Common systemization myths debunked.

Episode Transcription

 

Den Lennie (2s):
Hey guys, it’s Den Lennie here with the How to Scale a Video Business podcast. On the 4th of November, it’s episode number 232. And today we are talking about systems. Now we speak about systems a lot on this podcast, and that’s because it’s such an important aspect of scaling your business. In fact, I don’t think there’s anything that can have a greater impact on your business than systemizing, not only how you operate in your business, but how every single process is managed in your business.

Den Lennie (44s):
Because if you want to create scale in your business and by scale, I mean, business is coming in, revenue is coming in and you are able to take profits without you having to do all of the work. And this is something I know that many businesses I work with. That is the Nirvana. They’re looking to step back from the day-to-day operations of the business and whether or not that’s to one day sell the business or to simply have a business that generates a very healthy return without you having to do the work.

Den Lennie (1m 24s):
You know, we talk about a business being saleable and what we mean by that is in a position where if someone were to come along and buy it like wire, it, they could, because it has a clear purpose and is systemized and can operate successfully without the business owner having to be there. And I recognize that this is something that is very, very rare in the video business space, but it shouldn’t be because there are plenty of businesses who may want to acquire a video business. In fact, just recently News Corp here in Australia acquired a major stake in a very large video business.

Den Lennie (2m 12s):
And so they’re called visual domain. And, so, as the world consumes more video content, I believe that are more opportunities for businesses to be purchased. But most businesses aren’t saleable because the business owner is so involved in every single aspect. So every single aspect of the day-to-day operations of the business. As you edit that out, but we actually don’t edit this podcast. We like to keep it nice and raw and live because it means we can produce more content.

Den Lennie (2m 54s):
And that is the system we have. Now, the point I’m trying to get to is you want to be aiming for a point where your business is optimized to a saleable condition so that you can choose how much time you spend working in the business. Now, I know many, many filmmakers will say to me, oh, but I love what I do, Dan. I love what I do. And I don’t doubt that, but having the choice to do work or not do work or scale your revenues by scaling a team, that’s a different thing. I’ve got members of my VBA who want to take three months off and travel with the family.

Den Lennie (3m 37s):
I have another member who wants to sell around the world. I’ve got other members who are more settled, and more established, and they just want to build a really solid recurring revenue. Now, regardless of where you sit on that spectrum, there is work to do to get you to that point. So what I want to do today is talk a little bit about what a systemized business looks like, but also take you through a bit of a journey of understanding the common myth that business owners have around systemizing. And the biggest myth is that the business owner himself or herself needs to be the one to systemize and actual fact, if you’re a business owner listening to this show, then you know that the chances are you are the bottleneck in your company.

Den Lennie (4m 33s):
And actually what you want is control and you want freedom, but instead, you seem to be constantly in survival mode. You know, you are probably in firefighting mode. Most of the time, dealing with challenges, dealing with issues. If you do have a team, maybe there are some systems in place, but oftentimes things aren’t done systematically or, to define standards. Maybe they’re not big on process. Maybe the team makes up as they go along. These are often situations that I see a lot of businesses and it can be driven by fear and it can be driven by ignorance, you know, just not knowing what to do and when to do it.

Den Lennie (5m 20s):
The truth is that the owner is the worst person to systemize a business. And yet in many cases, business owners, the challenge they have is that they believe systems are done a certain way in their business. And most cases, the reality is somewhat different. And so, what we have to do is understand, what is actually going on in a business currently. So, in survival mode, you know, there’s just a lot of firefighting going on. And I would say that as much as 80% of the businesses that I talk to before coming into the VBA are in that survival mode.

Den Lennie (6m 1s):
There’s a bit of denial. There’s a sense that they don’t want to admit to themselves that perhaps things aren’t as effective or as efficient as they could be. And, there’s a stubbornness that comes with it, which is, you know, rather than accept that none of us know anything, and we’ve all got something to learn, and there’s this kind of survival mode. And what that means is the business is stationary. It’s key person-dependent. If you have got a team then some of the team will kind of do things a certain way and follow some level of systems, others may choose not to, oftentimes systems are stored in the team member’s head. And so one of the first things we want to do, and we get into a business to work with them on a systemization process is the three things you want to get right.

Den Lennie (6m 50s):
We want to get some certainty in the business. We want to be able to measure performance, and we want to make sure there’s buy-in from the team, on the process. So, the first part of the process is we need to extract how things are currently done in the business. And we do that through seeds of sessions, which I’ll talk about in a moment, but the ideas that we want to get out of that survival mode into a stable mode, where we call stationary, where, at least we can figure out what is going on currently, and actually document that. One of the areas that we find there can be some rub is business owners.

Den Lennie (7m 33s):
When we do start the systemization process, want to kind of create systems the ideal scenario, like the way they want things to be done rather than how things are actually done. Then what we do is we do it slightly differently. We extract and document how things are currently done. Then we can move to a kind of more scaleable model. Now, just another myth to kind of unfold here, unpack is that documented and organized systems deliver great results because it’s not the full picture.

Den Lennie (8m 16s):
It’s really important that not only that the systems are documented and organized, but they’re actually being implemented by the team, any kind of, here’s how we do things here. So at the scaleable stage, what you’ll find is your systems are partially documented. They may be stored in some kind of clunky solution. They might be in Google docs, they might be sitting in some sort of project management software, and you might have to constantly remind the team to use the systems. You might have to constantly remind yourself to use the systems, because if you’re anything like me, the business owners, the biggest threat to the systemization of a business because if they don’t use the systems, we often guilty of jumping into something and just kind of like fudging through and not following the system.

Den Lennie (9m 9s):
And so it’s, our systems only work. If the business owner, the leader actually drives the systemization process from the outset. Otherwise, it’s a bit of a disaster. And the, and the goal ultimately is to get to saleable, which is where you are. Everything is going well that is complete documentation from start to finish of the business. Think of it like a Swiss watch, precision, where everything is absolutely done the same way every single time. And the culture inside the company is this is our way of doing things. This is how we do things here, and there’s what I’d call the optimized stage.

Den Lennie (9m 49s):
So if we take them in steps, think of it as a pyramid, the bottom level of the pyramid is survival, where you are, you know, there are bottlenecks in the business and there’s usually the business owner. And, you know, you start a business because you want to control and you want freedom and you, you get into a business and you realize you don’t have any control in any freedom. So you’re the bottleneck. So the next stage up is to get to the stationary stage, what we can extract, how things are currently done. And I mean, move to the scaleable stage where things get a little bit more organized. And then the ultimate top of the pyramid is the saleable stage where things are optimized. So that’s kind of the theory behind what we want to do. And we do this actually through a process that’s actually been very carefully considered called Systemology.

Den Lennie (10m 35s):
Now David Jenyns has been on the shore multiple times, Dave and I have run full-day events. Systemology photographers. They’ve used to run Melbourne video production. And what was interesting was he wasn’t a filmmaker. He was an entrepreneur who created a video production company because his SEO company needed to provide services. And so they built a systemized video business from the ground up. Now, Dave subsequently sold Melbourne video production and now works on teaching business owners, how to systemize their business. And I’ve actually been going through a certification program with them recently. So I’ll be the first specialist video production Systemologist certified partner, and very, very shortly.

Den Lennie (11m 20s):
And so I wanted to share how that process looks and if it resonates, maybe you can, we can get in touch and have a chat and see if it’s the kind of thing that your business is ready for. So, we run a 12-week systemization program. It’s a Done For You program. And over 12 weeks or 12 sessions, we look to document 15 to 20 core systems in your business. So we take how you’re doing things right now, and we get them down on paper or virtual paper. And then we actually work out how your business operates. So we start by defining what your business core systems look like.

Den Lennie (12m 4s):
And we have something called the critical client floor, which is a, a floor of really the core aspects of your business from getting attention to processing inquiry, to managing a sales process, to collecting the money, onboarding clients, delivering your production, and then finally, how do you repeat that? And, and what we do is we call that a critical client flow. And what we do is we work out what those core steps are. So it might be, organic search is one of your core ways of getting attention to maybe you get a lot of repeat business or referrals.

Den Lennie (12m 48s):
Maybe you do a strategy workshop, maybe networking, maybe you’re doing LinkedIn outreach, maybe you’re doing pay-per-click through Google. All of those attention areas are to drive into an inquiry stage. And how does your inquiry stage currently watching people just ring you up, or is there some kind of automated systemized process for filtering opportunities that come into your business so that you can have some method of weeding out the deadwood. You don’t want inquiries from everyone, you know, anyone who’s ever done any SEO will normally make a lot of inquiries, but they’re not necessarily qualified inquiries. So you want to make sure your inquiries are qualified and then are they moving into some kind of discovery call?

Den Lennie (13m 32s):
And what does that look like? And how do you then create a proposal? I mean, how is that delivered? And, are you following up with the client to do the deal? And then how is that then executed? How do you kind of sign the deal over and then kick the project off and then go into your pre-production phase and then your production phase and your post-production phase and delivery and reviews and approvals? And then how do you make sure you’re staying in touch with clients afterward? So we take those core systems. And then what we do is we look at well, who’s going to do those systems. So we then figure out which departments are responsible for which element and who in the company is responsible for delivering those elements.

Den Lennie (14m 19s):
So we always talk in terms of roles, not people, what role is responsible for marketing? What role is responsible for sales? What role is responsible for production? And oftentimes what happens in this process is the business owner’s name is against everything. So it’s quite common. And then what we do is we take them and we start to walk out and break down by department, what systems need to be created. So maybe there’s a system for organic search. Maybe there’s a system for Google My Business, maybe the system for how you get repeat business referrals. And what we do is we start walking out who is going to be responsible for that, what resources are there already in place, and who is the knowledgeable worker, who is the person who is going to be responsible for sharing that system?

Den Lennie (15m 7s):
And what we then do is we work out all of that. And so we assign which systems are going to be documented or extracted from each role within the company. And then from there, we go through an eight to sort of eight to nine-session extraction process where we literally get the business owner or the team member to take us through the exact process they go through when setting up a job, she, or, you know, creating an invoice or pre-producing a project. And so what we do is we spend 60 to 90 minutes extracting all of these systems, and then my team then document everything.

Den Lennie (15m 50s):
And then we put them in something called system hub, which is a system’s documentation, SAS platform that we then organize the systems. We have videos, we have screenshots, we have step-by-step instructions. And the idea is that someone could come into your business as a new employee. And instead of having to explain everything in the first month or two or three, you can show them the systems documentation and say, well, look, you know, for the first week or two, just go through these systems, watch the videos. This is how we do things here and then follow the instructions. And then, so this idea is that you can give, so our 10% guidance, 80% of the heavy lifting is done by the systems.

Den Lennie (16m 35s):
And then 10% of the time is spent correcting. So as a business owner, and instead of bringing someone new on and having to go through weeks and weeks of training, where they’re just asking you questions every five minutes because nothing’s clear what we’re actually doing is making that process a lot easier. So in a 12-week process, we will literally document the 12 to 15 to 20. The number varies depending on the company and core systems. So basically as many systems as we can document and extract in 12 weeks, we do. And then what we do is we organize all of that information. So it makes sense. And we label everything and we have a process for numbering and labeling so that everything is very clear.

Den Lennie (17m 18s):
And we go back to that critical client flow, and we hyperlink all of the steps. So when someone new joins your company and you’re explaining how your marketing system works, while you can show them this document and they can click on organic search and that will take them to a system and a subsystem, which shows them exactly how it’s done. And this process is very, very powerful. I’ve worked with a number of companies now, and the transformation that we see is just phenomenal. So, we then organize all of those systems and we have a lot of experience in running video businesses. So we bring a lot of our perspectives to the table as well.

Den Lennie (17m 58s):
We know there are efficient ways to do things. And so what we’re able to do is guide the business owner down a certain pathway. So Jeff systems that might be beneficial and also be able to kind of gently pull on the reins and just guide, you know, micro degrees of adjustment to make the process very smooth. And then what we do is we look to integrate that into the business. And then the final sessions of the 12 weeks we work with the team and we demonstrate how to utilize the systems. And then we kind of teach someone internally. We encourage someone to tell me who the system’s champion is to take the rollover.

Den Lennie (18m 38s):
So after the 12 weeks, we hand over that mantle, we give them all the systems and guidance on how to continue because systemization is a process that never really stops. We’re always wanting to update, upgrade and improve. And then, you know, beyond that, we sometimes work beyond the 12 weeks with clients where we go on and look at the scale, we look at maybe optimizing systems and we look at how systems are currently done. And then we perhaps can look at some best practices, how should this really be done and how can we improve this system? So once you’ve got a base level of how things are done currently, it’s very easy to start to scale and go deeper into invoicing and hate HR and other kinds of systems.

Den Lennie (19m 26s):
And then the thing with systemizing a business is it gives the business owner certainty. It gives the business owner a sense of, it, frees them up from the day-to-day operations of the business. And it means that the business becomes something that is an asset to them. And not simply a noose around their neck, that, you know, we’ve all been there when it feels like the business owns you and not the other way around. So I just wanted to kind of share a little bit about the system audience. Dave kind of do it in detail without really showing you, but if you are listening to the show and you feel that you’re a bit overwhelmed, you don’t really have any clarity around what should be happening, maybe your pricing isn’t quite correct.

Den Lennie (20m 16s):
Maybe there are other aspects of the business that you just feel aren’t quite working as well as it could be that systems are a systems conversation is the thing that’s missing. And if it is something you’d like to learn a bit more about, then please do drop us a line. Connect with me on LinkedIn mentioned, you’ve listened to this podcast and we can have a chat and see if something that we can help with. For businesses in the right phase of growth, this is something that is very, very significant. And, one of the advantages of working with us on this is that if you do decide to come in and do some systems work with us, then we tend to bring you into the VBA as well.

Den Lennie (20m 59s):
And so you get the added benefit of getting the business coaching around what we do in the VBA as well. But yeah, I just wanted to kind of share that with you guys today, because we haven’t really talked directly about how what we do to help people. We talk a lot, bring a lot of guests on about systems. We’ve talked to Dave a number of times, but you, we’re not actually offering that as a service for video businesses. So we’re helping Video businesses, scale through systems. And generally speaking, those businesses are been there doing at least 30, $40,000 a month. There’s got to be a level of, of income, their team. It’s not something you would be doing if you’re a one-man-band, but if you’re a team of three or four and you’re doing 30 to $40,000 a month, and then systems is something that is really, really going to help you.

Den Lennie (21m 48s):
It’s just not something you should be thinking about. If you’re sort of at 10 to 20 grand a month, it can certainly help. And inside the VBA, we have a lot of systems training. And so something that might be an option for you to come in and just do that. But if you want us to do your systems for you, that’s the kind of threshold we’re looking at. And then, if you want to learn more about that, then you can connect with us on the website. Ask yourself, this. Has owning your own video business, been everything you dreamed it would be when you first got started? It might be hard to admit, but think about whether you’re genuinely achieving everything you set out to when you made that decision to grab the camera and go it alone.

Den Lennie (22m 28s):
Are you really working less? Are you really earning more? And are you really in control? Chances are you’re bloody good at what you do, but you’re having to work like a dog 70 plus hours a week, whether it’s filming, editing, marketing, or any of the other jobs that come with being the big boss of your own video company. When you’re managing projects, constantly searching out for new clients, and worrying about cash flow, it’s easy to lose sight of the bigger picture or make real progress. Let’s face it. That stress is the last thing you need. When you’re trying to run a profitable company that supports you and the people you care about. Truth is a business. It provides financial professional and personal freedom really is achievable, but maybe you’ve got that nagging feeling that you’re overworked, lacking stability, and struggling to get to where you really want to be right now.

Den Lennie (23m 15s):
It could be that you just don’t know how to make a positive change on your own. So I created the video business accelerator coaching programs to really supercharge your video business. With these unique coaching programs, you’ll learn all the tools you need to get complete confidence in the success of your video business. You can take the first step on your journey to a successful business that doesn’t control your life. Let me show you how. Head over to denlennie.com and click on accelerator.