Podcast overview: Systemization: it has to happen if there is to be long-term growth and if the business owner or corporate manager is to “have a life.” Without a scalable plan for organizing things, additional growth only magnifies current inefficiencies. Presented by Sam and Josh, it’s a 24 minute cut-to-the-bone session, aimed at getting the systemization job done starting NOW!
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Business Systemization: Four Mistakes You Do NOT Want to Make
Work the System Enterprises Podcast July 7, 2015
Josh Fonger: [0:00] Welcome everyone. This is Josh Fonger with “Work the System.” Today we’ll be talking about business systemization, four mistakes you do not want to make, and I have my business partner here. Sam, are you there?
Sam Carpenter: [0:13] Hey, Josh. I’m here, and you’re right, these are mistakes you do NOT want to make if you’re going to systemize your business.
Josh: [0:20] We’ve seen them all, really, so we’re going to be compiling what we’ve seen in the field, and Centratel, and give you the best of the best. Take some notes. Don’t make these mistakes. Along the way, we’ll certainly tell you what to do; what the right approach is to systemizing your business.
[0:37] If you’ve not been to our website before, it is www.workthesystem.com. There you can download Sam’s book (for free) and you can also check out our new website. We just did a major update. You can see some of the resources we have and some of the other things that can help you out with your business.
[0:56] If you haven’t been tracking with us very long, the big focus of our company is to help companies have dramatic growth, simplify their operations, and provide predictable profits using systems. That’s what we do. It’s based on the book “Work the System.”
[1:11] Speaking of books, Sam, tell us the good news about your new book.
Sam: [1:15] It (the manuscript) went to the publisher last Monday and (getting that done) that was an epic success. Because I’d been working on it more or less since Work the System: The Simple Mechanics of Making More and Working Less came out in 2008. I’ve thought about it for four years, and I’ve spent pretty much the last three years putting it together and the last two years writing it.
[1:38] It’s about half the size of Work the System and it’s geared toward people who don’t have businesses…maybe people who want to have a business someday, but it’s more directed to the general population.
[1:51] (I’m) pretty excited about it. It won’t be published till January. I’m sure some of the things we’ll talk about today, they’ll be out of that book. But I’m very excited about it, and anybody who’s a writer out there understands what a great day it is when you send your manuscript to the publisher.
Josh: [2:07] Great update, Sam. I know the book is already good, even though it’s not even finished yet. I read the manuscript just a couple days ago, and read it in one day which I don’t do with any other books. It’s very compelling. If you’re interested in systemizing areas of your personal life, your health, your relationships, anything non‑business, it’s a great read.
[2:31] Let’s get back to the topic of business. That’s why we’re all here today. Either you are an online business owner, or traditional business owner. (Or), you are in the corporate world trying to systemize your departments. That’s what we’ll be talking about today. Making sure, as you make this shift, that you don’t fail. You succeed.
[2:50] Let’s just jump right into it, Sam. Tell us the first pitfall, the first thing you don’t want to do.
Sam: [2:57] There’s a number of things you don’t want to do, but this is really important. You and I talked about what we thought were the most important four things. There’s about 20 or 30 of them, actually. This has to do with seeing your business as a separate entity. I’ll talk about it in a little while, but we do not want you in the middle of your business. That has to change.
[3:24] You’ve got to see your world differently. You’ve got to see your life as a collection of systems. You know why? Because that’s exactly what it is, and that’s what your business is. You’ve got to see your business as a collection of independent and separate systems.
[3:41] We’ve got so many new people here, Josh. I think since the last podcast we’ve…Our subscriber base has jumped 400 percent or something like that, and we had 5,000 ” listens” on the last podcast.
[4:01] We’ve got a lot of new people out there. If you haven’t read my book, what it talks about, the thread of it, is this business I bought over 30 years ago and I still own today, Centratel. It’s a call center. It started out as a confused mess.
[4:18] I had an insight, and I changed everything. I went from 100‑hour workweeks to 2‑hour workweeks and I make a lot of money now. Where I just survived for a decade and a half, this last decade and a half has been wonderful.
[4:33] I couldn’t do that until I got myself out of the middle of it and started looking at it as a separate entity, as a separate organism. We’re having the same thing now, Josh, with Work the System (Entrerprises)…these other businesses we have: Coaching, software, educational products. This is the struggle for me now as the CEO, and we have you and Andy, and Marcello over in Italy, and we’ve got people all over the world.
[5:02] My job is to make sure that the documentation gets done correctly and that we keep this as a separate entity from our personalities and from us. We work real, real hard to get that separateness. That has to happen.
[5:21] We’ve made this transformation with this primary insight in hundreds of companies hands‑on, talking to the owners with our coaching and consulting. People have done it with just the book, Work the System: tens of thousands of people. Every single one of them has to look at their business as a separate entity. It has to happen. You have to get outside of it.
[5:46] While I’m talking about it you have to face reality. You have to face reality! It’s what it is. This is what my new book is about. By the way, the name is “The Systems Mindset: Managing the Machinery of Your Life.”
[6:04] This has to do with not just your business, this has to do with every element of your life. My point here is that I faced reality 16 years ago now. I was in the middle of my business. I thought I was terrific, I was a hero.
[6:18] I was wrong. You have to get out of the middle of it, and that’s it! You just have to do it. You have to automate, delegate, delete. You have to treat it as a separate entity. For no other reason than someday if you want to sell it, you can’t sell yourself.
[6:33] You’ve got to have it separate, so no matter what you do in your business, whether it’s online, bricks and mortar, or you’re working in a corporate department (you make that corporate department separate). Or if you have an online business or a bricks and mortar business, it’s got to be separate from you. It has to happen. You cannot fail to do this. A separate entity made up of separate systems.
Josh: [7:00] Perfect, Sam. I couldn’t agree more. Without that mindset shift, everything else is just not going to happen. As the leader, you need that, and you need to instill that into your team.
[7:11] The second one, I would say the second main reason I see companies fail when trying to make this shift is they get the mindset shift, and then they just jump in. Jump in two feet forward. They don’t know what they’re doing. They don’t have the core framework of processes, procedures, templates, project plan. They don’t actually know how they’re going to lead this change.
[7:34] The clearest example for me would be an aluminum door and window company I worked with in Australia. That’s exactly what they did. A very ambitious owner, very smart. Had a great company going, but he wanted to go to the next level. He read the book, he said, “This is what we’re going to do, and we’re going to start documenting our systems. We’re just going to do it.”
[7:53] It failed. They had literally a mutiny on their hands in their business because they were going in all different directions. They didn’t have a clear direction of where to go. They were missing the fundamentals. It’s the stuff we talked about in the last podcast, “Break on Through NOW! Quickly moving from chaos to control.”
[8:12] If you missed that, go back and listen to it. I won’t go into all the details, but that’s what they were missing. This particular company, and a lot of companies I work with, they get started, they fail, and then I start working with them afterwards and give them those fundamentals. The Strategic Objective, which is also talked about in your book. The Operating Principles. The Working Procedures. The templates; a clear project plan.
[8:35] All that structure needs to happen, because what you’re doing when you systemize your business is you’re making a change. A dramatic change. Step one, it’s in your head. Step two, you’ve got to have these fundamentals, or you’re going to fall off the tracks.
[8:50] We’ve seen it so many times. To save money, to save time, to do it right…get the fundamentals or you will fail. If you don’t have those, listen to that podcast and it’s all revealed.
[9:05] All right, Sam. Let’s have you start talking about number three on our list.
Sam: [9:09] OK, Josh. This next point relates to the prior point that I made. This has to do about not being the centerpiece of your business. You have to make this mindset shift and see your life as a collection of systems, and your business as a collection of systems.
[9:25] You have to see yourself as a process and as a system, too. If you’re in the middle of it all, you’re going to fail, ultimately. You’re going to fail with systemization and ultimately you’re going to have trouble with your business.
[9:38] I made a little list here, Josh, of different businesses I’ve dealt with in the last week, of people who are in the middle of their businesses. I am buying a new house. [laughs] Pretty excited. A little bigger house than I have with a great view, and I hired a real estate agent, and she’s going 80 hours a week. She does very well, but she’s in the middle of everything and she can’t go anywhere.
[10:05] In this last week I have a coach at the gym and his name is Jim. He does very, very well, six figures, with his coaching. He’s in the middle of it, and he knows he can’t continue that. He told me that yesterday, and we’re going to work together on that.
[10:21] Then I had the garage door repaired last week, and I couldn’t get the people to show up. Why? Because it’s a small company and it’s real busy right now here in Bend, Oregon. He and his helper and the girl in the front office, they’re just really slammed, because they’re in the middle of everything, and this owner is in the middle of everything.
[10:43] The janitor at our building that we just bought –we had to let our previous janitor go – and we got a new janitor. It’s a problem because they own the company, these people, and this janitor owns his little janitorial company and he’s pulled in a million different directions. I can go on and on and on. You see it everywhere.
[11:02] Once you get the systems mindset, you see it all around you…that 9 out of 10 businesses could do so much better if the proprietor wasn’t in the middle of everything. How do you stop it? You stop it by ADD. [laughs] Automate, delegate, delete.
[11:19] There’s so much we don’t need to do. There’s so much that can be delegated to somebody else – which is the heart of it if you run a business…a bricks and mortar business where you’ve got a number of people working for you. Or if you have an online business where you have people scattered all around. You’ve got to be able to delegate.
[11:35] Then, of course, automate the best you can. You’ve got to do your documentation. Sorry about that. There’s heavy lifting at the beginning, but it’s heavy lifting right now for most businesses anyway You’re working hard.
[11:48] At Work the System we have a lot of new subscribers to the website and a lot of people who haven’t quite read my book yet. Very quickly: I had 100‑hour work weeks and made no money and now I work 2 hours in the same business, and it’s 20 times the size as it was back then.
[12:05] I was the centerpiece of the business, and I thought I was so heroic. I could do everything. Oh, I could do everything, and I talk about it in the book. It’s the thread that goes through Work the System. In the first decade and a half, I was just in the middle of everything and it was a nightmare.
[12:23] This mindset-shift happens all at once, and the benefits start instantly. Then you have to stick through it for the first few weeks…couple of months. Josh, that’s why we coach people over several months. We don’t want them to slide back into their old habits. But really, once you get going and you see the difference it makes in your life and your bottom line, you’re never going to go back. You’re never, never, never going to go back.
[12:48] At first you have to slow down, roll up your sleeves, put in the work, and don’t make the mistakes. We’re talking about four of them here. That is not to be the centerpiece of your business because if something happens to you, your business is gone.
Josh: [13:04] Great examples, Sam. I see that all the time. A lot of the coaching clients I work with right in the beginning, they are their business. The process is: let’s start isolating some of those systems that you do and documenting them and delegating them and deleting them, automating them. All those things you talk about. That’s key. If you don’t do that, you’re going to be stuck. You will be the bottleneck in your own business; in your own success.
[13:28] The last point I want to mention is having a business model that can actually scale. You might have a business model that’s working for you now. It’s providing a source of revenue, some profit. If you do want to make this shift to growth, you need to shift your business model. It could be your pricing, it could be your offering, it could be your location, your method of delivery, who you work with. It could be a number of things.
[13:53] That’s really what we focus on in the beginning, because if you don’t do this, you’re going to be stuck. You’ll be making systems for a business model that won’t take you to where you want to go. It won’t take you to that next level.
[14:05] Two quick examples. One is a hypnotherapist in California I worked with and he did everything. Very smart. He has a successful business in that he was making money and making profit. He could help people lose weight, quit smoking, sleep better, overcome anxiety, fears, phobias. Really you name it and he could hypnotize you and solve your problem.
[14:30] He was working like a dog. (but) his business was not going to grow like this. He was online, he was offline. What we had to do is simplify his business, because it was just him and an admin person helping him out there. To really grow and to scale, he had to make an adjustment. That adjustment was to just focus on the core business, which was losing weight and quitting smoking. That was it.
[14:55] Then he could raise his prices, he could build better products and services, he could sell those offline and online. It really revolutionized his business. He was charging twice as much, doing half as much work, and it came from simplifying; understanding exactly what his growth model was going to be, and building the documents to scale in that way and take him to the next level.
[15:17] The second example I’ll share is a hair salon on Georgia. She had three stylists working for her, and they had a very unique way that they would do your hair. They specifically targeted African‑Americans and they had this very specific styling that they would do. People would drive literally 200 miles to this location to get their hair done.
[15:44] We had to make a tweak in her business model because she was not excited about opening up multiple locations, and she was not excited about training people in her local area to be her competition. That was not her goal.
[15:57] She wanted to take what she learned and go online with it, so it was about packaging and documenting and systemizing every single thing she did. She could grow her localized business and train her staff, and be less involved. That’s what she did. She worked herself out of a job in her location, but then she was also building this product so that she could open up her salon styling program through the nation, because it was very unique.
[16:24] Again –d another way to scale; she had to make an adjustment. She had to shift the way she was doing things. She had been a stylist for 20 years, so this was a shift. She had the right strategy now, she had the mindset shift, she had the documentation. She had all the pieces you need. The sky is the limit for her business now, which is very exciting.
[16:44] Sam, do you have any concluding thoughts?
Sam: [16:48] Let me do number five here. This is a mistake you do NOTwant to make. I’ll just generalize Work the System. I think about you and me and Marcello, over in Europe , and Andi down in Bend, and I happen to be up in Vancouver, Washington right now as we record this. Our communications are incredible. We’ve got our code writer in Romania, Manu.
[17:14] We have people all over the place and we have incredible communications. We use email, voicemail, the EVM thing; we use group mail. We use all kinds of methodologies to communicate with each other, and we all have a style and it’s all pretty much the same. There’s nobody not responding. I never leave a message for any of you folks out there without getting a response. I like to think you always get a response from me.
[17:44] You’ve got to have a good communications strategy. For instance, online, bricks and mortar, working in a corporation…especially working in a corporation. If there’s somebody who’s just not going to want to communicative with you very well, you’re going to have to fix that. You’re going to have to fix that somehow. The communications strategy has to be good.
[18:06] As long as you’re systemizing your business, you might as well set up a protocol for that (communications), and it has to be written down, so everybody understands what it is and what the rules-of-the-road are. You need everybody within the organization that’s going to be part of the communication strategy to have input, or you won’t have buy‑in. You’ve got to have everybody buying into what that communication strategy is.
[18:27] I won’t go any more about it, but that’s a fifth mistake you do not want to make if you want to be successful systemizing and if you want to have a successful business.
[18:37] Then I guess what I’d add, Josh, is that the competition out there is not that great. As I said before, look around at the businesses around you in the little town you’re in, or if you’re doing online stuff, people you deal with out there. People are not organized, generally. If you can get systemized, you’re going to be way ahead of everybody just because you did that. Because nobody does that!
[19:02] We’re the only ones that help businesses do that, Josh. I’ll just throw this in, a little bit of a boost for ourselves, maybe. What we do is help people systemize, there’s nobody else who does that.
[19:17] Then another note I made while we were talking here, Josh, and I love talking about this, but I’ll make it very brief. Becoming successful in business and systemizing your business is not about your IQ or your education level or who you know or how much money you have, and I like to say “or who your daddy is.” [laughs] Or even how much you work, how hard you work.
[19:40] It’s about your machine. It’s about the separate entity you have, this business. It’s about the systems within the business. It’s about the systems, it’s not about you. If you’re going to have a separate entity, you’ve got to get out of the middle of it, and you’ve got to start seeing your life as a collection of systems…which it really is.
[20:00] I’ve got a chapter in the new book about this. It’s very important that you don’t think it’s all about you. It’s about the machines that you create, the machines that you document, the machines you get going that you can convince other people are wonderful machines (so they will) help you operate them.
[20:18] Then I think the last thing I’d say is don’t procrastinate. You’re working your tail off already. You might as well get systemized now. Take action now! Success isn’t going to happen unless you make it happen. It’s never going to be handed to you. You have to do it yourself. You have to get a grip on things and manage the machines of your life. This is what you need to do.
Josh: [20:40] Perfect, Sam. That’s coming from someone who knows, who’s lived it and has proved it out. The concluding thoughts I have, probably just a summation here. Number one, get the mindset shift. You have to do that if you’re going to make your business shift. In the mind first.
[20:57] Number two, make sure you know the fundamentals. Make sure you have the strategic objective, operating principles, working procedures, a procedure project plan. You have a plan in place so you can actually be effective with this strategy. Because it takes some time. There’s some heavy lifting. If you’re not going to lead people properly, you’re going to have failure.
[21:16] Number three, keep yourself from being the bottleneck by not being in the middle of the business. You need to make that shift. You need to isolate the things that you do, document, systemize those things. Automate, delegate, delete, ADD. You need to make that happen. Otherwise you’re going to continuously be gumming up the works personally, as the owner.
[21:37] Then number four. You need to be willing to adjust your strategy to make sure it’s scalable. Be willing to tweak it, to adjust it. Possibly you need to focus it, possibly you need to expand it into a few other areas you weren’t used to before, but be willing to make that shift if you’re going to go to the next level.
[21:54] Then the last one, the bonus one. Make sure your communication strategy is rock‑solid and clearly communicated to everybody. Everyone’s on the same platform, using the same methodology, having the same ways of speaking consistently so you can really have that, I call it grease for the wheels, so to speak. It’s very important.
[22:15] That’s pretty much it. Certainly go to our website, www.workthesystem.com. It’s new, it’s revised, it’s updated, there’s plenty of resources there, documentation resources, and we have software, we have a coaching problem, we have consulting we have “Done for You.” A lot of things you can get right there if you want to move to the next level.
[22:34] You can also subscribe to the channel. We’re going to be releasing a podcast likely every month about ways you can systemize your business. The most timely announcement is our group coaching. Our next coaching starts July 13th. That’s when the early bird begins.
[22:53] If you’ve been on the fence about the coaching program, we do it three times a year. We’ve had, as Sam mentioned, dramatic growth since the last time offering this. I think it’s over 400 percent at this point. We’re growing quickly and we hope to have you in that next group session.
[23:12] You can go to workthesystem.com to find out more about that. You can’t sign up yet. You can get on the waiting list, but a week from now, that would be July 13th, we will open the doors for our next session.
[23:26] That’s pretty much it. Thank you for listening to “Business Systemization: Four Mistakes You Must Not make.” Hopefully you were taking some notes. Hopefully at this point you will not make these mistakes, but instead you’ll make the appropriate adjustments. Thanks a lot, Sam, and thanks everybody.
Sam: [23:43] Thanks, Josh. Catch you later.