Big Business Processes - Real-Life Example

They potentially might want to sell the business at some point in time because they're not immortal. None of us are immortal yet, are we? So you better put something like Systemology in place so all your processes are fully documented.

Hello, it's David here from Systemology and we are shining a light on business owners and sharing their system story. And I'm here with Rick Ivanovich from TRG International. Maybe just to start, Rick, if you can introduce yourself and tell us a little bit about the work that you guys do.

The company was born nearly 30 years ago. Last year, next year. And we started selling accounting systems around the world. And we started with one man, without the dog. I started it in my dining room. And here we are. We've got I don't know how many dogs. I don't think we've got any dogs in the company, but I think, I think we're about 500 people, something like that. And we sell to clients in about 80 different countries. Our main thing is selling accounting systems and everything related to that. Performance management systems, reporting systems, manufacturing systems, you name it. We also have a boutique offshore development center. These are, you know, engineers who do all the programming stuff. We've got about 350 of them hidden away. And we do some people stuff, we do talent, we do all the psychometric testing. And because I like coffee, we have a small coffee shape here in Vietnam as well. Oh, awesome.

I'm curious, like, there's no way that you can grow the business that you have without rock solid systems. So. And, and I'm, I'm talking more specifically about documented process. I'm curious to know, do you see yourself as a systems person?

Yes, I do. I see myself as a systems accountant. Anyway. Yes, I was your traditional management accountant. You know, I was one of those folks who make the numbers look like what you want them to look like and give you meaningful information rather than talk about the past and to do accounting. Accounting is a system. Everything in accounting is a system. We have debits and credits, we have processes for everything. And, and in any business, as they scale you, you better make them good. So I do it for lots of clients all over the world, you know, and our biggest clients, they are, you know, big global listed, multi billion dollar companies. And yeah, we provide them standard operating procedures for all the systems that we provide them. We don't just give them a system. Here are all the processes that go with it. So, you know, you can't have one without the other. Yes, because if, if we're going into an organization and we're changing their systems. You know, here's a new accounting system that you have to use. Yes, I know, a debit's a debit, and a credit is still a credit that hasn't changed for a thousand years. But the, the, you know, your paper process, all your manual processes around it, how you put information in and take it out, how approvals are done, you know, in the more sophisticated systems, they're super, you know, automated. And there's no, there's no paper anymore. There's no paper anymore. But if you think about it, if you've been doing everything manually, how do you change it to everything electronic? Okay, so from the. If we make it really basic, we open an envelope. If you ever get one of them anymore in the post, if that even exists in some countries, and you take out a thing called a paper invoice. You know, what are you supposed to do with it? Well, it's got to go into that scanning machine and it gets scanned and it gets, you know, labeled. And then that gets automatically, you know, through optical character recognition, it automatically makes all the entries into your accounting system and their approval paths. And, you know, it gets routed to the correct person to authorize. Okay, they authorize it. And depending on the value, maybe it's a big amount. So there's a massive matrix of authorizations. So that's how it works. You've got to have that documented. It's got to be documented. How do you pass that knowledge on if it's not documented? Okay, and in some of the industries that we operate in, and the main one is hospitality, think hotels, they have a thing called turnover. You know, people come and go. All right, so if, if you're experiencing turnover in a hotel, just an existing hotel of maybe 20 or 30%, who's going to train all the new people? Now, that's the easy one. Let's flip it around another way. It's a new hotel, there's nobody there, no one's employed, and bang, here's your accounting team of 10 people. If that, if that's not documented, what are they supposed to do? There's no one there to tell them what to do because there's no one there. It didn't exist before. So you know, it. It's just like the manual of how to do stuff. So that's what we do for people, and we do it for ourselves. And then we also start experiencing a bit of turnover. But to be quite honest, we've never had high turnover. That's why some of the people who work for me have been working for 5, 10, 15, 20, or even 25 years, and we're only going to be 30 next year. So, you know, we have this thing is we bring in graduate entry and we grow them. We bring in graduate entry and grow them, and they find something with us and they're happy with us or, or they leave and find a better job somewhere else. Wonderful. Our job's done. That's what we do. We grow people, and a lot of them stay with us. Wonderful. I don't mind whether they stay or whether they go. I want them to have a wonderful future. And if it's elsewhere, that's wonderful. We do have multiple boomerangs. They work for us, they leave, work somewhere else, come back, they leave, they work somewhere else, and they come back again. So we have multiple boomerangs. And, and, and, and that's what we do. So why. I don't know. Maybe it's. It's clear what to do in what we do. As I said, as we were trying to scale, I mean, how do you scale from 20 people to 30, 40, 50, 60, 70, 80, 100, 100, and whatever it is, you know, in hundreds, who's going to teach all those people? So I think it was literally, literally 20 years ago. Okay. The. I spoke to one of my friends who wanted to start an internship program in a university that he was working at. And you might have heard of this university is called rmit.

Yeah.

Which I think is just down the road from you. Yeah, very close. And so we said, yeah, we'll do that. I believe in interns. We'll take some. In fact, we'll take a lot. Give us 5, 10, 20, 30, 40, 50 of them. You know, we were taking them in waves. I thought, okay, what am I going to do with them? I thought, I know these ones from this discipline. They're really good at systems thinking. Okay. Because they were doing what they do. Bis. Bachelor of Information Systems or something like that.

Yes.

I thought, okay, you guys, you. You like systems thinking. You like all that flow charity stuff. Great. You know, So I literally took five of them. Document the entire company, the whole lot, everything. Work in every single department. Write down exactly what they do. And do me some beautiful flowcharts. So we see how the whole company fits together. And that's what it. That was literally 20, 21 years ago we did that. And it was beautiful because then we worked out, oh, this is what we do. This is useful. And then when new people came, we just say, look, this is how it all Works okay. And that was wonderful until we lost it. I think we lost it. I don't know what we got. I think we misplaced it. It was pretty stupid. And then we just got another wave of people. We did it all over again. And then we started formalizing it into, you know, flowcharts. Pretty. But no, we want standard operating procedures. And as our business grew, we said, all right, let's start providing these to our customers. Okay? Because a lot of them didn't want it. They can work it out themselves. And obviously we're going to charge a bit more for this. So we started said, okay, for everything that we do internally and externally, there's got to be a standard operating procedure for it. Okay? Now, one of our core values is kaizen, all right? Which means change for good. Our interpretation is not just the sort of the Toyota way of making things a little bit better. Every single day we do that, but it's also make ourselves better. It's lifelong learning. So every day we've got to learn something. And so you look at everything with the lens of, what can I learn today? Maybe I'll read a new book called Systemology or something like that. Yeah. And as we look at our processes, we say, can we improve the process? So, you know, sometimes arguments flare up between people or between teams. How you were supposed to do that. Now you were supposed to do that. No, no, no, that's. That. That. That's your job. It's our job. Wait, okay, what does the SOP say? Well, there isn't one. Well, there you go. Fantastic opportunity. Go and write one. Okay. Or if there is one. Yeah, but the SOP says this. Yeah, but we wrote that 10 years ago. Do you think it's time that. That, you know, we. We dusted it off and changed it because, you know, things have changed. Nothing is set in concrete.

Okay?

And this is the. Going back to what I said before. Do you want to be an architect to change? Do you just want all these things to flare up and. And the arguments, all those silly things that happen in offices continue because people are hiding behind a set of rules. Okay, yes, they're correct. They are the rules. However, they don't fit your business anymore. They're not relevant. Okay, so you're going to just be reacting to that, or do you want to shape it? Do you want to change the mindset? To be constantly looking at how you're doing things and looking for those tiny, tiny suggestions from anybody? It doesn't matter who it is. Could be the cleaner. It doesn't matter who it is who says, I'll have a look at that. Okay, what is it? Oh, that sounds good. We'll do that. Sticking to an sop, shall we? We'll change the sop. So that's where it came from. That's where it came from. And, and accidentally, you know, with all the business networks that I'm in, I happen to know quite a lot of people because I've been here a long time and some of the people I know are in, you know, the industry that they're in is mergers and acquisitions. So they're always looking at companies to buy or they've got a company to sell and just, you know, in conversations that I had from them on how they value a company. Well, a com. You know, when you buy a company, you're buying what it does. There may be some so, you know, intellectual property there. You might be buying the contracts that it has with its customers. We're definitely buying the. By hoping you're buying the people that are there rather than trying to turf them out. And, and I, what I've seen is those organizations that are more solid, that have been systemized more, that have a very robust system, not just a word of mouth system, but a fully documented system, they tend to get a much higher valuation. And think about it, if you're going to acquire this other company and they look brilliant on paper, financials, wonderful, lovely people. And you say okay, right. Is any of this documented? No, no, no, no, we don't need that. These people were here for decades. They all know. Everyone knows. Yeah, but what happens if they leave? How do you transfer that knowledge? So, so I, I guess what I found out is, you know, as a startup, wind the clock back and you know, you're a handful of years old, everyone knows the knowledge because we're so young. Right. But as, as the firm gets older and as people do start moving in and out and I believe the older a firm gets, the institutional knowledge that you lose is increases. You know, it's not about how we'll, we'll go hire another person in that role. No, what about the, if that person's been there for five years, they got five years worth of knowledge. If it's 10 years, it's 10 years worth of knowledge. If none of that is documented, your knowledge is walking out the door. Those little tips and tricks and little things that they know, they, they just know like that they don't even have to think about it. That's walking out the door. So as far as I concerned, yeah, Put it into a. A standard operating procedure. But that's only one part of it. The other part that I see is how do we capture that knowledge? Because it's not really a procedure. And. And for that we. We created our own academy. Yes. Now, this was triggered by the pandemic. I did say before. We, you know, we sell accounting systems, we implement them all around the world. So what does that mean? You jump on a plane, you go to the other part of the world, and you go into their offices and you do your stuff. Covid was a little bit brutal in Australia. I know you shut down the country for a few years. I'm in Vietnam. We shut down the country here. Well, not we. The country was shut down for a few years as well. So for two years, I didn't fly anywhere and nor did any of our consultants. So how can we implement if we can't go there? All right, so we've had to transform everything we do to a complete 100% remote delivery. How to do that? Well, we better do a lot of documentation. Okay. And not only that, because some people like reading it. We take that documentation and we turn it into an online video we create. We built a video so you can just go on, sign up and learn it. Okay. We offer that to all our customers. They now have, you know, online learning for the stuff that we sell is the only, Only one available in the world. Okay. Which is great, good for us. But we also do it internally, you know, literally HR processes, onboarding processes, whatever processes, they're all there. So if we have a new hire or an intern or anyone, here you go, knock yourself out. Go read it, go learn it. For any job, for any role, everything. So you could be here doing this job, and you want that job over there, great, you can learn it. What's the problem? To me, that just sort of made. Made sense.

I think what I like most about that, and you've got an extremely large business, a lot of the clients, when they first get started with system, they're just getting things off the ground. And sometimes they don't even see themselves as a systems person. And it's good to see, I think that you saw yourself as a systems person, and I can hear it in the way that you explain all this, that it's built into the DNA of the business, which means everybody's going to be aware of it, especially when they come on board and go through your academy and training, and it's part of onboarding for team members. They're going to know, ah, this is just how we do things here. And that that programming starts early on. I'm, I'm just thinking when you read Systemology, because we talked a little bit about this before you, you had this systems mindset well before Systemology was even an idea. And I'm just curious, when you read Systemology, what was that like as far as, like reaffirming what you were doing or if you picked up any new thoughts or distinctions as you went through it?

To me, you know, it's one of those books when you pick up, your head falls off because you're going, you know, yeah, yeah, I agree with this. But, yeah, I agree with this. And it's like, you know, where was this book, you know, when I needed it, like three decades ago? Because I, you could say I accidentally did what I did. To me, it seemed like the obvious thing to do, you know. Why did it seem like that? I know maybe because I am an accountant and maybe a bit anal about things. You know, everything is very, very, very rigid. So they've got to be rules. So that's where I was coming from. But if I didn't have that, would I have bothered doing it? No. You know, we have a lot of people in the company, you know, all the different disciplines. Some people maybe programmers, engineers, accountants, you know, those type of people maybe, yeah, they like that structure and they like the rules. But you know, in other teams, like, you know, in marketing or sales, you know, the salesperson, the growth hackers, all those kind of people, documentation, you know, is. It's something they might not like. So it was a fortunate, fortunate, maybe accident for me or maybe. Yeah, it just happened. So when I read the book, I thought, this makes a lot of sense. This is something that I, if I had read, I could have just followed it. Okay. Rather than I reinvented the wheel a million times and we got to where we are, maybe we could have achieved it, you know, a few decades earlier. So, so, so in, in, in, in future. Yes, documenting things, these processes. I've never really thought about it too much. It's just the way that we do things and it seems obvious to me, but, but as I've, you know, I'm a huge fan of, of Simon Sinek and, and starting with why, you know, I've obviously been in the company for a long time because it's my company. And so I, I keep forgetting the other people might know why we're doing it. Okay. And I'll say something like, yeah, well, we agreed that, you know, the other year they go. Yeah, Rick, 10 years ago, the other year. Really? Okay, so, yeah, maybe we should recommunicate the message then and explain why we're doing this. Yes. So with a Systemology book, it's. I have been pondering. I say, shall I just introduce it as yet another compulsory read? That, that, that's where I am at at the moment. And we have a few books that are a compulsory read because it helps really sort of encapsulate the way that we think and what we really, really, really believe is a key ingredient to. To success. So, yeah, I'd recommend to anyone, you know, if they want to build a business and they want that business to grow and they potentially might want to sell the business at some point in time because they're not immortal. None of us are immortal yet, are we? So you better put something like Systemology in place so all your processes are fully documented. So if you do get hit by a truck or just decide to retire and put your feet up or do whatever you want to do, you've put the maximum value, you put all the knowledge in your asset, which is your firm, and that's very, very sellable. Yes. Yeah.

Wow. Well, I loved the insights that you've provided today, especially, like I said, from the top end of town for people and the relevance that Systems has all the way through that journey to help you get to that. It's one of those master skills that I talk about that all business owners need to get their head around because it touches every aspect of the business and it's about that transference of knowledge which is critical, especially as you get larger and the team gets larger and that tribal knowledge. You don't know what's getting passed and what's not unless you're very particular with that. So what I'll do, Rick, I'm going to include a link obviously across to the TRG International, also your website as well. I know you've got your book and all of your details on that. So I'll link through to the. The Rick Evonovich website as well. Dot com. But yeah, huge thank you for your shares today.