Episode 273

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For many agency owners systems is the S Word. We bristle at the idea of being confined. It feels like an attempt to stifle our creativity and ability to think out of the box. But if we’re honest with ourselves, there’s a lot of wash-rinse-repeat in our work every day. And without systems (which I translate to “the agency’s way of doing something) everyone develops their own way of accomplishing each and every task. Not only does that mean we are inconsistent at best but it also means that if that employees leaves, so does their tribal knowledge. This is a problem we can and should solve.

My guest for this episode is Josh Fonger, a Business Performance Architect and co-founder of the company, Work The System. The company is based on a book by the same name by Sam Carpenter and exists to help people implement the concepts. If you loved Michael Gerber’s book The E-Myth, but wished he’d told you HOW to follow his recommendations, you’ll love hearing from Josh.

In our conversation, Josh outlines not only why systems are important but the specific steps you can take to build them into your agency, no matter how long your agency has been around or how you’re functioning today. While the work may not seem sexy, once the processes are in place, you’ll love the reduction of mistakes, the ability to scale and the increase in profitability.

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.

Business Systems

What You Will Learn in This Episode:

  • Practical tips for how to create systems for your agency
  • Why processes actually create more space for creativity
  • How the tribal knowledge method can fail you
  • Examples of how documenting systems allow you to productize your service
  • How to get started when it all feels so overwhelming
  • The agency owner’s role in building systems
  • How to document processes in a way that your team will actually reference them
  • How to get everyone (including the company owner) to follow the process once it’s in place
  • Productivity tips for how agency owners can extract themselves from the day-to-day in order to concentrate on business development.
“Systems and processes aren’t about crushing creativity. It’s about the methodology to get to the place where you can be creative.” @fongerj Click To Tweet “People come and go but systems stay.” @fongerj Click To Tweet “You have to see systems, not as a destination, but something you’re building.” @fongerj Click To Tweet “Creating systems and processes is about investing one brick at a time in your future.” @fongerj Click To Tweet “The more systematic you are, the less gray area there is.” @fongerj Click To Tweet

Ways to contact Josh Fonger:

Additional Resources:

Speaker 1:

Welcome to the Agency Management Institute community, where you’ll learn how to grow and scale your business, attract and retain the best talent, make more money and keep more of what you make. The Build to Better Agency podcast presented by White Label IQ is packed with insights on how small to mid-size agencies survive and thrive in today’s market. 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 McClellan here from Agency Management Institute. Welcome to another episode of Build a Better Agency. And this is an episode that is focused on a topic that a lot of you like to think about, maybe like to talk about, but actually don’t want to do. Doesn’t mean we shouldn’t do it, doesn’t mean we don’t need to do it, but this is not something that is going to excite you. So why in the world would I start an episode that way because by now half of you have stopped listening. So hopefully the rest of you have stuck around.

The reason why I want to talk about this topic is because I know a lot of you have growth goals and plans for 2021 or whatever year it is that you are listening to this because you always have growth goals and plans. And one of the things that gets in our way is the lack of systems and process. So in many agencies of a certain size, and I would say, I see this really raising its head when you get to about eight, nine, 10 people. You struggle with it smaller than that, but this is when it really gets to be problematic.

Is at an agency of eight, nine, 10 people, you’re finally getting to the point where there’s too much going on for all of you to know everything that everyone else is doing. So it’s uncomfortable, if you were a smaller agency and you grew into 10, 12, 15 people. First, particularly for the agency owner, it’s disconcerting not to know what is happening in the agency and not to know what everybody else is doing and where every project is at. But you’ve gotten to the point where you just can’t possibly have all of it in your head anymore.

And at this point you are also at the point where you don’t really have the agency way of doing things. You may have the outcome, maybe the same for the agency, but everybody who does something, let’s say design an ad, everybody who designs an ad does it a little differently. They approach the work in their own way as opposed to a defined agency way. So a couple of problems with that. Number one, somebody leaves, Babette takes off and goes to work for another agency. Everything that was in her head and how she did her work, gone.

Two, those discrepancies between how Babette does it, versus how Drew does it, versus how Mary does it, those are minor until they get to be major. And sooner or later, and many of you have experienced this, the discrepancy is that they get to be a bigger deal and it’s noticeable when one person versus another person on your team does something either internally or on behalf of a client. And the worst part of it is that every time you grow and you add another staff person or somebody leaves and you have to replace them, you have to reinvent the training and the onboarding because there is no documentation to the work that you do.

And I think that we as an industry really bristle at the idea of systems or processes because we think of our work as creative. And so if you remember back to the episode I did, the Wonder Bread factory versus the Artisanal bakery, those of you that love to make everything as unique and custom to the client, and there’s no, as you would call it cookie cutter to the work, the idea of systemizing that seems counterintuitive. For those of you that run more of a Wonder Bread factory, where you are doing the same kind of work for the same kind of clients on a consistent basis, one of the reasons why Wonder Bread factory agencies make so much money is because they have embraced the idea of there should be a common way of doing things that is efficient and effective and people can step in and out of the role and nothing gets lost in the translation.

So I’m going to argue and my guest, I think will argue that systems and process aren’t about crushing creativity. They aren’t about keeping you from giving your client a custom solution or a custom answer to their problem, it has nothing to do with it. It’s really about methodology to get to the place where you can be creative and you can do your best thinking. And even if you think all of that is garbage, you have to understand that you’re going to be stuck at 10 or 12 or 15 people if you don’t create systems and processes inside your business.

There’s no other way around it. You may not want to ever be a Wonder Bread factory. You may not subscribe to Michael Gerber’s book, The E-Myth, where everything is documented. But there are certain things we do that absolutely can be and should be documented, and that’s what I want to talk about today with our guest. But before I tell you about him, and before we jump into the conversation, I also want to remind you that without a doubt for every single one of you listening, one of the most important systems or processes that you can have, and frankly, one of the least likely systems or processes that I see inside agencies is your biz dev process.

So if you’re listening to this in real time Stephen Westner and I are teaching a workshop in Orlando on January 21st and 22nd called How to Build and Nurture your Agency Sales Funnel. And here’s what I’m here to tell you. First of all, the workshop is very hands-on. So you’re going to leave the workshop with a sales funnel built out, with a sales plan built out. You’re going to know who you want to talk to. You’re going to know what you’re going to talk to them about. You’re going to know how often you’re going to talk to them. What channels you’re going to use.

You’re going to have a calendared, like we’re going to make you do the work in the workshop, because I know that if we just teach you what you should do, but we don’t actually show you how to do it, and we don’t make you do it, you’re going to go back to the office and it’s not going to get done. So we’re going to make you do it in the workshop. But I promise you if you come to the workshop and you stay focused and you do the work and let us help you do the work, this will be the last new business system or process you ever have to build. That’s how powerful it is.

This is a workshop we taught for the first time in January of 2020, and the agencies that attended that workshop that put that into play for themselves, went into the pandemic strong, came out of the pandemic strong and have teed up for a killer 2021. So if you are open to joining us, we are capping the workshop at 25 people. It’s on Disney property. They have been incredible about safety. Not one person has contracted COVID from being on Disney properties as they reopened in July, so I am very confident that you’ll be safe.

But if you’re open to it and you want to kick off 2021 with the last biz-dev the system or process that you’ve ever had to create, if you’ve ever created one, and you would like a sustainable biz-dev program at keeps putting right fit clients into the sales funnel, come on down to Florida and join us and let us show you how. All right. So let me tell you a little bit about today’s guest. So Josh Fonger is a business performance architect and he is co-founder of the company called Work the System.

So Work the System, the company is based on a book called Work the System, that Josh did not write, but he connected with the author and they decided to create a company helping people implement the book. And many people say that Work the System, which by the way I highly recommend the book. That Work the System is the sequel to E-Myth that Michael Gerber could have, or should have written. So this shows you how to do what Michael Gerber inspired you to want to do.

So I’m going to pick Josh’s brain as aggressively as I can for you to get as much good wisdom and practical tips as I can about how we can and should systemize our business so that the agency runs smoother, more profitably and can grow without as much friction. All right? So let’s get to it. Josh, welcome to the podcast. Thanks for joining us.

Josh Fonger:

Glad to be here.

Drew McLellan:

So I gave a little bit of your background, but explain to everyone sort of how Work the System the company came to be and your role in that.

Josh Fonger:

Sure. Yeah, definitely. Well, it’s kind of a … I’ll give you the short version, let me just put it that way. So Sam wrote a book called Work the System. And he wrote it in his, I guess his late 50s, early 60s, and he was not writing the book to start a company. He didn’t need a company. He had his income from the company Centratel, which is what the book is based on. And so he was not trying to start a coaching or consulting company.

And meanwhile, I was traveling the globe as a consultant. So I was flying from company to company, to company fixing them with their inside sales and outside sales and their branding and marketing, just kind of a generalist, right? And I was getting pretty burned out with being on the road. And providentially, we met, we talked and we said, “Well, let’s just start this company together. We’ll call it Work the System based on the book.” And so that was over 10 years ago. And that’s how it began.

And really for me as a consultant, what I was noticing my work was that I would work with a company and they would improve, but then I would go away and then six months later, a year later, two years later, they were back to where they were before. And then I’d come back in and do the same thing. And I was noticing that the solutions were good solutions, but they just weren’t sticking. And that’s where the methodology really comes in. The Work System method is that it actually makes all your best practices stick so your company can actually grow instead of just stay at a plateau. And so we just had a great relationship and worked together and that’s how it started.

Drew McLellan:

Awesome. Okay. So I want to read something that you guys have written about the company, because I think this tees up our conversation. As you and I talked about before we hit the record button, agency owners as a general rule don’t love systems and process. They feel confined by them as opposed to it being freeing to get the minutia out of way so they can do their bigger thinking. But something you guys wrote was and this is I think from the book.

“So the simple mechanics of making more and working less, helping business owners get unstuck using systematic solutions and helping businesses properly organize and systemize their operations so they can achieve exponential growth.” So talk to us a little bit about that. Everyone has seen the dark side of systems, which is, it tells me what to do and agency owners loath to be told what to do.

But talk to us a little bit about sort of your philosophy and the book’s philosophy around how do I do this? Like how do I do this to get to the point of growth? What is the methodology that frees me to grow my company?

Josh Fonger:

That’s a great question. I’m probably going to give you a long answer.

Drew McLellan:

It’s okay.

Josh Fonger:

Is that, a lot of times people get stuck in the tactics of the, how to do it, and I’m sure we’ll get there during this interview. But it starts with not seeing their world properly or not really thinking about their business properly. And so people usually complicate what they do and it’s more overwhelming than it needs to be. And so a big part of what we try to help people do in the beginning is to see their world differently, see their business differently and see it as a series of systems, repeatable processes that actually you could break up into separate pieces.

And if you did, you’d realize the simpleness, the simplicity of those pieces and the repetition of those pieces, and then the ability to delegate those pieces, optimize those pieces, document those pieces, whatever it might be because different treatment might need to happen to different pieces. Case in point, my wife and I have a system for our relationship. And so the goal is a great relationship, a great marriage, right?

And one of the components of that, because if I just said, hey, make a great marriage, that’s hard to do. One component is to have a date night. So the system is, every Friday night to go on a date. It’s a system. It’s repeatable, right? It’s something that we can count on and then we can improve upon that and make it better and make it consistent and make it … fulfill the requirements of a successful date night, we don’t necessarily need to document how we do that.

Drew McLellan:

You don’t have like a three ring binder on date nights?

Josh Fonger:

No, but I think this is where people who are creative, they get stuck in that. Well, if I did that, then it will take the joy out of it. But instead it’s just a routine, that’s a habit. Now, I’m not delegating date night to anyone else, right?

Drew McLellan:

And it will not make a great marriage by the way.

Josh Fonger:

No.

Drew McLellan:

Yeah. Well, having someone else plan or participate in your date night, not a good idea.

Josh Fonger:

Well, that’s the night without the kids. But in your business, if want to extract yourself from the day-to-day. You actually do have to find a way to take those best practices and document those specific elements so that they can be done at a consistent way. Because we say, systems stay, people come and go, but systems stay. And so what you want to do is obviously find great people and give them great tools to work in, but you ultimately are going to need to have those things written down so that training, delegation, cross training, optimizations, measurements can happen.

And so that’s what we try to ultimately get the owners to get to the how, but first it needs to start with having a mindset shift change, and then seeing their world as, oh yeah, you know what? There are a lot of repeatable things. They are actually simple if I break them down and therefore, because they’re simple, because I break them down, I know that I could delegate some of those pieces.

Drew McLellan:

One of the things that I talked to agency owners about a lot is they get to a certain size and they realize that everybody in a certain department has their own way of doing something. So it’s Babette’s way and Mary’s way, and Bob’s way as opposed to the agency’s way. And so to your point, when Babette leaves and takes all of that tribal knowledge with her, now it has to all be reinvented.

Josh Fonger:

Yup. Totally. I mean, it happens in every company and people don’t like to think about someone leaving, but it’s inevitable. I mean, every couple of years, people are going to leave sometimes sooner. So you want to extract the best practices as you’re going along instead of just waiting for the right time to do it. You just need to start doing it, knowing it’s going to happen. And I think usually where people get stuck is they think this is going to be a long time and I don’t want to document, that’s perfect, and so therefore I just won’t get started. As opposed to, if you’re going to have a sales call with somebody, why don’t you take notes as you do that sales call, make a little diary of how you’re doing it.

And then the next time you do a sales call with someone else and they take some notes, and then the next time someone new does it, so then you’re building those best practices in an organic way. And then eventually you’re going to formalize it and figure out the best way to do it. Instead of just seeing it as a project that you’re just going to do some day as opposed to just getting started.

Drew McLellan:

I can remember, gosh, this was probably 20 years ago. So I own an agency and I also run AMI. So in my agency, probably 20 years ago I read, of course like everyone has the E-Myth by Michael Gerber. And I was like, all gung-ho, we were going to systemize everything. And so I assigned the development of systems to someone on my team. And so like three weeks later they brought me this binder of systems and they had like documented ridiculous things like how to make coffee, right? And I was just like, I don’t think that’s what we’re talking about.

So I think one of the places where agencies get stuck is its overwhelming. When they think about everything they do that, the idea of documenting in air quotes, all of it seems over … So how do I decide what’s worthy of documenting or in what order I begin to create systems?

Josh Fonger:

That’s a great way to do it. And the order in which it actually happens might not always make the most logical sense on paper. So case in point is usually people will start documenting based on things they’re doing right now because they’re doing it. So it’s not like I need to stop what I’m doing and go document something different. I’m putting an event on next week, we should probably document it as we’re doing it, that just makes logical sense.

It might not be the place where we’re bleeding the most, it might not be the biggest opportunity, but it’s just something we’re doing, so that makes sense to do that. Also, for those people who are in smaller businesses right now, it’s typically things that you, as the owner are doing. So those day-to-day things that you’re doing, you know you shouldn’t be doing, you should be doing high level tasks, more CEO level things. And so those are things that are not necessarily are going wrong. They’re not necessarily things that are going to bring in the most money, but they’re just freeing up the owners’ time is always a smart thing to do. And so we’ll start with those.

And beyond that, it’s going to be the elements in your company that are done the most often. Those also should be documented. So you might say, hey, let’s do this thing that we do once a month that’s really important. And it might be, but if you’re doing 50 sales calls a day, you probably want to document that because it’s probably 10, 15, 20% improvement you could make on that if you really got down to the details and that’s going to have your biggest benefit quickest. And it’s funny because Sam does have, how to make coffee as a procedure in his business, right?

Drew McLellan:

Yeah.

Josh Fonger:

But they’ve been doing this for 15 years now, and so it wasn’t the first one. It probably wasn’t even in the first 150, they did. But also what I would say is the level of detail they did for that one was pretty small. They basically, they have a coffee maker. They googled it and found how to make coffee based on the coffee maker, and hit print, and they just taped it to the wall. So it took them seven minutes to make that procedure. So you also need to invest the right amount of time on the actual procedure you’re doing. So some of them getting it perfect really matters because working with this nuclear power plant, repair company and getting it perfect matter.

Drew McLellan:

Right, much more than the coffee, yeah.

Josh Fonger:

The other ones, not so much, right? You don’t have to stress yourself out by and getting those best practices in place. You’re always going to find innovations. You’re always going to find automations. You’re always going to find improvements that you didn’t see because you never really took just a few moments to focus in on it and write it down. And I mean the other key benefit is, other folks in your company will get a chance to look at it and say, “Oh, I didn’t know you were doing it that way. That’s an easier way to do it. Didn’t you know about this thing over here. And when you pass it over to me, I wish you would add this thing. It takes like four hours of work because you don’t.” And they’re like, “Oh yeah, that’ll take me two minutes to add this thing in there.” And all of these ideas will come to the surface because there’s a place for the ideas to go. Previously the ideas were just in people’s heads and they weren’t tangible. So it’s-

Drew McLellan:

And they probably were often unspoken.

Josh Fonger:

Well, exactly. And everyone just, well, I thought that they knew and I assumed they knew and they assumed this and it works. I mean, you can kind of grow, and see why my family businesses have done historically well, is that there everyone had the sixth sense. They all knew each other. They were in the same family. And so they were able to just because of the way they grew up and the way they work together, they can kind of fudge many of those things and loyalty and hard work plus that allow them to grow to a certain size. But if you don’t have that and you actually do want to grow beyond looking at the business, you have to get things documented along the way.

Drew McLellan:

Is there a size of company that you bump into that you’re like, okay, you can get by without systems until you’re about X people. And then the tribal knowledge method really starts to fail you and it becomes a barrier to growth.

Josh Fonger:

I would say and it depends on the industry of course, and your profit margins and stuff. But if you’re doing a half million, at that point, you really have to start to get some things in place because at that size, if you have three or four people that you’re working with pretty regularly, and they all are experts in what they do and you, as the owner are close enough to it, where nothing really goes off the rails. And you’re still figuring out your business model, you’re still figuring out what people want to buy. You’re still figuring a lot of core elements of your business. And so you don’t see documenting the systems as the key to your success.

But I will tell you that I’ve worked with a number of agencies under that size, some even startups, and they just started with this from day one, right? They knew where they wanted to go. And a big part of it was their mindset shift to see how they saw the business differently. And they just started with the idea of building a company that’s systematic, right? Because agencies, there’s one I was talking to yesterday, not a client yet. They’re a marketing, sales, design agency, whatever, they’re into all sorts of different things.

And I said, “Your core thing, it sounds like is putting on online events for people. You get everyone to the place, you put on the event. You do the stuff afterwards, you market it, you advertise it, just this event thing. Like that is a closed loop repeatable system that, there’s a lot of moving parts and a lot of people involved. But if you could just document how that operates and maybe there’s A event, B event, C event, now you can start to productize your service and then you can start to scale this service and actually not being as a nightmare.”

Because I put on events, you put on events, it can be a nightmare if you don’t have things dialed in, if you’re like, we’ll do all events differently. You don’t want to do that. You want to get into routine with it. And so that was the shift for her. And she was doing $150,000 a year, was a shift in strategy and mindset. Not necessarily let’s write a bunch of this stuff down, it was that, that she needed to get.

Drew McLellan:

I think this would be so much easier if we had all started with it in the beginning. I mean, if you had outlined how, and then you just up … that would have been easier. I think the challenge is to your point earlier, it feels overwhelming. And so how do I jump in and start? So I want to ask you about that. Like how do I do this and what is the agency owners’ role in it? I’m going to ask you about that. But first let’s take just a