Define

I can think of a number of moments in my life that turned out to be far more impactful than I realised at the time. But the one most relevant to the book you’re reading was when my wife and I discovered that we were pregnant.

Like most parents-to-be, it had a profound impact on my outlook on … well … everything.

I was going to be a father. I was going to have a son. My son was going to have a father. All of which, now that I write it down, doesn’t seem that profound. But at the time it was like discovering the world was secretly run by shape-shifting aliens.

Everything looked and felt different. The lens through which I saw the world was completely new and from that moment all of my experiences, plans, dreams and hopes were from an entirely different perspective.

One of the first things I realised was that my lifestyle had to change. Obviously, it was going to change in many ways, whether I wanted it to or not, but I had some control over how I reacted to those changes. And the biggest part of my life that I needed to adjust was my work life.

At the time, I was running a digital agency called Melbourne SEO Services. We helped businesses with their online presence through things like search engine optimisation (SEO), paid advertising and content marketing. Like most agencies, we worked with lots of different clients in many different industries, so we depended on a high level of campaign customisation.

I’d been working in this business for over ten years and, at that point, I was working at least 60–70 hours a week. I was trapped on the hamster wheel of finding clients, delivering for clients, maintaining relationships and then circling back around to getting new clients again. Each part of my job was critical and required my constant attention.

But now … How could I possibly spend that number of hours at the office and still have time to be there for my boy? I didn’t want to be one of those dads who’s always too busy – too busy to walk my son to school, too busy to watch his footy games, too busy to help him with his homework.

Even if I shifted my office and worked primarily from home, the number of hours I would need to put into my business wouldn’t change significantly. I’d be physically present but mentally absent. Which, to my mind, amounts to much the same thing.

On top of all that, I was incredibly stressed out a lot of the time. My role in the business was such that it literally couldn’t work without me. I had plenty of great employees doing fantastic work, but I was the one who held it all together.

It was like the business was a huge clockwork machine, and I was a cog in the middle that kept all the different elements connected and moving. I enjoyed the work and I was – and still am – proud of what the digital agency produced for its clients. But it placed a lot of pressure on me and, frankly, I didn’t want my son to grow up in a house with an absent father. It wasn’t even a question. Somehow, I had to change the way in which I did business.

At the time, our being pregnant didn’t present itself as an opportunity to change and improve my business. It was an opportunity to find a new kind of happiness and grow a warm, loving family home, where business was going to take a backseat to those priorities.

But with the wonder that is hindsight, I now realise that without that motivation to significantly change my work situation and to do so quickly, I might still be working crazy hours, moving ever closer to a life of high blood pressure and burnout.

Being pregnant became a defining moment in my life, and as it turned out, for my business.

You’ve heard it said that necessity is the mother of invention. Well, for me, fatherhood necessitated invention. I literally had to invent a way to build a business that worked without me.

You might think the obvious answer would be to simply sell my business, downsize it or even start from scratch with something simpler and less time intensive. Yet I wasn’t ready to let go of what I’d built up over the course of ten years.

And even if I’d wanted to sell the business, I would have had a hard time doing so. No one would be keen to purchase a business that is entirely dependent on the person who’s leaving. I would first need to restructure the business so it could function without me at the helm.

Which would solve my problem anyway. That was the ideal scenario: I keep my business (and the income it provides) but I reorganise and systemise my business so that I don’t need to be involved on a day-to-day basis.

Was such a thing even possible? If you’re the critical cog in your own business, you know only too well how difficult such an endeavour looks at first, second and even third glance. When you’re an entrepreneur who builds a business from the ground up, so much of the operation relies on your specific talents that it initially seems like an impossibility that it could run without you.

That was my point of view as well. What would it take for me to engineer such a paradigm shift, and exactly how long would it take for me to accomplish such a feat?

As it turned out, it took around twelve months. By that time, I’d systemised almost all the key elements of my business AND hired a CEO to replace me at the top of the business. I’m still involved in the sense that I meet regularly with my replacement to discuss issues and make suggestions on critical issues, and while I prefer my CEO to make almost all the key decisions, when it’s absolutely necessary I reserve the right to have the final say.

My involvement with the business is about as minimal as it’s possible to be, and it all happened before my son was more than a few months old. Critically, the whole operation has proved to be sustainable. I work from home, primarily on my new business venture (of which SYSTEMology is just one element), and if one of my kids – yes, I have two of ’em now – wants to knock on my office door and tell me about their day or ask me to go outside to play catch, that’s absolutely fine. They often make cameo appearances in my Zoom meetings and can be heard in the background of my podcast episodes. This is the life I have shaped for myself.

Like I said, the right motivation is a powerful factor. Achieving the same results in your business might take longer or, if you have the right incentives (and a solid plan), you might be able to accomplish this faster. But for now, just know that no matter how entrenched in your business you may feel yourself to be, SYSTEMology will help you find the freedom you’re looking for. Or maybe the freedom you need.

So, that’s your first step in applying SYSTEMology to your business …

Get pregnant!¶

Actually, no, don’t do that. I mean, do it if you want to; being a parent is endlessly rewarding. But don’t get pregnant just to create motivation.

For most people, I would imagine that the prospect of a better-functioning business, a reduction in work and stress and the potential to extract yourself from operations (or even sell the business) is motivation enough.

Your real first step is to begin to get clear on what’s holding you in the business.

In Michael E Gerber’s original book, The E-Myth, he explains the ‘entrepreneurial myth’: the false belief most small business owners hold that just because they understand the technical work of a business, they can successfully run a business that does that technical work.

The truth is there’s more to running a business than just doing the technical work. There are sales, marketing, financials, human resources and management, just to name a few. That’s what makes business so challenging. Moreover, at every turn, the business owner is solving problems and, as a result, they get really great at problem-solving.

The trap is that this skill of solving problems then leads to the business owner unconsciously training their team to become dependent on them. Instead of empowering their team to solve problems, they’re the knight in shining armour who always saves the day. This, in turn, makes them even better at problem-solving and causes team members to become even more dependent.

It’s a horrible cycle that’s almost impossible to break. So, how the heck do you remove a business owner from a business so dependent on them? What’s the secret?

The secret is systems.

What is a system?¶

A system – also known as a process, a procedure, standard operating procedures (SOPs), work instructions, a ‘how-to’ document or workflow – is just a series of linear steps that, when followed, produces a predictable outcome. This definition works on the smallest level where a system may be a detailed step-by-step instruction, all the way up to a high-level system that shows how an overall project fits together. A system may be unconscious and undocumented, but it still has a series of moves that produces a result. Whether we’re aware of it or not, we all have systems that we create and use in different areas of our life. We might not be aware of the existence of those systems, but that doesn’t make us immune to their results. For example, if we have poor health systems (we eat junk food and don’t exercise), over a period of time we will become overweight – whether we knew this would be the outcome or not.

In short, not knowing will not save you. In business it’s the same. Poor recruiting systems will lead to staffing issues, poor financial systems will lead to cash flow issues and poor marketing systems will lead to lead flow issues. All problems within business are, ultimately, caused by poorly performing systems.

And the first step to improving them is to become aware of their existence. See your business as a collection of interconnected systems.

Keep your systems simple¶

SYSTEMology is built on the foundation of keeping things simple. We start by breaking your business down into its component parts, identifying the critical points and then building those core components into simple systems.

The key to making this work is simplicity. You’re not a Fortune 500 company, you don’t have hundreds of staff and you don’t win any awards for making your business more complex.

To remind you to keep it simple, I will sometimes use the word ‘overview’ to stop you from going too granular. For example, as part of SYSTEMology, you will create an ‘overview system’ to outline the highlevel steps in the delivery of your product or service. This will typically include many smaller steps and components. It may be supported by a range of more detailed documented systems, it may include more than one person and it may have a time delay between the steps. But remember to view it as an overview – so just capture the top level and keep it simple. If you’re a detail-oriented person, or worse, a perfectionist, YOUR challenge at this stage is to hold yourself in check and avoid getting too granular.

My epiphany on this subject came from a good friend of mine by the name of Mike Rhodes – he’s a former E-Myth coach, owns a company called WebSavvy and is a super sharp guy.

He’s a lover of systems and really learnt the value of a systemised business when he sold his first business, an internet café in New Zealand. Mike created a manual that described every detail of how to manage the business and keep it running smoothly so that, when he eventually found a buyer, he was able to get top dollar. It was an easier and more profitable sell BECAUSE the new owner knew the business would still be able to operate when Mike was no longer running it.

After selling up, he moved to Australia and started a new life and business.

Through Mike’s work as an E-Myth coach, he fell in love with the power of Google advertising and set up a business to help other companies leverage this opportunity. He continued to create systems and processes for this new business except, this time, he decided to go all-out. He documented every aspect of his business and literally created hundreds of systems … he even created an index of all these systems that he stuck to the wall of his office.

We shared office space for a while, and I used to look through the window and see this great big wall of systems. There were pages and pages, each line representing a system with its own unique steps and processes. He wanted everyone to see it as a reminder that they were only a few steps away from finding the relevant system for their job at hand.

Sounds like a great idea, right? But in reality, it bombed. It was too overwhelming. Employees couldn’t make sense of it. And, in addition, because the business centred around digital marketing, his systems were prone to change almost on a daily basis. As you could imagine, keeping it up to date was an almost impossible task.

This taught me – and Mike – a valuable lesson about systemising a business …

Don’t over-document your business¶

Just as in many other areas of life, the Pareto principle (sometimes called the 80/20 rule) applies here. This is a well-established theory by Italian economist Vilfredo Pareto, who found that 80 per cent of the effects of a thing come from 20 per cent of the causes. For instance, many businesses, when they look closely, discover things like…

• 80 per cent of their leads come from 20 per cent of their advertisements.
• 80 per cent of their sales come from 20 per cent of their salespeople.
• 80 per cent of client complaints come from 20 per cent of their client base.
• 80 per cent of all sick days are taken by 20 per cent of their employees.

Once you’re aware of this principle, you’ll start to see it at work everywhere, and business systems are no exception.

Just 20 per cent of the systems you create will provide 80 per cent of your efficiency wins.

How do you identify the critical few systems?¶

Bearing in mind that one of the primary objectives of SYSTEMology is to have your business deliver its central product independent of the business owner, do you think you could explain HOW the core of your business works on the back of a napkin?

Do you know the minimum viable systems required to consistently bring in new business, convert those leads to clients and then deliver your product/service?

If not, don’t worry … In SYSTEMology this is step one and we have a process (surprise, surprise) to uncover these core systems. It’s called the Critical Client Flow™ (CCF). It takes about twenty minutes to complete, identifies the critical few and provides tremendous insights. Through the process you will see the ‘holes’ within your business and it will help you develop laserlike focus on what needs to be systemised.

To be clear, you will not create anything new at this stage; you’re merely uncovering what you’re already doing in a format that is frequently eyeopening. To understand the concept, all you need to recognise is that there is a path your client and business follows to deliver your core product/service. We’ll use a simple template to help you identify this flow.

Head to www.SYSTEMology.com/resources and download the CCF template. Print it out, start at the top and let’s work through it together, filling in the blanks.

Step #1: Identify ONE primary target client and ONE primary product you sell to that client.

At its core, business is about solving problems – and you’re rewarded for solving those problems – therefore the first step is to be clear about the problem you’re solving and for whom you’re solving it.

Yes, it’s true, very few businesses have a single target client, let alone a single product or service. Some, particularly those selling physical products, may have hundreds or even thousands. Even if you have a service-based business, you probably have a range of services you provide to a variety of people. So, systemising every potential scenario would be a daunting task. That being the case, for our very first step, we’re going to select just one. Regardless of how your business is structured, or the industry in which it operates, pick just ONE target client and ONE product or service.

Which one do you pick? Start by thinking about your dream clients. The ones you enjoy working with the most. The ones who pay your advertised prices and then happily refer their friends and family.

Next, pick the product that would be the best starting point for that client. Ask yourself, what is a great first purchase for this client? Which one will open the door for you to continue working with them long-term? Now I know, for many, the idea of picking just one target client and one primary product feels like you’re closing yourself off to other opportunities. However, I’m not suggesting you stop all other lines of business. Remember, this is just an exercise, and starting with just one client and product ensures you stay focused.

We can’t systemise everything on day one, but we can start to systemise your Critical Client Flow.

And if you’re not yet clear on the problem your products and services solve and for whom … it’s best to figure that out first. SYSTEMology is about cloning what’s already working within the business, so you need to be clear on where your sweet spot is located.

Here are some examples of what you’re looking for:

• If you’re a bookkeeper, your target clients might be farmers and your primary service is an initial financial audit.

• If you’re a digital agency, maybe you serve franchisors and your primary service is building them a new website.

• If you’re a rock ’n’ roll music clothing store, you may target teenagers who like rock music and your primary product is a heavy metal T-shirt.

Just focus on ONE central client and ONE primary product or service. Once you’re clear, fill in the blanks at the top of the worksheet.

Step #2: Define your Critical Client Flow.

There are key stages your clients and business go through to deliver your core product – from how you first get the attention of your target clients, through to delivering your product to them and hopefully turning them into repeat clients. The CCF identifies this as a series of linear events.

Note: The difference between a CCF and a typical ‘client journey’ is that it also focuses on the requirements of the business to deliver your product. If you already have your client journey mapped out, that’s great; no doubt it will help you complete the CCF. But they’re not the same.

Of course, every business is going to have a slightly different series of steps, but broadly speaking they’ll include most or all of the components below. Your job is to fill in the blanks.

Before you begin, there are three rules to keep in mind:

1. Don’t overthink this.

2. Don’t go into detail – two or three words to label a step is all you need.

3. Only populate the CCF with activities you are currently doing.

Let’s look at each component, starting from the top.

Attention: How do people learn about your business?

Search engine traffic? Pay-per-click ads? Podcast advertising? Direct mail? Speaking engagements? Referrals?

There are literally hundreds of ways to generate new business, but as you go through the CCF, the question is: How are you currently doing it? Avoid filling in the blanks with things you’d like to be doing. Just list your primary methods of getting your prospects’ attention.

Enquiry: When someone is ready to enquire about your products, how do they do it?

Is it through an inbound call, do they submit a web enquiry, or both?

Sales: Your prospect has shown interest in your wares and now they’re primed to become a client. What happens next?

Do they bring an item to the checkout counter? Do they add items to their online shopping cart and click on the ‘checkout’ button? Do they call you up to make an appointment? Do you issue proposals? How do you close the sale?

Just name the typical process, keeping in mind this exercise is for ONE core product being purchased by ONE specific target client. Don’t try to describe every possible sales process.

Money: How do you collect payment?

This could be an easy step – cash or card. Or, if you’re a service provider, you might invoice before the work is carried out. Or afterwards. Or a combination of the two.

Onboarding: How do you get your clients started?

This could be as simple as putting the goods in a bag, or it could be an in-depth onboarding process involving questionnaires, setting up projects in a project management software and assigning the account manager.

With service-based businesses, you may find it helpful to identify how new client projects are set up as opposed to how you deliver the actual work. This ensures nothing is missed, expectations are set and there’s a smooth transition from the sales team to the operations team.

You could probably list a whole bunch of systems here, but keep it simple. Don’t list more than one or two steps. We’ll build up the details later in the process.

Delivery: How is the work completed?

A physical business might just involve handing the product over. But an ecommerce operation could cover ordering stock, checking it off, packaging it up and shipping it out.

For a service-based operation – a bookkeeper, for instance – this would include how to extract the initial data from the client’s accounting software, how it’s interpreted and how it’s delivered to the client.

Oftentimes, this step in particular gets people’s minds racing as they think about the multitude of steps in this process. Rest assured that we’re going to capture all the details later – for now, we keep it simple.

Repeat or referral: Last, but not least, how do you go about encouraging clients to either remain a client or come back again to make additional purchases?

If you’re in the business of selling coffins or some other product where you’re usually making a one-time sale, think in terms of referrals. How do you encourage your clients to send you new business?

I always find it easier to write out this whole process by hand, using the worksheet. The goal here is to break your business down into a linear series of steps that your clients move through when working with your business. It should consist of no more than 7–12 steps.

There’s a good chance you’ll experience some ‘a-ha’ moments as you go through this exercise, because it often highlights areas of weakness and helps to explain why certain issues appear within your business. By capturing only what you are actually doing, any holes become immediately apparent.

If you have trouble creating consistent leads, for example, it’s probable you don’t have multiple methods for gaining your clients’ attention. If you’re having cash flow issues, you may have poor invoicing systems. If you have trouble with clients who constantly follow up and micromanage you and your team, you probably have a poor onboarding sequence that fails to set expectations.

These insights will guide you in later chapters on where to focus, but for now we’re just concentrating on how your business currently operates. It’s not a problem if you have to massage the CCF a little to suit your situation. I know everyone’s business is a little different and there’s never a ‘one size fits all’. As long as tweaking the template doesn’t involve blowing it up to more than a dozen steps, you’ll be just fine.

If you have ended up with more than twelve steps, have another go at creating something shorter and more concise. You could, for instance, combine some of the steps together, especially if they’re all being carried out by the same person or department.

As an example, if you own a retail store where there isn’t really a separate ‘onboarding’ stage for new clients, this could be combined with the delivery step.

The goal, ultimately, is to explain in simple terms how your business works from start to finish, in a linear fashion.

Step #3: Share your completed CCF.

You can then test your result by sharing your creation with someone outside of the business – preferably someone who knows roughly what your business does but isn’t directly involved. If you can show them your CCF and they can understand it WITHOUT you having to talk them through the steps in great detail, you’re in good shape. If they find your creation confusing or too complex, have another go and simplify further.

Here are a few sample CCFs to give you some ideas.

The last example might sound odd but it’s actually the CCF that I would have created if I still owned Planet 13, the rock ’n’ roll musicinspired clothing store that was one of my first business ventures. It may not fit the template perfectly, it may not have an in-depth sales system, invoicing system or even delivery system, but there is still a system that can be documented.

Before you jump in and think, But my business is different, let me agree and say yes, it is. However, every business has a Critical Client Flow. I’ve never once, over the years of helping hundreds of people perform this exercise, found a business where I couldn’t identify their CCF.

Remember … one client, one product, one journey. Document that and you have a CCF.

It doesn’t need to be perfect and it doesn’t need to be all-inclusive. It just needs to exist and provide some focus into how your business delivers value to your clients. And the really exciting thing is, once you systemise this, you’re well on your way to solving your target clients’ problems without key person dependency. This is also the first step to dramatically increasing your capacity and ability to create a scalable money machine. Yes, there will be a range of other systems we’ll look at further down the line, but the CCF strikes right at the heart of the myth that you will need to create hundreds and hundreds of systems to build a systemised business. This is a false belief, and the fact is you will get tremendous wins by focusing on just the critical few.

Would it be helpful to watch a live creation of the CCF? Watch Nick Griffiths from MediBooks (an Australia-based bookkeeping firm) as he walks you through the creation of his. Sometimes all it takes is seeing someone else follow the process for you to ‘get it’.

www.SYSTEMology.com/resources