Systemising – The Path To Business Freedom

A business should be the vehicle that supports your lifestyle, not a life sentence.

Let’s take a step back. The first thing we need to cover are some fundamental rules.

Rule 1: It’s OK to actually enjoy your work!

Let’s look at the richest people in the world. Can we first take a minute to state the obvious? There is nowhere NEAR enough diversity in this list! That is a given AND it’s what we’ve got to work with, so let’s dig a little deeper.

Do these people enjoy work?

Here is a seriously LONG but seriously great piece of writing from Tim Urban on how Elon Musk thinks which is a fair indicator that he not only enjoys his work – he loves it!

Jeff Bezos, well let’s look at the advice he gives not only aspiring entrepreneurs, but his own children: “Be proud of your choices not your talents”. I think it’s fair to say that he is proud of what he has built at amazon and is passionate about the work he has done (and will do in the future, no doubt).

Bill Gates has not only built the biggest and most successful computer company of all time, he has also built a Foundation that is quite literally saving lives. He has changed the world with his thoughts and his money. Does he love what he does? Here’s a great article that breaks down how Bill Gates sees and practices happiness.

I can see the counter argument to this. “They’re already successful! Of course they love what they do… now!”. This is true and valid, and looking back through their personal histories and the personal histories of anyone that has any amount of success and happiness… they focused on what they are good at and eliminated or delegated the rest. Does that mean they never worked hard? Not at all! It means what they were working towards and the process itself was enjoyable. Challenges can be enjoyed… if not in the moment, upon reflection. No one likes falling down but we all like to be able to walk. The only way to get there for a toddler is to fall a bunch of times but that doesn’t mean they aren’t enjoying getting closer to their final goal.

This leads me into…

Being Free at the Beach

Rule 2 You don’t have to flog yourself.

In a conversation Warren Buffett was having with Bill Gates he said that “busy is the new stupid”. You should protect your time. Busy is not a proxy for how important you are. This is such an important concept to understand. Once you can completely accept this then you are well on your way to a better business and life.

So how do you do it?

Your business need an infrastructure that works without you so you can work on growing the business and take time for thinking. The next step is for your business to become a systemised business.

You might benefit from improved sales systems, customer relationship management systems, systems to help you onboard new team members or perhaps just creating clear documentation of your current systems to allow for manuals to be created for those repeatable processes in your business.

“The key is not to prioritize what’s on your schedule, but to schedule your priorities.” – Stephen Covey.

Systemising isn’t only for big businesses anymore.

In fact, systemising was never just for big businesses. A system can be as simple as a clear objective, a whiteboard on a wall and a willingness to use it consistently. As the Stephen Covey quote mentioned above says, it can be as simple as a schedule that starts with your priorities. That being said, there has never been a better time to really get your systems dialled in. Cloud computing, the internet age and a healthy dose of VC funding has made it possible to do what only huge corporations could do in the past. These systems and processes can now be done with software that costs tens of dollars a month rather than hundreds of thousands.

BUYER BEWARE: Owning (or renting) the software is not enough. The software needs to be implemented and used effectively. The problem is in the promise of new software. Just because it CAN solve all of your problems doesn’t mean it will and often it will take WAY longer than you think.

I remember when we started our first real business. We decided we *needed* the BEST website! We spent well over $10k on design and building this website in 2010 (which was built using proprietary software which meant that we couldn’t easily update it ourselves). We expected that we would build it and when people saw our website compared to everyone else’s that they would have no option but to pick us. Turns out there were a few additional hurdles to overcome:

  • We were brand new and therefore we didn’t rank organically for anything
  • People cared a whole lot less about a pretty website and a whole lot more about price (in this particular industry)
  • People wanted to buy online and not have to speak to anyone (e-commerce was an additional $10k that we didn’t have to spend).

The upshot is that we had to work twice as hard to be found and break even. We didn’t do our research and we were easily led astray by the ‘professionals’.

Fast forward to our next business (in 2013). We built the website ourselves using 10 minute online tutorials and designers from fiverr to get a proof of concept. It cost us less than $50 and this website went on to be the catalyst for a $1million dollar business.

Fast forward again to today and there are now drag and drop editors that mean building a website is easier than ever before and the systems are baked in. If you spend the time to learn them you can get the same result as the big guys for a WHOLE lot less.

These innovations aren’t just happening for websites they’re all over. Accounting, legal, personal finance, project management… you name it, there’s a VC-funded startup that has nailed your pain point.

This is AMAZING, but if you don’t know what you need then this is all fool’s gold. The promise is only as good as your understanding of your needs.

You need to do the hard yards first!

You might be surprised at just how few companies have anything written down about how they do what they do. Without documented workflows in place, your business procedures and obligations will only remain in the mind of the individual who actually knows how to do it. And this does not lead to peace of mind as a small business owner!

This can be a daunting task. Here’s a great tip though… you don’t have to do it yourself.

You DO need to identify what needs to be written but you don’t need to do it yourself.

You can either:

  1. Use a product like loom to screen-record yourself doing a process or procedure. Send it to a team member to document the series of steps that it takes for you to perform a given task.
  2. Identify the regular processes completed by your members of staff and ask them to screen-record themselves completing the tasks. Ask them to send the videos to a dedicated team member to document these processes into a list of easy steps. These steps should be shared with a colleague who is unfamiliar with the task. If anything doesn’t make sense, ask the original staff member to give further explanation.

You just need to start somewhere. It’s important to remember that these standard operating procedures (SOPs) are not meant to be perfect. In fact, the best SOPs are never truly complete. They’re a living document that should be updated frequently.

Here’s a list of SOPs for the key systems that make up most small businesses (that you can get started on today!):

  • Your lead generation system – How you bring new leads into your business.
  • Your lead conversion system – How you convert your leads to new customers.
  • Your production system – How you produce your product or service.
  • Your delivery system – How you deliver your product or service.
  • Your service system – How you take care of your customers and your products before and after sale.
  • Your financial system – How you track your profitability and ensure compliance.
  • Your human relations systems – How you hire, train and take care of your team.

“The key is not to prioritize what’s on your schedule, but to schedule your priorities.” – Stephen Covey.

What kind of processes can you systemise?

Only One – your business. Your business IS a system it may just not be well oiled and require subsystems in place for it to fly.

What is a system? The wonderful Dr Russell Ackoff defined a system as:

“A system is a whole whose characteristics derive out of the interactions of its parts. Not the actions of its parts taken separately, it’s the way the parts interact. And therefore when a system is taken apart, like an automobile, if it’s disassembled, it’s no longer an automobile. It’s not the sum of its parts, it’s a product of the interaction of its parts.

So how do we get the system that is your business humming as a glorious whole?

First it’s identification. To continue with the car analogy, when a car stops working it’s not the whole car that needs fixing but the part or parts (subsystems) that have become so dysfunctional that it has affected the whole.

Now, I’m assuming that your business hasn’t completely carked it, but it may be in a serious need of a service.

One of the best diagnostic tools that exists is from a book by Mike Michalowicz called Fix This Next. This book has a tool called the Business Hierarchy of Needs (BHN) which is based loosely on Maslow’s hierarchy of needs. The BHN consists of different levels which are NOT linear, you will cycle up and down through the BHN throughout your business journey.

At the bottom there is Sales (this is like oxygen, without sales your business can’t breathe), then there is Profit (it’s all well and good to have sales but if you are spending more than you are earning more sales will just kill the business faster), then there is Order (this is where we’re looking at efficiency, and where use of systems and automation can really make your business shine), then it’s Impact and Legacy right at the top (where we look at what difference we’re making in the world). You can do a free evaluation to find out where you are currently at on the Fix This Next website.

The BHN represents your business system as a whole. Each stage of the BHN affects the rest of your business (either positively or negatively) and, as I said before, you will cycle up and down the hierarchy as you go.

You may be thinking that all systemisation happens in the “Order” stage. This is incorrect. Systemising happens at EVERY stage. In fact, I believe this is HOW you cycle through the stages – by creating systems that allow you to grow through the hierarchy.

Sure, when you are in a position to look at “Order” you can really see some significant gains especially when it comes to return on time (check out this talk from Rory Vaden on the compounding effect of time multipliers). However, as Peter Drucker said it’s more important to do the right thing rather than do the wrong thing right.

Fix This Next Strategies

Elimination, Automation and Delegation

These are the only alternative options to doing something yourself. I also believe tasks and processes should be dealt with in this order. If you can’t eliminate it can you automate it? If you can’t automate it can you delegate it to someone else?

Elimination is by far the most underused strategy. Often we do things for dumb reasons. “It’s easy enough!” “Everyone else does it themselves!” Sometimes we have overinflated the importance of our tasks in our head without validating that it is actually important.

How do you eliminate tasks?

In the video I mentioned above Rory Vaden suggests that you procrastinate on purpose. This sounds funny but it is really quite powerful. If you’re not sure if something is important the only real way to find out is to NOT do it and see what happens. You will be shocked how often the answer to that question is that absolutely nothing bad happens at all. In fact sometimes our incessant meddling gums up the whole system and slows everything down! So my challenge for the next 5 days is to find one thing per day that you can procrastinate on purpose. If nothing bad happens then eliminate it.

Another way to identify the things in your day that can be eliminated is by a good old fashioned review. In Laura Vanderkam’s book 168 hours she promotes the idea of a time log. You can download her spreadsheet template here. In this you will see where you really spend your time. I have found even after a typical day’s work you can really get a sense of what is taking up your time. Maybe it’s meetings, maybe it’s emails, maybe it’s checking and rechecking financial statements. Now ask yourself the following:

  1. Are all of these tasks absolutely necessary for me to do?
  2. Do I really need to dedicate this much time to all of these activities?

The answer to at least one of these questions is almost always NO.

So what do you do? My favourite (and most drastic) is to simply stop. I do concede that this can be tricky, especially if you’ve trained everyone around you to constantly interrupt you. You may need to lovingly start to set some boundaries. Maybe move your office to somewhere that has less people around, maybe start working from home more, maybe start blocking out meetings with yourself so that you can start regaining some control of your calendar. Whatever you do, for this to work you must communicate.

I am a recovering people pleaser. This has meant that for most of my life I have been unable to set any meaningful boundaries. I’m pleased to report that after years of trial and error I can now state that I often lovingly set and hold my boundaries AND it rarely bothers anyone. I also need to state that I tripped and fell many times along the way. I also made horrible messes and annoyed people I cared about by going too far and sometimes getting emotional when it would have been better to be logical or reasonable or empathetic.

The key difference in success and failure in boundaries for me has been communication. In a simple framework:

  1. Tell people what you are going to do.
  2. Do it.
  3. Tell them what you’ve done.
  4. If anything changes ask questions until you get to a result that everyone is happy with.

One thing that often happens when you are a freelancer or contractor is that the requests far outweigh the time that has been budgeted for your services. The most common reaction to this is frustration and resentment toward the client because they aint’ showin you no respect or they’re trying to take advantage of you.

This is so often NOT the case. Usually the reason that they are overstepping your boundaries is because they are not the expert (you are!) and they simply don’t know how long things take. Secondly they’ve given this amount of work to you before and you did it so now they think that’s what is appropriate because the expert neglected to tell them otherwise. In my experience, most people are reasonable and if you take the time to talk them through things they understand and WANT to do the right thing if you let them. After you have done this and the workload exceeds the budget simply ask them what their priorities are. “So you probably have enough budget to do A, B and C but D will push you over. Do you want me to replace B with D or do you just want to up the budget a bit?”. Do you see how this is reasonable AND gives everyone all the information required to make reasonable decisions? If you keep hiding all the information from people bad choices are going to be an obvious outcome. Communicate and ask questions. This is the true key to boundaries in my opinion.

Simple Sales Process

The math of automation.

Next we move onto automation. This is by far my favourite because it’s like buying back time. Sometimes this calculation can be tricky as the effort and time it takes to automate a task can occasionally outweigh the time it would just take to do the task. This can be false economy however. If it is a one time task the calculation is pretty straightforward. If the task will take 6 hours to complete but 3 to automate then automate. If it will take 3 hours to complete and 4 hours to automate do not automate. But what about a 30 minute task that you have to do once a week. That’s 26 hours per year. Even if you spend a whole day automating you will be in front in 16 weeks! If you are able to take the long view it is probably worth it. You may not have a day to spare at the moment though and that is why elimination comes first. You have to make room before you can automate. If all else fails you can also look at hiring someone to automate these tasks. Just make sure you know exactly what you want, otherwise you may end up spending the same amount of time that you would implementing the automation just in explaining what you want.

The art of delegation.

Finally delegation. This is like automation but more expensive. It may well be worth it though. When you delegate you also obtain another person’s knowledge and skill set. It is so critical to understand 1) why you are hiring someone and 2) to effectively onboard them so that you both don’t end up doing the same job. Or worse, your new hire sits around waiting for something to do. You want them aligned with you and the goals and purpose of your business and excited to help propel you to the next level. The level that will require you as the owner to have enough time to think and work ON the business.

Save Time, Make Money

Effective systems are the way to get back your time as a business owner, to get back to doing what you love and earn the money you deserve. Working harder and harder is a vicious downwards cycle to despair. If you can get some oxygen and push through the inertia the business systems you build will not only bring you more time but your business will be worth more too. You will compound your time and effort by building an asset that can support you and your lifestyle.

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Need A System

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