Create Business Systems Sam Carpenter header

Sam Carpenter is the bestselling author of Work the System, a book many entrepreneurs consider to be the best book ever written on systematizing a business. If you’ve read The E-Myth or Think and Grow Rich, this book is right up there at the top of the list of books that every entrepreneur should read.

As an entrepreneur, Sam struggled for many years to grow his company. What he realized is that he was spending almost all of his time “putting out fires,” handling “emergencies,” and he was always bogged down with day-to-day work. One day he finally decided to create systems so that his business could work without him having to put out all the fires and constantly work in the business.

In today’s interview, Sam shares his story and why you absolutely must create systems for your business if you ever want to escape the rat race and get ahead.

Sam has a varied background. He’s done everything from digging ditches to project managing for an electric company. He started his first business 30 years ago and has never looked back. The call center Sam bought was a nightmare for 15 years. He was working 80 to 100 hours a week at the same time he was the single custodial parent for 2 children.

Sam kept that call center going for 15 years. At the end of that time he had 12 employees when he had what he calls a “mini enlightenment.”

He realized he was seeing his life all wrong. He changed the way he visualized his life and began taking radical action to change his life’s direction.

It took him 5 years to fix his business. He took another 5 years to write a handbook for his employees teaching them how to operate the business successfully without him.

He realized the book he wrote could help anyone run their business better. That’s when he began to edit the book so that it could be used by a public audience.

He took two years to write the book for the public. Over the last seven years Sam has been lecturing, blogging, and sharing his message every way he can.

Systems Produce Better Results With Minimal Effort

Sam is another example that the systems of our lives are far more important than things like background and education. He has the money he needs and the time he wants to pursue his happiness.

“Getting what you want in life has nothing to do with the attributes you have. It has to do with the machinery.” – Sam Carpenter

I totally agree with what Sam has to say about getting what you want. I have a four-year degree from one of the top entrepreneurship schools in the country, and the only two things that I learned from that four years of schooling that I use today are my Microsoft Excel skills and business accounting.

What has propelled my business the farthest are personal skills, the soft skills that are not taught in college.

The thing about ultra successful people like Steve Jobs, Bill Gates, and Mark Zuckerberg is they knew what they wanted and they simply went after it.

It took Sam a while to figure out what he wanted out of life.

Work the System: The Simple Mechanics of Making More and Working Less

Create Business Systems Sam Carpenter quote image

The idea of “simple mechanics” is very important.

Our lives are made up of simple processes. Every day we run the same procedures over and over to do our work, get through our day, and moved through our lives.

Everything we do in our life can be broken down into simple individual processes.

  • How we get up in the morning.
  • How we get dressed.
  • How we go to work.
  • How we set up a sales presentation.
  • How we put the payroll together.
  • How you go to the bathroom.

Everything we do in life can be broken down into a simple process.

Every linear process that we execute on a daily basis leads to the results of our lives. Everything about our lives in this moment is the result of simple processes that we have executed through our lives which have brought us to this present moment.

What we have right now, this present moment is the result of numerous unrelated systems.

The problem most people have is they don’t see the simple systems that are the motive force behind their life.

Focus on the Process to Get the Result You Want

“We need to spend our time in the processes, not in the result. If you spend your time adjusting the processes and documenting them, if you spend your time in that part of the equation, the results will take care of themselves.” – Sam Carpenter

This reality we live in is not a mishmash of random sites, sounds, and events. It is a very logical group of unrelated systems that operate on cause-and-effect.

Our lives are collections of independent unrelated systems.

It’s only when you realize this fact about the way the world works that you can take a business and break it down into its component processes to make it work better.

Most people spend their time trying to get their results to conform to what they want in their lives. The truth is that you can’t control results. You can only control the processes that lead to the results you want. If you work the processes long enough you will eventually get the results you want in life.

Creating and implementing good systems is what produces the results people seek. That’s why some people you wouldn’t expect are very successful and other people who have everything going for them on paper can’t make their lives work.

As one example, how many underperforming college professors are there who simply collect their annual salary and who don’t get any further in life? Quite a few.

On the other end of the spectrum, how many unattractive people are there who have a beautiful spouse, all the time they want, and all the money they want?

The unattractive people who achieve unbelievable results they want do so because they’ve identified the processes necessary to get the results they want. And they work the processes.

Successful people spend their time focusing on the processes that lead to successful results. Unsuccessful people focus on the results they want and try to will them into existence.

If you spend 100% of your time in the processes of running your business and living your life, the results will take care of themselves.

Three Steps to Creating Great Systems

  1. Get it. See all the individual systems that work in your life and work on them individually.
  2. Document it. Document all the systems operating in your life right now. You have to document these systems one at a time as they occur.
  3. Optimize the process. Things change over time. You must constantly tweak and update your processes as they evolve.

How to Achieve Your Goals with a System

What you have to understand is that you can’t control the results of your life. You can only control the processes you execute that lead to certain results.

You can only control what you do in each present moment that will lead to a result in the future.

It’s very damaging to say something like, “In two years I’m going to have $1 million in the bank.” It’s damaging because you can’t control the factors that would lead to that result. And when you fail to get that result, you’ll have more evidence that you can’t get what you want in life. That is one of the many ways that you can get yourself into a negative spiral.

Don’t go overboard trying to achieve huge goals. Instead, point yourself in the direction of making a lot of money. And focus on the individual processes that lead to that result. Don’t give yourself a hard and fast deadline. Keep working diligently every day at moving forward in the direction you want to go.

Get all your energy and everyone around you moving in the same direction. In a business you do that with documentation.

Create an Outline

Sam didn’t have an outline when he wrote the first draft of his book. He spent several months writing into the dark and another two months organizing that first draft into the foundation of what has become his book on systems.

An outline would’ve saved him months of time in crafting his message into a form that a mass audience could use and understand.

Document Everything

Documentation is what allows you to look at your processes objectively and make them more effective and efficient. It’s like an outline for your life and your business.

In today’s culture we want everything now. It’s very important to slow down, document the processes that you do on a daily basis, and then look at them and see if they can be automated, delegated, or deleted.

Improve Your Attention Span

Today we have an incredibly short attention span because of the Internet. The antidote to that is to read every day. Sam reads an hour a day. It helps him to extend his attention span so that he can more effectively work the processes of his business. Nicholas Carr wrote a book on the subject called The Shallows: What the Internet Is Doing to Our Brains.

The ability to focus is vital if you want to be successful at working the processes of your life. Reading allows you to practice the process of focusing your attention.

Reading nonfiction books allows you to practice focus and learn a great deal. It’s especially good to focus on nonfiction books that will help you gain the skills you need to be successful in business and life.

You may not be able to remember all of the details of everything you read, but the information does sink in, calms you down, and helps you learn even on a subconscious level.

Speed Reading

If you want to read faster, you should study the basics of speed reading. Here’s a quick summary:

1) Understanding eye fixations and practicing proper eye movements.

2) Using a tracker (pen/finger) to guide your eyes during practice sessions.

3) Practicing at high speeds (you shouldn’t be able to comprehend much if anything – the point of speed when practicing is to train your eye muscles and stop subvocalization).

4) Eliminating the subvocalization habit as much as possible (That’s when you say the words out loud in your mind as you read them. You might even find your lips moving as if you were softly saying the words as you read).

5) Avoiding regression (That’s when you read the same line over and over, or have to backtrack because you didn’t understand something or forgot what you just read)

How to Build the Right Team

“People come to me and say, ‘Sam you’re so lucky to have people who are so loyal.’ They miss the point. I do have people who are smart, loyal, and wonderful to be around. But those types of people are everywhere. What I did was provide a platform, a business system that is black and white and that they contribute to.” – Sam Carpenter

The key to Sam’s approach to systems is a bottom-up approach. Every system that operates in Sam’s businesses is well documented. The secret is that Sam’s employees do all the documentation.

By allowing them to determine and document their own procedures and processes they become invested in moving the company in the direction set forth in the Strategic Objective guiding document.

Sam taught his employees to create a series of wonderfully explanatory documents that detail every step of every process required to get successful results.

Because the employees created these procedures themselves, and they have the latitude to change procedures as necessary, they’re heavily invested in the success of the company.

The top-down model of team-building that occurs in the military is not workable in private enterprise. It works in the military because when someone decides they’re not going to follow orders you can either fire them, or shoot them in extreme circumstances. There is some value to that approach especially in war zones and life-and-death situations.

In the private sector a bottom down approach that gives people the ability to define the way they do their work is much more effective.

You have people documenting their procedures and passing ideas up to the management. The management approves the ideas and things move forward quickly.

It’s important not to have committees weighing the pros and cons of the change in procedure and slowing down the operation of the business.

Communication is another key element of this approach. You want to communicate quickly and clearly with all the members of your team.

Essential Planning Documents for Your Business

There are 3 key documents every business should have.

The Strategic Objective Document

A strategic objective document is not a mission statement. Mission statements are often vague and ineffective. They are wish lists of how you wish your company would behave in the best of circumstances.

A strategic objective document sets down the direction you want your company to go in.

A strategic objective document is a single page, perhaps 400 words. It says:

  • Who you are.
  • What your product is.
  • What you don’t want to do.
  • What your objectives are.

What processes you’re going to use to achieve your objectives.

Operating Principles

These are the rules that govern how you operate your day-to-day business.

One of Sam’s operating principles is do it now. Why do it now? Because that’s what works the best.

Working Procedures

These are the operating procedures that walk you through every process of your business.

Most businesses call working procedures “SOPs” or “standard operating procedures.”

Sam prefers working procedures because it gives the procedures a sense of flexibility and the procedures are always flexible. They’re always changing to make the process better for the business and the client.

Another way to look at this is:

  • The Strategic Operations Document is like America’s Declaration of Independence.
  • Your Operating Principles are like the Constitution of the United States.
  • And Working Procedures are like the laws of the land.

Sam didn’t plan it that way. That’s just what works.

  1. You need to have an overall vision of who you are and where you’re going.
  2. You need to have rules and regulations to function within.
  3. Then you have to outline how things are going to work.

The best way to formulate a process in your business is to get everyone together who performs that process and have them agree on the best way to perform that process.

For example, Sam owns a call center. He has a procedure for answering the phone. Everyone who answers the phone at his call center has input into that process. Once a process is defined, it’s written down and everyone follows that process.

That way a nearly perfect process is executed 100% of the time.

You do that in your personal life as well. You may not document all of your processes in your personal life. But you figure out the best way to do something, and then you repeat that process every time you need to do that thing.

That’s how you move through the mechanics of your life. If you have the discipline to go through every one of your processes, and define the best way to do everything you do, then execute on the process in that best way, you will become more successful over time.

Your success in life will be determined by how well you identify, manage, and execute your processes.

Positive emotional experiences will come as a byproduct of life that isn’t in chaos.

“If your wife just left you, and your three months behind on the mortgage, and your kids hate you, it’s pretty hard to sit and meditate. You gotta get the mechanics of your life fixed first before the emotional stuff will take care of itself.” – Sam Carpenter

Get Your Life in Order

In this society most people say they have to get their head on straight and then they’ll get their life in order. But the order of your life has nothing to do with your mental state.

The state of your life has everything to do with the processes you’ve been working and how they’re managed. That’s what leads you to success.

How you answer the phone at a call center has nothing to do with your state of mind—it has everything to do with the process you choose to follow.

Your life can be managed by simple mechanics and you really don’t have to worry about the psychology. When you do things correctly, you’ll become more confident and you’ll feel more positive emotions because you’ll be solving big problems and moving your life and business in the right direction.

Systems Give You Power

You can tell who the unsuccessful entrepreneurs are because they tend to drop everything to micromanage their business.

The entrepreneurs who have systems in place are successful. They’re successful because their systems run their business and they are fully present to engage in life every moment.

Systems allow you to focus on your most important work. And when you’re off work you can focus on things that are important to you in life.

Systems allow you to create all the money you need and all the time you want to do what you want to do with your life. Having money and time allows you to have control over your life.

A Working Procedure Case Study

Of course authors need to get their writing done. But there are a lot of other things that authors need to do in our day-to-day life.

One thing everybody needs to do is pay their bills. Sam pays the bills for his business every month. He pays his bills on the 10th and the 25th  each month. He has a system in place to make sure those bills get paid on time.

He has Outlook email him on the 10th and 25th of every month to remind him to pay the bills.

He pays the bills so he can see the money coming in and the money going out. He wants to make sure the money that goes out is well and properly invested in moving his company forward.

That’s one of the simplest procedures that you can implement.

On the other end of the spectrum, Teresa is Sam’s head of receivables at his call center. They have about 1,300 accounts that have to be billed monthly. She has a 14-page working procedure (SOP) that she goes through line by line to bill companies every month.

It takes her three hours to complete and all the bills are sent out by the sixth of the month.

Having a written down system in place saves time and ensures there are no billing errors.

The reason this bottom down systems approach is so successful is the emphasis on improving the system as much as possible each time it is used. Over the last 20 years Sam and his team have improved their processes thousands of times. That’s going to lead to massive efficiency and effectiveness.

Advice for Authors

As a writer it’s important you identify your biological prime time during the day. You want to write when you have the most energy and enthusiasm. You want to do things like exercise on your off-peak time.

Doing your most important work during your peak energy time is the most effective way to produce the results you want.

“If you change a lot of little pictures the bigger picture gets better and better.” – Sam Carpenter

People and Resources Mentioned in This Interview

Bill Gates, Richard Branson, Oprah Winfrey, and Steve Jobs as examples of people who were massively successful without a college degree.

Nicholas Carr and his book The Shallows: What the Internet Is Doing to Our Brains

Sam’s 10 concepts blog series – Sam’s homepage. You can get his book Work the System for free by signing up for his email list. – this is Sam’s business documentation software. You can try the software for free and he has several payment plans.