Work the System summary

Book: Work the System by Sam Carpenter

Write an owner’s manual standardizing every task in your company and hire disciplined employees to follow it and update it.

Main ideas:

The system

• Your task is to improve your company’s “owner’s manual”, called “the system”, anytime a problem or task happens on a recurring basis.
• It’s about spending more time fireproofing instead of fighting fires. In the very same spirit that E-Myth talks about building a franchise, by standardizing every task. Except this book goes much more in-depth on the implementation.
• The system is composed of 3 major documents:
  1. The “Strategic Objective” is a one-page document written by the leader in about 6h describing the purpose of the business. Who we help, to solve what problem, with what solution, and the main difference with alternative solutions. It’s like the “constitution” of the company. Its purpose is to help decide about how the company should evolve in the future with the “big picture” and the “why” of this company in mind.
  2. The “General Operating Principles” is a 2-3 pages documents written by the leader in 10-20 hours describing the 10-30 general principles that help solve problems and take decisions within the company. It defines the mindset and culture of the company.
  3. The “Working Procedures” are a set of step-by-step explanations on how to do every recurring task. They are meant to guide a normally intelligent person without exterior help. The first set is written by the leader, but they are subsequently updated by employees, under the manager’s supervision.
• That being said, beyond this “owner’s manual”, a big part of the system is about finding the right employees to follow this approach of doing business.

Recruitment

• Since you can’t teach work ethic, mindset or attitude, you need to pick the right people from start and fire the ones who don’t fit.
• The main traits to look for during recruiting are clearheadedness and self-discipline.
• You want to attract and keep smart, loyal, goal-oriented people.
• In exchange, you want to pay them 50-75% above your competitors.
• You should avoid part-time employees. It’s already hard to find a good employee, and part-timers are not as good, so twice the recruiting effort for a lower performance per dollar is a waste of your time. Also, part-timers don’t make their job a priority.
• Checklist. Did this candidate:
  1. Showed up on time for the interview?
  2. Pass the aptitude test?
  3. Know about the business? Did he check out the website before applying for the position? Are there questions about what goes on in your business, or is the applicant just looking for any job? Is advancement important?
  4. Smile? Seem happy? Generally, did he seem to be self-disciplined?
  5. Listen to you, or were your words sliding by unheard as he waited for the next opportunity to pitch his expertise?
  6. Carry on a reasonable conversation; look you in the eye?
  7. Appear to be literate? How does the resume and any written work performed as part of the interview process look? How did the applicant talk (too many “yeahs,” “likes,” and “ya knows”)?
  8. Convey taking care of himself? If not, the raw truth is that in most cases of personal neglect, there is a lack of self-discipline.
  9. Have a stable work history; not bounce from job to job?
  10. Pass the drug test?
  11. For certain positions, pass the criminal background check?
  12. Have solid references?
• Candidates must pass ALL questions because your team will progress at the speed of the slowest employee.
• However compassionate, the “this person needs a break” gut feeling is too often a mistake. Use gut feelings to disqualify rather than to qualify people.

Management

• Have an independent quality team with undisputable rules to review every week all employees, with up to 35% bonus for the best-performing ones.
• Also, depending on the nature of the job and typical employee, you can have random drug tests every 2 months, testing everyone at once (to avoid being accused of targeting anyone) with $6 multi-drugs oral tests.
• If an employee does a good job, say it publicly, and if he makes a bad job, tell him privately.
• Quiet courage is the courage to do what should be done, even if few people see it.
• What your employees want most from you are clear direction, respect, and paychecks that arrive on time. Everything else is secondary.
• If turnover is a challenge, reward seniority. Like with working time-slots granted on seniority.
• Everyone in the company should divide tasks into 4 categories:
  1. Urgent and important. Act now.
  2. Not urgent but important. Plan them.
  3. Urgent but not important. Delegate them.
  4. Not urgent nor important. Eliminate them.
• Everyone in the company should fight procrastination:
  1. Visualize laziness like a rat on your shoulder, and track it to kill it without thinking every time it appears
  2. Ask yourself “Why am-I a procrastinating?”

Strict adherence to the process

• Employees will adhere if :
  1. The procedures are efficient.
  2. The procedures have been created and updated by them.
  3. They know that if they follow the procedure, and it fails, they can’t be held responsible.
• This “strict” adherence is balanced with the eagerness to make instant adjustments should the environment change or should someone come up with a better idea.

Process update

• Make your employees write the procedures and review them.
• Celebrate mistakes to help problems to be noticed, but don’t incentivize mistakes nor make fun of who did them.
• Incentivize procedure updates. All updates must be sent to a supervisor for verification.
• Infrequent problems must be solved with common sense and the General Operating Principles
• Quality and precision of what is delivered to the customer must not exceed the required result, or it’s a waste of energy and resources that could be better employed on other aspects.

Firing employees

• Clear rules mean no second chance. Fire people as soon as they break any rule. It’s mandatory to avoid any long-term toxic effect on the rest of the staff.
• Fire the rebels. Keep communication open, but fire people who routinely work against you, are contrarian, malevolent or irrational. Either family, friends, customers, or employees. Because it makes no sense to continue to communicate with such people. End the relationship. You are not in the business of defending yourself or being coerced.
• Your business is not a democracy. You are the leader and that’s both what you and your staff want.
• Reject non-fans. Remove people who can’t or won’t deal with your vision. Replace them with people who share your systems mindset.