Episode 362

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Are you making yourself irrelevant in your agency? We’ve been talking a lot lately about how important it is to have systems and processes in place so you can work less and get back to doing the parts of agency ownership that you love. But if you or anyone in your agency becomes irreplaceable, you will be stuck in your 60-80 hour work weeks.

This week, our guest Jesse Gilmore gives us a thorough breakdown of how to identify single points of failure in an agency—Hint: it’s often the agency owner—and how we can create a better flow that helps everyone work together more successfully. When we give our employees the tools they need to work effectively and delegate with other team members, our whole workflow improves no matter who’s out of the office that week.

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.
single points of failure

What You Will Learn in This Episode:

  • How to identify single points of failure in your agency
  • If you’re the single point of failure, how do you make yourself more irrelevant?
  • Why removing single points of failure is vital for scaling your business
  • How to create systems and processes that aren’t cookie-cutter solutions
  • How to carve out time in your already busy schedule to put systems in place
  • What is the difference between a bottleneck and a single point of failure?
  • Timing out changes to your agency’s systems and processes
  • How removing single points of failure can improve agency culture

“A single point of failure is when if someone is gone, then the business literally can't either do business or do it at the same quality.” Jesse Gilmore Click To Tweet “I wanted to teach the world what I learned so that other people didn't have to go through what I went through.” Jesse Gilmore Click To Tweet “I started to see how impactful it can be when you create predictability in an agency, focus on client results, and make that predictable. It's like you become this diamond in the rough.” Jesse Gilmore Click To Tweet “You want to create a culture where people are advancing; they're innovative. They use the processes and the systems because they know they are a winning team.” Jesse Gilmore Click To Tweet “It's really enabling standardization and process to allow you as an entrepreneur to live your vision. The vision that you had at the beginning of your agency.” Jesse Gilmore Click To Tweet

Ways to contact Jesse:

Resources:

Speaker 1:

If you’re going to take the risk of running an agency, shouldn’t you get the benefits too? Welcome to Agency Management Institute’s Build A Better Agency Podcast, presented by White Label IQ. Tune in every week for insights on how small to mid-size agencies are surviving and thriving in today’s market. We’ll show you how to make more money and keep more of what you make. We want to help you build an agency that is sustainable, scalable and, if you want, down the road sellable. With 25 plus years of experience as both an agency owner and agency consultant, please welcome your host, Drew McLellan.

Drew:

Hey, everybody. Drew McLellan here from Agency Management Institute. Thanks for joining us again for another episode of Build A Better Agency. We are going to be talking today with an expert in how to avoid single points of failure inside the agency. So different than a bottleneck, a single point of failure, oftentimes, by the way, is us, but it is really about looking at where is one person or one resource a risk for you in terms of what happens if they go away, what happens if they get hit by a bus, what happens if they get hired, what happens if they just can’t sustain the energy level or the output level anymore. So going to be an interesting conversation.

Before I tell you a little bit more about our guest, I want to remind you about a tool we haven’t talked about for a while. So last year, we put together a report card so agencies could measure how they’re doing in terms of equity and diversity and inclusion. So if you would like to look at that report card and see how the agency’s doing, and many agencies are using it quarterly or semi-annually to check their progress, you can go to agencymanagementinstitute.com/racialequity. Again, agencymanagementinstitute.com/racialequity, and you can download that report card. You can modify it to serve you differently or better, but it’s just a free resource that we would like to make sure that you know is available to you. All right.

So let me tell you a little bit about Jesse Gilmore. Jesse, interestingly, entrepreneur, had owned several businesses, and was, by his own admission, the single point of failure in some of his businesses but didn’t realize it at the time, decided to go back and get some more education. When he did, he learned about single points of failure, and through an internship and other things, he realized what a critical element of business this was.

Now, he has a company where all he does is help agencies and other businesses identify their single points of failure and then systemize or process their way out of that problem. So really interesting guy, really knowledgeable, and I think you’re going to really love the conversation. So let’s get to it.

Jesse, welcome to the podcast. Thanks for joining us.

Jesse:

Awesome. Thanks, Drew, for having me.

Drew:

You bet. Tell everybody a little bit about your background and how you have come to be somebody who’s thinking about this idea of a single point of failure.

Jesse:

Sure. Absolutely. So I became an entrepreneur in my 20s. I actually started my first business with my brother when I was 20 years old. It had just come from doing door-to-door sales, where I was talking with business owners all the time. I was always asking them, I’m like, “How do you make a successful business?” and whatever their answers were, I started cataloging different notes. So I thought that that was what it took for me to run my own successful company.

So me and my brother, we applied that knowledge and we found that as the business started becoming more successful and we started becoming more popular, our hours started to increase. So what ended up happening was is that it took us a long time to get a proof of concept, finding clients for your service, being able to have a predictable result driven from that to the point where in the five years at the end, we were becoming more successful, hours are too much, working 60, 80 hour weeks for years, and we just burnt out. We actually dissolved the business at the time where it was actually the most successful, and didn’t-

Drew:

Huh.

Jesse:

Yeah, and so-

Drew:

I think the whole idea of the 60 to 80 hours and the burnout, I’m sure a lot of listeners are feeling that pain with you. Yeah, yeah.

Jesse:

Yeah. A lot of clients, before we were start working together, that’s a lot of times what the bigger problem, but we’ll tackle that in a little bit. I didn’t really understand what was wrong, so I started another business, and another, and within those three businesses, it was the same exact thing. I was constantly trying to apply what I had learned before, but if I didn’t work, work didn’t get done. So I felt constantly a slave to the business. So I ended up sucking up my ego, going back to school, and I started working as an intern for a four billion dollar global corporation. I started working in HR, and very quickly, they realized I wasn’t the typical intern.

Drew:

I’m sure.

Jesse:

They were like, “Here’s three months worth of work,” and I was like, “I got it done in three weeks,” and they’re like, “Ah, okay.” So I started working under the VP of HR and she told me … Judy was so great. She was like, “I’m going to give you a project you can’t complete in such a short time,” and I was like, “Okay.”

She’s like, “We have a problem,” and this will all relate to single points of failure but, “We have a problem. We have a whole bunch of people that are going to retire, that have tribal knowledge in their heads of how to make the metals that go in space stations.”

So the company basically had SpaceX as a client. What the goal was is to systematically remove all single points of failure in the business through training, operation systems, creating integrated business management systems. So that way, it didn’t really matter who was doing the work. The work was able to get done so that way they could make that.

So I was on this mission. My sole mission in corporate America for about six years was working with VPs and this chief human resources officer of this four billion dollar global corporation to basically build a system to take all this tribal knowledge from the people that it took them 25 years to learn and make it to where someone could learn that in a much shorter period of time.

So during that time, I learned a lot about business systems, but actually, the big aha moment was when it finally got implemented and then one of the facilities got sold and I was like, “Oh, this makes it actually profitable, and this is how acquisitions work,” and all that kind of stuff. From that I go, “Oh, my gosh. It was the thing that was missing. I was the single point of failure in my own businesses. As I took on more clients or became more successful, the hours increased and it was like this rat maze.”

Drew:

After a while, you just can’t, it’s not sustainable.

Jesse:

Yeah, and it’s like everybody’s human. If you’re doing the same thing over and over and over again without progression in your own company, then burnout, but also, you become complacent, you don’t believe in the vision that you originally had when you first started the agency, right?

Drew:

Yup.

Jesse:

You got to have some type of progress and it’s a progress and develop in your own self. So towards the end, I actually was part of that facility that got sold. So during the acquisition, I saw how change management works in organization, the integration between two different systems now and how to build it into the new system. From that, I realized that I wasn’t fulfilled and I had learned enough from it just like the door-to-door sales. I learned enough that I was ready for something new.

So I started consulting and I didn’t really have a focus on it other than I knew this business systems and predictability was my new thing. I wanted to teach the world about what I learned so that other people didn’t have to go through what I went through, which is part of the reason why I’m actually really excited about this conversation.

So when I started Niche in Control, so that’s the company that I have, it’s my fourth business, Niche in Control originally just started as a consulting business, really focused on business systems. One of my first clients was a business that was a SaaS company, and they had a single point of failure where their vendor, so the person that actually did everything when it came to development and all that kind of stuff, was their single point of failure, and so they couldn’t actually get out of the contract. As the vendor started raising their prices, they were losing profit margins. They didn’t know how do that.

So I actually stumbled upon marketing agencies through a mastermind I was a part of, and it was an accountability partner and I was like, “Oh, you’re digital marketing and I’m systems, and you need digital marketing.” So we started working together and I started to actually see how impactful it can be when you create predictability in an agency and really focusing on client results and making that really predictable. It’s like you become this diamond in the rough and it’s like, “Holy crap!”

One of my first clients that was a marketing agency went from 15,000 per month to over 100,000 per month in nine months, and then it became monthly reoccurring on the 12th month. It’s all based around the things that I’m just about to describe with single points of failure, removing them, setting up predictability within the whole business, and really making it to where that marketing agency owner is no longer the six-figure hustler, and they’re more like a seven-figure CEO.

Drew:

Yeah. So as I’m listening to you talk, I’m hearing the listeners, the agency owners in my head saying, “That’s great, but our world is every client’s unique. They all want something different. We don’t do cookie cutter. So how in the world can we create that kind of systemization or process?”

Jesse:

Yeah. So in the agency world, there are two main schools of thought you have. Either you’re a complete productized agency, where you’re serving the average of the agencies that are out there, not really solving a specific need, and then there’s the customization, where you are bending over backwards for the client, doing everything for them, and everything is new. You’re reinventing the wheel.

When I realized these two schools of thought, they’re not really seeing that there’s 75% of what you do for a client that’s the same. It’s the same for every client on how you maybe onboard, but there’s 25% that is custom to the client. The key is to make that 75% as systematic as humanly possible, as predictable, efficient as humanly possible, and then that actually frees you up to focus on the 25% that’s custom to the client. When you do this, you’re creating what I call scalable customization, where you’re not only getting the speed and efficiency, but you’re also giving the client exactly what they’re looking for.

Drew:

Okay. So let’s talk about what gets in the way of creating this easier, better way to do the work.

Jesse:

Honestly, it starts off with time. People always think that they don’t have enough time to do something. The key is us you must carve out time and make this a priority. So that’s the first step. The second step is really just understanding that there is a systematic way of removing these single points of failure. I think it’s really the third one is based around buy-in, especially if you’re a larger organization. People get resistant to the idea that they’re not going to spend as much time working on the client’s work and they’re going to focus more on systems and processes and things like that, which if you’re looking at a utilization standpoint, yeah, the utilization might dip a bit, which is always nerve-wracking for anybody, but the key is is to put control limits on it and do it more at a continual pace, not really focus so much on the destination of getting every single standard in place, which is impossible, and really focusing on really getting just a pace at which standards are made. We’ll talk a little bit about strategy when we get into a single points of failure, but yeah.

Drew:

Yeah. So let’s define that. So what is a single point of failure and how is it different than a bottleneck?

Jesse:

Yeah, absolutely. So the easiest way to describe and understand the difference between a bottleneck and a single point of failure is to first off understand the value stream. For anybody who’s never heard of value stream described before, the easiest way to understand this is view it as a picture, and it starts off with a faucet, and the faucet turns on, and the water that comes through the faucet is leads. The leads go through different pipes through this journey of going from a lead to a prospect, to a client, to completing the client agreement.

Throughout this faucet and this journey, the water is going to fall through four different containers. First container is client attraction, otherwise known as prospects conversion to an appointment. The second one would be a client conversion, which is appointments into clients. Third one would be client fulfillment, so actually completing that client agreement, and the fourth one would be customer support and account management. On the other side of this whole value stream is what’s called throughput. For anybody who’s in operations, they know it’s the continuous flow of value through that system.

So a bottleneck is really where there is some type of constraint that’s holding that flow of value from becoming optimized. So you might have it to where the leads are coming in, you have no problem getting appointments, you have no problem making those appointments into clients, but you might have a problem when it comes to fulfillment. Now, you you know you have a problem or a bottleneck when it comes to fulfillment if the timeframes that you’re projecting are off or the cost structure is off or the client-

Drew:

Yeah, you’re not delivering on time or on budget.

Jesse:

Yeah, and then if you have a bottleneck in client fulfillment, one of the things that I see as a big trap is, usually, agencies will just throw account managers at it. So they’ll go, “Oh, I’m just going to hire more account managers,” when they’re not actually fixing the root cause, which is streamlining client fulfillment. So that is a bottleneck or just a constraint of the flow of value.

Now, in comparison, the single point of failure, let’s just take, for example, that there’s no bottleneck. So it’s a continual flow of value, everybody in the business is doing what they need to, it’s normal, but when a single point of failure is there, it’s when an individual could be a founder, could be an employee, could be a contractor or a vendor, and if they’re absent from the business, the business can no longer function as it has or produce the same quality of value to the clients. So a single point of failure is where if someone is gone, then the business literally can’t either do business or do it at the same quality.

Now, the single points of failure are pretty much in every single business up to eight figures. If you’re in a six-figure business and you’re trying to get to seven, the single point of failure removal is actually you as the founder. So that’s your journey to removing you as a single point of failure. If you’re a seven-figure agency going to an eight figure agency, you know that the game that you’re playing is not necessarily client acquisition, it’s talent acquisition.

The way to stand out as an agency and grow from seven figures to eight figures is based around getting your whole business to become this business system and removing single points of failure. So it might be your employees. It might be contractors, getting rid of contractors that are single points of failure so you can bring them in-house for employee. From doing that, your biggest challenge as a seven-figure agency is buy-in. So you got to get people to buy into it.

I’ll talk about a strategy in a little bit that’ll actually help those seven-figure agencies to be able to prioritize standardization and do it in a way that actually allows your team to build teams and process to build processes, which is ultimately one of the greatest things that as an employee working in a company, if you can leave your fingerprint on the business and be able to make a difference, that’s how you do it. You’re actually empowering your people by doing so. So I get really passionate about it, Drew.

Drew:

Yeah. Well, it all sounds great until, and again, I’m channeling the listeners, until I think about, “Oh, my God, how do I actually do that?” So first of all, how do you identify that you have a single point of failure? Is there a process or a thought process or a way to look at the business as objectively as possible when you’re inside of it to see that you actually have one of these?

Jesse:

Yeah, absolutely. There’s a series of questions that I actually do in my live webinars because they are an idea where if you can answer these questions, if you’re wondering about a single point of failure or bottlenecks in your business, single point of failure, so the first question for you is if you took a two to four-week vacation from your business, would it sustain or grow without you? So always start internal. Always start with you first, right?

Drew:

Yeah, right.

Jesse:

Then the second one would be if one of your vendors, so I’m sure that everybody that’s in the audience knows the difference between a vendor and a contractor. A vendor is where they own the process, and they’re basically doing it as a part of you or a contractor follows your process. So when I use vendor, I’m talking about strategic partners, but if one of your vendors raised their prices, and you wanted to leave, could you do so without the customer being impacted? So that’s the vendor one. Then for an employee or contractor, if one of your top employees or contractors left, would your quality of service stay the same in the eyes of your client or customer?

Drew:

Yeah. Good questions.

Jesse:

Yeah. So those would be your identifying factor. Okay? Now, I found the single point of failure. Let’s just say it’s me as the business owner.

Drew:

How often is it the owner?

Jesse:

I would say nine times out of 10, unless you research business systems and you’re a geek like me about it. Yeah. It’s something that’s just very apparent until you hit about eight figures. Again, when you hit eight figures-

Drew:

Sure, right. It’s different. Yeah.

Jesse:

… you’re developing years of leaders and it’s a different game. So if it was you, then the step-by-step process is just to start by regaining your time because you want to make it to where once you start doing this, you don’t want to stop and you want to make it at a pace that is like the marathon because as an entrepreneur, you’re on a marathon of entrepreneur. It’s not about the destination of achieving whatever. It’s about consistency.

So regaining your time, and the key is is to carve out eight to 10 hours per week for you to work on the business, which allows you to have the space in order for you to focus on this project. Now, I know what the audience is probably listening is probably thinking it’s the same thing that all my clients were thinking originally, “How am I going to carve out eight to 10 hours to work on the business? I’m already working 60, 80 hours.”

Drew:

Yeah, 60 hours, right.

Jesse:

Yeah. Then the key is is actually just to make it so it’s not added time. The way that you carve it out, there’s a four-step process. I have a whole YouTube channel that’s all based around really carving out this time because it’s t