Traction Page 14
1. Have each person prepare and then share with the other what he or she believes the other’s three greatest strengths and three greatest weaknesses are.
2. List all the issues and solve them.
3. List the action items from the solutions.
4. Meet 30 days later to make certain that the action items have been accomplished.
Nine out of 10 times, their differences will be resolved. In rare cases, they can’t be, and you have a tough decision to make because one must go for the greater good of the team. The analogy of the dying plant applies here. Once you cut off the dying limb, the plant flourishes, just as your team will. This is sometimes a hard pill to swallow, but, assuming you’ve conducted the personal issues solving session and exhausted every other option, it’s what’s best for the health of the team. Hopefully, the dismissed member can be relocated to another team in the organization.
Even in a healthy company, though, not everyone is going to get along like best friends. We are talking solely about building productive business relationships, as well as any personal issues severe enough to hinder the team from being frank about the company’s needs.
With the Issues Component clear, you can create an open and honest organization that comfortably calls out issues and uses the Issues List and the Issues Solving Track to document and eliminate them. You’re growing closer to reaching your full potential as a business.
You are now ready to work on the most neglected component of all, the secret ingredient of building a successful, well-run business: process.
CHAPTER 7
THE
PROCESS COMPONENT
FINDING YOUR WAY
When Jim Weichert, the founder of Weichert, Realtors, one of the largest real estate companies in the world with over 19,000 salespeople and over 500 offices, was asked the secret of his success, he gave a one-word answer: consistency. That means consistency works. Consistency allows him to scale his business. As a result, he has built a solid organization that has endured for almost four decades.
Nothing can be fine-tuned until it’s first consistent. The Process Component is strengthened through your understanding of the handful of core processes (on average, about seven) that make up your unique business model. You then have to make sure that everyone in your organization understands them, values them, and follows them. This component is the most neglected one, often taken for granted and undervalued by entrepreneurs and leaders. Yet the successful ones see what process can do for them. By not giving this component your full attention, it’s costing you money, time, efficiency, and control.
Imagine once again that you could rise above and look down on your organization. How would it look? What are all of the moving parts? You should take this high-level view from time to time and appreciate what you have. Sometimes you can take what’s been built for granted. To paraphrase philosopher and logician Kurt Gödel, you can’t be in a system while at the same time understanding the system you’re in. In other words, you need to raise your head from time to time and see the system for what it is, whether it’s good or bad. We are normally so buried in the day-to-day scramble that we never take the time to do this. Yet, you’ll see something new every time you do.
A typical organization operates through a handful of core processes. How these processes work together is its unique system. To break through the ceiling and build a well-oiled machine, you need to possess the ability to systemize. That is what this chapter is all about: helping you systemize what you’ve built. You’ll discover different ways to improve upon your processes, simplify them, apply technology to them, and, most important of all, make them consistent throughout your organization.
Michael Gerber, author of The E-Myth and The E-Myth Revisited, calls this your franchise prototype. To the degree you can clarify your systems and hone them, you will run your business as opposed to having your business run you. The culmination of identifying, documenting, and having everyone follow the core processes of your business is your Way. When you have a clear Way, you immediately increase the value of your business, strengthen your control over it, and give yourself options. From there, you may grow the business, let someone else run it, sell it, or simply take more time off.
Countless business owners complain about their lack of control or freedom and yet, in the same breath, discount the value of process. It’s like the story of the dog sitting on a nail. A gentleman walks up to a farmhouse. On the porch is an old man sitting in his rocking chair, and next to him is his old dog. The old dog is moaning, so the gentleman asks the old man why. “It’s because he’s sitting on a nail,” the old man replies. “Why doesn’t he move?” asks the gentleman. “Because it’s not hurting enough for him to move.”
Those business owners complaining about lack of control and freedom need to get off the nail and work on systemizing their businesses. In many organizations, people do their jobs however they want, resulting in tremendous inefficiencies and inconsistencies being embedded in the system. If they really saw all the variations, most business owners would be shocked. Many of them are just plain afraid to uncover what’s really going on. They cross their fingers and hope that the company will keep chugging along.
A good example of a company that gained the power of the Process Component is Franklin Communities. It owns and manages eight manufactured-home communities. Despite being in a stereotyped business, owners Ron and Andy Blank have broken the mold. They run a tight ship. They implement every EOS tool to the letter. With the help of an amazing and tenacious operations person, Shelley Taylor, they created their Way and ran with it. With the help of a strong sales team led by Larry Lawson, each of the eight managers runs his or her communities by the book. The result is an occupancy rate that has the competition scratching their heads. While the industry’s occupancies are dropping, Franklin’s have steadily increased over the last four years.
To systemize your organization through your core processes, you must take two major steps. First, you have to document the core processes. Second, you have to ensure that they are followed by all. Let’s start with documenting.
DOCUMENTING YOUR CORE PROCESSES
There are three stages in documenting your Way. First, identify your core processes. Then break down what happens in each one and document it. Finally, compile the information into a single package for everyone in your company.
IDENTIFY YOUR CORE PROCESSES
To start off, schedule an hour with your leadership team. This is not an assignment to delegate to one person. Take this initial step together so that you’re calling your core processes the same thing. Entrepreneurs tend to claim they already know what the processes are; I frequently get resistance on the need to call this meeting at all. Every time I suggest it, the reaction is, “Oh, we can do that in five minutes.” I’ve yet to see a team do it in less than an hour.
Here’s why. Your leadership team needs to identify and agree on what to call your core processes. Once you start the discussion, you’re going to find you have different names for them and lack consensus on how many there are.
Your core processes typically include the following:
The HR process is the way you search, find, hire, orient, manage, review, promote, retain, and fire people.
The marketing process is the way you get your message to your target audience and generate interest in what you do and prospects for your salespeople.
The sales process is the way you convert a prospect into a customer.
The operations processes are the way you make your product or provide your service to your customer. There are typically one to three core processes within operations (e.g., project management, logistics, warehouse, distribution, service technicians, account management, service delivery, production, quality control, customer service).
The accounting process is the flow and management of all monies coming in and going out.
The customer-retention process is the proactive way that you take care of your customers afte
r your product or service has been delivered and the way you retain customers so that they continue to come back and send you referrals.
No matter how many core processes you have, you need to identify the ones that address every activity going on in the business. Then list them in one document and make sure that your leadership team is 100 percent on the same page with the amount, the names, and what they are.
It’s surprising how productive this step is. The exercise creates clarity of thought that is then put down in black and white. You will find it to be worth every minute of the hour you spend. You will realize a return on the time invested quickly as a result of everyone immediately speaking the same language.
Now that you’ve identified each core process and have a name for each one, everyone must call each of them by the exact same name from this day forward. If the way you manage your accounts is called the Customer Care Process, everyone must call it that. Just by calling your core processes by consistent names, you reduce complexity and increase efficiency in the organization.
DOCUMENT EACH OF THE CORE PROCESSES
In this step, the Accountability Chart comes into play. The person that is accountable for a certain process takes charge of documenting it. The head of sales and marketing takes the sales process and the marketing process. The head of operations takes the one to three operations processes, and so on. The integrator usually owns the entire project, making sure everyone is clear and on track.
To avoid wasting time, make sure you’ve completed the first step of identifying your core processes before you start documenting. A single example will show why. One client skipped Step 1 and went ahead and documented all the procedures in the organization. When the client was done, it had 100 separate procedures documented on its intranet. This work was not a total waste, but once the client went back to Step 1 and agreed on its seven core processes, each of the 100 procedures suddenly took on meaning because it became a part of one of their seven core processes. The client found that the procedures were much better organized, and could be transferred to all of its 120 employees. Still, it would have saved a lot of time and effort to identify the core processes first.
When documenting the processes, you should follow the 20/80 rule. That means document the 20 percent that produces 80 percent of the results. In other words, document at a very high level. You should not be creating a 500-page document. The 20/80 rule gives you the highest return on your time invested. The trap many organizations fall into is wasting valuable time trying to document 100 percent of everything. If you document 100 percent of a core process, it might take 30 pages. If you document the most important 20 percent, you should need around six pages.
A similar common problem is trying to document every single little detail down to the nth degree. This is overkill. You just need to capture the basic steps in the process, because the real problem is that people are skipping steps, and not always on purpose. Festering problems then blow up weeks or months down the road. In the heat of the uproar, you treat the symptom and not the root cause, which was that someone skipped a step. There is always an uncomfortable laugh when I share this truth. You need to document the steps in the process at a very high level, with several bullets under each step, which are procedures. This way, you can make sure everyone is following the process.
What you’re illustrating are the basic guideposts to helping your people become consistent and efficient in your organization. The following is an example of a documented process:
THE HR PROCESS
Step 1: The Search
• Define role/job description/salary (the seat)
• Decide search medium
• Begin search
• E-mail 20 sphere/peers
Step 2: Interviewing
• Screen résumés
• Initial interview/profiling tools
• Second interview
• Check references
• CEO interview/core values speech
Step 3: Hiring
• Eight-hour on-the-job trial
• Decision
• 90-day trial
Step 4: Orientation
• HR policy/review employee manual
• Benefits review/forms
• Position training
• CEO orientation (company story/culture)
Step 5: Quarterly Reviews
• Manager fills out the People Analyzer in preparation for the review
• Follow the review checklist
• Review the People Analyzer
• Document the review and have it signed by all parties
• File review with HR department
Step 6: Termination
• Three-strike rule with documentation
• Terminate upon third strike
• Contact legal counsel
• Meet with employee/have HR present
• Exit interview
• Document termination and have it signed by all parties
Step 7: Ongoing Benefits Management
• 401K management
• Bonus plan
• Health insurance
• Employee files
In the end, each core process will run between two and 10 pages. Operations processes are usually the longest. Don’t be totally constricted by the 20/80 rule. Include whatever you feel is necessary. Just make sure you keep it simple.
Once you start to document, you’re going to uncover some hidden bones. Some steps will be in place that don’t have to be. You won’t understand how the heck they ever got there in the first place. When you ask why, you’ll hear responses such as, “Well, we’ve always done it that way.”
A man was once with his wife’s family for Thanksgiving. During the preparation of the meal, he observed his wife cutting the back of a ham off before putting it in the oven. Curious, he asked her why she cut the back off the ham. She responded, “It’s tradition. It’s the way we’ve always done it in our family.” Her mother had just arrived, so he took the opportunity to go over and ask why they cut off the back of a ham. She said, “It’s tradition. It’s the way we’ve always done it.” Fortunately, his wife’s grandmother was there as well, so he went to her and asked the same question. She replied, “Once upon a time, the pan was too small, and it was the only way to get the ham to fit in the pan.”
Your people doing things because they’ve always done them that way is not good enough. With the opportunity to build a well-oiled machine, you must now be able to show them a better way.
As you simplify, most of the time you will find that your core processes are too complex. By documenting the process, you will find many opportunities to dumb them down by eliminating redundant steps, taking out any confusion and any complexity. The goal is to streamline.
Eliminate steps, condense steps, and put checklists in place where possible. Some steps in your processes will easily be converted to checklists that can be used on the floor or in the field. You should make your processes bulletproof so that no one can screw them up.
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Checklists have been an extremely effective tool for my clients to create consistency, quality control, and repeatable results. Please consider this heavily when documenting your core processes. There’s a reason pilots and health care professionals use them. Countless studies have shown the considerable difference between using them or not. Use them for proposals, events, project management, and account management, to name a few.
* * *
Another advantage of simplifying each of the processes is to discover where technology can be applied. To connect core processes, or to enhance them on their own, realizes efficiencies and increases your profitability. There are great software systems that can connect your core processes and eliminate redundant steps, but make sure the investment of time and money will actually produce a return. Don’t implement technology for technology’s sake, leading to unnecessary headaches.
In my previous business, I made a move that I call t
he $45,000 Mistake. We needed a technology to manage The List that was created from our target market, as covered in Chapter 3. We kept a tremendous amount of information and history on our clients and prospects. We also needed to tie all of our North American trainers together.
I engaged an organization that claimed to have the latest and greatest technology. They were going to create the ideal software for us from scratch. This software would connect sales, marketing, and operations. After months and months of work and $45,000 spent creating the software, we scrapped it. Instead, we used a simple $500 off-the-shelf product that did everything we needed. The mistake I made was in not taking a close look at the process and the market for software. I got too caught up in the sizzle of what that particular software company was promising.
Technology must improve your Way. That means you must research and then decide based on creating efficiencies and simplification, not hype.
The other reason you must document and simplify your processes is that your business has to become self-sustaining. It has to be able to run without you. You have to get your key processes out of your head and onto paper. God forbid something happens to you or any of your people. If one of you disappeared tomorrow, could someone step in and pick up right where you left off? They should be able to, and by doing this step, you’ll ensure that they can.
PACKAGE IT
Good news! Now that your core processes are documented, Step 3 is the easiest of all. Here’s where you take all of the great work you’ve done in Steps 1 and 2 and package it. The titles of your core processes now become your table of contents. Each documented process in Step 2 becomes one of your sections. You put them in a binder or on your company intranet. On the cover, put your company name followed by the word “Way.” If your company name is the ABC Company, then it should read “The ABC Company Way.”