EPISODE 50 | The Power of Procedures
Hey folks and welcome to another episode of Builders Business Success Podcast!
This is our 50th episode of doing this like this. I think it’s probably our 1 millionth episode of doing something, but it’s our 50th episode of doing this in this format, builders business success podcast in this format and so going to be giving you some giveaway stuff.
There’s a fantastic book that a friend of the show his name is Brandon Adams, Brandon T. Adams and he’s got this awesome book. It’s called The Road To Success. It’s got some amazing stuff in it to help you be successful in any endeavor you wish. So we’re gonna be giving away a couple of those books during the show or after the show.
What we’re gonna be covering in the 50th episode is the power of procedures. As you may be aware, or you may not be aware that we’re writing a book and we’re actually using the podcast to create the content for the book.
And fundamentally we’re just unpacking everything that we do and build this business black belt.
We’re not holding anything back that that, you know, you need to pay to access or anything like that. This is our best stuff. This is, we’re completely open completely transparent and sharing with you what we do in builder’s business, black belt. And so we started doing that quite some episodes ago.
What we’re up to today is the power of procedures. And what I’m gonna be sharing with you is the value that procedures can bring your business.
So we’re gonna talk about the when, the who, the how and most importantly, believe it or not, the how not to do procedures because a bunch of people go, yeah, yeah, procedures, man.
They’re really cool. Let’s go do procedures. And they waste their time and they create problems. So just because you’ve got procedures doesn’t mean you’re improving your business. So we’re gonna unpack all of the detail about that.
Q and A in this episode is going to be about how to spot time-wasters. Would that be valuable? I see you nodding. Yes, it would be valuable.
How to spot time-wasters in your business but then how not to lose an opportunity as well because you know, some of the conversations I have and some of the descriptions I’ve being given about how some builders qualify their clients or prospects at that stage, they can lose an opportunity.
*Transcription of the show*
The topic is procedures and the power of procedures.
The first question you need to ask yourself about procedures is why have them?
There’s an absolute metric shit ton of reasons as to why you should have procedures and why you should build your business around procedures.
The first reason is, and this isn’t getting any better by the way, currently statistics, 90% of all small businesses will fail in the first three years.
When I first started doing this a number of decades ago, the statistic was different. It was 80%, which I thought was disastrous. 80% of all small businesses that started would fail within the first five years.
It’s gotten worse, 80% or 90% of all small businesses that start fail in the first three years.
But there’s another really interesting statistic. And that is around 75%, oh, I’m not gonna say franchises, I’m gonna say franchise style businesses succeed.
So what would you rather be in? In which camp would you rather be in? Having 90% chance that you’ll fail in three years or having 75% chance that you’ll succeed?
So I’m leading with that because I wanna give you the most powerful reason I’ve got as to why you need to start to build procedures using the suggestions I’ll give you through this podcast in your business because it gives you a much, much better chance of succeeding.
The big majority of the businesses that make it through past that three-year mark don’t necessarily what I would call succeed in any case.
They don’t necessarily succeed, they just exist. And the big majority of small business owners have just basically bought themselves a job, a low paying high stress job. And that’s not the idea of having your own business.
So what’s some more reasons as to why you should have procedures in your business? One is consistency.
And that is so, so important in a business. If you’ve ever read the E-Myth revisited by Michael Gerber He talks about how important consistency is. And he gives this whole story about where he went to get his hair done.
Went to get a haircut and when he walked in there, they said, you know, please sit down here and read these magazine and we’ll get you a glass of wine while you’re waiting and he just raved about the experience.
The next time he went, ’cause he went back because he had such a great experience. The next time, it wasn’t quite the same and they sort of bought him a cup of coffee instead of the glass of wine, or what have you. And he thought that might’ve been, you know, just a misfire.
So we went back a third time and none of it happened. And so he stopped going back there. And that happens with a lot of businesses that we have a rush of blood and we do things a certain way and then it’s inconsistent. We stop doing it. Procedures create consistency. So it’s so important to have your business based in procedures. Without procedures, you don’t have a benchmark for improvement.
If you’ve got five or six different people doing the same job, five or six different ways, and that job is perhaps producing results, or perhaps it’s not, or perhaps sometimes it is and sometimes it isn’t, if everyone’s doing things a different way, we haven’t got any data to be able to look at to improve how we’re doing things. So you’ve got to use procedures so you’ve got a benchmark to improve from if that makes sense.
And here’s what I think. I think that a lousy procedure is better than no procedure because at least you get some consistent data, some consistent feedback, some consistent results which you can measure any changes to the procedures against. If you haven’t got that consistency you can’t measure the value of any changes.
So you, again, you’re just sort of blindly throwing stuff at the wall and seeing what sticks and that’s, you’re kind of going back to a hope strategy. I hope this works. This procedural approach is much more measurable and reliable. Another reason because you need lots of reasons to do something at same. So I’m gonna give you a whole bunch of reasons.
If you’ve got procedures, other people can step in. If somebody leaves, if somebody is away on holidays, if you have written procedures that are created in the way that I’ll talk about in the rest of this session, you can have somebody step in and get a pretty reasonable result from following that procedure.
So how the procedure is created is kind of important as well because you really can’t create a procedure where it relies on people’s experience too much.
You’ve got to be able to have the steps and the resources available for someone to be able to step in. Being able to do that, if somebody leaves, somebody can come in and hit the ground running and you don’t need to have this massive transfer of information from somebody’s brain to the other person’s brain.
Particularly if somebody left, you know in a hurry, for whatever reason you don’t get that changeover opportunity. Somebody’s gone and then you’ve got to bring somebody in to take over where they left off. If procedures exist, that happens with a lot less friction. It works really, really well. One more. I’ll give you one more reason as to why you need procedures.
If you think that in the future you are ever going to sell your business, having procedures will give you a far more saleable business and somebody buying your business can see how professionally, they can see the steps that the organization that’s being created in this business and just like somebody leaving and somebody coming in and running the business or running that job or position if somebody’s sick or away, if a new owner comes in they have a massive amount of confidence that they can come in and follow the bouncing ball.
They’ll also, obviously there’ll be able to improve it but rather than having to learn from scratch they’ll be able to make an assessment of the value of your business.
And generally when it’s procedure based, the value of your business in their mind will go up significantly. So that means that if you’re going to sell the business you will make it number one, easier to sell, but number two, you will get a much bigger price a higher price for the business when you sell it, if it’s procedure based.
So that’s the why folks. I hope I’ve given you enough reasons for you to start to wanna put the time in to create procedures for your business.
And when I say you create the procedures for your business you might create the procedures for what you do but it’s actually not the right thing for you to do to create procedures for other people to follow. We’ll unpack that in a minute. So what do you need to do?
What you need to do is identify the where and the what. And what that means is don’t create procedures for the sake of creating procedures. And I think this is absolute gold. It’s taken a long time to learn this. Please take notice of it. And that is allow the opportunity for a procedure to present itself.
There’s no need to create a procedure to tell people how to buy the milk. They know how to do that sort of stuff. And I’ll tell you a bit of a story in a moment why that is actually counter productive. But the best thing to do is allow an opportunity for a procedure to present itself.
How we might do that is getting the team involved. So in your weekly team meetings, what I suggest and what we teach our black belt members to do is get the team involved in a conversation about what sucks. What’s boring, what’s frustrating? What problems have cropped up?
Why has a customer been made unhappy and complaining? So all of those things that are ugly about your business are opportunities to create procedures. But the key is to get the people who are going to be performing those procedures involved in the creation of them, okay?
So important to get them involved. And I’ll tell you why in a little while but allow procedures to reveal themselves, or at least the opportunity for a procedure to reveal itself. And what do you need to do to create a procedure?
Well, the first procedure you need to have in your business and I know this is gonna sound weird, but go with it. You need a procedure for capturing procedures. That’s the thing that is missing in most businesses is a procedure, a process, for capturing procedures. So I’m gonna give it to you. It’s really simple. Get your pen out, here we go.
The first thing you do with a procedure is give it a name. It’s got to have a name. The name needs to make a bit of sense too because you need to have a way a platform to capture your procedures.
You can use Google docs and all of those sorts of things. There’s online software you can get for capturing procedures but keep it simple, keep it easily accessible. And that’s why the name is important to be able to do a search and be able to find that procedure very, very effortlessly.
So the first thing you need to do is give it a name. The second and most important part of a procedure to capture procedures is the purpose of the procedure. You’ve got to be able to identify the purpose of the procedure and the purpose needs to be relevant, it needs to have meaning.
The purpose needs to have purpose folks. The good thing about that is if you can’t figure out the purpose and if this purpose isn’t powerful enough, well, you’ve just bought yourself some time because you don’t need to create a procedure. If there’s really no meaningful purpose for creating procedure, don’t bother.
But the other thing is if you do have a purpose people are far, far more liable to comply with a procedure, follow the procedure, if they understand why. If you can tell them why they’ll more than likely follow it. And so a purpose is really super important. The third step in creating procedures is capture the steps, okay?
All right, step one do this, step two do that, you write down the steps. And then the fourth part of capturing the procedure is gathering all of the necessary resources and some procedures don’t need resources but let’s just say, and this is a really daggy lame example, but it should get the point across. Let’s say that there is a procedure for ordering stationary, you know?
And here’s how you do it. Here’s the form that you fill out to find out what we need. And here is the person you need to speak to. And here is the phone number that you need to ring to order the thing. And here’s where you get the order number or whatever.
So, but the resources to be able to perform a procedure they need to be easily accessible that you need to have them at the person’s fingertips because if you don’t have at the person’s fingertips, they’ll tend to procrastinate.
Yeah, I’ll just do something else, I’ll do that later and then that thing doesn’t get done. So those are the four steps to creating a procedure. The name, ease of access, purpose, make sure it’s needed, necessary then the steps and then the resources.
So how you need to do this and make sure that these procedures are followed because I can’t tell you how many times I’ve run into businesses, not necessarily building businesses but back in the day, when we used to work with all sorts of businesses that had procedures that just weren’t followed and one springs to mind, ’cause I was doing a session with these guys and two owners of the business.
And one almost had a conniption when I suggested, well, you need to create procedures around this. The cause of this problem or this problem can be eliminated if we create procedures and he almost passed out. You know, he got really angry about that whole suggestion.
As it turns out, I found out that about 18 months ago they’d paid a consultant to come in and write all of their procedures and capture all of them and they paid about 50 grand to have it all done and put in a beautiful letter ban folder on the shelf. No one even knew it existed, let alone using it.
So the suggestion of using procedures didn’t sit well with this person. So what can we learn from that? Number one, we don’t write procedures for other people. And most particularly we don’t get some outsider to come into the business to write procedures for people, Okay?
The other thing that was missing and I’m gonna expand on that writing procedures for other people in a sec. But the other thing that was missing is a system and systems are different to procedures.
I know people use them and use those two different words and they think they mean the same thing, but they don’t. The procedure are the steps. Here’s how you do this. Step one, step two, step three, step four.
A system causes that procedure to be followed. And you can’t always implement a system to ensure that your procedures get followed, but where you can and it makes sense, please do. An example of this, and again, I’m probably gonna be known for lame examples.
It’ll be written on my headstone that, you know, he knew what he was talking about but he used really lame examples. That’s gonna be on the headstone.
So here’s my attempt at an example of a system that’s really lame. Let’s say you’re at a shop and the boss keeps saying we’ve got to capture people’s postcodes for marketing purposes and the people go yep, yep, yep and I keep forgetting, I keep forgetting, I keep forgetting.
And the bosses jumping up and down every week at the team meeting saying, you’re not capturing the information you need to capture it.
In the end he gets the shits and he creates a system and he puts an automatic electronic lock on the front door of the shop and the only way that the lock lock can be released is on the computer system the person behind the counter has to put a postcode in the customer’s contact record, presses the enter button and then the lock opens the front door.
It would probably be illegal which is why it’s a lame example. You can’t lock people in your shop but that’s the idea of a system. A system is something that causes people to have to use the procedure. And there are certain times when that’s appropriate many times, it’s not.
So what do we do in that case? Well, we recruit the team to build, refine and give feedback on the procedures. If you get the team involved in discussions about what sucks, what gives them the shits, what’s boring, what’s frustrating, what causes anger and angst and get them involved in a discussion of how can we get around that?
What can we do to get over that? When people start to contribute to the process, the procedure to be able to eliminate something that is painful for them, they are far more likely to use that process. They’re far more likely to comply.
They’re far more likely to encourage enthusiastically other team members to use that process as well. If other team members aren’t following the bouncing ball the team members that were involved in the creating of it will tend to encourage other team members to use it.
I did say that I was gonna talk about the, how not to. And I’ve kind of alluded to it. Don’t build procedures for other people and then do a decree from the balcony, you know, and say this is how we’re gonna do it from now on because people don’t like being told what to do.
And I found this out firsthand years and years ago working with an accountancy firm and the whole, we had this whole conversation with the owner about things needed to be proceduralized because we were talking about the difference between a, like a franchise style business and standard garden variety, small business and the difference between the two is a franchise style business is based on procedures.
And I gave you the statistics at the start of the show you know, 75% of franchise style businesses succeed. 90% of small businesses fail in the three first three years. You know, which group do you wanna be in?
So we wanted to create procedures. And I created a, or called a meeting with everybody there and started talking about how wonderful it’s gonna be and we’re gonna do these procedures and blah, blah, blah and talking about procedures there’s procedures for this and procedures for that. And everything’s gonna be proceduralized. And there was one lady I could see that she was getting really upset about this.
Anyway, at the end of the meeting, I went over to her and she was with a bunch of other girls who work there as well and I just said, what’s going on? You know, why are you upset? And she just burst into tears. But they were tears of anger I found out.
That she, she just said, you know, I’ve been working here X amount of years and I don’t need to be told how to do my job blah, blah, blah, you know, absolutely tore strips off me. And at that point I realized there’s a place for procedures and there is a place where you don’t create procedures or at least you don’t create them in that way.
What we were able to do after everything was calmed down and I said, well, that wasn’t the purpose and sort of, we understood each other, we were able to create a regular get together where we put the things that frustrated them that they didn’t like, that that were, you know, boring and things that just didn’t work as well as they liked.
And they had input, creating new ways of doing things. It worked really, really well. So don’t create procedures for the sake of it, don’t create procedures for other people,
Get the team involved, get the people involved and get them involved, not only in the creation but the constant refinement of your procedures and constant feedback as to how they’re working and what we could do now.
So I hope that makes sense. It can make a big difference to your business. So start creating procedures or get the team involved in creating procedures for your business.
Q & A
The Q and A that we’re gonna cover is how to spot a time-waster.
We get asked this quite a bit. And it’s not only how to spot a time-waster, but make sure don’t lose an opportunity at the same time. Ready for the answer? Answer is don’t try.
Don’t even try to spot time-wasters because that is when you lose opportunities. You start to make assumptions about people. So I suggest you don’t try. What I do suggest is you implement a qualification process. We’ve talked about it a lot.
You can scroll back and watch previous episodes where I’ve showed you exactly how to create a qualification process. And it’s a series of behavioral hurdles that what we call your anti-avatar. So you need to do a little bit of work to make this work. And that is create the anti-avatar.
That is the person that you don’t want anywhere near your business. By getting intimate with them and understanding what makes them tick. You can put these little behavioral hurdles in your process that you know that your anti-avatar won’t jump over.
So you never have to say no. You never have to make the decision. And so you create a hurdle and you give them the reasons why it’s good for them, the benefits for them if they jump over the hurdle, that’s called education. So you give them all the reasons to jump over the hurdle.
If they don’t jump over the hurdle you don’t have to say, no, you don’t go to the next step, they don’t waste your time but you don’t have to identify them.
You just have a pathway where the people that you know are your right people, they’ll jump over the hurdles and end up becoming a great quality client.
And the people you don’t want anywhere near your business that are wasting your time, they just want a price check, they want to price shop, they want a free quote, they want all to use and abuse you, they won’t make it very far into your process.
So they don’t end up waiting time but you don’t make that decision upfront. You don’t make that call. You just take them to the next step, offer them to go to the next step and through their actions, they will move forward. So you should never say no. You basically create two pathways.
You create a pathway for a reasonable person which is your pathway with the jumping over the hurdles or you create a pathway for the unreasonable person which is you can refer them to go see somebody else And they will make that choice you don’t have to make it.
Personal Productivity Hack
So the personal productivity hack is a thing called the PSR. That’s what we call it in belt anyway, short for personal success ritual.
Going to unpack this at some stage in one of the future episode, but I just wanna give you an overview so you can maybe create your own but our PSR has four parts. And it is the very first thing you do when you get up in the morning is you look at or listen to or read something that is somewhat inspiration.
We point our black belt members to a particular video on the inter webs, but after a while, they find their own there’s a absolute heap of them on the internet. So grab something that’s inspirational. Step one, step two is when you’re in that little bit of an inspired state, you start to write things down.
It’s called a 60 second success system, and you get a pen and paper and you write like crazy for 60 seconds all things that would be wicked to have become accomplished experience if there were no limits to time, talent or money. So fundamentally you’ve got to write stuff down that’s impossible.
What that does is it puts your brain into this space where anything is possible and it’s a stretching exercise for the next step.
So the third step in the PSR is about a three minute goal setting session where you’re either writing goals unpacking goals you’ve written before or just spending time with your goals and getting in touch with them, getting intimate with the goals and the steps and the actions that you need to take to get there.
You should be in a bit of an inspired state by this stage because the fourth step is creating your prioritized daily action list. And that is the list that you work off with your priorities for the day, the list of actions. And this is a game changer in our intro to this show.
You’ll see a guy’s name’s Andrew PC sitting down there with the glasses and he’s the poster boy right now for people who have gone from working 14 hours a day he sent me a post the other day. He said, he’s now, and he’s only been with us, not even a year, and he was he’s old school, you know, working 12, 14 hours a day.
His work was his life. He was a workaholic and he sent me a message the other day saying he’s now attempting to get everything done in two days.
So everything that he used to do in 14 hours a day, five and six days sometimes seven days a week, he’s now attempting, and I have all the confidence in him, to get it done in two days a week. And he’s super excited about that.
What he used was this PSR, but most importantly that prioritized daily action list and writing down the really high leverage stuff giving them the priority and then working off that list every day.
Takeaway & Jump On A Call
So what’s the takeaway from today?
I think build a business, don’t do business is my takeaway. Always have that thought.
People just go every day and they do business. You know, they do business, they transact and they, they get clients and talk to suppliers and subbies and they doing business. Build a business is the takeaway.
I think that if you’ve ever read Robert Kiyosaki, Rich Dad Poor Dad is one of his books probably the most famous books. He talks about what a business is and what a business isn’t and his way of thinking, what a business is, is it’s something that you can leave, have zero to do with for 12 months and when you come back, it’s bigger and better than what it was when you left. That’s a business.
How many of us have a business? Not very many. And so what we need to do is have a focus on building a business rather than having a focus every day on doing a business.
The PSR that I just talked about is a profound contributed to that. And it’s a personal success ritual. It’s not a business success ritual, It’s a personal success ritual. So, and what it does is get you into constant improvement. And even the procedures is all about constant improvement.
So everything today, I think is all about building a business rather than doing a business. So that’s it for this episode going over time again, sorry but I wanted to tell you what I wanted to tell you.
So I hope that’s okay. If you’ve been watching live please hit a hashtag live in the comments. If you’ve been watching it on the replay put hashtag replay in the comments. And as I said, for the final time, we’d love to help you with any and all of what we’ve spoken about in this episode. And all you need to do is book a call.
There’ll be a link in the comment section once we go not live, once we’ve finish we’ll put a comment, we’ll put a link in the comment section. If you’re watching it on the what’s it called, the blog, there’ll be a button underneath the video here.
If you’re listening to the audio only you can, on Spotify, Apple podcasts, whatever platform you’re listening to it on, all you need to do is navigate the buildersbusinessblackbelt.com.au and there’ll be schedule a call buttons like that one that I’m pointing to which you wouldn’t be able to see in the audio only one, but you’ll see it when you get there.
Click that, fill out the information, schedule a call. It’s gonna be fun times. It’s really, really exciting. Love to talk to you, love to point you in the right direction. So I hope you got a lot of value out of this podcast. We’ll be back again live in the Builders Business Success Forum.
So if you’re not a member become a member. Love to see you in there. You can get in there and ask questions and hang around with some really smart people in that group.
But we’ll be back again in that group live with another episode, 51 of builder’s business success podcast, 10:00 AM Eastern standard time Australia, Sydney time next week. Look forward to seeing you then.
I’m Mick Hawes Builders Business Black belt. That’s it. Bye for now.