EP34 Building a systems lead business with David Jenyns

The conversation explores the importance of systems and processes in businesses, with a focus on the book 'Systemology' by David Jenyns. The main themes include the definition of systems and processes, the ideal businesses for systemization, the role of systems in reducing dependency on individuals, and the starting point for systemization in a business. The conversation also touches on the balance between systemization and creativity, the value of capturing tasks and processes, and the role of a systems champion in larger organizations. In this conversation, Mike Scott and David Jenyns discuss the importance of having a single point of accountability for systemization in a business. They emphasize the need for someone who has the most knowledge about a particular system to be responsible for documenting it. They also discuss the challenge of getting people to follow systems and offer strategies for overcoming resistance. David explains that Systemology is different from other process improvement methodologies because it focuses on capturing and making processes repeatable, rather than improving them. He encourages business owners to fall in love with the results that systems and processes bring to the organization.

Takeaways

• Clear and timely reporting on numbers and metrics is essential for businesses.
• Strong systems and processes can solve reporting problems and reduce dependency on individuals.
• Systemology is a valuable resource for understanding and implementing effective systems.
• The definition of systems and processes can vary, but they are interchangeable for the purposes of this discussion.
• Systemization works best in small to mid-sized businesses with involved business owners.
• Building a systems-driven culture is important for long-term success.
• Systems are the most valuable asset in a business, as they are not dependent on individuals.
• Systemization should aim to create consistent outcomes and cultivate a systems-driven culture.
• Systemization is not about over-optimization, but about capturing the most probable outcomes.
• Great talent is important, but businesses should not rely solely on individuals.
• Systemization can increase the value of a business and reduce risk.
• The starting point for systemization is to record and capture tasks and processes.
• Creating a culture of recording and documenting tasks is crucial.
• In larger organizations, a systems champion can drive the systemization process.
• The role of a systems champion is to make it easier for team members to document and capture processes. Having a single point of accountability is crucial for successful systemization in a business.
• The person with the most knowledge about a system should be responsible for documenting it.
• Resistance to following systems can be overcome by celebrating wins, showcasing successes, and recruiting team members who are receptive to the systems-driven approach.
• Systemology focuses on capturing and making processes repeatable, rather than improving them.
• Business owners should fall in love with the results that systems and processes bring to the organization.

Chapters

00:00
Introduction and Common Problems in Businesses

01:33
Introduction to Systemology and Guest Introduction

03:32
Defining Systems and Processes

09:13
Reducing Dependency on Individuals through Systemization

15:04
Building a Systems-Driven Culture

Find out more about  working with me or about applying to join the ILN.  mike@smbmastery.com.au

 https://www.linkedin.com/in/mikeadamscott/

https://theintentionalleaders.com/

Transcript

Mike Scott (00:01.902)
Hello everybody, good to be back. So I work with a lot of founders, a lot of leadership teams, primarily in small and mid -sized businesses and two really common problems that I see, I would say with almost every company that I work with at some stage. The first one we will not be speaking about, but I'm going to mention it because it's relevant. The first one is a lack of really clear grasping, reporting, timely reporting on their numbers and metrics. The second one is a lack of strong...

systems and processes. And actually the second one can really serve and solve the first one, which is why I kind of mentioned it. I've got a lot of experience in this, some good, some bad. I've read an enormous amount on this topic. And the resource that I've gotten the most from to date is a book called Systemology. It initially caught my attention because not was it just endorsed by the legendary Michael E. Gerber, who's I'm something of a fan boy for those of you who don't know.

He wrote the Emo3 Visited, which is one of the foundational business operating system books. Read it if you haven't read it. He not only endorses this book, but he actually got the author to come in. Well, he wanted him to come and run his businesses. And that really caught my attention because my understanding of Michael Gerber is he's a pretty critical thinker he's kind of the godfather of working on your business, not in your business. So this guy who wrote this book, Systemology, must have something valuable to offer. With that said,

Really, really excited to welcome the author of Systemology, David Jennings. Welcome to the podcast.

David Jenyns - SYSTEMology (01:33.287)
An absolute pleasure to join with you today.

Mike Scott (01:36.106)
Awesome. Okay. So I want to get stuck in straight away and I want to ask you a question. It's not a bit funny, but I want to ask you a question to clarify a constant source of debate, frustration and confusion in my world and my clients worlds. What is the difference between a system and a process?

David Jenyns - SYSTEMology (01:54.75)
I, in my systemology book, lump everything together under the one phrase systems, because there are a variety of different terms that people use. And you mentioned process, and we talk about SOPs and workflow diagrams and how to docs. So there's actually a variety of different definitions that team members will get confused. And there are differences between each.

So it makes it a little bit challenging. What I like about a system is it can work at the high level and be all encompassing. Whereas a process tends to sit as a piece that sits under system. Like a process is something sort of listed out as a, almost like a step -by -step, or that's the way that I see it, as opposed to a system which might include the tools, the software and...

everything from a definitional point of view, but I actually use the terms interchangeably just because it gets confusing if you kind of get down into the tic tacs of what means what. My definition of a system, I just say it's a series of steps that when followed produce a consistent outcome, which works at that very high level, like an overview type system and explains high level how something works and maybe the tools and all of the pieces, but it also works at a

micro level where it's step by step how something is done, know, logging into my OB and issuing out an invoice. It's a series of steps that when followed produce a consistent outcome.

Mike Scott (03:32.822)
Okay. So what I'm taking from that, I tend to agree for what it's system process, same thing for the purposes of this discussion and all discussions around your work. They're interchangeable. think today I'll try and index around systems. I like that word more than process. I don't know why I think it has less baggage than process. So that's what I'm hearing. Systems processes, folks. It's the same thing. We'll probably use systems more than processes today because of the name of the work that David's done. But I like that because it actually does.

It does clarify a bit. I see people getting a bit in the weeds as to the difference between a system and a process. I like what you're saying. Let's just use the same term. They mean the same thing. Really what we're indexing around here is a set of steps to consistently produce the results of the outcomes that you want. That's what really matters here. Would you say that that's a... I'll be on the same page. Okay.

David Jenyns - SYSTEMology (04:22.677)
Yes, I reckon you hit the nail on the head. And I think of it almost like Inuits. If you were to ask them what snow is, they're going to tell you there's probably 60 different types of snow, but you and I just call it snow. We don't worry about sleet and all of the different types. So I just simplify it by going, it's just snow.

Mike Scott (04:44.45)
Yeah, I like that. I like that. So we're just talking about systems. Okay. So I want to calibrate this conversation a little. My understanding, please correct me if I'm wrong, this is just from me stalking you online and your website and doing the normal stuff. You ran a digital agency, specifically like performance SEO type agency in Australia. I think you've exited that business. That's where you really cut your teeth on creating a systems led business. My sense from looking over your case studies and seeing some of the people that you've interviewed for case studies.

is that your system systemology is certainly a good fit for small to mid -sized businesses with let's say 20 to 100 staff, maybe revenue between one and 50 million. But I really want to hear from you before we start this conversation, where does the system work best? I don't think there is any catchall system that will work for a 17 ,000 person corporate and a four person business.

The work that you've done since you created this, the work that you've, the companies you've worked with, where do you, what do these businesses typically look like that are a great fit? Is it a segment? Is it a size? Is it a demographic, psychographic? Where is systemology best suited?

David Jenyns - SYSTEMology (06:01.181)
Yes. So there's usually a few criteria that exist. Generally, it centers around the idea of the business owner and their involvement in the business. If they are heavily involved in a lot of the different departments in business and they're getting pulled in to help answer client or staff related questions, that's a bit of a telltale giveaway. Size wise, would

say, while it can work with people maybe up the end of the spectrum, and we have got clients with 100 plus team members, but I wrote it really for me to solve my problem. And I wrote the book that I wish I had when I was getting started. So I'd say it's more down that end around 10 to 30 staff is probably more ideal. And I just find the larger an organization gets, the harder it is.

to change the culture and while you're smaller and really what we're looking to do here with systems is create and cultivate a systems driven culture. So that's why I tend to say you wanna start planting this seed as early as possible. Otherwise it gets exponentially more challenging. And also the larger companies also oftentimes have other requirements and other boxes that they need to tick. Whereas I really focus on practicality,

we're not putting systems and process in place to tick a box so that we can get an ISO accreditation and go for a big tender. it's not about ticking a box. It's about changing the way that the team thinks and reaching the conclusion that this is how we do things here and having a process that people actually follow because they see it benefits them and the organization. So as far as.

industry and other things. Look, we've worked in a variety of different industries. I think it works particularly well in service based business, know, professional services and things. Seen it in building industry, immigration, e commerce business, really, we've touched all different industries and the thought process, it's not industry specific.

David Jenyns - SYSTEMology (08:21.593)
And even to the point where I see it applied in profit and not for profit. Like we're just talking about an organization and we're talking about identifying best practice and capturing that standard and moving from some sort of tribal knowledge into a central knowledge base that the team can be trained on and reference as they're doing their work.

Mike Scott (08:43.406)
Yeah, that was a really helpful framing because, and I wanted to start there because I think it's very dangerous to say, here's a thing that works for everyone, right? Like rule one on one in marketing, don't try and be everything to everyone because you become nothing to nobody. So I like how you said, I built this to solve my problem. My problem was a business between 10 and 30 staff. This is really about changing culture. It's really hard to change culture when you're a multiple hundred person business. It's almost impossible. Those that do.

are the case studies because they're the outliers. Something that you said in your book irked me a lot, and I like being irked because then it makes me think. And I've actually come around a lot. And I'm putting words in your mouth, but you make a statement at some point saying, people are not your biggest asset. Your systems are. And I was like, whoa, whoa, whoa, hold on, hold on here. Come on, buddy. That's not true. know, I've built and sold and exited businesses, always indexing heavily around people. But it got me thinking a lot.

David Jenyns - SYSTEMology (09:21.085)
Yes.

Mike Scott (09:42.05)
And I gave you the benefit of dark and I listened to the book and I've actually completely come around and it's for a very simple, it's a very simple reason, as you say, but for the audience benefit, for the very simple reason that people can get hit by a bus. People do come and go. People are excellent. If your systems are good, they can't be hit by a bus. They can't come and go. They are evergreen. And it relates back. I can see the influence on Michael E. Goebel here because again, my words, it's been a while since I've read his book, but

He said something that I got a long time ago saying, these are my words, but it is a false sense of security when you build an amazing business that has very deep reliance on a handful of individual heroics. You might be getting the results you want, but you're actually at risk. So what he says, my words, we need to build businesses that can actually thrive with very mediocre talent in the business. This feels weird because we're always taught and told to get the best possible people we can.

and to invest in our people, which I agree with, but I'd love to hear from your brain. Just talk me through a little bit more insight into this going, yes, we want great people, but actually we should build businesses that don't rely and depend on great people, that can actually run and thrive on kind of mediocre talent. Just talk me through your version of this.

David Jenyns - SYSTEMology (10:59.869)
Yeah.

Yeah, there's a few things here. One, I want to, I suppose, rock the listeners' thought around this and maybe how they think about it. And my thinking has been changing also. Firstly, we understand that a lot of business owners very business owner dependent. So it's the same problem, whether it's the business owner or it's dependent on other team members. It's that the business is reliant on

that person to deliver the result, which is dangerous because really the only thing that you own are the systems, you don't own the people and as we said, they will come and go. that from a risk minimization point of view, if we think about when we're selling a business, like what does the potential acquirer do to value a business? They want to buy something that has low risk, the less risk something has and the more confidence they can have that it will continue to

delivered to a great standard, typically the more they're going to want to pay for it. So removing key person dependency in any way will increase the value of the business. That said though, there's always a little bit of a yin and a yang here because I appreciate great talent. And to some regards, think, mean, Michael was heavily influenced from

McDonald's and he sees it as the greatest small business on earth. And this idea has shaped the way that he looks at and thinks about business. And the thing is, they were trying to recruit 15 year old kids to flip a hamburger. But the reality is, I see a lot of the listeners listening to this. I don't think there's probably anybody running a hamburger business who's listening to this podcast. So we have to be careful not to.

David Jenyns - SYSTEMology (12:57.555)
blindly follow what McDonald's has been optimizing for, which was to build a hamburger business. If we don't, I actually think there's a good balance between having you want great people doing great work and we need to be careful. remember Reed Hastings, founder of Netflix, when they went on their journey, wanting to systemize and they thought, right, we're going to fully.

McDonaldize the way that we're doing things and we're to make our business dummy proof. And then he ends up systemizing every aspect of the business. And then he said, but then I realized if we dummy proof our business, only dummies want to work here. And then that was his aha moment to go, Ooh, we need to be careful, not completely over indexing on systems and process and taking some of the human element out.

And you want to have great team members. want to have process that captures the things that need to happen in business that must happen to a certain standard. You want to have the most probable outcomes systemized so that newer team members can cut their teeth on those things. But it's actually great to have really exceptional and talented people handle the variations and innovate the process and continuing to

evolve. And I know there are some misconceptions in there about systemization, removing creativity, and depending on how you approach it, it's really how far do you lean into it. So, you know, my thinking has changed now, just mindful that McDonald's has been systemizing for 60 years. So we've got to be careful to look at where they are today. And they go on a journey and have also created a culture of innovation.

mean, McDonald's is constantly changing their process. So there's an element here to having process, but also then knowing when to break the process and when to re -engineer the process. So there's a lot of light and gray here and yin and yang, and it'll depend on your business and your situation and where you are in the journey.

Mike Scott (15:04.771)
Yeah.

Mike Scott (15:08.598)
And I think McDonald's is a great one because it's a controversial business. I don't like McDonald's, right? Like, I think they're net negative for the world. However, I'm always using them as the poster child of repeatability, right? So there's this thing where I talk about them all the time. I genuinely think the world would be better off if McDonald's didn't exist, right? But at the same time, I can hold true what they have done from a purely capitalist sort of business perspective is remarkable, which is actually a really good conversation because

David Jenyns - SYSTEMology (15:35.572)
Yes.

Mike Scott (15:38.318)
You use the word overoptimized and I think that's what this is about is they have hyper optimized on process to the detriment of health, all sorts of things, but you don't have to go that far. You don't have to become a McDonald's, right? Like a lot of businesses, I do a lot of work with my clients on creating and crafting a very coherent and clear vision. Almost every business when they start, they think that their vision has to be really grandiose. And the first thing I say to them is it doesn't. Your vision might be to never grow beyond 15 people.

David Jenyns - SYSTEMology (15:48.5)
Yes.

Mike Scott (16:06.926)
to just create an environment that people love coming to work, to just do good work by your customers and have them their lives easier. That can be an amazing vision. It doesn't have to be big. And what I'm hearing from you is that the systems work is a similar thing. You don't have to hyper over optimize like McDonald's did, but taking a business from no systems to 20 % improvements can just create the freedom, the success, the bottom line results that can really drive your business, which is a, I think it's an important.

point for people to realize this isn't binary, right? Like this is a spectrum of improvement.

David Jenyns - SYSTEMology (16:38.42)
Yeah.

Some other things to think about is when you're first getting started systemizing your business, just because you don't systemize it doesn't mean it's gonna magically stop happening in your business. Your business is kind of already working. So you actually want great team members to be able to fill in the gaps and paper over where maybe the systems fall short. So...

And as you're on the journey to building your systems and your processes, I actually say just capture the most probable because if you end up over engineering a system and over optimizing it and trying to put every possible variation of what might happen in every situation, one, it makes it hard for the team to follow. Two, if it does break, the more that you optimize to...

different paths, the more likely it is to break. You're actually much better off having a more general system and approach that applies to all scenarios and then plug great team members in to then execute on those general systems. And also that helps to then attract in those great talented team members because the great talented team members don't want to be micromanaged down to the nth degree that they

do something this way, this way, this way, you must click here, you must do that. So there is a fine line and you have to think about the role as well. Like different team members and different tasks may require more detail than other roles. Maybe an administrative assistant who's answering the phone, you want to have a very particular exact system for the way that that's entered into your CRM versus a project manager that might be...

David Jenyns - SYSTEMology (18:24.307)
delivering something for a client and has visibility over multiple team members and different things need to be moved around based on timelines and when contractors are available and well that needs some level of flexibility built in there. So it's very hard to say one size fits all and it's about understanding all of the different tools available to you with systems and processes and then you

you get better at knowing when to apply what.

Mike Scott (18:55.224)
So, okay, so my assumption is that the vast majority of the audience listening to this does not need to be convinced why systems are important in a business. So we're not even gonna do that. We're not gonna do what I normally do, which is like understand the problem and then what's the solution. I just don't think we need to go there. Could be wrong, but I'm pretty confident about that. The topic of improve your systems and processes is a near constant one. Seems like never ending. know, I've been part of...

EO for many years and lots of these sort of business forums. It's not a new thing, right? But it usually kind of, yeah, yeah, yeah, we need to do that. We need to do that. But then nothing kind of happens, right? We just hire better people, more people, just kind of throw money or head count at the problem. You speak about it. I like this. I actually use this terminology myself. Maybe that's why I like it. But I like your succinctness saying, really, guys and girls, this is about taking your business from survival to sellable.

whether or not you want to sell it. I'm a firm believer that we should run businesses as if we're to sell them, even if we're not. It's just the right way to do things. You spoke about that a little bit earlier. When your business is in survival mode, and really what I mean by survival mode here is not necessarily you're in serious trouble, but it's just kind of like you're just grinding to keep things moving. Maybe you're profitable, but it's just not fun, right? You're resource constrained.

In every sense of the word, you don't have a lot of free cash. You don't have a lot of free time. You don't have enough people in the business. You've got people like me saying, Hey, you need this role and that role and this role and the other role. You're trying to make sales because that's what you think your primary role is at the stage of your business as a founder. You're dealing with staff issues. Like shit is difficult. Right. Where is the best place to start when you're in that sort of place and you want to begin to take the first step from the survival, which you're resonating with. And if you're listening to this and you're feeling like.

sort of in your brain, then it's because you're not alone. Where do you start with the systemization to take that one step towards becoming sellable, which at the moment feels implausible?

David Jenyns - SYSTEMology (20:55.657)
Yeah, one of the best skills that you can develop is the ability of capturing slash recording what it is that you're doing. No matter how rough around the edges it is, I would suggest create a Google folder or a SharePoint folder.

Think about setting up a sales and marketing and finance folder and then literally just start recording little videos of you doing the work that you're doing. Make it unedited, raw, if they're one hour long, three hours long, it doesn't matter. You just need to build up the habit and the muscle for recording of tasks being

complete because it is a bit of a skill that needs to be developed over time to how do you articulate what you're doing? How do you explain a step? How do you make that transferable? And even if it means you record the same task, you issue out an invoice through my OB record it the next five times you do it and then just start saving it into this folder. And the aim of the game is

How can you make this so simple that it doesn't take any additional work outside of what you're already doing, as in you are just recording yourself doing the work and talking through it? Because that starts to build up a bank of tasks that are getting done in the organization and little training videos for that. And we can leverage some AI and...

getting a virtual assistant in at some point in time, that's maybe step number two, where we can then start to process some of these videos and turn them into little checklists and how -to's. But I don't wanna take away from the business owner, if they're in survival mode and they've already got 50 million things to do, the last thing that we wanna do is add another thing onto your to -do list. So trying to build up the habit of just recording what it is that you're doing to the point at which

David Jenyns - SYSTEMology (23:09.671)
it doesn't feel like it's any extra work. That I think is probably the best starting point.

Mike Scott (23:15.694)
So, and maybe I'm putting you too much on the spot here, but my business, before we were acquired, it was a pretty specialist software development business, right? So we had pretty highly qualified, experienced software engineers. We were working in quite a specific niche. In our case, was fintech and blockchain scale -ups. We were doing very high value work. So what we were doing was expensive. The people where we were hiring were specialists.

And there were multiple people involved, right? So for example, we had a project manager, you might have DevOps, you've got a software engineer, you've got another software engineer, you've got another software engineer, you've got a designer, you've got a UX person, you've got QA, you've got all these different moving parts that are involved in doing a thing. Now that was my world, if I think about my clients, they're in all sorts of different industries, but it's similar. You know, you might have field technicians out in the field or engineers out in the field. You might have...

Salespeople, mean, you get it, right? There's many different people working on a single project. How do you go about what you've just spoken about in that instance, where there are multiple people involved in a set of tasks that are also working in different locations? How do we build this culture of step one being just record what you're doing? Is that too specific or can you speak to that?

David Jenyns - SYSTEMology (24:40.072)
Yeah.

depending on where someone is at in the journey, the first part when we talk about survival and we're talking, I imagined, as you described that, a smaller team. So if it's a smaller team and the business owner really wants to do this, like we need them to be the change. And I remember when I gave Michael Gerber one of the early versions of Systemology, the first thing that he said is,

this all sounds great, Dave, but I'm just going to give you one bit of advice. Don't let the business owner off the hook because you make it sound like the systems champion is going to fly in here and save the day and the team's going to do all the documentation and the business owner doesn't need to. And it's not that the business owner will be documenting everything, but they really need to buy in on this. They need to understand it. They need to have some level of, you know,

understanding some of the topics that we're talking about and how it's done and what's involved. So that's a key part of it as the team starts to grow. And then we start to talk about the type of business you were running, which is probably at a little bit of a larger scale than a handful of team members. And really the best way to do it at that point in time is you introduce what we call a systems champion. And that of all of the things that I've done,

with all of the businesses I've worked with, if I was to identify one leverage point that will yield the biggest results, it's that. Having someone on the team who has the role of systems champion, who's not the business owner, whose job it is to make it easier for other team members to record and document and capture what it is that they're doing. They'll also be the ones that

David Jenyns - SYSTEMology (26:37.279)
Take that recording, get it transcribed, feed it into chat GPT, get draft number one of the process, polish it up, go back to the knowledgeable team member and say, great, here's what I drafted up after us doing the work. So having someone fulfill that role at the level at which you're talking about is probably what I would suggest. It may be an existing team member that has some extra capacity. The key is capacity here for that role.

Either that, or maybe you recruit a return to work mum or dad, or you find a virtual assistant who can step in just to really take the bull by the horns and get this started and build up a little bit of momentum. Cause the hardest bit is the starting bit.

Mike Scott (27:19.779)
Yeah.

It's kind of like the fundamental, right? I mean, I can see in the background there, you've got traction up on your shelf and I can see a purple book. So scaling up is probably there. And know, these things are all really saying the same stuff, right? I mean, I love these books, but when you read enough, I'm sure you have the same experience. They're all kind of saying the same thing in different and clever ways. But there's a consistency through all of these, you know, Matt Moshery's work, Traction, Scaling Up, Michael Gerber. Like there's a consistency through here, which you've just echoed again, which is like, you need a single point of accountability.

which is the system champion. So that's a big takeaway, folks. If you're listening to this, like, this is not a magic pill. There needs to be somebody that is singularly accountable for this. And I like what you said there, Dave. If it's not someone internal with capacity, because we need to be real, figure out, get creative, who can be this person. It doesn't have to be a team member. It can be an outsourced resource, which I think is an important part of this. You said a phrase there which comes up in your book a lot, and I want to, it's a good segue because it's actually my next question.

You speak about in the book quite a lot that kind of by definition, it should not be the business owner that's doing all of this work because the large part of why we're doing this is to create freedom and space for the business owner and scalability in the business to remove that bottleneck. You speak about the knowledgeable person, right? The person who has the most knowledge about a particular system in the business. And you clarify there, they don't have to know everything about the system, but they just have the most knowledge about the thing in the business.

Why is it that you think that person that has the most amount of knowledge should not be recording the process? My understanding is that you sort of have the knowledgeable person. So here's the person who knows the most about how to make a cup of tea. Someone else should be shadowing or recording that person making a cup of tea in an ideal world. Why is that?

David Jenyns - SYSTEMology (29:13.533)
Yeah, so there's a couple of points here and again, it depends on where someone is in the journey of creating their systems. When I wrote Systemology, it was for businesses that haven't yet installed a systems culture and really got things going. Therefore, the first step is to capture what you're currently doing and make that repeatable. Tremendous wins can be gained just by going,

who already does this thing pretty well, let's capture that, let's make that the baseline minimum standard, and then let's bring everybody up to that level. Sometimes if it's left to the business owner or someone maybe in the leadership team who's really highly knowledgeable, what they'll end up doing oftentimes is wanting to craft the system the way they would like it to be, not the way that it is. And then that becomes a little bit of a

a hurdle now because now they need to think about the way that they would like it to be and how do we make it better and how do we improve it? And then we're to have to test some things and it's got to be the highest skilled person to do it. And all the highest skilled person's already busy. So now this is on their to -do list and it's important, but not urgent. So we'll get to it when we get to it. So we never get it done. Whereas if we just say, who knows how to do this pretty well. Let's.

capture that and not look to improve it. And that's why we make it a two person job. So the second person isn't looking to improve it. It's just capture it to make it repeatable. And then that becomes the baseline. We're really talking about the baseline at some point further down the line. Once the business owner has space and they've removed themselves from the day -to -day operations and they're not working in it, then the business owner will actually do some of their best work working on it.

but you don't want to start working on it while you're still in it. So this is a stepping process to get them out of the init. And then at some point having them actually work and engineer and rebuild systems is actually a very good use of their time. But we definitely don't want to start there.

Mike Scott (31:27.36)
And I think that's a pertinent point that I love that you articulate this so well in the book. It's, it's, and I just want to repeat what you sort of said. It's that when the most knowledgeable person creates the system, it's usually done in a sort of a wishlist format. It's like, this is what we want it to look like in the future in an ideal world, not this is how it is currently being done and it's working at least to a degree. And I think that's a critical, critical thing. You know, I've watched a lot of project managers in my business.

do things very differently. The ones that are highly successful generally would start when they took over a project, not with a project plan, but actually just obsess over recording what is. What's the reality of this project? How broken is it? How far behind are we? How many stories, ethics, tasks are there? Start with obsessing over the reality and then going, okay, now we can start a plan. The ones that just skipped to, it's fine, here's the project plan.

without actually getting the reality, highly unsuccessful, which is a similar sort of way that you're talking about is record what is happening because you said this earlier and I like it. Acknowledge the success that you've had despite systems. You have a business, you're still in business, you're still alive. So the stuff you're doing is working to a degree, right? Like give yourself some kudos and record what is. I love that. I want to move on a little bit here. okay, now we've recorded the systems. They're not pretty, they're not perfect, but they're working.

We've now got them. We've because AI is so easy now we've transcribed them. We've thrown them into chat GPT. We've got a version one of the systems. We've cleaned them up. They're 80 20, maybe 70 30. They're, they're not amazing, but they're working and we can begin like we've got them. We've got a set of systems. They're stuck in a Google drive somewhere or a SharePoint folder. Now what, what do we do now? We've got them. They're recorded. They're ugly, but they're fine. What do we do now?

David Jenyns - SYSTEMology (33:19.657)
Yep. The next key is to make sure that you're never one click away from that process at the point at which you or the team member needs it. So that might be a link in your calendar, a link in your project management. It could be a QR code that's stuck to a piece of equipment. It could be, you just want to remove the possibility of any team member saying, yeah,

but I didn't know. I didn't know that's the way that we set up that equipment. I didn't know that was my expectation. So once we start to install this everywhere, it just makes it so much easier to point back to that classic thing, which is it's always the system's fault. So if anything goes wrong, well, let's look to the system first. Is it a problem in the system? Did you not follow the system? Okay, well, that's another discussion. But you always blame the system first and you build that

culture of where's the system for that? Where's the link for that? Do we need to tweak that? How do we fix that? So that's probably one of the big pieces is to have it so front and center because then it starts to help with the performance management of team members as we start to transition to this is how we do things here.

Mike Scott (34:21.942)
Mmm, I like that.

Mike Scott (34:38.846)
I love that, Dave. know, often when a client will come to me and say, you know, this team's productivity is bad or this person's product, the first thing I'll say is before you even get to accountability and productivity, would they be able to tell me exactly what is expected of them? And do they have all the tools to do their job is absolute clarity in existence. The answer is always no, always never has somebody come back and said, yep, no, a hundred percent. They are super clear. They can demonstrate it. They understand the measurement. They understand.

Never. always is. You know what? Actually, if I'm honest, maybe it's not clear and I need to go back and clarify this with them. And I love what you've said there because it was really succinct. You just said, just remove the option of them ever being able to say, but I didn't know. So I love those little examples, stick it on a piece of equipment with a QR code. Brilliant idea. Just make it like, there's no excuse anymore. Right? We can, we can make this stuff immediately accessible. So I, I love that.

As we progress through this conversation, I'm thinking about something that happens quite often. So I'm not a systems expert, but I've felt the pain of a lack of them forever and tried very often to get them right and with varying degrees of success, usually low success. But I've got a good few clients who are very capable people, very thorough people, and they are confident that their systems are solid. And if they would just get followed by people.

then they would consistently get the results that they need, right? In other words, what I'm just really picking out here is my experience is kind of two problems with systems. Either you don't have systems, therefore no one's following them, or you do have great systems and no one's following them. So really this leads to a two parts question. Just because you have a good system, sorry, let me rephrase this. Just because you have a system doesn't mean it's a good system.

David Jenyns - SYSTEMology (36:18.697)
Yep.

Mike Scott (36:35.534)
So the first question, and I'll ask you both the questions, then I'll get you to answer them one by one. The first question is, how do you determine whether your system is a good one or not? That's the first question. The second one I'll actually come to afterwards. how do you sort of rate or value your system? What's the sort of objective measurement of whether it's a good system or a not so good system?

David Jenyns - SYSTEMology (36:38.526)
Yeah.

David Jenyns - SYSTEMology (36:59.657)
Hmm. I like to think of it in terms of what is the output that comes at the other end of that system and someone following that system. Is it to a good enough standard? Does it deliver what we expect that system to deliver? It's really just inspecting the output and

It might not be perfect and things might break, but again, we know it's always the system's fault. So we just go back to the system and go to work on the system if it's not quite what we expect. Remembering also, this is another reason why you want to hire great team members. Great team members will paper over the cracks of poor performing systems. So that's especially while you're getting things up and running at the start.

having great team members is excellent because it also helps when we're trying to capture what is our process and we're creating the process. So regardless of what way you look at this, having great people is always a good thing. And I think, yeah, working with them and then seeing what that output is, like part of this is, we're talking about minimum viable systems. We want a basic set of systems that exist

in across the entire organization, understanding that each department has a specific role that it needs to fulfill for the business to survive. So marketing needs to generate leads, sales needs to convert those leads, operation or client fulfillment needs to deliver the product or service. So each of these departments have something that the business needs. And we want to go, what are the minimum number of systems in that department?

you if I had to pick five or 10 systems that would ensure that this department had its best chance of delivering on what it needs to for the business and starting there and going to work on those systems and then working towards making sure that they at least deliver on what it is that they are needed to do. Because if they're not doing that, that department will not be able to deliver its responsibility

David Jenyns - SYSTEMology (39:18.589)
and that will then bring down the overall health of the business. The metaphor I often use is the human body. The human body is a system and there are a collection of subsystems within it. There's, you know, respiratory and cardiovascular and the different subsystems. And if one of those subsystems is unhealthy or not performing well, it brings down the overall health of the human body.

Mike Scott (39:23.043)
Mmm.

David Jenyns - SYSTEMology (39:45.467)
If one of those subsystems fails, it can even kill the human body. Same in business. Your business is a system. There are these subsystems, marketing, sales, operations, finance, et cetera. Each one is responsible for something. If they're unhealthy, it'll bring down the overall health of the business. And if it completely fails, it can kill the business. So the aim of the game is to get those minimum viable systems to an appropriate standard. if...

If it's not at that appropriate standard, that's when you know that it's breaking and it's not at least achieving minimum objective. And then you know, we need to go to work on those.

Mike Scott (40:25.186)
Totally get it. Second question is probably the most important question or the most difficult to solve. And in my experience, this one comes up a lot, right? And it's the second part of the likely reason your systems aren't working. In this scenario, let's assume you've now got good systems. You're confident and you have data to your point. These systems are producing an output that you want when they're followed. You can see that, you can measure it. You know that now. You know that your systems are good.

Well, let's say good enough, right? But people, or at least some people, are just not following them.

I was with a client recently where they have the situation. They're a larger organization than that sort of 10 to 30. They're about double that. They're very good at what they do. They're specialists. They have some incredible stuff. And then they have some staff that have just sort of stopped following the systems. A comment that was made, which is a very fair comment. When I was saying, if we want to become a systems led organization, truly, then really what we're saying here, and I'd love for you to push back on this if you disagree, but...

Really what we're saying is we need to be willing to fire people once we have gotten to this point and all agree that this is what we're doing. And if you don't follow these systems, this is not the place for you. And the response is it wasn't coming from a place of anger or frustration. It was actually just a statement saying, if we did that, we would not have enough people in our organization and the labor market is tough and we wouldn't be able to rehire. And it's a fair comment. So really where I'm going with the question here is.

Once our systems are good and we have confidence that they're right, but people are not following them, what do do?

David Jenyns - SYSTEMology (42:11.487)
Yeah. You pushed a few buttons there for me and some rabbit holes that we could head down. think one of the challenges that you're identifying there will only compound with the size of the business. So it will be most acutely felt in those larger organizations. And that's why they're going, well, if that was the case, then we'd have to fire everybody.

And that's why it's so critical to get it right as early as possible because there are two types of people in this world. There are those that will follow systems and there are those that won't follow systems. And if you have not given any consideration to that fact when you're recruiting team members for your organization,

you may have filled up your organization with a bunch of people who won't follow process. Or at the very least, you might not have selected someone who will follow process and who will be receptive. So, I mean, that's a, maybe a tough pill to swallow for some, and some people will opt out of this process as we go, because building a systems driven organization,

shines a light on team members and what they're doing. It creates a level of accountability and transparency. And some people don't like the spotlight shone on them because they work in a little black box where no one really knows what it is that they're doing. And they think that gives them job security and you have to depend on me because you don't really know what I'm doing and you don't really have anybody else who can step in or that.

that then I mean that that'll start to breed like a cancer like you don't want that inside an organization. So I mean with that said and I don't want to belabor that point because I mean that's the reality but we've got some businesses that may have built the organization without thinking this now they're trying to retrofit it and now they're concerned about the labor market and things like that. The first thing that you want to do is

David Jenyns - SYSTEMology (44:25.639)
Identify those in the organization who will support this initiative. Lean in on them first. Don't find the ones that are gonna resist and make this challenging. Find those that will stick their hand up, say they wanna join in, who will, are natural organizers or like process or just connect with this idea and start shining a light on them.

and showcasing system wins and celebrating when someone follows a process or documents something. Mention it on your team meetings, mention it in Slack, mention, like do your best to showcase when you're winning with systems and what that looks like, and then see how many more people we can get to join in with this movement.

There may come a point where some people will opt out or you just can't get them to join in and maybe we need to cross that bridge when we come to it. But first start off where we're strong and really celebrate those wins first to try and grow it. that's the hardest bit where we're really just looking to build evidence inside your organization that you are a systems driven company. And then over time, we...

Mike Scott (45:26.924)
Yeah, I like that. Yeah.

Mike Scott (45:36.514)
Yeah, I like that Dave.

David Jenyns - SYSTEMology (45:39.443)
You know, we build an onboarding process that speaks to this right from day one. We build a recruitment process, which means that people don't get through the door unless we know they're going to resonate with this message. And they automatically opt out before they're even recruited. And then when they are on boarded within indoctrinate them from day one, that this is how we do things here. All of the challenges that that client is talking about exist with existing team members.

that are stuck in their ways and used to doing things. That's what makes systemization and changing this so hard is all of the resistance happens upfront. People try, hit the resistance and then give up and they don't break through and get the result where all of the greatness happens on the other side of that resistance. But they've got to get through the hard bit first, which is at the start. And the bigger the organization, the harder it is.

Mike Scott (46:32.184)
Hmm.

Mike Scott (46:35.64)
You there's a, you would have heard this. There's a, there's a very famous saying that the titles are interchangeable, but the version I heard was the CFO says to the CEO, but what if we invest all this time and money and effort in these people and they leave? And the CEO famously says, well, what if we don't and they stay? What I'm hearing from you is it's almost the opposite. It's almost going, well, what if all of these people that are anti -process don't leave? What's the cost and the risk of that?

Right. It's an interesting lens on this. I think your approach there is really pragmatic. What I took from that is pick out the people that are pro, create some evidence and early wins, celebrate, showcase, and socialize those early wins to create evidence and start from there. I really like that approach. It's practical. It's psychologically sound.

And it really becomes a value, right? Whether it's articulated or not, really what you're doing is you're saying that a core value of this business is now, use whatever word you want, but it's system. And if we take like Jim Collins's work, we need to be prepared to hire and fire on values. And if we have a core value of a business becoming a systems -led organization, we need to be able to hire and fire. Okay, I'm conscious of time. So I want to ask you, think, one more question, and then we can begin to wrap up. So...

You know, there are things I mentioned earlier, there are business operating models like the mushroom method, scaling up the EOS system, all these things. And they're wonderful. I use a lot of these tools. They're really fantastic. In all of these things, there are elements and modules that speak about process or system, all of them. What's different about systemology?

David Jenyns - SYSTEMology (48:18.335)
Yeah, so a couple of things. One, systemology is built from practical foundations first, as in the idea of process is, hey, how can this improve the business and make it run better, cheaper, faster? And a lot of the other previous process improvement methodologies that came before it also, I mean, it's in the name.

their process improvement, which pre -assumes you have a process that you're looking to improve. Systemology first and foremost is actually process capture. So we're not looking to improve, we just capture and make it repeatable. So systemology is actually the step before a lot of these process improvement methodologies like Lean and Six Sigma and some of these other methodologies, they happen later. This is kind of like, how do we go from zero to one? That's what we focus on.

And in a very practical way that delivers results. And it is a system in itself. Like I used to think when I was systemizing my business, why isn't there a system to do this? So it's, you know, it is a system to systemize your business to go from zero to one. And I, I searched high and low before writing the book. Otherwise I would have just promoted and shared the book. I felt like this work was not done.

And done in this way. I, said it right at the start. You're like, I don't think we need to sell business owners on why they need to systemize. We all agree that we need to do it. And systems and processes are important to build a business that you first dreamt of when you started business. So we all agree that. That's, and that's what I felt with even the E -Myth. I read the E -Myth and I got all excited and pumped and thought, yes, I need to do this. And then it was, yes. And I mean, Michael talked about it and I've got a couple of other.

Mike Scott (50:00.248)
But how do we do it? Yeah.

Mike Scott (50:08.056)
But how do I do it?

David Jenyns - SYSTEMology (50:13.865)
reviews that have come in similarly, they just say systemology is the how -to guide for the e -myth.

Mike Scott (50:20.896)
Yeah, I saw that. That's why I read the book. Dave, super, super cool conversation. We covered a bunch today, but what's the message that you want to leave with the audience?

David Jenyns - SYSTEMology (50:33.449)
Main thing, I always like to try and light a fire inside the business owner around what is possible with systems. And you might not see yourself as a systems person. You may have tried it in the past and it hasn't quite worked. Deep down intuitively, you know that it's something that you must do when you want to do, but you kind of stuck. I wanna open the idea that

just because you might not see yourself as a systems person doesn't mean you can't own a systems driven business. The job of the business owner is to fall in love with what the systems and the processes bring to the organization. I don't like documenting systems and processes. That's not my thing, but I've fallen in love with the result of what systems and processes bring. And I've seen thousands of businesses and can compare

And it is night and day difference from those who adopt this culture versus those that don't. It's completely undeniable. And I think having that opportunity to work closely with Michael on a project, talk about it in the book, but what I found amazing, Michael's seen as the godfather of small business systems, yet him personally, he's very loose and unstructured and not really that systems driven.

but he's just basically surrounded himself with systems driven people. So visionary founders, it's actually very natural and quite common for visionary founders who are quick start and get things up and running and off the ground to not be that systems person, but the business still needs that in the organization. So the founder gets it off the ground, that's the person listening to this right now.

to go to that next level, you need to introduce this piece and build up that capability in -house. And it's most definitely the master skill of business. So I'm just hoping we touched on a few points that someone might go, you know what, maybe I can give this a go. I can see this as possible for me. That's really what I want someone to take from this.

Mike Scott (52:45.826)
Yeah, I love it. I mean, you know, it's, I've read the book, I've read the book again. I've reached out to some of your team. I want to chat to you after this. mean, I'm going to be bringing this into the work that I do because it's practical, it's useful, and I can totally see the, the value of this. So I love it. I think you've given, I think this is a very generous thing you've brought to the world. Sure. You've built a business off it and it's a lead gen magnet and it's very clever, but it's, there's a generosity in this going, I've had the pain. I figured this out and now I'm

bringing this to the world. that's great. Dave, thank you so much. It's been a super cool conversation. Really appreciate the time. And I suspect you'll be coming back on this at some point in the future. But I really appreciate it. Thank you very much.

David Jenyns - SYSTEMology (53:28.617)
Yeah, love it. Thank you.