Guillaume: Hello everyone Guillaume Le Tual here, host of the Ecommerce Wizards Podcast where I feature leaders in business and ecommerce. Today’s guest is Nick Sonnenberg, CEO of Leverage and visit his website, getleverage.com. Today we’re gonna talk about how to save 5 to 10 hours per person per week in your company. That’s Nick’s proposed topic for today, operational efficiency.
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Nick, welcome to the podcast.
Nick: Thanks for having me.
Guillaume: Pleasure. So can you please tell us a bit about yourself and your background as an entrepreneur?
Nick: Yeah, I’ve been running Leverage for about six years now. Prior to that, I was a high frequency trader on Wall Street so my background is in financial engineering. For those that don’t know what high frequency trading is, basically, I would be building algorithms, coming up with new formulas, coding computers. The computer trade stocks very large volume, billions and billions of dollars at microsecond speeds, trying to capture fractions of a penny, based on what the math said the theoretical price would be. Being an engineer by background, I like to build things and I like problem solving automation, obviously, since it was all automated trading. And so I kind of applied the same thinking process to how to run a business. After many pivots, Leverage helps businesses get more operationally efficient. We’re not looking necessarily at microseconds, but we’re trying to save people 5 to 10 hours a week per person on the team by leveraging systems and tools, and automation and smart ways.
Guillaume: That is a bold claim, but I believe it can be done. There’s a lot of inefficiencies lying around all companies, that’s for sure. I’m kind of curious about your background there for high volume trading, was that successful? You’re probably not the owner of that software that you’ve built for a corporation, I’m guessing
Nick: I guess it matters how you define success. I probably generated 70 to 100 million before I was 30 in p&l for the company. But the type of training that we did was, I might have 10 down days a year. The math was pretty good. The risk reward was very strong, you could say.
Guillaume: That was a pretty smart way of making money. Congrats there, nice work. Okay, so let’s dive into it. How does a company go about saving 5 to 10 hours a week, per employee?
Nick: How big is your team Guillaume?
Guillaume: It would vary between 20 and 30 right now.
Nick: Okay, good size, you’re probably at 20 to 30. You get by, but you still can feel pain when there’s a scavenger hunt, and if you ask someone to do something and the information or the document isn’t as easy to find as you would hope.
Guillaume: It happens, that’s for sure. Let’s say the thing is documented, where did somebody put that thing? Where’s the document that documented that? That happens.
Nick: Exactly. Nothing kills me more than just waste and inefficiency. If a document gets lost, then you spend thousands of dollars paying someone to build it. Or they can find it, but it took them half a day to find it. Let’s say it costs you $300 a day to hire that person, $150 is just burnt because there’s disorganisation that doesn’t need to be there. They spent half a day doing crap that should have never had to be done in the first place.
So, we work with 30 person ecommerce companies up to the Fortune Three in the US, various industries and sizes. Every company has very similar issues. It’s just amplified, the bigger you get. If you’re at 25 now, if you go to 50, it’s not twice as hard, it’s like 20 times as hard in terms of the complexity of scaling. Because complexity scales exponentially with team size. What we found is a few things. One, that the sooner people clean up their operational efficiency, the easier it is to scale. It’s hard sometimes to convince people because a lot of people are just optimising for top line revenue, which is something very tangible, you see it hit your bookkeeping system, versus saving time or cleaning up how systems are set up, you don’t see that hit the balance sheet or the p&l statement immediately. What I found across all sizes and organisations is, it’s much easier to clean things up or make any change when you’re smaller. It’s very hard to scale when your foundation is broken.
No matter what size or industry, there’s three buckets that we identified every company needs. On the face of the planet, every company needs these three things to remove that scavenger hunt, and avoid some of those pitfalls of things getting lost or taking longer than it needs to. So those three buckets, we have an acronym CPR, that stands for Communicate, Plan and Resource. Those are the three key areas that we found, everyone needs to be thinking about. So every company, you could be listening to this podcast now, you could be a coach, a financial advisor, you could be running a CPG company, a health company. You need to communicate, both with your team and your clients. You need to plan, work needs to get done, there’s tasks and projects. And then you have resources, you have assets, you have processes, you have SOPs, you probably have to do payroll, that’s a process how to do payroll. You probably have to onboard new team members, that’s a process.
You probably have core values, or a vision, objectives or some goals. These all need to be documented and captured somewhere, both to de-risk your business, you don’t want to have risk that if someone leaves, the moment they leave the door, there’s all this knowledge that just leaves the moment they leave. But also, you don’t want to waste time having to answer people’s questions. You want onboarding to be as fast as possible, instead of taking three months to get a new hire up to speed? What if it could take three weeks because you have really clean documentation. So those are the three buckets. It’s important to understand that there’s different tools that are built within each of these buckets. Some of the biggest issues that we see is that people don’t think about those three buckets and they start using basically text and email to hack all three of these buckets.
There’s different tools built to solve specific problems. You build websites, so you understand, you build something for a specific purpose. The tool to do external communication like email should probably be different than internal communication tools like Slack or Teams, because there’s different functionality that they both offer. Those are not project management tools. You can’t answer basic questions like, “What did I ask Kimberly to do that’s now past due related to this project?” You could search through and stitch 100 messages together to answer that, but project management or work management tools are built for that. This is why at Leverage we’ve made a partnership with Asana, and we’re helping people roll out Asana properly, because most people are completely broken in this category. They’re using text and email, it causes a scavenger hunt. They’re missing this whole category of work management. Lastly, pretty much no one does a good job of documenting policies and processes which generates a tonne of risk and in the long run slows people down. So these are the three areas that we help businesses clean up.
Guillaume: Alright, let’s talk a bit about chat because with COVID now, almost everybody works from home when it is technically possible. How do you see that being the proper way of communicating? You have Slack or MS Teams or Skype or whatever you’re using, creating interruptions all the time in the workplace or having instructions not being perhaps documented the proper way in your project management system Asana or others, what do you see as best practises there?
Nick: Understanding when to use a tool is number one. When should you use Slack versus Asana? For example, if you’re going to take your team camping in the forest, you need walkie talkies to communicate but you still need a map to navigate out of the forest. So Slack, which we’re talking about right now is the walkie talkie and Asana, for example, would be your map. So step one is understanding when to use each tool, then step two is how to use it. The whole distraction conversation that you’re bringing up, you can look at things like notification preferences, part of the culture should be like response time to expect, it’s definitely inefficient for people just to be responding within three minutes to every message. Most people are under-utilising asynchronous communication with tools like Loom that don’t need to be written. Most people are under utilising agendas for meetings, and moving things off of any of these platforms, adding it to a collaborative agenda and then addressing a bunch of topics in one shot. So lots of problems that stack up.
Guillaume: Are you saying that people should sort of avoid chat more or less and just put everything in project management software, or send an email so it’s not urgent if it’s something that you can answer asynchronously at a later time? And we should maybe keep chat for more urgent stuff that I’m expecting an answer now or as long as I get my answer within a few hours, it’s fine.
Nick: Yeah, if something’s not urgent, and you have a meeting next week, it probably should just get added to the agenda. But also, on top of it, a lot of people are putting actionable tasks inside of communication tools that have a high probability of getting lost because they belong in a project management tool, they need to think about those two things.
Guillaume: Yeah, there should never be any action items left in notes or meeting notes, those must be extracted. Notes are purely reference material and all action items sit in a project management software, otherwise will never get done by your staff, that’s for sure. Is there any other kind of techniques or tactics or strategies top of mind that you’d like to share in terms of how to improve efficiency?
Nick: There’s tools like Loom I just mentioned. Sometimes, typing is too annoying because you have a lot to talk about and you need to share a screen. I think a lot of people are always under the assumption that you need to be on a live zoom to do these things. There’s a lot of things that I communicate to my team that might be 10 or 20 minutes. There’s a tool called loom.com, which’s a great video recording tool. One, we don’t have to waste time trying to coordinate schedules. My calendar is packed, it’s not easy to find time, it becomes exponentially hard to find common times when you have multiple people. If you need to do a six person meeting, good luck finding that time. Also, time isn’t linear, the value of a one hour slot at 9am on a Monday is way more valuable than 9pm on a Friday when you’re in the back of the Uber.
If you can free up synchronous communication off your calendar and then give people pre-recorded video that they could watch in their own time, maybe they’re going on a walk around the park, maybe or they’re in an Uber, maybe you’re a slow speaker, and they can watch it at 2x speed. Maybe there’s parts of that conversation that they might want to rewatch because it was complicated. So there’s so many benefits. I’m not saying every case. Sometimes you need to do live brainstorming, for sure. But you definitely don’t need 100% of your video conversations to be live on Zoom, some percentage depending on the context could be pre-recorded. I cancelled so many standing meetings that we had and now people know exactly the kind of structure of what I’m looking for in certain videos. And now I’m getting into video and now I take back control and I could use my discretion on when I watch this video and then send them back a video to get back to them.
Guillaume: Okay, so let’s say your daily summary of what you’ll do today you did yesterday, that kind of stuff, I just send you a two minute video and you click the link whenever you’re ready. So the general idea here is to move more and more to asynchronous communication, which totally makes sense to me. Pretty good. Okay. Anything else that sort of comes to mind regarding communications or you want to move to the next topic?
Nick: I mean, we could talk about this stuff all day. Everyone’s used to email, I think Slack and Microsoft teams have gained popularity. I’m really seeing a lot, which is why I mentioned before we’ve been building up this Asana partnership and program. We’ve really been seeing project management as probably one of the biggest gaps in companies; either they’re completely missing it, or they tried rolling it out and it didn’t work. And then they think it’s the problem of the tool or the tool doesn’t work or the tool sucks. But project management, work management seems to be one of the biggest missing things in companies that we look at.
Guillaume: Okay, so anything more specific we can get into, say common problems you’ve seen or something like that?
Nick: Well, the way meetings are run. So let’s say a meeting needs to be live, because there are some that need to be live. We talked about agendas. But even having a bit of a structure to it, like at the end of that meeting, all the action items are captured, decisions that are made should be logged in your knowledge base. People aren’t doing things like this. Clear pre-work for a meeting to make sure it’s as efficient as possible is not really being dealt with properly in companies. Sometimes, if everyone spends 10 minutes thinking about what they want to talk about and sending out some ideas ahead of time or coming prepared, everyone can save time. So at the end of the day at a high level we want to kind of tie all this together with a few concepts.
A lot of these things is shifting the mentality within an organization from optimizing for speed of transfer of information to how quickly can I get this information again, shifting the mentality to optimizing for speed of retrieval of information. Okay, maybe I’m in text, and it’s faster for me to tell you this right now over text. I will get out of my text message and open up a sauna project for example, so I’ll click into this project and then I’ll add the task for you in that project. So that takes an extra three clicks, it might take an extra 20 seconds. But I’ve just put it where it belongs and if everyone has this mentality of taking pause, spending a little bit extra time putting things where they belong, shifting mentality from speed of transfer to speed of retrieval of information, you’ll shift the organization from a bunch of people trying to optimize for individual productivity, and optimizing for team productivity, which requires collaboration, coordination, and sometimes people sacrificing their own time for the greater good of the team. But you’ll also see that if everyone does this very quickly, definitely everyone’s going to be saving multiple hours a week.
Guillaume: Yeah, that’s an interesting concept to bring up. It’s shown in some Agile Scrum training that if you try to do too much local optimization that everybody seems to have what would appear to be 100% efficiency, the whole process becomes slow. And you need a few people to sort of take the hit, quote, unquote, to unblock the team, and then we go faster as a team. And if you only measure and reward individual performance, you’re gonna create a slower machine than if you say, no, the goal here is the speed of the group, the performance of the group as a whole is more important than individual performance. Assists those guys who spend their time not doing billable hours, but if the scrum master is not there to unblock the team, the team just slows down. Because it’s going to hit roadblock after roadblock and won’t be ready to work when they actually get to that task. That’s a pretty interesting concept.
Also, from my own experience I can say it’s somewhat surprising, the quality of note taking can be quite varied from one person to another. Everybody went to school for so many years nowadays everybody should be great at note taking, but that’s really not the case. Notes are often too personal and hard to read. So it must pass the test that if you give this to somebody else, do they understand what you’ve just written? And very often it’s missing very basic concepts like, who is this for? Who’s this action for? Who should be doing this? Why do you need it? You gave me a solution that I need to implement, but why do you need this? Maybe I know a better solution. What’s the objective with this? And then, what’s the definition of done, of this task? Like if you’ve reached this, this task is complete. So I can validate if I’ve met your objective, what we’ve delegated as a task here. So, note taking makes a huge difference. I actually had to train the staff to do proper note taking, so there’s less confusion and more efficiency in this.
Nick: Yeah. You know, all this stuff, note taking, documentation, process documentation, you can’t be replaced, you can’t be promoted. So much stuff is not documented, which means it’s going to be very hard for you to ever not do that thing again that you might not like. If you can’t give it to someone and it’s hard to give someone something, if there’s no documentation on what they need to do in the first place.
Guillaume: So you’ve been talking about communication. You’ve talked about planning and resources, is there anything you’d like to cover like in those other aspects?
Nick: Well, you know, there’s a variety of tools inside of that resource section. We’re partners with a tool called Process Street. I forget what our code is. In the show notes, we can give it to your people. You can contact us and we’ll give you some of our special things. But tools like Process Street are great for documenting processes. It connects to automation tools like Zapier, so not only do you have the documentation but you could start automating various steps, even if a step is like a five second step. Most people say it’s not worth automating. But if you have to do that 12 times a day, that’s a minute a day, five minutes a week, 20 to 25 minutes a month, that’s a few hours a year. Just that one silly thing not to mention. A bot is not going to get sick, complain or mess up. Sometimes that five second task, if you mess up one out of every 100 times might take you 10 hours to fix the mess up. So you have to take that into consideration too when you start thinking about the benefits of automation.
Guillaume: Yeah, my observation on this is first, they need to get the process in order and then automate. So the first step is often to have humans to document it all, to test it, to learn it. Then you’ll know that this process works well and then you can add technology to automate it.
Nick: Also when you document, one of the things I talked about is when I look back to the high frequency trading days, every year, you have to take a two week block leave, which means you’re locked out of everything. You can’t come into the building, I can’t get into email, I can’t get into the trading system. They do that to make sure you’re not doing anything shady and hiding trades. Obviously, that never happened with me but when you leave, you have to document how your algorithms work and how your book works and give it to someone.
Even though I was the expert at my books that I was trading, just the process of documenting and handing it over to someone, every year for eight years, I came back and there was always an improvement to how the book traded. And you know, fresh eyes spark innovation. So when you start documenting things and you get other people to stress test what you’re doing, even if it’s not a full permanent transfer, but just a temporary, take a look, try to run payroll for a week. It’s hard to see the label when you’re inside the jar. So when you get someone else to do it, you’re going to start challenging the status quo. And people will start challenging, why are we doing this? And nine out of 10 times when they start asking questions, the answer is going to be, well, that’s because we’ve just always done it like this. I guess you’re right, we should have probably updated this three years ago, but the last guy did it like that.
Guillaume: So to reach, let’s say for the five to 10 hours per week of optimization, we work on improving communication, we work on improving how you can retrieve that information and you plan for the speed of the team instead of the speed of the individual. Then you put everything in your project management software, you then have your processes well documented, well defined, tested by humans, and then you apply automations to it even if they’re small processes, of course, a larger process gets priority but it’s also about the cost of the investment needed to automate that process. Is there something out of the box with the Zapier or do you need a custom development for $20,000 or more? What else would you put in place to try to gain those five to 10 hours?
Nick: I mean, if everything you just said people just executed properly, it probably even be more than 10 hours. So it’s not about more, it’s about doing each thing that we’ve just talked about, and doing it properly. A mistake people make is trying to do too much. They try to touch all these things simultaneously, you don’t get benefit out of any of this stuff if it’s partially rolled out. So do one at a time. You have to be strategic, that you want to do this in a strategic order. And depending on your business and your needs, it could be Asana as the most important or it could be getting to Inbox Zero.
So that’s the type of stuff that we help businesses with when we do this roadmap to prioritize, and see where you’re at. But the reason why that order matters is some things might be really important but it might take six months to fix. And even though once it’s fixed, you’ll save three hours, maybe starting with a quick win, which psychologically is going to get everyone on the team excited. And maybe in two weeks we could save you an hour, you should probably start with that. So now everyone’s got an hour back that they could reinvest into that next strategy that you need to roll out, make sense? Go one at a time. Most of the time when people say something like it doesn’t work, or we tried this and it didn’t work, it’s just the way it was rolled out. People just weren’t properly taught, when and how to use the tool.
Guillaume: Yeah, if you do it pass 10% each year, you’re not reaping any benefits in the pass 100%. Truly roll it out, train everybody, document the process that you trained everybody on, and then you enforce it. It’s actually being followed there. So is there anything else that you’d like to cover for today’s meeting?
Nick: I think we’ve firehosed them enough here. But if people have more questions, they can feel free to reach out.
Guillaume: Okay, so how can people get in touch with you, Nick?
Nick: Well, so the website is, GetLeverage.com. There’s some links there that they could click on to book a call with my team, my personal email is [email protected]. They could always reach out if they have some specific questions that we talked about here and I can direct them to the appropriate person.
Guillaume: All right. Well, thanks for being here today, Nick.
Nick: Thanks for having me.