Process!

by Mike Paton

A company with a strong Issues Component can solve issues as they arise and make them go away forever—rather than letting them linger for weeks, months, and sometimes even years. A strong Process Component, of course, is about getting the most important things in your business done the right and best way every time. And finally, a strong Traction Component is about instilling discipline and accountability at all levels of the organization so that, everywhere you look, everyone is executing on your vision day in and day out.

The journey to implement EOS is a journey to strengthen all Six Key Components. Many leaders mistakenly believe that they can solve all the issues in their business by just working on one or two of them, but we know from experience that becoming 80 percent strong or better in...

In his book The E-Myth Revisited, Michael E. Gerber captured the essence of these concepts, calling it the “Franchise Prototype”: A proprietary way of doing business that successfully and preferentially differentiates every extraordinary business from every one of its competitors.

A strong Process Component builds a high-level blueprint for executing consistently well today and improving and innovating as required. Investing time in this simple discipline will yield extraordinary results and help your business outperform the competition.

It’s easy to forget that every large, successful company began as a small, entrepreneurial business.

to scale your business and achieve your vision, you must start instilling discipline and accountability now, while you’re still a small, growing company.

The good news is the tools we’re sharing were created specifically for privately-held entrepreneurial companies with between 10 and 250 employees. Their owners and leaders are growth-oriented, open-minded, and driven by a desire to build something of enduring value while serving their customers and employees well. These businesses include manufacturers, distributors, professional service firms, tech companies, retailers—you name it. No matter the type, industry, or size of your business, strengthening your Process Component will yield specific benefits:

1.You’ll grow faster (and more sustainably). When your marketing and sales processes are documented, simplified, and followed by all, you’ll create more leads and increase your win rate. You’ll invest less time and money on unproductive or improperly-focused salespeople, or on marketing activities that don’t produce results. Not only will you get better at acquiring new customers, but your discipline for process will help you retain and grow existing relationships as well. Moreover, many of the leaders we spoke with for this book agreed that process is the key to removing themselves as the bottleneck (or “walking SOP”) holding back the company’s growth.

2.You’ll attract and keep better talent. As we write this book, finding and keeping great people is the number one problem faced by growing businesses around the world. Strengthening your people (or talent, or HR) process will help your company get better at sourcing, recruiting, interviewing, hiring, onboarding, training, and supporting your employees.

Recruiting and retaining great people goes beyond your HR process. Having your other core processes followed by all will keep your people safer, reduce mistakes, and make them really good at their jobs a lot faster. People who master the fundamentals feel confident and valuable. A consistently followed process for leading, managing, and driving accountability will help, too. It will create a proven way for building and maintaining a great culture, gathering feedback to ensure everyone is engaged, and recognizing and rewarding exceptional performance.

As a result, team members will see their bosses as supportive coaches who can help them improve and advance, versus critical opponents waiting to catch them messing up. As a result, great people will want to stay (and recruit talented friends) while marginal performers will feel pressure to improve or exit.

3.You’ll engage everyone in a culture of excellence. In many organizations, excellence feels less like an attainable goal and more like a business buzzword used by managers in a halfhearted effort to increase productivity. If you’ve hired the right people, the folks on the front lines want to do their jobs well. Without a strong Process Component, they each learn their own ways to get things done. Then those experienced (but selftaught) team members are asked to train their newer peers, and so on. This may wo...

Atul Gawande, physician and renowned author of The Checklist Manifesto, notes that the failure to proactively document best practices creates inconsistencies that get “embedded in the system.” This happens without leaders or employees understa...

a strong Process Component provides a clear baseline of simple, repeatable actions that produce desired results. Every employee sees the value of doing it the same way, no matter their level of experience. When processes are documented, a business can expect consistency of action, predictability of outcomes, and a foundation from which you can consistently improve each process. Rather than grappling with a culture of inconsistency, you’ll have embedded a culture of excellence.

4.Your customers will be happier. What about the people or businesses that you serve? Core marketing and sales processes create a consistent set of realistic expectations in the marketplace. One or more core operations processes will help you consistently deliver high-quality products and great service. Consistently meeting expectations will help you build a strong brand, delight your customers, and decrease the likelihood of their leaving for the competition.

Perhaps more importantly, a documented, simplified core process for customer satisfaction and loyalty will help you better understand the needs of each customer so you can consistently meet or exceed those needs, and proactively validate their loyalty with customer feedback surveys or regular business reviews. When you track customer satisfaction data, respond to constructive feedback, and show your customers how hard you’re working to execute well and continuously improve, relationships are forged, and great things happen!

Whether it’s due to more consistent execution, wow experiences, or both—a strong Process Component means fewer customers will leave for the competition, the size and breadth of your relationships will increase, and you’ll get free PR and more referrals from raving fans.

5.You’ll have more time. As Coach Wooden reminded us, doing things right creates more time for everyone. Documented core processes help new employees get up to speed and begin contributing much faster. Managers deal with fewer basic questions and can spend their precious time coaching, mentoring, developing people, and improving processes. You and fellow leaders will have more time to imagine, think, strategize, plan, and (gasp!) lead.

The benefits of having more time extends well beyond the workplace, of course. Disciplined, consistent execution in the business will free up time for your own passions, family, and friends. And that pursuit is neither luxurious nor selfish. Busy leaders who also enjoy their personal lives and take time to recharge are always more effective and valuable than those who feel overwhelmed by the day-to-day. Even if the extra time is used to “do nothing,” as author Anne LaMott said in Bird by Bird, “Almost everything will work again if you unplug it for a few minutes . . . including you.”

6.You’ll get better at resolving issues. Having an agreed-upon way of doing the important things in your business will help you more quickly and accurately determine why you’re not getting the results you want. In contrast, a team that hasn’t yet decided how to do the most important things consistently well often jumps to inaccurate conclusions about why the business

isn’t growing fast enough, or generating enough profit, or attracting and retaining enough great people, or serving its customers well.

When it comes to resolving issues, sometimes a bad (or no) process can make good people look like bad people,

7.You’ll make more money. Now let’s look at the bottom line. When your company is experiencing the benefits described above, your business will become more profitable. As a leader, you’ll also be more valuable to the organization and compensated appropriately for that value because you’re able to spend less time in the day-to-day and more time leading.

8.Your company will become more valuable.

process can have an exponential impact on the value of your business. If you plan to share or transfer ownership someday—to a member of your family or leadership team, a private equity or venture capital firm, or a strategic buyer—a strong Process Component is essential. As The E-Myth Revisited author Michael E. Gerber said on the Legal Mastermind podcast, “If your business depends on people and not on process, your business does not have any value.”

Put simply, what makes a business valuable is its ability to generate consistently excellent results without relying on the founder or a small group of experienced team members. If your business is valuable solely because you (and maybe others) are willing to work eighty hours a week, investors will be more likely to buy you or your best people than to pay a premium for the whole company. When a company is set up with the tools to run independent of its leaders, it is more valuable today—while you still own it—and, in the future, if you ever decide to sell some or all of it.

9.You’ll live a better life. Yes, we realize that this is a bold claim. However, when you experience any specific one, if not all, of the benefits identified above—consistently attracting and retaining great people, growing faster,

making customers happier, earning more money, and creating independent value—wouldn’t your pe...

When your company is a well-oiled machine and no longer needs your day-to-day firefighting, you’ll have the time, energy, and financial resources to pursue other passions. Countless successful business leaders contribute to causes beyond their business doors.

However you define your ideal life, a stronger Process Component will help free you up to live it. You deserve it.

Not strengthening your Process Component can be expensive, risky, and even fatal to a growing organization. The most obvious costs are the inverse of those

benefits listed above. A weak Process Component can stymie growth and erode profitability. You will have more trouble finding and keeping great people, and it will be harder to serve your customers well. That will make your business more dependent on you, and, accordingly, less valuable. You’ll have less time to lead in the business and little time to enjoy life outside of the business.

Here are three specific ways failing to strengthen your Process Component can harm your business:

1.You will struggle to find and keep great people. As noted above, without a proven approach for finding, recruiting, and evaluating world-class candidates, winning the battle for the best people is nearly impossible.

Great people want to work for organizations that have a clear sense of who they are, where they’re going, and how they plan to get there. They want to know exactly what’s expected of them and feel confident that they can do the job well. They want a leader who cares enough to help them become successful a...

Does your company have a carefully designed process for leading and managing its people? Are your team leaders, supervisors, and managers properly trained? Or are your employees at the mercy of the individual capabilities of each unique boss? Do you have clearly defined roles for ...

or encourage training and development? Do you reward and recognize top performers? The companies that are winning the talent war are doing...

The direct and indirect costs of poor engagement and retention are significant. The Gallup organization calls unnecessary turnover a fixable problem that costs US businesses $1 trillion per year. According to the Society for Human Resource Management (SHRM), companies spend between 50–75 percent of an employee’s annual salary to recruit and train someone new.

The indirect cost of turnover is even scarier. A business that’s understaffed or full of new, inexperienced people is far less likely to meet growth goals, ship quality products on time, or deliver service that meets customer expectations. Everything—including your life—gets harder. You have more messes to clean up, more apologies to make, more overtime to pay, and more problems to solve. Talent experts Geoff Smart and Randy Street illustrate this point vividly in Who: The A Method for Hiring: “According to studies

we’ve done with our clients the average hiring mistake costs fifteen times an employee’s base salary in hard costs and productivity loss.”

2.Your business will stop growing. Inconsistent execution in just about any area of your business can halt growth. For example, the lack of a solid marketing process leads many companies to spend a lot of time and money without building a strong brand, reaching the right prospects, differentiating themselves from the competition, or generating qualified leads. Without a great sales process, it’s tough for companies to win new business consistently, build strong relationships, grow accounts over time, or get customer referrals. Without solid operations and finance processes, it is nearly impossible to keep those hard-earned customers happy beyond the sale or the business financially healthy.

3.Your business may fall behind or become obsolete. Being strong in the Process Component means regularly reviewing, updating, and improving the way important things get done. Left unchecked, failing to observe long-held processes with a critical eye and make improvements as the world around you changes can put you out of business.

As things grow and change, relying exclusively on tribal knowledge (meaning, company information that lives only in employees’ heads) becomes increasingly difficult. A leader’s job is ensuring the gears in the watch are aligned, functioning properly, and telling time. Failure to do that well makes everything harder. The good news is the risks and costs caused by a lack of or inattention to process are completely avoidable and these benefits are more easily achieved than you might think.

The ability to learn is the most important quality a leader can have. —Padmasree Warrior, Founder & CEO, Fable

We hope that section I, Commit motivated you to face the problems, challenges, and lost opportunities caused by a lack of attention to and discipline for process. If so, you should now be ready to learn exactly how to document, simplify, and get your core processes followed by all. This section II, Learn provides a step-by-step guide and a complete set of simple concepts and practical tools being used by thousands of businesses around the world to do just that.

Using these tools and completing the steps outlined below takes the typical leadership team nine to twelve months. When you and your team have finished, you’ll have a clear, simple blueprint for the exceptional results that your business or team can achieve on a consistent basis. To be successful, this journey must start with and be driven by you and your leadership team. Of course, you’ll also collaborate with next-level managers and key individual contributors from time to time. However, you and your leadership team really need to own and drive this project.

That may surprise you, because many leaders think the best way to complete this work is to ask the person who’s best at something to document that process. To be sure, involving others in this work is smart. Han...

1.She may not love the idea. A top performer enjoys being a top performer. You’re asking her to boil the important and unique work that she does every day down to a few essential steps. You explain that you plan to teach everyone else in the organization how to do it just as well as she does. If she’s competitive at all (and find us a top sales performer who isn’t), she may not fully commit to this project.

2.She may struggle with the assignment. To many top performers, consistent excellence comes naturally. Describing what they do and how they do it in a simple, straightforward way can be difficult.

You’re trying to document the way you want the sales process to go every time, not all of the possible variations—and that’s often tough for an experienced team member.