Episode 256

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Agency growth isn’t easy and it isn’t a given. It’s not because agency owners don’t want to build their agency to be sustainable, scalable, or sellable down the road. It’s because they consciously or unconsciously avoid putting systems and processes into place. Instead of having a “your agency name here” way, every one of your team members has their own way of serving clients and getting the work done. When you’re five people, that’s tolerable. But once you get past ten employees or so, that breaks and you are stuck. Want to get unstuck?

As long you allow everyone to work in their own way and there’s no standardization, there’s a ceiling for how much growth and scale you can achieve. Systemizing your team’s workflow and putting new processes in place can get your agency unstuck.

David Jenyns believes deeply in the relationship between systemization and agency growth. After rolling out new systems and processes within his own agency and witnessing the powerful results, he organized the experiences into a new book called Systemology. In this episode of Build a Better Agency, David shares some of the key lessons and techniques from his book so we can apply them in our own agencies and achieve unprecedented growth.

A big thank you to our podcast’s presenting sponsor, White Label IQ. They’re an amazing resource for agencies who want to outsource their design, dev or PPC work at wholesale prices. Check out their special offer (10 free hours!) for podcast listeners here.

Agency Growth | Putting systems and processes into your agency

What You Will Learn in This Episode:

  • How agency growth is hindered by a lack of systems and processes
  • How David mastered the application of systems and processes in his own shop
  • What David believes are the mandatory systems and processes for all agencies
  • How to use David’s “Critical Client Flow” system
  • Why your systems and processes cannot be dependent on the agency owner
  • How to get your team members to embrace and appreciate new systems and processes
  • What characteristics and personality traits we should be looking for as we look for our system or process champion
  • The outcome and benefits we can expect to see from implementing new systems and processes within our agency

The Golden Nuggets:

“A lot of agencies get stuck at the same size because the capacity of the owner is preventing them from growing any larger.” @davidjenyns Click To Tweet “Systems and processes are not about getting hands-off so you can work less. They are about redefining the work you’re doing so you can level up.” @davidjenyns Click To Tweet “I realized that if the delivery of a product or service was dependent on me, it was never going to scale.” @davidjenyns Click To Tweet “Intellectually, we get it. But the application of systems and processes is extremely difficult for many agency owners.” @davidjenyns Click To Tweet “Implementing and embracing new systems and processes will change the way you look at your business.” @davidjenyns Click To Tweet

Ways to contact David Jenyns:

Additional Resources:

Speaker 1:

It doesn’t matter what kind of an agency you run, traditional, digital, media buying, web dev, PR, whatever your focus, you still need to run a profitable business. The Build A Better Agency Podcast presented by White Label IQ will show you how to make more money and keep more of what you make. Let us help you build an agency that is sustainable, scalable, and if you want, down the road, sellable.

Bringing his 25-plus years of experience as both an agency owner and agency consultant, please welcome your host, Drew McLellan.

Drew McLellan:

Hey everybody, Drew McLellan here from Agency Management Institute. Welcome to another episode of Build a Better Agency. As you know, not only do I run Agency Management Institute, but I still run my own agency. And as of 2020 we are 25 years old. And so knock on wood, it seems to be working.

I can remember when I started the business, they never said it, but I know my parents thought I was insane for jumping out and starting a business on my own when I had a perfectly good job, but it seems to be working just fine.

And I think probably I was always meant to be a business owner. And I know that because even when I was an employee, I wasn’t awesome at following systems and rules. I kind of wanted to do it my own way. And I was brilliant at the workarounds.

And so today’s topic is particularly interesting to me, because I had to learn this the hard way. And so what we’re going to talk about today is putting systems and processes inside your agency. And I know, I knew this from my own agency, and I certainly have seen it over, and over, and over again with the agencies that we work with, that oftentimes, the biggest barrier to an agency being able to be sustainable and scalable, is you, is the agency owner.

And it’s not because you don’t want it to be sustainable, or scalable, or sellable down the road. But when you stay in the middle of things, and when you allow everyone to do things their own way, so David has a way, and Mary has a way, and [Babet 00:02:27] has a way, and as long as the outcome is fine you’re okay with everybody getting there on their own path, as long as that is the norm for your agency, there is a ceiling for how much you can grow and how much you can scale. And the savior of that is sort of systemizing or putting process around the way the work gets done.

It’s not Babet’s way, but it’s the agency’s way. And everyone inside the agency, including the owner, follows that. And so many years ago in my agency, I realized, I read The E-Myth, I read Traction, I did all of that. I understand that we needed to have sort of an operating system in which we worked.

And of course, the greatest deterrent to making that happen was me, because I of course kept end running around the system, just like I did when I was an employee. And the challenge with that is, of course, that doesn’t work. If the owner doesn’t adopt it, then nobody adopts it.

And so when I learned about David Jennings, who’s my guest today, and what he did with his agency, and he got so good at it with his own agency that he’s now written a book called SYSTEMology that is coming out shortly if you’re listening to things in realtime, where he teaches us exactly how to think through, and build, and implement systems and processes inside our agency, just like he did in his shop. I knew I had to have him on the show, and I knew we had to pick his brain to find out what he knew and how we could adopt it into our shops.

And so I would love to just jump right into the conversation, introduce you to David and ask him all the questions that I know you have, because they’re the same questions that I had as I was sabotaging my own agency’s efforts to systemize. So let’s jump into it.

So David, welcome to the podcast. Thanks for joining us.

David Jennings:

Pleasure. Thank you for the invite.

Drew McLellan:

As I said in my introduction, we’re going to talk about one of the, one of what I think of as the cuss words of agencies, which are process and systems. And you know as an agency owner, and I know as an agency owner, I’ve had my shop for 25 years, that we are just not wired as a general rule, to welcome restrictions and boundaries. That’s just not who we are as people. And yet we all know that after an agency gets to a certain size, if there aren’t normal, ordinary, the way we all do things, and instead David does it his way, and Drew does it his way, and Babet does it her way, that can cause chaos and a loss of profit inside the agency.

Intellectually I think we get it, but I think the actual application of system and process is challenging for a lot of agency owners. One of the reasons why I wanted to have you on the show is because you have seemed to have mastered that. So tell us a little bit about your shop and how you came to the realization that systems and process actually could be to your benefit.

David Jennings:

Well, we run a digital agency in Melbourne Australia called Melbourne SEO Services. And I’ve owned that company for 13 years. And there was, at the beginning, I resisted systems and processes for a good amount of time, even though I was familiar with things like The E-Myth, and Traction, and Scaling Up. There’s plenty of great books that talk about systems and processes, but I always felt like, “Yeah, but a digital agency is a bit different because it’s quite creative, it’s dynamic.” The online landscape changes so frequently, if I write a process, it’s going to very quickly be out of date. And even if I got a system in place, my team members probably won’t follow them because they’re creative people.

So I was carrying a lot of this baggage for years, and it kept me trapped in the agency for a good 10 years. I was very much the center cog in that machine. I was handling all of the issues. I had a small team around me. I still had a team of 10 that were full-time and part-time employees, and then a handful of contractors that we were working with. But the defining moment happened for me is when we fell pregnant with our first child. And I just had that realization that if I kept on going at it the way that I was, I would just never really be present for the kids as they were growing up. I’d be that dad who was always too busy and couldn’t find the time because I was working in the evenings, I was doing the weekends, I was getting up early, really just running that agency life.

That was kind of where that turning point happened where I said, “Well, I’ve got to do something.” And I can see there are agencies out there that are running, where the business owner isn’t running front and center in the machine, and they are able to step in and out of the operations. So I thought, “Well, if it can be done, I’m going to do it.”

That’s when I kind of got started on that journey and that’s really what, I suppose, set the dominoes off.

Drew McLellan:

How many people at that point did you have inside your shop?

David Jennings:

Yeah, so we had 10 team members that were either full-time, I think there was about six of us full-time, four of us part-time. And then we had probably about another five to 10 contractors that we would pick up and work with on Upwork, or just on more of an as-needed basis.

Drew McLellan:

Okay, so you come to this, you have this epiphany, you’ve got to systemize your business, despite your reticence and perhaps your disbelief that it could happen. How did you move from deciding you needed to do it, to actually implementing, beginning to implement it inside your agency? How did you even know what systems and processes you needed to create? And today, what do you believe are the mandatory systems and processes for all agencies, whether they’re traditional, or digital, or whatever they may be?

David Jennings:

Yeah, well I think the first thing that happened is I started to retest a lot of the assumptions that I’d made around systems and processes. Things like systems and processes remove creativity. That the business owner needs to be the person who creates the systems. That I’m going to need a truck load of systems. That I’m going to need some sort of complex solution. Or this needs to have some special software that manages it.

I started to think through this and go, “Well, is that really true?” And I had built up a video-production business along the digital agency. So we started off offering SEO services, then we expanded out to offering paid AdWords and Facebook ads. And something that kept on coming up was, “Can you help us with content?” And then we ended up opening up a second arm of the business called Melbourne Video Production.

Now, I couldn’t turn on a camera if it needed to save my life, or maybe I could turn it on, but I definitely couldn’t use it, and I definitely couldn’t do any editing or anything like that. So that part of the business, that section, it was a strange part of the business, because it was the only part of the business that I didn’t know from the get go, how to hop on the tools. And that actually ended up being the biggest blessing. Because I didn’t know how to hop on the tools, that entire part of the business had to be built without me in it.

I found a videographer who came in, and I worked with him, and I started to take the pieces of the business that … Because he used to run his own freelance business, and when he came on board as an employee I said, “Well, you handle all the operations. You handle chatting with the clients, lining up the shoots, doing the pre-production, production, post-production stuff and let me handle the business side of things.” Because we had the infrastructure in place with the bookkeeper, and the sales team, and the admin and all those sorts of things.

And it was that, I kind of just kept on looking back at that part of the business to see, “Well, what did I do to make that bit work?” Because that almost worked as a silo. And then I started cherry picking out the best bets from that segment, and dragging it across to the other part of the business, and really just started to push myself out, and realized if the delivery of the product or service was dependent on me, then it was never going to scale, and it was broken. So I needed to get very clear on how can I deliver something of value to clients, that I was not involved in that delivery?

And then it started me on this journey, and the first thing that we did to identify those mission-critical things, I developed a method I call the Critical Client Flow, or the CCF. And it really is just a one-pager that you list out from the top, how do you get customers? How do you answer that inquiry? How do you sell them? How do you on-board them? How do you deliver your product or service? And how do you get them to come back?

You literally just map that out. And right there is the first 10 to 15 systems that you start with. And some are going to be in more detail than others, like the operations or the on-boarding might have a lot more steps to it than some of the other ones, like answering a phone call. But you can still start high level. It’s always if something appears too big or too complex, just do an overview system.

What are the main key steps? You don’t have to make everything super granular or detailed like you’d expect the McDonald’s menu to be where they list out line by line exactly how to flip a hamburger. The chances are, and it was the same with us, we had great staff. They could make an average system work really, really well because they were great staff. So I just kind of focused on, even if we just have an average system, and then we get some consistency, that’s infinitely better than no system. And we just kept on getting better and better from there.

Drew McLellan:

So as you were building out the systems, because I can see how an agency could build out the systems, but still leave the owner in the middle of it, so how did you build out a system that, in essence, the work that your company was used to doing meant David was in the middle of it? So now you have to build a system where David doesn’t exist really, in it, right?

David Jennings:

Yeah.

Drew McLellan:

So how did you do that?

David Jennings:

The first step is to think about one primary product that, imagine it is the gateway to your business. If someone has never done work with you before, and what is one of the first products or services that you might offer to them where they get to know you? Now, that product or service, you want to make sure that it has good margin, attracts the right people in, it can be delivered without the business owner. And you go through that thinking, and you just start off with one product first.

Because sometimes if you’re a full-service agency, you’ve got six, or 10, or 20 different products or services that you offer, and they’re all going to keep happening. Your business is kind of already functioning, so just let that keep going, just focus on the one first. Focus on something that you know can be delivered without you and start there. Because what that does is, if you can get to a point where at least something within your business, and if it’s the first product, and if that can be delivered without you, then that becomes a huge amount of power for the business, because they can go out and sell this product. And it almost can then become like a screening process for whether or not you want to work with clients ongoing. At the end of that engagement, whether or not you go ahead and introduce your other products and services.

For our digital agency, one of the first things that we did was actually a web build. We identified the target market of selling websites through to franchisors here in Australia. And we went through and mapped out the process for the way that we do a web build. And that we found was great to start them there before we introduced our paid services, or SEO, or AdWords.

And so we had two things. It was either a web build or an SEO starter pack. They were the two products that we heavily systemized.

As far as to answer question, some other distinctions on how to make sure that the business owner is out of this, and it depends on what team members are around you. Sometimes, just start off systemizing, if you’re really having a challenge to say, “I don’t know if I can get someone to do this creative piece.” Well systemize the heck of everything around that. Everything from the way that the client is on-boarded, to the way that you’re sending out your weekly or monthly reports, to the way that you’re closing out projects, or the way that you’re setting up staging servers. Systemize everything that you can that’s easy, because that least gets it off the plate of the business owner, which then gives them more space. And then their involvement is getting less, and less, and less.

Oftentimes it’s more in the head of the business owner, and you have to break this habit. It’s a bad habit because what’s happened is, the business owner started the business. The business grew to a certain size. And it grew to that size because the business owner was great at doing everything and they would win clients, and they’d solve problems, and whenever staff have an issue, the business owner would step in. But this creates this cycle of dependence for business, for the team to then rely on the business owner to become the knight in the shining armor.

Drew McLellan:

Right, absolutely. And I think that’s why a lot of agencies get stuck at a certain size. It’s the capacity of the owner that is really keeping them from growing any larger.

David Jennings:

That’s why systems and processes, and it’s not just with agencies, because we work with a lot of different businesses, I find that is a common roadblock, and one of the biggest roadblocks I see for small business. The business owner starts the business because they have an idea, they see a problem in the world, they want to create a product or service to meet that and solve that problem. They get started. This is classic E-Myth stuff, the entrepreneurial myth is that because I’m a technician, and I know how to do the thing, that I then know how to run the business.

But it is very different from doing the thing and running the business. There are a lot of other components and that’s that stumbling block. And it’s actually very hard to bridge that gap, because the other thing is, a lot of business owners, they are big-picture people, they are visionaries, they think of things at the macro level. But to bridge through the gap, you need to be more of a micro-thinker.

Drew McLellan:

Absolutely right, detail oriented.

David Jennings:

Yeah, a details person.

Drew McLellan:

Yeah, and most visionaries aren’t that.

David Jennings:

Exactly. That’s one of the secrets as well, depending on what size you get to, but it’s to find the Yin to your Yang. As someone running a business, who could be that operations person? Who could be the detail person? Who could manage the team? That’s another key bit that actually enabled me to step out, was to find that person.

Drew McLellan:

Yeah, so in Traction language, you were the visionary and they were the integrator, right?

David Jennings:

100%, nailed it.

Drew McLellan:

Yeah, so I know you believe there are certain systems that every agency should have in place.

David Jennings:

Yes.

Drew McLellan:

What are those?

David Jennings:

It goes in, effectively there are three waves that you go through. The first wave is the critical client flow, which is, we talked about it a little bit earlier. And it’s all about the core of how can the business make money? You want to systemize the way that the business can make money, so the business can make money without person dependency. That’s the first one.

Then once you move past that, you move into the second wave, which then deals with all of the systems that fall outside of the critical client flow that are required for growth. And usually that focuses on, I always start on the finance department first. So you think about finance systems around paying wages, paying expenses. You might think, making sure that you’re doing the monthly P&Ls and meeting your accounting and tax requirements and things like that. You might have a bookkeeper, you might have an accountant, they might be handling some of this. You might have gone, “Oh, I’ve already got that outsourced.” If that’s the case, you still want to get at high level, even bullet points, so you understand what is happening, when it’s happening and how it’s getting reported through to you. Finance is usually the first one.

The one after that I usually look at is HR. And HR is about how you hire staff, how you on-board them, and the way that you manage and keep them. And it’s all about thinking, in that space, “I want to embed systems thinking, and this is the way that we do things from day one.” To the point where you run a job ad, and in the job ad you say, “Here are three systems that you will be doing as part of your job day in and day out.” And that shows them right up front that you’re a systems-run organization. Because the biggest challenge you’ll find, and with the resistance to systems and processes in agency-land are your existing staff, because they’ve always done it this way, “Why do I need to change?”

But if you hire someone from day one, and teach them that, “This is the way that we do things. This is a process that you will be following. Here is how you set up every project in the project management. Here are the 10 things that you need to get before you start with a client, and that’s just the way we do things.” And they see that from day one, “Well okay, that’s just how we do things here. And if you don’t like it, then you’re not a good fit.” So that HR piece is an important one.

And then the last one is the management piece. And you’ve mentioned Traction, Traction’s great. It really doesn’t matter what framework you have, as long as you have some form of meeting cadence and rhythm. It’s all about finding which departments are meeting when, and it’ll depend on the size of your team. But you need to have a sales meeting. You need to have, potentially, sales and marketing might get joined together. You might have a finance meeting that happens weekly. And you might have a management meeting that happens fortnightly. Again, it will depend on the business how frequently, and the size of the team.

But then you start to get almost like I say, it’s a system for that meeting. It’s really just an agenda. What are the few things that you talk about? Well, in my finance meeting, every single week we look at our cashflow coming in and we have a spreadsheet that we look about, and we talk about that, and how are we looking. Are we on track? Is there anything we need to address? And then you maybe have a monthly meeting where you review your P&L, and what’s coming up.

Again, it’s about figuring out what that looks like, getting it on the calendar. And when you kind of combine all the this together, it’s the minimum viable product for running your business, those core systems. It’s not about systemizing everything. You don’t need to worry about, “How do I systemize taking out the trash?” That’s not going to add to your bottom line. You systemize … It’s the 80/20. The 20% of the business that drives 80% of the results, just get those systems down first.

Drew McLellan:

Yeah, makes sense. I want to take a break. Then when we come back, I want to talk about those existing employees and the resistance that they have towards being systemized, and all of the objections, and all the things that we hear about, and how to overcome those. Let’s take a quick break and then we’ll come back and we’ll talk about that.

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All right, we are back with David, and we are talking about systems and processes inside your agency. And if you’re still with us, bless you for sticking it out, because I know that this is a horrific and scary topic for you. But I will also tell you, we work with about 250 agencies a year, and the agencies that grow year over year are the agencies where they have figured out the appropriate place for the agency owner to be, and to apply his or her talent. But they’re not in the middle of client-service delivery. And they’re not in the middle of creative production and all of that, because they have built