E21: Scaling a Service-Based Business

What if you could scale your service based business without hiring a lot of employees? Welcome to Invisible Solutions. I'm your host, Steven Shapiro. Each week we tackle your most complex problems using the lenses from my book, Invisible Solutions. If you need the lenses, go to get. And with that, let's get started with today's episode. For pretty much my entire career, I've been in what would be called a service based business. I started out with accenture, where for 15 years I focused on large consulting projects. And then for the past 20 years, when I've had my own business, a large part of my revenue came from speaking workshops and advisory services. A lot of my friends are in a similar situation where they have service based businesses. And one of the things we're always trying to figure out is how can we grow our businesses without cloning ourselves, without working 24 hours a day and without having to create a big business. That is we have to hire a lot of employees. So the problem I'm going to tackle today is how can we scale a service based business without hiring a lot of employees? Now I'm going to talk today maybe a little more about service based businesses that are like consulting, training and speaking rather than maybe a hospitality service. But some of the concepts are certainly going to apply and I'd like you to just keep an open mind as you listen to this. And even if you have a product based business, there are many concepts that are going to apply here. So we're going to use six lenses. Now, I know I said in the past I try to limit it to 3, but in this episode I really feel like there's just so much meaty goodness, so many opportunities here for us to use these lenses that I didn't want to shortchange people. We could use all 25 quite easily, but today we're just going to use six. And the first lens we're going to use today might be the obvious one. It's number four, eliminate. And the eliminate lens says, what can you get rid of completely? So in this case, you might want to ask yourself, what is the work that you're doing that doesn't create value for your clients? Now, I always look at the work that I do and say, well, okay, this one's creating value, this one's not. Well, what's the obvious answer here? Traditionally, as a speaker, as a consultant, as a trainer, we get on planes. So travel does not create value for anyone, doesn't create value for our clients. It certainly doesn't create value for us. It creates value for the Airlines, but they're the only ones who are getting value out of it. And maybe our frequent flyer miles are added benefit. But regardless, the easy answer is how can we eliminate travel? That would be the reframe or how could we eliminate the non value adding activities? Now, obviously one answer would be virtual, but let's look at all the other ways that we are doing non value added work and see how we can eliminate it. There's a lot of work that we do as consultants and as speakers that doesn't create value and really try to be very aware of where you're not creating value so that you can cut it out. The next lens we're going to use is number 11 and this is the resequence lens. This is one of my favorite lenses. I use this pretty much every time because so often we assume that the problem has an implied timing. There's some kind of sequencing involved. In some cases it might be that we can't get started with the work till we have all the data. So we're gonna wait, which then increases lead times. Or in some cases maybe we make the decision we're just going to guess and hope we're right and then deal with the fallout of being wrong later on. Today I want to talk about a variation of resequencing and it's something I've talked about in the past, but I think it's worth mentioning again is about the timing in terms of being synchronous versus asynchronous. So think about it for a moment. Most of the time what we do is we assume that if we're giving a speech, everyone has to be in the room. Or if we're doing consulting, I need to have a call with somebody, I need to be with the client at that time. So there's a sequencing assumed. But what if we challenge that and said, how can we do the work asynchronously? Well, now we have access to a variety of tools and a variety of methods. So for example, in speaking, if you're giving a speech, well, why does everybody have to sit on a zoom call and watch you give the rote portions of the speech? Well, prerecord that and send it to people beforehand. I just did that For a speech that I did yesterday. We sent them a 10 minute video. Everybody watched it. So we saved 10 minutes and we could spend our time being more engaged while everybody's together. And if you're doing advisory work, let's say coaching, you usually assume that you need to have the person you're coaching the person, you're mentoring the person, you're advising on the call with you. That's how it's typically structured. But what if instead, you could have asynchronous conversations with people? Now, sometimes it's done through email or text, but my favorite is actually voice. And there's a number of tools out there, and I've mentioned them before. Voxer and Yak are two that I like to use. And basically, these are asynchronous tools that allow you to engage with your clients. But it doesn't have to be real time. So people leave me voicemail messages, basically, and I get to listen to them. And then once a day, when I have a chance, I go through them and answer them so I don't have to block time out of my day. I'm able to answer questions when I have some downtime. It gives me a little more flexibility, a little more convenience, and I can actually handle more questions than I could if I was hopping on a phone call every single time. In the previous episode, I mentioned that I launched the Problem Solving Institute, which is@theproblemsolvinginstitute.com and one of the key components of this is actually providing advisory services on an asynchronous basis. So for me to be able to provide these types of consulting services to a large number of companies without my working 24 hours a day, this is the only way I could do it. So think for yourself. How can you, whether it's asynchronous communication tools or sending things before or after, where it can be consumed at someone's leisure. And take a look and see how you can change the timing. Now, if you're going to scale your business, well, obviously it helps to have other people help you out. And this is where we get to lens number 12, which is the reassign lens. And the reassign lens really asks the question, who else could help you with the work? And there's a lot of different ways that you could do this. Part of it could be you could have people license your content so you could train others to deliver your content. Now, they're not employees. Maybe they go deliver it and they give you a portion of it, or maybe they give you a certification fee. But whatever it is, there's a lot of different ways that you could reassign the work. And I've done this in several different cases. One time with a company, big training company, they licensed my content. I gave them all of my materials. They were able to convert it into a Two day in person training course. They deliver the training course, they sold the training course. And every time they delivered the training course, I got a percentage of the revenues. So I was scaling my business without having to do any work. I've done the same thing with elearning courses. So there's a lot of different ways that you can reassign the work. Which means maybe somebody else delivers your work. And by the way, that someone else doesn't have to be an independent contractor. It could be an employee in a company. One of the things that I do is I certify, I certify people inside of companies in my process. And the advantage of doing this is that I don't have to keep on going back to the same client because I've given them the tools that they are now able to use and they have a cadre of people inside the organization who are able to take it, run with it and support the organization. So I've scaled the business. Now I charge for this obviously, so that makes me money, but at the same time it helps the client because they're spending a lot less money than they would have spent otherwise had they brought me in to do everything. So it's a real win win situation. The next lens we'll tackle is number 13, the access lens. Now one of the things which I'm always thinking about for myself is even though I'm in a service business, what if I were to turn it into a product business? How can I productize my services? So for example, I have Personality Poker. That's a product. I sell that product, people buy that product. I'm able to sell it without having to become a service provider. I don't have to deliver the speeches, I provide them all the training materials, the personality Poker cards and they're able to deliver it. That's one way of productizing what we do. Another way is to think about subscriptions. And I like the idea of subscriptions because this is recurring revenue and it also creates a lot of value for the client. And so if you do this, there's two ways that we're going to talk about this. One is the obvious one which is maybe we create some kind of video based subscription. So instead of my delivering the same message over and over and over to a company, well now maybe I pre record it and make it available to a large number of people. We're going to get to that a little bit more later in this episode. Part of it is really just starting to think like a product company rather than just a service company. But the next lens, and this is a fun lens, I use this one a lot. Also is number six. This is the analogy lens. And the analogy lens asks the question, who else has solved a similar problem in a different area of expertise or different industry? And for this, and then, bear with me, this one's gonna sound a little crazy, but I really, I love this one. If you go back quite a while ago, although Netflix today is known for their streaming service, really where they started was with a DVD subscription service. And the way they did this was brilliant. They didn't charge you based on how many DVDs you actually received over the course of a month, but rather you could only have a certain number of DVDs out at any given time. So if you had a subscription that said, hey, you can have two DVDs out at any given time, they would send you two from your list and you could keep them for all 30 days and only watch those two. Or you could send one back and as soon as they receive it, they'll send you another one back. And this is brilliant because basically what they gave you was unlimited access to DVDs while limiting the number of outstanding DVDs, the number that you actually have received. And I love this concept and I'm going to give you a product company that uses this concept, but I think it really could apply quite easily to service based businesses. And it's a company called Freedom Boat Club. And I used to live in Boston. And in the marina where we were, there is a place called the Freedom Boat Club. And the Freedom Boat Club is a boat club. But instead of renting a boat, you get unlimited access to all their boats. The only caveat is you could have two outstanding reservations. So you could have a reservation for Monday and a reservation for Friday. You couldn't reserve one for the next week until you used one. As soon as you used Monday, boom, you got another reservation and you could reserve one more time. And this was the way that they were able to manage the flow of activities to make sure that everybody was having access to the boats that they wanted to have access to. And I often think this would create a really interesting advisory service or consulting model. The concept would be that you get unlimited access to the consultant, the advisor, the coach, whatever it might be. So instead of just saying, okay, you're gonna have one coaching session once a week for an hour, you get unlimited access, but you can't reserve another coaching session till you've finished one of your other coaching sessions. It really is an efficient way. I Think of managing a limited inventory. People who want to take advantage and really want to participate frequently will take full advantage of it. People who don't, well, then they won't have to. It's sort of like Netflix. You want to watch one DVD a month, that's your choice. If you want to watch 10, that's your choice. It's a great way to manage a limited resource. And this leads me to the last of the lenses that we'll talk about today, which is number 24. Again, one of my favorites, which is the Variations lens. And basically the Variations lens says, let's not create a one size fits all strategy. Let's create different strategies for different situations. So I want you to think about your clients or your customers. Do you treat them all the same or do you have different ways that you treat different customers? You can have variations across companies and say, well, certain companies I'm going to treat one way and other companies I'll treat a different way. And it might be based on size. So for example, you might say, okay, if you're a Fortune 100 company, I know you have more money, therefore these are the types of services that I'm going to offer you. Whereas if you're a smaller company, maybe you only have $50 million in revenues, well, I have a different offering that I'm going to give you that's targeted to you. You still have the same needs as the big companies, but maybe you just want something that's a little scaled down. So different offerings for different groups of people. The same thing is true inside of a company. If you look at what I created with the Problem Solving Institute, you will notice that there is a pyramid on the page. And one of the things which I've realized is that within a company we want to treat different employees differently in terms of what their needs are. So maybe we have some people that we go deep, the people that we certify. And for those people, I'm going to give them a lot of hands on help, access to me, whatever they need to make sure they are becoming masterful at the techniques. And maybe there's a broader community, people who are advocates, people who are excited about the work. Maybe they don't want to put in the time to become certified and become real experts, but they want to know enough so that they can support their teams. And ultimately they might be supported by the people who are certified. And then finally, we might want to have ways of offering our services to every single employee inside of a company. And to do that, well, we have to get creative. If you're asking the question how can I provide support to 100% of the employees of a company? Well now, obviously it's not a service conversation, but it's probably going to be some kind of digital product conversation, creating videos, maybe there's group coaching from time to time. When people want to show up, they show up. So there might be a service component, but when you use the variations lens, it really helps you get creative about how you can serve different customers differently and different employees within a company differently. So in today's episode we covered a lot of territory. We talked about six different lenses as a way of reframing a problem. We talked about the eliminate lens, which basically says how can you eliminate any of the non value adding activities, travel being the obvious one. We then went to lens number 11, the resequence lens. And in this case we talked about how can we change the sequencing instead of always doing everything synchronously where everybody's on a phone call or on a zoom call. What can we do before the call? What can we do asynchronously using various chat tools that are available? Next we went to lens number 12, the reassign lens, which is all around figuring out how can we get other people to potentially deliver our content. These might be other consultants who become certified, or they might be people in an organization who become certified so they can carry on the work within that company. Next was number 13, the access lens, which is about thinking about ways of creating a subscription service. We then tackled number six, which is the analogy lens where we talked about Netflix and a boat club as a potential model for scheduling services. And then finally we closed with lens number 24, the variations lens, which says let's figure out different strategies for different companies and different people within a company. And with that, we are at the end of this week's episode. If you want to learn more about the Problem Solving Institute, go to the problemsolvinginstitute.com make sure you have the at the beginning of it, the Problem Solving Institute. To submit problems that you want solved on this podcast, go to invisiblesolutionspodcast.com There's a place where you can leave a voice message or send us an email. And remember to download the lenses, go to getthelenses.com I look forward to being with you next week. Until then, happy problem solving.