:

1. Reactivity dominates - Your business responds to events rather than shaping them
2. Capacity constraints become permanent - You constantly face the same bottlenecks
3. Innovation stagnates - There's no space to reimagine approaches
4. Problems recur endlessly - You solve the same issues repeatedly without addressing root causes
5. Growth requires proportional resource increases - Scaling means adding people at roughly the same rate as revenue
   
   

The Strategic Advantage: Working "On" the System

Working "on" the system means taking a higher-level perspective—analyzing, designing, and improving the frameworks and structures through which work happens. It includes:

• Redesigning core processes
• Building scalable systems
• Developing people and capabilities
• Creating strategic clarity and alignment
• Establishing metrics and feedback mechanisms

This work is transformative. It changes how value is created and delivered, often permanently eliminating problems rather than repeatedly solving them.

The Benefits of System Design

When you deliberately work "on" the system:

1. Problems are solved structurally - Issues disappear rather than requiring ongoing management
2. Capacity expands non-linearly - The same resources produce dramatically better results
3. Innovation becomes systematic - Improvement is continuous rather than occasional
4. Leaders gain freedom - The business runs smoothly without constant intervention
5. Growth becomes more efficient - Revenue can increase faster than resource requirements

The Critical Balance for Business Success

The most successful organizations we work with maintain a deliberate balance between these two modes. They recognize that both are necessary, but neither is sufficient alone.

How the Balance Shifts Over Time

In early-stage businesses, leaders typically spend 90%+ of their time working "in" the system. This makes sense—establishing operations takes priority.

As organizations mature, this ratio should gradually shift. Mid-sized companies ideally allocate 20-40% of leadership capacity to working "on" the system. The most sophisticated enterprises might dedicate 50%+ of senior leadership time to system design and improvement.

Creating the Capacity for System Work

The most common objection we hear is: "We don't have time to work on the system—we're too busy working in it." This creates a circular trap, as working exclusively in the system ensures you'll never have capacity to improve it.

Breaking this cycle requires:

1. Deliberate calendar blocking - Schedule specific time for system work and protect it rigorously
2. Delegation development - Build team capabilities to handle operational matters
3. Prioritization discipline - Distinguish between urgent and important
4. Incremental approach - Start with small system improvements that create capacity for larger ones
5. Documentation - Capture knowledge to reduce dependence on specific individuals

POPTip: The System-Design Mindset

At Pillar Optimization Partners, we help organizations develop the capabilities to work effectively both in and on their systems. This balanced approach creates sustainable competitive advantage that's difficult for competitors to replicate.

The shift begins with a simple but powerful question: "Are we solving this problem for now, or forever?"

When leaders consistently ask this question, they naturally begin identifying opportunities to work on the system rather than merely within it. Over time, this distinction becomes second nature—creating organizations that continuously improve rather than merely operate.

The most successful businesses aren't just well-run today; they're designed to become better tomorrow. This system-design orientation ultimately determines which organizations thrive in changing environments and which remain trapped in cycles of operational firefighting.

What percentage of your time is currently dedicated to working on your systems rather than in them? The answer may reveal your most significant opportunity for transformation.