Why do successful owners obsess about minimizing lag time? Welcome to today's episode, interesting experience today.
So I was with the cleaners, the cleaners come in and clean the house.
And they were speaking of another client that they had visited, who was building a new house and they said, You know what, we're not able to get timber, we're not able to get the wood.
We can't build this house out of wood.
We got to use our medium, we've got to use metal.
And this is not just happening in Australia.
I got buddies over in the States, and they're saying the same thing.
Hey, timber is really expensive.
The interesting thing about this is that what is not clear is where did this problem begin? Or not so much.
We're pretty sure we know where it started with Coronavirus and the shutdowns and the lockdowns.
But the interesting question is when are the problems that we are experiencing now? When are they? Are they due in March 2020? Are they due to perhaps September 2020, march 2021, perhaps September 2021, probably not September 2021?
Why? Because this problem has been getting worse for several months, maybe even a year now.
So somewhere in that gap between the beginning of Coronavirus and what we're experiencing now began the problems that we're only experiencing today, or in this case of the timber a couple of months ago.
This is a problem of lag time, the problem.
And the result has such a big gap that it's hard to tell how bad this is actually going to get.
Like if you're thinking well, it began from lag problems began maybe in December 2020.
And now we're experiencing now that's 12 months.
But if you think well actually probably May 2020.
Now it's 18 months, or perhaps it's only a couple of months ago.
But what's interesting is that lag time makes it difficult to get the feedback of that system and these complex systems of world economies or countries economies very difficult to make a judgment about how to act.
And it may be far easier to shut down production.
difficult as that is but far easier to shut down than it is to actually scale back up.
And even know prices might be sky-high for timber, a new entrant into that timber market is also facing high prices in labor, shortages of labor, and relative inexperience in business.
This means that even with the lure of high prices, like look, this timber it's getting sold for high margins high prices is very difficult to enter into that market.
And so it may be that even though demand remains extremely high, why money is cheap.
That the number of players that have been taken out already by this Coronavirus choices and decisions means that these high prices are here to stay.
But what I want you to appreciate here is the lag time, in this case with the team of we don't even know when the actual problem began, at least in your business, you will have a better idea about hey, this is what we set out to do.
Let's say there was a new project that began and then at some point, it's got a result that is of course you like Well, that took three weeks to get to that result.
So you could go back next time and improve it and make changes and run it again.
And you're going to get an answer within three weeks.
But I want you to appreciate that
a competitive business that can do that same system, that same project in three days, because they have a documented system, their processes are written down.
They can get feedback so much faster, three days versus three weeks, they can iterate and make changes multiple times in that same three-week gap.
So at the end of three weeks of business, one has got one set of feedback because of their long lag time.
But business to now has seven sets of feedback in that same time.
They could have made a change, got the result, and then looked at that result and said hey, did that make it better or worse if it made it better, they keep that improvement.
This is the principle of kaizen or incremental improvements, but if it didn't work, then they can revert to the original system and make a different change and try again.
So they get set even attempts that improvement in the same time that the business that does not run systems gets to make one.
Now notice in the business conditions that are existing right now, and will continue to exist 2022 2324 25, it is highly unlikely that the problems that we are facing are suddenly going to get better, I want to give you the analogy that if you throw a spanner in an engine that has exposed gears, that engine will likely stop, but the restart of that will take a massive amount of work for in exists of throwing the spanner in, you got to pull all those gears apart, you got to identify the problems, you got to put it back together, you got to get the parts, you got to troubleshoot this whole thing, it is a mess.
So we could be existing in these difficult environmental business conditions for years.
And what that's going to mean is that any business that has a massive strategic advantage, like knowing how to run their business on systems, so that they can run seven tests in the same time that their competitor runs one, they are going to thrive.
In fact, it is highly likely that those that are existing in such long lag times because they refuse or choose to not systemize, their business will be bankrupted, they will be eliminated.
Why? Because the advantages are just so high for those businesses that know how to reduce the lag time between making a change in a system and getting the results.
Of course, that business that runs without systems and takes three weeks has an additional problem from that lag long lag time.
Not only does it take forever to get the feedback, but they cannot be sure that the system was run correctly in the first place.
You see, when you don't have documented processes and your team doesn't use them, you cannot be sure that all of the steps got done, your compliance just isn't there.
Versus the business that operates on systems three days, but every time the system gets executed the same way.
So if they make one change, they know that is the one change that caused the different results.
The other business do not they cannot be sure.
And they may well be highly misled because they think it's the change.
But in fact, it was a different execution of that system.
This has implications across how we do everything in the world.
Basically, anything that has a step-by-step process of getting something done is a system.
And the problem that you face is that either your systems are undocumented, they are out of date or your team does not use them.
And you are at a strategic risk of those businesses that choose to get this on point.
The advantages are not just in being able to do things seven times faster.
But also that business that can execute systems dramatically decreases their risk of catastrophic errors, the lawsuits, the miss payments, the destruction that can happen from small things compounding over and over until they turn into a giant mess, where the time taken to do it correctly might have only been 10 or 15 minutes.
And yet the solution takes 1020 100 200 hours.
The business that operates on systems puts in 15 minutes and gets a consistent result the business that does not take the risk that 15 minutes not being completed to standard leads to 200 hours of work huge amounts of cost.
This is the risk that you take when you continue to choose to not systemize your business you got to get this on point.
This is coming.
Those businesses that choose systems will win.
They have such a competitive advantage that anyone choosing not to run on systems will simply be unable to compete.
And all we will be left with is systemized business competing with systemized business, which is great news because it means that we have highly efficient highly effective services and products being provided for a world that we need this to be on point, we got problems worldwide because of our lack of systems.
So what are you going to do? What are you going to do if you're in business in listening to this message, then?
you've got a choice, you can either continue to ignore the system's conversation, you can ignore the wisdom that comes through from the relatively few books written on systems.
Why? Because it's difficult to get it on point in your business.
But those that do speak of the holy grail speak of the heavens opening up why because they run on systems if this is something that you want if you want to have a conversation about this, or you just want to get a little bit more educated about what a system is and how they work and why they make such a difference to both the profitability and the protection of all that you have worked for.
Head over www.systemio.dev.
Thanks for tuning in today.
I look forward to seeing you on the next episode.
As we continue this journey into the power of systems create results.
