February 28th, 2023
With David Jenyns, Author of SYSTEMology, Host Of The Business Systems Simplified Podcast, Serial Business Owner & The Guy Who Sold The Melbourne Cricket Ground (MCG). David’s entrepreneurial journey began in his early twenties when he sold Australia’s most beloved sporting venue, the Melbourne Cricket Ground. Since then, his business experience has spanned franchising retail clothing stores to founding one of Australia’s most trusted digital agencies, Melbourne SEO Services.
In 2016, he successfully systemised himself out of that business, hired a CEO, and stepped back from daily operations. Through this process, he became a systems devotee, founding SYSTEMology. Today, his mission is to free all business owners worldwide from the daily operations of running their businesses.
Jenyns spends most of his time supporting the growing community of certified SYSTEMologists as they help business owners implement SYSTEMology across the globe. He also delivers workshops, and keynote addresses and hosts his own popular podcast – Business Processes Simplified.
In this podcast, David shares how important systems are regardless of how big or small your business is. He also highlights the importance of asking systems-related questions in the recruitment process, and how you can find the right people to onboard.
Join us for our episode as we discuss some insights about the important elements to make systems work in your business. We also talk about what most business owners will never understand about scaling their business’ area of expertise.
Biggest takeaways (or quotes) you don’t want to miss:
- “Systems have always been part of my DNA”
- What is a Michael Gerber approach?
- “There’s never been a more important time to get your systems than right now.”
- “As a business owner, if you don’t see yourself as a systems person, that doesn’t mean you can’t have a systems-driven business.”
- “Simple scales, complex fails.”
“If you want to move up in an organization, you actually delegate down some of your lower skilled tasks or you systemize it and that helps you to move up in the organization.”-David Jenyns
Check out these highlights:
- 06:17 What David realized that made him begin systematizing.
- 08:49 What is the minimum number of systems that a small business needs?
- 14:36 System is…
- 21:18 Some ways where things go wrong for small businesses when it comes to onboarding.
- 29:37 What is one of the most important elements of making systems work in your business?
- 43:43 First step as a business owner.
- 55:43 David shares his final takeaways for the listeners.
How to get in touch with David:
On social media:
Special gift for listeners: You can get free resources here.
Imperfect Show Notes
We are happy to offer these imperfect show notes to make this podcast more accessible to those who are hearing impaired or those who prefer reading over listening. While we would love to offer more polished show notes, we are currently offering an automated transcription (which likely includes errors, but hopefully will still deliver great value), below.
GGGB Intro 00:00
Here’s what you get on today’s episode of Guts, Grit and Great Business®…
David Jenyns 00:04
The business owner in particular can’t help themselves to want to reengineer a system the way that they would like it to be because they’re a visionary, they see the business as the way they would like it to be. And that then gets in the way of just getting done, when quite often, the biggest wins can happen just by taking what’s already working, and making it repeatable. Because most small businesses struggle with repeatability. Like it’s usually dependent on a few key staff. And if Sally is off next week, invoices don’t get issued out until she’s back the week following. Or only this team member knows how to sell these leads. But if you figure out what is the way that they’re doing it, and you bottle their current best practice, and you bring everybody up to that standard, you actually get really significant wins in the business.
GGGB Intro 01:06
The adventure of entrepreneurship and building a life and business you love, preferably at the same time is not for the faint of heart. That’s why Heather Pearce Campbell is bringing you a dose of guts, grit and great business stories that will inspire and motivate you to create what you want in your business and life. Welcome to the Guts, Grit and Great Business® podcast where endurance is required. Now, here’s your host, The Legal Website Warrior®, Heather Pearce Campbell.
Heather Pearce Campbell 01:37
Alrighty, welcome. I am Heather Pearce Campbell, The Legal Website Warrior®. I’m an attorney and legal coach based here in Seattle, Washington, serving entrepreneurs throughout the US and around the world. Welcome to another episode of Guts, Grit and Great Business®. I am super excited to welcome David Jenyns to the show. Welcome, David.
David Jenyns 02:00
Hey, Heather! I’m very much looking forward to this.
Heather Pearce Campbell 02:03
Yeah, I am as well David, for those of you that don’t know David. In 2016, David successfully systemised himself out of his business, one of Australia’s most trusted digital agencies, Melbourne SEO. Through this process he became a systems devotee – founding systemHUB & SYSTEMology. Today, his mission is to free all business owners worldwide from the daily operations of running their business. This was live David, I’m sure there’d be cheering right now. Just gonna say it like everyone’s like, yes. Waiting for this episode, please free me from the operator, the daily operations. So I’m going to jump right in and just ask you, I’d love it if you could share with us a bit about your own story and how this became the focus for you.
David Jenyns 03:01
Systems have already always been in my DNA. And I’ve kind of, my dad was a systems engineer. And many of the different businesses that we’ve had, I’ve had a variety of different businesses over the years everything from importing products to this rock’n’roll clothing music store that we modelled on hot topic, states that did it here in Australia,
Heather Pearce Campbell 03:23
I remember hot topic.
David Jenyns 03:26
And we set that one up as a franchise and we sold a franchise or two. So systems have always been thinking systems. But my last business the one you mentioned, the digital agency. For some reason, I thought that business couldn’t be systemized, even though systems was in my DNA, I thought this business was different. And Google’s always changing. And we’re a creative agency. And I don’t want to put systems in place because, you know, the remove the creativity, and my team won’t follow the systems anyway, because Google’s always updating them. And I ended up getting stuck in that business for what feels like probably about 10 years too long. And I was just working so many hours in that business, burning the candle at both ends. And then we found that we were pregnant. And I remember that moment thinking, Ah, I don’t want to be that dad who’s always too busy, who is working on the weekends, doesn’t have time to the the kids and walking them to school, those sorts of things. So that was kind of like the big turning point for me, because I knew intuitively systems was a big part, a real critical element to get out of the day to day operations. And then I started to test a lot of those assumptions on why I thought this digital agency was different. And I started that process of removing myself and I had the deadline. It was like, we have nine months and I’ve got to dramatically drop the hours that I’m working and I basically demoted one of the team members internally, she became the CEO. And I basically started to step out probably took a little bit longer about 12 months. And I ended up taking a huge amount of timeout while my first son was born. And that was kind of like that moment where, just for that timeout, I did some thinking and thought, what do I really want to do, I kind of felt like I’d fallen out of love with the digital agency at that point in time. And I knew this is a really big problem to solve to help get business owners off the tools and out of the day to day operations. And that was that bit where I said, you know, what, I’m gonna go really sort of headfirst into this area.
Heather Pearce Campbell 05:41
Hmm. I love that. And I mean, not the you know, because I’m sure that there were some bumps along the way of trying to do that. And often, though, I think people find themselves in a pinch point that forces a decision around that, right. And for you, it was pregnancy and fatherhood. And that’s a pretty big, awesome step. What did you learn in that journey? Like what were the big aha was for you as you learn to apply and test some of your assumptions around systems in your own business to begin to systematize your way out?
David Jenyns 06:17
A big part of it was this, there was a lot less systems that I actually needed than what I thought I needed. I thought I was going to need hundreds and hundreds but I really applied the 8020 and I had good team members and for some reason in my head, I thought, everything needs to be systemized and if it’s not systemized, it’s not going to happen. And beat team members are going to miss things. But then I started to realize, you identify the critical things that you want to have done a certain way or following a particular process. And you really focus on getting those right, because I had great team members and I think a lot of that baggage came from thinking about how McDonald’s systemized or the way that we did it in planet 13, where I was taking, you know, teenagers who were working on the front counter, and they had zero skill, and I needed to train them up. So of course, we needed, you know, much more documentation.
Heather Pearce Campbell 07:20
Yeah, right. It’s the Michael Gerber approach to like systematize everything, so you can plug in the lowest common denominator and not be reliant on a top for top performer, right, because that really is part of the message like plugging people into the system. And then it runs. And you know, because you built the system.
David Jenyns 07:40
And I really recognized that we had great staff and to a certain extent, some of the team members, I didn’t want to tell them how to suck eggs, they knew how to do certain things. So I’m not going to tell my bookkeeper, let’s create a system on how to issue out an invoice through MYOB, which she did every day she’d been with me for 10 years, she could do it with your eyes closed, we came up with more higher level frameworks and steps for certain things. And we started to decide what to what level of detail the things need to be documented, some things do need to be documented to a great level of detail. So they can be delegated down to less skilled team members, other ones, they might not have needed that level of detail. And it really started me thinking, what is required? What’s the minimum number of systems required to systemize a business? And that was one of those big things that got me to get a result so much quicker and actually reduce a lot of the overwhelm that comes from systemising.
Heather Pearce Campbell 08:43
I love that. So is there an answer to that? What is the minimum number of systems that a small business needs?
David Jenyns 08:49
This is an exercise, we go through actually my book systemology, and we’ll give a free template at the end. But yeah, you don’t even need that you can do it on an A4 sheet of paper. One thing that I do is I suggest that you map what we call the critical client flow. And it’s just the customer and the business journey that you go through to deliver a core product or service. So you in the top left hand corner, you’re right, who is the dream client that you would like to have more of, they’re the ones that pay your advertised prices refer your friends and family pleasure to deal with. You think about what is the primary product that you sell them? Like, what’s the first product that you sell that client that might be the gateway into the rest of your product line. And then you map the linear journey you think, and the rules of this game is you only capture what you’re currently doing, not what you would like to be doing. First document that and you go, how do we grab their attention? How do we handle the incoming lead? How do we sell them? Do we do a proposal do I take 50% up front? How do I onboard them? How do I deliver and how do I get them to come back? And you do that on an A4 page just like a flow diagram, almost, but you don’t put more than a few words in each of the different boxes. And it captures high level, how the business works. And then you ask, where in that process is the pain? And you’re usually that’s where you get started. But that, you know, set of systems, which is usually only 10 to 15. If you start there, and you systemize, that you’re actually systemising, how the business makes money, which is really, if you can do that without key person dependency, you will on your way, there are some other systems, you want to look at a little bit further down the line, like how do you recruit and onboard staff and some finance systems and things like that, but at the guts of it, if you’re going to start anywhere, start with how the business makes money.
Heather Pearce Campbell 10:51
Yeah, I love it and focusing on what is it that you’re already doing. I think a lot of people in their business planning or even reorganize what they’re doing, they do focus on like, what I’d like to be doing, what’s coming next, right, not what is already currently working.
David Jenyns 11:08
That’s a biggie, because the business owner in particular can’t help themselves to want to re-engineer a system the way that they would like it to be because they’re a visionary, they see the business as the way they would like it to be. And that then gets in the way of it just getting done, when quite often, the biggest wins can happen just by taking what’s already working, and making it repeatable. Because most small businesses struggle with repeatability. Like it’s usually dependent on a few key staff. And if Sally is off next week, invoices don’t get issued out until she’s back the week following. Or only this team member knows how to sell these leads. But if you figure out what is the way that they’re doing it, and you bottle, their current best practice, and you bring everybody up to that standard, you actually get really significant wins in the business.
Heather Pearce Campbell 12:10
But I’d love you to speak to that point. Because I think so often small businesses think that they’ve developed a system, but they are still reliant on a person executing the system, right. And so like you said, if somebody is sick, or like I had a VA for a time, and she was a mom, and I loved her, but her kids like mine, every other week, something was going on, and she’d just be absent, you know, and that was a real struggle to get around some of those bottlenecks. How do you work with small businesses on on fixing what they’re doing so that they are not so reliant on key players?
David Jenyns 12:47
It starts in a few different stages, oftentimes, one of the first things that we do is we think about what are the essential repeatable delegate level tasks, that some of these key team members are doing things that kind of have to happen in the business. And we often start with those systemize them and the ideal scenario is always to have a primary person and a secondary person who can back it up. But in small business, you know, that’s not always the case, you can be stretched pretty thin. I think having a virtual assistant, you know, based out of an emerging economy, if they can handle some of those essential repeatable delegable tasks that are well documented. So certain things you will go into more detail, that then frees up the space of those higher skilled team members, and then makes it easier to kind of manage workloads and have people step in and things like that. So it definitely in the early days, that’s a big part of the challenge of small business and you grow and you add team members, but the aim of the game is really to always delegate down to lower cost team members to free up the higher value team members to work on things only they can work on, and get them off those repetitive recurring tasks. And you mentioned Michael Gerber, early on, I happen to do some work with Michael. And he mentioned one thing that always stuck in my head, which is, every business is a school. And you’re taking your team members, which are the students and you’re training them up and trying to make them as productive as possible in the shortest amount of time. And that’s really what a system is. It’s like a lesson plan. You’re teaching them how to do something. And if you can make that training of the students less reliant on your highest skilled team members, like the ideal scenario is get the new team member to watch the video or the training, get 80% of the way there they learned mostly how the task is And then they might do it and be supervised by the supervisor. But there’s only the 20% left that the supervisor needs to give to make the adjustments, give the feedback, but they’ve already done the bulk of their learning through the system. And that’s kind of what we try and work on thinking about our business as a school and training up team members.
Heather Pearce Campbell 15:23
It’s such a good concept, you know, because I think that struggle of training people up can really be a thorn in the side of small businesses, right? If they, if they’re not looking at it through the right perspective, it can be like, ah, here we go again. Whereas if you approach it from like, you know, this is just a part of the machine. And we build this into everybody’s experience. And it’s always going to be there and always going to be ongoing, I think it’s a much easier pill to swallow and to deal with more strategically.
David Jenyns 15:56
When it comes to recruiting and onboarding for a lot of small businesses like to get someone up to speed that takes quite an effort and a challenge. The onboarding system is such an important system to plant those ideas in the heads of your team members earlier, that this is how we do things here. And having some of those essential, repeatable delegable tasks that within the first three months, they start on these tasks, which helps them to cut their teeth, learn about your business. And oftentimes, those systems we talk about, they will just capture what we call the most probable, so here’s what’s most likely to happen. And oftentimes, that means newer team members can handle those, anytime something falls outside of that, that’s when they might stick their hand up and say, Hey, supervisor, I need a hand here or this is slightly out of that, I need some help. And that’s where they learn. But if you if you have something, you know, some training that gets them going on the the most probable what is most likely to happen, that’s the best way for them to start and feel valuable, like they’re contributing to the team. And part of that induction process that are, we’re a systems driven business, we have a way of doing certain things and you start to teach team members, if you want to move up in our organization, you actually delegate down some of your lower, you know, skilled tasks, or you systemize it and that helps you to move up in the organization. So a lot of this has to do with that recruitment and onboarding components like, but that kind of comes a little bit further down the line. Step number one is you got to systemize the way that business makes money. And then kind of step number two is then we start to think about, well, what systems are required for growing and scaling?
Heather Pearce Campbell 17:51
Yeah, well, that growing and scaling piece, I mean, it’s critical for small businesses that want to get kind of beyond this trap of like creating something that’s viable, but not really what they dreamed of creating, and even viable. Like for many, I think it’s kind of barely viable, right? Yeah.
Heather Pearce Campbell 18:10
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Heather Pearce Campbell 20:48
So on onboarding, though, and you gave us some great highlights, talk to us about some ways that things go wrong for small businesses when it comes to onboarding.
David Jenyns 21:02
The step just before onboarding around the recruitment is really important because you want to think about how do you screen out people and before they even get in the door, and make sure that you’re getting the right people when you’re small. Sometimes small business owners, they’re just looking for warm bodies to fill seats. And hey, I’ve got to fill this position. And they don’t realize the cost of getting the wrong team member, and how damaging that can be for the money that you’re paying that team member all of the time and energy that they suck up from the other team members, the fact that they might not work out, and then you’ve invested all of this time with them, and they move on. So definitely coming up with a process where you’re you have a screening process where they’re filling out a questionnaire and they’re doing a trial task. And then they’re going through an interview process. Those steps, while it sounds like a bit of work upfront, they really save you down the line, because then you kind of move them into that onboarding process. And the onboarding process, there needs to be a little bit about learning what the company does and who they serve. And what the software stack is, I think where a lot of business owners go wrong, is they’ve obviously got all of this knowledge in their head and some of the team members that have been with them for a while. And then they’re just kind of throwing these new team members in the deep end and just hoping that they’ll swim, many of which sink or they significantly extend the time at which it takes to skill someone up. And the aim of the game is to make your new team members as productive in the shortest possible time to be adding value. Because they’re not making the business any money or adding to the making of money while they’re just sitting there training. So you need to think about how do we get them doing something that isn’t just a busy task? Like it’s something that is required for the functioning of the business, maybe it’s handling an incoming lead, maybe it’s entering them into your database, maybe it’s some outreach, maybe it’s setting a project up, like you have to think about what are those tasks that are essential, repeatable, delegated? Well, that you can really systemize and then have those ready to go for the new team member, because that’s the best way to have them learn as well. You don’t have to sit down and spend three weeks I’ve we used to do this, we had an onboarding process where someone would start and they just watch videos for about three weeks. And then we realized after doing that for a while it was in one ear, out the other like…
Heather Pearce Campbell 23:46
They’re not applying it 100% Yeah. Yeah, well, and I think it is so easy for small businesses to throw so much at a new person, because they just need help, right? And often because they don’t have a lot of wiggle room in their budget in their timeline, right to allow for much inefficiency. And so I think the struggle is real when it comes to, you know, and stepping back, like you said to the recruitment process. And if we pause there for a minute, are there things that small businesses do right and do wrong? Even if they’ve thoughtfully put together a questionnaire and they’re trying to screen? How do folks screw that up?
David Jenyns 24:27
One thing is not throwing the net wide enough, and not having some different stages with the gold can like really shine. You want to give the opportunity. Sometimes you don’t know how great someone is until they’re sitting next to some others. And then it’s it’s that perspective of seeing, Oh, wow, this person got back to me so quickly, and I gave them the trial tasks. They have one or two clarifying questions and they got to work They over delivered and they listened to exactly what I said. And then that becomes really clear when they’re sitting next to someone who doesn’t do any of that. And they’re slow to respond. And they ask 50 million questions, and you can tell right from the get go that they’re very painful. So I think that’s an important part, I think, the way that people write the job ad is another real key. Because the job ad really is like an advertisement, if you think as this whole idea of getting new staff is like a marketing exercise. And you’re marketing to the potential candidates, you need to make sure that that ad has the right hook. And it’s interesting to your, your dream team member, that they read it and they go, Ah, wow, that’s the type of business I want to be working at. So you want to add personality in there and explain what they’ll be doing and some of the skills that might be required to succeed in the role. I think that’s a big part of it as well, to kind of break some of those just norms that, you know, when people are scrolling the jobs board, or this just looks like another job, well, you’re not going to grab the attention of your a player who wants somewhere special to work on and something’s, you know, a worthy goal to be working towards. So I think, you know, there are definitely some key things that people can time now.
Heather Pearce Campbell 26:24
I love that. And I love the perspective, first of all around adding personality, right? How do you make sure that it’s standing out to the right people, but also this concept of getting enough people in through the initial filter to be able to compare? I think, you know, it’s interesting, even talking, I talked to a gentleman the other day, who’s also in the legal field, and he’s trying to hire currently, and he’s like, you know, a year ago, I posted an ad and he got, like, I don’t know, 70 plus responses. And he’s like, you know, I did the same thing a few weeks ago and got five, right. So there can be dynamics where you have to look longer or harder, or in a different location for the right people. But I think not rushing that process is really important for small businesses to get the right fit.
David Jenyns 27:13
Definitely, in the current climate, there’s never been a more important time to get your systems right, than right now. Because in many markets, the labor market, it can be challenging to find great staff and keep great staff. So you need to make sure your recruitment system is really solid to be able to attract the attention of the right person. And once you get them on board, the way to make that team member feel supported to give them what they need to give them a great environment. And systems is such a big part of that, like systems is a way to codify certain actions that help to build your culture. And I think now we’re starting to see how important in this climate I mean, that’s from an HR perspective, let alone from an operational perspective and using systems as a way to reduce waste, and make sure that the team is more efficient, and they’re working on things that add value like systems is such a central driver to that well, I’m definitely finding more and more that businesses are starting to recognize how important they are because the economy is a little bit more challenging, which then means you just have to be a better operator.
Heather Pearce Campbell 28:36
Yeah, oh, it’s really true anytime, in my own business, even when there’s a breakdown, and I think, Gosh, that didn’t work quite right. Or that was not the experience I wanted somebody to have with my business. And working with various team members on that, I will often ask the question, because, you know, people and like I had a new hire not too long ago, that was like, Thanks for not immediately getting mad at me. And I remember thinking like, why would I get mad at you? Because my first thought is to go to how do we fix the system? This is a system problem, right? It’s not a person problem. It wasn’t a performance problem. It was just like, we have the wrong system in place for this particular thing. How do we revisit that, so that we not only improve the client experience, but we improve the internal experience of our team as well, right. And it’s, you know, it’s not always easy to do because sometimes, like we just want a problem solved, but we have to slow down and look at the system.
David Jenyns 29:32
I love that and it touches on this idea of really probably one of the most important elements of making systems work in your business is building a systems culture. And there’s a handful of philosophies and ways to approach problems and you’ve hit the nail on the head with one of them, which is you always look to the system first. It’s only if something goes wrong. It’s first, the system that you check out if some One hasn’t followed the system, well, maybe that’s a different discussion, but you first want to go in is the system’s fault. And there’s a handful of things like that, that you can do that start to build a systems culture, the way that we go back to the recruiting, you know, when you’re running your job ad, or when you’re going through that recruiting process, sharing one or two of the systems that someone might be doing as part of their day to day, and you share that right up front. And then the team member already gets an idea straight up front. Hey, they’re a systems driven business, and they’ve got the ways of doing things that will repel people who wouldn’t fit with that type of culture. So having that early on, including some systems related questions in your interview process, and finding out, you know, how they feel about systems, have they created systems, what does that look like? And then once you start getting in, and you’re working with the team, you mentioned, blaming the system if something goes wrong, or if a challenge pops up, always looking well, what is the system’s solution. And, you know, the other things like, showcasing great systems, and when the team, you know, just like bringing up kids, you want to praise the behavior that you want to have reinforced, like, oftentimes, you know, with my boys, if Nate or Jordan does something, right, I’ll praise them in front of my other son, so that the other son, whether consciously or subconsciously goes, Wow, if I want that type of praise, that’s the type of action that I need to be taking. And again, this helps to build a systems culture and a big part of what you need to be thinking about.
Heather Pearce Campbell 31:48
Oh, well, and I love even this idea of embedding it into the recruitment process, like asking systems related questions, right? People may not think of that, even if they are a systems really like systems run business. So I think that’s huge. And and the importance of repelling the wrong ones, somebody who’s like, I want autonomy in my job, I’m not here to follow systems or whatever, right versus a personality that’s like, you know, what, I can totally operate well within systems and help improve them.
David Jenyns 32:20
And a big part of the what I see systems doing is it creates a level of accountability and transparency, which is what you want to have in your business. Sometimes, when you first introduce systems, and it’s brand new, and the team, you know, you’ll actually find most of the resistance to happen that happens with systems happens upfront with your existing team members, because they used to doing things a certain way, we’ve always done it this way, why do we have to change, whereas new team members, if that’s all they’ve ever known, there’s no resistance. So you’ll find sometimes with existing team members, sometimes, as you’re trying to introduce this, some people may have created a little black box around them when nobody really knows what they’re doing. And it creates this job security for them. Because you’re like, Oh, if we got rid of them, we’re not going to know what Jenny’s doing. And nobody knows how to do it. And that is quite destructive for a team, especially if you’re trying to build this culture. So as you start to shift systems is such a great way to shine a light on the work that’s getting done, accountability, transparency, which then really gets everybody to raise the level up.
Heather Pearce Campbell 33:34
That piece is huge around. And I love that you relate it directly to accountability and transparency, because I think one of the things that most quickly breaks a team is when you have somebody who’s either underperforming or not really doing the job that they’re there to do and other people know it, right. But it can happen in this way that you just described, like they’ve created a black box for themselves. I had one experience a few years ago, where I got hired at a local firm to step in and lead a team of about 15 people over the course of a year on a massive project. And it was I mean, we were helping 1000s of clients on, like, through a legal process and the team had sought, you know, it was a great team, there was a certain level of some dysfunction and things that weren’t happening and and, you know, one of the first things that I did is had to get in and learn the system, like what system existed, what were they doing, what was the output and trying to figure out how to actually look for things that were measurable, and then redesign it right and look at it in a way of how can we have people being accountable because it was purely a numbers based system. We had a certain number of clients, like I said in the 1000s that we had to serve in a very specific way and on specific timelines. And it wasn’t until we set up this level of accountability that, that we realized, and I’d obviously inherited this project. So I didn’t create the systems that they were already working on. But this one team member had basically no accountability to anybody because nobody didn’t know what she was doing. And it became a major rub as people progressed. And we started to actually make our way through these numbers to realize that, you know, there was some consistent under reporting, and just not being transparent with her work. And it was a real challenge to like, get my hands around that. But as soon as I figured it out, it’s like the clarity that you have if you’re leading a team, so drastically different than if if people are left to do a job without systems where you really lacked that transparency.
David Jenyns 35:46
And the cost to that business, like as you get bigger and bigger, it’s easier for someone to hide in that. But as a small business, where you’re quite often operating on razor thin margins, and I mean, you can’t have that level of waste, and someone taking advantage of the system, because it endangers the rest of the team and all of the other jobs. My current CEO, one thing that she does really great is she talks about this idea of, if a team member is cancer, they need to be cut out straight away. Now, oftentimes, you know, I sometimes would hold team members on longer than I should, like, I love to give the team member the chance and the opportunity. But there’s a point where, when you know, someone’s not the right person, how long do you hold on to someone when you know, they’re not the right person, you should probably get rid of them straight away. And that’s been a big learning for me as we’ve kind of gone through this process. But it’s so easy once you get a systems culture in place, to then, you know, all of this sort of involves things like your culture, and like, you know, what are your values for the companies, so you recruit, and you fire based on values, and that accountability and transparency is one of those. And once you’ve got the systems in place, and then it’s more obvious, and it’s happening out in the open, then team members that don’t fit will start, some of them will opt out themselves. And then you use your new recruiting system to get the right people in because building a business, it’s different from your family, you don’t really get to choose, you’re going to have some family members that might be a little bit rough around the edges and rub you the wrong way and a little bit challenging, but that your family, what do you do, that’s just what it is. You can’t choose but in business, you choose your team members, you choose who is working with you. So you might as well choose ones that make you feel great that do great work that support what the team is doing that like that gets everybody to operate at a higher level.
Heather Pearce Campbell 38:04
Yeah, absolutely. And the cost to a team from a morale perspective and an output perspective, when you have somebody who’s not the right fit. It’s, it’s just so obvious, right? It’s painful. So I’m curious what what piece because you cover a lot, obviously systems encompass so many areas of business, and people are looking at a lot of things as they, you know, even map the top, you know, the 80-20 rule, right? Map the top most important systems in their business, where is your favorite place to spend time with your clients?
David Jenyns 38:39
Hmm, I think it’s with the business owner, I do a lot of work with the business owner. And they oftentimes have the baggage that’s going on in their head about or should I be letting go here, I need it to be done to a certain standard. And they just hold on so tightly, oftentimes, because they’ve built the business to a certain size. And they’ve been successful, because they’ve held on tightly, and they’ve maintained the standards, and they’ve micromanaged and looked over every project. So all of that behavior has reinforced by the success of the business growing to where it is. Now to move it through to that next level, like that’s okay to get a business off the ground. And you kind of need to do that. And business owners are a little bit crazy. And they work a ridiculous amount of hours and they pour their heart and soul into their business. What you need to avoid happening though, is getting stuck there. Because it also becomes a point where you actually have to change and evolve. If the business is dependent on you. You’ll never really break free of it, you effectively have a job and that’s typically not why the business owner first got into business. So I really really try and help the business owner, reframe the way that they approach things, think about how they step out, you know, how do we pass that responsibility? How do we identify a systems champion inside the team that can really champion this, how to help the business owner recognize that they probably the worst person on their team to be documenting systems, like, it’s okay to extract the IP out of their brain, but they should not be writing systems. Most of them don’t even like systems, they’re not systems people, like their creative people. And that’s okay. So, you know, a lot of the work that I, I try and help them like when I did my work with Michael Gerber. One thing that I realized now Michael Gerber, the godfather of business systems, he wrote the book called The E Myth, he is so loose and unstructured when it comes to systems. He’s a creative thinker, but he’s figured out, he needs a yin to his yang, and he’s got the team that handle everything that needs to be handled from a systems perspective, which then gives him the space to do all the creative thinking that he does. So you actually need both. And it’s okay, as a business owner, if you don’t see yourself as a systems person. That doesn’t mean you can’t have a systems driven business. And you kind of need to get this because all great businesses have systems in it. Like it’s the only way to build something that works beyond you and becomes a functioning machine that you can step in and out of.
Heather Pearce Campbell 41:41
Oh, I love that last point so much about like, it’s okay, even as the you know, the CEO of your business, not to be a systems person that reminds me, I had a conversation with a woman who lives really in the financial but building business space as well, more from the finance side, saying you don’t have to be a CEO that even really understands or runs the finances. Like there’s lots of misconceptions. And I think people will often kind of prevent themselves from going into that role. Because they think like, Well, I’m not cut from the same cloth as those other guys. Or, you know, I didn’t come with this inherent knowledge on these topics, which I would assume CEOs have to be experts in, right. I think it’s very similar. And it’s a relief to hear like, you don’t have to be a systems person or an expert at this. And you can still have a systems-based business.
David Jenyns 42:39
As a business owner, because I mean, the dirty secret of systemology is I don’t really like documenting systems myself, even though I’m a systems person, and I don’t. But as a business owner, I fell in love with what systems can bring. And that’s really what a business owner needs to think about. Business owners need to recognize how important systems are, the fact that they create time, reduce errors help you to scale your profits, and they’re essential. So fall in love with the result that they give not the process of creating it. And then find the team members who once you understand the value of them, you then are able to allocate resources to go to work on that piece. But unless you value them, in business, especially small business, you’re so limited on time and resources that you might not give the system’s the time that they need. So that’s probably your first step as a business owner, to really think about how much you’re leaving on the table by not systemising. What is the true cost for not systemising your business? And I guarantee it’s probably a lot bigger than you think.
Heather Pearce Campbell 43:55
Hmm, it’s such a powerful question, how much are you leaving on the table? Or what is it costing you not to systemize your business? To be respectful of time, because I know you know, we’ve got a few minutes left. But the one piece that I keep going to is, I think some business owners can get decent at hiring some of the various levels of support that they need. But that final piece of being able to remove themselves from the day to day will you talk to us about the difference between right hiring up some of the initial support to help expand and grow certain parts of your business but not getting stuck at the part where you’re actually removing yourself.
David Jenyns 44:37
To the piece there is there’s one or two things to think about. Firstly, the buck needs to stop with someone. So for you to step out, someone needs to take responsibility. And I know that’s a huge step for many and we’re talking about hiring your operations manager or the CEO or the person that steps in. And then the business owner actually steps out and becomes a true business owner, where they’re able to work on it rather than in it, that doesn’t mean that they stop working in it, they might step in and out. And they might work on the pieces where they add the most value or bits that they enjoy. What I think business owners need to work to, is to have the option, most business owners don’t even have the option to step out because there’s no one there to take over that level of responsibility. So that’s a real key one, to find that person for you to step out, at some point, you will need to find someone. And then when you find that someone, you need to understand that it will take time for them to get it, they will make mistakes, they’re not going to do it exactly as you they haven’t had the years of experience and understanding every facet of the business. And you need to let them make some of those mistakes. And you need to not micromanage them and give them the room. And you know, in many regards, as I’m talking this through you with you right now, I’m giving myself a little bit of a therapy session as well, like this is a reminding for me, I have an operations lady all around, she does a fantastic job. And we’re kind of going through that period, she’s been with me in this new business system ology for about a little over a year now. And just now I feel like she’s really starting to find her feet. And she’s understanding the different personalities and what the business needs and when to put the foot on the gas and when to put the foot on the brake. But finding that person and working with them, like that’s a really interesting dynamic for the business owner, who has to let go, and who has to stop being the be all and end all and has to stop training the team that they are the knight in shining armor. Whenever you’ve got a problem, you come to Dave and Dave will solve your problem. And before you know it, you’ve just created all of these dependencies on you. Right, another bottleneck? Yeah. And you’ve got to work through breaking those. And that’s a big part. And probably one of the most key pieces for that final step you’re talking about?
Heather Pearce Campbell 47:21
Well, and I imagine, you know, maybe it’s more of a challenge for some, I imagine that it’s a bit of a struggle for people to sort out, what am I looking for in? Let’s just say like a CEO or a replacement version of me, right? Before we get there, I want to ask, do you find that there are certain financial thresholds that small businesses need to get to before they’re lined up to be making these decisions? Or can it happen at various stages for various types of businesses?
David Jenyns 47:52
It can happen at various stages, oftentimes, it has to do with the size of team and number of team members. And the reason I do that, rather than tying it to money can be depending on you know what country you’re in different income levels, depending on where you’re recruiting, like, sometimes you if you’re recruiting in certain economies, the labor can, you know, be significantly cheaper than if you’re like, you know, recruiting locally. So there’s a handful of things, but generally, like, the first thing to remember is, generally, a team member or a supervisor shouldn’t have more than seven direct reports, once you get up to the point where you’ve got seven team members that you’re managing. As a business owner, generally speaking, that means you’re spending most of your time just keeping everybody else busy, and you’re not having enough space for you to do your work. And that’s the same as you start to grow and you branch out to different departments, you know, then you might get a department head and, you know, in marketing, and a couple of team members sit underneath them, or you’ve got someone in operations and a few team members that sit underneath them, you want to grow them up to seven, again, once you start to hit for some reason. It’s around that number seven, that people just start to get stretched. So for me, when we hired the CEO, and I’ve done it in a few businesses now before in the digital agency, I did it now we’re doing it in system ology, and we did it at Planet 13. The way that I did it was the CEO for me usually came in at around that 10 to 12. Mark, as in I’d already started to think about, you know, we got a little department head and a couple of team members that are sitting underneath them. And then I’m starting to realize, well, the CEO has someone to actually manage because the CEO oftentimes when you start a business as a business owner, you are the technician, you know how to do the thing. You’re the lawyer, you’re the hairdresser. You’re the lawn mower. So you know how to do the thing. And that means you, you know, that’s you grow to a certain size, and then you need to start to get someone else who could do that thing. It’s both a blessing and a curse to be able to do the thing. So oftentimes, when I get a CEO, I don’t necessarily want them to do the thing. I want them to manage the team. And yes, they need to have an understanding of what needs to be done. But I also don’t want to get to the point where it’s too easy for the CEO to get sucked into doing the work, which is the same problem that the business owner suffers. So I don’t want to set them up for failure upfront, by making it that oh, yeah, you can now fall into the trap of doing the thing, because then that stops them from doing all the other tasks that a CEO should be doing, managing the team members thinking strategically, growing each of the different departments, those sorts of things.
Heather Pearce Campbell 51:01
Oh, it’s such a great, I mean, a great point about getting somebody who’s not too close to the work so that they become the backup, or the helper or the overflow person, right? It’s not what you want a CEO for.
David Jenyns 51:16
Yeah, they ended up being a little bit too overpaid for that position. But even more than that. Oftentimes, again, it’s that’s what happens with the business owner, like I had one of my biggest breakthroughs in the digital agency business, where we had a sister company, and it was Melbourne video production. And we built it up as a side business. And I’m not a camera guy. So I don’t know how to do the shooting or the editing. And it was so much fun and so enlightening for me to build a business, where from day one, I couldn’t do the thing. And that’s actually where I got most of my insight on how to remove myself, because I learned and had a personal experience that you can grow a business without being the person doing that work.
Heather Pearce Campbell 52:11
Yeah, I love that I love and probably, you can grow it faster, because you’re less attached overall to the work itself. Right?
David Jenyns 52:21
Yeah, you become much more strategic in your decisions. You think about the money and what, how much money? How should you be pricing things, so that you can pay the right people to do the right job, and still have money left over for marketing and have some profit in there. Rather than sometimes the business owner, especially when you’re getting started out, you just make up for any shortfalls with sweat equity, and you own the candle at both ends. And you put extra time in. And what that does is it masks how well the business is actually performing. Because you’re the one bridging the gaps and papering over any cracks, as opposed to the business actually functioning the way that it should. So it’s, I mean, that’s a great exercise. And part of what we do in systemology in the book, like that whole critical client flow that we talked about. The goal is to make that almost like a mini business inside your business, where you’re just delivering that one thing without key person dependency. And we’ve had clients that have done that, and then killed off 90% of the rest of their product line, because they’ve realized, we can do one thing profitably and do that really, really well. And we didn’t need the 10 other products that we thought we were selling.
Heather Pearce Campbell 53:41
Oh, that is so huge. Yeah, the actual revenue generation and especially like finding out what’s profitable, right. But I love that and the way that it sounds like it allows so many entrepreneurs to simplify their business, once they go through that exercise.
David Jenyns 53:58
That’s a big key for scaling, like, simple scales, complex fails. So the more complex something becomes, the harder it is for you to grow it. So the aim of the game should always be about simplifying.
Heather Pearce Campbell 54:16
Hope people wrote that one down. Yep. Simple scales, complex fails. Oh, my gosh, David, this has been so fun. I am curious, out of respect for our time, where do you like for people to connect with you online?
David Jenyns 54:31
If you hit to systemology.com, there’s just probably the links to everything. Definitely checking out the book is a great place to start. It’s over on Amazon. There’s some links from the website to get to that systemology goes into my framework and the seven steps. We just talked about one of those today. There’s an audio book as well, if you’re a podcast person.
Heather Pearce Campbell 54:50
Yeah, I love that.
David Jenyns 54:51
Yeah. And Michael Gerber actually wrote the foreword to the book and he reads the foreword. So that’s worth having a bit of a listen to and, yeah, on the website, this links to our Twitter and I do quite a bit on YouTube and those sorts of things.
Heather Pearce Campbell 55:06
Oh, good, awesome. Well, we will share those links and including the link to your book under the show notes. So be sure to pop over, check out the show notes and connect with David at legalwebsitewarrior.com./podcast look for David’s episode. David, I know that there’s so much more we could dig into. I feel like this is such such such an important topic. But I think that, you know, you really dropped some brilliant tips today. Everybody needs to hear this and they need to hear it more than once. What final takeaway would you like to leave people with?
David Jenyns 55:43
I hope that we’ve lit that fire inside the business owner listening to this who might have closed off to the idea of systems in the past. And then we’ve got them to challenge some of those assumptions and think maybe I can do this maybe I can own a systems driven business. Like, I think if we’ve achieved that enough to the point that you go take some action about it, you talk to your team, you get a copy of the system, ology book, anything, just take that first step to building a systems culture because it’s so critical for you, the business owner.
Heather Pearce Campbell 56:17
I love that so much, David, thank you. I so appreciate your time. Thanks for popping in and visiting with us today.
David Jenyns 56:25
My pleasure. Thank you.
GGGB Outro 56:29
Thank you for joining us today on the Guts, Grit and Great Business® podcast. We hope that we’ve added a little fuel to your tank, some coffee to your cup and pep in your step to keep you moving forward in your own great adventures. For key takeaways, links to any resources mentioned in today’s show and more, see the show notes which can be found at www.legalwebsitewarrior.com/podcast. Be sure to subscribe to the podcast and if you enjoyed today’s conversation, please give us some stars and a review on Apple podcasts, Spotify or wherever you get your podcast so others will find us too. Keep up the great work you are doing in the world and we’ll see you next week.