Episode 103 Podcast Transcript
Speaker 1 (00:00):
A lot of business owners think that systems are going to slow them down or box them in, or somehow the growth’s going to stop that idea of iterating it, keep doing it over and over again. Keep taking little steps. That’s how you keep growing the business and growing it in a way that’s sustainable. So it’s really important to do that. The systems aren’t the enemy, they’re the answer.
Speaker 2 (00:22):
Good day everyone. Rob Kropp and Dan Stones here from Pravar Group and welcome back to another episode. How are you, Dan?
Speaker 1 (00:28):
Very good, thank you Rob. Hi everyone. Looking forward to today. In a way, it’s an interesting topic for us systems. It’s a word that it sounds a little bit boring it. A lot of people think it sounds like paperwork or a waste of time, not important and clearly not urgent. We get that and I think it’s important that we say that upfront, right? It might be true, but the lack of systems is one of the biggest things that stands in the way between a business owner and their freedom. And we talked about a little bit about this in episode 55. We talked about how freedom comes from structure and the people that you put in place that gives you freedom. I think everyone understood that really cool. But the thing is that’s only one side of the equation. The other side is the other half, which is systems, which is what we’re going to talk about today.
(01:11):
So while structure helps give you an idea about who is going to do the work systems help you out in terms of how is the work going to be done, and more importantly, how’s it going to be done when you are not there? And when you combine those two, that’s where the magic really happens. So today we’re going to break down those three reasons why systems aren’t really optional in your business. And the very first one is that systems create efficiency. It’s amazing. I think Rob, time and time again, people misunderstand how much of their weight gets killed just by doing things repetitively. The number of times you’ve got to do the same thing over and over.
Speaker 2 (01:44):
Especially in the early phase of business when you’re trying to get it up and out of the ground. And when I talk early phase, I’m still talking a business doing still around the million dollar mark because the business is solely reliant on you to do all the thinking and make all the decisions. And that’s almost where the repetition comes from because in that early phase of business, you are the business to some degree, aren’t you?
Speaker 1 (02:09):
Yeah. And it’s the first time you’ve encountered these things in your business. I don’t know how we do it. Let’s figure it out and we sort of figure it out as we go. So I think that’s the thing. No one really writes it down the first time. It’s almost like we’ve got to find our fate, we’ll figure it out, but there’s a real transition point at which just figuring it out needs to step up into that next level.
Speaker 2 (02:29):
It’s when you first get your first couple of employees on and when it’s just you make the decisions, you do the work and you kind of get on with it, but all of a sudden now you’ve got a couple of tradesmen, couple of apprentices, and maybe your bookkeeping around you. All of a sudden it’s not just you making the decisions, it’s people then asking you the questions and those questions comes multiple times a day. It’s explaining the same process over and over again. And this is where the repetition comes from. It’s because people, different tradesmen, different apprentices make different mistakes on different job sites. Because the reality is as you start building your team, you can’t be in all places at the same time. And this is where as you start to grow, somewhat start to feel a little bit more trapped than ever because it’s like, well, I knew that by hiring a grand crew around me, I thought I’d get my time back. But to some degree you feel more trapped than ever because as you start to grow, you’ve got your own job to do, but then you kind of got to do the thinking for everyone else, don’t you?
Speaker 1 (03:35):
Yeah. And it’s interesting because the context changes on a site. The job sites change, projects change, customers change. The way you do it doesn’t necessarily change, but the way it comes out, and you can check yourself as you’re listening to this, do I hear the same thing? Well, I thought it was different if your staff saying, I thought it was different, and you then have to repeat yourself over and over and over again. This is one of those things where you are wasting time having to restate things even though it’s the same process, it’s the same system to be followed. It’s just because they’re in a different space, a different slightly different job or whatever it is. They think it’s going to be something completely different and they go off the rails and try and do it a whole different way and try and reinvent the wheel if you like. And it’s not even just the complex things. It’s those simple things over and over again, not answering the same question about how to fill in a time sheet or how to clock into a site, whatever it might be for the fourth time that week to the six different person. It’s that sort of thing that we’re trying to get away from.
Speaker 2 (04:30):
Yeah, definitely. And I think, I don’t want to say that that’s why I don’t like this first reason. It’s not that necessarily saves you more time, but that’s why I like that It actually makes you more efficient because you as the owner become more efficient and the business becomes more efficient because it’s getting rid of the repetition of that conversation. So you’re not repeating yourself around, this is the standard of what the job cards looks like. There’s just a systems around how job cards get done. It’s not how do we do this particular component of a job? There’s just a system of how we do that job. It’s not around, oh, how do I log into the job management system again and then look for that question. Well, there’s a system around that. You don’t have your admin person saying, oh, what do I do here around this invoicing? No, there’s a system for how you do your invoicing. So that’s where the efficiency gains come in because things get done faster, more consistent, which we’ll talk about shortly to a better standard because it’s not so reliant on you having to be the bottleneck. That’s the problem as you’re growing a business, if there are no systems, you are the bottleneck for everything. And that’s why I like to think that that’s where the efficiency gains definitely come in.
Speaker 1 (05:50):
Yeah, absolutely. The second one you mentioned there, and it’s obvious when you look at certain organisations that systems create their consistency, the results you get come out of the systems that you put in place and it’s the consistency even when you’re not there. So right now, ask yourself, where does the quality of work land? Where does the level of service go when you are not there? For a lot of people, it’ll depend on who shows up that day, who showing up on site, who’s doing the job. And if you are on site, chances are the job gets done the right way. If you are not there and you’re relying on whoever it is and you’ve got no systems in place, it can turn into a real coin flip really quick.
Speaker 2 (06:30):
This is a huge one because when it’s just you in the business, you know that you do the job at a high standard because your reputation is at stake. And the moment you start hiring ground crew or bookkeeper or admin or even project manager further down the line, you can’t be everywhere and you all of a sudden hire team to create leverage. But all of a sudden now you’ve got four trucks on the road doing four different maintenance jobs at any given time in that day, or you’re running multiple projects at the same time where you can’t be there upholding the same standard across the board. And this is the biggest problem for a businesses that’s growing is that often the quality slips and the quality slips because the business owner is phasing themselves off the tools. And as you said, it all depends on who and how the ground crews show up or who and how your office crews show up to get the admin type of work done. When you become less intrinsically involved in the doing of the work, this is where the business can grow. But quality slips and what can go from a good reputation and a profitable business can turn to a bad reputation and unprofitable very quickly because systems aren’t in the middle maintaining a certain standard or a consistency of how things get done.
Speaker 1 (08:00):
So doing the right things the right way is really, really important. And when you are setting your team up for success, what success looks like, what the right way looks like, it either has to have you there so you can quality check everything as you go, or they rely on that system you’re putting in place so they can consistently do it without you being there. And your expertise, your years of experience, your guardrails that you use can be put into the system that you put in place. And again, that just breeds that quality whereby if you step off site, it’s not that everyone’s just going to fall off the cliff in terms of the level of accountability, the level of service or the quality that they’re offering when they’re doing the job.
Speaker 2 (08:39):
Correct. This is what happens when a business grows without system is, as we said in episode 55, you’ve got to get the right people at the right time to deliver the right work, but you then have to support them by systems. And examples of this is is that there’s a system for how admin answers the phone. There’s a system how invoices go out the door. There’s a system, how you liaise with customers on site. There’s a system for how job cards get filled in. There’s a system how data management gets done. There’s a system for how variations are captured, like this is what we mean by creation of systems. And when that becomes standard, it becomes consistent, but then it doesn’t matter if it’s Bob, Mary, Frank or Tom doing the work across the board. As your business grows, the quality maintains to a certain standard and then it’s your job as the owner is to manage to that standard, manage to that quality, manage to the system rather than you doing the work. And this is the transition that happens over time. You go from doing the work to building a team to managing the team to that standard or to that system that you create over time. And this is the evolution of a business owner. But without that system, that’s why it feels like you’re running a daycare centre because the reality is everyone’s just off trying to do the best they can with no guardrails in place and you are having to pick up the pieces around the way.
Speaker 1 (10:07):
Yeah it is really hard to be consistent when you are the only one who knows how it should look, how things should work, how the system that you follow. It’s no good having it in your head. And I think the consistency comes before what is our third key reason why, which is because systems let you scale. If you’ve got systems in place, you can then start to bring more people on. You can start to put more structure in. You can start to focus on going out and winning more work, but you can’t grow a business when it’s inside your head or you are required to be in 50 different places at once.
Speaker 2 (10:40):
Correct. And this is where so many businesses go wrong, is that they get, there’s way too much emphasis in the marketplace around scalability. It’s a buzzword, let’s scale, let’s rapidly grow, let’s 10 x man. That’s the buzzword in the marketplace. But when you scale a business without the right structure and the right systems, it’s inevitably going to implode at some point in time because the business outgrows your capability as a leader. It outgrows your structure to be able to support that growth. And it outgrows the scaffolding to hold it all together. And the scaffolding of a business is the systems. And so when you have the right leadership with the right people and the right scaffolding of the systems holding all that together, that’s why a business can scale over a period of time without it coming crashing down. But if any of those elements are missing, you scale and comes crashing because the business cannot be sustainable over a long period of time and be held together without the right structure and the right system supporting them.
Speaker 1 (11:52):
And I think it’s important as we talk this through the idea that there’s only so much that, and it’s not just how many jobs you can take on, it’s not that sort of thing or even we talk about it before cashflow and how much money you’ve got in the bank to be able to do jobs. Yes, they’re business imperatives, but think about it on the basis of systems, how much can you personally manage? How much can you explain? How much can you fix, how much can you supervise? The ceiling is based on your capacity without those systems in place. So without it, like you just said, more just means more chaos more than anything else. There’s just more to be done, more to explain, more to fix. And you do, you often just ramp up the stress, you get more problems and that scaffolding comes crashing down.
Speaker 2 (12:33):
But you get to the point in business, and I’ve been there before when you’re growing a business and you’re like, man, we are getting bigger, but this is just getting out of hand, it’s getting out of control. And so there’s got to be periods of time in business where you take a step forward and grow and you consolidate, take another step forward and you can consolidate. So there’s always periods of building banking, building and banking, building and banking. And in those banking moments, you’re allowing the business’ infrastructure to catch up to the growth that the business is happening. Sometimes you’ve got to build infrastructure before you grow. Other times you’ve got to grow it and allow the infrastructure to go at any one period of time. So when you’re growing or scaling a business, it’s not just a straight line up. There’s got to be times where you take your foot strategically off the accelerator to be able to go, you know what? We’ve got to let our systems evolve to where we are going and you’ve got to allow them to catch up. And so systems are never a one and done thing. You always iterating or making improvements and installing new systems as you grow and they just get bigger and better to suit the phase of the businesses in at that period of time.
Speaker 1 (13:48):
Yeah, it’s a really important point. The systems you run with one crew versus three crews are going to be different. You’re not going to do your systems once going, Hey, we started this whole conversation. I’m getting out of the ground. I’m going to go from what’s in my head to having something written down. Now my crew can run that. Great. Now I’ve got three crews in place. You’re going to need a whole nother set of systems. So you’re going to keep iterating as you go. As we talk about, you’re going to keep redesigning these systems, keep optimising these systems, they’re the backbone. And as the building grows, the scaffolding goes up, which is what you want. And it’s part of your favourite word, which is leverage and systems provide that.
Speaker 2 (14:25):
Correct. And that’s why you can see a business that you can see someone doing a million dollars doing 70 hours a week, or you can see a business owner doing 5 million in a 40 hour week. That bigger business is making more money with less time and pressure and stress on the business owner. The only reason they’ve been able to get there is through good structure and good systems. And so what systems enable us to do is create that scalability and it enables the business to achieve more by being less reliant on the business owner because then it becomes a real business. It’s something of value, something that makes money over and above just a wage for the owner. It’s a tangible asset that you can build or potentially sell down the line, but it’s supported by good structure and good systems and that’s what creates the scalability in the middle.
Speaker 1 (15:23):
Yeah, it does. And I think as we sort of come to the end of our three things hopefully, and it’s probably worth reiterating these three reasons should be enough to start getting people to see why it’s important to build systems, but it’s not going to necessarily, it’s still hard to do because where’s the urgency importance lie? That equation that we always talk about it’s systems are rarely urgent, are they? The urgency is dealing with the problem or re-fixing it or telling the staff again what they’re not doing or what they are doing. That’s what gets taken up by urgency. So you’ve got to really commit to this. So understanding these three principles, it’s heftier than it sounds.
Speaker 2 (16:03):
I look back on our journey in Pravar, the first five years was just me being a one man band. So I didn’t need a lot of systems because it was just Rob coaching. The first time we hired a coach. It was like, okay, well we had no systems and it was very much let’s just get in there and work it out along the way. But there’s been so much evolution along the way. I didn’t wait for all the systems to be created before we started growing. The way that I’ve approached it is in the early days it was like, where is the repetition? Where are the inconsistencies or where are the things that I’m lacking visibility over? And what it meant was I just over time had a little note section of my phone going, I need a system for that. I need a process for that.
(16:53):
We need to get better at that. We need to get better at that. And so we created systems on the fly. So I think a lot of people can get caught in this thing going, I’ve got to set my business and set it up, and they read the E-Myth and think, well, I’ve got to systemize my business McDonald’s and I’ve got to get all this done perfect before we do all this. That’s not the case at all. You’ve got to do it along the journey and systemize along the fly. And like we say to a lot of our clients, it’s one system at a time over time. It’s one strategic play at a time over time. And if you’ve got the ability just to keep rolling out and iterate and make changes and improve things along the way, you’ll look back in a couple of years time and go, man, look how much we’ve changed and evolved over that period. So take the pressure off yourself. Don’t think you’ve got to systemize everything from here on in. Just choose something that’s grinding the most amount of gears and systemize that and then just move on to the next thing.
Speaker 1 (17:47):
Yeah, I like it. Really important stuff. A lot of business owners think that systems are going to slow them down or box them in, or somehow the growth’s going to stop that idea of iterating it, keep doing it over and over again. Keep taking little steps. That’s how you keep growing the business and growing it in a way that’s sustainable. So it’s really important that do that. The systems aren’t the enemy. They’re the answer.
Speaker 2 (18:08):
Yeah, systems don’t slow you down. Like the creation of systems I don’t find exciting, and I think for a lot of business owners, we don’t find it exciting. So you’ve got to really get the people in around you to help you develop the systems. Not the most enjoyable thing of documenting systems and rolling them out, but it definitely doesn’t slow you down. If anything, it actually speeds you up because it takes all the pressure valves off, it removes the stress, it creates the efficiency, it creates the consistency. It makes you go faster and more efficient and be more profitable rather than actually slowing you down.
Speaker 1 (18:44):
Yeah it takes out, there’s a word, friction. It takes out the friction in the business that the steps in between get smoother, like you’re saying, which is really, really important as you evolve and grow. I think we can jump into a challenge here. I’ve got a challenge for as you listen to this and this week, the way to do this, like you said, I’m really mindful that we don’t want people to jump in and go, right, business is going to stop while we systematise our business. That’s not what we’re talking about. And it’s not automation that’s a given as a result of the system. So what we want you to do this week is just start small. Pick one little part of your business, one process, one thing that you can think of. Think of it right now. What’s the thing that you’re sick of explaining over and over and over again?
(19:28):
It doesn’t matter what it is. It could be how to clean a vehicle up at the end of the week. It could be how to put stuff back into the shed. Whatever it is that you are sick of doing over and over again, that can be your starting point. So start small, and then what we want you to do is get that thing that you say out of your head and onto paper. And when I say onto paper, however you want to record it, but get it out of your head and really just understand what success looks like. How do you do it, how do you want it done, how should it be done in the future going forward for this phase of the business? And just start putting that on paper and then put it in a way that you can summarise it. So get it out of your head, read it a couple of times and then go, right, I’m going to write this out as a series of steps or a process or a number of paragraphs, whatever it is for you, but have it in a way that you can then take it to your team and say, Hey, we’re going to put a new system in.
(20:18):
I want you to hear this and I want you to give me your sort of feedback or ideas on it, but this is where we’re going to start. And just give yourself that gift of going from the point where it’s in your head frustrating and annoying and just swimming around to it’s on paper to the fact that you’ve had one go. It’s sort of improving it and then discuss it with your team and just let that one thing evolve from there. And pretty soon you’ll go and do another and another. And all of a sudden the business starts to get into this mode of, Hey, we can do a system here. We can do a system there. We like working to systems and people buy into that and start to follow it. So really important that you understand every system you build is one thing less that’s going to tie you to the business going forward.
Speaker 2 (20:58):
It is, and this is where when we say it sets you free because this is how you can have holidays, this is how you can have breaks. This is how you can not be chained to the desk all day long because people, your team revert to the systems, not revert to you for everything. And Dan’s right, it is as easy as grabbing your phone and recording a little video around how you do something. It’s actually that easy of going, okay, guys, this is how we do something. And then send it out to the team or talk about it in your toolbox talk or it’s as simple as opening the notes section on your phone, hitting record, talking into it around how you do something. Copy and paste that into chat GPT and say, turn this into a five step thing around how we do this around here. There’s your system. You roll out to your toolbox, talk to your team next week so you don’t have to overcomplicate it. And I think, Dan, that’s the beauty around the challenge you’re setting them is do one thing, make it simple, do it straight away and roll it out to your team, and then that becomes the snowball effect of the system’s thinking or the system’s culture that starts within the business.
Speaker 1 (22:04):
Yeah, we talk about a lot, don’t we, in terms of less is more. And I think when you get your system right, you’ll find that you’re not adding more to the business, you’re actually taking things out, and you’re actually going to end up taking away complexity, taking away friction. It’s a taking away as opposed to an adding on top of that’s what’s really at the guts of putting in a good system.
Speaker 2 (22:24):
Yeah. One of my favourite sayings is complex fails, simple scales, and so relevant when it comes to systems is that complexity around how a business is hung together is where it fails. But the scalability of the business is through the simplicity of the way that the structure and the systems hold that business together to unlock the scalability.
Speaker 1 (22:48):
Yeah, absolutely. And they’re simple enough to work when you’re not there.
Speaker 2 (22:51):
If you’ve enjoyed today’s call and you know that you need to really not only sharpen up your structure, but also implement great systems into your business, and you just don’t even know where to start, but you know that you want to have a business that runs without you, not you tied to it every single day, then book in your free discovery call@strategysession.com.au. Let’s talk a bit about where you’re at, where you’re trying to go, and we talk about the systems and structure that are going to be able to set you free from the day-to-day grind. Get stuck into today’s episode, especially the challenge that we set into the end, and looking forward to hearing from you around how today’s episode has helped you out. Until then, looking forward to coming back to you next week with another episode here on The Trade Den. Until then, take care.
Speaker 1 (23:37):
See you soon.