The Four Hour Work Week... For Real
by Mastermind Adventures founder Mike Brcic
Feb. 28, 2018
this post originally appeared at mikebrcic.com
WARNING: This article is over 6500 words long. Proceed at your own risk... but it might just change your life.
The Four-Hour Workweek
Since its initial publication in 2007, Tim Ferriss' The Four Hour Workweek has been translated into 35 languages and has sold over 1.3M copies.
It's spawned a generation of acolytes and devotees, and it catapulted Tim to entrepreneurial fame.
I'm a big fan of the book, and since first reading it in 2010, I've gone on to read it twice more.
The only problem is... I've never actually met anyone who has managed to whittle their work week down to four hours. I've met lots of people who have implemented some or all of the suggestions in the book, but no one who actually has a true four hour work week.
Every now and then I'll meet an entrepreneur who's had a successful exit and is temporarily - usually for a month or two - enjoying the fruits of their labours until they launch into the next 60-hour-a-week startup.
But someone actually enjoying a four-hour workweek?
In this post I'm going to outline in detail - and 10 steps - how I actually managed to take my 7-figure company (Sacred Rides, the "#1 Mountain Bike Tour Company on Earth" - National Geographic Adventure & Outside Magazine) and almost completely extricate myself from the business, so that it runs smoothly and stress-free without me.
I'll admit right off the bat that I'm not actually enjoying a four-hour work week as of this writing (Feb. 26 2018).
Last year (2017) I launched a new company, Mastermind Adventures (whereby I host high-achieving entrepreneurs on adventures in spectacular locations), and I'm still working about 20-25 hours/week on this company.
But I have managed to whittle down my total workload for Sacred Rides - a big, complex, 7-figure business with a lot of staff - down to 2 1/2 hours of team meetings every Tuesday. I have one remaining project that will take up another 3 to 4 hours of my time, and that should wrap up by next week.
Over the coming months I will be using all of the strategies and tools that I outline below to bring my workload for Mastermind Adventures down to less than 8 hours/week, keeping only the things I love doing. With this process now outlined, I can now repeat it for every business I launch.
"But I love my work! I don't want to work less!" I can hear my fellow entrepreneurs protest.
First off, I call bullshit. That's an excuse to justify your busyness. Or an excuse to avoid having to spend time dealing with other issues, or actually face the noise in your head and in your soul.
I know a lot of entrepreneurs - from the events I attend, through Mastermind Adventures, and through my former life as a consultant and Dean of Social Enterprise at the Centre for Social Innovation.
Most entrepreneurs I know work crazy hours and are stuck on the hamster wheel of scale. They're convinced they have to keep biggering and biggering, as if that's the natural order of the entrepreneurial world. They build a business that requires them to create a lifestyle around it.
In 2017, I decided I wanted to get off that wheel and wanted to design a business that worked around my lifestyle, not the other way.
Here's a bit of the backstory behind that decision.
In the spring of 2017, after 6 months of intense work to launch a new program for Sacred Rides (equal parts franchise and Airbnb), steering the ship for the core operations of the company (which was becoming more and more stressful), and launching Mastermind Adventures, I was burnt out.
In 2016, I had reached the 20-year milestone with Sacred Rides and was approaching my 21st anniversary of running the company. Frankly, I was getting tired of the business. I still loved my company, and was really proud of what I/we had achieved, but I was increasingly spending my time on tasks and projects that were really draining me and making me miserable.
I wasn't enjoying my work. I wasn't spending enough time with my family. I was leaving too much of the household responsibility to my wife. I wasn't happy and I wasn't contributing to the happiness of others around me.
On top of it all, my relentless push for scale and growth had pushed the company into unprofitable territory, and was causing cash flow issues and stress.
If you had graphed my life out, it would have looked a little like this:
I realized something had to give.
A couple of significant events (outlined below) changed my perspective, and set in motion a process that is continuing to this day.
So without further ado...
Below is the process - or at least the most important parts - that I followed in order to bring my workweek down to 2 1/2 hours a week. There's a lot of information below, and if you're serious about wanting to cut down your workload you don't have to do everything I did - just do 1 or 2 things and I promise your workload will decrease, your stress level will go down, and your life satisfaction will improve.
Although delegating and outsourcing were a big part of the process, it wasn't just about delegating and outsourcing. Taking tasks and responsibilities off your plate is great, but if you don't do it right and set up the right systems around it, you'rinevitably going to get sucked back in to your business.
The information below isn't necessarily listed in chronological order of how I tackled things. In some cases it is, but mostly I just listed it in an order that I thought made logical sense.
NOTE: I want to state up front that the information below draws from all kinds of incredible sources. I didn't reinvent the wheel with any of this - I just took bits and pieces from other awesome wheels and made what, for me, is a 'superwheel' that creates a framework for more effective work.
I did my best to reference and link to the relevant sources, but if there's anything below that is uncited and deserving of credit, please bring it to my attention and I'll rectify it immediately. My sins, if any, are sins of omission, not commission - some of this stuff may have made itself known in my consciousness as if original but was actually the product of some long-acquired wisdom.
1. SURRENDER EGO
Two resources came into my life last year that radically changed my perspective.
The first was the book Ego is the Enemy. This short, pithy book by Ryan Holiday hit me like a brick. As I turned the pages, I saw more and more of myself in this book. I came to realize, with every passing word, how much my ego had been driving the bus and calling the shots.
The second was a roundtable session I attended at my friend Jayson's event Mastermind Talks. The session was led by a fellow named Philip McKernan; Philip holds transformational retreats around the world (I've probably talked to half a dozen people who all echoed the same words, "life-changing").
It was a short session (1 hour) but very impactful. One of the questions Philip asked the room was "Where are you seeking validation?" (or something to that effect). As I reflected on the answer, I realized that so many of my entrepreneurial goals were, in effect, a quest for validation.
I wanted my company to be in every country on Earth. I wanted to achieve triple-digit growth rates and 9 figures. I wanted to be on the cover of Entrepreneur magazine. I wanted to speak on stages around the world, to tens of thousands of people.
Over the coming months, I began to reflect on and dissect my goals. Would getting on the cover of Entrepreneur really make me happy? Would achieving triple-digit growth? Would flying halfway around the world to speak on a stage for 40 minutes?
As I pondered these questions, I began to realize that these were not my goals - they were my ego's. They were a child's cry for validation.
And the more I pondered, the more detached I became from these goals and the less excited I became about them.
As the weeks passed, I reflected on the things that had brought me joy:
Reading with my daughters, throwing a baseball with my son. Being a role model for them.
Laughing and adventuring with my friends.
Playing my guitar.
Writing music and playing with my band.
None of these things were compatible with the ego-driven goals I had previously set for myself. Setting crazy growth targets invariably led to more stress and more headaches (and less profit - more on that later). Pursuing a speaking career meant more time away from these joy-inducing moments.
I realized that in order to build a business that supported my desired lifestyle and most meaningful goals, I had to re-orient my business priorities.
The starting point was changing the metrics we tracked.
Our primary metric would no longer be revenue or sales. It would be profit.
Over the past 3 years we had pursued an aggressive growth strategy, fueled by investor money. Revenues had grown steeply, but profit had suffered, to the point that we had become unprofitable.
No longer would revenue drive our decisions.
Everything would be oriented around profit, because without it there would be no company (I was tired of turning to investors for money and knew I couldn't and wouldn't do it again).
This necessitated several changes:
- Raising prices: On July 1, 2017, we raised our prices by an average of 20%, making Sacred Rides among the most expensive suppliers of mountain bike adventures in the world. I felt confident that we could deliver a better product than anyone else, and knew that there were enough customers out there that would pay for quality (and who recognize that you have to pay for quality.
- Cutting overhead: In September, I reduced our overhead by almost 40%. Some of this was easy (getting rid of software we didn't really use, cutting our developer budget) and some was really hard (laying off staff and reducing one team member to part-time hours). But it was necessary if we were to survive. I also realized that part of growing the team was the ego-stroke of being able to say how many people I manage - what madness! I know very few entrepreneurs who enjoying managing people.
- Increasing gross profit: Also in September, we reduced the total number of trips we would run in 2018 by 1/3. The net effect would be that we would run fewer departures but would hopefully have more people per departure, which translates into considerably more gross profit.
The net effect of these changes didn't help my ego. I would probably have less revenue, would definitely have fewer staff, and we would run fewer trips.
But I was able to quickly and easily come to terms with no longer being driven by revenue - our new breakeven sales targets were now almost 50% lower than before. We could have a drastic drop in revenue and still be profitable. Which would ultimately be way less stressful. Now, instead of missing targets, we smash them consistently.
As long as my ego was OK with being a smaller company - and it was - then we as a company would be OK.
Interestingly enough, since implementing these changes, our revenues have actually gone up. And profitability has gone way up.
I just needed to be OK with not feeding my hungry little ego.
...THEN TEAM HAPPINESS
The second metric we would track would be team happiness - of which mine was paramount. I knew that if I continued to be unhappy running my company, then that would trickle down to my employees and ultimately to my customers.
Conversely, if I was happy and my staff were happy, then we would ultimately have happy, enthusiastic customers.
I knew that part of my unhappiness was due to a) doing work that I didn't enjoy doing and b) dealing with stressful issues that kept coming up.
More on both of these later, but ultimately I decided that if I wanted to be happier running my company I needed to spend less time running my company and I needed to track my happiness level ("what gets measured gets improved").
So I started tracking my joy level (i.e. the joy I get from running the company) on a weekly basis. And I implemented regular happiness surveying among my employees.
This is still a work in progress, and after years of pursuing aggressive growth and not considering the effect on my staff, there is still work to be done in this regard, but I can say pretty confidently that things are a lot better than they used to be, and I am waaaay happier running the company (which now involves as little work as possible).
2. EMBRACE SIMPLICITY
As the company had grown, it had taken on an intense level of complexity. On top of my office staff, we had over 50 contractors around the world, working for the company. We had developed our own massive IT infrastructure, with two full-time developers to manage. And I had launched a whole startup within the company (the aforementioned franchise-meets-Airbnb program).
Why do we entrepreneurs have such an addiction to complexity? Is it because complexity makes us feel important?
The complexity was killing me, because with complexity came issues, and with issues came stress, because the team usually turned to me for help resolving those issues.
More on how we address issues below, but one way we addressed all of this was to look at the company through the lens of simplicity.
Simple became our new mantra, our rallying cry, and the filter through which decisions were made.
"Does this increase our level of simplicity or our level of complexity?" is a question we now frequently ask when making decisions.
On a macro level, we tackled complexity at every level of the company.
On an operations front, we had 3 different supplier models (company-operated, subcontractor, franchise-operated), each of which had its own contracts and agreements, own quirks and idiosyncrasies, and own complexities.
Tackling this was job #1, a job we started last year and which I took over in October, with 1 stated goal: move everyone to the same operating model and contract.
This has massively reduced our complexity, which has in turn massively reduced both the frequency and amplitude of issues, which has thus in turn massively reduced my stress level.
It's just way easier to deal with consistency throughout your supplier and product lines, which means we have more time and energy to spend on marketing and sales.
On a marketing level, we dove into our metrics and identified our top three marketing channels for customer acquisition, focusing on meaningful metrics, and ignoring vanity metrics. We then doubled down on those channels and stopped putting time and energy into others.
Knowing we're only focused on three marketing channels makes marketing way easier to manage, more impactful, and more fun to manage (it's generally more fun to go deep on a project and do it really well than spread yourself thin among too many projects).
simplicity in action
Here's an example of our simplicity mantra in action.
Prior to this year, we spent considerable sums of money on paid advertising, primarily via Facebook ads. We built complex funnels involving multiple landing pages, deadline timers, multiple autoresponder campaigns, and multiple traffic and retargeting campaigns.
It took a lot of time and energy to manage all of these campaigns, and ultimately they weren't that effective, producing minimal ROI and, when time and energy depletion was factored in... negative ROI.
So I decided that while we still wanted to use paid marketing as a channel, we would apply the simplicity lens to our approach.
I knew that Facebook campaigns could do well for a short period of time, but with a limited audience (mountain bikers with $ who like to travel), we would need to continually refresh our campaigns with new creative. So we couldn't just set up a bunch of campaigns and then leave them on indefinitely.
But I could set up a system that would allow my staff to very easily turn campaigns on and off when needed, and promote certain products at the appropriate time.
So on February 1 of this year (2018) I started by deleting hundreds of campaigns from our account, leaving in place a handful that had performed well. I organized everything in 4 root-level campaigns, with 2 conversion-objective campaigns and 2 traffic-objective campaigns.
I then set up 4 ad sets in those conversion campaigns with a small budget, and set them to run continually on a budget of $3/day each. I wasn't too worried about hitting up this small audience with the same messaging over and over, as I knew that staying top of mind with an audience that loved us would probably pay off.
In the traffic campaigns, I set up a handful of ad sets in one campaign (mostly blog post ads to a cold audience that was unfamiliar with the company), and about three dozen in the other (main) traffic campaign, mostly warm audiences who had heard of us before, but with different trips/destinations advertised in each ad set.
I set all ad sets to run continually, with a budget of $3/day each, and to avoid wasting money, I set a bid cap of $0.75 CAD per landing page view on the ad sets, so that I (or my staff) didn't have to keep coming back to check.
All told, it was about a 10-hour investment of my time to set everything up.
I then kicked things off by turning on the conversion campaigns, and turning on a half-dozen ad sets in the main traffic campaign.
I let them run for a few days then came back to monitor the results.
The results were surprising to say the least.
After spending only about $100 CAD, Facebook had generated two bookings (worth about $8500 CAD) and had delivered traffic to the website at about $0.11 per landing page view.
I let them run for a few more days. After about a week, some of the traffic-optimized ad sets had crept up to over $0.30/landing page view, so I turned them off. I then turned on a couple of new ad sets.
I came back a few days later again and found that most ad sets were still performing well (sub-$0.15 per landing page view), some of the original ad sets had crept up over $0.30, and one of the ones I had turned on a few days before had also exceeded $0.30/view.
So I repeated the process, turning off under-performing (>$.30/landing page view) ad sets and turning on new ones.
Again, same results. New ad sets, with new creative (images, videos, text) performed well.
We're now 26 days into this simplicity experiment, and here are the results:
- I've turned Facebook ads management over to one of my staff and have given her instructions on how to manage the campaigns. All she has to do is click the on/off button on ad sets that don't meet the criteria, and turn on new ones. This takes about 15 minutes on Monday and Thursday
- We've spent $599.20 CAD so far this month (our budget is $600/month, but we can exceed that because we'll be way under budget on other marketing initiatives)
- Facebook ads have generated 4 bookings. The average booking is $4200 CAD, so that's $16,800 CAD in revenue, or a 2803% ROI.
- The ads have also generated 2,733 landing page views on our website, with an average time spent on site of 0:41 (which is pretty good for FB traffic). This has also helped to populate our retargeting audiences
Time will tell if these results will continue, but I feel pretty confident that they will - we have lots of ad sets we can turn on and off to avoid the creative getting stale, and the audiences are hyper-targeted.
Could we get better results by spending more time managing our Facebook spend?
Probably, but I'm betting the 80/20 rule applies here: 80% of the results are coming from this 20% effort, and the additional 80% effort will only generate increasingly diminishing returns (I should also note that Facebook advertising has always been a very small piece of our customer acquisition strategy).
3. FOCUS ON UNIQUE ABILITIES
One of the aspects of the program I really loved was the Unique Ability process. In a nutshell, it's a process to help you uncover what you're really passionate about and amazing at, and then clearing things off your plate so that you can spend as much time as possible in your Unique Ability.
After reading the book, I had a very clear sense of what my Unique Ability is, and didn't bother with the step where you solicit your friends' and colleagues' feedback on what your UA might be. I simply went straight into the process of clearing off everything that wasn't UA (and now I've taken it a step further and pretty much cleared off everything).
The process (for me) was a three-step process:
- Make a list of everything I do in and for the company on a repetitive basis, in a Google Sheet. I had this Sheet open in my browser for a week, and just made note of what I was doing.
- For each item on the list, I then marked the task as either:
- I for Incompetent (stuff I'm no good at and that drains me)
- C for Competent (stuff I'm somewhat competent at, but not really that good at nor energized by)
- E for Excellent (stuff I'm really good at, but not really enthusiastic about)
- UA for Unique Ability (the stuff I should be focusing my time on)
- Then, starting with the Incompetent stuff and moving up to Competent and then Excellent, figured out a way to stop doing that activity by either:
- Delegating to one of my staff
- Outsourcing to my VA or someone on Upwork
- Automating through software
- Eliminating (because it's not a useful activity, no matter who does it)
I started and completed the UA process with Sacred Rides - again, I pretty much eliminated everything except my Tuesday team meetings (which I have to do to keep abreast of what's happening), but if I wanted to, I could spend time in the company on my Unique Ability. I've now moved on to following the UA process for Mastermind Adventures as well. I also started developing a task list for my personal life and plan to get to that soon.
As mentioned, this is all in a Google Sheet, and I scheduled a full day every week where my entire goal was to figure out how to eliminate almost everything from my Sacred Rides workload.
For activities I couldn't eliminate, the first step in getting rid of them - before I delegated, outsourced or automated - was then to write my Playbooks...
4. WRITE PLAYBOOKS
This is something that has been a work in progress for quite some time, but only really proved its worth in 2017 with a switch to a slightly different approach.
Prior to 2017, I knew the value of developing systems and processes in the company, so I implemented a staff wiki on our website, whereby any staff who had a task that they did repeatedly (e.g. sending an email blast) would be required to outline the process step by step in a wiki.
Over time our wiki grew, with over a hundred different entries outlining almost every process in the company. My directive was 'never explain a process twice' i.e. if another staff person asked you to explain how to do something, you didn't show them how - you wrote the wiki and then shared it with them. If they had to ask you questions about it, it wasn't written clearly enough or with enough detail.
The problem was that the wiki was a bit clunky and it was hard to search for things. Often it meant getting questions like "I know there's a wiki for X, but I can't find it - what do I search for?"
In March of 2017, I watched a virtual roundtable delivered by business-building genius and friend Dan Martell (again courtesy of Mastermind Talks). In the talk, Dan outlined his 'Playbook' process, which was similar to our wiki approach but with two key distinctions:
- It's all managed in free, easy-to-use Google Docs and Sheets.
- It includes the crucial 'Final Checks' section in each process, where you outline any final checks that need to be done before you hit send, make the phone call, or mark the process complete
Basically, each process is outlined in a Google Doc, following a standard template format. The process is outlined step by step, in as much detail as possible, so that someone who has no idea how to do this thing, or is on their first day on the job, can follow the steps and complete the process.
Then each of those processes is linked to from a central Playbook (much like a Table of Contents), in Google Sheet format. We've broken our processes up into sections, such as Sales processes, Marketing processes, Operations processes, and... well, you get the idea. This makes it really easy to find what you're looking for.
We also have a tab in the Sheet for 'Reference Docs', which can include stuff like our Marketing KPI tracker, list of joint venture partners, etc.
Here's what the Playbook looks like:
And here's what a Process looks like:
Midway through 2017 I went on a Playbook tear, outlining almost every single thing I do in the company, and putting it in a Process doc, so that I could start offloading stuff onto others.
This is now a key component of my process for removing myself from a business - a repeatable format that I will bring to any company I run.
5. USE GUIDING PRINCIPLES
You've probably heard the term core values before. At most companies they're, at best, a bunch of fairly meaningless phrases that sound like they were stuck together by a phrase generator, sitting up on a wall in a boardroom. At worst, they're a joke ("integrity" was one of Enron's core values).
You probably know, or suspect, that companies that take their core values seriously typically outperform those that don't.
What you may not have suspected is that core values can be a powerful tool for building a self-managing company.
At Sacred Rides we don't have core values, we have guiding principles. It's a subtle but powerful distinction. Our guiding principles aren't just words on a wall or feel-good fluff, they're words that guide our decision-making on a regular basis. That's why they're guiding principles.
What that looks like in action:
I no longer have to be involved in every decision in the company. I now ask my staff, during our weekly huddles and one-on-ones, to outline any major decisions they've made. I ask them if and how they used our guiding principles to make their decision and if the decision is in alignment with those principles (if it's not, they'd better have a good reason for going against our guiding principles).
For example, one of our guiding principles is 'Make 100-year decisions', which means, in practice, 'don't make decisions based on short-term thinking'. So if my staff make a decision that might not make any sense immediately or this quarter, then as long as they can show that it will make sense in the long term, then I'm totally fine with it.
For reference, here are Sacred Rides' guiding principles:
- Make positive impact
- Take risks
- Make 100-year decisions
- Our team matters
- Have fun & be ridiculous
- WOW our customers
- Be 100% accountable
6. HAVE A SYSTEM FOR EXECUTION
If you're going to remove yourself almost entirely from your business, you'd better have a system for:
- outlining what is priority and what isn't
- keeping people accountable to ^^^
Over the years I've developed a pretty killer system for achieving these objectives. It draws on some of my favourite resources, including Scaling Up, the Entrepreneurial Operating System, Todd Herman's 90-Day Year, bits and pieces of a few others resources, along with some of my own additions and flair.
It all goes into a Google Sheet with multiple tabs across the bottom.
Some of the key pieces:
- A One-Page Strategic Plan: this is a spreadsheet that outlines some of our key metrics, our quarterly, 1-year and 3-year goals, along with key initiatives required to achieve those goals.
- A Quarterly Goals and Projects planner: A sheet that outlines 1 to 2 major goals per quarter for each senior team member, along with the projects required to achieve those goals. Each project is then broken up into up to 10 tasks or deliverables, and tracked and reported on on a biweekly basis during our weekly huddles (our weekly huddles alternate between reporting on 2-week springs and addressing the issues list, among other things).
This tab is revisited at the end of each quarter, where we report on our achievement of our quarterly goal, why we feel short if we did, and what we will focus on during the next quarter.
NOTE: We used to have up to 5 goals each per quarter - in 2017 we simplified (simplification!) and brought that down to 1-2 goals each (ideally just 1) and up to 3 projects toward those goals. This has increased our focus and success rate significantly.
- A daily schedule for each management team member, broken down into 1/2 hour increments. There is time in the schedule (two 90-minute chunks) for ongoing/regular daily tasks and focused time for projects. I'm continually pushing my team to make sure they carve out at least 1 of those chunks every day to move projects forward (rather than getting sucked into the weeds of everyday work), and ideally both chunks.
The tab also asks team members to rate every half-hour time chunk they've planned out on a scale of 1 to 4, with 1 being least valuable work and 4 being most valuable work - a $ value is then assigned to each 1/2 hour chunk and they can see, at the bottom, the total value of their day. More time spent in level 3 and 4 activities means the total value increases significantly.
- A team schedule where we can view each other's daily schedule: this simply aggregates everyone's daily schedule in one place, along with their goals and projects.
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7. RESOLVE ISSUES FOR GOOD
Something that contributed significantly to my stress over a high-growth period between 2014 and 2016 was the frequent 'fires' that kept coming up: issues that had to be resolved that kept pulling me away from my projects, interrupted my workflow, and just used up a lot of my and my team's time.
Like most businesses, our response was to drop everything, figure out what was going on, then slap a band aid on the problem. And then, lo and behold, the same issue would pop up a few weeks later. Then we'd drop everything and repeat the process.
I think it was around late 2015 when I encountered the book Traction, and another book called Get a Grip by the same author. In it, the author describes a process for resolving issues for good, whereby you set aside time every week, as a team, to deal with and resolve recurring issues, by following a 3-step process:
- Identify the Issue
- Discuss It
- Solve it with a To-Do plan
So what we did was, rather than dealing with issues when they come up, we created a Google Sheet where staff could list issues as they come up*, rather than bringing them up with the team and disrupting everyone's workflow and focus.
Then, once a week, we would look at the list of issues, and vote as a team on which ones we wanted to tackle that day.
Once we decided on an issue, our discussion was usually framed in a '5 Whys' format: ask why this issue is happening? Then when a reason comes up, ask why again. If needed, repeat the process until you get at the root cause.
Customers aren't paying their balances on time.
- Why? Because they're not getting notifications that the balance is due.
- Why? The notification wasn't turned on in our system.
- Why? Because the person that set up the notification forgot to turn it on.
- Why? Because they didn't follow a process.
- Why? Because a playbook wasn't written for setting up notifications.
- Why? Because staff aren't consistently writing playbooks for our repeated processes.
So now, instead of just turning on the notification (which would certainly solve the initial problem), we get at the root cause, which is that staff need to always write out a process whenever they do a recurring process (i.e. a task that they do repeatedly).
So now we have a policy that whenever you have a repeating task, you write out the process and put it in our Playbook. Then you follow that process whenever you do that task.
Once we figure out that the root cause is, we decide on the next steps and assign someone to be accountable for resolving that issue.
Note that they are accountable for resolving that issue, but not necessarily responsible for resolving it i.e. they don't necessarily have to do the actual work, but they do need to report on whether it's getting resolved or not.
Now when we have our weekly 45-minute issues meeting (it's actually biweekly now, since we have far fewer issues to resolve), we spend the first 10-15 minutes looking at the in-progress items and reporting on progress toward solving the issue, before we move on to new issues.
I can't overstate the impact of this process.
Whereas prior to this, issues may have taken up as much as 25% of total staff time and caused a lot of stress, they now take 45 minutes every two weeks for the meeting, and perhaps 2-3 hours total staff time per week to resolve the issues discussed.
Issues rarely ever come up again, because we've dealt with the root cause rather than the symptom. And they cause almost zero stress, because we know that issues will get dealt with, and they will get dealt with properly.
*NOTE: absolutely critical issues still get resolved as soon as possible
8. GET A REGULAR REPORTING SYSTEM IN PLACE
With all of the systems in place, and almost all company duties off my plate, I still needed to know if the company is healthy or not, and if not, what needs to be done to get it back to health.
In order to better assess the company's health, I realized I needed:
a) more meaningful - and fewer - metrics
b) a consistent reporting rhythm
For years we've been monitoring lots and lots of metrics or KPIs (Key Performance Indicators). At one point I had 8 different dashboards, with at least 10 different report widgets on each. I was drowning in data, to the extent that I couldn't make sense of it all.
So I went through our metrics and got rid of all of the metrics that I thought were either vanity or unimportant metrics. I asked myself, 'what are the top 3 metrics that will paint a relatively complete and accurate picture of my company?'
For us, these metrics are:
- Cash flow, week to week (and current cash position)
- Gross profit* (from the operation of our trips, pre-overhead), both monthly and a trip-by-trip basis
- Seat sold % (our gross margins increase steadily as we fill up a higher percentage of available seats on each departure)
*Net profit is important, of course, and we do look at it, but with our monthly overhead being very consistent (variation is <5% from month to month), it's not really a metric we can affect on its own - gross profit is the primary contributor and is a number that varies considerably, and over which we have the greatest control.
These metrics are tracked on a weekly basis and a great deal of attention is paid to them. If they're not where we need them to be, then we spend time trying to figure out why and come up with a plan to address the problem.
The goal of focusing on these 3 metrics is to recognize that they are the 'vitals' of the business (much like heart rate or blood pressure might be for the human body) and then use them to guide our decision making, while not getting distracted by the other vanity metrics.
For instance, if cash flow is poor, then I might give my bank a call to see about increasing our line of credit.
If our gross profit is not hitting its target, we might look at increasing trip price, or reducing the number of discount we use.
If our seat sold % is too low, then we might look at reducing the number of total seats we offer, to get higher numbers of people per departure rather than spreading them out too thinly.
We also track other metrics, such as website visitors and qualified leads, but these are mostly used so that the relevant people can analyze them and make changes to their own duties. They're looked at but not obsessed over the way our vitals are.
After coming up with our metrics, the next step was to come up with a system and rhythm for getting these numbers at the frequency we wanted them at.
I of course wrote playbooks for this, so that the relevant people knew exactly how to get this information, where to put it, and when.
This information is now shared weekly, first during our weekly team huddle, where we look at a range of company data (including, of course, our 3 vitals), and then later in the afternoon, during my meeting with my bookkeeper and my COO.
In about 30 minutes total over the course of the day, my team and I know exactly how the company is doing and how it will likely do over the next few months.
9. TRUST THE TEAM
With all of these systems in place, my workload for Sacred Rides, as mentioned, is down to 3 hours of team meetings every Tuesday (our weekly team huddle starts in 45 minutes as of this writing).
Everything is running smoothly and profitably, and I'm able to provide maximum value to the company by just getting out of everyone's way, and providing useful feedback when needed.
Part of getting to this place was to learn to place trust in my team. My team won't always make the same decisions I would have, and they won't always do things the way I would have, but that's something I've learned to be OK with - and in many cases, they make better decisions and do things better than I would have.
So the only remaining thing now is to...