Introduction To Business Systems Thinking

Different business owners that I work with have different levels of motivation. Sometimes it's that sometimes they're looking for an exit, sometimes they're looking to retire, sometimes they want to scale for impact. But like all business, it's challenging. There will be hurdles, and there's no two ways about it. There's a lot of hard work that needs to go in. You've got to be a certain type of crazy to be a business owner and stick with it through the ups, the downs and everything in between.

What do you think makes a good business?

There are a lot of elements, but if I was to single it maybe down to one core one, especially as it relates to thinking about systems and process, it's repeatability. I think it's really important that a business gets very clear on who they're serving and the promise that they're making to those people, and then they're able to deliver on that promise. And it's that delivery piece on the promise that they make in their marketing, in their sales, to be true to their word and to be able to do it consistently and be repeatable. So I feel like that repeatability is missing. Otherwise, it's not really a business. It's more of a job that the business owner owns.

Right. Right. And do you think, I mean, it seems almost obvious then that when. When you're running a good business, the market will respect you or pay you back in a way for operating in a really consistent and repeatable manner. Right?

Yeah. And I think one of the big things is you don't have to be the best, you just have to be consistent. And I think that idea that McDonald's doesn't make the best hamburger, they make the most consistent hamburger. And if you go to Tokyo or if you're in Melbourne or you're in New York, the Big Mac always tastes the same. It's not the best burger, but clients crave consistency, whether it's for themselves. They need to know, if I'm going to buy something, I know what it is that I'm getting, and if I'm going to refer someone or recommend someone, I want to know what they're getting. And that's the missing piece for a lot of small business.

That sounds really almost counterintuitive to where a lot of people start. Right. Whereby they've got financial motivations, let's say, or maybe they're not necessarily financial, but genuine motivations to help as many people as possible, but they take such a bespoke approach to helping. Right. And often to their own detriment. From a financial perspective, but then also the customer's detriment because you can't necessarily be 100% every single day.

Yeah. And a lot of it has to do with like, scalability and depending on the type of business that you're building. As I said, for a lot of business owners, really, they're just building their dream job. And the job you only get paid for when you show up and do the work. And when you're not there, you're not getting paid. You don't really own a business at that point. A business is something that can generate profit independent of the business owner. It works. There's a system that's been identified and it's replicatable and doesn't have key person dependency.

That's a really great point. That separate identifiable unit. Right. In both physicality, but then also intellectually as well. Right. That the business can make its own decisions. Right. And forge its own path with direction. Right. You've got to have a driver behind the steering wheel. But ultimately it's got to be a separate, own, identifiable unit. I mean, speaking to, you know, a lawyer or an accountant for that matter.

Right.

They'll always consider the business to be that separately identifiable unit. And that comes from, I guess, a risk motivation. Right. Whereby you know from if you're trying to protect assets or generate wealth, you want to do it in a way that is most efficient. And, and having a unit that can create its own revenue, take care of its own expenses, but then also grow and thrive based on a strategy is. Is where the value comes from.

Yeah, there's quite a bit like at the start, when someone gets up and running, they do bootstrap it. It comes from an idea in their head. You cut the corners, you just get things into action, you move quickly just to get proof of concept, concept to go, hey, I know who my target audience is, I know what it is that they want to buy and we can actually get clients and deliver for them and make them happy. Like, that's oftentimes where it all starts. The business owner quite often is the technician in that role. And that's like how you get the initial momentum and then it's that transition to then becoming the business owner, which requires a different set of skills that a lot of people really struggle with. And a lot of the behavior and habits that have helped them grow the business and get it from startup to getting some momentum then end up being the things that hold them back because it's been reinforced in their brain that, hey, the reason I'VE grown. The reason I've been successful is because I've done all of these things. I've micromanaged, I've seen over the top of things. I'm involved in every single thing. And that's why we deliver to a great standard. That's why the clients come back. I'm the knight in shining armor who solves all of the problems for everybody. So that behavior gets reinforced and then it becomes really hard to break those habits to put into place what's required to scale to the next level and build the business without key person dependency.

That struggle point for owners, right. That to me is a mental thing more than anything. How do you go about making that mental shift other than knowing? I think if we had to take a poll of a whole bunch of or a sample of a whole bunch of business owners, they would be first to put up their hands to go, well, it's easier to make a decision necessarily than change their entire mindset. I mean, that's true of a lot of things with human beings. But how do you go about it?

Oftentimes it has to do with the picture that's in the mind of the business owner's head. As in they have a picture on what they see their business as or what it looks like or what they're building towards. A lot of technicians, especially if they've just got their own business up and running, they don't have the vision to know what this looks like without them in the picture. So sometimes it's good to maybe have worked in another business that has scaled and grown because then you know what that looks like. Or if you've had another business that's been successful and you've been able to scale it and move through that, it's much easier for the next business when you're in startup mode to know, well what needs to happen for that to happen. Just a lot of business owners, they're really flying blind because they. They don't know the pieces that need to be in place, which. So it really starts with the individual, the business owner and whoever's driving that business needs to have a vision for what it is that they're creating and what the business needs to look at for it to work that way.

Sure, sure. Is that. Is that an insecurity issue or the reason why I say or ask the question. Is it an insecurity issue because the information's available? Right. There are plenty of great businesses out there that, you know, they can model themselves off. And we're at the point where the marketplace is so, so competitive, right. In whatever industry you're in, even if you're a vanguard of some kind of financial or tech startup or something like that, the chances are the model of how the business operates exists already. So there's, there's leverage. So I guess it begs the question, right? Is, is it ego then that keeps business owners from, from maybe looking outside their field of view and going, okay, there's a better way of doing this, or is it the insecurity element whereby they're just, okay, this is what I know, so I'm just going to stick to it.

Maybe it's different for a lot of different business owners. Sometimes it's that they're not looking or they're just not ready to hear it or see it. I mean, you can lead a horse to water, but you can't make it drink. Like, they could be surrounded by all the information in the world how to be successful in their particular industry. But unless you're actually looking for that, it's, I think a lot of business owners, they are very much stuck in the day to day business and they just don't have the spraying space to, to think about anything else. Like they're just in the weeds of doing the work and they start early, they finish late, they got some family obligations, they're doing some stuff on the weekend. Before you know it, there's not that much space, especially if you're involved in the delivery, let alone the whole different role of growing the organization and being the business owner. So, but again, it, it depends. You're right, A lot of people, it can be ego also, because you are the business and you, you love the sense of significance that you get in the business because everybody looks to you for the answer. And that might make you feel like you're in a really powerful position. A lot of it has to do with, well, what type of business are you looking to build?

Sure, sure. I mean, that's really quite profound, actually.

I guess then if you are, I guess, becoming more aware of the opportunities that exist in building out your business and I guess taking a more strategic view rather than going to work as you explained, every single day and kind of, it's Groundhog Day, right. You're passively running the business. If I could, if I could call it that, taking a more active approach to working on the business. Right. That in itself, I guess creates a mental shift, but then taking that a step further. Right. To creating that repeatability in the product that you're offering to the marketplace, which ultimately is Going to lead you to that point. We started with about what makes a good business. Right. All of those individual steps. Right. I think start with one question and it's am I going to do this again tomorrow, or am I going to do this again tomorrow with a external purpose in mind, being that I want to create a good business? Or, I mean, it doesn't necessarily have to be that broad. It can be a lot more specific. But do I want to create a business that means that next year I can not work Fridays? Right. The team is there that that can handle every issue that comes. Comes about, or is it that I want to just double what I'm making or taking from the business or something along those lines? So, I mean, to summarize that point, having an external purpose, I guess maybe ask the owner that question of, okay, is this all that you want, or is there something else that you want in conjunction with what you're doing at the moment, other than just waking up, going to work every single day, going home, looking after the kids, or whatever the case may be?

Yeah. If I think back in my own situation, think about Melbourne SEO Services and go, what was the big driver When I made the change there? It did come from within. And I thought, I don't want to be that dad who's always too busy. So I had a reason because I was consumed by the business. And then I thought, well, I need to make a change. And I've seen other business owners, agency owners, scale and build a business that works beyond them, so I know it's possible. And then, well, why not me? Okay, well, let's have a look at it. And felt like there was a little bit of a deadline because we had a baby arriving. So now we've got a ticking time bomb. So that gave me the direction, the focus to really go. This is what I want. But different business owners that I work with have different levels of motivation. Sometimes it's that sometimes they're looking for an exit, sometimes they're looking to retire, sometimes they want to scale for impact, sometimes. But like all business, it's challenging. There will be hurdles, and there's no two ways about it. There's a lot of hard work that needs to go in. You've got to be a certain type of crazy to be a business owner and stick with it through the ups, the downs and everything in between. So you've got to have a reason. Why, why would you stick with it? Otherwise, why wouldn't you just throw in the towel and move on? Because it's going to be hell to build the business of your dreams. Like it's, it's tough work.

Sure, sure. Well, that. No effort, no reward. What I was going to. Just leveraging off of that point, right. If it's going to be a really challenging point, but you've got the external motivation or that that switch has been flicked right in your mind and you're ready to take the next step.

What are those elements that you need to have, the other elements in your mind that you need to have right before you jump into this giant, giant process?

I think.

You'Ve got to, at least from a systemization point of view. I look at a lot of things through the lens of systemization. You've got to have almost got the battle scars a little bit. Like I feel like having worked in a variety of different businesses and seen different things has really given me the appreciation of systems and how important they are and how they are these core essential building blocks. And I draw a lot on previous experience in businesses that makes me go, yeah, this is the way, like there is no other way to build a scalable business that provides, you know, that key person independence and profitability that the business owner has been looking for. So I know that. So it's now it's easier for me to kind of really lean into that. So.

Yeah, like what other things? I think just experience, I suppose, is a big part and there's nothing to substitute just getting in there and doing it.

Do you think that battle scar point is.

A necessity? And the reason why I say that is I think if we sat any business owner down here right in front of us and espouse the virtues of systemizing their business and making it repeatable and how successful could potentially be that everyone would be on board. Right. And even if they can make that mental switch that they're going to have to be a key part of doing that. Right. And that's an outcome that they want to chase. I think we've all. The reason why I'm saying is I think we've all seen a few people say, yes, absolutely, I want that so much. And then it just never happens.

Yeah. It's funny, I had the discussion with my wife recently about. Because we've got two young boys. It's what makes a great man. And I feel like you have to go through some level of struggle and you need to have things happen for you to form into a great man, you know, under great pressure is how diamonds are formed and you can't. So I'm quite conscious as I raise Our kids, you know, we don't want to serve everything on a silver platter. They, they need to earn their stripes and there's a certain amount of work that needs to be put in to get a great result. And look, if I extrapolate that over to business, I think it's the same. Like, I don't know if you could be born with all of the lessons that you need to grow and scale a great business. They have to be learned from somewhere. Yes, there are shortcuts, looking what other people are doing, getting mentors. There's really no replacement though, for getting in there and doing it and learning it firsthand because you can intellectually get it and say, yeah, systems and processes are important. We all agree that. But how much do you actually lean into that? And do you believe it to the point that you're going to devote time, energy, money, resources to installing it in the business? Or are you going to get distracted when the client's on the phone yelling that they need this or that and you're caught in the thick of it and you can't make space? And so it's. Yeah, I kind of feel like you need a bit of a baptism of fire.

It sounds like the trials and tribulations break down those limiting beliefs. Right. To get you to a point where you almost have to believe that there's a better way of doing it. Right. That this isn't necessarily normal. Right. The pain and stress of working what seems to be twice as much, maybe on a time basis or twice as much in terms of effort than your competitors for potentially a lot less in return, or something like that. That makes you then ask the big question, which then makes you take the big leap. Right. And gives you enough momentum to get through the process.

Yeah. Because when you're in the thick of it, you're replacing time for dollars. That's when you're working in it, you're rewarded for that work that you're doing. The work that we're talking about is more the developing of an asset that doesn't pay immediately. Assets always pay later. We make the investment now, that investment compounds over time and then we get the payoff further down the line. But a lot of people are a bit more short term in their thinking. And, and I think you need to have that discipline to know, hey, there's this different type of work here. Like if I'm the technician, yeah, you should be paid a wage based on the work that you're doing in the business, even if you're the business owner. For that technical work, the role of the business owner is to build the asset, which is different sort of work. And where do you get paid off the asset? That's through profit distribution. You don't get a wage for that. You're making an investment that, that hopefully gets the asset to then, you know, throw some extra money off the top and you should get a deliver like a dividend from that.

Given, given that asset creation piece. Right. How, how does that then fit into the business's strategy? Right. So the, the business owner has, has made that mental shift. They're, they're about to commence the journey, right. They now have an idea about where they want the business to go. So they have that long term vision. They're building out their strategy. They recognize now that, okay, if we're going to create a good business, and a good business is defined by repeatable work, right? Repeatable good work through the leveraging of assets. How do you go about making those assets?

Well, if I think of the system, each system as an asset, really what I'm talking about is identifying what works and building a collection of what works. So each system is just, hey, we've done this thing, this is what works. We've done the work once to identify what that thing is and now we can continue to profit from that one thing because we figured it out. So you're effectively creating an asset out of nothing, like out of thin air, the systems and the processes. That is an asset that helps the business grow and things to be done and delivered to a certain standard without the business owner or without certain key team members. It can also be an asset that when it comes time to sell the business that is also valued. So creating an asset, that's what I love about systems is you kind of, you, you create it out of thin air through the work that you do and the in the trenches, learning what works and what doesn't and then collecting all of these. And then there's a compounding effect that happens. So it's just like Einstein said, compounding is the eighth wonder of the world. And systems have a compounding effect that a little bit of time here is saved, a little bit of efficiency here is gained. We stack all of these systems on top and before we know it, it's throwing profit off the business that wasn't necessarily directly generated from the business owner. It was generated because of the asset that these team members were able to follow and execute and get the great result without the business owner.

Okay, in terms of that process and creating, creating assets, how does the system methodology, right. And then off that System Hub help business owners do that.

Yeah. Well, initially System Hub is the software and it came first. And then Systemology is the teaching, which came second. So when I had the Digital Agency, we realized systems and processes were important. And then it was like, well, where are we going to save them? And we have them sitting in Google Drive at the time, or actually it was prior to that as Dropbox and they were just sitting in Word Documents and it was a little bit clunky. And then we thought, ah, look, this is important. Let's create our own solution to scratch our own itch. So we developed some software and then we thought, hey, a couple other people are asking. And then we launched the software and then that ran for a little bit of time. And then I started to watch and say, why is it some people run with this and make it a success and others don't? Some people will just sign up. And we could tell by looking at the statistics they haven't logged in in 12 months. And at the end of the 12 months they unsubscribe. And then I'm thinking, well, of course you're not going to get the result and you're not going to build up the asset if you're not doing the work. So then we're thought, well, maybe we can create Systemology as a way to almost like for consumption, to teach people how to get the best results from the platform. And again, I wrote the book thinking I want to write the book that I wish I had when I got started. And I knew systems and processes are important, but where do I get started? What's the first system? How do I do the documentation? Where does the documentation get stored? Is my team going to follow the process? What happens if we're updating process? Like all of these questions were circling around and I thought, okay, well let's answer that, put it into a system. And then whether people use System Hub or not, the methodology's platform agnostic. It's really the system for systemizing a business.

It's really interesting here you speak about that because obviously you made the mindset shift, right? And then you went down the road of systemizing your business. But there was all this, this cascading effect of assets, right, Whereby you created the individual systems, put them on Dropbox, which are individual assets in themselves, right? And then. But recognized that there was a better way to do it, right? Which then created System Hub, which was another separately identifiable asset which you could then leverage, right? And all of a sudden, before you know, it, you have a whole new business unit. Right. Of, of systemizing businesses, which again, I mean, not that we need to convince anyone any anymore about the benefits of this kind of approach to running a business, but it literally speaks for itself.

Yeah, I don't think like towards the end I just, I fell out of love with the digital agency work and then I realized systems and processes are these core building blocks that's pretty poorly addressed. And I felt like I could do some really big impact. And that's where I thought, you know what, I'm going to lean all the way in on this because I see the value and whether it's true or not, I've somehow brainwashed myself to believe that every problem in business is a systems problem. So I can. That is quite empowering because anytime something goes wrong, I can think, well, I can go to work on the system to fix it and then we can figure it out, develop our way and then that problem is solved and now we can move on to another problem, the next problem.

That sounds like a pretty significant lesson. Lesson or something to have learned from the process. Right. To understand that okay, every issue has a solution, you've just got to potentially see it through that lens. Right. What other surprising lessons along the journey did you discover that may be counterintuitive to the way that people or their indoctrinated methodology of running business?

Probably the big one that surprised me is that most business owners are rubbish at systems and processes. They're not very good at them, they don't necessarily even like them. And I know just before we started recording, I was talking through a little bit of a story recently where I've been doing some work with Michael Gerber. I talked about it in the book the Founder of the E Myth and he's seen as the godfather of business systems. But in reality, he doesn't like documenting systems. He's not really a systems guy. And then the more that I looked in with all of the business owners that I work with, I realized it's actually pretty normal for a founder, a visionary who gets a picture in their head to move quickly and get things into place. Oftentimes they're not systems people and.

It'S normal. That just means that you need to surround yourself with systems people. And we know that systems driven businesses get better outcomes for the clients, better outcomes for the staff, better outcomes for the bottom line for profit. So we know that that's the case. So business owners should want to build a systems driven business and then business is just easier. So why not recruit systems driven people? And a lot of people don't think about that when they recruit. But you should. Especially if you don't think that you're strong at systems and processes. You should recruit really smart systems and process around you to help support where you're not strong. So that was really a bit of a aha moment for me to go. This is actually pretty normal. And just because you might not be a systems person doesn't mean you can't own a systems driven business.

Right? Right. I mean that seems like a pretty critical takeaway for the business owner out there to understand that. Okay, you can, you get that it's great. But don't necessarily burden yourself. Right. With the obligation of being that person or the driver of it inside the right. Get the benefit of it and ultimately you're the one responsible. But the opportunity is to leverage it to someone. Right. Which in itself is almost starting the journey of systemizing. Right. Because.

That first step forward is actually something that you've entrusted someone else with.

Yeah. And that person we talk about entrusting with and giving someone that role. We call them the systems champion. It probably is. If I had to pick anything out of Systemology, that's one of the most important takeaways is that you need a systems champion that's not the business owner. You need someone who has capacity, someone who is naturally organised, does checklists and it's easy for them because that's just the way that they think. And you put them in the position where you say right. We're going to identify the mission critical systems out of all of our key leadership team members or out of the specific departments. We're going to find out what they do, we're going to record them doing the task and then we're going to turn those recordings into process and we're going to document it and get it all centrally stored. And that's the job of the systems champion. Especially in the early days where because systems are always important but they're very rarely urgent. Which means for a busy person like a business owner, they will never get to it because they're always stuck in focusing on only urgent tasks. Urgent and important is typically what gets the business owners time. Very rarely is it important non urgent work. So at least in the early days when there's a lot of chaos going on. So you need to have someone on the team who at least inches forward, just does a little bit, gets you a little bit closer, builds that asset that we were talking about. You need to start to invest into that asset to before it pays dividends, because you don't see a return straight away. Depending on how much you put in, it could be 6, 12, 24 months before this effort really takes off. And then you're like, I can't imagine doing business any other way. But you don't see it in the moment. Like it's real flat and then it pops, right?

You hit this critical inflection point. As a business owner that's, that's entrusted someone with that, that responsibility. Are there any common misconceptions about entrusting them or even the process as a whole?

I think of the business owners that I've seen and the systems champions I've chatted with. Generally, like the ones that make the best systems champions, they're juniors who may be trained in the technical work, so they might have gone to university. They're the junior mechanic, the junior lawyer, the junior junior accountant, whatever the industry is, the junior person. They're trained on how to do that work, but they don't know how to do or run a business that delivers that work. And what a gift to give them to say, hey, you're going to be my systems champion. They're often young and hungry and ready to learn because they've just come out of university and you say, I'm going to connect you with all of the key people in our leadership team and I want you to capture their systems and process their core tasks on what they do in each of the departments and we're going to organize it and store it. That is a great way for them to learn and they might even evolve. Like I've seen many systems champions move from that role. I've got one client that comes to mind where that systems champion is being groomed into the GM because they became one of the most knowledgeable team members in the organization because they have visibility across all departments, as opposed to a lot of, you know, experts or leadership team members just have visibility on their role or their department. So that finding that person and look, you might not get it right. Sometimes you hire a systems champion and they're wrong. Sometimes they might be in that position for six months, 12 months, whatever. You just want to always have someone in that position so that way it moves forward. And then each new systems champion that might come into the role, you get all of the previous work that's been done. Now they've got a bit of a head start to kind of pick up where that other person left off. So the reality is, unless the business owner lets go, they'll never be able to let go. So there has to become a point where you trust and I feel like systems and processes, it's the easiest way to let go because you're effectively saying, here's my expectation, here's how I want things done. You're capturing that and that's an asset that'll stay with you for life. As in systems that you develop in this business that you're working in right now, you might take to the next business as well. Like it's. You can develop up these assets so there's time and like it's worth the investment in and it makes it easier to let go. Like it's like you said, I mean, the question was, how do we let go and how do we kind of take that first step and how do we trust?

I think at least because you're working on systems, that makes it easier and understanding at some point in time, unless you always want to be the guy or the girl, you're going to have to pass it off to someone else.

Sure, sure. Look that to me using a junior person. I'm sitting here having a massive aha moment because that is completely counterintuitive to, I think, how a lot of people would approach it as first step. Right? Okay. If it can't be me as the business owner, then I'm going to pick the next best thing. It's going to be my next senior person, my2IC or whatever the case may be. Right. That is probably again looking through a Len, maybe 15, 20 years of experience. Right. That sees, you know, five big steps rather than 25 actual steps or smaller steps on creating the outcome just because they've been in it so long and that's how efficiently their mind works these days.

Another thing is just like you, Mr. Or Mrs. Business Owner, they are as equally busy. All of your best team members are busy, which means systems and process development is important, but it's not urgent because this is not something that's bleeding neck. Like it's got to be fixed right now. So it'll go on the back burner. So part of the magic with that idea, as you said, a little bit counterintuitive, is we're giving it to someone who will have space, who will have capacity, who. It will be their top priority because they need to learn to do well in their role. So it's within their best interest to kind of dig into it.

So find the hungry junior.

And task them big and set them out for greatness. What have you seen with some of your clients what can, other than the obvious, perhaps, but what can systemising a business do.

Really? It just helps to deliver whatever outcome the business owner is looking for. Like, we've collected a huge number of case studies and stories, chatting with different business owners and systems champions. And whether you're looking to exit a business, whether you're looking to scale a business, whether you're looking to step back and have holidays, whether you're looking to stories in just about every different industry with every different outcome that business owners are looking for. And systems are a way to get there. Because all we're doing is we're talking about stacking systems what works. And that will never not be a good thing. We're making things that work in the business repeatable and we're removing that key person dependency which then frees up the business owner. It's really all about freedom, the freedom to choose like a business owner. If they want to work in it, great. If they want to work on it, great. If they want to work out of it, if they don't want to be involved, like most business owners don't have the choice. That's the challenge. I don't care what the business owner does, as long as they have the choice on what it is. And systems help to give the freedom, which then means that it's much easier for them to achieve the outcome or the goal.

Right, okay. I mean, feel free to use some examples, but.

In your experience, are there any differences between systemising for exit or systemising for lifestyle, let's say. Yeah, in your experience?

I don't think so, other than, I mean, if you were going for exit, you just think.

Who am I ultimately going to be selling this business to and what is it that they're going to want to buy and what is it that they're going to pay top dollar for? So if you are looking to exit, and I think of Diggy Doggy Daycare, they are a client of ours, they run a doggy daycare center here in Melbourne, or used to run a Jeanette Farren, she'd been in the business for 10 years, decided that she wanted to exit. Exit's one of those things where if you want to exit, you don't decide today and you sell next month, you work towards an exit if you want to get top dollar, otherwise it's going to be a fire sale. So you make the decision, which she did and then she started working towards it. She systematically removed herself from the day to day operations, started not going into the location, started working from home, started to Work on, you know, financial performance of the business and some of the management stuff and really changed her role, got the key team members into place, documented a lot of things and then ultimately, to cut a long story short, she sold to Petstock, which is an Australian listed company. Who bought it and the reason they bought it, they bought it for two reasons. They said one, financial performance and two, it was more about that business being a franchise prototype and they bought it for the systems because they said, well, we can put a diggy doggy daycare into, you know, all of the different pet stock store and you've already done all the thinking, you've got the process. And she got the dream outcome, the dream exit that 99% of business owners don't get. And she got it at a young age and then took a year off, got a caravan, travelled around Australia and then asked herself, what do I want to do next? And now she's moved on to what her next business is. But that, that's the path as far as like an exit is concerned. But you know, there are other stories we can walk through for different outcomes.

Yeah, look, I'm keen to hear as many as possible. I mean, what I'm taking from that example though, as incredible as it sounds, right, is that first of all.

I don't think when she set out or started that business she had ever the intention of selling it to a huge listed like pet stock, right? So for everyone, that is, I got into this because I was a technician or I just wanted to do this thing or I saw a gap in the market and I thought it'd be a nice business, that I could be my own boss, create a bit of freedom and things like that. You can then make that mental shift to go, okay, got something that the marketplace loves, we've commercialized, we've got proof of concept, right? We've been doing it for 10 years and it's now time to look for grander pastures or bigger and better things. I am now going to take that mental step forward and go, it's time to systemize the business. And then all of a sudden if a large listed like pet stock can come along and look at it relatively in comparison small business, right, and say there is a lot of value in that business, right? Because I mean the alternative for pet stock was that they try it themselves, right, that they start throwing them in there and maybe have five years of missteps, right, that might cost them a truckload of money, whereas they could go, here we go, here's a known quantity Acquisition price of X.

Right.

We get a proven concept, it's now just up to us to replicate it. Which is a system in itself, right?

Yeah. And for them, like you want to sell to someone who it's a strategic buy because they're going to pay significantly higher multiple multiples if they already have a whole bunch of assets that they can then leverage off this new ip because now they can add this into their existing business and unlock a whole bunch of additional wealth. So it made sense for them to want to pay a premium for that as opposed to just someone else who might want to take over the business and continue to run it as a sole operator, pet business.

What about on the. On the more lifestyle side of things? Business owners that. Yeah. Or clients of yours that have, that have started the systemisation journey and ultimately succeeded. But what does success look like for them?

There's a great story. I hinted at it, so I'll go back to it, because it involves the systems champion. There's a guy called Ryan Stanard and he runs a company called Stannard Homes out of adelaide. They're a 15 million dollar custom home building company and his daughter Erin is their systems champion. She actually started off as an interior designer in the business and what ended up happening is the interior designer department head ended up resigning. And just before her resigning, Erin had started going, well, what are you doing? And I'll capture some of the process. Like she naturally just did it and then before she knew it, that lady had resigned and Erin got to step up into this role and then Ryan intuitively saw that and said, hey, we should really be doing that in all of the departments, ended up putting her as the systems champion. She worked with all of the department heads, figured out the core processes, got those documented, stored in a central location and he has said that she's now the smartest person in the organisation. He's grooming her to be the gm. And just Christmas just passed. Ryan ended up taking seven weeks off over Christmas, which in the building industry is pretty unheard of in that if you're a builder and you're not working, you're not making any money. So he took seven weeks off, got a caravan, did some touring around Australia. Business continued to operate because of the systems. And I feel like that's, yeah, a great example of someone who kind of, yeah, just took this idea and really ran with it from a lifestyle perspective.

It also, what it really highlights to me is that there's someone that is, is actually not at all a technician. Right. His daughter wasn't a builder. I mean, like I'm willing to concede, obviously she grew up in the environment, right. You'd always pick up on things and whatnot. And, and being an interior designer, I think a lot of people would argue, well, you got to kind of know how to build. But I don't want to disc the impact of the story at all because it's really quite profound that someone that ultimately hasn't done a trade. Right. Is now potentially going to be running or will at some point. And actually, you know, I'm going to give her a lot more credit than that. Is probably already running the building company, right. As it is by taking on that role, which is incredible.

It's funny, the other one that comes to mind, there's a guy, Gary McMahon, and he runs a bushfire management company, Ecosystem Solutions. And I remember when he started working with us, I mean he was working 70, 80 hour work weeks. He was burning the candle at both ends. For him, the problem wasn't getting business. Like he had more business than he knew what to deal with because he was very specialized, very good at what he was doing. So the line of people at his door to do business, but he was just run off his feet doing the work. And when going through this process, he started to systemize everything around.

Where he added his special magic because he was trained in doing the bushfire management stuff. But there's a whole bunch of stuff around that, the administrative stuff, lining things up, preparing certain reports, scoping out different properties, all that stuff really, that could have very easily been systemized and was systemized. He ended up building out a team of girls in the office and got himself out of all of that. So now he just really focuses on these higher end big projects. And I remember as he was telling me the story, like his revenue and profit margin jumped significantly. Can't remember off the top of my head, the numbers. But the other thing he said, look, the biggest win for me, he said he thought systemology saved his marriage because he was like, I was burnt out not investing any time into the family and you know, give it a few more years and it probably would have ended in divorce. And then, you know, sometimes people go, okay, Dave, does that mean you're saying that systemology can save marriages? And I'll say, yeah, systemology can save marriages.

Yeah, absolutely no Sarah. Instances. Yeah, yeah, I can imagine. Look, I mean the saddest part of all of that, right would, would have been on the hypothetical side of things, would have been that that does happen. And, and, and he Sits there in the, in down two years down the road or whatever. And he's like, what did I, what did. Have I got for it? Right? Because we also know that even though he's flogging himself 70 to 80 hours a week, he probably actually wasn't putting, you know, a lot into the bank account at the end of the day either. So he's, he's actually ended up with.

Of it.

And there's no salable asset at the other end because really all he had was a job. No one's going to want to buy that. And the truth is, the biggest payday that any business owner will ever get is when you sell your business. And if you're not selling a business, then you're kind of missing out on. One of the perks or the true upsides of being a business owner is selling the business. Because the business is ultimately your product and the buyer is the ultimate customer for that product, like the person who buys your business. So if the business is the product and the person who buys it is your customer and you'll get paid the most of it, you only have one of them to sell and a lot of time and energy and effort and asset and everything's gone into it, you want to make sure that you've got the opportunity to sell it because that's really where you'll get rewarded for all the hard work.

Absolutely, absolutely. I mean, one thing other than necessarily selling, right? It creates other opportunities whereby you could, you could go down the franchising model, right, where you're not necessarily, not necessarily selling your actual physical business, but all the intellectual property around how it is run, right? So taking a bit of the pet stock example, right, giving it to someone else to create the opportunity or for them to replicate your opportunity sort of thing, which in itself, Right, right. Go going back to the. It's a collection of assets, right? And a collection of assets are separately identifiable and salable, right? So that doesn't mean that you have to walk away from your business, right? If, if you, if you want to still, you know, go to work every day, feel like you have purpose, maybe there's clients and things like that that you, you, you know, you never want to leave high and dry sort of thing, but you know that there's also a great big opportunity for you to share what you've created with the rest of the world and there's other motivated individuals that are happy to take on that intellectual property and apply it in a different geographic region, for instance, or something like that. All of Those doors are opened up through systemizing your business initially. Because without having, without doing that. Right. What do you have to sell to them?

Yeah, really. And almost like to put that very succinctly that systems give you optionality. It. It increases what you can do. And there's infinite ways you can cut this different deals. You could sell part of your business and remain on. You could sell all of your business. You could acquire other businesses. You could. I've seen a guy that's in the H Vac business, the heating and cooling space, and he has developed his best practices for scaling up H Vac businesses. So he buys them undervalued and failing H Vac businesses. Has his crack team that's been with him for the past 20 years that know what he does and how to quickly scale up a business and his systems. He deploys those team members into that business over the course of 12 months, builds up the value and shows, you know, hockey stick like growth and then sells the business. And he's done it about 12 times now. And each time he's selling a it, he's adding an extra zero onto the end of his exit price because he's getting better and better at it. And he's just using the same systems every time. It's like he's reselling the same systems every time and packaging it up and going, oh, it comes with systems. And look, it's proven great. It's a turnkey operation. Yeah. The opportunities there. This is just optionality.

Sure. I mean again, to hammer the point home Russia. The application of systems inside the business has now turned into the system of acquiring, applying systems and exiting to then acquire, apply systems and exit in a repeatable way. So not only does he have the business of actually getting in there and doing the work, but then he has created a whole nother business at a higher level of doing that same thing over and over again, which is creating that repeatable outcome every single time he makes an X. Right.

It's, it's.

Again, not that we need to hammer home the point anymore, but it's, it's incredibly powerful. How limitless this could be. Right. If you, if you, if you get your ducks in a row, everything lined up.

I feel it is the master skill of business. The most important skill that a business owner can develop is the ability to be able to develop effective business systems and collect these because they're just the building blocks of business. This frame as well, I mean we're talking about it through the lens of business, but this applies to anything I mean, this is systems thinking. You're trying to understand the different systems in the world and how things are interconnected and what results, what, what recipe do you follow that gets a particular outcome, what process, what's the steps that you go through? But the same thinking, once you see it, you can't not see it and you start to see it everywhere.

Yeah, yeah.

Maybe if I can put it to you this way, if I put myself in the seat of a business owner that's maybe not quite there yet. Right. But they still have some almost objections in their mind, right. Where they still have a very technical mindset and they're sitting there going, well, I can't, I can't systemize what I do because it is just so technical or, or even if it's not necessarily technically driven. But you know, a business owner sitting there, well, if it's not me going out and doing business development to get leads, then how are the leads going to come? Right. How am I going to create more, more revenue? Right. But I think you'd have a great response to that, to be honest, because it's, I mean, I'll leave it up to you to answer, but it's, it's all possible, right?

Right, Yeah. I think you just need to come to the realization that others have done this before you. Like there is infinite number of examples of people in the same position that you are right now who've got this extraordinary outcome by following this path. So you might think that you're a unique snowflake and that the work that you do is extra special and oh, but my business is different, my industry's different, my staff's different. I tried to do that and it didn't work for me. I mean, you can come up with hundreds and hundreds of reasons why it's not going to work.

When the reality is it does work. And you need to realize at some point in time if you want this outcome, you're going to have to figure this out. You can't grow and scale and build a profitable business without process like otherwise. Again, it's just a job job and you'll be very key person dependent. So it's not going to get any easier. And you might as well go to work on this now because it does take time to master this skill and understand it. So yeah, I'm hoping that we've just said some things that maybe challenge some assumptions you might have or some preconceived notions about what building a systemized business looks like. And I don't want you to fall in love with documenting process. I don't like documenting process. I want you to fall in love with the result that a systemized business brings. Like the result of those systems is what you as a business owner should be getting excited about. It's not the documenting. I don't like documenting. Michael Gerber doesn't like documenting. It's. But you need them.

Sure.

And it's just an essential part of scaling.

You've just. Yeah, what is that? What's the saying? To eat your veggies first.

Right? Yeah, that's right.

You got to do the things that you. That you don't love. Look, maybe if we could almost end on some final thoughts, right. From my perspective, right. What you just kind of explained there is if it's not this, then what. Right. So if, if you're not going to do it, then I guess get really comfortable with the way things are happening at the moment because nothing's going to change. Right. Unless you, you find a solution to clone yourself all of a sudden, whereby then you can double your ability to do twice as much technical work or you've got twice as much ability to do business development, then you might as well give this a go because without it you're going to be extremely limited in what you can do. Right. There's no, there's no solution. With that said, though, I guess if we could layer on, I guess the how technology. Right. Could also influence the process. Right. To take some of that burden perhaps away from the business owner. Right. Or sorry. Or the systems champion for that matter, in I guess, enabling the entire process.

Yeah. Look, there's never been a better, easier time to systemize your business than today. Like everything that we're seeing with the advancements in AI and technology and the ability to take a video recording of someone doing a particular task and transcribe it and feed it into ChatGPT and get a draft process together and save and store that in System Hub like now. It's so much easier. It was worth it beforehand. The time, the effort, the investment to systemise a business was worth it before when we used to have to do it manually and the systems champion would watch the video and write it out by hand. And that was slow and time consuming. Now we can do it 10 times quicker. Not only that, the whole game of business systemization is to continually delegate tasks down to less skilled, typically lower cost team members, or to AI and robots to do things that you've identified as essential tasks in the business. That's the aim of the game to free up the highest skilled team members to work on the highest value tasks that typically don't have process yet documented, you haven't yet figured out your way on something or you're testing something new, or you're trying to innovate. Your sharpest, brightest minds work on that. They figure out the way, codify it, document it, it delegate it down. So it's understanding that process and understanding how, how key that is. I think long term the systems that you document today will become the programming of the machines tomorrow. Like whether you're delegating down to less skilled, lower cost team members or you're taking your SOPs and feeding it into an AI agent and say, hey, I want you to execute on this task or can you go do the first couple of tasks and come back to me once you've done those first few steps and have a human in the loop scenario where you show me what you've done and then I tell you what I like and then the AI agent goes off and continues to complete it. We are, are very quickly approaching that time. Like we're already seeing it in specific verticals and we're seeing it with specific use cases. But the AI now is getting general intelligence and it's able to make decisions based on the data that it's given. That's the difference between where we've been versus where we are right now is previously, you know, robotic automation stuff had to be very specifically programmed. If the person does this, then you do this. If they do that, then you do this. And you would need to plan every single variable. Whereas now with AI we can say here's all of the data you've got. I want you to make a decision on what you think is next best based on your general intelligence and based on the data that you have about this situation. And then it can fill in the gaps. So now with the right direction, AI can start to make decisions. And that right there is the big shift that we're seeing.

So for those that.

It'S almost like the bar is getting lower right into this space of adoption and ultimately the process or the journey has become that much easier by the leveraging of other assets. Right. So to kind of, to kind of hurry those along that are thinking about starting the journey, but also potentially aren't starting the journey or still considering or whatever, you can imagine how complex, sorry, you can imagine how competitive, right. The marketplace is going to be in two years time when everyone else or new entrants. Because I mean this is the biggest thing that I See is that new entrants to the market, they already have this kind of mindset in a lot of ways. Right. And I hate to say the world has changed a lot over the last 15 to 20 years, but. But the chances are that if your business has been around that long, it's probably got some hairs on it. Right. In terms of the way that it runs. Right. And you're probably maybe just crawling to the finish line in your business life cycle to then hopefully going back to the exit point, hopefully someone gives you some money for it. Otherwise you're probably just shutting the doors. But the opportunity is to go. Well, there's a lot of opportunity out there. We've spoken about the opportunity of embarking on the journey. Right. But you can probably get it done in half the time that you would have otherwise been able to do it if you'd done it five or ten years ago. Right. If you just make the decision today and then let it take care of itself.

Yeah. I think I love looking at like examples around me that kind of show what happens if you don't embrace this change. And I think of something like Australia with their nbn and we've been moving and rolling out this fast Internet for however long and it's. And now technology's caught up and fast surpassed. And even the NBN that we're rolling out is not as superior as some of the other solutions that will deliver better Internet at infinitely lower cost with things like Starlink. Now, in certain emerging economies where they might not have gone down the route of rolling out the NBN because of all of that heavy infrastructure and how they do it, they can leapfrog two or three technologies and then they can jump in further down the line now. But we kind of feel hampered here at Australia because we've made such an investment now. We've got this sunk cost, we're committed, we've got to see it all the way through. But now there are infinitely better solutions and there are new businesses in your industry that are starting right now that are embracing these technologies from day dot. And you won't be able to compete because you're still stuck with the legacy of the way that things used to be done. And yeah, that's why we see companies like Netflix gobble up Blockbuster because Netflix found a better way and went all in on it. And Blockbuster held out way too long. They had the opportunity to buy Netflix and they passed it up because they thought, no, this is not going to take up. And same with Kodak, like there's plenty of businesses that just missed the boat because they didn't embrace the technology change.

Look, on that note, I think it's an amazing point to end because although it might scare a lot of people hearing that, I think it should be a take it as a warning and motivation. Let me put it that way. It creates enough urgency to. To a have the mindset shift. But then once you've had the mindset shift, to take that first step of finding your systems champion and empowering them to take action inside your business.

Yeah, hopefully we've inspired someone. Someone listening to this takes that next step and starts to go, you know what? I can build a systemized business. That's really what it's all about. That's why we're here today, to light that spark in someone to go go, hey, I might have tried that before, but I'm going to give it another go because it's that important.

And it sounds like the challenge is, especially with going back to the technology point. The challenge isn't necessarily that it's hard or complex. The challenge is just getting it done.