SPEAKER_02 0:16

Okay, last week we spoke about, you know, mapping out your processes in your business, going through reach sales, delivery, billing, and then after sales service, making sure you've got clear handovers, you've got clear direct responsibilities for one individual. And then that's how you interrogate your engine process. And we're going to talk about, you know, then how do you improve it, remove wastage, all these sorts of things. But mapping out sort of tells you kind of what happens in your business. But today what we want to do is try and build an engine inside your business that is robust, that's not going to break as you scale your business, as you add more volume. And that's one thing that we see regularly. I mean, we'll all be really aware of businesses, for example, that had one or two heroic individuals, you know, one or two excellent, excellent people that built a reputation. But then as they grow and they hire more additional people, they aren't as good as those two original people and you know the business suffers, or a product business where, you know, a business comes out with one fantastic product that really, you know, really makes their mark and builds their brand. And then they subsequently release additional products that aren't nearly as good. So similarly, in an advice business can be challenging as well. As ours, I mean, we'll share our experience is that advice businesses are difficult to scale. I mean, you can't really, and I'm talking about financial advice, business advice, you know, anything along those lines, I guess professional services. We couldn't double the number of people in our business over a course of 12 months and without a reduction to quality. Because at the end of the day, there's a lot of nuance in giving advice, and it's really about on-the-job experience and mentorship and these sorts of things. So it's not impossible. It's not impossible to go and find, God forbid, another 10 miners, another 10 Stuarts, but it's really difficult. So today we want to talk about really five things. We're going to talk about why consistency is really key, using templates and checklists to build out those contingencies. So sorry, sorry, consistency, systemizing judgment itself. So, you know, how do you do that for processes that require a lot of judgment? Like a GP is a great example, you know, that that would see a lot of different, a lot of different patients, a lot of different problems. Cutting friction, uh, so reducing the number of handovers, that improves consistency and quality as well. And then how do you embed all this through the training, ownership, and regular review? So let's get started, Mina. Let's jump into consistency, why it matters more than heroics.

SPEAKER_01 2:56

Yeah, thanks, Drew. And I think a lot of businesses owner or business owners focus on the wrong thing here. They want their team to sort of deliver an exceptional experience every time. And of course, it's that's valuable when it happens, but clients don't judge your business on just one interaction. They form the view over multiple interactions they have with you. So if I've if we use an example from our business, you know, obviously we provide financial advisory, we've provided accounting and tax and business services, advice, insurance and mortgages and so forth. So if they engage Stuart for a financial advisory piece of work, and they've had a great experience there, they want that experience or would expect that experience replicated with myself in the accounting and tax division, for example. Good luck. Never gonna be as great as me. Doubt that. So that that's what really builds the trust, the trust equation that we we spoke about. You know, it's the trust that builds and that establishes that consistency, and clients want to know broadly what experience they are going to get each time with the with your business.

SPEAKER_02 3:53

And sometimes you can be your own worst enemy, Mina. Like if you if you said an expectation, an unrealistic expectation that you can't repeat, or at least you don't think your team can repeat. So in that situation, to use your example would go the other way. If someone dealt with me first and then dealt with you, I'm gonna set an unrealistic expectation because obviously I'm so wonderful at what I do. But no, seriously, like you can see that in businesses, sometimes they set such high expectations that they're setting themselves up to fail because they won't be able to sort of deliver that consistently. And then also the other thing, too, is to remember is that customers and clients, you can do a hundred great things, a hundred fantastic things. And then one thing is just a little off, just a little inconsistent, they'll remember that. They'll remember that five times, ten times more than they'll remember the hundred great things.

SPEAKER_01 4:43

Our staff commonly hear me talking about how it's actually hard to win a client, but easy to lose. And I think that's what comes it comes down to or what boils down to is that one outstanding experience followed by two inconsistent ones can really like hinder the brand. It doesn't strengthen it, it creates a lot of uncertainty, that trust is broken. So that's really the principle behind quality at scale. You need to define what quality actually looks like in a way that can actually be observed and measured. So, for example, in our business, we have an expectation or a KPI around communication. If a client calls or emails us, we've got a uh expectation from our staff that we will respond within 24 hours, if not the same day. And that's what good looks like from a communication standpoint for our for us. It means something, means uh the same thing for all team members as a clear defined metric for the team to actually follow. And it's not uh vague or inconsistent in it in its approach.

SPEAKER_02 5:40

And like I said, consistency is far more important than brilliance. You're better off doing, you know, doing everything 90% great than most things 50% great and absolutely killing it in one aspect. I think that's what, you know, that's what makes McDonald's so successful, and we've spoken about it many times. You know exactly what you're gonna get. And remember, consistency is one of the trust equation components, you know, that it because it comes back to reliability and just as a refresh, it's credibility plus reliability plus intimacy divided by self-orientation. So that that reliability aspect is absolutely fundamental and a key component of building trust.

SPEAKER_01 6:17

So let's do what we always do. Use an example. The Ritz Kalton, we all know that hotel chain that charge an arm and a leg for a night that stay there. But they have some what is called gold standards, and it and it's really just three steps of service and pretty simple, I would like to think, anyway. You know, it's a warm and sincere greeting using the guest's name, anticipation fulfillment of the guest's needs, and a fond farewell again using the guests' names. And um, I I recently came from a holiday. I unfortunately I wasn't staying at the Ritz Carlton, but um Here's another holiday. I reiterated to to Stuart that you know it was such a great experience in the hotel because the staff could actually anticipate what we needed each and every time. I've got a young daughter, they looked after her, you know, they they made sure that when we came to sat at breakfast, for example, you know, a quieter table, you know, with some colouring was provided and so forth. They really anticipated our stay and what we required as a young family. And they always addressed me by name. Who did the colouring in? That was me.

SPEAKER_02 7:17

Yeah, okay. But it's smart, isn't it? Because the first impression, so say hello, use the name, and and then goodbye, that's the last impression. And then I think it's really the way I describe it is caring. You know, people not just going through the motions because it's really about anticipating needs, is really about genuinely caring about the client and the outcome. But you can capture those in, you know, three really simple rules that kind of everyone understands it's brilliant.

SPEAKER_01 7:43

Yeah, and it's not difficult, is it? Like it's nothing's really left to instinct. It's a clear sort of guideline as to what's expected for you as so I for I forget what they're the reception staff. I'm not sure if they have a particular name for them. But um, you know, it's they've got the clear training, clear process as to what they need to do each time uh a guest arrives at their hotel. So I know in our business, for example, we we got a philosophy where we actually hire people with values. We do not want to instill our values on someone, but someone that replicates our own values. And that's where I think the Nile Rits do it well in the sense that they're not hiring to basically just instill this is what you must do, but they they've got staff in there that actually want to deliver a good service. So, sure, once you've defined what that standard actually is, how do you make sure people hit it every time?

SPEAKER_02 8:33

Standardize the process as much as possible, meaner, is really the answer. There's going to be functions in your business that are going to be quite standardized, and you need to put in place systems and tools to help people deliver exactly the same outcome, follow exactly the same process to deliver that. And then there's going to be in many businesses, things that or processes that require judgment. So you've got to treat these two very differently, and you'll talk about the judgment bit in a second, Mina. But let's just talk about the stuff that is all the same every time. It could be proposals or preparing a report or drafting an email or doing an analysis or responding to customer inquiries or support inquiries or these sorts of things. The simplest process is to standardize using checklists and templates. And that really just improves the consistency and takes the, I guess, the emotional labor to some degree out of it. That means we don't have to go and reinvent the wheel every single time, that we go through exactly the same process and we're all doing it exactly the same way. You don't want to build a business necessarily that destroys teams' ability to come to work to improve a process or to use their own flair or approach. But it needs to be, it needs to have pretty good guardrails in place, I think. And great people want to come to work and make change. So also, no system is set in stone in terms of we can't change it. But ultimately, there's one good way. And we should all decide what is the one good way or one good process to complete this task or complete this operational process in our business. And we all decided what that looks like, and then we all do it exactly the same way. And so there was a the World Health Organization did analysis back in or a project in 2007, 2008, and they came up with a surgical surgical checklist and they rolled it out across eight different hospitals, three different continents, and measured almost 8,000 patients. And what happened was that it showed the complication rate fell from 11% to 7%, and the death rate fell from one and a half to 0.8 of a percent. I think 0.8 of a percent still probably too high, Mina. But it's simple checklist was, you know, confirm the the patient's name, confirm what they're in for in terms of operation. Really simple stuff that surgeons already knew. I mean, you would think that they're already doing that. But these small, it shows how powerful checklists are. If you think about pilots, you know, they've got really codified manuals and checklists. They're they're they're highly trained. You know, if this happens, you need to do this. You can see I've just shown my knowledge, my aviation knowledge by that description.

SPEAKER_01 11:17

Not everything's Tom Cruise, Top Gun related, sure.

SPEAKER_02 11:20

So I knew we'd get Tom Cruise in the podcast eventually. Anyway, you know, that the it does, I don't think anyone can really argue against the power of checklists. And again, you can do it in a way where you don't become McDonald's. I mean, people would say, you know, I don't want to build a business like McDonald's because it is pretty benign, it's average. We're not saying that, but we're what we're really saying is that checklists can do a lot of the heavy lifting and so come templating.

SPEAKER_01 11:45

But I think what you really got to hone in with the checklist and the templating is not to still take away from your staff's ability to recognize the ability for them to add value or recognize opportunities to improve the systems and processes in place. The problem with having things that are too heavily checklisted or too many checkboxes to to go through is that you take it away your staff's your staff ability to sort of autonomous autonomously, sorry, independently, sorry. So it's really important for you to actually still empower your staff to bring forward their ideas.

SPEAKER_02 12:20

And that's where the Ritz-Carlton values come in, Mina, which are perfect. That's why I like how well they're framed. Like they haven't turned anticipate your guests' needs into a checklist. Yeah, it's just a value, and I think that's really good. But I I imagine if you anticipate that someone will need a car booked to go to the airport or offer to book it, that they would have a process and a checklist to go and do that. So I think the two go hand in hand. But it is important to recognize if you do hire great people, and of course, team is the fourth element of the vert flywheel, which we'll talk about in the coming weeks. But if you do hire great people, great people want to go to work and do what work that they're proud of. So absolutely, I think in a business you need to sort of present it to say, we must be consistent here if we're going to do this process, there's one great way, but don't ever think just because the way we've done it last year is the way we're gonna do it this year. But what about the, I mean, the big pushback meaner is, and we can talk about it in our business, how do you give advice? Like someone wants to sell their business, you know, it depends on the industry, how long they've had the business, its profitability, its size. You know, there's so many factors that go into it. And you would argue, how are you gonna build a checklist around that? So how how do we deal with the the parts that require so much judgment?

SPEAKER_01 13:35

Yeah, I think that's where a lot of businesses get stuck. A lot of the business owners sort of think it's all too hard because the task relies heavily on sort of experience or judgment and it can't be systemized. But I would argue sort of in most cases it can. And the challenge is to really break the experienced person or what the experienced person is actually doing. What are the decision points? What are they looking for? What are the signals that they're looking for? Which ones can be ignored? You know, what combination of factors changes the decision? And at what point should someone stop and actually escalate the issue even further? So once you make those decision points visible, you can actually start to build a framework around them. That might be sort of like a decision tree supported by, you know, a library of real life examples, or could be, you know, something sort of that a less experienced team member can see what a good decision and output actually looks like without having to stop the task at hand and try to revert back to you.

SPEAKER_02 14:31

And a system can be training, like, you know, we've got checklists, we've got templates, but then the other part of a system can be training and going through case studies and analysis to say, okay, well, in this situation, this is what we did and this is what the outcome was. Yeah. And they could be good and bad case studies, you know, what do we learn that was positive and what did we learn that was negative? And then together with a decision tree, you start to build, you know, some robust understanding and knowledge around these decisions that require judgment. And I think, Mana, like you said, you need an escalation point. Like you're not trying to build a system here that's gonna capture every single situation, even the ones at the extreme, but you've just got to build something that's gonna catch 80% of them.

SPEAKER_01 15:14

That's right.

SPEAKER_02 15:14

And then if you've got the judgment, if you've got a process inside your business that requires judgment, you're always gonna need to hire experienced people at some level and they can escalate it to those people.

SPEAKER_01 15:24

Yeah. And I think if you look at another medical example, funny enough, but Atulgawandi, I think that's how you pronounce it. But he made a similar point in in medicine in 2012. He um he looked at the Cheesecake Factory and see seen tried to ascertain what he could learn from there in and apply it in the medical industry. And what he looked at is in the Cheesecake Factory is the way it managed sort of complex operations while still being able to produce a pretty consistent result across hundreds of dishes night after night across multiple chains. And what what he noticed is that kitchens used standardized recipes. They had clear instructions, photos showing how dishes should be presented and systems to monitor sort of timing. But it didn't that doesn't necessarily mean that no judgments involved. The cook still had to use judgment within the framework provided, and the processes themselves continued to sort of evolve as better information sort of became available. So his broader point was that hospitals sort of despite dealing with work that was far more complex. I would hope would be more complex than preparing a few dishes. Absolutely. So it was more complex and more consequential, often lacked the same, lacked the same level of consistency. So the answer wasn't to remove clinical judgment, it was to systemize the repeatable parts so that the judgment could actually be focused on the situations that genuinely required it. So the decision tree sort of that I referenced earlier. So I think the same test really applies in any business. Take something your most experienced person does that requires their instinct and break it down and understand what is actually going on with their mind.

SPEAKER_02 16:58

The decision architecture here is the key element. What are the things like if you ask me, you know, if you've got an investment property that's not performing, what are the six or seven things? I'll just pull that number out of the air, things that I would normally consider in 99% of client scenarios to decide whether they should keep that property or sell it. And the the great benefit here is the great accelerant is AI. Like using Claude or Chat GPT to interrogate your own thinking and come up with a decision architecture is much, much easier today than it was like even a couple of years ago. So quite often, you know, we throw these things out and say, oh, there's too much judgment there. Just escalate it to someone that's really senior in the business. And that's simple, just throw people at the problem. But actually you can pull it all apart, can't you, really, Mina? And and then you could feed Chat GPT or Claude a whole bunch of scenarios and get it to pick up. And that's where that's its key strength, I think, is finding trends and spotting trends and consistencies and then breaking it down into a really coherent model.

SPEAKER_01 18:01

Definitely. And although AI might not pick up the nuance, but it will pick up the steps involved. And that's not really a mysterious skill. It actually just formulates the decision skill that allows you to replicate the decision making. Now, it still might need a review at the end of the process, but the what we're trying to uh say here is that you don't need to be involved at the very start. So it might get that person 80 or 90% there, and then it gets to the person with that that small experience to give it a final overview or tick of approval. So, sure, once you've got that ownership and judgment working properly, what do you actually think slows down the business day to day?

SPEAKER_02 18:38

Hand over and escalation points, meaner. I think the you can reduce friction by giving people the tools to make decisions rather than needing to escalate it or move it to a different department. I think that's probably the key thing to sort of reduce friction. And one of Netflix had a a really good example of managing expenses. So instead of having a really, well, you would expect that they're gonna have an expense approval, you know, travel policy that's gonna be really rigid and codified and whatever. It's not. Their policy is is just five words. Act in Netflix's best interest. And I love it. I really do because the right people always do the right thing. The wrong people, only the wrong people do the wrong thing. So if you get the right people in your business, you don't need to come up with these codified sort of situations. So they've got no approval chain, no, you know, per night cap on hotel, no expense report that needs to be signed off by a manager. You can imagine how much a company the size of Netflix can save. So instead of doing having those sort of very rigid processes, they just created a value that everyone could be guided against. And the thing is, you know, people are going to sit back and go, yeah, but some people are gonna take the piss and you know spend too much. But it's really about what is the net benefit. So for Netflix, they saved a lot of time and hassle and empowered their team members, and at least their team members felt trusted and empowered as well. And so they saved a lot of cost there by reducing that friction, but they realize that they're gonna get one or two bad apples that are gonna do the wrong thing. The cost that they save will be more than the cost of people sort of taking the piss and doing the wrong thing. And so, of course, there's a net benefit there. And I think sometimes in business, and particularly as we grow, we solve problems with systems and really codified rules, where all we're doing is building rules around the wrong people. Whereas if you feed the business the right people, and I don't want to sort of steal our thunder in a few weeks' time when we talk about team, that, you know, that if you've got the right people, then you just build the systems for those people. It's much like laws in society, you know, they're written for the lowest common denominator, which is shame, is shame because we all have to, you know, I don't want to come across like a libertarian, but you know, we all suffer from losing our some of our civil liberties just because we need to build rules around the lowest common denominator. Well, that's might be necessary to some degree in society. I'm not gonna have that conversation today, Mina, but you don't, it's not necessary in a business. But the theme really is try and reduce friction, try and make a process as end-to-end as possible, reduce the handover. So if one person can do most of the process, that typically is faster. I mean, it depends on what sort of business because you don't want to pay someone $200,000 a year to do a process that, you know, someone that could earn $80,000 a year to do. So within reason, but I think you just want to make that your systems and processes as coherent, as seamless as possible. So, Mina, we're after consistency here. So we've talked about trying to standardize processes, use checklists and for processes that require a lot of judgment, we can build decision trees and case studies and some training elements. We've also then worked out that if we want consistency, then we reduce the handover and, you know, the room for error in terms of miscommunication, these sorts of things. But once we implement that, how are we going to make sure that it's going to be consistently followed?

SPEAKER_01 22:10

Yeah, I think a lot of businesses fail at once they've got a system, they think that it's set in stone. And everyone's gonna follow it. But the problem is a system that's not properly trained or reinforced or reviewed will eventually drift back to someone relying on the strongest person in the team to actually compensate for it. So it creates a basically a time issue, a reliance issue, a person that's single point sensitive. So unless that's why I think training is really important. Training has to be part of the system itself, not something that's sort of bolted on at the end of it. So this this sequence from my perspective, it's fairly simple. You teach someone a method, you have them demonstrate it under supervision, and only then allow them to work independently once they can consistently meet the required standard. If you skip that middle step, poor habits can then become embedded in that actual process, even though you have a system in place. So the review process matters just as much as the actual system. So Pixar's Brain Trust actually had a good example of how you can actually protect quality without taking ownership away from someone doing their actual work. So a small group of experienced filmmakers regularly reviews works in progress and gives direct, specific feedback about what isn't working. So importantly, the brain trust doesn't have the authority to force change, but the directors listen to the feedback but still but they still own the final decision. But I think that's a really important distinction. You want a strong review and challenge, but you don't want to create a culture where people stop thinking for themselves, as I sort of referenced earlier, because every decision ultimately belongs to someone more senior.

SPEAKER_02 23:46

I think the training element and giving feedback, you know, is is really critical. You know, people need to think about the onboarding and the training that happens within their business. And I love that saying the standard you walk past is the standard you set. Yep. And I think great people will typically rise to high standards, whereas ordinary people will lower themselves to the standards you tolerate. So you're actually better off to set high and clear standards from the get-go. When you're training a process, make sure you know that it's really clear what done looks like. This is the level, and and you know, don't set that person out into the world, into the big bad world in and work in your business until that's really clear.

SPEAKER_01 24:25

Yeah, definitely. And I think it's important to have a standard group of like experienced people meet at a regular cadence, review real work and give direct feedback because it leaves it leaves the the responsibility for acting on that feedback with the person who owns the work. So you're not only just getting them to follow a process, but it's giving them to also the ability to sort of think on their feet, see if there's a better way of doing it. Or actually, it might be that the senior people actually get feedback in return and might be able to improve the system or the process. So I think that's how you can really stop standards from quietly sort of drifting over time. You catch small issues while they're still small rather than sort of discovering them after they become part of the of the way the business actually operates. So, like a habit or such.

SPEAKER_02 25:08

And we do that in our business, we do a lunch and learn where we're sharing different bits of advice and strategies. Here was the client scenario, here what here's what we did about it. Part of that is an education piece. The other part is, you know, making sure that everything is up to scratch. And normally professional services have really rigid review processes as well. So if you're not in professional services, it's something that you can you can maybe borrow into your business. But, you know, every financial plan and financial model I will look at, for example, just to make sure that's a quality control check, just to make sure that, you know, we're still following the same processes, we're still delivering the same quality advice. Uh, that's not necessarily so scalable, but it's still a very important key component in that sort of creating that quality feedback loop. Okay, so what can you do with all this information? Well, firstly, the best thing to start is find the process in your business where quality matters the most. It's probably going to be in the operations, in the delivery part of the process rather than reach or sales or could be after sales service, of course. And try and find all the repeatable processes and systemize them as much as possible. And then find the one or two decisions that can that still require some judgment and really try and nail them down into a decision tree, into case studies, these sorts of things. And then remove as many handovers as as possible. So, really, what we're trying to do is pick one process that is very dependent on quality and interrogated as much as possible, and then set a review period for that process and just see how it goes. Measure the results as well, rework, customer satisfaction, profitability. You know, that you can't manage what you don't measure because ultimately what you want to do is create a feedback loop for yourself and also for your team. So you can demonstrate, hey, this is the process we're going to use from now on in terms of re-engineering our internal systems and processes to try and achieve the same level of consistency and value, regardless of volume. And that'll give you the confidence then and also the confidence of the team that they're working for a great business that is very interested in delivering consistent value to their customers. And it's a business they can be really proud of. If they can, you know, do that by selling a thousand widgets per month and then triple that to say deliver 3,000 widgets per month and without a diminishing quality, that's something people can be proud of. People are proud to work for a successful business, but it can't be just about the money. It can't be, I mean, profit is a necessary requirement for business, but it's not the reason that we do it. And most team members are gonna connect with the reason. They want to be proud of the product and service they're delivering. And so by engaging them in the process and using one of those processes as a guinea pig, if you like, it'll help you build confidence in terms of you know how this approach can work and it'll build the confidence of your team as well. Okay, next next week we're gonna talk about meeting cadence. Uh, as I said at the beginning of today's episode, you know, communication within a business is the cause of a lot of friction, a lot of problems, a lot of dissatisfaction, and a lot of wastage in terms of profitability. And so you we really need to build that out in our business to make sure we've got clear, consistent, and free communication. We're going to talk about that next week. But before I let you go, what we're main or I have been busy is preparing some downloadable content. So all you need to do, and the link is in the show notes, go to vertflywheel.com. Obviously, value engine rich team is the vert flywheel that we're talking about. And we've produced four downloadable bits of content that you can use to improve the value pillar within the Vert flywheel. Of course, we spoke about value over the previous week. So we've got an offer clarity worksheet to make sure you've got an offer that resonates with your target audience, a pricing power workbook where we talked about price makers and price takers and how can you engineer some pricing power, the trust engine and turning clients into customer advocates. How do you do that? And then a value health check in terms of really interrogating the value you're delivering to clients. And so, what we're also going to do over the coming weeks is give you some downloadable content and some usable practical information to help you implement through the engine pillar as well as then doing reach and team. So just that again, vertflywheel.com. You can download everything there for free, very simple. And hopefully, what we try and do is bridge the gap between teaching concepts in the podcast that hopefully resonate with you, but then also helping you practically implement that in your business as we go. Okay, that's it for us for this week. Until next week. Bye for now.