Thoughtfulness and the System

I’m living right now in Kiruna, Sweden, and the endless contrasts between the cultures, attitudes, and systems of Sweden and America afford me a wonderful chance to contemplate my opinions of things. This is a topic that rarely wears itself out, but there is one particular difference that highlights a choice that businesses must make—driving laws.

In Sweden they follow very similar laws to the U.S. and in fact, a first-time American driver, fresh from the airplane and fighting jetlag’s initial battle really won’t notice much difference at all. Here, they drive on the right side of the road. They stop at stop signs that read STOP in very good English, and they have crosswalks and driver’s licenses and alcohol limits and speedlimits and police cars to enforce it all.

But they also have roundabouts. And they have uncontrolled intersections. And they have certain “head” roads where rules change. And they have this weird propensity to allow others to pass them.

In a roundabout, the person who is in a roundabout has the right-of-way. In an uncontrolled intersections (which, I might add, two of every three are uncontrolled) the person approaching from the right has the right-of-way. Except when one of the roads in the uncontrolled intersection is a “head” road, in which case they have the right-of-way. And when somebody is approaching from the rear, you pull over and let them pass.

Um… Michael, I can hear you saying, these are really no different than what I’m used to. Well, that’s true in principle—there are laws enacted in the States that address all of these things. But really those are fringe cases; I can think of one uncontrolled intersection in my little home town in Washington. Here in Kiruna, with a comparable population, there is exactly one intersection that is controlled by stop signs, and only four that are controlled by lights.

So in practice, there’s a large difference—in the States, you drive and follow the obvious, pre-defined rules. In Sweden, you pay attention to what’s going on around you. Are you on a head road? Is that car approaching from the right? Are you approaching an uncontrolled intersection? Are you overtaking that car? You are forced to think the entire time. You’re forced to be considerate.

It’s almost like in our quest for efficiency and order, the States designed the road system to allow for a driver to drive without thinking, to just trust that the system will take care of you, while in Sweden they demand a certain presence of mind, a certain level of attentive selflessness.

This Swedish attentiveness allows for the drivers that are outside the norm, for drivers in the third standard deviation. It allows for large tracked equipment and for daddies with their strollers and for underage drivers in their underpowered cars and for road construction without flaggers or traffic control. The American system optimizes for the 1st standard deviation, and as long as you stay inside the confines of “normal” you’ll get to your destination faster and easier.

There is a joy in driving in Sweden that there isn’t in America, and there is a relaxing ease in driving in America that is missing in Sweden.

Are you going to create a system that is slower, safer, and more considerate? or are you going to create a system where the decisions have been made and the fringes have been ignored? Do you want the workers in your system to be forced to make decisions at every turn? or do you want the majority of small decisions made for them to allow them to better concentrate on the big decisions? Do you want thoughtfulness or efficiency?

Secret Sauce

Our least-kept secret is our processes, and it’s the only reason that we’re successful now and that we will be even more successful in the future. See, we do this thing called “checklists” that makes it really easy to get things done–you choose your task, and follow the checklist. There’s a checklist for payroll, there’s a checklist for uploading billings to persnickety customers, and there’s a checklist to get a lead to a customer. We run our weekly meetings using a checklist, we solve our issues using a checklist, and we use Basecamp to hold these checklists. We love our checklists. In fact, a good chunk of my inspiration for our little system came from The Checklist Manifesto, by Atul Gawande.

The checklist is our “What” and “When“–it specifies what to do and the order in which to do it.

For many of our processes, we complement the checklist with a handy-dandy Powerpoint document collectively called Silverdocs. They go into quite a bit of detail on exactly how to get a task done, including screenshots of computer programs. Note that we don’t have a Silverdoc for every checklist, but we do for the ones that are highly critical or likely to change hands often. Payroll, for example, is well-documented.

Silverdocs are our “How.”

We use Basecamp to run our checklists–each customer, each external job, and each internal project gets it’s own Basecamp Project, usually pre-loaded with checklists. See, our company is spread far and wide–I’m in Kiruna, Sweden, and there’s employees in Minnesota, Washington, and Alaska. It’s important that we have a tool to communicate between us on tasks, and Basecamp works perfectly. We can also create checklists fairly painlessly using email, and we hope to use their API to automate this even more.

Also, we have an Accountability Chart that clearly defines the roles of each person. This makes it pretty obvious who “owns” each checklist–for example whoever is in the Tax and Insurance role “owns” the quarterly tax checklist for each company. Basecamp makes it easy to assign To-dos based on this.

Together, the Accountability Chart and Basecamp show the “Who.”

But, as with most successful systems, there’s a meta-system that is worth talking about. No process, no checklist is perfect. And even if it were, it wouldn’t be for long–the world is a’changing, and we gotta be a’changing with it. We have a specific time every week for discussing these checklists–a one hour meeting–and during the week there is chatter about the best use of the lists. The checklist and accompanying Silverdoc will always change.

And lest you think we’re all robots–it ain’t true. We like our checklists not because they force us to do things the same way, but because they free up our time. We can do things quickly while knowing that we did it right. And when we’re done working on the stuff that has to get done, then we can work on stuff that’s fun, like dreaming up the next feature of Silvertime, or helping a customer plan a new branch in a new state. And that, dear reader, is the the “Why.”

PS – For the astute visitor of michaelonsystems who feels they are missing something, we submit that the “Where” is irrelevant in 95% of our work. Numbers are easily transmitted via fiber-optic cable, and little packets of information often are springing hither and yon.

Just do it NOW!!!! (Or What I Learned from Observing my Wife)

I thought I was being smart. See, I figured if I just waited for a while, their would be less effort spent on doing the dishes. You can pile them all up in one spot, and then you can batch-process the whole lot. And the clean dishes in the dishwasher? if you need ’em, just take them straight out of there–saving the time of putting them away at all. As long as you put the food away, the dishes are more easily done once per day (maybe even once every TWO days). Work like a madman for 45 minutes and whambam you’re done.

Except it isn’t really all that pleasant. That means that there’s nearly always nasty crusty dishes lying in your sink, taking up the space you might have used to fill your water cup. That special long-handled spoon that you bought in Europe to get jam out of the jar  is underneath the frying pan, covered in chicken grease. There’s no clean coffee cups. And the kitchen, a place that normally is for visiting and for “being family” in is transformed to a barely functional food storage, a place to enter when rumbling tummies or whining children demand, and to exit again as soon as possible.

It’s amazing what changes when Rebecka, my wife of seven years, is around. She doesn’t wait to put things in the dishwasher. She doesn’t stop to do a full motion-study of just how the dishes need to go from left to right to save three motions. She doesn’t wait until the floor is really dirty before she sweeps. She’s constantly in motion, patting here with a cloth, sweeping there with a broom, and dishing steakpans and coffeecups while they’re still warm.

And the kitchen is cozier because of it.

When considering individual tasks, my way is better–it takes less effort. But looking at our family life as a whole, as a system, it’s clear that her method is superior.

And then it hit me–this is exactly what I want in my business, for me and my customers. I want the work done when it is right in front of us. Let us strike when the iron is hot, even if it seems like more work. While allowing for periods of concentration, deal with that email when it comes in, the first time you read it. Don’t let that customer lead get stale. Don’t allow that expense report to go un-reported. Update the bank reconciliation more than once a month. Bill your customers every day, not every 30 days. Assign somebody to the Firemans’ seat, where their job is to respond to customer requests within 5 minutes. Take phone calls instead of just returning them.

I’ve been batch processing too long, and the smell of the chicken grease is starting to get to me.

Focusing Stone

I’m all over the place. I’ve got people calling me from all of my various clients asking me to help them with this-or-that, I have two clients waiting on proposals, I’m starting work on an unrelated building project, I have financial statements I’m cleaning up, I’m trying to be home with my wife and four kids, I’m pursuing a job in Sweden, I’ve got three hobbies that I work on and 10 more that I would like to work on, I have a blog to write, plus I’m trying to get enough exercise and sleep.

And because of the way I roll, doing all of that is impossible.

It’s impossible because I try to do everything at once.

It’s impossible because with too many demands and too much stimulation I freeze up–and wind up doing nothing.

It’s impossible because each task demands more attention than I care to give.

It’s impossible because I’d rather go chase the next new thing rather than finish the old boring thing.

But what’s so cool is that I’m getting it done anyway through the help of what I call my Focusing Stone. See, even though I’m borderline ADD, I’ve got a couple of things going for me. First of all, I’ve got good help. My wife’s amazingly good at coping with me, and keeping me on track with everything on the home front. And David, my IT/Programmer/Bookkeeper/Personal Secretary pushes me when I’m slacking and helps me up when I fall at work. Second of all, I’ve got good systems.

My internal Focusing Stone is broken. (Some might even say it’s a mirror, causing to me to arrogantly focus on my own self-interest, but I digress.) So I had to build an external Focusing Stone–a crutch–to help get me through the day. Here’s what it consists of:

  1. Delegate. I mentioned I’ve got good help, and I use them as much as I can. My wife pays the bills at home, and David pays the bills at work, for example.
  2. Don’t waste time. My secret obsession is a news site called Hacker News. I don’t know why I’m so addicted, but whatever. But I’ve found that if I’m not careful, I can spend easily half-hour to an hour reading through all that is interesting but non-essential. To fight this, I installed Leechblock, an addon for Firefox that allows me to screw around for 10 minutes and no more per day. (There’s a similar one called StayFocused for Google Chome)
  3. Schedule. I use Google Calendar aggressively, and it syncs with my Windows phone. I try to commit myself ahead of time–for me, uncommitted days are timesinks in which no productive work gets done.
  4. Team up. If I have a living breathing human being working alongside me, I just don’t get distracted.
  5. Email filtering. I get emails from people that I never see, simply because I’ve been able to sense a pattern and build a filter in my inbox to deal with them. Bookkeeping client? BAM!automatically delegated. Automatic receipt? Into the accounting inbox. Amazon or Newegg ad? Deleted. Group email that I was somehow included on? Tagged and archived. I can’t afford the external distraction. I distract myself enough as it is. I use the Google Apps webmail client, but you can do the same thing with Outlook rules.
  6. Freshdesk. This one is new to me, but it’s a ticketing system that puts all our bookkeeping tasks in order, sorted by date of submission. It’s been helpful simply because it means there’s less need for communication. It’s already obvious what needs to be done, no need to talk about it.

None of this is perfect. Just today, I missed a meeting with a client that I had scheduled because I overslept. I spent at least 15 minutes just chit-chatting with people.

I can’t change my nature, but I’m more than willing to build a system or two to help cultivate it.


The Four Activities of an Administrative Team

I often see the the office treated as some unwanted necessity. They’re viewed as the phone-answers, the mail-openers, and the go-fers. People refer to laying off people in the office as “cutting overhead.” It’s thought of as a group of uninspired people who only feel that they’ve done their job if they get in your way.

Which is totally screwed up.

The office, or rather, the whole administrative team, can be a force of nature. They can serve the company, make everybody’s lives easier, and set the prevailing company culture. They can help you understand the impact of the latest big decision, and help you make the next big decision. They can show you what happened yesterday, and how to change your behavior today. They can teach you things you didn’t even know you needed to know.

The administrative team of a company–whether it’s the polished accountants of publicly-traded firm or the handyman’s wife down the road–should be working on the following four things:

  • Strategy is the primary occupation of a well-oiled financial team. Business is inextricably linked to money, and understanding money and its impact on future plans must be done to have any measure of success. Strategists see the big picture, understand possibilities, are creative and push the company forward.
  • Efficiency is the ability to make things happen consistently and quickly, without fuss or drama. It’s the know-how to navigate complex regulatory regimes, the ability to make payroll seem like no big thing, the ability to make honest complexityseem simple. Efficiency eliminates friction between departments, and removes the drudgery from the people who make the money for the company.
  • Control is the function that most people associate with the roll a bookkeeper or company accountant plays. This involves managing risk, preserving assets, and understanding security. Controllers set up budgets and manage expectations, and play a lead role in examining trends for undesired behavior.
  • Education is the least obvious, but has the highest impact of the four activities. Education includes both teaching people within the company about the finances, but more importantly teaching people the “why” behind process and the “how” behind strategy. Educators take the company vision and make it a roadmap, showing the company the steps between here and there.

These are not elusive goals. These are things that you can begin working on immediately. Strike up a conversation with your accountant on your future plans, and press them for their opinion. Ask your bookkeeper how she intends to streamline quarterly tax reporting. Talk to your IT consultant about security. Think about who you could peel off from their “everyday” work to begin training.

Times and seasons and business and systems must change. Build a core group that understands these four concepts, and strives to make them better, and you and your business will be able to change both more quickly and safely.

A Crutch or a Platform?

If you have a really dialed system in place, you don’t need excellent workers. McDonalds does it all the time: with unskilled workers from a huge variety of backgrounds, they can make the same Big Mac the same way every time. McDonalds realized early on that in order to scale in the fast food industry, it couldn’t wait for top-notch workers, for chefs with degrees and experience and opinions and “taste”. It had to take the employees that it could get–and so it built it’s Big Mac-generating system.

McDonalds built a crutch.


Rialto Restaurant is a upscale restaurant on Harvard Square, in Boston. They serve thousands of people every year, but they’ll never serve billions. They rely on Jody Adams and her highly-trained staff to produce high-quality food. Jody, in turn, relies on her recipes. She has checklists for every dish, and every dish is made to perfection. Nobody is allowed to deviate from the checklist, although being trained chefs, not everything is specified. Further, the recipes don’t stay the same, but change and improve over time [1]. Jody gets consistently good food, but still needs amazing talent to make good in the first place. Her and her chefs can create offline, when building a new recipe or tweaking an old one, but then they stick to what they’ve created while under the gun. The whole team works better because of the system.

Rialto built a platform.


What are you after? Do you need a crutch because you can’t find the people? Or do you need a platform to help the people you have?

[1] “The Idea”:Gawande, Atul The Checklist Manifesto, (New York: Picador, 2009)

Redundancy is good, resiliency is better

As businesses grow, inevitable specialization occurs, where a certain process is done only by one person who is really good at it. This has its benefits. Now the charismatic guy with no possibility of being consistent isn’t responsible for budgets, but can concentrate on selling. Now the gal with the cutting sarcasm and a knack for numbers can concentrate on the bookkeeping instead of having to deal with cranky customers.

However, specialization has its drawbacks as well. The primary one is that eventually, an increasingly specialized work force breaks the Mack Truck Rule:

If any one person gets run over by a Mack Truck, the business must still be able to function.

After a crisis, such as a sudden termination or a medical emergency, businesses are left in a pinch–the person they relied on for so many years is gone, and there is nobody who can do her work. Nobody really knows how George set up the website after they changed web hosts. Nobody is quite sure how Susan mixed the Candy Cane Espresso that the customers like so much. Nobody really knows how Nancy figured out the payroll every week. They just know it got done. So, with the pain fresh in their mind, managers vow to never let that happen again, and make sure that at least two people know the process. This is known as System Redundancy, or the duplication of critical components to make sure the system has less chance of failing.

However, redundancy doesn’t much help the second drawback to specialization: the fact that change becomes hard. This is due to the Theorem of Empathetic Change:

The better something is understood, the easier it is to change.

In fact, introducing redundancy can make change that much harder. Since there’s multiple people that have it under control, it seems that there is no need to worry, and certainly no need to spend additional money on a process that’s working well. Redundancy can take the pain out of a process, which saps all the drive out of anybody wanting to make that process better.

Besides, if changing the behavior of one person is hard, changing the behavior of two is more than twice as hard. Now, instead of convincing a single salesman that it’s time to start concentrating on aluminum mills, not just iron foundries, you have to convince him and the marketing director, who fills in for the salesman when he’s on vacation. And besides, since neither you nor anybody else in the company really knows what they do when they’re selling, it’s tough to say just how big a change it is you’re proposing.

Remember, just because two people understand something, it doesn’t mean that others in the company can. Better, then, to make sure the critical process that any one person does can easily be picked up by another person. And doing this is extraordinarily simple, but mind-numbingly boring: write the process down. Sometimes people refer to these as Process Manuals, some as Standard Operating Procedures. Others make them into Training Guides, still others make Checklists.

These written instructions give the business an important advantage:  Resilience. Now, come what may, you can do what another did yesterday by thumbing through the three-ring binder, or checking out the company wiki, or looking at the checklist doc on the server. Sure, it won’t be easy if you’ve never done it before, but at least it is possible.