SPE01 SYSTEMology Book Launch – How To Define Your Most Crucial Systems

Welcome to the Business Processes Simplified podcast. I am not your host today. You weren't expecting that. I am the guest and I've got our host today, Charlie Valla. So I'm going to step back and let you take the reins. Charlie.

An absolute pleasure to be here, Dave. And honestly, a little bit of an honor to get to host this show for a little bit from here to give context to this episode, what me and Dave are actually putting together at the moment is a bit of a series and a bit of a breakdown of some of the important parts of Dave's new book that will be coming out very, very soon. Dave, there is the book. Anyone watching the video, you'll be able to see the COVID of the new book here. I've been very fortunate to get a preview copy as well. But when's the book actually coming out?

Dave, Book comes out on the 18th of August 2020, so it'll come out in hardcover, Audible and Kindle format on Amazon.

So if you haven't already, I'm not sure on the exact release date of these podcasts, it'll be very close to that from there, but you'll be able to get your copies from that. Now to context this even further with a little bit of a story, Dave sent me a preview copy of this book about, I say about a month and a bit ago now, and it has actually caused, I suppose, a respark in my love of systems and also a bit of a stab and knife twist on some of the things I forgot to do, like Dave taught me systems so many times, many, many years ago and it was a really good reinspiration to that. So with the back and forth in conversation me and Dave have been having, I posed the idea we should do some breakdowns of some of these chapters and give some insights and helpful things that will help you go further with systems. So in this first episode of this series, we're going to be breaking down stage one of the process, which is define and I'm going to pass the mic over to you now, Dave, I've been talking way too long. But, but let's leave this out. What is the defined stage and why is it first?

Yeah, the defined stage is this whole idea of forcing focus when it comes to systemizing your business because it's quite an overwhelming topic for many people when you say the word systems and processes and you've got to systemize your business. People jump to a franchise business and they think of McDonald's or Subway or KFC and all of the detailed documentation they have and they think that's what I need in my business. So it's very overwhelming. People don't really know where to start. And when I developed Systemology, which is the system for systemizing a business, I thought, well, where do you start? It's like eating an elephant. You just have to take your first bite and just get started. So what is that first bite? So it's talk about it in the book actually as well, using the idea of the applying the Pareto principle, you know, in your business, if you recognize that your business is simply a collection of systems and those systems ultimately run your business. Some are documented, some aren't documented, some are trapped inside of the heads of a team member and some are written down on a piece of paper. No matter where they are, you have these collection of systems. And the real key is to apply the 20 or identify the 20% that deliver the 80% of the result in the way that your business runs and the way that it runs efficiently. And the whole define process is just a way of identifying those uncovering it. You're not creating anything new, really. All you're doing is you're uncovering in your business what is already existing.

Yeah. And it makes such a huge difference to do this first. So why was define previously in a different order? Why did you have it different deeper in the process? And why have you brought it to be the first thing?

I love the idea of this series because I get to share the development and the backstory. Because there's a bunch of stories that didn't make it into the book that I just didn't get the opportunity to share. And people have been following my work for some time, will have heard little snippets, but they might not understand the linear events that happened which kind of made Systemology what it is today. And the defined stage actually used to be later in the process. So I uncovered the seven stage process by looking at, well, how did I systemize my business, how did I remove myself, how did I hire a CEO? How do I build it up to a point that it was generating profit without me involved in the day to day? And I thought, how did I do that? And I realized there are a series of steps. And it's hard when you're in the thick of it sometimes to immediately recognize what you're doing. And is that the best order? You kind of have to try things and move things around. And it wasn't until I started to work with other clients and we started running these little focus groups where I'd take A group of business owners through the systemology process over a three month period. We'd meet basically every week and then I would take some of the feedback that they'd get and just keep using that to refine and chisel the process and decide what was essential and needed to stay and what needed to come out. Define was actually I believe stage four initially, which for me it's. I look back now and I can't imagine it being anything but stage number one, because the whole define process, that's what sets the context for what you're about to undertake this very important mission of systemizing your business. Of course you need to know, well, what are the systems you're going to capture? Of course that needs to come first. But initially I was doing things like you need to select your tool tools, you need to make sure that you get clear on who your team is. And then I thought maybe you need to get the buy in from your team before you even start the extraction process or this identification process that you go through. But then I started to realize, yeah, you, you first need to know what it is that you're trying to capture. And then also by doing that, you get the quickest win. I think what ends up happening is when you identify those 10 to 15 systems that you're going to start on first, which is part of a process we call the critical client flow. You have an aha moment and I've seen it hundreds of times where people will go through it. It's a very simple exercise. It's on an A4 bit of paper and immediately people go, I can see the holes in my business. I can see what, why I'm having the problems I'm having. I'm having lead generation problems because I don't have any consistent ways for generating leads. I'm having problems with clients and having to manage them because I don't have a proper onboarding experience to manage their expectations. I'm having problems with selling them into other products and services because I don't have an appropriate handover process once we've delivered and handed over the work. Like all the problems in someone's business can be related back to a system level. And the CCF just makes it so obvious for someone where the holes are that you'll get an instant aha. So it kind of made sense, particularly from getting the quick win because that's the other thing I find with systems and processes is that the benefits sometimes are not felt immediately. It's actually there's a lag time between when you install a system and when you feel the positive effects, not to mention that you layer systems on top of each other and that's where you get the biggest wins. So it doesn't happen until a little bit later. So I needed to engineer systemology to get someone that win right up front, to get them excited, to help them to understand that we are about to do one of the most important things a business owner can ever do in their business. And they'll get a quick win, they'll, they'll realize and get that excitement and then that carries them through the process.

Isn't it interesting that it's only when taking a group of people through it that you recognize how it's most universally applicable? Because being you're so system strong and it's like, I think when we're really good at something, often we forget what it's like not to be good at something. So it's like for that beginner level person or someone that has no systems going to systems, it becomes the aha moment of like, why we need to do this now. I actually think the CCF or client critical flow is probably one of the greatest concepts in this book. And even if someone just took that, they have the chance of having like a really big impact. But I want to share a quick little funny story, Dave. So you asked me to host one of your events in Melbourne. This is going back a couple of years ago now and I hadn't heard of client critical flow yet. And you presented it and I'm actually hosting that.

I'm going to have to adjust slightly.

Critical client flow, sorry, Critical client flow. Apologies, I'm too excited. But I have to share this because you won't actually know, but I had the mic and I actually stole someone's workbook to take home with me because we didn't do it that way. And I was like, this changes everything. It completely. As you demonstrated, this part of the process changed the way we thought about introducing systems in our business. And I realized very quickly that we were systemizing and putting attention into things that just weren't important or going to be used. We're almost over systemizing some areas, thinking it was going to help us the most instead of tackling it with this view here. And it was a really great tool of bringing everyone onto the same page.

I think you were one of the handful of people that recognized the power of it and then vocalized it to me because a few people that I really trust and respect their opinions had suggested, hey, you are onto something here. And you were one of those that said there is something in the critical client flow. I don't know what what it is, but it gets to the heart of solving a problem and it does it with such simplicity. And anyone who goes through that process and then you can apply it to any business, that's I feel another great measure of a fantastic tool or a system or a framework is its applicability to any situation. A system needs to be tight enough that it focuses you to get the result, but loose enough that it can be applied in any situation and still get a great result. And that comes from my stock market education background. Many, many moons ago. When I think about a trading system, something that is over optimized, maybe on historical data, might perform fantastically well in the past, but because it's over optimized, when you apply it to current day data, it often performs quite poorly. The magic is actually the sweet spot in the middle and that's when you actually know you've found something that works. And that's magical because it's almost like a principle and it can be applied in multiple different sort of arenas.

Do you know, I have thought about this. Do you know, this is an opinion piece here. Like, you may disagree thoroughly, but it kind of reminded me, I'm like, you know, why was this such a breakthrough? And this is for me, I'm speaking from my own experience. It was the digestible nature was so easy for me to bring other people in on it. And if you think like I'll use, an example is like Robert Kiyosaki's cash flow quadrant. It's a cross with four letters. Like, it's not like I'm trying to understand the matrix here. It's so easy to comprehend and articulate, yet offers value. So it's this crossover of simple and effective that I think really, really nailed it.

I stumbled over the critical client flow by looking through my workbooks that I'd been scribbling in for and I constantly saw this same. It almost looked like a map. And I kept on turning it the page and then seeing another redrawn version of the same map. What the critical client flow is, it's an extension beyond just a typical customer journey because it also deals with the steps that the business has to go through to deliver the product or service. But it's that journey that the client and the business goes through from start to finish, from grabbing someone's attention to selling them, to onboarding them to deliver to get them to come back. Because if you can get that Part of the business to work without the business owner or out without any key person dependency. You've created something that's scalable, that can bring profit and money into the business that isn't dependent on any particular person. So that's the goal here of going through the systemology process, particularly these early stages, is how can we deliver that core product or service? Do it without any person dependency so that you can go out and sell a truckload of them. You can lean into your marketing and your sales because you don't have that fear. Like, I know sometimes business owners, especially when they get being started, they can have. It's almost like they sabotage their own success by thinking, hey, if I make this sale, then I have to do the work. And then they're already busy and they don't really want to do more work. So then they start undermining it and they don't even notice. But imagine if you had the confidence to know that you could solve a client's problem and you could do it at scale and you could feel confident that you're delivering real value. Well, you would go to town on your marketing and your sales because you know that that will just grow and it'll just solve problems. So it's an interesting process to go through for someone who hasn't done it. And I think, yeah, provides tremendous insights.

It's a perfect step to go from someone that's never done systems before and is newer to the concept and giving them something that they can really get an impact in. Now. I'm very curious on this because you mentioned the idea earlier about we'll call them special snowflakes. Have you ever come across a business that couldn't use this concept? Has anyone truly been outside the ccf?

Not one. And I've had many who have claimed that they are unique and they are different. I remember doing a little focus group for an EO entrepreneur organization. They wanted me to come in and do something for a little group. And I sat down with a lady who owned a jewelry store and she said, look, I've got an online, like a physical jewelry store. People walk into. I can't see how the critical client flow would work. And I said, oh, fantastic example. As luck would have it, I used to run a rock and roll clothing music store that was bricks and mortar that people walked into. And although I didn't recognize it at the time, we had developed a critical client flow. People walk into the store. Like, first off, actually we would have advertisements and we would sponsor gigs and that would get People into the store. Once they were in the store, we had a way of greeting them. We then wanted to get them into the change room and try on some clothes because we knew that was closer to making a buying decision. When they'd come up to the front counter, we would try and then upsell them, stickers, patches, whatever. We'd end up handing over the product and then we try and get them on the mailing list to get them to repeat and come back. So that was what I just talked through there. And you'll see it when you do get the book and you go through the critical client flow. I even give that example in the book. But that is the critical client flow applied to a bricks and mortar business on something that very easily you could go, ah, no, no, this my business is different. But the thing is, every business is looking to solve a problem for their clients or deliver a product or a service. All we are doing in the critical client flow is mapping the journey of the customer or the client and the business and what they have to go through to deliver that. So there's often a lot of similarities between businesses. The biggest difference always seems to be in the operations. It's the delivery side of the business because everybody might be selling different products and services. You might find an E commerce store has a little bit of a difference to a service based business. You might skip a step or two. For example, the collecting of the money on an E commerce store is clicking, you know, your add to cart to get the item into your shopping cart and then checking out and entering your credit card details. Whereas a service based business you might have a sales process and you might need to issue an invoice and they might pay up front. So you might sort of skip some steps, compress some steps, but the framework is solid enough that it applies to every business.

It's an interesting point you bring up there. In even recognizing like the differences from here, is there any types of businesses you think would get particularly more benefit out of the CCF than others? So do you think service providers have an advantage here or do you think this universally is just valuable across the board?

Universally valuable. It's funny, I used to think that it was more applicable and valuable for the service provider and then I recognized that's because I have an affinity to service providers. But then when I started to work with bricks and mortar businesses, then I started to work with e commerce businesses and we'd go through the same thing and they would get the same level of aha and insight regardless of the Business. It's just a way to clarify and then immediately spot some of the holes. So I've actually found that it's universally applicable and will universally give insight.

That's fascinating. I'm service biased as well. Sorry, I should say. Which is where that question kind of came from. But both the examples you use there have come from say E commerce or commerce, so physical stores or online stores there in itself. Now, have you seen a particular business or. I'd love like a story here of someone who's had like a huge impact from bringing this into their business. So is there anyone stand out that's grabbed ccf, done it, and then just taken off like a rocket?

Yeah, there's. There's quite a few and I list them. There are some in the book which you'll learn about when you read through the book. So I'll try and not reiterate, but there are a range of additional case studies that got left on the cutting room floor for various reasons.

You know, I'm on that list, aren't I? I'm on that list.

Well, it was a case of. I wanted to. The. The idea of a case study is for someone to read the case study and go, that is me. And I can resonate with that message and where they are and then I can see what they went through to get the result. So that was probably one of the biggest sort of filters. And then not only that, I wanted each story to then back up whatever the lesson was in that particular, like in that particular chapter. So for example, the first stage, the defined stage, which we're talking about, the myth was that business owners will need to create lots of systems. A lot of people think, and we address right at the start, that they might need hundreds to systemize their business. When actual fact with as little as 10 to 15 and focusing on the critical client flow, you can get a significant win just out of focusing there. So that myth then made me try and find, well, what is the story that then ends up supporting that. So one of the ones I just skirted past. Yes. How you didn't make it. I'll let you.

That's me making a sound of stabs.

Yours was because you're more advanced and you are a systems guy. You are already such a great example of the transformation of systems and you've had the ability, you have actually spotted the two what I consider the biggest leverage points for a business owner and you've mastered them. It is finding great people, particularly in emerging economies where. And you get great bang for buck because their cost of living is lower. So it's combination of great staff with process. When you nail those two, that right there is that magical moment. Like if you're solving a genuine problem that your clients have and then you combine that with people and process magic, that's when your business comes alive. So the one that I wanted to I suppose talk about the jump to mind as soon as you asked was Michael Coleman. And he runs a company called Digital Thing. Now that's a like a. They build websites and help with maintenance and do some big e commerce sites and things like that. It was an interesting one because he had thought that his business was too creative because he was working with designers. He thought, well, this is too much of a creative, quick moving industry for us to systemize. But as we went through the critical client flow, almost immediately we started spotting the holes and why he was having some challenges and we dug into it and even we noticed things like in his culture, like in his values, he had listed that he and his business partner would be involved in every project. Like that was actually written into the values of the company, that they had the personal touch that they were involved all the time. So from the inception of that business they were programming in that it would never work without them. And it meant that everything bottlenecked through him. When we mapped out the critical client flow, then he started to recognize which pieces he was playing a role in and which pieces he felt could and couldn't be replaced with the way that he was selling things. And that had tremendous breakthrough. He defined the critical client flow he had his business partner on at the time. And then they actually started teaching the critical client flow to all of their staff. Because what that did is it helped the staff to know here's how we work, here's the process and here's where you fit into the process and why you are so important is because if you don't do your job well here, it impacts this, this, this, this like the downline effect, it helps someone, it gives them the context for the business and it was tremendously insightful for him. And he's gone on and done some really great things with the business off the back of working through systemology.

I love that story. You brought up some really fascinating points there. Creative people or artist type business owners like designers, as you mentioned there strike me as the ones that will hold on to doing everything the longest because there's such a concern of quality and their touch and their brand. So you know, for example, if you're a really good designer you want to make sure that your design flair is on everything. So if that's, like, your real big concern, you're going to have a really hard time doing systems and letting go because of that deep fear of, like, what if something gets to a client that isn't at the level I'm happy with here. And I tell you what, one way to be sure that you will never get that leverage and systemize your business is the mindset that it can't be done. I'm really. I love hearing that a designer has been able to do this, because if you can hit it at that level, it kind of changes everything.

I want to get a T shirt done, or maybe I need to get a desktop with a quote. Because I often say this. If your business doesn't work without you, your business is broken. And I think someone just needs to let that sink in and realize if they honestly believe that they are the only person who can do the thing, your business is broken. You don't have a business. You have a job. So you need to break that mold and think, well, if I am reaching that conclusion that I don't think it can be done, then it's broken. No one likes broken things, so it's time for you to go to work and start fixing that problem. And, yeah, we will do the little cliffhanger and teaser for a later episode. I'd love to really drill into that particular myth or misconception a lot of people have, which is that systems remove creativity. It's a common one. It's. I address it in one of the chapters because it's one of the big ones. There are kind of seven big myths that we see. There's a range of others, but it's just baggage that people pick up and collect along the way. They might test it just once or twice, and then it gets reaffirmed or reinforced, and then they go, oh, that's just the way it is. I'm not a systems person. Systems won't work for me. And they write it off, and then they never retest that assumption, and then that's what traps them in the business. But of course, you wouldn't expect to nail something the first thing. Who would expect to hop on a vert ramp and put on a helmet and roll down the other side and expect to do some Tony Hawk 720 or whatever he does these days and land at first go. No, you know, got to try it, practice it, do it, do it, do it, do it. And then you'll kind of break through. But I'm telling you, and you intuitively know this because you see businesses that work, that work without the business owner. You know that it is possible to build a profitable business that works without you. So you know that. So the question is, why haven't you done it? Well, you might have reached some conclusion and had some faulty assumption, or you've been following a process that someone else has said, oh, this is how you systemize. Maybe you read Lean or talked about Six Sigma, or maybe you've gone for ISO certification and you've realized, you know, Lean is designed for, you know, bigger companies or Six Sigma, you know, manufacturing. Maybe they're 100 person organizations. Maybe ISO certification, that's all about just doing systems for system sake. So you might have dabbled in some of these areas, but the approach was never designed for the small business. And that systemology is designed for the small business to show you that, yes, you can build a systemized business.

It's so interesting. I'm curious about this, Dave. This is probably the one last question I will have for this actual episode. But I listened to what you said there and I recognize in my own journey in business, the thing that got me started or inspired to do systems was basically my business wrecked my life, I'll be blunt here, is that I had to work a Christmas Day to get a Boxing Day sale ready. And my wife was devastated to leave a family thing and it struck it hard. But overall my quality of life was terrible and I'd hit a ceiling and could just basically see, well, there's no way to grow this with more hours. And I could see that it was massively impacting my health as well. But from your point of view, you've worked with so many other people. Do you find the first thing or the trigger point for someone to get into systems is that capacity thing. They just recognize there's nothing else they can do if they keep going the way they are or does something else open the door to systems.

There seems to be different things for different people. And depending on where they are in the stage of their business and their age and past experiences, there can be different trigger points. The one that you sort of alluded to there of working very long hours, being a slave to the business, and which is the direct opposite to why you started business. A lot of business owners, when they start business, they think about freedom and they want to have choice and control, and then they start business and then they realize they've got anything but that now they have to deliver for the client. They have to Deliver to a certain standard. They have to. There's a lot of work that needs to be done and they work really, really long hours. So that is a huge catalyst and probably the biggest catalyst. There are other catalysts as well. Some people think in terms of exit planning as well. That's another big one that I do see where people are thinking that they want to sell their business and then they realize they actually have no value in the business because the business is them and no one would want to buy the business. People who are just changing gears, I've seen some people that are ramping up and it's not. They actually won't decrease the hours. That's another big one. Some people, it is about decreasing hours, but some people just want to be more effective with what it is that they're doing. And they'll lean into it and they'll still be doing the 60, 70 hour weeks, but at least they won't be doing the tasks that are the same repetitive tasks over and over and over. That's not driving the business to the next level. I'm at a little bit of a different stage now. You know, like you with young kids, I'm. I'm also thinking about how can I get evermore done with less so that I can be more involved and you know, have a really well rounded life focusing on lots of. But don't get me wrong, I still work hard, but I kind of work hard on what I'm enjoying. I think that's what systems gives you. It's a level of freedom. It gives you freedom in time, freedom in money, and then also freedom in choice for who you work with and the projects that you work on. I think that that level of freedom is hugely underrated. I think once you get it as well, you then start to realize that business can be fun. Sometimes when people get started in business, they're all excited and they're passionate and they love what it is that they're doing. And then after years of doing the same thing over and over and the grind sets in, the business end up becoming that thorn in their side. They lose the passion for what they're doing. And it's because they're just doing these repetitive things and they're not doing what really sparks them or gets them going. And as a business owner, oftentimes you're a problem solver. You like figuring things out, you like doing it once and having a big impact. You don't like doing small little trivial stuff day in, day out every single week for the rest of your life.

Amen to that. I really enjoy the way you spoke about that. And it's funny that even as you said that I was like, oh, hang on. The reason and love of systems that I have has evolved. The kids thing, as you said, I've got a little one now which, you know, and it's like every second you can get with them or being able to organize things differently really, really counts. So listeners, this has been a bit of an insight into define the first stage. I think it's maybe chapter two in the book that really goes deep in here and I really love these stories and the behind the scenes you've been able to create with this. Dave. Now there are going to be more of these episodes we are going to record and we're going to break down some future sections or stages. We'll call them from here. But Dave, let's wrap this episode up. It has been an absolute pleasure going through Define with you.

Thank you for having me, Charlie, on your podcast here. I think you're being the host of the Business Processes Simplified podcast and if you want to sign up and find out more about the book, just head over to systemology.com book we'll be sharing some preview chapters, behind the scenes interviews, extra tools and bonuses and all this excitement that sort of leads up to the launch of the book on the 18th of August 2020.

And of course guys, I'll speak for Dave here, but we'll put links in the description. I'll make sure Dave and his team does it. There'll be links anywhere you are listening or watching this episode. There will be links available for all these things as well.