The 400-Hour Workweek by David Vasilijevic - HTML preview

CREATE AND IMPROVE SYSTEMS: TEST, MEASURE, AND SCALE

You must make a system for EVERYTHING you need to do more than once. Systems and delegation work hand in hand. One always calls the other one. To run a growing business, you need to set up a system for everything. If you take the time to set it up once, you’ll build your business faster and avoid wasting time forever.

There are tasks that generally only happen once during the life of your business, such as getting your EIN number, building a website, designing your business’s logo. Once it’s done, it’s done once and for all.

Systematizing your business enables you to release more control to your employees, gives you the freedom you truly want, and also ensures you get your desired results from your employees, even when you’re not around.

Anything that demands your personal involvement and time … you won’t be able to scale. Forget it. You’re tied to it. If your personal time is required, your potential growth is inhibited.

MAKE A DIFFERENCE

To help you shift your mindset the right way, think like a franchisor. Act as if your business is the first of 1,000 of the very same units to follow. So how do you go from one to 1,000? It boils down to building a business on the back of SIMPLIFIED and IDIOT-PROOF tasks. That’s why you must prepare a detailed instruction manual, where you’ll list ALL the tasks that are carried out in your business by any person, any given day of the year—exactly as McDonald’s does, as Starbucks does, as 7-Eleven does—as any successful franchisor does for potential investors. They call it a bible.

When every PROCESS is documented and every single task broken down, everything becomes much simple. Can you imagine if you plan, test, and establish policies and systems for every job in your company, how easy it would be for a newbie to take over a position? That’s how you make people work the right way. Let them get familiar with your processes and systems. Then, once they feel comfortable, let them know that, unlike McDonald’s, you also want them to be creative and that you’re open to new ideas.

That’s also one of the very first things a potential buyer of your business will look at: how TRANSFERABLE is it? How SYSTEMIZED is it? Is it a headache to take over or a turnkey operation?

Take note on everything from how files are saved to how decisions are made; from how to handle phone calls with the entire script to how to do the bookkeeping; from each step of the management of your projects to how to track prospects.

Even when certain actions seem obvious, make a note of the steps and approaches. What is intuitive for one person may not be to another. By archiving the detail of all procedures, new members of the team will be able to understand the decision-making process.

The beauty is that even if people change, the process doesn’t, and your clients won’t notice any change. THAT’s the key.

You get it out of your head and out of your people’s head; put it down on paper or capture digital copies in a format that anybody can understand. If there are other partners working in the business with you, have those keep close records on how they manage tasks.

WHERE TO START?

Here are a few activities for which you’ll need to design and document systems:

• Attracting prospects
• Manufacturing goods
• Answering the phone
• Upselling to your clients
• Pricing your products
• Purchasing goods
• Developing products

Here’s what you want to do, in the right order:

1. GOAL—You need to start with the goal. What do you need the system for? For example, to answer the phone the right way.
2. DETAILS—Document the process, in this case the script: “Good morning/afternoon, thank you for calling Vee Partners. My name is Nicole. How can I help you?”
3. RECIPIENT—Who is the intended user of this system or process? The receptionist or the assistant? Even if you’re alone, or are a very small team, don’t hesitate to mention who it’s intended for. It’s clearer this way, and it might be useful in the near future.

That’s it. Done. These are the three steps you need to implement for each of the tasks that occur more than once in your business. Of course, the most trivial tasks are the shortest ones to describe. You can describe your process by any means you think is best, whether it’s text, an infographic, or a video.

COMBINE YOUR SYSTEMS WITH YOUR PEOPLE

There are three different kinds of systems:

1. Hard systems: how something looks like, such as logo, uniforms, banner, ads.
2. Soft systems: how you greet customers, how you deal with complaints, how you sell, how you follow up.
3. Information systems: standardized reports or processes, that is, training programs, tracking metrics, website traffic analysis.

Keep in mind that you’re the one who’ll work on the most important systems in the beginning, and as your business grows, when you HIRE people, you’ll get help from your people to define certain tasks, to ensure quality, and to actually IMPLEMENT the tasks. So when you delegate down, you set up the whole system from the beginning, and then you update it with the help of the people who implement it.

Now, when you delegate up the activities that you CAN’T do alone, there are two solutions:

• You enlist the help of an employee who has the expertise and they’ll do the job for you. In this case, you give them the outcome you’re looking for and tell them to take note of all the necessary steps to set up the whole system. For example, you need a design for one of your products or services, so you decide what you want the design to convey. But since you lack the knowhow, you need the help of your designer from the very beginning.

Or

• You get a freelancer to do it. In this case, you won’t ask them to give you all the details of the work they carry out. Your system would be about how to HIRE the right contractor to carry out the work on your company’s behalf. For example, first write down the job that needs to be done; then go online and find some samples that you’ll show your candidates; then go on three freelancer websites (Upwork, Freelancer, and Fiverr) and post your job description; review the proposals; ask each of them to provide you with samples of their work; choose the two best ones.

This diagram summarizes it well:

Now you know when to delegate and when to systematize. It depends on whether you KNOW the activity you delegate, in which case you delegate down. So first you create the system, and then you delegate. Or if you don’t have the necessary knowledge, delegate up, and delegate to an employee or a contractor. If it’s an employee, you don’t create the process and ask them to create it; if it’s a contractor, you create the process detailing how to hire the right contractor.

Besides, you know why you have to create the process for finding the right contractor? Because this is a task that you’ll soon delegate.

DO IT

Whatever you choose, all big corporations have robust systems in place; that’s a prerequisite of growth. It’s not because they’re big that they have systems, it’s precisely because they had systems in place before, that they were able to grow.

Nine out of ten businesses that make less than $5m in sales don’t take the time to set up a back-of-house management system. The reason why most small business owners don’t devote time to systems is because they’re too preoccupied with instant gratification. It takes at least a couple of weeks to take a snapshot of your business processes, and a couple of months to realize the gigantic results.

That’s the reason why nothing grows or evolves in their businesses—because they keep doing the same things. There’s no transformation. That’s really what differentiates serious companies from wannabe businesses.

In Mergers and Acquisitions, some acquiring companies specialize in buying businesses that are not systemized and need a quick fix, and they flip these for a quick buck—like double the price within a year or two. As a business owner, setting up systems isn’t that difficult. You just have to PLAN it and do it. I would say that this activity gives you the best return on investment.

When you set up systems, you get back 2x, 5x, 10x, and even 25x what you invest in energy, money, and above all, in time …

Because the best part is: it’s exponential! The more your business grows, the more time, money and energy you get back, thanks to your systems.

In addition, it also works the other way round: when somebody faces a problem in your company, all this person has to do is to go back to the root cause: what’s the system for fixing this problem, if any? It’s the opportunity to create or modify the system, so such problem doesn’t occur anymore—it’s fixed once and for all.

The business owners I work with don’t always see the immediate necessity and therefore don’t take the time to do it. I’m here to remind them of the tradeoff: either invest a few hours now in establishing the foundations, or waste hundreds of hours later, not to mention money and energy. Many are simply unaware that if they keep doing the same tasks over and over again, it severely slows the whole 8-figure process down.

To scale your business, EVERYTHING is related to what you choose to do and not do. By the way, the word scale is bandied around a lot these days. Let’s define it precisely, as opposed to mere growth.

Scaling: being able to sell more by acquiring more people (salespeople, for example) and automating or building systems to make it easier to increase output.

Growing: selling more by having more customers, more frequent purchases, or a bigger average cart value.

First you scale, then you grow. I always use the word grow, assuming the scaling work has been taken care of before.

WARNING

From time to time, and especially if you continue to grow your business beyond eight figures, always make sure your systems are not overcooked. Use procedures carefully; you don’t want to kill your people’s creativity, initiative, and passion in the process.

For the sake of your employees and ultimately your clients’ satisfaction, you want to engender a culture of excellence, one of fulfillment. Not a culture of rules and rigidity. Good leadership is the development of people, not only the direction of the business. It’s a very important point to tread with caution, but I don’t overemphasize it here because 99% of the time there’s not enough systemization in place in small companies; so there’s little danger at this point, especially for 5- to 7-figure companies.