An almost never talked about benefit of having a highly systemised business - EP #110 with David Jenyns

Hey guys, Den Lenny here, host of the how to Scale a Video Business podcast. Today's guest is Dave Jennings from Systemology. Now, Dave was a very early guest on maybe episode five or six of this podcast and we've got him back partly because he's just released a new book called Systemology, which he's going to talk about in the show. But mostly I wanted to get Dave on to share more insights about why it's important to systemize your video business. Dave is actually the founder of Melbourne Video Production and interesting. He wasn't a filmmaker. He built a business entirely around video production and used systems at its core as the skeleton, if you like, of that business. Now, Dave introduced me to systems a couple of years ago and it's been transformational in how we run our business. The truth is, Systems set you free. So please make sure you get a coffee, settle yourself in, and super enjoy this episode.

David, it's so nice to have you back on the show. I think you were one of our very early guests on this podcast when it was called something else. It's exciting to have you back because you have a new book.

Tell us about the book.

I'm so glad that you asked. It's called Systemology. Create time, reduce errors, and scale your profits with proven business systems. And the whole idea really is to summarize a lot of the thinking that I've been doing around small business systems. I think it's a really poorly addressed area for a lot of business owners. They're just typically not wired that way. We see it a lot in the creative space as well. The videographer who can shoot the camera thinks that they can run a videography business, but then they get very heavily stuck on tools. I mean, this speaks exactly to all the work that you do. And I have sort of experienced that firsthand in a lot of my own businesses and then worked quite diligently to remove myself to Systemize, to hire a CEO and then ultimately sell a couple of businesses following this process. And the book really just captures all of that knowledge into one book and delivers it in a step by step process that anybody can follow. Kind of builds on a lot of Michael Gerber's work. If you think about Michael Gerber from the he wrote the E myth, he helped people understand why systems are important. And then the big hole has always been, yeah, but how do I do it? And that's what Systemology aims to fill.

Well, I mean, just to give some context to the listeners who perhaps haven't listened to the first episode we didn't and I'll post a link to that below this. But Dave and I actually ran a one day event for video production companies called Systemology for Videographers. And the reason for that is that Dave actually started, built and sold Melbourne Video Production. So Dave, I'd love to just share a bit about that story before we get into other stuff because to give some context to the listeners who perhaps don't know who you are and go, why has he got a systems guy on? Do you want to just share briefly your story with Melbourne Video Production and how that started, progressed and then, and then you ended up selling that.

So it very much was the catalyst for discovering Systemology. We built a digital agency called Melbourne SEO. I got quite a lot of inquiry from clients about creating content. So we decided to set up a sister company, Melbourne Video Production, to help some of our digital agency clients create fantastic video content. The only thing was I didn't know how to shoot. Like I'm not a videographer, I don't know how to edit. You know, I'm not in Premiere or you know, the closest thing I might use is maybe Imovie and using my iPhone. So I built that business from scratch, not knowing how to work in it. I had to from day work on it. And that's really what gave me all of the insights on well, how do you build a business that isn't centered around the business owner? How can you make sure the core service, the video production side of things could happen with contractors and team members and we could still return a profit without me doing any of it. And then I took a lot of those insights because I had a lot of challenges at first with my digital agency, I didn't think it could be systemized. I had thought, oh, this digital agency is a little bit different. It's a fast moving world online and, and systems would very quickly get out of date. And I was worried that it would remove a lot of the creativity in the digital agency. But then when I saw it working in the video space, which is a highly creative space, that's what gave me the insight on yes, it can be done. And I cherry picked the best ideas from just that small division of the business, deployed it into the agency and was able to systemize over a period of about nine months, removed myself, hired a CEO and then she started running the business and had done in that CEO position for about three years.

And you sold Melbourne Video Production last year. And I think one of the things that's so interesting about systemizing a Business is that it becomes very attractive to someone to buy because literally anyone can walk off the street, buy a business like this. And the, the instruction manual is held digitally in System Hub, which is a company you now run. But isn't that fascinating? Like, you know, I think we were on a coaching call this morning with my video business accelerator clients and Caleb, one of my clients, has just been smashed after Covid in a really good way. He's now never been busier and he's like, man, we're just at capacity. How do I, how do I kind of. I'm not sure who to hire next. And I took him through a process of, well, let's work through where the bottlenecks are in your business. Where's the constraint? And what we established was he was the bottleneck. And this will make so much sense to you, Dave. He was the bottleneck. Everything was in his head. So I went into System Hub and I went into the actual video production systems that clients can access in System Hub if they buy the annual process through a link that we have. We actually have something very special for videographers.

But.

And I took him through the steps and he could see his face just relaxing. I said, so what you need to do is map this out and have a critical client flow for this particular part of the process and then record the loom videos of what it is you're doing. Then hire a VA and have the VA map it out. And that's very much what you talk about in your book, isn't it? That's the whole process. Can you elaborate on that for those listening and watching this?

Yeah. So as we started to work with a bunch of different clients on solving this problem, how do you remove the bottlenecks, particularly the business owner, how do you systemize it? And then how do you plug in virtual assistants and team members and contractors to then run parts of the business? I ran a good number of small focus groups. We were doing them over sort of three months sprints, working with just the business owners and their, you know, if they, if they had an operations person, they would oftentimes join in. And then I just kept on chiseling and honing away. That's what ends up developing into the systemology process. It's a seven step process. And that very first step that you're talking to is the defined stage and the critical client flow, which is getting very clear on what is the journey that the customer and the business goes through to deliver your core product or service. So in the case of video production Maybe you've got a particular video package that you sell to a particular target audience and you literally on an A4 bit of paper, anybody can do it. I mean, you could do it off the back of listening to this interview right now. Get yourself an A4 bit of paper at the top of the paper. Think about how do you get the attention of your target audience, how do you then respond to that inquiry? If it comes in through the web or the website, then what does your sales process look like? Do you have a qualification phone call? Are you meeting with them? Are you sending out a proposal? How do you follow up that particular proposal that you put out? And when they're ready to go, how do you take the money? Like are they invoicing half up front or half on completion or all up front, whatever it is in your business? And then how do you onboard a client? How do you set the right expectations and let them know, hey, we go through pre production, production, post production. Here's the journey of what you expect and what we will need from you. Then you get into the actual doing of the work. So what are the steps in each of those pre production, production and post production? And then how do you do your final handover to the client if you literally just map that journey out on an A4 bit of paper? We call that the critical client flow. And it's one of the best ways to help you focus on the systems that will impact your bottom line. Because if you can get your critical client flow to deliver without key person dependency, without needing the business owner, then what you've done is you've created a money machine inside your business that can generate money regardless of whether or not the business owner is there. And that, that is step number one. Identify those systems. And by using the critical client flow process.

Now I, I know a lot of people listening to this will know about the E myth. They'll know who Michael Garber is. Michael E. Garber. And I know that you have a fascinating story which actually you open the book with. So I don't want to kind of give the game away. But you, you have quite an interesting sort of association with Michael Garber, don't you? Can you, can you tell us about that?

Yeah, I was quite fortunate. It tells the story at the start of the book. As you kind of indicated, I didn't have any past relationship with Michael. I didn't even know anyone who knew Michael. Through just a series of fortunate events and.

Just good timing and opportunity, his wife came across some of my work outreach to me. And then invited me to work with a project.

For Michael. And this was actually through my digital agency. So he was unaware of the work I was doing with Systemology. He was unaware of the book that I was writing. And I got the chance to work with him on a dream project for three months that concluded with me flying to Carlsbad, California, attending his dreaming room, and finally facilitating a mastermind with a group of some really heavy hitters in the business space. On thinking about Michael's future legacy, he's coming up to 83 now, and he's thinking about, you know, the final innings of his life and how he can make sure that his legacy continues well beyond his passing. And I was facilitating that group, and I hadn't had any interaction or connection with Michael or anyone in his world not more than sort of a few months prior to that. So it was just amazing. I think the biggest lesson that I took away from that is quite often in business and in life, you have these serendipitous events, these opportunities that pop up. And as a business owner, sometimes you're just too busy to see them or you're too busy to even take advantage of them. And what systems allows you to do is you systemize your business. It creates space for the business owner, and that space gives you a chance to see opportunities and more importantly, actually grab and run with them. So that's a premise I've actually weaved through the entire book. This whole idea that systems create space. And yeah, it was like a magical carpet ride working with Michael. And to this day, we still, we're working on different projects. He's just written the forward for my book, so we keep in touch and we're working on some new projects. But you never know when those opportunities are going to present themselves, and you just have to be ready for them.

I mean, such an amazing story. And, you know, I'll let the viewers read the book and get the full lowdown. But I think what's particularly interesting about systemization and something that I've experienced in the couple of years I've known you and become a real fan of systems, because it creates freedom, and that freedom allows you to be creative. But interestingly, when that opportunity came across your table, which is for anyone who doesn't know who Michael Garber is, it would be like Steven Spielberg saying to you as a video producer, hey, come and help me with this project. I mean, that's the magnitude in the world of marketing and systemization. But what I think was especially interesting about that entire process was and again, something else you mentioned in the book was when that opportunity arose, it was like you had to make a decision very quickly and remove yourself from your own business for three months to work full time on helping him with that project. How is that possible? Because I think most people listening to this, myself included, are very involved in their business. And I know you're always having a gentle go at me to go, hey, this business is very dependent on you. Then what are you doing? And I appreciate that. But you were in a position where within a small margin of time, you were able to basically just step straight out of your business, weren't you? Tell me about that and how systems enabled that.

Yeah, I think the big thing is, and everybody's at a different process in the business, business goes through a life cycle and it has to pass through certain gates to get to the point where you have a fully systemized business that is profitable, that runs without you. So I've had the good fortune of growing a few businesses up to that level. But then similarly, like where I am right now with the work that we're doing with Systemology and System Hub, that's much earlier in its life cycle. So I too now am working back in the business. It's what a business owner does to get the business off the ground and grow it to a certain point. The trap is that most business owners stay there and they just get stuck because all of the skills and talents that have helped them to grow it up to that first level, then oftentimes the skills and talents that hold them from letting go and systemizing and empowering team and making them the numbers stack up and building a real profitable business that delivers a profit to the owner whether or not they're there or not. So that's the ultimate goal when I think about business, is if you need to build the business so it can work without you and your business is actually broken. I see it as a broken business if you believe that the business could never operate without you. And it really is just a myth or a misconception. It probably just happened through a series of events that you as a business owner have gone through that has led you to the conclusion that, oh, I've tried to systemize once before and it didn't work. I tried to hire good staff and I couldn't find any and I ended up having to micromanage them. You might have done a couple of small steps and then reached the conclusion that this doesn't work. And I'm here to tell you that it does work. And you know that intuitively because you have seen other business owners that have built video production agencies that work without the business owner and are profitable. That's what Den does. Den coaches people how to do that. So you know that it is possible. So the real key here is to now that you've had that insight and you know that it's possible. That's why you're watching this. Systemology is, is designed to give you that path and that journey.

I've always maintained that that structure and discipline set you free. And that's not actually my call. I forget where I got it from, but. But I started to embody that four or five years ago. Because as creatives, you know, you find yourself oftentimes being attracted to the shiny object, oftentimes being easily distracted by anything but the thing you should be doing. And yet, the more structure and discipline you have in your life and business, the freer you feel. And I feel very strongly that systemizing your video business is the next level of that, because it's so easy to become overwhelmed in a creative process. You just need to have two or three projects on the go simultaneously. One's in pre production, one's in production, one's in post, and you're trying to chase a client who's not paid you. Meanwhile, somewhere in the background, you're like, oh, I should probably be doing some marketing, but you're so busy you don't have time.

Why is it systemization helps that. Why is it that? Because I think, I think some people might view systemization as, oh, my God, I've got to build all these systems. I don't have time. I don't have time already. But the book talks about this and, and it doesn't have to be painful, does it?

No. So you've hit the nail on the head around this idea that systems create freedom. And the. The biggest reason that it does it is, particularly in a creative business like videography, you know that there are certain things that need to happen in a certain way for this production to go smoothly. You need a checklist to make sure that you're taking the right equipment on the shoot. You need a process for the way that you set up your projects once you're back at the office. And you need to ingest that footage, and then you need to get it into the right format so that you can then start to edit it. You need a process for when you're going to be getting feedback from the client. And you need a way, a structure to be able to limit the Scope. Otherwise you get the client that just keeps making micro changes and they go, oh, I've just got another easy one for you. Can you just tweak that? Little do they know that that throws the audio out. That is dependent now it ends up tweaking your Adobe after effects file that's been rendered and separately and layering over the top of a video. And you know, they're seemingly small changes could, could end up ballooning out and they don't recognize this. Unless you have a process, a way for structuring the way that you're delivering and aligning those expectations, things can derail. But if you have all of those smaller things that are just taken care of, then you create the space for when you actually need to do the creative work. So when it gets time to, let's say the edit and you've ingested your footage and you followed a process up until there, well, now you don't have to worry about all of the micro things. And the reduction in that worry, the removing of having to think of those small things then allows for creativity because you now have created the space for your brain to go, I don't need to focus on these other little things because I know I just have to focus on being creative on this one thing because this is where I am and everything else is taken care of. So that's probably the big insight is that creativity that it brings. That was more echoing your point. I'm wondering what was the question there?

I think.

I rambled a bit to the question because I got a bit lost myself because I guess my point is being that systems really do set you free. And I guess my second part of that is a kind of a reflection on the fact that when I started systemizing my business before I did, I was like, oh God, systemizing my business. It's like that's going to be like pulling teeth. But you shared with me and taught me that if you do the high level critical client floor and you kind of map out the process floor, then record the videos of you doing it. So I actually have a label on my computer that says do do it once. Record a system and the loom videos that we use. When I had my VA on board one of the. And I'm going to a little plug here because it's important because I think it's amazing. But you run a company called System. You have a company called System Hub. Now that that is a system documentation platform, if I've got that right. And when I brought John on my VA from The Philippines. Your training was so good for the first two weeks of John's job. He was just there to watch the team training that you create. And he did all that training and at the end of the two weeks built a system and then I just fed him systems forevermore. Can you talk a bit about System Hub and why you set that up and what that does and how that fits into the Systemology arena?

Yeah, well, definitely, first off, hats off to you for the way that you manage that process. I actually use you as a case study and example in the book and also when I talk to a lot of clients because you.

Embrace the idea of systems, realized that you weren't the best person to be creating them. You then put your team member that you wanted to do the systemization. You got them to go through the Systemology training, they followed it, you recorded the videos and then they did the documentation. So that's another key insight that you'll get when you work through the book is that systemization, the key is actually to make it a two person job. You have the person with the knowledge and then you have the person who does the documentation.

And then we, we actually did a.

System Hub was actually what came first before Systemology, so.

Oh, you go, sorry.

There was a slight delay in the feed there. Yeah, go on, tell us more about how Systemology and System Hub came about.

Yeah, so System Hub actually came first and it's the software to store the systems and processes. And then I realized after working with hundreds of companies that the software on its own is not enough to systemize a business. You also need a method, a training, a way of getting your whole team on board. So that ended up giving the birth to Systemology. It's the two. What makes us quite unique in the magic is when you marry the two together. System Hub houses and stores the systems and processes in the cloud. It makes it easily accessible by your team. It's intuitive, it's designed for a very specific purpose. And Systemology is then the education piece that then explains to the team the importance and how to do it and where to get started. And I think that's, that's really where we've created something very unique.

I think the other thing I want to just mention here because you know, I was in that position where the idea of creating systems freaked me out because at the time I was doing probably more than I should have been in the business anyway. But it is yet something else as a small business owner to deal with. And I think the thing that was so attractive to me and why I got involved with System Hub as a user probably 3 years ago now, I think maybe 2 or 3 years ago, is that you provide so many done for you systems as part of. I know there's different membership things. It doesn't just come as standard. But I got the annual membership and it was just like there were all these systems already in there. And so I just felt it was important to mention that because you do give an enormous amount of value. Can you talk about some of the system examples that you have already in System Hub? You know, and I know this is based on buying an annual membership and it's very affordable, but you kind of. You've done a lot of the heavy lifting for us already.

Yeah. So the way that I think about business is in terms of the different business departments. So all business has sales, marketing, hr, finance, operations. They're kind of like some of the key central departments that are similar regardless of the business, the industry. You know, everybody has to get leads and everybody has to sell to those leads. Everybody has to pay wages and invoices and expenses. Everybody has to do management. They need a way for the way that you manage the team, your hr, the way that you're hiring and onboarding. So when I recognize this, I actually started to see with all the different businesses that we worked with across different industries, huge amounts of similarity. The biggest difference between one industry and the next, typically speaking, is just the operations. It's the delivery of the product or service. But all of the other systems, the systems that work in my business can work just as well when they deploy them in your business. And same with many of the systems you've developed for the video production industry that we've partnered together on. And we actually give to clients of yours when they purchase System Hub.

If they're designed for one video production agency, they can work for any production agency. They're 80% of the way there. So with that insight, I realized I started running an event called the Business System Summit, which is the biggest event of its kind in our space for business systems. I just get business leaders in all of their different verticals and departments and I get them to share a system or a process on that particular event. And then I have my team do the documentation and then they turn that into a system or a process. And then a lot of those live inside System Hub. So we want to try and give people everything that they need. Almost like the cake is 80% baked already and they just need to come in and, you know, maybe it's Time to do the icing and finish the cake and make sure it's unique and suits them. But the bulk of the work is done. We've done the mixing, we've done the baking. You're just up to the dressing point.

And I just want to say here, there's one in the video systems within System Hub. Whenever I show my clients this one particular system, literally their jaws drop because there is a client onboarding system. And at the bottom of that page there are somewhere in the region of 15 pre written emails that are labeled emails 1 through to 15 and they are attached to each stage of the process. And so from, and I was sharing this with clients this morning, the actual onboarding stages is about receiving payment. And a lot of videographers skirt over the payment or wait till the job's finished or invoice in 30 days. And I'm always a big fan of, you know, 50% up front, 30% on completion. But this particular email talks about, and it mentioned it three times, the importance of getting this invoice paid before production starts. And when I show my clients that, they go, oh, oh my God, that's amazing because it's written in such a beautifully soft, gentle, firm, but non antagonistic way. It's like as soon as we receive payment, we'll begin production. Just to confirm the link will come from Xero, here it is. And as soon as we've had that confirmed, we'll begin your process. And that one small step had some of my members this morning going, oh, oh my God. Like it's just, that's so cool. And that's just one of 15 emails of one particular system of literally dozens. So anyone's interested, I'll put a link below and you can check that out. Dave, you created some completely new content for this book which you sort of shared when you did a speaking gig for us at one of our events here in Melbourne. So, so we know we've got the seven steps of the systemology wheel, but you've also developed a new kind of process of establishing an understanding where your business is on the systemization journey. Can you spend a couple of minutes sharing a little overview of that? Because I think that's really fascinating as well because it gives tangibility to why we would systemize a business.

Yeah, I think to get any form of movement in business and growth, really important to understand where you are and where you're going. So the book opens up with what I call the four stages of business systemization. The first stage is the survival stage. That's where a lot of business owners, when they first get started, start. They're still figuring out what is the core product or service that they're selling. They're jumping from one thing to the next. They're not clear on the target audience, they're not clear on the problem that they're solving. They don't really have any systems and processes because they kind of just making it up as they go. So it's really the business at Sage One is effectively the business is the business owner. They might have some team members around them, some contractors, some part time assistants, but really it's the business owner. Then you kind of progress through to the next level, which is what we call the stationary phase. Stationary still not a great place to be, but at least it's a progression up from survival mode. At this point it's almost like you're sitting still. It's like you're spinning plates or you're on some sort of treadmill. You never seem to get in front. You've got some work coming in, but it's almost like this. You're chasing to get the work, you get the work, you do the work. Once the work is done, you're chasing to get more work and then you get that work and then you do the work. And it's just this constant cycle that's very difficult to break out of at this point. You often become dependent on certain team members. You know, maybe in the video production space, maybe you have a videographer who goes out there and shoots for you and you do the editing. You're heavily dependent on them. Or maybe you've got an editor who is, you know, you're heavily dependent on them and, and if they were sick, you wouldn't be able to deliver your core product or service because all the IP is trapped up in their brain. So that stationary phase is all about. You're getting some momentum and some traction, but you are stuck. You're stationary because you can't really grow. There's no capacity there. You might already even be at capacity. Then the next stage after that, that you move through, you get to what's called the scalable stage.

And at each stage there is a way to unlock the next stage. Like that first stage, survival. You need to recognize that you are the bottleneck. That is one of the release points that moves you to the next stage, the stationary stage. You need to then start to extract some of the knowledge from the brain of the team member who knows how to do the thing. Then we move to that next stage. Which is scalable. You've got some systems captured, but it's a little bit clunky. Maybe you've got some systems around your sales, or maybe you've got a checklist that you follow when you go out on. Shoot, you've just got these ad hoc systems. Maybe you've got them dropped in a Dropbox folder in Word Documents. They're a little bit hard to find. Team members don't always reference them, but you've kind of cobbled something together. At least now you're a little bit more scalable. If you hired another videographer, if you did get some more work on board, the wheels wouldn't fall off straight away. You know, you'd be able to at least kind of just fudge it through. The business owner would still be heavily involved. The level that you want to get to, that everybody should be striving to, is the final stage. And it's at this point we call it saleable. Now, whether or not you, as the business owner, you sell or not is irrelevant. But you want to build your business as though it were saleable. Because once you get to that point, you're not dependent on team members. You have a particular way of doing things. If someone is sick, you can very easily just plug another team member in and they can pick up where the other person left off. Because you have that way of doing things, you also create something that someone would actually want to buy. You have a valuable asset that is able to generate money for you as the business owner, regardless of whether or not you go in or not. As. As a business owner, you should be really be paid in two ways. You should be paid. You should be getting a wage, and that should be the wage for you doing the work as an employee. If you're working in the business, in addition to that, you should also be getting profit distribution. You should see that as a separate payment. So if you removed yourself and you stopped getting a wage and you paid someone else your wage to do your job, you should still now, as a business owner, get a distribution of profit, which is the benefit that you get. The reward for taking the risk for building up the business, getting it to a certain point. Now, that's all unlocks when you get to this final stage. The final saleable stage is actually where all the magic happens. That's where the opportunity opens up. That's when the industry leader, Steven Spielberg, comes and knocks on your door and says, I want to do a project with you, and you've built a business that works without you. That you can then go, great, I'm happy to work on your project for the next three months because this is the opportunity of a lifetime and I've put myself in a position where I can actually take advantage of this. So those four stages, it's survival, stationary, scalable and saleable. You want to think about where you are, you want to think about where you want to get to and then you actually systematically progress through each of those stages.

Well, Dave, it's fascinating. It's so exciting to see this next phase of the Systemology movement. Where can people find out more about you and the book?

Yes. Well, best place to do you head over to systemology.com book we're going to be giving away some preview chapters, behind the scenes interviews, sharing interviews like this, and a range of different tools. I want you to understand as a business owner how much money you're leaving on the table by not systemizing. And you can find out all about that over@systemology.com book once it's live and which comes out August 18, 2020, depending on when you're listening to this video, you can actually head to Amazon. The book will be listed there. We've got a hardcover, we've got a Kindle version and also the audiobook version. So if you prefer to listen to me, I actually read the book out. So I know a lot of people always like listening to audiobooks where the author reads it.

Well, guys, I have. I can't give Dave a big enough endorsement. Systemization. Systemization of my business has been enormous for our growth. Dave, thank you so much for your time and I hope we can get you back on the show at some point in the future with the next the next development of the Systemology movement.

Perfect. Thanks again for having us, Dan.

Hey guys, thanks for watching. I hope you got a huge amount of value from that episode. If you're looking for additional support or resources to support your business journey, then head over to Denlenney.com where you can get a whole heap of other resources, free downloads and access all the other episodes in this series. Be sure to subscribe and I'll see you next time.