The Framework That Transformed My Business (And Can Transform Yours Too)

0:09Hello and welcome to another episode of the Duct tape marketing podcast. This is John Jantz, and my guest today is Nick Sonnenberg. He's an entrepreneur, Inc. columnist, guest lecturer at Columbia University, and Wall Street Journal bestselling author of a book we're going to talk about today, Come Up for Air, How Teams Can Leverage Systems and Tools to Stop Drowning in Work. He's the founder and CEO of Leverage, a leading operational efficiency consultancy that helps companies implement his CPR, Business Efficiency Framework. So Nick, welcome to the show. Thanks for having me, John. So you start out the book early on talking about your own drowning in work.

0:49And I think you actually used a term that you decided to fix the sink. So you want to talk a little bit about your own journey to maybe what led you to the book? Yeah. Thanks for having me. Look, we all know what it's like to drown in work. And we all have our war stories as entrepreneurs and business owners. Mine very quickly was we grew to seven figures in the first year, fully bootstrapped, had about 150 people on the team, growing 20 % a month. And that all sounds cool. But the other side of that was we were losing 15 % clients every month. We had 15 % churn, losing around half a million dollars a year and three quarters of a million dollars in debt.

1:31And no one knew who I was. So, you know, there's two sides to every coin. And then so everyone knew my business partner at the time. And one day, my business partner decides to pick up and leave. And not in two weeks or two days, I get two minutes notice. And apart from just sitting there holding my coffee, sweating, not knowing what's going to happen, I had to decide, do I bankrupt this company or do I stick it out? And I saw a path to cleaning things up. And I decided to stick it out. But I mean, man, I'm telling you, that really tested every bit of me as a human being. In three months, we lost 40 % of clients, team members, revenue.

2:17To take that kind of shock to a system in such a short period of time is pretty difficult. The frustration was there was clearly certain things that needed to get fixed, but there wasn't enough time to fix them. you know like there was just client complaints and team member issues and all this stuff and by the time i got through the day and like my email my slack messages the day was shot and you know you can only work you know once you hit the 16 17 hour mark i mean you gotta also get some rest you know and so just like it it got me realizing like we always talk about time is money. But it really is.

2:59Just like it takes money to make money, it takes time to make time. And I knew that I was never going to get out of the rat race if I didn't figure this out. I did an audit and it wasn't like I was extremely text-avvy. We wrote the book on automation early on, but we were still missing quite a lot of things. And when I started analyzing the buckets of where my time, the leaks in this bucket were, there's three big buckets. And the first was communication. Like I said before, by the time I email and responded and Slack messaged everyone, that was nine to five. And then once you get into the next bucket, doing tasks and projects, now you're well beyond the normal workday.

3:48But when I started breaking it down, there is a huge amount of time wasted and spent communicating with people. So I knew that that was just one huge bucket we need to think about. Then the other bucket was, well, there's all this work that needs to get done. And that's another significant chunk of time. But more importantly, so there wasn't one place where I could go to look at all the stuff that needs to happen. Answering basic questions like, what do I need to work on today? What did I delegate to someone that got done that didn't get done? What's the status of this project? it's not easy to answer basic questions.

4:23And that was perpetuating the issue of communication because then you have to go back to the communication tools to ask people for things that you should be able to self-service answer. And then the last part is what I call in the book R for resources. I was already pretty good at that. Had I not have been, we would have for sure gone bankrupt. But having a central place where people could go and instead of pinging you and asking you for something, they could go and self-serve. not to mention the decrease in risk you know if someone leaves and now it's not that all the knowledge leaves with them so anyway when you break it down this was the epiphany i had communication planning resources so cpr and that was the genesis of this cpr framework which i'm now known for and wrote a book about but what ended up happening john is once i started focusing in these buckets, the company really started changing rapidly.

5:17And we kind of dug ourselves out of the hole. And then people started reaching out asking me to consult them. Because back then, we were a freelancer marketplace. We weren't what we are today, which is an operational efficiency training and consulting company. And so Tony Robbins reached out, Poopery, Ethereum. We worked with interesting companies. And everyone was benefiting from this CPR framework. And we're talking back nearly 10 years ago now, when a lot of these tools were just brand new and there was no kind of playbook. And so this framework was kind of like the early day playbook of how to think about how you work together in the modern workplace.

5:56And that was kind of the light bulb moment. Like, well, this worked for me. It's working with all these people. Maybe the big opportunity here is helping to reinvent the way work is done and teach organizations, advise and strategize and help train organizations on how to maximize organizational level efficiency versus a lot of literature out there is around personal productivity. Yeah. And so that's my story. I'm sticking to it. Well, you know, the other thing that I see a lot of is there's a lot of people advising on this and the fix is like, you just need to create a system for everything. And what I find is that that just makes people go into overwhelm.

6:35So how did you kind of prioritize what, I mean, because systems are a big part of it, of this success and part of your book, but how did you prioritize where to start? When we work with clients, and I view leverage just a client as well, kind of. You're a client of yourself. Sure. I'm always looking through the lens of ROT, so return on time. Just like you have back to the time money comparison. Sure. You have ROI and finance. You have return on investment. you have return on time. So what is going to take the least amount of time that will yield the most amount of time savings? Simple question, but there's probably thousands of things that at any point you could do and infinite number of process improvements you can make.

7:23But really, you should be looking at what's going to maximize the return on time. And then just kind of move along there. And then obviously you have to be, there's also additional factors to think about, like risk. You know, something might not increase the return on time, but if someone's 50-50, they're going to quit and you don't know how to do their job, like maybe you got to bump that up. Yeah. You know, it's interesting. I've done a lot of, you know, over the years, personal productivity stuff. And one of the kind of well-worn things is, you know, track your time for a week. And every time I've done one of those kinds of exercises, I find there's a lot of stuff that I probably just don't need to be doing at all.

8:00I mean, how much of that do you think is a factor? Like a lot of companies, you know, people stay busy because that's what they're supposed to do, but, but they're not really focused on stuff that matters. I think it's a lot. I think even like Elon Musk wrote about this in his book too, but you know, you, the not to-do list is more important than the to-do list, you know? Yeah. And so like really the filters should be, does this even need to get done? I think I read wrote about this. There's a chapter in my book. The things to think about, does this need to get done? And if it does, does it need to get done by me?

8:34Should be the next step. Right. And so, because there's a lot of other ways that stuff that does need to get done could get done. You have... And maybe better. Probably. Most likely. There's AI, there's automation, even better than AI. Right. Because automation, it's just 100 % going to execute something exactly the same way. You have virtual assistants, cheaper labor. There's other team members, maybe not cheaper, but just more equipped that like it. So does it need to get done? Then does it need to get done by me? And then the third question, if it does need to get done by you, then the third is, does it need to get done by me now?

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9:54That means if you spend$5 ,000 on TV ads, you'll get an additional$5 ,000 to spend. Head on over to adcritter.com. That's adcritter.com and get started. So when you started making some of these changes in your own business, there probably was a little bit of a culture change that went along with it. But, you know, was it hard or do you find that some organizations structure struggle, I should say, with implementing this kind of change? Everyone struggles. It's not easy. If it were easy, I wouldn't have a business around it. But any change is hard, whether it's this change or, you know, you want to roll out new core values or what, you know.

10:37All change is hard. Yeah. And it's an investment, you know. But if you're a short-sighted person and you just want to maximize your revenue in the next three months, you probably shouldn't worry about a lot of this stuff. You should probably just pick up the phone and just spend all your time doing that. If you're more of a long-term oriented thinker and you're trying to play the long game and trying to maximize revenue over the next two to five years or even one to five years, this is critical. You know, this is absolutely necessary to do that. So it really just matters is, are you optimizing on the short term or the long term horizon?

11:16Yeah. And certainly from an exit standpoint, you know, I talk with a lot of business owners that they want to exit the day-to-day, maybe sell it, but just maybe just exit the day-to-day work. Well, you're never going to do that until you build some of these systems, are you? Yeah. I mean, the valuation is going to be significantly higher if you give them a turnkey business. Yeah. Yeah. If somebody brings you in now as a consultant and you have this framework that you're going to bring to them and how does the engagement start how does it go i mean do you the first thing is you gotta bury unbury all the bodies you know figure out what's going on or yeah usually with most we start with a roadmap so we we got to look under the hood and understand kind of holistically because you don't want to make decisions in isolation and just say oh you need a sauna because like it's important i literally just got off a roadmap call 30 minutes ago it was one of the few cases where actually some of the tools that we normally talk about didn't make sense.

12:10And there's a variety of reasons. So you have to know holistically how they're operating and how they're solving each of these things within CPNR. I've hired in the past Salesforce consultants to help advise and consult on CRM. And guess what? You get Salesforce if you hire a Salesforce consultant. They don't know more holistically what's going on with the business. They look through that lens of every problem could be solved with that thing. So we pride ourselves that everyone has similarities, but also we acknowledge that there's uniqueness. And to best service our clients, you have to look holistically at the problem.

12:48What are some best practices on some of the areas of CPR? Like, for example, in our organization, no team member is supposed to send me an email. It all goes through Slack, for example. So all of our internal communication goes through Slack. That's just one of our practices. Are there a handful of best practices that you, again, every business is different. I have a book of like 10 ,000 of them. Yeah. Yeah. No agenda, no attend. Also, even on the internal, that's great, but you take it a step further. And if it's a task or project related, it shouldn't go in Slack. It should go in your project management tool.

13:23Sure. Right. We use monday.com. great so there's a whole bunch of them you know if if if there's a if if someone can self-serve and answer a question they should go and look in your wiki kind of so things like that yeah i was going to ask you about that um do you believe every business most every business should have some sort of knowledge base like that yeah i mean everyone has knowledge i mean the way you do payroll is knowledge yeah yeah so how do you get all that out i mean i know that again, I know that there are very practical tools to do that. You know, people talk all the time about, well, just use Loom, you know, document all your processes, but, but you know, it's a daunting process for a lot of people.

14:05How do you, it is. And, and the challenge too, is you don't see like more profit in your bank account immediately after you go through it. Yeah. Yeah. Maybe less sometimes, you know, I always tell you, it's an investment. A lot of times people, yeah. Stop to, it's like, well, it was just so much easier for me to do it rather than tell somebody how to do it. Yeah, the problem that, yeah. But the problem then is like, which is pretty obvious, like you're signing up to just do it forever. At some point, the investment of training someone or doing something, there's an upfront cost, but then it's the only way out.

14:42You should have one, work with a company like ours to help create a strategy. Two, the loom is a good, just catch all, If you don't know how to get started, just start recording everything and put it somewhere. It's better than not having it. Right. But you also want to have an internal champion of this stuff in your company. Yeah. This stuff doesn't work where it's do as I say, not as I do. But then it's also you let the inmates run the asylum and everyone's kind of just doing whatever they want because you haven't given them guardrails. So this stuff needs to be a top-down decision and you need to have an internal champion for it.

15:21is, is there a type of person like, does that need to be like a detailed process person just loves that? Cause that's, that doesn't sound like a very fun job to me, but again, my personality, you know, so is there a certain type of person that, that, that just thrives on that kind of job? I think like the CEO needs to be bought in that this is important and committed to it. Right. And like there should be company goals around this type of stuff. Um, you know, and that goal could be a financial goal. You want to maximize revenue per team member, profit per team member, Because the more efficient you get each person, the fewer people you'll need to hire.

15:54At the end of the day, what we're talking about is increasing capacity. Most people think the only way to increase capacity is through hiring, but it's not. It's actually the worst, most inefficient, most costly way to increase capacity. So the CEO should put some goals around that to show the commitment and track it. But then the decision maker, the lead person that we work with oftentimes is the COO or the president or someone more ops, chief innovation officer. Yeah. So this is a trick question. Is there a size of business or industries that should do this? No, everyone should do it. I mean, the sooner you do it, the more leverage you're going to get.

16:39I mean, in a perfect world, a solopreneur should start doing this, right? Yeah. but you can argue it's even more important because like you have less resources. So like every minute that you save is really, really important to you. Yeah. Yeah. But the bigger you get, you know, then the longer you wait, the more money you're wasting. Yeah. But, but my guess is that most people, because they can do everything, they can manage everything in their head, right. For a while. And, and it really is not until it becomes a crisis probably that they start thinking about this. Yeah. 10 people ish. Yeah. Well, it's like, You don't want to wait to like start eating healthy and working out like after you had the heart attack.

17:17Right. Exactly. So what are, what are some, are there any examples of, of, and you don't even have to name names or anything, but any examples of, of where you've seen somebody come back to you and say, like, we got two days a week back, you know, or, you know, anything along those lines. Pretty much everyone. Like, honestly, I'm not trying to say it in a brag way. I literally, it's very rare that someone doesn't come back and say like, it's been completely transformational and not just like the time savings and profit, but also just less stress, less anxiety that things are slipping through the cracks, less, you know, less stress that you have to work harder.

17:55Yeah. Yeah. That's an interesting point because I think a lot of people it's like bottom line, bottom line, but you know, like what's joy cost, right? You know, I mean, so to get a little bit of that peace of mind back to where you're like, wow, I don't have so much stress anymore. I mean, even if numbers don't go up, profit doesn't go up, that's worth a ton, isn't it? Totally. Yeah. So tell me where, again, appreciate you stopping by, talk a little bit about Come Up For Air. Where can people find out more about your work, find out about the book itself? So comeupforeir.com is everything about the book.

18:28And then if people need help on the training consulting side, we got getleverage.com. I have a podcast, The Optimized Podcast. So those are some places that people are interested in this material. They can go and check out more stuff. Do you, are all the consultants that work with clients employees or do you, are you licensing this or? We have a mix. We have 1099s. We have partners. We have W2s. It really just depends on, you know, what the topic is. Yeah. Got you. Awesome. Well, again, I appreciate you taking a few moments to stop by the Duct Tape Marketing Podcast. Hopefully we'll run into you one of these days out there on the road.

19:04Thanks for having me, John. you