SPEAKER_01 0:16

Okay, welcome back. Last week we talked about the founder as the hero trap as in the founder does everything in the business. I think most people that run a business would be familiar with that situation. And we finished with a simple test to really pick one core process, write it down, think about the trigger, the inputs, the steps, the output, what done looks like, and trying to implement that in your business. But today we want to zoom out. And before you start with any single process, we want to look at the whole entire processes in your business and what takes a customer right from the beginning where they learn about you and then like you and then trust you, then become a customer to hopefully then repeat business and then potentially referral down the track. So today we're going to really run through five things, Mina. We're going to talk about why you can't fix the process that you can't see. So really mapping out, understanding the full customer journey, and why every stage needs one clear owner and one defined output before you hand over to the next stage. And number four, how those vague handovers can cause real problems, not only in customer experience and satisfaction, but also profitability. And how to hunt down the waste inside your business because if you've been in business for a while, you're going to have processes that were right when they were established but no longer necessary. So, Amina, let's talk about the processes you can't see and the importance of really mapping everything out.

SPEAKER_00 1:48

Yeah, definitely sure. And I think the problem that most business owners fall into is that they they have a general overview of their business. They don't, they can't sort of look into the each process or each system and how actually all comes together. Most business owners fall into the trap of, you know, yep, we've got a sale, we know the sales team looks after the sales, it goes into manufacturing, for example, you know, the production team do what they need to do, and then you know the money money goes in the bank account and you know, then there's delivery. But the problem is that how customers find them or what roughly happens next is not a clear indication of how that business is actually tracks or how their process actually eventuates. What they need to do, what business owners need to do is actually describe stage by stage in enough detail that someone else could actually follow it. And that's the gap in in most businesses. You can find people that are single point sensitive, they know how to do their job well. But if that person in that point in time breaks down or is not is away or you know leaves the business for any reason, then the the business can actually fall apart. So unless you have good instincts about your business and actually know what's going on in your business, you're actually quite blind and things can break down.

SPEAKER_01 3:00

And it's common, isn't it, Mina? Like uh, you know, when you first start a business, as I said, you you establish those processes, but things change and then you delegate those processes, but until you kind of reinterrogate them, you don't know necessarily what people are doing. And it's not until you have a look at it and then stand back and go, well, actually, that's a bit clunky now. Like it worked when we first set up, but now we've got different software or different processes, whatever it might be.

SPEAKER_00 3:25

That's right, Stuart. We always say that you're either growing or you're dying, and that goes exactly, you know, for your systems and processes. Unless you're being adaptive, you're you're constantly on top of those, and have actually a responsible person to oversee these systems and processes, then the business can fall at break down at any point in time. And we saw that with Southwest Airlines as a good example of what sort of invisibility costs when it finally caught up with them. And it happened in December of 2022, and it was a winter storm that triggered a chain reaction inside the airline's crew scheduling system. And Southwest were quite sort of manual in their approach, and they didn't actually have a good system that could sort of deal with when systems were down, and it ended up cancelling around 16,000 or just shy of 17 actually thousand flights. Sounds like Jet Star. I know, just like any other day at Jet Star over about 10 days, strand, you know, and more than two million passengers were actually stranded. So the storm was the trigger, but the storm wasn't really the cause. The airline's own sort of tracking system had been running manually, like I said, for years, and nobody could actually see in real time which crew was where or which flights were put at risk. And it took one bad week to expose it. And eventually they were actually fine 140 US million dollars, you know. So it's a bit, you know, that will definitely hit their PL a little bit. And it was the actually the largest ever civil penalty for a consumer prosecution violation.

SPEAKER_01 4:49

And look, I I don't think we're all, you know, running businesses that are going to be fined $140 million, but it does, you know, re-looking at processes is really valuable. I mean, you can avoid these sorts of things, but where is the leakage in your business? How many customers or clients are you missing out on just by having a clunky or a process that has a lot of friction? Or are you, you know, we're we've seen in our business where we've got staff doing activities and processes that are completely unnecessary anymore. And it's not until we really ask the questions, why are we doing this, do we then discover it? It can create so much waste here.

SPEAKER_00 5:24

That's right, Stuart. And the same blindness really exists in smaller businesses every day. You know, it quietly costs them time, money, and eventually customers if nobody's actually mapping out the journey before they actually touch it. So, Stuart, what does the map actually look like?

SPEAKER_01 5:39

There's really five stages, I think, uh you can break any business into, regardless of whether they're online products, services, professional services, whatever. And the first one starts with reach. So, how does the customer hear about you? You know, whether that's you, whether it's outbound reach, such as advertising, or whether it's inbound reach that they're finding you on Google or finding a blog or podcast that you've produced, but really understanding what is that client journey and how you're building that trust and likability with discipline to try and use that trust equation that we spoke about in the value pillar. The second part is sales, which obviously is converting someone that is showing some interest to converting into a customer. So, how easy are we making it to buy product, to ask questions, to remove risk? Again, many of the things that we spoke about in the value pillar. The third is delivery, which is obviously delivering the value that were promised. That's obviously a core, a core component. The fourth is billing, which is really getting the money out of their pocket into ours and trying to make that process as simple as possible. And many, you've used Amazon's one-click purchasing as a really good example. There were, it's a bit old hat now because everyone does it with a Shopify shopping cart.

SPEAKER_00 6:52

Shop pay and so forth. Yeah. It's become a lot easier these days.

SPEAKER_01 6:55

Yeah, it's reduced friction significantly. I mean, you just remember what it was like 10 years ago. You had to go through four or five different screens just to buy something. But again, reduce that friction. And, you know, I think that's something that's really popular is, you know, monthly subscriptions. Again, that sort of process. So that's billing. And then finally, and it's not the last but least, it's uh after sales service. So once the job is done, how do we turn that customer? And we talked about that a couple episodes in terms of turning great customers into great advocates. And yeah, we love to use examples in this podcast, man. So air task is a good one because they've really designed the process from start to finish to deliberately, you know, deliver value and reduce friction. So of course it starts with the customer posting the task for free. And within hours, you typically get uh multiple quotes from different taskers proposing different fees and completion dates and times and all those sorts of things. You choose the one the one that you want, the job gets done, the payment gets collected and made once it's done. It's held in escrow until obviously the job is done to satisfaction and the loop closes with a two-way review. You know, you review them, they review you, and then it's off to the next customer.

SPEAKER_00 8:06

And I think uh what what resets Airtask apart is thereafter sales care because if there's something that does go wrong with them, people continue to use AirTask because they find insurance or warranties around the fact that if the work's not done correctly, then the payment might not get released or the payment might actually be held until a rectification is actually provided. So it's really a lot of what a lot of the issues that businesses face is that they fail at the after-sales care, in my perspective, Stuart. I think they deliver well, they bill well, they've got the money through the door, but it's transactional in nature. They don't really provide that after sales care. We used the example of Koala Living, I believe, in the last podcast. And that's what really set koala living apart is that after sales care.

SPEAKER_01 8:50

Yeah, spot on. And look, not everyone needs an app like Airtaster. Not every business needs that to connect all those dots, you know, connect some reach to sales to delivery to billing to after sales care. But the key component, the reason why we use the example is everyone needs to have a coherent idea and understanding and strategy on how a customer's journey through those five different stages transitions and how easy it is, how seamless, how integrated. And that's why the the Air Taster example is a good one because we can all picture it. Most of us have used it so we understand how it works, and it really does connect the dots between those five different stages. So, I mean, once you've sort of mapped it out, what's the first thing that actually needs fixing?

SPEAKER_00 9:35

I think I first got to address that a map on its own probably doesn't change anything, right? Because a lot of businesses they sort of get trigger happy in terms of documenting everything, having a hot map or SOPs and so forth, but I don't really follow it. So I think a map on its own doesn't change anything. I think the next step is actually to the really hone in and divide the journey into stages and assign a person to each stage so they're individually responsible for it. So someone's really accountable at every defined output, not just sort of a general area of responsibility. So, like I'd like to sort of use two sort of phrases. So if I say, for example, the sales team look after sales, that's not an assignment. There's no high degree of accountability there. But when we say that the sales stage ends with a signed proposal and a deposit are in hand, that's really an assignment, a clear task of what actually success looks like in that particular process.

SPEAKER_01 10:30

And that handover is important, right? Like that, that's where the gaps can be created, where something between reach and sales isn't integrated. Sales blame reach and reach blame sales because they're not getting the conversion rate they want. So it's really, it's really important to clearly understand what does done look like? How does that how does that client transition across? And but also the feedback is two ways. Like if reach is doing something, like the marketing isn't clear, the promise is a little off, that's going to create a lot of friction for sales that needs to be sort of fed back into the loop.

SPEAKER_00 11:05

That's right. And I think um Apple, I know we we tend to use a lot of examples, and examples tend to be sort of larger companies here, but I think there's a lot to learn from them, and a lot can then be used in the smaller business environment as well. And with Apple under Steve Jobs, they built an entire discipline around the same idea. So every action item in their meeting agendas actually had a named person around it. So internally they called it a uh directly responsible individual or DRI. So there was never really any ambiguity around who actually owned that task or process or anything like that.

SPEAKER_01 11:39

Apple, I mean, Apple's always a good example just because it's very well known, highly profitable business, highly successful business. In a market that's really competitive, you think, you know, one of their core components is, you know, phones, selling phones, I know they sell a lot of other products, but that's a pretty low margin business typically. And it's said that Apple makes about 80% of the industry's profit in mobile phones, so they are very profitable. But one of their core thesis in Apple apparently is that they don't think they think hiring better people is much better than hiring more people. So we've mentioned this before, but their investor relations team is two people apparently, whereas for a multi-trillion dollar business, they'd normally have an investor relations team of 40 people. So it really is a great example because you it yes, it's it's people, which is the team for flywheel pillar, but systems is is an important thing. And and here's a system in broad daylight in terms of allocating responsibility.

SPEAKER_00 12:36

Yeah. And I think that what to really take away from this is really that each of those five stages we mentioned earlier, you really need a DRI. You need that directly responsible individual to own that process. So, and that person needs to actually have a defined output and understand what success looks like in that process. It can't just be handle onboarding, but something along the lines of onboarding is done when the client has signed the engagement letter and completed the intake form, for example. It has to have defined outputs and a clear visibility as to what done actually looks like. Vague ownership is actually where accountability quietly evaporates. It's too broad in nature. It just basically says, yep, look after the handboarding, onboarding, make sure they're on our system, you know, raise an invoice or whatever it is. It's it's too vague. There's no clear defined output. There's no nothing that set that outlines what actually done and success looks like in that. And that's where things can go visibly wrong and their client experience or customer experience can actually fall apart. So, sure, you can probably talk to talk to us about what happens when clarity's missing.

SPEAKER_01 13:44

Look, it's it's a common, I mean, most common problems aren't in the actual process themselves. Like sales team knows what the sales team's doing, the marketing team knows what the marketing team is doing. It's really where the two join together, you know, where the prospect gets handed to the sales team and the sales team hands the prospect to the operations team in terms of delivering the product. So, you know, it's it's a really common situation. We see it in banking all the time where the marketing team will go, okay, we're going to, you know, have a promotion, a home loans promotion, and we're going to offer some really strong discounting. So they'll send out a circular to mortgage brokers saying, look, okay, we're we're going to beat anyone in the market. And all of a sudden the mortgage brokers are on top of it, of course. You know, they want to write business. And then every client they speak to, let's go to ANZ, for example. ANZ's going to office the best pricing, but no one tells the operations team. You know, the poor back office, the credit assessment team. And so what happens, and it, you know, we've been in this business for more than a couple of decades, it happens all the time, is the credit team gets absolutely smashed. And so, from an operations perspective, you know, the approval turnaround times blow out, the customer expectation is then destroyed. And then people go, look, I want to go to ANZ because the rate is cheap, but then their experience is horrible because sales and marketing haven't spoken to operations. And you actually end up destroying a lot of value rather than creating it. And so the simple solution to something like this is just getting the two departments to talk together and making sure one individual is responsible for that particular segment goes a long way, Mina, as you use the Apple example, because then if I know I'm on the hook to make sure that handover is really clear and concise, and then I have to make that communication, then that's on me to make sure it works. But also what you want to do is make sure what done looks like. So if I use the mortgage example, a marketing strategy isn't just a smart strategy that's executed and they go and buy some media and run that media and then they generate a bunch of inquiries. That marketing process is done once they speak to operations and that they estimate the sort of volume that's necessary, and operations gives them the go ahead to say, yes, we can deal with that higher level of volume. I can't believe the banks with, you know, they're such big animals that they can't get their head around this. So it's really making sure that handover is very clear, making sure that there's so a clear definition of done, and making sure that one individual is responsible for reporting to the other individual what that looks like and that they're talking together. The worst thing is that you have a really vague process and no one is or one person in the business is responsible for all those different steps, and normally it's the founder, and that's where business gets into problem because there's 180 things you need to think about doing each day, and of course, you're going to drop the ball on some of them. And if those processes aren't re-interrogated every so often, and that people in the business aren't talking to each other and providing feedback up and downstream, then you're going to have, you know, create things like friction, you're going to destroy customer value, you're going to create a very inefficient, unprofitable sort of delivery, you're not going to get the repeat business and the referrals that you might get. I mean, that it's endless in terms of the negativity that comes with it. So, Mina, once you've done the ownership and you've got really clear handovers, what's next?

SPEAKER_00 17:10

Well, first probably got to highlight that even if you do have a well-mapped and well-owned process, it can actually still have waste hiding in it. And that's really comes down to the fact that it could really be over-engineered and it can consume time and money without actually improving the results for the customer or or or the business overall. And Toyota gave this problem its most fame famous language. Now, there was an engineer who I'm not gonna attempt to pronounce his name.

SPEAKER_01 17:36

Come on, use your best Japanese.

SPEAKER_00 17:38

Is it uh Taiichi Ono? I think it is.

SPEAKER_01 17:42

Probably not, but we'll go with that.

SPEAKER_00 17:43

We'll go with it. He was the engineer who built Kyoto production system in the late 1940s, probably around the same time. He were going to school, maybe. But um, they identified seven categories of waste, known in the Japanese language as Mura. And it comes down to the seven items are weighting, transportation, overprocessing, inventory, motion, defects, and overproduction. Now, Kyoto's own accounts of that period describes decades, and what I really want to highlight here, it's decades because it's a constant improvement of deliberate incremental refinement. So it's not a single fix. And that's why we always say it's never set and forget. You know, it's never, it's either you're you're growing or you're and that's what it really comes down to. It's none of those seven items are exotic or sexy in nature. They're just chasing information as the production lines develop, as the technology develops, they're chasing information that should have should arrive automatically.

SPEAKER_01 18:36

And systems, I think, in business are living animals. And this is the thing, right? We've got to that's why you've got to have someone that owns the process. It's not about developing a system, training your team, having a standard operating procedure, and then walking away and thinking, well, that's it. Business is done. I'm sure there's some really simple businesses with not a lot of moving parts that that might happen in parts of it, but it's rare. And particularly these days, I think with technology, with products, with customer expectations, I think is a big one, Mina. Like everyone expects more from the businesses they deal with. Just they're trained and hardwired to always get more. You know, you've got to sort of re-engineer and interrogate those processes. And it's one thing, you know, that I found in our business, Mina, that when we when we do look at our systems and processes, if we haven't done it for a while, you you find the waste, you find the things that people aren't doing. Toyota looked at even things like if you had to walk two steps over to get a particular tool, move the bench closer. I mean, I know that's really obvious, and in manufacturing, that's going to really move the dial when you've got thousands of people. I mean, if we've got, you know, in our business, we were updating two spreadsheets, for example, to record information. And that was very clunky, and it was a symptom of having too many different systems, not one source of truth. So it's funny, you can, you can, it's like almost picking a scab at a little bit, like you pick away at it or peeling an onion, and the more you sort of peel away, the more you find you can improve these things. But it's not until you really interrogate them and really take the same sort of approach that you know Toyota uses or a lot of really great businesses do.

SPEAKER_00 20:08

Yeah, spot on. And I think, Stuart, the practical way to sort of find this in your own business is probably to spend two to four weeks on sort of the core processes, the same way you'd sort of do a timesheet. I know we all love timesheets, but you know, it's it's required, it's necessary because, you know, in larger businesses, the sort of the leakage of or or wastage in terms of production can really add up. And if you look for the patterns, that can or repeat and cascade. So, where does someone chase information that should really exist is really the question. It's it really comes down to how's it actually being imported into the system? How do you actually understand what's what the what that system or what that process is actually, the output requirements of it are required of it, and actually deep dive into it so you can understand, okay, every single point in this process can it be done better? Can we sorry, go ahead.

SPEAKER_01 20:57

Yeah, I was gonna say, and I think you know, that's the founder's job. Yeah. I think you I think it can be more than one person in the business, of course, but I think you know, I remember hearing Eddie Maguire on the radio once and he said talking about when he was president of Collingwood, and I don't really like to use Collingwood as an example, what a terrible example, but he said he's uh he's he works on a need-to-know basis, he needs to know everything. Now that I mean maybe you can take that as micromanaging, but you really got to sweat the small stuff in business. So I think when we're r interrogating systems, we want to be on top of it. We really want to understand what that process is. At the end of the day, you're the founder of the business, you understand what you want delivered in and how you want it delivered. And so I don't think you can really delegate that. I mean, you can, you can delegate parts of it, and particularly if if if your strength really isn't in systems or system thinking. But I think you need to have sort of visibility, don't you think, Maina?

SPEAKER_00 21:49

Oh, 100%. And you know, the problem that most owners face is as long as the bank account's ticking along, they don't really want to know the detail, right? But the problem is what we've found with a lot of mature businesses from our experience is that if the owner's not touching base, then it can really sort of crumble underneath them. They're really not involved, and there might be a competitor that comes and you know does something better, cheaper, faster, or has better quality. So it's really important for the owner to still always touch base and be involved.

SPEAKER_01 22:17

And the leakage can be incremental, like you don't necessarily notice it, but a 5% drop in margin could mean no a 20% in dollar value. And you know, you you won't, as you said, you won't see it. You'll see 1% each year. Five years later, all of a sudden it's not generating as much profit, or you're losing market share, or you, you know, your your clients aren't referring as many other people, or these sorts. It can show up in in many ways, but it's a really incredibly important process to really map that out. Something we're doing at the moment in our business is really map out the client experience. We know internal processes and and how we're delivering work, but how does the client feel, you know, when they're dealing with different parts of our business? And we want that to feel seamless and the same, really the same across the board. Okay, so what does that all mean? What should you do with this? Well, the first thing is I think just really understand those five-stage journey, the the reach, sales, delivery, billing, and then after sales. And I'd say after sales is probably just as important, if not more important, than any of the four previous stages. But really map that out in your own mind and have a really clear idea of what are the key success factors, what do you really want to see in each of those stages. Secondly, make sure that you've got one person in your business that owns that process, owns that stage, and make sure there's absolutely a clear defined output for each stage and that they're talking to each other and that it's coherent and they really understand what goes on. Communication is probably one of the biggest things that happens in business that causes the most grief. That is lack of communication, miscommunication, under communication. So none of us want to spend hours and hours in meetings, in staff meetings. So there's other ways to make sure that communication is, you know, runs nicely through your business, but it really is one of the biggest, one of the biggest problems. And then third, look for those handovers, make sure they're nice and clean, make sure they're not causing any friction. As I said, that's probably one of the biggest things that that happens from departments and processes. And then track your team's time. We did this many years ago in our business. Like if you, and particularly in a service business, even in a product business, it's important as well. You know, if you're going to interrogate processes and understand what's contributing to the cost and friction, you really need to know what people are doing and where they're spending their time. So not only are we, you know, understanding what is the process, what are the all the tasks, how they all fit together within one of those five stages, but how long is it also taking is important as well. And you will learn, as I said, you know, it's like peeling an onion, you will learn a lot just from interrogating that process and taking it through. We probably can't overemphasize how important the process interrogation mapping and documentation is. And I know that the problem is that we all rush to the urgent at the expense of the important. And this is one of the things that is just so important in a business, particularly if you want to scale it and you want to scale it whilst still maintaining profitability and most importantly, maintaining quality. And that's exactly what we're going to talk about next week. How do you scale a business that doesn't diminish quality? So until then, bye for now.