The Five Metrics That Reveal Your Highest-Impact System to Fix Next | Ep 260

Please note: This transcript was generated using automated transcription tools and may contain typographical errors or inaccurately captured words or phrases.

Dr Steve Day: Deciding where to put your efforts in terms of creating systems, automation or applying AI is a critical decision for small business owners. We have limited resources, limited staff, and limited energy and time ourselves. So making this decision is an important one to get right. I\'ve often gone down the wrong route and wasted lots of time and energy on stuff that hasn\'t really given me the value back I hoped.

And my clients have had the same issue. And they often come to me and ask me for advice on where I think they should be put in their efforts in terms of systems. It\'s part of our Core Revenue Flow. Which is about identifying the critical systems in your business and then choosing the right one.

Until now, it\'s been quite subjective. But today I wanna reveal for the first time a five point scoring system that leads us to a Autopilot Index. That gives an objective relative assessment of all of the critical systems in your business. So you can actually make an objective decision about where you should put your efforts.

So listen to this episode as I walk you through this awesome, simple scoring system. To make your decisions on where you\'re gonna focus your efforts for in terms of systemization, automation and AI in the coming months and years.

Okay, so today I\'m gonna talk you through our Autopilot Index scoring system. This, like so many of these episodes has come from counter discussions with my clients. And in particular a discussion recently with a brilliant client who\'s got a construction business. And we\'re trying to figure out how to decide which of his systems should be the one we focus on together next.

We had a look at this and we used my existing scoring system. And we sort of subjectively picked like how well systemized each of his existing systems are. But we realized there were some holes in this. That actually we need to be looking more holistically at the impact of each area of the business.

About how good it is today and how much the impact is having on the team and also on the objectives for the business. But also what would be the effect of a improvement in that area? Like would there be an actual big gain in terms of maybe team time and energy or in terms of getting towards our goals. And by having that holistic view of actually scoring things in more ways than simply just saying, how systemize is this?

Or, you know, how critical is this? And just giving it sort of a, a figure or a rating. I wanted to put something that was more concrete. Something that was more consistent. That we could use time and time again, and to be able to assess any 2, 3, 4, 5, whatever part the systems in the business. And actually compare them so we can make an objective decision about which direction we should go in terms of our efforts of improving any particular area of the business.

So let me talk you through this whole process. So the Autopilot Index is using our business when we\'ve already identified the critical systems that we need to, you know, look at and optimize. And make sure they\'re working absolutely brilliantly.

This is our Core Revenue Flow, which I\'ve discussed in previous episodes. And this is where we go through and think like, how do we generate revenue in the business? What are all the systems going from? Like how do people even know we exist, how do we get them as a lead? How do we nurture them, how do we sell to them, how do we onboard them?

How do we serve them, how do we get them as repeat clients, how do we get referrals off them? That is our Core Revenue Flow. And doing this, we\'ll give you a list of maybe five to seven critical systems that allow you to generate money within your business. Now, the challenge is, which of those five to seven systems do you focus on first?

If you\'ve got limited resources, like most small business owners, you can\'t do it all at once. So you\'ve gotta make an objective or subjective, as it sometimes is, decision about which way you\'re gonna go. This Autopilot Index is a way for you to give a relative assessment of each of those systems. So you can make a really confident decision about where you\'re gonna put your efforts.

So I\'m gonna use a real life example from one of my clients. I\'ve simplified it slightly for the purpose of this recording. But it\'s pretty much true to what we actually discussed when we were going through this scoring system together. His business is about renovating and selling apartments. So his main steps in his process to acquire new apartments to then sell.

Or that they need to be searched for. We need to actually find the finance to buy them. We need project managers to actually run the projects. And they actually need to do the construction piece. And then we need to sell the apartments. The five systems with the search finance, project managers, construction, and sales.

We then went through and scored each of these systems in terms of the five scoring metrics that go in to create the Autopilot Index. So the first score is the key. Person dependency. And this is how much of that system or process is still trapped in somebody\'s head and not documented anywhere. So if a particular person was leaving the business, what would the impact on this system be?

So if you had, for example, in this case, the search part of this, so going out, finding new properties. If the entire of that process is done by somebody with loads of experience in doing property searching and they literally just turn up to work every day. And at the end of their day, they gave you a list of new properties to go and buy, but none of it was documented.

That would be an absolutely very high impact if that person left. So we score that super highly. So that each of these scores is about how much impact is there on the business. And you\'ll see as we go through the scores. So we get at the end to a total of five scores out of five. The total will be the highest score or the worst score.

So, so to speak, would be 25 outta 25. And that would mean the system is basically hopeless. And so what we want to try and do is to work towards improving those scores over time. So again, in this case, the key person dependency is like how much is still trapped in somebody\'s heads and not documented anywhere else.

The next score is the team impact. So this is like from day to day, how much is the lack of a system affecting the team? How much time is the team spending on this particular work? Like if this is a fully automated system, as in it was run by either AI or automation or bit of both, and had no human involvement whatsoever, the impact would be zero.

That would be a fully autonomous system. And conversely, if this is literally just people kind of making stuff up as they go along. They\'re really asking questions all the time. There\'s loads of blockers that are in the way of them just getting on with their work. It\'s like back and forth asking loads of questions.

That is gonna be a super high impact score. Because the system is causing major problems for the people doing the work. And it\'s really resource intensive because there is no like decent process to follow. Somewhere in the middle of that, would be a process which is relatively well documented. There\'s loads of like guides and checklists, for example.

Maybe a little bit of automation coming in, but it\'s still got people involved in the day to day and not every question is answered. So any sort of off the norm questions, maybe they\'ve gotta be escalated to a supervisor. So that would be a sort of middle, middle of the ground, so a two to three kind of score.

So five is like total chaos. Zero is fully automated. And the scores are somewhere in the middle. So that\'s our team impact score. And again, it\'s out of five. Next is our founder impact. And that is how involved is the founder or business owner still in that process? How much is still in their heads, in some cases, all decisions haven\'t been made yet.

No one\'s actually thought about all the different possibilities. And therefore it\'s not been written down anywhere. Because it hasn\'t actually come up yet. How much time and energy of the founder is being pulled back into that process at any one time at the moment. So how much they involved. Decision making, doing, or actually just solving problems or fixing stuff on a day-to-day basis. So that\'s the founder impact.

And again, zero means they\'re not involved at all. It\'s been fully delegated. It\'s brilliant. Never ask a question about that ever again. And five is they\'re literally doing it themselves every single day, day in, day out. Next score is the short-term impact, and this is talking about goals. So what is the impact on the short-term goals based on the current level of like systemization of that particular part of the business, that system in the business.

And this means that if we just did nothing and carried on as we\'re going, does the current status quo, the way it\'s being done, like how much effect is that having on the short term goals of the business?

So for example, in this case, like if you need to get five new properties by January in order to keep the business afloat. Because of cashflow, et cetera, then that is a critical short term problem. How if your goal is a to grow to a hundred properties over the next five years, that is a long-term impact, and that\'s the next goal we\'ll talk about in a second.

So the short term impacts are often the urgent important type work on the Eisenhower Matrix. And the long term impact will be the not urgent important works, I\'ll say longer term sort of goals. So if, for example, the search process was pretty scanty and not really well documented. And there was a critical need in the business to find properties urgently to keep the cash flow going. Then that would be a hugely high impact.

Then looking at the other end of the scale, if you\'ve got a load of cash in the bank. No matter how bad your financing system is. It\'s not a critical short term issue to be able to actually fund new property purchases. And therefore, even if you are lacking a decent system in finance, if you\'re sitting on a small treasure chest of cash, it\'s not a critical issue.

So actually it\'s not having enough effect on the short-term impacts. Now, the long-term impact though of having a non-existent finance system would be significant. If you can\'t raise any finance, you\'ve got no idea like what your cash flow is, your budget sites all completely up in the air. Even if you\'re sitting on a relatively big, somewhat cash at the moment, you\'re gonna run out at some point.

So even so, if there\'s no financial system in place, then just having cash isn\'t enough to actually secure the future of the business. So that would score highly as a long-term impact. But maybe if you are sitting on big cash, it would be a non short-term impact. So that\'s a short-term impact.

And then the fifth and final score is a long-term impact. So how does the current system affect the chances of hitting our long-term goals? This could be your annual goals or your five year goals. Like if you\'re, in this case, a property, and as I said before, you wanted to grow to a hundred properties in two years.

Like what would the effect to each of these things be? So again, we score this out of zero to five. So zero is you\'ve got a brilliant system that doesn\'t really need any, an improvement. And if nothing else changed, it would still get you towards your goals. Or it could be a five, which is we critically need to actually do something about this.

We are never gonna hit our goals with the current system. So in this case, in this example, there\'s a critical area about being able to get more project managers. To be able to manage the construction projects. And so this is absolutely critical to be for this company to be able to hit their long-term goals. Because they want to grow the business rapidly.

They can\'t do that without project managers. So their sales side is adequate. It could be improved. But actually it\'s not gonna affect their targets. They\'ve got to a point now where things are pretty good and they\'re happy with that. But this other end of the business is finding the actual staff to actually run the business.

That is a critical issue. And as identified as that would have the biggest long-term impact on the basis if it\'s not resolved. But it\'s not the immediate concern, so it scores lower on the short-term impact. Because they\'ve got enough for now, just not for the future. So by having these five scores. The key person dependency, the team impact the founder, impact the short-term impact and the long-term impact. We\'re then able to add those together to get a total impact score.

So it\'s just the total, it\'s out a 25. And then we can give each one a score. We can then very simply from that, work out the relative impact. So how much does each of these systems contribute to the overall, negative impact of them not all being completely automated. And just basically running by themselves.

And so once we\'ve got the relative impact, that really is now starting to guide us on where we need to focus our efforts, first, in terms of systemization. And just as a side note. Because this came up in conversation when I was working with this client. Here we are talking about creating systems, about documenting, about proving efficiency, about optimization of our systems.

We\'re not actually talking about what the, the immediate need for that business is. Because in this case, if they need to go out and find new properties. Then actually they actually need to go and find new properties. Creating a fully documented automated system for that may not have the short term impact that\'s needed. Because it, the timescale is too short. But it will have a huge, long-term impact.

So this work we\'re doing here, this systemization work is separate sometimes from the actual operations of what is happening on the day-to-day right now. Similarly, if you are struggling to pay your mortgage, and you\'re desperate for sales in the business. I wouldn\'t recommend you go and build a sales system and hire a sales team.

I recommend you go through your contact list, you pick up your phone, and you start phoning people and selling to them. Because that is gonna be the quickest way to solve that immediate crisis. So here we\'re talking about how do we prevent that crisis from ever happening again in the future. So if after you\'ve got out of that black hole of needing to sell, quick, quick, quick. And now you have a little bit more comfort again, so you\'ve got some time to play with.

Now we can go, well, how do we build a sales system so that I never get back into that horrible place again. When I\'m having to like pick up the phone. And ring people all day long just to try to, you know, pay the mortgage or whatever it is that you need, the need the money for. So this concept here about creating a systems implementation plan is about the longer term or the medium term.

The growth of the business about the stability of the business, about the de-risking the business. So removing key dependencies to allow you to actually, work regardless of who is actually turning up to work on a day-to-day basis. To have everything locked into the business and not still chucked in people\'s heads.

And this relative impact will give you that ability to assess one particular system against another in terms of where you should be focusing your efforts next. And the final part of this is our Autopilot Index score. And this is a measure of how autonomous each of your systems is. So a hundred percent score in your Autopilot Index means that something is totally autonomous.

It works without human intervention. It could even be like self-improving with all machine learning and stuff. If you wanna take, its. The extreme, but it just means it just happens without you having to do anything about it. So, for example, my client onboarding system. So if you, were to sign up today and work with me, then everything happens completely autonomously.

You get added to all our systems or updates over our CRMs. Everything happens completely autonomously without any human input whatsoever. If you wanna add staff to our systems, it\'s all autonomous. If you wanna remove them, it\'s all autonomous, et cetera, et cetera. So certain parts of my business are totally automized, so therefore I can give those a hundred percent.

I don\'t have to look at those again unless something critical changes or there\'s a, like a direction change in what we do, or some new technology comes out that supersedes the existing system to such an extent that I need to do a change. We then have the next level down, which is optimized, then functional, then Manual, then improvise, and then lastly, non-existent.

So, optimize is when we have got brilliant documentation. The repetitive stuff may be automated, but there still needs some supervision for sort of the higher level decision making stuff. Functional means we\'ve got really good documentation. Some stuff may be automated, but it still requires, you know, expert people in there to make any, major decisions.

And it\'s often quite human, heavy still. Manual is, it\'s all basically humans. The odd thing may be automated, but it is, and it is partly documented, but it\'s still relying on, experts to be able to fill in the gaps and make it actually function. The next level is improvised, so that\'s when something is pretty much made up on the spot.

People just because of they know how to do stuff, they\'ll just figure it out and get it done, but there\'s no consistency. Expectations aren\'t met because there\'s no actual knowledge about what the expectation is, and therefore clients, for example, get poor experience or different experiences or staff just end up doing different types of work to get the same result.

The last one, non-existent means well non-existent. It\'s not really done at the moment. It\'s never really come up. We know there\'s a need for it there, but we haven\'t actually gone around and done it, done it at all yet. This could also, non-existent, can be if you\'ve outsourced something to a third party.

Say for example, you use an agency to do all of your social media, like your system may simply be asking the agency to produce social media for you, and that\'s it. Like they go away and do everything. You\'re not involved whatsoever, and but that does mean you have absolutely no system. Apart from asking someone to do it for you.

So if that company was to go burst, obviously you would then have no social media going out whatsoever. So that\'s like the highest level of key person dependency. There is no fallback plan because no one else knows how to do it because you\'ve offloaded it. So in that case, it could still happen in your business.

Even though it\'s a non-existent, as in there\'s no defined process in place at all, but actually it\'s still functioning and happening because you\'ve asked someone else to do it for you. So that\'s probably the gray area, if you like, as in does that class as a well systemized process or not. I\'ll let you decide and you can come back, gimme some feedback if you have any thoughts on that.

Okay. So that\'s it. Let me just summarize what we\'ve been through today and the key learnings from this. So firstly that actually having a plan about where you\'re gonna put your efforts to improve your systems, to optimize, to put automation or AI apply to a system, like having a plan to do that is critical.

So you don\'t end up putting time and effort into systemizing or optimizing something that actually isn\'t gonna return value or isn\'t actually affecting the business in a negative way today. Using the Autopilot Index Scoring system is a way to give you a relative and relatively objective opinion. Of where your systems are at, how they\'re affecting your business, and therefore guide you on where exactly you should be focusing your efforts on Next, we looked at the key person dependency, the impact on the team, the impact on the founder, the impact on short-term goals, and the impact on longer term goals.

Which then gives us a score where we can see that what is the impact of every single system in your business that you\'re assessing and was a total impact in a negative way of them not all being automated nor fancy and just doing everything they should do without any input whatsoever. From that, we can work out the relative impact, so therefore we can start actually.

Ordering things into what we should be looking at first and make a really objective decision about what we\'re gonna focus on next. And then lastly, we\'ve got the Autopilot Index score, which gives us a goalpost to move towards. And in case you\'re wondering, as I shouldn\'t mention it before, like how we calculate the Autopilot Index is simply looking at the impact score.

So for example, listen, it\'s called 12 out 25 on the impact score. It\'s the reverse of that. So it would be the difference between 12 and 25 in case 13, and then as a percentage of the total. So therefore 12 on the impact score equals 52% in the Autopilot Index. So just to recap that, again, you take the total impact score, which is 25, you minus the impact score for that particular system.

So if that. Impact score was 12, for example, it\'d be 25 minus 12, so we\'re left with 13, and then we just divide that by 25 and then make that percentage. So it ties it by a hundred. And now you\'ve got an Autopilot Index score, which gives us a score out of a hundred percent. Meaning a hundred percent is a fully automated system that basically runs itself.

And 0% means it doesn\'t exist and there\'s nothing documented about it at all. Having that allows us to actually work towards our goal of being autonomous and therefore having a business that runs with or without your input at all. It\'s not about achieving a hundred percent in everything, it\'s about achieving 80%, which is when something is.

Optimize and being happy with that. Because that means that you as a business owner shouldn\'t really be involved at all. It\'s just that you haven\'t fully automated everything. It\'s a bit like most things, the 80 20 principle, you do 20% of the work to get to 8% of the result. That last 20% going all out on automation and the AI, et cetera, at this state in history is still a huge amount of effort and work to get right. And to be absolutely, and to skill your team up to be able to do that and to maintain stuff, et cetera.

And so therefore, that last 20% is sometimes a nice to have that you don\'t need to strive towards. So the Autopilot Index System is a way for you to assess, not only the state of your current system so you can actually score yourself. And see where you are at in terms of the journey towards a optimized or autonomous business. But, also the relative impact of the lack of those systems for each of the critical systems in your business. And that then guides your future decisions on what you\'re gonna systemize and optimize next.

So that\'s it. If you enjoy this, please do hit subscribe so you don\'t miss out on future episodes where I help you to live with more present purpose and peace and put your business on autopilot, of course.

And please do share this with other small business owners who you think may find this useful. And if you are listening to this on the podcast, you can find this entire episode on YouTube with a screen share of the Autopilot Index scoring sheet so you can see what this looks like. You can go to @drsteveday42, you should find my profile. And therefore you\'ll find this video.

Thank you so much, and I\'ll see you next time.

The Five Metrics That Reveal Your Highest-Impact System to Fix Next | Ep 260

KEY TAKEAWAYS: Business Systemization Strategies

BEST MOMENTS: Smart Business Systemization in Action

TIMESTAMPED OVERVIEW

Episode Transcript

VALUABLE RESOURCES

LINKS TO CONNECT WITH THE HOST

ABOUT THE HOST

For more articles related to business systemization and prioritization, you may also like:

5 Human-Centric Marketing Strategies with Chantal Cornelius, Founder of Appletree Marketing | Ep 213

SYS 136: Everything I’ve learned from hiring over 160 Filipino Virtual Assistants (PART 1)

SYS 193: Stay Competitive: Why Business Transformation Requires Automation and AI – Interview with Ricardo Silva, Founder of Engibots

Discover How Small Business Owners Leverage The SixR System To Achieve Time Freedom In Under 90 Days

How Small Business Owners
Leverage The SixR System
To Achieve Time Freedom
In Under 90 Days

Free On-Demand Masterclass

The Five Metrics That Reveal Your Highest-Impact System to Fix Next | Ep 260

​KEY TAKEAWAYS: Business Systemization Strategies

BEST MOMENTS: Smart Business Systemization in Action

TIMESTAMPED OVERVIEW

Episode Transcript

VALUABLE RESOURCES

LINKS TO CONNECT WITH THE HOST

ABOUT THE HOST

For more articles related to business systemization and prioritization, you may also like:

5 Human-Centric Marketing Strategies with Chantal Cornelius, Founder of Appletree Marketing | Ep 213

SYS 136: Everything I’ve learned from hiring over 160 Filipino Virtual Assistants (PART 1)

SYS 193: Stay Competitive: Why Business Transformation Requires Automation and AI – Interview with Ricardo Silva, Founder of Engibots

How Small Business Owners Leverage The SixR System To Achieve Time Freedom In Under 90 Days

Free On-Demand Masterclass

KEY TAKEAWAYS: Business Systemization Strategies

How Small Business Owners
Leverage The SixR System
To Achieve Time Freedom
In Under 90 Days