If It Ain’t Broke… Break It: How to Scale Without Collapsing

0:00The old adage of if it ain't broke, don't fix it is incorrect. We need to be breaking things along the way. We have to innovate. We have to disrupt. We have to. It's almost like you want to disrupt yourself. Don't wait for the market to disrupt you. The Action Coach business operating system is a structured approach to building a business that works without you. Systems give you freedom. And welcome back. The$100 Million Entrepreneur Podcast. us. This week, we're going to look at the systems maturity model. What does that mean? Well,

0:32Brad:there's five different maturity levels of systems from chaos right through to continuous improvement. And for you and me, we have to know these and understand them because what got us to X won't get us to Y. And as we grow and scale, we need to see that the maturity of everything we're doing is very strong. So let's break each one of those down because as we, and I want to be clear on something. The old adage of if it ain't broke, don't fix it is incorrect. If we're in a scaling, growing, exponential oriented business, we need to be breaking things along the way. We need to recognize the fact that a system that handled a thousand customers won't handle 5 ,000 customers.

1:16Brad:We need to understand the technology that worked when we had a team of 15 won't work when we have a team of 150 type things. So that philosophy needs to be the first thing that we do. So five stages of systems maturity. Obviously, we begin with the lowest level, that is chaos, where there are no real systems. And we don't even have checklists at that point in time. Moving to consistency. Consistency is usually where we actually do build in a level of checklist. there's basic systems in place so that we get consistency of delivery that predictability factor is what allows us to feel um that the business does have a capability of running without you if that makes sense now the third is where we get the scalability okay so the third layer of systems maturity is scalability where now it's not just a system to keep the business running, it's a system to build the business.

2:14Brad:It's a system to keep up with growth. So there's not just operational systems. Here's how you make a hamburger. There's here's how you grow the business. So you sell more hamburgers type thing. So level three is scalability. Level four is where we get to optimization. So now what we're doing is we're no longer just happy to see it working. we're now optimizing and getting the best possible results from it so you know if you use a marketing term you're running the ads you've got you've got ads running you've got no idea you're in chaos right you're just doing anything consistency you've got ads running and they run all the time marketing is consistent scalability your ads are now performing and getting a good return on ad spend optimization is now we're saying okay now that we're making money from it now we need to actually make the most money from it sort of thing.

3:08Brad:And then stage five of the systems is autonomy. So once you move to autonomy, now you start to think about, okay, the systems are regrowing, if that makes sense. And that's ultimately where we need to be in a scale world, in that the system that we had that was doing phenomenal, that was optimized and was scaling, it keeps growing okay that system evolves it's an autonomous system now when we look at AI AI is giving us a perfect example of that that it grows and learns from itself and so a company that is growing and learning from itself will be getting better on a day in day out basis now to do that though and this is the interesting thing when I look at most people most people resist systemization They're like, oh, it kills creativity.

3:59Processes. No, no, look, systems give you freedom. OK, structure actually increases speed, increases freedom for you as the owner, for the team, for them to be able to do better jobs because there is a systemic way of doing things.

4:16Brad:They know how to do it and they can get the results from it sort of thing. So it's really important that we understand that phase. But in most cases, what I see from people is that they want their systems to improve by 5%, 10%, a few percent better. In most cases, what I find is that if we aim to say, OK, well, we're doing X. What if we had to five times X or 100 times X? That creative level thinking of setting massive goals means that we have to innovate. We have to disrupt. we have to it's almost like you want to disrupt yourself at some point don't wait for the market to disrupt you disrupt your own business by setting a challenge of okay what if instead of that we had to do this you know the moment someone ran a four minute mile all of a sudden people realized it was possible so break the barriers i remember learning from john buchanan the australian cricket coach and john would talk about uh when he took over they set the mount everests meaning what are the things that have never been done before?

5:19Brad:Yes, personal bests are amazing, but what about Mount Everest? What about things that have never, ever been achieved before? So within Action Coach, we install the business operating system. And what that means is, if you look at most businesses, they run on great people. They don't run on an operating system. The Action Coach business operating system is a structured approach to building a business that works without you. A commercial profitable enterprise that works without you. Back to our definition of a business. So when you look at SOPs, standard operating procedures, playbooks, automated workflows, these are all great within the area.

5:59But overall, the business operating system, how do you run the business? What's the cadence of things we do? What are the dashboards? how do we track the progress of what we're doing? See, in most cases, a business is not run on an operating system. The business is run by good people doing good things. And yeah, there's a system for this and a system for that. And fantastic that those things are in place. But to scale, we need that operating system. We need that level of cohesiveness of all of the people, all of the systems, the operations of the organization needs to be run under that system.

6:38And so I know when we install ABOS in a company, people on day one are kind of like, oh my goodness, I now see how much work there is to be done. Because our initial assessment is like 184 questions. So it's quite vast to get into the depth. But when you combine our ABOS, the Action Coach Business Operating System with APEX, Action Coach Planning and Execution System, that's where you do your business plan and run all of your metrics and your numbers and all of those sorts of things by having the two dashboards it gives you a full view of what you're doing now if we think that um tracking of outcomes yeah let me put it this way most systems track outcomes we want to track inputs reliability step by step we want to see what's happening along the way if

7:29Brad:that makes sense. So yes, you want to know the outcomes, but ultimately what creates the outcomes, again, if I use it from a sales perspective, yes, that's what you got in sales, fantastic, but how many dials did you make today? What was your new reach out number? What's your referral number? What is like all of these things that create that are just as important. So systems maturity, let's link it to say corporate value, okay, or company valuation. Most buyers when they're coming to you, especially strategic buyers, because if you look at it, you have independent buyers, that's someone who's just buying a business, okay?

8:06Brad:You have financial buyers, they're buying based on a multiple of EBITDA in most cases, okay? Now the freedom of the business, meaning how much it runs without the owner, how much it is self-running, definitely impacts the multiple. Ultimately, though, it's the strategic buyer who will in most cases pay the most. Why are we looking for a strategic buyer? Well, because they're looking to expand geography. They're looking to acquire customers. They're looking to acquire a new product line or a new service line or bring their product or service line to a new group of customers that are in your business type thing.

8:40They might want your people. They might want your technology, your equipment.

8:44Brad:Maybe it's a contract that you have or an open door that you have that they want to get into because then they can sell their product or service to that big company. There's so many different ways to do it. So when you look at building great systems and maturing the systems in your business, it gives you the freedom to be able to do it. Now, for me, I remember when I first started loving systems, I worked out in my head that as a very small business, every system I wrote saved me somewhere between five and 10 minutes a week. So if I documented a system, I didn't have to get involved. it, the team could do it, therefore it saved me five, ten minutes a week.

9:22And I got super excited at one point, realising, hey, the more systems I write, there's a chance I'll never have to come back in again, you know, if that makes sense to everyone. So when we start thinking about

9:34Brad:automation, today AI has to come into that scenario. Software, most softwares are AI enabled today, and we have to start thinking where can we use artificial intelligence to do the thinking for us, to do the work for us. Obviously, early stage artificial intelligence is all about doing the heavy lifting work. As we get further and further, it's doing the thinking work for us. So it's really important that someone on your team, whether it's you or someone on your team, is playing with every piece of AI technology, working out, will this work for us, won't it? How will we do it? I think it's really important to do that.

10:12See, if you were right, well, let me take a step back. Let's do a systems upgrade checklist in your company. Take a look at the

10:20Brad:business, see where you have the most consistency. You'll probably have the most systemization and the best people in that part of the organization. So training, system, delegation is a part of that and obviously a measure. But if you were to look across your organization, most times I say, don't try and systematize the whole company. Systematize one area of the company first. OK, raise the level of systems in one area. And once you've got it raised in that area, you'll realize, hey, we want to raise it in this area, too. And you'll keep raising it across the board. Challenge your team to get the systems more automated, more documented, more technology.

10:58And yes, that will require an investment. So in order to do that, maybe what you want to look at is go back to the bottleneck process and find one system each week that you can, you know, what's one bottleneck you can remove each week? Imagine if for the next 12 weeks you remove the 12 biggest bottlenecks in your company. What would success look like if you were able to get rid of the 12 biggest bottlenecks in the company over the next 12 weeks sort of thing? That to me is where we start saying, OK, our system's maturity is what allows us to scale and not fall back. And I'll repeat that. See, one of the biggest things about growth is growing, putting in a stopgap so that you don't go backwards.

11:41Grow, put in a stopgap so you don't go backwards. Grow and keep growing on it. Sometimes that does require a grow and plateau mentality. Hey, we've grown. Let's build a sustain. Let's go and do that sort of thing. I know there's been times in our business where we've sat down and said, hey, we've built all of these new things and we've done all this new stuff, but it's not being used at the level we want it to be. Let's take a slowdown period, 90 days, 180 days, and let's actually activate all of the things that we've already built. So systems maturity from chaos all the way through to autonomy.

12:17What level of systems are you running with right now? Where do you need to upgrade them so that as you scale, the business stays strong? Remember, some of those systems you're gonna have to break in order for the next level of business to be achieved. So keep coming back, keep learning. You never wanna miss a strategy that'll get you to 100 million and make you the$100 million entrepreneur. Thanks for joining me on the$100 million podcast. If you've got value from today's episode, make sure you've subscribed and share this with all of your friends. Never miss a strategy that could change your business and your life.

12:50And remember, the fastest way to scale is to learn from those who've done it. That's what this show is all about. See you on the next episode.