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How to Stop Drowning and Start Systematizing

I couldn’t breathe.

Every time I kicked hard to get a gulp of air, I lost a little strength. The riptide pulled me out further. I sunk below the waves.

I was pulled out of the ocean in Hawaii, glad to be alive.

But then I returned home – to the office – and felt the same feeling.

Drowning. Firefighting. I couldn’t get ahead.

But this time, no lifeguard on a jet ski to pull me out of the riptide.

There was one big difference though. And that is that I had created the ocean of work that was drowning me. After all, I was the CEO. The choppy waters, the endless riptide pulling me was my own doing.

Since then I’ve talked to hundreds of entrepreneurs, and most feel the same.

Here’s how I work with clients and portfolio companies to build a raft, then a rowboat … and then, a battleship.

Step 1: Map The Business Functions

First, I zoom out and look at the business from a high level. Break it down into core functional areas like sales, fulfillment, marketing, HR, accounting … Make a comprehensive list of every function the your company, even if some of those roles are currently being done by the same person (i.e. the founder).

This exercise exposes just how intricate the business is and how vital it is to have standardized systems across each area. Like a clock, if one gear is off, the whole mechanism grinds to a halt.

Step 2: Define All The Tasks

Now I drill down into each function. Identify every repeatable task that role performs, whether it’s sending invoices, onboarding new hires, or creating social media content. Get granular. The more tactical we can be in defining each discrete step, the better the documentation will be.

Note how frequently each task recurs. Is it a daily task like customer service? Weekly? Monthly? This will help you prioritize which tasks are ripe for systemization first.

Step 3: Assign Owners

Next, I designate who is responsible for managing each task. Tasks can’t fall through the cracks if someone’s name is next to it.

This owner may be the entrepreneur initially, but the goal is to eventually delegate tasks so he’s not the bottleneck. As you systemize and document how each one is done, they get delegated.

Step 4: Document Processes

Now comes the documentation piece. For each task, I have the task owner map out how it’s done from start to finish. What are the exact steps? What inputs do they need to complete it? This is writing the owner’s manual for each task.

I like having them record themselves doing it and create a checklist from that.

Step 5: Streamline with Technology

Once everything is documented, I take a second pass to identify opportunities to leverage technology. Could any manual tasks be automated with software or AI?

Even simple changes like using templates or project management tools can be big levers.

Step 6: Centralize Knowledge

Finally, I collect everything in a master playbook that’s accessible to everyone. This living document becomes the single source of truth for how everything gets done in the business.

As we refine processes, swap owners, or incorporate new tech, the playbook evolves. But everyone is always working off the same updated protocols. No more misalignment.

Building your life raft is a process. You just need to stop thrashing for long enough to realize your predicament … And swim out of the riptide.

Want a cheat sheet to growing a thriving business? Get business training for free at the CEO Workbench.

October 4, 2023

Tracking Time Sucks. Embrace the Suck.

Should you track your time in your company? If you run any services business – especially an agency like I did, you might hate the idea.

Time tracking is frustrating, painful, and for most services business owners it’s a major source of unhappiness.

So why should you do it?

I hate tracking time – before I ran an agency, I was a lawyer and there was nothing worse than spending your day watching the clock and writing down everything that I did. So much so that I converted my law firm business model to never track time.

So many years later when I started the agency, I didn’t track time either.

I’m going to tell you why I was wrong – how I learned to love time tracking – and why time tracking will:

Make you a lot more money, and
Make your profitability numbers more believable in an acquisition.

Before we start, though, I want to be clear – I mean tracking time internally for your own records – NOT for clients. As I’ve said a million times, if you run a services business you should NEVER bill by the hour.

First we’ll look at WHY time tracking is important

Then we’ll look at FEARS people have for implementing

finally we’ll go over HOW to do it to be most effective

So first, the WHY

Let’s imagine that every member of your team – at every level – had a company credit card. They’re told that they can buy whatever they need for work, and that’s it. They’re not told how much it can cost, or what’s work appropriate.

And you never look at the credit card bills.

That’s what you’re doing if you don’t manage time.

Your team is getting paid for their time, but without knowing how they’re spending it, you don’t know if they’re making good choices. You don’t know if the things they’re spending time on are actually a good value for you or your clients.

In fact, you don’t know much of anything about how well they’re making decisions with the thing you’re paying for – their time.

This means that if you don’t look at their time, you could be paying for massive inefficiency. You could be under-paying superstars and overpaying for laziness.

I know, you’re probably thinking “I have a sense of who’s good and who’s not” … But I can tell you, having looked at the time in more businesses than I can count, that you’re wrong. You have no idea.

And it’s hurting the team.

So that’s the downside. What’s the upside?

Tracking time gave me huge insight into:

profitability – imagine looking at a dashboard and being able to see that you could make 10% more profit with just a few tweaks.
resource allocation – think about not feeling understaffed all the time because you know how to cover all your client engagements
team effectiveness – imaging being able to reward superstars and keep them from leaving
timing hiring – imagine knowing the right time to hire, and having the budget to do it

When I finally got my head around time tracking, that’s what I got out of it.

But wait, I’m afraid that it’s going to make my staff unhappy. And not only that, I don’t want to track my time.

Let’s talk about the fears of forcing the team to track time

They’ll hate it
They’ll leave
They’ll just lie on the timesheets

Before your mind goes there, remember what you’re trying to create – a great business that attracts superstar employees. And guess what? Superstars LIKE accountability. Sure, time tracking might piss of Lazy Larry who spends most of his day on eBay, but isn’t that a good thing?

Remember that time tracking is a way to have the team get better at what they do. It’s a way to be more effective for clients. It’s transparency so that everyone knows that the whole team is pulling its weight

And that’s ALL things that superstars love. (side note, I’ve got other videos on hiring and rewarding superstars)

Now how about you? Well, here’s the thing. As the owner you don’t have to track time (you can breathe a sigh of relief now). I recommend that you do, as I’ll get to in a moment – but you could make it a requirement just for anyone doing client work (which shouldn’t be you, but that’s a different topic)

So before we wrap up, here’s how to run your billing system to get the information you need from timekeeping. The software tool isn’t important – what IS important is how you collect and use the information.

Here’s the formula in four easy steps:

Before each week, the staff should plan their allocated work time to each account and record it for the upcoming week (based on the metrics you set for profitability per account/service line).
At the close of the week, compare actuals to estimated. This gives a sense for “is the organization learning how long it takes to do things” and “where are we misestimating things due to internal or external efficiency?“. This process was huge for me getting good at time tracking and profitability.
Add the agency as a “client” in your tracking software and have staff bill to that. This does a couple of things: (1) lets you see who is working on systems/processes to make the business better, and (2) makes it so there’s an ‘escape valve’ for where people bill time. Without this, they’ll fill up a 40 hour week by inflating client billable time and that will make your metrics less useful
If you, the owner, are billing time – set up a client called “Client Number One”. You are Client Number One. Time you spend working on the business vs in the business gets put there. Your goal is to increase Client Number One time as much as possible.

Wait – there’s one more thing before you move on to the next thing. And that’s to know that of the hundreds of services businesses I’ve helped, ALL of them that got any scale tracked time. So now is the time for you to decide whether that’s going to be you.

August 14, 2023

Entrepreneurs: 8 Keys to Scale Your Business Quickly

I’ve created over 753 strategic plans for entrepreneurs. At the core of each one are two things: Simplicity and Scale.

Here are eight things to cover in your strategic plan to grow with less complexity.

Before we jump in – it’s important to realize that the same things that make your business fun (and profitable) to run are the things that make it irresistible to buyers when you want to exit. So you’re getting a double benefit focusing on these 8 keys.

Here are the keys:

1. Margin

Make sure you know your margins and they’re healthy for your industry. Too many entrepreneurs put their head in the sand because numbers are scary. Here’s the hack: just ask your bookkeeper for a report. And read it. Seriously, the numbers are already done for you.

2. LTV

Know the lifetime value of a customer. If you don’t know what a customer is worth you’re flying blind. You can’t plan marketing, staffing, or growth. Know and grow this number.

3. Systems

All wealth comes from systems. A company is a machine that takes in capital, people, and resources and produces customers and profit. Without defined systems you don’t have a machine. You have a medieval workshop. Those suck to work in.

4. Optimization

Optimize your processes to deliver higher quality for less time and expense. Many businesses can increase profits significantly by just fixing poorly run processes – and use that cash to scale. You’ll need to – scaling with bad processes is a recipe for failure.

5. Delegation

Learn to delegate the right way. A company where the owner is necessary isn’t a business, it’s a job. Learning how to delegate in a way that’s a win for both you and your team is an invaluable skill.

6. Management

Manage your team with clear goals and accountability. That starts at the top. For consistent results make sure to use business scorecards to manage by numbers, not by emotion.

7. Hiring

Compromising on hiring because you just “need a body” will cost you in the long run. Hiring an A-Player will multiply your business. The wrong hire can set you back years (it happened to me).

8. Retention

A company scales by upgrading product, team, and customers. Keep the right people, and shed the rest.

The Scale Cycle

These eight factors are part of my Scale Cycle that helps entrepreneurs how to scale their business with simplicity. Start by picking the one that will have the biggest effect on your company, tackle it, then move on to the next. Then… Repeat. It seems simple, because it is.

Get a weekly list of short, actionable steps to scale your company with simplicity in the Boardroom Bulletin™.

December 27, 2022

How To Delegate For More Freedom In Your Business

Every business owner or entrepreneur has heard, at one point, that delegation is the key to growing a business and staff management, which is absolutely true. As a force multiplier, delegation gives business leaders leverage, allowing them to get more done than they could on their own. However, force multipliers don’t come without a cost.

In the case of delegation, the cost is complexity because to delegate correctly, you must know how to communicate. It’s entirely up to you to explain which tasks need completion, and the person you’re presenting to has to return the same level of communication.

In many cases, this is where the delegation process starts to get messy. Communication is easy to lose, so let’s chat about what to do when your delegation process works until it suddenly doesn’t.

Common Problems With Delegating

Delegation requires well-organized communication. The employee you begin the delegation process with will have to collaborate with other team members at some point, whether to ask a question or communicate the delegation request or results.

We’ve all been in situations where communication is messy or imprecise. Resolving communication results in more communication, primarily as you delegate more tasks to more people.

Most business owners reach a point where they’ve gained complexity and leverage, but they’ve added more staff members to the delegation circle. Business owners back off when the complexity level becomes too intense, such as the need to communicate with ten employees instead of one.

Delegating and Communicating Correctly

Instead of taking on more tasks and moving backward because you didn’t delegate correctly, let’s regroup and fix what went wrong. When the complexity was too much, you backed off from your delegation. You abdicated.

Abdication is delegation destined to fail, but the problem isn’t the delegation itself. Instead, it’s handing off tasks without the proper checks and balances. Delegation can work for anyone, regardless of the number of people involved, and it’s all about solving the issues within the communication process.

Hint: It’s as easy as creating a quick document that clarifies what tasks team members need to complete, the expected parameters of success, and what components require reporting.

Delegation Liberation Framework

In response to the seemingly endless communication problems that come with delegation, I created the Delegation Liberation Framework, encouraging business owners to document the following.

What you’re doing and why, or the purpose of the project
Your criteria for success
Tracking and reporting so you know the project is on track and set to meet all deadlines
The resources the person in charge needs to get the job done

It’s essential to document these items to the subject of your delegation, ensuring that they now own the responsibility of the project. Encourage them to ask questions beforehand, eliminating the loss of complexity. Try the Delegation Liberation Framework, and notice how much more you can delegate and how easy it becomes over time.

If you loved the ideas in this article, get a weekly list of short, actionable steps to scale your company with simplicity in the Boardroom Bulletin™.

November 10, 2022

CEO Vanishes for Three Months … and This Happened

This summer my dad nearly died. At first we thought he was just tired – and the ER near where we were staying in Maine had no answers. Two days later, his lungs were filling with fluid, so we drove to Boston – where he stayed for five days. Then ten days more in another hospital when we got home.

After he was released from the hospital he was still on oxygen and getting out of bed was difficult. I was an (unqualified) nurse for weeks.

It was over two months of not being able to focus on my businesses before he was better.

Imagine that, almost three weeks where I could have only the bare minimum of meetings, and couldn’t do any “hands-on” work myself. I had to rely on the people and systems I had in place beforehand.

Here are six reasons the wheels didn’t come off the bus:

Communication:
All my companies are run using asynchronous communication. Nobody needs to be available at the same time in order to make progress.

This is in stark contrast to most companies – where meetings (endless meetings) are the norm. But is that really the best way?

Your best time to get things done might not be the same as for other team members. When you can set the company up to move projects forward with the fewest meetings possible, the entire organization not only gets more resilient to absence – but productivity goes up.

What did this mean for me? If I needed to be at the hospital, I didn’t feel any guilt about missed meetings.

Decisionmaking:
I live on a “1000 year flood plain”. In other words, most things just run unless there’s a very rare occurrence. Instead of me being the bottleneck (remember, the neck of a bottle is at the top – the CEO), I only need to be in the loop when something is mission critical.

Everything else can run on parameters I’ve set. I’ve empowered the team to make decisions without me being in the way. So if a lawsuit comes in (hope not) or something of that magnitude, yes – I’m pulled in. But I don’t have to be for most anything else.

Do I get involved normally? Yes – to grow faster. But I don’t need to.

Automation:
there’s a ton automated (machine and human automation) so it runs on rails. Importantly – the automations also flag the team when something is out of bounds.

The key is not just to automate “what happens” – but also to automate notifying when something isn’t on track. So it’s MORE than just the process being automated. It’s alerts to know when things humans do go off track.

When I was gone, I knew everything was running on time and on track – because I wasn’t hearing anything from those alerts.

Dashboards:
I know what’s going on by looking at just a few Google Sheets and custom-coded dashboards. Advertising, marketing, sales, delivery – I can pull up the information without interrupting the team.

Here’s a goal for you: can you run your company on nothing more than your cell phone? Looking at a few reports, giving (asynchronous) guidance to the team, then logging out?

Revenue Model:
This one saved my bacon. It’ll save yours too. Recurring revenue means that even if sales went to zero (it didn’t), I’d have months and months of runway.

Never (ever) underestimate how awesome that is. If you don’t have a recurring revenue offer, find a way to add it. You can add recurring revenue to any business – I’ve done it in dozens. Do it, now.

Advertising Model:
We use paid media to acquire customers. $X goes in, Y clients come out. It took months of testing to get there, but when the process to do this is nailed down it’s a thing of beauty.

Once you have advertising down this way, it’s an asset of the company. Something an acquiror would pay a lot for. And something you’ll appreciate every day. Ask yourself – if some competitor in your space has figured out how to make advertising work for them reliably, why can’t you?

Dad had a hard summer. He’s on the mend, slowly. And I’ll admit, my eyes were off the ball for longer than I’d have liked. BUT this I can say, hoping you can do the same – I had nearly three months of my absence and the companies kept ticking along.

How long would yours last? And what are you going to do to absence-proof it?

Discover a weekly list of short, actionable steps to get out of operational deadlock, build a self-managing team, grow strategically, and increase company value in the Boardroom Bulletin™.

October 20, 2022

How To Lose Customers and Make More Profit

My business lost a major contract, so I cut the headcount of my company in half. It wasn’t a good start to that year.

Even after the cuts, I thought we might not make it.

I made some quick changes, and the opposite happened – we were more profitable and started to grow faster than before. Here’s why:

The contract we lost was almost half our monthly revenue. Everyone in the company knew, and gave them ‘all hands on deck’ service. Even when that customer made unreasonable demands: insane deadlines, pulling me in, second-guessing the team, and renegotiating price down every quarter.

Then they had a management change. New management had “their guys” that they brought in. It happens a lot (and you should plan for it, if you’re a vendor). But I wasn’t as prepared as I should be.

And just like that, we were out. They didn’t have the courtesy of even calling me, let alone a meeting. They sent a breakup email.

I’m sitting there stunned reading the three-sentence message. Wondering what the (BLEEP!) I’m going to tell the team whose livelihoods depended on this account.

I had no idea this would be the best thing for the company in the long run.

We helped team members we let go find new positions as best we could. That cut the company down to breakeven. We weren’t losing money – but not making any, either.

Yay, no salary for me (again).

Next – figuring out how to support our remaining clients with a demoralized team. That was trickier, because they all had lost friends to the layoff. Each one was wondering if the company would survive, or whether they would be next.

The key to solving it?

Doubling down on process.

We’d spent so much time delivering for the Big Client (and their unreasonable, out of left field demands) that we spent no time making delivery better. We realized that we’d been ignoring some far more profitable smaller accounts.

And I asked a critical question – how could we revise everything to support far more smaller, but more profitable, customers? (Have you analyzed your customer base?)

We made a two month plan to refactor how we delivered. I doubled down on marketing and sales – which I could do, now that I wasn’t being pulled into delivery.

Do you know what we found in just a couple of weeks?

That we could deliver for clients with 20% fewer labor hours, and more reliable results, with better process.

It just required that we take the time to do things differently. Time we didn’t have with the Big Bad Client monopolizing every spare hour. We went to work doing what we should have all along:

Document the process (the right way)
Communicate differently, both internally and with customers
Lean on automation more to reduce manual labor on the team and increase reliability of delivery for the customer
Analyze who should be doing what

The 20% decrease in workload let us take on new clients. Which drove higher profitability.

Within seven months we were more profitable than before. AND I wasn’t pulled into anything. AND the team wasn’t second-guessed by a bully client.

This was early in my career. I came up with some rules that I’ve held to since:

The first is never let a single customer become a material part of revenue.
The second is the point of this article – don’t scale before you’ve optimized delivery, because-

Stuff’s gonna break
Your team’s gonna break
The company’s gonna break
You’re gonna break

OK, so how do you apply this in your company? It depends on what you’re delivering, your labor mix, and a few other important factors. The important part isn’t what I did, in my situation with my team and my customers.

The point is the thought process you go through to fix the problem.

Step back to first principles: is a small number of customers risking your company’s revenue? Are they preventing you from doing a better job for higher-margin customers?

Start by asking those questions – and go from there.