Susan Solovic: Hello and welcome to today’s featured advisor series. I’m Susan Wilson Solovic and our featured advisor is Sam Carpenter, a widely successful entrepreneur and the author of a great book. I’ve been reading it form cover to cover. It’s “Work the System: The Simple Mechanics of Working Less and Earning More” and I just think that is making more actually but I love that concept.
Previously we’ve talk generally about the book and then we also talked a little bit about how to get into to that mindset. Now we’re going to talk a little bit about what you call a non-holistic mindset and that’s interesting because in today’s environment everything is holistic and then everything is supposed to be very relaxing and all that. But you’re saying a non-holistic mindset, explain that.
Sam Carpenter: I run the risk of alienating about 70% of the population so I like to be able to explain what I mean by that. Holism is wonderful. It’s a wonderful thing. We have all this working parts and they affect each other and they result in this over here.
So for instance, the extreme would be and I think many of us have heard of this, the butterfly are flapping its wings over Brazil affects the weather over New Hampshire. Everything is related to everything else and actually that’s true. And that’s of course true as any physicist would tell you that.
And say that things flow and they move and they ebb but the problem with that is in a personal life, it leads to a state of paralysis. Now the holistic result is a perfect thing. It’s a wonderful thing but a holistic solution is a mistake.
And so with work the system what I talk about is we’re going to take this holistic entity. This conglomeration of what I call sights, sounds and events. We call our business for example and we’re going to take it apart, it’s okay to take it apart. We’re going to have the deposit procedure. We’re going to have the sales procedure. We’re going to have the hiring procedure, we’re going to have separate systems and yes I know that they affect each other.
But we’re going to take things apart and fix them one at a time. So we’ve got this entity called a business, and we have all the parts working very well. Each independent part works very well and we put them together and I’m here to tell you that when you do that, you’re total entity will be very holistic and will be working very efficiently and things will move along. You will be working less. You will be making more if you’re willing to take it apart.
Now the holistic solution that I was working on in my business for the longest time was to find a manager who would read every thought and could be a fortune teller and knew exactly what to do in every situation. Where I can find this person and I think I found this person and then they didn’t work out and I’m disappointed and they quit or whatever happens or another bank loan would solve all my problems in my business.
These are holistic what I call Band Aid solutions. To work the system process gets underneath instead and goes after the individual systems. You take each system one at a time and fix it then you might have hundreds of systems and you have to have faith but you work through and you get all your systems working fine and guess what you got a tremendously holistic result. All the working parts are working together and every one of them is sufficient in working with another system and by itself. It’s very efficient and your holistic system is working very wonderfully well.
Susan Solovic: Well, I understand that and I can also see that it’s good perhaps if an employee have to leave suddenly or even your self. I mean if you got sick or something at least there is a process, the documentation in place. So the business itself can go on.
Sam Carpenter: The system we have for that problem of losing a valuable person is this. One of our principles of operation and we’ll talk about our documentation in another segment. But one of the principles is that for every role and the role is the system not the person. For every role of COO, CFO, Sales Manager, for every role we will have a duplicate.
So every manager has a mini me and they help with day-to-day activities but everybody knows if someone got run over a truck tomorrow that this person will move in and take over that role. Now my COO, Andy is having a baby in August. There is no a problem because Holly will slide right into that and they won’t be a ripple. So that’s the system, the system is the role of the manager. And so we can lose anybody in the office including me and things will keep rolling along.
Susan Solovic: Sure and you know actually, I always tell our entrepreneurs when they are starting out and they’re hiring that critical first employee. I always say it’s better to hire smart and rather than fast because you need that first person you grab anybody or warm body you pull him into business.
But if you’re already thinking and you’re getting your system you’re going to start thinking about what kind of skills that core competency do I need to develop and grow the business.
Sam: That’s a job description.
Susan Solovic: Right, there you go. It is, isn’t it?
Sam: So we write that down and we think real hard what do we want this person to able to do and we always hire people that we think can move up the ladder. We don’t hire anybody in the business that we don’t think has a capability of moving up the ladder. But when they come in we provide them exact instruction on what they are job is.
And we say look as you learn a job, help us improve the system that’s written document. So it’s more reflective in what you actually do. We’re constantly working the system, working the documentation for that person to make the job more fully explainable, is that a word? Anybody who had to come into that job would be able to do it just by reading the documentation.
Susan Solovic: Sure that’s wonderful. Now you also talk about, let me get the word in right, outside and slightly elevated viewpoint. I like that statement I also want you to tell the story about Linda, your wife, and her new car but first of all, let’s talk about what does that mean?
Sam: Outside and slightly elevated. What that means is I think we all like this term thinking out of the box, right?
Susan Solovic: Sure and that’s been overused, I think.
Sam: It’s overused but it’s a wonderful metaphor for pulling yourself out of a situation and the next step in that would be okay, think out of the box but stay out of the box. And you see yourself in that box too, so you’re outside and slightly elevated looking down on your situation, on your business for example.
That’s very interesting. Well, this is there is a system there and there a system there and I have this person over here doing this and there I am over there. And so you’re looking down on things as if it was a mechanical game on a card table. And that’s when I talk in the previous segment about this epiphany that I had where I was in bed late at night and I finally got it, what the deal was.
And in my business was a series of systems, a series of mechanical devices working together to create this entity called Centurytel, the telephone answering service and I could take those things apart and take those things apart and fix them one by one and make the whole entity work real well.
Susan Solovic: And we get in to business and we think we know the answer. It’s like of course well it’s this. But it is not always that obvious and in the book you talk about going with your wife and she thought she wanted she wanted to buy used car. But you use this slightly elevated approach outside and elevated.
Sam: I’m a husband, right? So I want to be her safe and so she had this 12-year-old Lexus and she wanted to buy another used one. And my thought was, well, if we buy a used one, it could break down. There won’t be a warranty and that will be a pain in the neck, I bet that will be expensive to fix.
And it’s so nice to have a new car. It just does things for yourself and so in outside and looking down made a lot of sense to buy a new car. Why would we want to buy a used car, Linda where the first 40,000 miles of its life have been used up by somebody else? The most fun part of the car.
Susan Solovic: Right?
Sam: And so from an outside and elevated viewpoint, you’re able to weigh all the pros and cons and make a really rational decision.
Susan Solovic: You know I want my husband to watch this segment because he is a CPA and he always worries about that depreciation when you drive off a lot. So we talk to him for missing out. He is name George.
Sam: George and I will talk about this.
Susan Solovic: Yeah, there you go. Now also you say this outside and slightly elevated viewpoint actually what you point out that about one in 100 businesses will actually survive to 15 years or more. But you believe that those who adopted this philosophy can really make it over the curve.
Sam: And you can work backwards from that logic and the reason I feel strongly about this. As well as the 80% of all businesses is failing 5 years. That is the standard statistic and that’s been proven over and over and if you follow that through for 15 years, yes, one out of every hundred businesses last.
Well, if you look at any large successful business, the main difference between any large successful and business in a struggling small business is not going to make is documentation. And so once the systems are documented and it’s organic processes are happen in the same way over and over again. The business is going to be successful and the only way you can get those organic processes to be permanently perfect is documentation. Boring but true.
Susan Solovic: Right, now that’s true. And I also find that so many entrepreneurs who have worked their whole life in their businesses and let’s say they do make it 15, 20 years and they want to sell that business or pass it on and they can’t because they are the business.
Sam: I have a friend that I talk about in the book who is a chimney sweep and vendor again we’re still using woodstoves it’s a fun thing to do.
Susan Solovic: It reminds of Dick Van Dyke and Mary Poppins.
Sam: Right, but a lot of the expensive homes have woodstoves in them and it’s kind of nice to have a real wood fire.
Susan Solovic: Sure. Oh, there’s nothing better than the smell of a wood burning.
Sam: And so my friend would go up on the roof and he had a wonderful business. He’s making a lot of money cleaning those but he fell off and I had another friend who had a charter boat going out and he is fishing salmon.
Susan Solovic: What a life.
Sam: Well, from four in the morning until mid afternoon he is fishing. And then he’s coming home and he’s cleaning the fish and then guess what, at night he is doing the books. And so what is he doing, he tries to sell the business? Will he go along with it? What’s the point? Or will the new person want to come in and work a hundred hours a week? And so every recurring process can be automated and delegated and it must be if this is going to an entity of worth.
So if you have a chimney sweep business, there should be other people doing the work.
Susan Solovic: You know what Sam I call that my top theory. Multiply yourself through other people.
Sam: That’s it. It’s called being a leader.
Susan Solovic: Right and you can borrow that sometime maybe what. And also Sam there’s more great advice that you can share with our audience on your website which is WorkingTheSystem.com.
Sam: WorkTheSystem.com and there’s a download there. It’s the only place you can buy the book until the end of the year when it is in bookstores and the other thing we have a boot camp coming up this fall where we talk about at all form the epiphany to the one through 10 steps.
Susan Solovic: That’s great, wonderful. Well, I sure appreciate it, Sam and you’ll be coming back and doing more segments with us here on your featured advisor series.
Sam: Terrific.
Susan Solovic: Wonderful, thanks
Sam: Thank you
Susan Solovic: Thanks to you for watching today’s featured series with Sam Carpenter the author of “Work the System”. So be sure to tune in for more of Sam Carpenters special featured advisors program right here on SBTV and remember small business is our only business.
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