What is Operational Maturity and what are the levels of Operational Maturity (OML)? The difference between the OMLs of businesses depends upon the standardization of the internal and external processes they employ, their competency in the services they provide, and the value they place upon industry investments. A firm with a low OML (level one or two) generally lacks the uniformity of resources and knowledge of operations to run a business effectively.
Businesses with level two OMLs have generally reached a point where processes are more standardized and repeated but complete uniformity has not been achieved.
In this podcast episode, Raj Goel talks about where his business, Brainlink International ranks on the OML chart, what his business did to climb to that level, and what can still be done to grow.
At a level three OML, the business has established an overall consistency throughout the organization and within the services it delivers. The business is capable of developing strategic plans to drive its services as opposed to merely keeping them afloat.
Businesses that have reached the operational maturity of a level four or five have learned to leverage their industries’ products or services effectively. The firm will deliver consistent service and support, a stable business environment, and proactive monitoring of its services or products.
The difference between a level four and a level five business exists primarily in the more mature businesses’ ability to enhance its customers gain a competitive edge within their industries. A firm with a high operational maturity level will act as a trusted provider and a trusted partner for its customers or clients.
Raj Goel also discusses Brainlink’s need for standard operating procedures (SOPs) and how following standard operating procedures helps build efficiencies and helps continue to grow the OML of Brainlink and build the business overall.
Raj Goel, CISSP, is an author, entrepreneur, IT expert and industry leader that specializes in the field of cyber security and privacy law. As founder of Brainlink, Raj has spent more than 20 years developing proven IT solutions for a range of high-profile clients in the financial, construction, architectural and property management industries.
His uniquely developed SOPCulture Process (winner of 2015 SmartCEO’s Culture Award) has changed the way his clients think about documentation by showing them how to develop processes for documentation of each and every task, allowing them to rapidly increase productivity, eliminate redundancies and increase quality of service to their clients.
Here’s a lightly-edited transcript of the podcast episode:
Welcome to the Law & Business Podcast. I am here with Raj Goel from Brainlink International. How are you doing, Raj?
I’m doing great. How are you doing Anthony?
I am well, thank you Raj. Why don’t you tell everybody who’s listening about Brainlink?
Brainlink is based in New York City and is an IT and cybersecurity consulting firm. We work with hedge funds, construction firms, and fast-growing businesses that are operationally mature/
And I want to get into this topic of operationally mature businesses. You and I were having dinner and we talked about it for a little bit and it was a fascinating topic to me about how a business owner thinks about his or her business. There is a difference between that operational maturity and not having that operational maturity. So why don’t you give me your general thoughts on, on the topic?
As far as the beginning, it’s just not my revelation.
General thought: There’s a whole body of business literature that talks about OMs, operational maturity levels, and essentially there are five stages in every business is life cycle, at least the ones that don’t go bankrupt or end.
Initially it starts out with an entrepreneur having a gut feel for the business. You know, whether it’s a one-person law firm or a one-person it firm or a freelance graphic artist and you’re going by gut feel.
Then over time you’d get some contractors, employees and you grow in size. And the next level up is a bit of standardization.
And then you pick your favorite brand of Macs or Windows and software and you’ve got three or four people. Now all of you have to have some sort of standards and that’s where a lot of businesses end up.
At least small ones.
Stage three is a formal standardization of processes, SOP fees, how you do everything by checklist and process. And there are no more cowboys and cowgirls left and people get disciplined or sanctioned, including the owner or breaking the rules or going off script unless absolutely necessary.
By stage four, now you’re actually doing things like forecasting, budgets, forecasting revenue and turning into quote unquote a real business.
And level five is what companies like IBM and Microsoft and KPMG and GMR where their development cycles and their forecasting and a future is measured in years or decades. They have lots of processes, they have lots of regulations, they have a system for doing things.
And ultimately that is what transforms a one-man, one-woman business or a hobby with a paycheck into a real company is when it scales beyond one person or the initial founder.
And it survives on its own as ongoing business entity.
Why don’t you evaluate yourself here and where is Brainlink on that particular scale and when did you realize where you were on that scale and how did you move it up?
Several great questions. So right now, we are at a 2.5 2.7 rating on a scale of one to five or zero to five.
I only realized where we were recently when I was at a conference for business owners where we talked about OML levels and this whole grid of how you rate yourself. And I went through an assessment but the need to improve operational maturity didn’t start recently. It is something that video’s hard about. Five years ago, uh, we were working with a client, a very well run construction firm and every meeting review, every review meeting I had with the client, CTO or owner was a humiliating, painful experience.
How so I would go, you know, hey, how are things? How did we do? I was expecting, “You guys are okay, they’re doing a great job” or “You guys are, I know your team is really nice.”
What, what I got instead, “Where your guy came in, set up two laptops and the signature is missing on one of them.”
Or, “I was here last week and my printers don’t work and don’t you guys have a process? Don’t you guys have a checklist?”
My initial thought was: Dude, that’s how it works. That’s been the SOP for our company for over 20 years. And that’s just the way our industry behaves. And it was a painful meeting to be in. And I nearly considered severing that relationship because I couldn’t find a way to make this client happy. And after blowing my top and losing my cool and just getting really, really angry.
I spoke to a few friends, including ones who are not in the industry, were not in the it field. And surprisingly, my IT friends are like, yeah, the client’s a fill-in-the-blank, you’ve gotta just fire them.
All my professional friends said, yeah, “The guy’s got a point.” “I really hate my IT guy.” “I really hate my IT girl, you know?”
“I don’t like calling IT because they always suck.”
And that is a damning indictment of my industry in how we run things. And that led to an epiphany of well, siblings, an epiphany. It just led to a frustration. And then I was reading the Economist in December, 2013 issue, if I recall, and met a great sidebar on the great hotels of the world. I love traveling. I love going to great hotels. It’s been a privilege of mine to stay at amazing properties. And in this sidebar, you know, uh, basically a third of a page in the economist had an interview with Bill Marriott Jr.
The secret to their fortune, you know, friends, these multibillion dollar fortune, right? It’s based on simple things like their 88 steps in their how-to-clean-a-room-manual.
Wait, wait, wait, wait, wait, wait, wait. Go on! 88 steps to clean a room!
I think for the average, I think for the average business owner, I think for the average listener to this podcast, they’re going to hear that and kind of freak out as to what that is.
It was: Are you kidding me?
But then a couple of things clicked in my head, we had some clients in hospitality industry, some on McDonald’s franchises, some on Hilton, and one of them was changing the brand from Hilton to Marriott. And I got talking to them, I said, “You know, what’s the difference? I always assumed that the logo on the stationary logo on the carpet, it was just that, just the logo. No real difference.”
Well, no, no, I can tell it. No, I can tell you that. I know that that’s not the case because when you franchise, you are licensing a business model.
I didn’t know that then.
I ended up speaking to this business owner over several drinks and he said, yeah, and I have to put all my people through all this training and it’s gonna be expensive, but it’s required to change the flag. I’m like, really? There’s really that big a difference between that Hilton and Marriott make beds or a vacuum the floors or pour coffee goes. Yeah, everything from the color of a carpets and the color of our walls to how our people greet our guests is in the manual. And my first reaction was, are you bloody kidding me? That’s just ridiculous. But the more I thought about it, it made sense that every great business, McDonald’s, Starbucks, every franchise, every business out there that has survived war than 10 15 years and beyond the founder, all they’re either selling you are their SOPs. When you become a McDonald’s franchise, you go to their burger, you want to become a burger king franchise, you go to Burger King University and what you’re learning is their process and their practices. And that got me thinking we should start documenting our things. And I tried and I went to my team and said, hey, I have an epiphany, a lightning bolt from the heavens. We’re going to write sop. And my entire team looked at me as if I’d spouted a third head in a horn and essentially gave me the proverbial end. The proverbial middle finger.
Yeah. Well, look, my first law firm was just as chaotic. It was a small firm.
The owner of the firm was kicked out of the big firm. I will say that I was told he left.
No, he was kicked out, but he brought his team with him and I saw it and I thought that that was going to have that particular standard. But you know, while the team is there, so this must be good. But man, it was crazy there, there wasn’t a standard of handling clients taking phone calls. There would be times when the secretary would page me in and I’m a first year associate and she’d be like, “Look, we have an irate client and Scott’s on the phone.”
And Scott was always on the phone. And how do you deal with that particular issue?
And Scott would say about every third day, it felt like make yet another iron-clad, a written-in-stone rule.
And then we would all have to follow it. But three seconds after he said it, he totally forgot what he said
So, we had two versions of scheduling software. One actually set up for an intellectual property law firm, but we only had two licenses on it. One for him at one for a paralegal. And we had to go make our own schedule and, and different pieces of software after that. Like, so I understand why when you try to put that together now that there’s now there’s, a bit of latency in the rest of your team.
It’s not just latency there. We’re right in that. Okay. How is this not one of other Roger’s crazy schemes that’ll hair-brained screams that’ll blow up and die in 30 minutes or 30 seconds? I think as founders and business owners, we sometimes have the goldfish mentality. I know, I certainly do.
Ooh, shiny object.
And so this idea landed with my team is a giant solid: the buggers of the likes of which we haven’t seen until the recent elections.
And that’s all I’m going to say about that.
So I said okay fine. Um, you know fine. I was not as polite as I thought, uh, as I could have been, but I was traveling a lot. So I ended up riding a couple of SOPs for my marketing admin. Basically. How do we send out a weekly emails? How do we create a monthly newsletter?
The five or 10 things I needed my assistant to do because I was too busy flying and going to conferences to deal with.
Okay. And I figured worst case scenario, she gets 80% accurate. Even 50% is better than my zero, cause I’m not gonna get it done and everything is better than nothing. And I wrote them to her literally as a, as I was sitting in an airport terminal about to catch my flight. You know, a flight got delayed. What else can I do? Gee, write some documentation.
So yeah, I wrote that up, sent it to her, went off of my conference and I came back two weeks later after two different conferences and my jaw hit the floor. She had sent the emails out weekly on time by 11:00 AM on Tuesdays, two weeks in a row.
Uh, one had a typo, which of course only friends made fun of.
The other one was correct.
But other than that, she had done a better job of getting stuff out on time than I had. I said, “Let’s work on a monthly newsletter.” And she actually did a much better job than I did of organizing things because I am the creator and the owner of the company.
It can give free passes to yourself.
She as the employee and not the owner was much more diligent about staying within the lines and following the rules. And about a month later I said, “Hey guys, you know, my marketing admin is doing all great marketing. How about we work on the tech stuff, our real bread and butter?” And the tech team said, “Yeah, that works for marketing. It’ll never work in it because we’re working it operations.”
It’s too important. We’re too smart. Well, I can use dumb. Okay, fine. And then since I was traveling quite a bit, I hired an intern to take some of my technical tasks, which I was responsible for, and I told them what the kids are going to do: here’s a problem that showed up on this server. I’m going to show you how to fix it. Your job is to watch, take notes and write the SOP. And that’s how I trained my intern or didn’t train him, but it’s how I share my intern, how to document my work.
He wasn’t technically qualified to do the work and that was not his job. I was too busy and too expensive to sit there and spend eight hours fighting with the word decree, a documentation. So the happy trick I figured out is, Hey, you got to college kid, you pay him 20 bucks an hour depending on your time and what the prevailing rules are.
We paid our interns. I said, great.
I’m going to lunch. Go to meeting. I’m going to record what I’m doing. You’re going to sit next to me.
He was literally sitting right next to me. I used to go to meeting to record what I was doing onscreen. I talked him through exactly what I was doing and why I was doing it. I said, great. Now go draft some SOPs.
And the first couple were terrible. I was going to say, “I can’t imagine that the procedures themselves matched what you were looking for.”
The first couple were terrible, atrociously bad, but he did get the formatting right. And in a couple of cases, he caught details that I had glossed over because as a neophyte, he brought that amazing worldview of, I don’t know what that means. Let me flag it. And what I’ve learned since then, and there’s something we’ve used with a number of business owners, key executives, is, you know what you’re doing in your business.
You’ve built it.
You know how to do this podcast. You know how to onboard a new client. You know how to file, you know how to do things when you’re training somebody else. Budget time for them to make mistakes, budget time for them to learn the basics and then follow the 80/20 rule.
The Predator Principle applies to get 80% of the topic, right?
It’s worth anything and everything you will pay them. Because if they can spend eight hours to save me one hour of my time, it’s worth it.
There are times when I’ve paid somebody to spend 40 hours to save me one hour of my life. So what other ways has your businesses improved? So the big thing about OML is as you improve your operational maturity level, the kind of clientele you attract in your business with changes.
10 years ago, if you had a pulse on a keyboard, we were chasing you for business. Six years ago, we were looking for well established companies, but still no real market definition. Today we only take operationally mature clients. What does that mean in our construction space? We don’t work with firms that are less than 50 years old. Why? I’m too old to deal with startups.
I love startups. They bring great technology and great products into the world, but they are operationally chaotic. They have no real management and they’re learning on the fly. And that’s great for other firms to take on. We take operationally mature firms where they have proper management, where they have a chain of command, what do they have systems and processes and when they need help and improving that or getting a better return on their investments. And on the financial side, our hedge fund and private equity clients are firms 10,15,20 years old.
Precisely because we like firms that know what they’re doing that are going to be around for awhile. Yeah.
A market dive could take out half of our client base. That’s reality. So it could other events, but as a betting man, I would say clients that have been around for 50-60 years, don’t die in the next bubble. Firms that have been investing for 15-20 years don’t die in the next big plane crash. And those kinds of clients tend to value firms that follow processes and procedures. And as a result our revenues have grown wonderfully. Our profitability is the best it’s ever been and it gives us the ability to hire more expensive staff, work with more expensive vendors and improve our capabilities. The more we improve our operations and our processes, the better the clientele we’re attracting and a better the client that we’re dealing with because people recognize how boys from a safe pair of hands and there’s another a wonderful quote from Paul Defoe, he’s a world expert on OML for it companies.
He’s worked with a lot of large firms and he said, “Operationally mature companies foreign hire. We go after the top 40% of the market where business owners have a need and a budget and a process for getting things done and you leave the 80% of the market to your competition to fight over.”
Why do large companies work with IBM and KPMG? Because large firms are high, operationally mature, they only want to work with other high OML firms. And that makes so much more sense. The more we improve our processes, the more were attracted to firms have good processes and more allergic. I am and we are too chaotic cowboys and cowgirls.
So how does a business start thinking about their own OMLs and improving and where would, where would one start for more information on improving their own??
Google, just search for OML or operational maturity levels and depending on the industry, every industry has metrics from experts in the field on what’s up rates in OML one law firm from an OML five law firm for example, or no ml one manufacturing company for an OML five. You know, there’s ISO standards on manufacturing quality control, things like that. And for bringing process into the business, there are three good books I recommend business owners read. Yeah, I know we all get so many book recommendations, but these are effectively our bibles that Brian link a first is get things done. It’s an amazing book and high on how to delegate.
And delegate effectively.
Next is the four hour work week, lousy title, but a great book, a masters level discourse.
Yeah. I think a lot of people think, oh well that means I can only work four hours a week. Once I read that book, and that’s not really quite true.
That’s not quite true. But once you read the book and you apply at least some of the tactics and principles, you’ll be amazed at how much more of your life you can delegate to third parties, whether it’s your travel agent, whether it is your considered app or other firms. Nice thing about living in the modern economy is things you consider grunt work and things you don’t want to do. The other people who just are delighted to do that. You know, a couple of good examples. I do a lot of presentations and I battle PowerPoint every single time and I’m not a designer and I’ve wasted so much of my life trying to get the PowerPoint to look right or the graphics to look right. Instead of that, get a site like fiverr.com or freelancer, tell them what I want or what I want done. Give them some time, give them a budget to work with and I come back with great results. You know, one trick I’ve learned in that arena is, so I have a PowerPoint deck that I want to turn into a really nice, surprisingly animated presentation.
Oh sure. I know, I’ve seen Prezi animations. They’re very impressive,
Very impressive. I just, I don’t have the time to figure out how to make them work and I don’t care too. So I go, here’s my PowerPoint deck. Uh, here’s what I’m looking for. Here’s what I’m not looking for. I don’t want a lot of flashing things. I don’t want a lot of clutter transitions. I want something that’s more like the game of Thrones opening sequence. And unless I can ask a flashback from the 70s and I will hire two, three or four contractors off a Fiverr or freelancer, let them go crazy with it. And then whoever’s stuff I like or I like best, I’ll go, great. I like this or this. From what you did. I like this, this firm, these are the people I paid for. Can you combine these three or four? And then I get what I want. And that would not have been possible had I not read and mastered the four hour work week because it, it really taught me how to break down what I want into tiny bite size instructions other people can follow or the people can comprehend.
Mistake I made and I think a lot of people make early on and when they go to delegation is they try to dump 5,000 item checklists on somebody else. When in reality, when you’re delegating lists, when you’re starting out and you don’t know the person, they don’t know you giving them bite size individual tasks is much more intelligent and saves a lot more sanity. And the third book I recommend, and it’s a book I live by, is checklist manifesto. Um, the goal of anything you’re doing and let go of anything I’m doing is first I figured out how to do it. That’s your first. I figure do I need to do it if I don’t need to do it, delegate it to somebody else and that takes care of 80% of the things that quote unquote I need to get done. The demanding 20% of the things that I only I can do.
Okay. First I figured out how to do it. For example, right before this call, our CRM system upgraded to a new version and they have a fantastic sales funnel module that I haven’t learned. I had not learned before. So on Monday I went to a class with a trainer and learn how to use sales module and in the hour before this interview, I actually went through the sales module, a training that I took on Monday and I started creating the sop on how to put a new lead into this, into the new version of the CRM, how to do a forecasting and then how to look at our sales funnel. Something we’ve never done before as a company and something I would not have done even three months ago. But since I’m building out a sales team for 2018 I’m going to be hiring salespeople.
I can’t have them fly by the seat of their pants. So not at all, but not when it comes to sales. And so I’ve got the sop drafted, my VP of operations and my CFO are looking at it. They probably won’t use it more than once, but they will go through at least once to find any bugs or defects. And as I use that sop more and more to put in all my sales opportunities and my sales funnel, and then I’d go to my team to get, okay, quick, we consider a lead or a prospect are in qualified engage, et cetera. Now the VSOP is done. That’s one less thing I have to do and one more thing, I can go to somebody else in my team and say, here, follow this process. Do it. Are they going to get it right the first time?
The first two or three times we’ll get things wrong in wonderful. You’re knowing waves, you know they get things wrong in the ways I can’t comprehend or predict. We’re still aligned. I go full proof documentation university builds better false. Uh, so we have learned in our own processing and our budgeting that if I’m going to ask him to do something the first time around, give him extra time because it’s a new platform, it’s a new system, it’s new way of doing things and after that the second, third, fourth, try it. They do a better job than I would myself.
Raj, I can’t thank you enough for taking the time. I don’t want to take much more of your time because you are busy and we’re recording this in the middle of the day and so thank you so much for coming. Once again, tell people how they could find you if they want to ping you on it or any other questions.
Raj Goel, g. O. E. L. You can go to brainlink.com B r a I N L I N k.com. If you want to learn more about SOPs and process, I have a blog site called sop culture.com s o p c u l t u r e. Service mark by your friend Mr. Anthony Verna and Verna Law.
So I blog there about how to improve operations and processes and how to do better onboarding of clients and all that jazz. Otherwise, just Google me. There’s 20 million Raj Goels in the world and Google still thinks I am number one.
Hey, I do pretty well under Anthony Verna, so it’s pretty helpful when your top and your own name, I should say. And the person who invented instant replay is an Anthony Verna. So I’m ranking over his family.
Raj, thank you so much for coming and let’s do this again at a later date.
Absolutely. I think it was a pleasure. Thank you. Thank you.