Sam Carpenter shares his experience and tips for creating and implementing business systems.
01:26 – Understanding the concept of “Work The System”
03:32 – What large successful organizations do differently
06:09 – What to consider when creating or storing this system
09:46 – The starting document
10:06 – What comes next
13:40 – When should you start?
16:29 – Ritual, routine and implementation
19:27 – The big mistake that some managers make
22:09 – Most salespeople often do one thing
23:18 – You can download the book for free
Life is not a confused mishmash. It’s a very logical collection of independent systems. [Click To Tweet].
A business is still a dictatorship, there’s a leader. I call it a benevolent dictatorship. [Click To Tweet].
I don’t want to fly in an airplane or be in a hospital where the pilot or the nurse is just winging it. [Click To Tweet].
James: James Schramko here from Superfastbusiness.com. Today I have a guest on a topic that is really really important for most business owners. Something that many people haven’t achieved yet but are on their way to. And I think with the help of this discussion, we might get there quicker.
So my guest today has a very popular book called “Work The System” which is all about making more and working less, which is all a great result that we could all aspire for. So I’d like to welcome to the call Sam Carpenter.
Sam: Thank you, James. Glad to be here.
James: Yeah, so we have a really good business audience to this particular show and a lot of people are familiar with the idea of having a standard operating procedure but I think there’s a lot of question marks around when they should start implementing this. And I get questions like, ‘What sort of system should I use to store it?’, ‘How and what do you do when your teams won’t follow it.
These sort of questions come up a lot so I’d love to first go into the overall, helicopter view. How would you describe Work the System to someone who’s new to this concept?
Sam: Well, it starts with getting…this is going to sound strange…but it starts with getting a better view of how the mechanical world works. What I’m saying is, most of us go through our days in our business, in our personal lives kind of seeing our lives as a mishmash of sounds, sights and events. And it’s our job to wade through this and kill fires and take care of stuff as it comes up.
And I like to refer to the game Whack-A-Mole and that’s where the little mechanical moles come up out of holes and it’s a carnival game where you smack them down with a mallet, a rubber mallet and they come up faster and faster and you smack them faster and faster and of course in the end, the moles always win.
And what this..the reason this happens is because people don’t realize that life is not a confused mishmash. It’s a very logical collection of independent systems, individual systems.
There’s the system for driving to work, the sales pitch, there’s a system for creating documentation and there’s a system for taking a break and having lunch or hiring somebody. They’re all independent of each other, in your business and what people don’t realize is that.
And so when I say we go a layer deeper, here’s what I mean: each one of the results in our lives, independent of the other results, is the product of a process or 1,2,3,4 linear step by step process over time that leads up to that result.
And what we need to do is not just see the independent systems of our lives but to be able to go down into those systems that produce the results and spend our time there making those processes better.
And this is what big companies do. This is how big companies get big. And this is the difference between a large successful organization, and a small, struggling one. The leader of the larger organization intuitively understands that he or she must work within the systems, within the independent processes of the business to get the results we want.
And the truth is, most people go through their lives sorting around the random results of unmanaged processes. And I’m talking about relationships and health and business especially. And most businesses, nine out of 10, small businesses, the owner is killing fires all day long, trying to correct the bad results of the systems that they don’t even see, much less manage.
And so, the way to get a system under control is to see the systems independent of each other, to see individual systems and document the process that leads up to the results of that particular system.
So, any big company has documentation, most small companies don’t. But you’ve got to get those, you’ve got to go a layer deeper to where the processes are executing and work on those processes to take care and insure the proper results up above. And that’s kind of a helicopter view of the whole thing.
But again, I, let me just finish this little bit with saying, the difference between a large, successful organization and a small struggling one is that the leader of the larger organization has taken the time to analyze the processes that add up to that particular business.
And a small struggling organization, the proprietor, has not done that and is just killing fires all day and trying to do their best mole whacking to get through the day. And you’ve got to get to this place where you look a layer deeper and see the processes that are actually creating the results.
James: Right, I like that. So, there’s a big distinction between the event that we’ll see and then the process that led to that. Sounds a little bit like some of the things I’ve read from W. Edwards Deming about processes and deciding what end result you want, or in this case, you’re already getting and then working out the sequential steps from the beginning to get to that.
Now, let me ask you a technical question: What system or what app or software should businesses be considering to use to create and store this?
Sam: (Laughs) I love this question. I love this question and in fact we have some software on our website, workthesystem.com. We have some third party software that, you know what, it really isn’t that great.
James: (Laughs) That’s a great endorsement.
Sam: Well, I know it. I know it. But that’s the kind of guy I am. It’s ok and I allude to that and the description of it but that’s our most-visited page, is the software.
James: That’s one of the biggest questions I get. It’s a huge question.
Sam: Ok, got to stop that because it’s not about the software. You can use a Word document to write down a process and what is a process? A process leads to a result but the process is over time and first you do this and second you do that and third you do that.
And I have so many people, especially people involved in Internet marketing. They can’t get this done unless they have a proper software. No no no no- you’re just making excuses for yourself. Everybody has Word or some form of word processing and that’s one you do this, two you do this, three you do this.
First is how you answer the phone. You got, let’s say three people answering the phone, in a small office. Maybe even out of a home. Maybe there’s just two people in a home answering the phone, a small business. And each of those two people, I guarantee, are answering the phone in a different way.
And each of those two people, depending on how they feel, you know, maybe one morning, somebody’s got a hangover and then he’s answering the phone in a gruff way and maybe in a certain way that he wouldn’t, he or she wouldn’t answer it the next day, when they feel a little better.
What you do is you take that process and there’s typically about seven steps and you put it down on paper and the two people get together and they use a Word document or some simple way of doing it. Even if they can even write it down – first we do this, second we do this, third we do this.
And both parties agree on the best way to answer the phone and then guess what? The phone gets answered perfectly every single time and you extend that to all the processes in your business. And that’s the important part, is not the software you’re using but the fact that you’re writing down the steps and you’re working on the steps of that process.
That’s how the world works. And if we get bogged down with the type of software we’re using, we’re missing the whole point it. Ok?
James: Yeah, that…it’s excellent. My team have a standing requirement that whenever we do a process for the first time, that we think we’re going to do over and over again, we make a standard operating procedure and we just happen to use Google Docs because we can share it to groups, but they send me an email and they say what will be the procedure for this, boss? And I’ll say, well, step 1,2, 3, 4, 5, 6.
The next thing, I’ll be sent an invitation to share a document where they document it. Now one of the important things that I’ve picked up from your book is that you constantly change the operating procedure, it’s a dynamic or fluid document. Would you like to expand upon that?
Sam: That’s right. Let me run through the three documents and then address that. Three primary documents. One is the strategic objective and that’s where we’re going, how we’re going to get there, what our strengths are, what we’re not going to do, and it’s usually less than a page of a Word document, ok.
So that lays out for everybody, especially the CEO, the head of the business, where they’re headed. And then there’s the second document which is operating, the principles of operation, general operating principles, and these are rules for decision making. So you get everybody in the organization to understand how to make a decision in a certain circumstance.
First is we have 30 in my call center, one of my businesses. One is do it now. Why? Well, generally speaking, doing it now beats doing it next Thursday, when you may be busy or when you may forget. Oh, so we have 30 principles like that and now we’re at what you were addressing, James, and that’s the SOP’s. We call them working procedures, same thing.
My staff of 35, one of my small businesses, spends the entire day working on their systems. The processes are all written out and what they do is they constantly make sure those written processes are perfect and if there’s something that comes up that can be changed to make it a little better, we go in there and we change it. It’s all stored in our hard drives. And not everybody’s carrying a piece of paper around to see what to do next.
They’re constantly improving the processes and now you’re getting to Edwards Deming and system improvement, constant system improvement and that’s what you have to work on your machine. Remember your business is a primary system, a primary machine which is composed of individual systems – systems that don’t necessarily have anything to do with each other.
They work together but they don’t, their construction has nothing to do with each other. And so what we do, all day long, is work on the processes of our business.
So, visualize this, you have in any given process, let’s talk about answering the phone again because that’s so simple. You have, step one, you pick up the phone. Step two, you say a certain phrase. Step three, maybe a way of transferring the call or whatever.
But let’s say you have five or seven or nine steps. You’ll go through that process and you make sure it’s perfect and then something in the environment changes and then somebody says, you know we can improve this by adding this step or deleting this step and that’s where we spend our time – working on that process, making it better and better and better.
So you’ve got these 1,2,3,4 steps that’s leading to a result. We spend our time in the first part of that equation – the 1,2,3,4 part. We spend all day in that part, the results will take care of themselves. And I’ll tell you, most people spend their days shuffling around, and this is the key point, most people spend their days shuffling around the bad results of their unmanaged system and processes.
Most people don’t go that way or deeper to look at the processing that are creating the result. If you have a bad results in your life, believe me, there was a process executing that wasn’t being managed, that led up to that result and that’s how most people spend their lives, shuffling around bad results. Their whole lives are spent that way.
The people who have all the money they want, and all the time they want, are constantly working on their processes and that 1,2,3,4 steps first part of that equation. 1,2,3,4 equals a result. The results will take care of themselves. You spend all day working on your processes.
James: Great! Now, I came from a sales environment and even for myself, on the back of my calculator, I had a checklist that I would use on a telephone call. And I had a write-up sheet with six questions I would ask everyone who walked in. So I knew that I needed a system for myself and that was a natural consequence to pass it down to my team.
So I think the question of when to start is kind of obvious, right? Would you recommend that every business owner starts now even if they’re a solo consultant?
Sam: Yes, and you know where it starts? It starts right this second, in this interview. It starts this second. And what I’d ask the people to do to get started is to look around wherever they are. I don’t care if you’re in a car, or in the living room or in their office. Look around and see the separate systems of your environment.
What does the telephone have to do with the light? And what does the light have to do with the bathroom down the hall? And in the bathroom, what does the sink got to do with the toilet, or the shower?
If we can start seeing these individual processes, you need to start seeing the independent systems of your life and say you go to your business and you ask yourself, ‘What is the biggest problem that I have?’. Well if you can see in your head the systems mindset thing of the individual systems, of the individual processes, you can isolate this problem to the system that leads up to it.
And what you do is you write down all the steps. And maybe it’s answering the phone but I doubt it, it’ll be something more complex. You write down all the steps that lead up to that result. And somewhere in there, there’s a problem or maybe the result itself is the problem. Once you’ve written down all the steps, you can analyze, you can go to your people and say look, this is how I see this process executing, how about you?
And I guarantee you, one of your other people will say to you, ‘No no no no! You forgot this step over here’ or ‘How come you do that? You don’t need to do that.’ And then it’s very simple once you can isolate the systems of your life with the new business for example.
Once you can isolate the process, you can get it fixed. And so you get that process, that 1,2,3,4 step process and it might be 50 steps, it might be 200 steps and it might be 7 steps, you get it perfect and then you execute it that way every single time.
And so you start now, you start right now by looking around, right this second and seeing the independent systems and then you think about what your biggest problem is. And then you start writing things down. And the biggest hurdle is doing it for the first time.
James: I want to actually, I just want to drill down on that…like as we discussed this, I literally have it, a checklist open which is my podcast interview checklist to remind me in case you know, I need to come up with a genius question to ask you. I’m used to creating checklists for myself.
When I film a video everyday, I’m now so familiar with my pack up routine that I actually don’t need to be running through the checklist. But I’ve observed this in my team as well, because we have a philosophy in my business that there must be two people who can do every job.
So each person’s training someone else and they tend to do things the same way much like a tribe would pass the story around the campfire and pass it through generations without having to write it down on to Google docs so, what’s your take on on routine and ritual?
And how do you monitor whether people will use the system or not because I’ll tell you something that comes up a lot, I hear a lot of business owners have created a work wiki and I’ve actually never found anyone who keeps it in shape and their staff actually use it.
So for that reason, we don’t use a work wiki. How do you help people use the system and monitor that adherence and what about when they know it so well that they’re not having to use it, is that a danger or is it the perfection?
Sam: Let me go backwards, our people do not carry a piece of paper around. They know what the processes are exactly and they’re very excited about using them and this is maybe my second biggest question after ‘What kind of software should I use?’. How do I get my people to climb on board? You know, it’s incredibly simple and it’s an incredibly wonderful solution and that is this: you get them to create the process, okay?
So, we have a big multinational company, heads up, it’s not that big. It’s a fifty million-dollar company, but they have offices all over the world and they have two warehouses. So, we go into the warehouse and the manager of the warehouse says, “I can’t get anybody to follow the processes that I set up. They just won’t even read it. They’re going to do it their way. I cannot get them to do it.”
And so, what we do in our consulting with this client, and we did it with this particular one. We said, “Okay, here is what I want you to do. I want you to have your…I want you to take your processes and hand them to your front line people and let them tear them apart. Let them tear them apart and let them create the process”.
And then, what do you get? You get a front line person who’s into the whole thing and they will follow it exactly. And if the leadership lets front office people know, front office, front line people know that they want their input, that they’re creating the processes, the front line people would be completely bought in.
Here is the big mistake that managers make: They write up directions and they give them to their staff and they tell them to do it that way. That’s okay the first part, the second part is not. What they should do is write up the directions, maybe it’s twenty steps, and they hand it to their front line people and they say “Tear this apart. What am I missing here? Help me out with this”, and that’s how you get everybody to buy in.
They get really excited about what’s going on and guess what, in the process people do the SOPs and the working procedures, you don’t have to. All you have to do is review what they did and that’s how you get people to buy in. It’s a bottom up strategy. It’s not a top classic corporate top down strategy, it’s a bottom up strategy. It’s still, you know, a business is still a dictatorship, there’s a leader.
I call it a benevolent dictatorship. This is not about democracy, this is about getting everybody to climb on the same train and get excited about what’s going on.
And you know what happens? I’ll just finish this up with one of the other great effects of this. When you have your front line people, for instance, in this factory I was talking about, doing a process, in this case it was fertilizer being injected into jugs, plastic jugs; fertilizer, liquid fertilizer.
What happens is, you get a new person comes in and they come in and they say “Well, I’m going to do this the best I can and I’m not going to pay any attention to this SOP”. Guess what, the pure group in the front lines will not tolerate that. You know why, because they helped create the SOP. And so, you’ve got a self-policing front line that is really excited and will absolutely follow the SOP.
Now, let me say one more thing about this. This SOP can be changed at any time and very quickly just so an improvement can be made on it. So, the front line warehouse person will go to the manager and say “Look, step number fourteen here is really stupid. Now, for this reason we had a change over here, we don’t need it”.
The manager would do well to go make that change in that five-minute period and distribute the change to everybody on the front line. And that’s how you stay fast and quick and easy and resilient and powerful is making changes that the front line people recommend immediately. That’s how you get people to buy in and it always works.
James: I love it. That’s so true. That’s exactly what happened in my business. I would start a process, go over to my team and say “Here’s what I’ve been doing. This is the result that I want. Can you make it happen without me having to be involved?”. Then, we write down every step on a post-it note and we arrange them on a whiteboard and then we document it.
And, it’s their process that they’ve created now and then they get to do it. In fact, I don’t see most of the new ones that we build anymore, they just copy me in on it and as long as they’re happy with it and we get the results, that’s awesome.
Sam: You sound like a natural to this.
James: Well, I used to run a 100-million dollar a year business as well with seventy-two staff, so I had almost made myself redundant in my last job by having everyone else “systemized”. And coming through that sales environment, it’s so true what you’re saying. I’d say most salespeople wing it through their career, never using a system, never using a checklist.
And, I don’t want to fly in an airplane or be in a hospital where the pilot or the nurse is just winging it. I’m happy for them to use the checklist every time.
Sam: Exactly, exactly.
James: Alright, well, you’ve been so generous with your thoughts. There’s some amazing concepts there. We’ll have the complete transcription available right near this post. I’ll have a link off to your website and to your fantastic book of which I have two copies. It’s so good, I bought it twice. I don’t know if you’ve had that endorsement before.
Sam: Do you have the third edition?
James: I’ve probably got every edition you’ve ever made.
Sam: Alright! The third edition is far better. And listen, your listeners can go to Workthesystem.com and download the book for free with PDF and audio…
James: Yeah, I’ve been sending people to your site for years and to your other interviews and I thought it was about time that I get the man himself on the show. So, go along to WorkTheSystem.com. You can access the book for free, how’s that? Well, thanks for sharing your ideas with us, Sam, and I hope you have a fantastic rest of the evening.
Sam: Well, thank you James, you’re a terrific host and will catch you later.
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