How Bill Sterzenbach Hires and Trains New Employees to Deliver a Predictable & Desired Experience to Customers!

Owen: My guest today is Bill Sterzenbach and he’s the partner at Upward Brand Interactions. Bill welcome to the show.

Bill: Thanks for having me Owen.

Owen: This podcast is all about getting guests like who’ve been able to systematize your entire business so it runs successfully without you, come on here and share the story of how you’re able to do that. But before we even talk about the journey of how you’re able to systematize your business what are some mind blowing results that you now experience as a result of going through that process of systematizing and automating your business.

Bill: Actually from the business perspective one of the most substantial results that we’ve seen is in the on boarding and training of new members of the team. In the past we had to hire based on experience. Today we can hire based on the character and the personality, the drive that all the other intangible properties that we know. Because we have a process in place we can train people to do the work and hire people for the people themselves. That’s been pretty substantial for us.

Owen: That’s awesome. I really love that. You basically get people who are the right people who are the right fit under the bus and you know that there’s a system that you can apply them to, and they will hit the ground running real quick as opposed to hiring someone without their experience but then they’re not the right fit. And you’re struggling to figure out how can we get this person out.

Bill: Exactly.

Owen: How would you say the company has been transformed as a result of systematizing your business?

Bill: The significant ways is somewhat related to that. Our customer also gets a really smooth and predictable experience. Because we have a step wise approach based on the fact that our services have been built around the concept of process, our customers are not being surprised. One of the examples I share with people a lot is if you’re [Unintelligible 00:02:08] about a home from a good realtor or a bad realtor you can certainly tell the difference.

Owen: How?

Bill: Anyone who has a predictable process in place knows to ask you for certain pieces of information at the very beginning of the process rather than continually, seemingly being surprised like things you’re sharing. For example when we bought a piece of property from a not so experienced realtor at one point they would tell us, “You need these documents. Bring them to this meeting and sign them.” We’ve prepared the documents and we’d bring them and say, “Based on what I’ve seen here it looks like you’re going to do this other document as well.” And we could just tell that they hadn’t really figured out what the flow was [Unintelligible 00:02:54]. This guy has been in the business for 20 years but I just don’t think he ever sat down and took an objective look at his process. We don’t want to do that to our customers. We really value what process brings as far as really smooth roadway for our customer through the program so we can tell the customer at the very beginning of any campaign or project, “Here are all the things that we’re going to be asking you for. Here are the points that which we’ll need them. Here’s the format that we’ve been led to receive them in. All that stuff seems trivial in the context of this context of this conversation. But when you’re executing or managing a large project and you’re working with a third party company, like our best stories do with us. They need all the help they can get and just keeping things bummed up and smoothed.

Owen: Yeah. During the pre-interview you also mentioned something about the three-step management training process that you guys now have.

Bill: The kind of way we’ve approached management, we sort of fall into it. As we were developing these processes we learned that essentially the way we were bringing our managers into the realm of professional management was we were first giving them responsibility, then authority, then accountability. What we found was if there was a framework within which a manager could work, we could give them some responsibility. Depending on the level of management that they’re getting into there might be maybe 15 or 10 domains of responsibility where they just need to watch, and measure, and report. And then when they become comfortable with that level responsibility we give them more authority where they can make decisions about those domains where they have influence. As they’re exercising that authority and we’re seeing good judgment, and they’re feeling like they’re getting a feedback loop of I made a decision, I didn’t ask permission, the result was either good or bad. However, the overall outcome was positive, and then we start having accountability. But we found that when you power responsibility, authority, and accountability onto someone it’s really just too much too fast. So three step, responsibility, authority, accountability process really does bring folks in to professional management and a reasonable applicable ways.

Owen: It gives them training wheels, like riding a bicycle. When you’re young you have that training wheels. And then you gradually get to the point where you don’t need the training wheels and get right without someone behind you pushing you. I guess we might have to go into more details as to what responsibility, authority, and accountability is later on in the interview. I’ll keep the listeners tuned to that. I’ll make sure to come back to what the differences between the three of them are. How will you say your personal life has been transformed as a result of systematizing the business?

Bill: Initially when I embarked on building these processes and systems I honestly thought that there would be a point where I could relax and the business would just run itself. The business is running itself but I think as entrepreneurs there’s only a certain level of relaxation that we’ll ever have [Unintelligible 00:06:17]. Sometimes I say a goldfish will grow to fit the…

Owen: The space available…

Bill: Yeah. And I think that as entrepreneurs and as people probably we tend to find the stress that we need to keep ourselves at our comfortable, stressed, thermostat levels. I don’t feel less stressed overall but I do feel less emergencies. I worry about things that are longer-term, bigger picture, instead of worry. But I’m worrying about much smarter, sort of organized things today than I was worrying about then, then I was worried about real day-to-day, nitty-gritty timelines and deliverables. Today I worry about how repeatable and teachable is this process, what is our recruitment program looking like, and how’s it working, and is it running on its own. I worry about different things today.

Owen: I think you also mentioned how back in the day before you systematized the business you couldn’t take a vacation without solving problems. You couldn’t step away. Talk about that.

Bill: What was happening was I had put my people on a position where they were dependent upon me to help them solve their problems. I hadn’t given them parameters, I hadn’t given them guidelines, and I hadn’t given them steps. So if they ran into an issue they had to call me. That was on me. What I found was once I put systems in place where the employees can make decisions within a framework that they understood I didn’t need to put out fires all the time. They didn’t want me putting out their fires. They really want me to put them out themselves, I just hadn’t given them the tool set to do that with.

Owen: Since now you have systems that allow the business to run without you, I’m curious, what’s been the longest time you’ve been away from it?

Bill: I think I’ve made it 2 weeks without really poking my nose in. That’s just me personally. I don’t think I could go much longer than that without just simply [Unintelligible 00:08:20]. My last vacation interestingly enough was just a few weeks ago, and one of the guys said, “Three days without driving anybody crazy.”

Owen: It’s more of a habit thing that you just want to come back, not necessarily that it cannot run without you. You need to wean yourself out of that habit.

Bill: Yeah. My personal satisfaction because as you know entrepreneurs, their business is their hobby. It’s everything. It’s hard to pull yourself out but I don’t need to do anything. If I stay out, I jokingly say the business would probably run much smoother if I could just keep my nose on a bit. So two weeks to answer your question is the longest I’ve gone where I haven’t been needed by the team. I know I could’ve stayed away another month and maybe they have been fine, I just happen to come back after.

Owen: Yeah, you have to test it. Just so the listener understands and get some context as to what your business and what you guys do, what exactly does your company do and what big pain or problem do you solve for your customers?

Bill: We’re a full service marketing agency. That means we essentially solve problems or create opportunities for our customers using five disciplines of search marketing or SEO, some people call it; content marketing, some people might call it social media; brand and design, which would be like creating the logos, creating names for companies, things like that; research and strategy, and that will be like doing focus groups and market research; and web development and app development. We use those five tools to either create opportunities, engagements, or solve problems for our customers.

Owen: Awesome. How many full-time employees you guys have?

Bill: About 45, sometimes  my partner and I count ourselves, sometimes we don’t, but it’s around 45.

Owen: I think you also mentioned you guys have a lot of contractors and freelancers as well. Talk about that.

Bill: Sure. We have probably 20 folks that we’ll turn to for really specialized things, like video compositing or overflow-type activities.

Owen: Is the company profitable? What was last year’s annual revenue and what do you expect to do this year?

Bill: We did about five and a half million last year. We’ll probably do a bit over 6 million this year. The company’s profitable. We did a pretty significant acquisition last year. That stretched us a little bit but we learned from it, we got better. We’re over it now and we’ve fully integrated the other agency into ours and it’s been a wonderful thing. We traditionally see about 15%-30% annual growth, usually in the 20% range. We’ve always been a growing company.

Owen: What you said just now is actually a testament to having systems because you cannot integrate another company into yours if yours has so much chaos. It’s just going to be chaos over chaos. I just want to let the listeners know that. That is awesome. That’s just testament of having systems. Now, let’s go back to when the business was not systematized so that the listener can understand where you came from. Take us back to when the business was not systematized and automated like it is now. What was wrong with it?

Bill: The biggest thing that our customers felt was there was just a lack of continuity and predictability. We found ourselves constantly surprising the customer. Today we even say never surprise a customer. We used to say only pleasant surprises but we found that customers are really just [Unintelligible 00:11:56] surprises even for the ones are [Unintelligible 00:11:58] stuff. We never want to surprise the customer, we want to set realistic goals, expectations, and steps. In the past we really lack that predictability and our customers felt it. And so that was a big issue.

Owen: I think you also mentioned something about even when you had to let go of an employee or bring on somebody new the customer also felt that pain that you guys are going through.

Bill: That’s absolutely right. The customer was subsidizing the cost of on boarding new associates essentially. The associate was learning how to do the work while working on the customers work, they may have been experienced in the area but they were learning how to do it with that customer. The customer is essentially feeling that burden. We found that once we had these processes and systems in place our customers were no longer feeling that on-boarding pain. The on-boarding was just so smooth that they learned a new name and a new phone number, and essentially they’re back up and running again with their new partner over here.

Owen: You also mentioned about how before you guys made a transformation, talk about how much time you’re working day-to-day back then?

Bill: I was working a minimum of 70 hours a week. I was doing management. I was in the day-to-day. Seventy hours would’ve been probably like a light week on a couple of those years. But the issue was I was trying to work on the business. I was working in the business. Of course I was working for the business because I actually filling the work. And so my understanding of where we needed to be even then I knew something needed to happen but my understanding of how far from the mark I really was and the way I was running the business was pretty rudimentary.

Owen: Back then when this whole thing was happening and the business was not systematized what was the lowest point and describe how bad it got. I think you mentioned something about when you were on a vacation. Talk about that story.

Bill: Yeah, the one that sticks out, this is the one that a customer really felt, those are the ones that really get you. Because it’s one thing for you and the business to feel some pain but when it transfers to the customers it’s double or triple as bad. We were on a vacation, the kids were small at the time. I just remember sitting at a restaurant in a New York water park helping the tech team get some service back online. And I could remember how bad the guys felt that they had me in that call. I thought to myself it’s not right for me to put them in a position where they have to call me and they feel guilty calling me on my vacation. So not only were they struggling to solve the problem because they need to pull me in but they’re also feeling bad about pulling me in just [Unintelligible 00:15:03]. And it was doubly bad for me. I remember telling my wife on the way home from that vacation. I said that is never going to happen again. It probably happened three or more times but in the real world never again is probably three or more times.

Owen: Speaking of the breaking point, do you remember when you realized that now I see what’s going on with my business, now I have to change this business, make sure that it’s systematized and it can run without me. What happened then? Do you remember that?

Bill: Yes. Are you really referring to what was my response when I decided something needed to change?

Owen: Yes, because we’ve told the listener how bad you felt with the vacation stuff, but the earlier response that you made to change stuff around.

Bill: The first thing I did was I started searching for business process. What is business process? I knew that’s what I was missing, but I had no idea how to start. I stumbled into a book called The E-Myth, which is a great book by the way. Everybody’s going to have a different experience but it gave me some fundamental things to start doing. I sort of started walking through the processes outlined in that book initially. I went on to engage some companies and things like that, but initially it was just stepping through some very fundamental, getting your business working in a process framework steps.

Owen: You also mentioned during the pre-interview that you engaged a coaching company, what was that?

Bill: The first company that I engaged with was E-Myth International I believe is what they’re called. They were founded by I believe his name was Michael Gerber, the guy who wrote the book. They had a pretty neat process then where they assigned a coach to you probably like a lot of the companies that do this today. The coach held you accountable for these weekly meetings, there were assignments. It was a very structured process target approach to learning process. It was extremely helpful in those early years because I honestly didn’t even know how to start.

Owen: Let’s go right into, what was the very first step you took to systematize the business after those initial E-Myth book reading and getting started with a coach. I think you mentioned the first thing you did was tracking of time.

Bill: That’s right. My coach challenged me to track my time. I think it was two weeks but he set it down to at least a quarter hour increments. I grabbed a mobile time-tracking app and I pretty diligently tracked my time. He said, don’t look at the data, don’t worry about it. Do it for two weeks and we’ll take a look at it together. Of course, I was completely shocked at where I was spending my time. I would’ve never in a million years predicted. One of the things I learned was we’re about as good at predicting how we’re going to spend our time as we are at assessing how we spent over time. If you look back over the previous two weeks and you try and put together where you spent your time from your memory, you’re going to think that the things that were miserable took more time than the things that weren’t, you’re going to have this completely distorted picture. If you actually track your time you’ll get an accurate picture of how you spent your time. That was the shocking thing. I really thought back over how I was spending my time and I thought I had a good picture. I wasn’t even close.

Owen: What did you find when you actually tracked the data?

Bill: I learned that I was spending an insane amount of time on small, technical things that could pretty easily be handed off to someone. Some of those things could be handed off to people who are already in my organization. I was just hanging on to it because I felt… I think everyone said this, it would take me longer to teach this than it would to just do it. But the problem is you just do it a thousand times. Just stop and teach the damn thing to somebody. And so that was the next thing I did is I started identifying all that list of activities which could I most easily hand off just to buy me 4 hours a week was my goal. I said if I can just buy 4 hours a week that I can partition up, turn off the email, turn off the phone, and sit and think about the business. I feel like I’ve gotten somewhere. And those 4 hours where what begin to transform the business.

Owen: Now we’re talking about the second step you did. So you said first of all you started identifying people that could take the task away from you. But then you also mentioned during the pre-interview that it was a difficult process of letting go.

Bill: That’s right. Once I identified some things that I felt could be handed off. I did hand them off but I created very rudimentary outcomes processes, steps, and some very rudimentary systems to manage them with. I was immediately disappointed in how they were being executed. What I had to come to terms with was I wasn’t disappointed in the outcomes, I was disappointed in the methods. I just had to realize that people are not going to do things exactly how I do them but I am comfortable with setting objectives for my [Unintelligible 00:20:33]. What I had done early on was I said, “Here is what I want you to do.” I mentioned that. I said sort of rudimentary objectives and measurables for it but they were too rudimentary and I felt that by the way they were doing the work I felt that I couldn’t be comfortable that the outcome was going to be what I wanted it to be, but I hadn’t defined the outcome well enough to where I could let go. In that process of handing it off I began getting much better at defining outcomes and how we measure them and when we measure them, and with what tool we measure them. I was able to say, “I honestly don’t care how he or she does this as long as it’s good for the customer, the work is quality, it’s profitable, and we can measure the outcomes. And know where it’s not working at the end of each cycle of whatever work we’re doing.” That was immensely helpful.

Owen: Besides this, what other steps did you take to systematize the business at that point? Anything comes to mind?

Bill: Yeah, I identified people, we had to create processes to measure, systems to measure processes. We had to come up with a system a process for developing processes. One of the things that we did is we didn’t really have a system in place for how we were going to pull all this together. It’s really weird, I thought going in, but the most important thing would be identify small tasks that I could hand off. And that is really important. But in retrospect if I could’ve done something differently, and I know that you produce a process system. I’m not selling your system here but if I could do something differently I would’ve started with a framework to put all these stuff in. Because we were creating Word Docs, and Google Docs, and Google Sheets, and we have a project management system. We just have all these pieces floating everywhere. I would say it was an 8-month project.

Owen: Wow.

Bill: Pull all that back in and unify it into one system, and which I would’ve started by saying, “This is the system for good or ill. We’re going to put our stuff in here. I wish I would’ve built the system for managing the systems and processes first, or at least identify one. It wasn’t a huge failing but it was something that if I could start over and if I were advising someone else, I would say first come up with a basic framework you’re going to store it and share all these stuff.

Owen: Back then when you were actually creating these processes, how did you even prioritize what order of steps to take? How did you even decide which systems to create processes for and which ones to create processes next? I’m trying to understand the decision making factor.

Bill: Yeah. The way that they view processes a lot of folks don’t really understand processes. They believe processes are sort of this bureaucratic list of to-do’s that you must execute in order to be in compliance with whatever system has been put in place. We view process as sort of a bucket where we put all of our processed eggs that we can rummage through before we start with the next project and anticipate those mistakes and not make them again. We say process allows us to not make the same mistake twice. We’re going to make new mistakes. Those new mistakes we’re going to add to our process and we won’t make them again. We knew we had to start with the most complex types of works. So we started our process, that definition around website development just because there were just so many moving parts and so many anomalies, and just little loose threads everywhere. So we started on the process of building a website and we ultimately ended up creating something like a 400-point checklist of how a website should be built, how to anticipate everything. Who you work with, they anticipate. So we prioritized by the types of work that we do that are most prone to be impacted by unknowns and variables. At the time that happened to be website development.

Owen: I think we also mentioned during the pre-interview that it would’ve been better if it started with a process for changing and creating processes. Is that the thing where you said you should’ve worked on creating a framework from which you create processes? Is that what you meant?

Bill: That’s right. At the end of all of this we decided that we needed a process for creating and deleting processes, and updating processes if in the beginning we would’ve had. It sounds silly. It’s like process-ception, we have a process for creating processes. But you really do have to have a process in the system. One of the biggest issues that we found later was we were hanging on to processes that it outlived their usefulness. Because people didn’t have a reliable and accessible means through which to modify or remove a process. They knew process was important and they saw what it had done to transform our company. So they would work with them on a dysfunctional process just because they knew the process was good because we hadn’t given them a tool to address it. Once we put the process in place for improving or removing processes we started seeing, it was a massive effect. Probably in the first 60 days from putting that process in place we had revamped 4 or 5 significant processes and increase our efficiency in a lot of areas just because people needed that outlet.

Owen: I’m sure the listeners are wondering, you got the fact that you were documenting processes for your business but they’re wondering what tools did you use? How exactly did you even document these procedures and processes for your business and what tools did you use at that time?

Bill: Because we started with a technical product of ours which would be the website development, we went out and started evaluating project management tools. The one we landed on was a tool called Active Collab. It’s just a project management tool and it’s really purpose built for things like website development and app development what not. We used Active Collab as our templating system for processes. What was and is nice about this tool was we could put all the steps for the process in, all the checklists, the approvals, and what not, and we could create a template from it. Anytime a project manager wants to kick of a website they just say start a new project from this template and all the timing, the approvals, and the checklists, it’s all built out for them. That’s great for the projects and it worked well. It still works well for projects, it’s not so great for the overall business because the tool was never created to help manage business processes.

Owen: It’s a project management tool. Once the project is done it’s done. Go ahead.

Bill: What we did was found that it was sort of falling short once we realized that we were going to need to create a new business processes that weren’t strictly technical in nature. And so we moved on to a sort of mish-mash of tools like Google Drive, which we still use and it’s beneficial in its place. We pass around spreadsheets. We’re still nowhere near I think where we need to be from how we aggregate and share all these documentation, but we’re moving in the right direction.

Owen: That’s good to know. At that time when you were working on systematizing and automating the business, what books or mentors had the most influence on you and why?

Bill: E-Myth was a great first step for us. It really put us on the pathway. We went through that course and like anything else you think, “I need more. Now we’ve grown to this level we need more.” And we discovered an organization called Aileron, it’s in the Dayton, Ohio area and it was founded by a fellow named Clay Mathile who was the CEO of Iams pet foods forever. He went through all this stuff with Iams, and to hear his stories is really comforting as a business owner. Here’s a multi-billion company that started out pretty modestly. He went through all of these lessons, solved the problems, and grew his company…

Owen: I’m wondering what was their website…

Bill: It’s it Aileron.org. It’s a non-profit.

Owen: Okay. Go ahead.

Bill: Aileron was just really instrumental in the next big growth for our business. Clay’s books and his talks have just been really instrumental in helping us. I have to mention Napoleon Hill. I started reading Napoleon Hill when I was probably 19 years old. And just that double canon of books that he created sort of put your head in the right space. I would remiss in not bringing up Jim Collins, another excellent author. Good To Great was significant. I didn’t fully understand all of it when I read Napoleon. I went back and reread that book probably three times after we built all these systems and processes. And it really helped us fine tune some of it. One book is never going to change your business but you pick up a little from all of these places and pretty soon you’ll have a pretty good composite plan.

Owen: If we just keep on only talking about what you did to solve the problem without really talking about the challenges you faced while you were solving them, we’re not going to give a full picture. Let’s talk about some of these challenges. What will you say was the biggest challenge that you experienced when you initially tried to systematize the business and how did you solve them?

Bill: A big part is culture adoption and implementation. One small thing that we’ve learned since we started this 4 or 5 years ago was you can really… The business ourselves and the management team we have you can really only attack about 3 things a year and you have to be really choosy what you’re going after if you’re continually barraging your team with, “Here’s a new way that we’re doing this. Here’s a new way we’re doing that. Here’s the new process for this, Here’s how we’re measuring that. They sort of become fatigued by it. And so you have to sort of select what are the big things we’re going after this year. We found that adoption and implementation was solved by being really deliberate, really clear, picking the big battles, and really executing with a lot of focus. When we ruled out new processes we were as careful as our company our size could be to define it well, communicate it well, train it well, and then follow it well. And I think that was significant. The other piece is we are a company full of experts. And so culture is important because you can’t put people in a position where they feel like they’re being thrown on a hamster wheel. The have to be able to operate  with some autonomy of course, and all they’re really asking for is sort of a framework. I think it’s Jim [Unknown name 00:32:22] in one of his books where he says, “An airline pilot knows more about flying that jet than anyone else.” He has a framework within which he operates. It’s not because you don’t think he knows how to fly a plane, it’s because he need to know it or to predictable parameters within which he can operate. And within which those players around him are operating. And that’s what we found culturally when we communicated with our team, both through our words and through our actions that we’re not “telling” you how to do your job. We’re just creating an environment within which you can flourish. That helped a lot because we were preserving the creative culture while adopting the value of process.

Owen: I like that. What would you say was the second biggest challenge, I just want to remind you of what you said, something about improving processes and eliminating unneeded processes.

Bill: We touched on that a little bit earlier but essentially once your team embraces process they tend to embrace the process. And so they’re hanging on to a process long after it’s outlives its usefulness. One of the things we had to get good at was before we really embrace process there was no process. And so later once we’d adopt the process and everyone believed in it, they felt as if they were questioning the process in a way that was denigrating the act of working from the court. They have to get comfortable saying, “This process sucks.” And just point blank addressing when a process needed to be removed, nullified, or replaced. That was really hard, way harder than I thought it was going to be. I think putting in a process to manage process was a big help but also getting people comfortable with… Our team begin creating processes. When I stop being the guy who own… And our management team took ownership of it that put them in a position where a lot of them felt like I created this process. If I tear it down it’s going to seem like a failure. We really had to reinforce that tearing down things you’ve built, that is the nature of creation. You don’t build it, put it on a pedestal and never touch it again, tearing it down, modifying it, replacing it, that’s the true art of creativity especially with respect to process. So getting people comfortable with pointing out when processes weren’t working, modifying or removing them was tough. But once that… really take off and improve because you now you’ve got a team of 8 people all working hand in hand to approve the company. They’re not coming to me every time they want to change or remove something. It was pretty instrumental but it was also a big task to get into that mode.

Owen: You mentioned something about how you are to say that never change a process during a project and how that helped. Can you talk about that?

Bill: Yeah, the old saying that don’t change horses midstream. One of the things we found, and this was pretty early in  our adoption of the process. We found that a project would get underway, or a campaign and there would be frustrations with the process. A lot of times the desire was to just tweak the process on the spot. Make the pain go away, and keep the project moving. When we committed as a team to say even is a process is broken we’re going to see it through to the end of this task, campaign, or project and we’re going to review it or we’re going to make it better. Not changing the process to fit momentary issues is critical. You don’t doggedly fail at a program just to follow the process. But what you have to do is you have to say how can I resolve these issues within the framework I have to the best of my ability. And sure that I’m going to circle back and fix what’s wrong in the process today. What we found is we just covered a review process. I’m sure lots of companies have something like this but we say that when there’s been a major failing in process or in a system, wait a few business days until after the issue to prevail, and schedule a review to talk about what failed or what was missing. We always find that when processes fail something is just missing. And so we schedule this review process and we have a template for a review and you fill it out, you put in [Unintelligible 00:37:01] parties and set it up. And we found that to be instrumental. That’s just not… Don’t monkey with the process in the midst of the word. Get through it. Circle back. Identify what was broken objectively, and change the process, the next time through you’ll get better.

Owen: …any other challenges besides the one you spoken about so far?

Bill: Yeah. There are a lot. I cannot think of what big one…

Owen: Just one big one in addition and if none comes to mind then we can move forward with the questions.

Bill: One thing I would say was significant. I think companies that are in the professional services are will feel this too. There was a real fear within the team that the process would slow things down for the customer. And we wouldn’t have that free fitness, if that’s a word. And it certainly will if you’re approaching process from the wrong perspective, or this is a checklist or it’s just this thing that writing down. But the whole ideal process isn’t about that, it’s about making experience better for the customer. And so we had to really take care to ensure that the processes weren’t actually slowing us down or harming the quality of the creativity of the work. I think that was a big struggle. And we have a saying here where we say you should complicate the process to the point of the possibility. Only then will all the solutions appear. And what we found was that when we’re initially creating process we would look at some of the complexities and some of the potential obstacles that the process might introduce or wouldn’t solve. And we integrate those other process but then we wouldn’t dig much deeper. It was almost like orally we’d look at the process and we’d say, “Yes, it fits all of these cases. Let’s not look at any more otherwise we’re not going to be able to implement the process.” And we weren’t really digging trying to find areas where the process wouldn’t work. And what we learned later when we started digging, so then we went through a period where we started digging and we started to feel like, “My god, we’ll never create a process that works.” Because we’re finding all of these such cases and issues that we realized that if you really dig and you drug every single, little squiggly thing out from under every rock eventually almost like magic an elegant solution comes forward. And it was a solution you would never have found if you hadn’t complicated the process to the point of almost impossibility. I know that sounds a little…

Owen: It sounds counter-intuitive a little bit.

Bill: Yeah. Once you experience it it’s a pretty magical thing. But you can’t stop three quarters of the way through developing a process you really do have to look at all the angles, all the issues that it might bring in. As you’re trying to solve all those competing issues an elegant solution always appears.

Owen: Given all the challenges that you mentioned earlier why did you stay committed to the goal of systematizing the business?

Bill: Because we really didn’t have anywhere else to go. You people say all the time, “How did you make it through that tough time? They’ll always say what were my alternatives. We ran the business for many years without processes. Everyone has processes they just don’t admit it. We knew that we were using processes to run the business before, they were just terrible, undocumented, unteachable, and not repeatable. So we knew that our only alternative was to go back to that. We knew nothing good lie in that direction. And so we knew we had to just completely commit and just power through the pain of the development of the processes.

Owen: At what point in time did you feel like the entire business was systematized and it could run without you successfully?

Bill: There are always going to be little areas where you feel like you could be better systematized. I struggle to say we are 100% perfectly systematized. I would say in the last 10 months we’ve seen the most, and it’s been mostly in having the right… We dropped the last director in one of our departments. About a year ago when she went into position it kind of opened the door for all the teams to begin collaborating at the director level. We really started seeing things clicking there because then they started comparing and unifying processes and it got really terrifying for, my partner and I were the owners at the time but we started really seeing the management team or the business sort of takeoff on its own at that point. I would say in the last year we’ve really seen it click.

Owen: Awesome. Just so the listener has an idea as to the different parts of the business, imagine the business like a conveyor belt. On one end is a customer who has a marketing challenge that needs to be met on one end of the conveyor belt. And on the other end of the conveyor belt is that same customer now has gone through your service and is raving about you guys and talking about how great you guys are. And they’re even referring to other customers. But behind the scenes there are different systems in your business that are helping to make that transformation happen. I just want to give the listeners some insight on the different parts of the business.

Bill: At the highest level we have sort of a front of house, back of house model, probably like most business. I jokingly sometimes say you have the servers in the front that work like diners in a restaurant. And you have the cooks in the back. They’re actually making the meals. So it’s not exactly that way because a lot of our “cooks” are working with customers every day. But we do have pre-substantial client management team and a substantial team of experts. But that’s at the highest level. And then when we talk about breaking down what specific systems we have essentially it came down to processes that define how things get done. Systems that allow us to manage the processes and report on how well the processes were working and how the work was being done. And then of course managers and people that are running the whole thing. This isn’t my saying but people say you don’t manage people you manage systems. And the systems enable the people to use processes to do great work. We don’t really manage our people anymore, our people don’t need manage, they don’t want manage. They just need a system a process they can use to get the work done, and we manage those.

Owen: So you have the front house and the back house. And then you have the account people and the account people work with the customers. And then the specialist do the back end stuff based on the project.

Bill: That’s right.

Owen: Okay. I’m glad you shared that. You might have mentioned some this already before. What systems do you in place to enable your employees to know exactly what they need to do. You mentioned some of the processes you have. I think earlier we’ve mentioned how the three systems which is the accountability, the responsibility, and… We mentioned we’re going to go back to it and explain what you meant by the differences. Can you talk about that now?

Bill: Yeah, responsibility, authority, and accountability.

Owen: Yes.

Bill: One of the biggest things that we put in place to allow our employees to understand the rules of the road so to speak is we start with the position agreement for everyone. People might call it a job description but essentially it’s just the philosophical standards by which we’ll judge how well they’re executing their responsibilities. And so, within that position agreement it says this is what you do here. Here are the objectives that we would like to see you meet within this role. Here’s how we’re going to manage and measure these objectives. These are the measurements by which you’ll be judged so to speak. Here’s the frequency by which we’re measuring all the goals. It essentially outlines what are the expectations for the position. That’s been pretty instrumental. What we’ve done is we tie, and in fact we embed the employee review template rather than the position agreement. So an employee can read the position agreement and then at the end they can review, like, “How is this going to be applied in my review?” They can go through their position agreement then to their review and say, “I think I’m going to do pretty well this year.” “I see some areas where I’m going to need to tune up a little bit.” That’s been a great thing, just the position agreement in general, it’s because it allows us to communicate the standards. Here we say three legs at the stool.

Owen: Yeah.

Bill: We say in this order, you have to do great work, you have to thrill the customer not satisfy the customer. The customer should be thrilled with what you’ve done. And we need to make money. We believe that if you one and two, three is going to follow. In almost every case it does. But doing one and two is the most critical part. And I’ve had employees ask in the past, what about [Unintelligible 00:46:59] the employees? And I always say look at one and two. If employees are performers, if they’re achievers, they want to do great work, work with a mission. And they want to thrill the customer, those are the two things they really want to do given that all the fundamental stuff’s in place. They’re being paid well and all this stuff. It just has to happen. You’re going to have happy employees, you’re going to have happy customers, and ultimately you’re going to make money. And so within the position agreements we outline in probably four places. And then of course we have the systems that outline the steps for executing each project. And I think those are critical for employees to know what to do. It doesn’t have every single, little incremental thing there to do but it has all the high points. So they kind of know what the way points are in every project. They can communicate that to the customer. They can create a predictable road map for the customer to understand where they’re going. And then training. We just really adopted training in the last probably 18 months, 2 years. We now have certification classes for each of our departments where there’s a basic and intermediate for each department now where employees could go double through a three-part course. And at the end there’s an assessment, and the assessment tells us whether or not you learned at all. And our employees are “certified” in each of their respective areas either as basic certification or intermediate and we’re working on the advanced certifications. You can imagine it gets incrementally harder as you go. But that’s critical. So training just to make sure that the employees are given the tools to do the job. But most of your listeners can think about times where they’ve talked to an employee about something, they like to say I do differently. And the employee says, “Great, thank you for telling me that. This is the first time I’ve heard it.” That’s what we want to avoid. We don’t want our employees to hear about an expectation within the context of a discussion about how they failed. We want them to hear about an expectation long before they ever have an opportunity to fail at it.

Owen: Yeah. We also promised the audience we’re going to explain in more details the three step management training process where it’s the responsibility, authority, and accountability. I want to use this as an opportunity for you to explain what each of them are and the differences. That way we can understand.

Bill: Absolutely. What we do is we have what we call a porous organization, meaning there are lots of openings and holes everywhere. We’re a small company, we have a lot of opening. We allow our employees to sort of flow around within the organization and find an area where they feel like they can perform. A lot of times it’s in some area of management. When we see an employee embracing, or they want to take it for a drive, or we see a quality within an employee that we think may lead them towards a good, professional management career we’ll ask them, “Would you like to participate in this area” if they aren’t already without our permission which happens, which is awesome. And so once they move into that initial phase of management. We usually put a management title, I guess what they’re doing. So we might say you’re manager of this area. ??But essentially they’re not really being partially measured against how well they’re managing that area or department. They’re really just given a set of responsibilities that live within the management realm. It might be something as simple as saying, “You’re responsible to ensure that every employee in your department is given a review on time. And that the proper planning’s go into place, etc.” You might be just helping your boss stay on point with reviews. That’s a very smart thing. That’s a responsibility. And so they’ve not been given any significant authority to change that process, they’ve not been given significant… to even do the review. They’ve just been given the responsibility to see to it that the review happens. Another one might be quality assurance. We might say, “You’re now responsible to measure these elements within your team and report each quarter on how well we’re doing from a quality assurance perspective. We haven’t given them any significant authority to change the way the work’s being done, how the measurements are taken, or when. We give them a little bit of authority. But after they do that for a while they might say, “The system that we’re using to do this is not great.” And we’ll say, “You are moving in to the authority phase of your management training. Why don’t you go select another system, present it to the management team, and should we find that it’s a good selection we’ll prove it. But then the second path of the night is later why don’t you go select the system, get it implemented, and get rolling with it. It’s very step wise. But then once they move through the authority they’ve begun making autonomous decisions, taking responsibility for those decisions, and moving to the accountability phase where we say QA isn’t where it needs to be. You’ve been doing it now for whatever it is. We can see it through these measurable means that the department is not hitting its objectives in QA. That is your responsibility. Why is that not happening. Now they’ve been tasked with the accountability for the thing if they initially just said responsibility to manage. At that point what usually happens we start right. We never pounce on it, we just say, “You’re moving under the accountability phase. And then our first conversation they might say, “I haven’t really been given the tools to do this job well.” We’ll say, “Who’s responsible for identifying and implementing those tools?” And they’ll say, “I guess I am.” And we’ll say, “Well, I think you know your first next best thing, don’t you?” Once they’ve tasted the accountability they’ll say, “Oh my goodness, I’m going to have to go back and look at how I’m doing a few of these things to make sure that I do have the tools and systems in place to meet this objective and accountability that I’ve just…” They know it and we communicate it. Until people have really fortified accountability it doesn’t get real. Once it gets real they kind of look back over all those two other phases and say, “What do I need to retrofit to lead this new responsibility I have. It has worked out really well for us and it’s been really good for the people. We haven’t really had many uncomfortable conversations we hire based on character. We have such high performing people that it’s almost like we’re pulling them back from killing themselves with just getting out there and doing things that push them. We just don’t have to push our people much.

Owen: How do you track and verify the results that are being delivered by your employees, I’m just curious.

Bill: We have reporting systems as you can imagine. Since we have five disciplines there’s five different parameters that we use to measure each of the teams. And they vary in quality between the teams because some of them do it a lot longer than others. Another thing that we have, and this is more of the operation [Unintelligible 00:54:27]. We have profit and loss statements for each time. The director of each team essentially owns their department and they get a P&L. They really manage their department by their P&L. That doesn’t mean that they make decisions on whether we do great work or… There’s parameters that are unchangeable. But essentially one of the best means that we use to measure the results, we start with the P&L. And we say, we talk cases a few times with a P&L who showed too high of a profit margin. And we’ve said, something is unsustainable in this because we know we want to live above here and you’re living over there. Of course we’ve also had situations where the P&L showed too low of a profit margin. So we started with the individual department of P&L’s as far as operationally. And that allows to begin to drill down into what might be happening. If the P&L has too high of a profit margin maybe that we’re under delivering. If they have too low a profit margin it might be that we’re either over delivering which usually isn’t the case, or that we have some bulky process or some outmoded system that we’re using that’s not allowing us to be as efficient as we could. So [Crosstalk 00:55:42]

Owen: Awesome. Now that you have all these free time I’m wondering which areas of the business do you focus on now and why?

Bill: We’ve never anticipated this, but recruitment. I’ve probably said this three or four times today already that one of the things we’ve discovered is finding great people isn’t easy, it’s easier when you don’t have to find great people that have the specific skill set. But it still isn’t easy to find great people. I probably spend the majority or the single thing that I spend the most time on is helping the teams to find great people. I do a lot of outbound contact. I do a lot of “employer” marketing. and I talk to a lot of people before I bring them in for the individual teams to talk to them because there’s no sense in wasting a manager’s time if the person just isn’t…

Owen: …the right fit.

Bill: So I spend a lot of time doing that.

Owen: That’s awesome. What’s the next stage of growth for the business? What do you plan to achieve next and why?

Bill: When we initially set out on this journey to build out these processes and systems it was in preparation for our ultimate model which is be able to pull them. This is our, in geography, where we can best serve them. One of the things that Upward has done really well I think is we don’t go into our market and try and dominate the market. In fact, we’re pretty comfortable if the other agencies in the market don’t really even know or care who are. What we do really well is we go into a market and we serve the types of customers within types of services that we really can [Unintelligible 00:57:28] on. We can go into a market, say Minneapolis for the sake of argument. In 18 months to 2 years have an established, profitable office in that area. We started with Columbus. That was the first time we put an office in the market and we did that very badly. And then we learned though a lot like vital processes. When we went into Cleveland it was much smoother. Of course we learned a lot because we’re able to see where our processes were not working and what needed to be added. Obviously Dayton was the third, and that went even smoother. The next step is going to be identifying a couple of new geographies to move into. Right now it takes us about 3 years to really digest one of these moves. Our goal is to get into about 18 months and we think the processes and systems are getting us there. And so the next big move for the company is to start moving out to these new geographies more regularly, more efficiently, and obviously refine our process. Or identifying geographies that can really serve be served by Upward. We’re working on that as well.

Owen: If you were to summarize the steps the listener should take in order to systematize their business so that it runs without them, what would say the summary of the steps will be?

Bill: I would say, first and foremost, the most important thing is to get yourself untethered from the daily activities. Even if it’s just a handful, just buy yourself enough time to identify a chunk of time. The way I did it was I said Wednesday mornings, 4 hours, I jealously guarded it. And I would not let anything have those 4 hours on Wednesdays. I didn’t care whatever it was. It didn’t get those 4 hours. And so the first step would be untethered from enough activities where you can set aside some time and hope make it regular time, and guard it against everything. One of the things that the people struggle with is focus on strategically important things. This is going to sound nuts but if you just spend 4 hours just thinking about your business, off your email, off your computer, away from your phone. The hardest thing I think entrepreneurs struggle with is they don’t think they’re working if they’re just sitting and thinking. But just taking a little time every week and just thinking about your business strategically, this is critical. So untether yourself. Identify some time to spend with the time you’re freed up from untethering, guard that time. And then if nothing else, just think about the strategic direction of your business, but [Unintelligible 01:00:12] strategically important things for those 4 hours. It didn’t take me very long at all to where I could extend that 4 hours into 8 hours. Most of your listeners have probably the read the book 7 Habits of Wildly Successful People by Stephen Covey. There he talks about stealing from the urgent but not important quadrant, including that time in the important but not urgent quadrant. That’s exactly what you’re doing here. You’re just stealing a little time. Over the course of the couple of months you’ll find that time growing.

Owen: Awesome. Is there a question that you were wishing I asked you during the interview that I didn’t ask you? If so, post that question and your answer.

Bill: I would honestly say, I thought about this over the years, what is one of the most significant things, or honestly say getting your head around why you have a process, that should be the first thing you do. And find your way to communicate that to your team. And for us, the reason we have a process was so that we could make the experience better and more predictable, and more creative for our customer. Everyone’s might be different. Then they’d say our customers are extremely happy, we just need to be more efficient. Know why you’re creating a process. If you’re not there yet you’re probably not ready to start.

Owen: Basically, have a strong reason why you’re even doing this in the first place.

Bill: Absolutely.

Owen: From that reason everything else feeds off from that, I get that. What’s the best way for the listeners to connect with you and thank you for doing the interview?

Bill: I would say the easiest thing to do, you can shoot me an email bill@goupward.com. That’s pretty easy. Connect with me on LinkedIn. I’m extremely active on LinkedIn. There’s some articles out there, roughly connect and then they’ve got a direct line to talk to me. But either or, just shoot me an email or jump on LinkedIn and connect with me.

Owen: I’m speaking to you the listener right now, first of all thanks for listening to the interview all the way to this point. If you’ve enjoyed this interview I want you to do one thing I want you to actually share the interview with another entrepreneur who you feel will find value from this. If you want to leave your feedback regarding the interview you can do that on iTunes by going to sweetprocess.com/iTunes. And if you have an Android then you can leave your feedback by going to sweetprocess.com/stitcher. Finally, if you’re at that point in your business when you’re tired of being the bottleneck and you want to get everything out of your head so your employees know step by step how to get tasks done without you, sign up for a free 14-day trial of SweetProcess. Bill, thanks for doing the interview.

Bill: It’s my pleasure Owen.

Owen: We’re done.