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#028: Effectiveness Before Efficiency

Listen to Episode 28

Today, we’re going to talk about the dirty little secret that systems consultants don’t want you to know. Stay tuned.

Welcome to The Client Whisperer™ Show. I’m your host Tony Banta, and I am the client whisperer. I’ve spent over a decade running multiple six- and seven-figure client businesses and I’ve learned that the secret to success in a client business comes down to one thing: leadership. Bad client behavior is the enemy. And with the right curriculum, infrastructure, and mindset, you can lead your clients to great success and scale your business the easy way.

There’s a good chance we’re gonna make some people uncomfortable with this episode. And that would be a good thing because there’s a dirty little secret when it comes to systems and that is, most of them don’t work. I’m serious. When you look at the statistics, there was that phenomenal study, and I’ll link it in the show notes, that looked at over 30 years of time. This study concluded in the mid-2000s, but it went back from the 70s and it looked at the rates of effectiveness in the workplace. And that was interesting because the buzzword is all-around efficiency. Are we being efficient? How can we drive efficiency – and certainly we talk about that too.

We talk about profit maximization all the time. We talk about how you need to efficiently deliver the work that you’re doing or the coaching that you’re providing or the consulting sessions that you’re having with clients. How do you do that efficiently on scale? But this looked at effectiveness, and specifically, it asks the question of workers in medium-to-large-sized companies, how much of their week – and it got pretty detailed so that the answers were pretty good – how much of their week were they spending actually creating value, creating new value versus reworking work that had already been done before? Duplicating work, re-typing, typing something into a different system, doubling work because someone made a mistake somewhere. And the results were staggering. Despite massive investments in technology, in new integrated systems and all of these things that happened over those 70 years, despite the fact that in that period of time there was a proliferation of computers.

In the 70s, it was not uncommon for people not to have computers at their desks. That was actually rare that someone did at that point in time and there was tons of, literally trillions of dollars over those decades spent on new technology, new equipment globally, and what did that yield? It actually yielded a decrease of over 10% in efficiency over that time period. So excuse me, a decrease of effectiveness, an actual increase in the amount of wasted time in someone’s week, which of course also means there’s a decrease in efficiency and that leads us to our topic today, because lots of systems consultants – and there are some great ones, I don’t mean to impugn the integrity of all system consultants. There are some, some very good ones. There are some ones that we recommend often to help systematize processes inside of businesses, but they’re the exception.

Most system consultants, most systems that are installed everywhere are actually missing the key components that they need to truly be effective and that steals efficiency. It gives a sugar high of efficiency. And here’s why. I’ll tell you a little bit of a story. When you optimize something that isn’t effective yet, oftentimes you get the feeling of efficiency. I was actually a partner in a firm and we had a software, it was a larger organization that I was a partner and we did consulting, but we also did a whole bunch of graphic production. That was one of the components of what we were doing. And there was a software partner who we worked with who managed the industry.

It was Enterprise software, which is notorious if you’ve ever gone to TJMaxx or Marshall’s or one of these stores. So not your Targets or those places, although those places aren’t that much better. But if you ever go into those stores and you’ve looked at the computers that they’re using, have you ever noticed what’s on the screens? They’re all black and white. It looks like they’re using DOS – now, they’re not, but they’re using a computer system that’s almost as bad. So as you’re sitting there in line looking at the candy, thinking about whether you’re going to grab some of those Belden chocolates or those German gummies that they have there that are down from their exorbitant prices but are now suddenly reasonable. When you’re thinking about that, when you’re smelling the candles that are in the aisle behind you, look at their computer screen. It’s like you’re being transported back in time 40 years to the 80s. It is,. And this is Enterprise software.

This is a lot like the software that we had. Of course, the user interface was much more modern. But Enterprise software is notoriously bad because the people buying are IT executives, they’re not the people who are actually using it. So when you or I buy an app on our smartphone, when we’re flipping through the app store, when we’re looking for a new to-do app or a cool weather app – in case you’re wondering, I like Dark Sky, it’s pretty great. When we’re looking at an app. I like Dark Sky because the user interface is great, ’cause it’s easy to use, ’cause it’s fun, because it adds value to my life. When you are a worker at an Enterprise kind of an organization, you don’t have that freedom. You use the software that’s put in front of you, and most Enterprise software has a pretty bad rap for being really difficult to work.

And a lot of it is because of exactly this reason. They look for efficiency. I’m going to actually call it false efficiency over effectiveness. They look for efficiency of, ‘Oh, the software can run on fewer servers,’ or, ‘Look at all of this processing that it can do and how effective it can do it,’ but the numbers that really matter, the effectiveness and the efficiency that really matters, that so often pieces of software like that – and I’ll relate this back to our industry – but so often what those miss is, what does the client need?

I’ll give you another example. I was a client, actually, in a coaching program, this was a seven-figure coaching program, multiple seven figures. They did millions of dollars of revenue every year and they were having client retention problems and that was pretty clear to see. They were also having client success problems, clients were just struggling to get results. A good 20 to 30% of clients were getting results and just about everybody else was in various degrees of struggling. And so to find ways of combating this, they added things and they worked to be efficient. They even used some – I was friends with some of their coaches and some of their coaches later spoke with me privately and would share things around how they would negotiate really hard down on the amounts of money that they wanted to pay their coaches, or they would pay their coaches a super-low amount and then give them a percentage of the client retention. And then when clients didn’t stay, then the coaches were making way less money. Just some really bad dynamics.

And they pushed to try and be efficient in those areas because they kept adding on more things, more and more things that are on a concierge. And when they did that, I shook my head, because no one in this program – this was a webinar, Facebook ad to webinar marketing accelerator kind of program and I shook my head because no one that was there – you know, I, I have a few higher-end credit cards and I have a free concierge. My wife and I are members of a local club. It’s kind of like a country club and we have access to a concierge there. Anytime we want tickets, we want reservations, we have people that we can call and who will help take care of that for us. We have that part of our life covered. We don’t want to be in a program to get a concierge and what’s more, it was actually kind of insulting because it wasn’t even real.

It wasn’t even really a concierge. It’s not like they were going to do any of that for us anyway. They were just going to answer questions and connect us with coaches. They were really just an assistant and it was really just a re-branding of an assistant and it’s this that is the problem. ‘Cause they worked to get efficient at that, at reducing the number of – the amount of time that those team members were spending, even though they added more team members. They saw that those team members were maxed out on things. So they then tried to optimize for, how do you decrease the amount of support emails that we have to take? So they just made it really hard to ask support questions. And what they totally missed in there is, after adding all those things on, after working to be efficient, what they totally missed was effectiveness.

They weren’t effective. They didn’t know the critical troubleshooting points when clients were taking action as they were instructing. They didn’t know the critical troubleshooting points that they needed to hit with the clients to fix what was going wrong. They didn’t have ways to measure what was happening for clients so that they would be able to give clients the right feedback on when they needed to make changes, because this happens no matter what your program is, some clients are going to get great results, some clients are never going to get results and it’s the messy middle that makes all the difference. If we optimize for that middle group, we win big because they will stay, ’cause they’re the ones who, they can’t just go anywhere to have somebody help them solve their problem. They’re the ones where it’s a little bit more nuanced and it also gets to be relatively easy.

Just troubleshoot. Just look at it in terms of, if it was your business or if it was your life or, if you’re a health coach, if you are a fitness coach, if it was your family member, if you cared that much, what would you help them do when you were troubleshooting? That’s the basis of effectiveness. But if you’re not good at that, if you discount that, if you disregard that, if you haven’t built the diagnostics in there so you can measure what’s happening, so that you can get good at being effective first, all of the efficiency in the world won’t make a difference.

Peter Drucker, famous business coach, the late great Peter Drucker is quoted as saying, “There is nothing so useless as doing efficiently what shouldn’t be done at all.” And that’s the piece that we miss so often, is when we don’t have the clarity to know which actions that we do with our clients, which activities as an agency are we doing that’s actually moving the needle? Which critical conversations are we having with clients, where we’re helping them over a hurdle, actually move the needle? If we don’t know that, then we have to invest in all of them. Once we do know that, you’re able to do things like – there was a program that I co-created a couple of years back around sales where we got the call review time down from about 90 minutes to about 20 minutes. How did we do that? We focused on being effective first. We answered the question of, what does the client need? And then we created a structure for the clients to ask for what they needed.

That was weeks of us digging into what was actually happening in the program, but that’s true efficiency, ’cause it’s built on a foundation of effectiveness. When we made those shifts, do you know what happened? Our staff time went down, but it actually enabled us to use A players to do call reviews, not B or C players because that’s all we could afford to do because, who’s going to pay for a multi-hundred-dollar-an-hour person to review their call at 90 minutes a call review? That just doesn’t work. If you’re in nutrition, the same kind of format can work. Reviewing what someone is doing. If you’re a dating coach and you’re reviewing their online profiles, same thing happens. It’s boiling it down, boiling the interaction that we have to have for the client down to the most essential piece of what is going to move the needle. 

Because here’s the secret, and here’s the secret that I don’t think I’ve ever met a systems person who actually gets: the majority of the impacts that your clients are going to have from working with you doesn’t relate to the agency level or the expertise-level fulfillment that you give them. Whether you’re a coach, consultant, service provider. The majority of the value that they get comes from the leadership that you provide.

That’s why they’re hiring you. They’re hiring you for leadership. There are all kinds of places that they can go online to get a workout plan, to get a nutrition plan, to sign up for an even automated system that’s going to run ads and run traffic to their business. They’re hiring you. They’re signing up for your program because they want something that works. You have to define what that is before you can even think about being. That is the dirty little secret. That effectiveness always comes first. Have a good one.

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