Rick was very frustrated with his business. Despite the fact he was working harder than ever, the business growth has stalled or plateaued. The business is wildly dependent on him and he couldn’t seem to get free.
Jennifer had a good business. Money was decent. She could take a little time off from time to time. But she knew deep down that the business wasn’t great. The business was far from its full potential. Her dream of building something extraordinary seemed more and more elusive to her. The business hasn’t clearly defined or differentiated itself.
The one thing Rick and Jennifer have in common is they are both stuck. They are intelligent and hard-working. Both were on a journey to build a great business. Although in different places in their businesses they are both on the continuum.
We all are on a continuum to move our business from perhaps barely surviving to modestly performing to performing well but yet highly people dependent to a growing and profitable, professionally managed, scalable, differentiated, system driven business that really matters with a powerful and compelling culture that genuinely serves the lives of the owners, customers and contributors to the business.
We have our own definition of greatness and I believe we all want to get there. If not, why bother?
The Level 7 System started with the premise – How to help entrepreneurs build great businesses that serve their lives.
We developed a set of Level 7 Core Principles; productive ways of thinking about business if you will. The idea is that if we embrace the RIGHT thoughts it will lead to the RIGHT actions.
Then came the Level 7 Implementation Program. We need to help business owners and entrepreneurs to apply the right thoughts in the most productive and effective manner. I am happy to say, my team and I have done a pretty good job of helping our clients accomplish that goal.
Everything changes. Innovation Happens (oh…that could be a t-shirt)
Not too long ago, at one of our Annual Level 7 Roundtables, a client asked me about the key activities of a Level 7 Business. I gave it some thought, did some research and concluded that there are 10 Absolutely Essential Activities Business Must Do to Become Great.
Here they are:
1- Get Your People Fired Up and Enthusiastically Engaged. Great businesses engage in consistent, intentional and varied leadership directed communication with the purpose of creating an enthusiastic collective focus with the people in the organization. Through these communication forums, leadership communicates goals, vision and values in a way to will inspire and get people bought in an on-board with the direction of the business.
2- Pay Attention and Listen. Great businesses expecting people to take an interest in the vision, goals and values of the organization, must demonstrate an interest in the concerns, ideas, frustrations and issues of their employees. These forums, or one on one meetings, with individuals are not intended for mentoring, performance reviews or providing team members direction, they are simply to listen to their people and appropriately respond. Most Level 7 Business conduct 15-20 minute One on One Meetings once per month. Calvin Cummings of Valbridge Property Advisors in Los Angeles, California suggested that implementing One on One Meetings in his business was one of the most important and valuable things he has done for the health, employee satisfaction, engagement and growth of his business.
3- Review Your Systemization Report once a week. Great businesses are systems driven. There seems to be a lot of confusion about what it means to be a systems driven business however. Some people believe that once they have a set of written and documented systems in a three-ringed binder on a bookshelf means they have systemized their business. Or they think that just because they have identified some process or workflow in an area of their business, even though it’s in their people’s heads, they have a systemized business. Well not to burst anyone’s bubble, but this is not systemized or systems driven. Read more about becoming systemize driven here.
Essentially being systems driven means your business has effectively orchestrated the process of documentation, testing, training and implementing your systems. In other words, creating great, high performing, results focused processes that your people are actually USING. Once you’ve done that, your business will be then be engaged in the process of evaluating and innovating your systems to continually make your systems better. The cycle repeats and your business continues to improve.
The Systemization Report is your reference to the current status of every system in your business as it relates to the systems development cycle. The Systemization Report serves as the catalyst that keeps the process of developing, implementing and innovating your systems.
4- A Commitment Standard is in place. If you have a systems driven business, you can trust and have confidence that your business will perform. Why? Because great systems produce great results. However, most systems are operated by people and, as such, you much trust your people to operate the systems according to the way they have been written and developed. If they don’t, then you will not get the results you are expecting or counting on.
A Commitment Standard simply clarifies the company’s expectations when it comes to commitments and follow-through. It establishes an environment of trust between management and staff and employee to employee. Although we assume people will consistently keep all their promises, things frequently slip through the cracks, people don’t always do what they say they are going to do.
This impacting results and business performance. The details matter. And one small slip can cost a company dearly. But the fact is people don’t always complete tasks on time or do things the way they are supposed to be done but it rarely addressed.
The Commitment Standard provides clarity of expectations when it comes to accountability and follow-though.
5- Stop Firefighting and Solve and Eliminate Your Problems Well. Most business owners are effective at solving problems. We are great firefighters. But to build a great business, we need to permanently eliminate reoccurring problems and frustrations. We need a systematic and effective approach to identifying the core source of the problem and in a step by step manner eliminate it. The Level 7 Problem Resolution System is a tool that our clients and their employees regularly use to deal with frustrations and challenges. Not only does it give the business owner and effective approach to solving problems and frustrations but it helps employees to effectively resolve problems too.
6- Monitor and Report Your Employee Performance. Great businesses have clearly defined, objective and measurable goals and expectations for each employee in their organization. These goals are communicated and reported to each team member on a monthly basis. Great businesses are on the same page with their people. When people are meeting or exceeding expectations they get high fives and acknowledgement. For those that are falling short; time and energy is invested to help them improve performance so they can start succeeding. If your people are succeeding across the board, your business is succeeding.
7- Be the Conductor and Orchestrate Correct Behavior. Great businesses understand that we must get things done. If it doesn’t need to be done, then eliminate it. We create Work Prioritizers. Work Prioritizers are essentially check or task list of reoccurring activities your employees are responsible for doing. This is not micromanagement just in case that thought went through your mind. It’s actually empowerment. You are setting your people up to succeed by providing them a resource that keeps them on track. Sales people are reminded to make 5 outbound calls per day. Bookkeepers are reminded to generate month-end reports by the 5th of the month. Front desk people are reminded to purge old files every month. Managers are reminded to review their Systemization Report weekly and take appropriate business improvement action as required.
8- Don’t Take Any Chances and Thread Your Culture. Great businesses are intentional about their culture. Threading or embedding a set of values in an organization requires a lot more than posting a list of values on a wall someplace on your premises. A well-crafted and threaded culture differentiates an organization among its employees and consumers. Level 7 Businesses employ a wide variety of strategies to establish and maintain a powerful and compelling culture. The most notable and effective is to create a Culture Development Team.
Having a Culture Development Team that meets regularly to develop strategies to communicate and engage people in the culture transfers the ownership of threading the culture to employees.
9- Know Your Numbers. I’m not talking about the occasional monthly P&L you might be getting. I am suggesting a set of key indicators that monitor performance for each department and area throughout the business. You could be looking at client acquisition numbers, lead conversion performance, closing ratios, employee productivity, brand development, quality control, client retention etc. The numbers for each business is unique to each business. Getting the numbers however is not enough. It also requires a clear and specific approach to responding when an area of the business is falling short.
10- Get Your Best Minds Together. Innovation is vital to any growing enterprise. Great businesses engage their key people in the business to participate in specific forums designed to initiate and encourage improvement in areas of concern in the business. The Level 7 Brainbank Process brings people together, they look at areas or systems that require improvement and then discuss and implement changes to their current systems to improve the business performance. Innovation and improvement goes from random and haphazard and business owner dependent to systematic, intentional, purposeful and engaging that includes people within the organization.
Once a business effectively and consistent engages in these key activities, they will see and experience massive improvement in all the areas of performance, revenue, profitability, capacity to scale and replicate, employee morale and customer satisfaction while improving your quality of life and connection to your organization.
Want to discuss or evaluate where you might be or how we can help you implement these 10 Critical Activities? Let chat. Click here to check out times and availability for a 30 Minute Evaluation, Assessment and Recommendation Call.
Rob (not his real name), asked me to help him develop his sales systems and train his sales people. He was stuck and simply couldn’t break past his sales ceiling. Revenue had hit a plateau.
I was pretty confident I could help him and the business. But I was concerned.
A business is an interconnected or interdependent organism. I was worried that we would encounter issues unrelated to the sales department, and their current systems, that were impacting the sales.
He assured me that if we encountered a problem, he would resolve it.
The company at the time had three sales people. Between the three of them they were generating about 2.1 million in sales per year.
I began to ask some questions to determine how the guys were spending their time.
Lesson #1 – We have to know if we are doing the right work.
As we drilled down to discover the truth, I uncovered that the sales people were spending about 25% of their time doing work totally unrelated to sales.
Specifically, they were driving around delivering printing to their customers. (The company was a commercial printer. That is real).
I inquired, “Don’t you have a delivery driver who does that for you guys?”
“Yup!” They replied.
“I don’t understand. Why are you guys spending your time doing $10.00 per hour work?” I asked.
The room was silent for a moment. They sales reps looked at each other assessing who was going to spill the beans.
Finally, Don (not his real name) spoke up. “Um…he’s terrible. He is rude to the clients. Very unprofessional. He doesn’t even bother making sure the printing gets to the right person or department. He has been know to literally walk in the door and drop the stuff off and just leave.”
Don (still not his real name) continued. “We’ve talked to the Rob (still not his real name either) and he hasn’t really done anything with it.”
At that point I clarified and confirmed that they simply don’t have the time to follow-up on new prospects because they are too busy.
They were too busy doing $10.00 an hour work and wasting 25% of their time doing it.
Do the math. That equates to approximately $750,000 in lost potential annual revenue.
Lesson #2 – One poor performing employee could be costing a company thousands of dollars per year.
Lesson #3 – Our job as business owners and managers is to create an environment where EVERYONE is performing at the highest possible level. Rob obviously didn’t know how to do it. I had to show him (that is true).
Do you really know how to do create an environment where your people are performing at exceptional levels?
Let's assume for a minute that you embrace the idea that the key to producing consistent, predictable results in your business is dependent on the quality of your systems coupled with the willingness of your people to follow the systems.
Essentially your goal is to create a systems driven versus a people dependent environment.
If you don't understand that concept or embrace it, you are missing out big time. Contact me. I will happily explain it to you. No pressure. It really makes sense or you can read The Level 7 Manifesto =>>
The big mistake people make in the process is thinking that they just have to go through the motions and get all their systems documented in the business and create these beautiful 3 ringed operation manuals. I have met many business owners who have done this and the end result is a lot of time and money invested only to have dusty, obsolete manuals sitting on a shelf some where.
Building a systems driven business is about creating a systems culture where everyone in the organization understands and embraces the notion that the key to your success is the quality of your systems. Further, the business supports what I refer to as the System Development Cycle.
This is the key. You must build install the systems development cycle.
The System Development Cycle is a reoccurring process that starts with the initial documentation of your systems, periodic evaluation of those systems and innovation of the systems as needed to improve business performance. Then the loop starts over again.
Want to simplify the process of building a great business? Get the system development cycle installed in your organization. Make IT the way you do business.
Read more about the System Development Cycle here =>>
Whoever came up with the statement "the customer is always right" was wrong. The reality is that this statement was designed for people who couldn't be trusted to effectively connect with a customer in order to create a win win environment.
But the customer is not always right. The customer doesn't always know what they NEED. They might know what they WANT. But the two are entirely different.
Henry Ford once said, regarding the first car he ever built, "If I'd asked my customers what they wanted, they'd have said a faster horse."
Effective leadership listens and observes trends. They do talk with customers and look to the future. They might not base their decisions on what the customer says they want however. They look for trends that reveal what the customer really needs or at least will want in the future.
I recommend that we do this intentionally. Take some time and simply ask the question, 'what trends and opportunities seem to be emerging that our clients and industry will be interested in the future?'
Here are a couple trends I have observed.
I see an ultimate decrease in the demand for commercial office space. Why? Technology is going to enable us to be able to telecommute more effectively. It's already happening.
There will be an increased demand in resources, training, materials and equipment designed for people to successfully work independently at home.
More outlets will emerge for socialization. It is already happening. Look at on-line social media. People will need to connect to others. If that isn't happening at work its going to happen somewhere. Starbucks like places will continue to grow as long as they can cater to the home-based work crowd. Wifi and Internet access, a quiet place to sit for long stretches of time will become common place in our neighborhoods.
I believe the next major break in technology since the desktop computer will be high functioning voice recognition programs. Think Star Trek and how the crew would interact with the computer. Key pads, mouses, touchscreens would become obsolete.
I would love to hear your feedback on trends in the world you see emerging too.
Please post your comments below.
To innovate alone or with another…that is the question.
I was meeting with a company the other day. We had just finished a team building process centered on the theme of innovation. After the activity we discussed how their company engages in innovation. We learned that in many ways, largely due to the personalities of the primary leaders of the business, that a culture of "innovate on your own" was largely embraced.
Knowing the leaders of this business well, I suspect this was not intentional. The fact is that their own style of innovation is such that they like to go into their offices and figure things out on their own. This is not a bad thing mind you.
However, some people are far more effective in the innovation process when they are able to brainstorm with others.
The point is this. According to The Level 7 Principle of Improving Performance, innovation can happen many different ways in an organization. Innovation is necessary and it must be systematic. If you aren't getting engagement from the people in the organization, then you might need to revise your system for improving performance to ensure innovation effectively takes place in the business.
Here are some key points to remember.
1- Innovation or improving performance in your business must be systematic.
2- Your systems, including this one, could be influenced, positively or perhaps negatively, by your personality.
3- Some people like to innovate alone. Other like to innovate in a group. Consider your people and create an environment that supports both.
I asked a client the other day how much he invests in research and development in his company on an annual basis.
“Eden,” he laughed, “I’m a small business with 25 employees and do less than 3 million dollars a year in sales, I can’t afford an R&D Department.”
“What do you think R&D is?” I asked.
“Well, that’s when you have a department specifically focused on identifying and testing new ideas and enhancing current products or services.”
“That’s correct,” I replied. “So are you saying that because you are a small business you don’t identify and test new ideas or enhance your current products or services?”
“Of course not! We are always looking for ways to make things better.”
“Is there really a WE or is it usually just YOU? I would imagine that you are probably the only one that is consistently looking for ways to make things better right?”
I continued, “And I would suspect that your process of improving your business is random, spontaneous, and haphazard. It’s probably what we call ‘interruption innovation.’”
An example of ‘Interrupt Innovation’ is when you walk into your place of business after a networking meeting and begin to make some changes based on idea you just heard that you liked.
Meanwhile your staff is saying, here we go again, changing things that don’t really need to be changed. Or worse, talking about making changes and then nothing happens.
Most business owners hardly give their current systems and procedures a chance to work before they are changing it and doing something differently.
So the difference between a large business with a dedicated and obviously funded R & D Department and your business is that they know they are doing R & D, and are intentional and organized in their approach. But because you, who don’t recognize that you are doing R & D, are not intentional about it there is a lack of organization to your approach.
Part of the appeal to entrepreneurship is the coming up with new ideas. You became a business owner because you believe that you can do something better than what is already being done.
I am not suggesting that you should give that up. In fact, I am going to encourage it. But do so in a way that supports the development and improvement of the business in a consistent and orchestrated manner, while creating an environment where your people actively engage in supporting the improvement and innovation of your business as well.
Here are some tips that will enable you to increase your effectiveness in improving your business.
1- Remember your business is a collaboration of systems working together to produce the results of the business. If you make a system better, you improve the business.
2- Schedule specific times to review your systems and procedures. Put it on your calendar to work on your specific systems and view it as a priority.
3- Research and Development ultimately comes down to learning. Think about it, that’s what big companies with fat R & D budgets do. They are learning, exploring, testing and researching.
A small business does this by intentionally exposing themselves to information that will help them see and understand new opportunities through reading, attending seminars, surfing the internet etc. Many of our clients set aside specific times of the week and close their doors to read and learn about things that will give them information that will help them improve their business systems.
4- Encourage your staff, regardless of the size, to get involved in the process of helping to innovate and improve your systems. If they are working the system, then it stands to reason they should be the master of it. Your bookkeeper should be the master of those systems as an example. Empower them to introduce ideas and offer suggestions on how to improve the systems they operate. Create an environment where your people take ownership of the systems they operate.
Engaging in these steps will give you the same leverage as the huge companies with deep R & D pockets.