The 6 steps to build out your expert system

In my last article on why you’ve got to make smarter choices that you know will scale, I shared that this week I was going to share my best input of handling the specific challenge of scaling up “expert systems”.

Scaling your business requires building it in such a way that your model and systems can be rolled out and replicated on a much bigger playing field. When you’re solving a business challenge, you must look for solutions that can be scaled.

But many business owners say that because they’re selling expertise that lives in their heads, they can’t scale their businesses.

Your expert systems capture the hard-earned wisdom of how to perform your company’s core business functions. They replicate that expertise in a formalized process and connected set of tools, training, and controls to make it possible for the business to own that expertise versus the know-how being held in the brain of a key employee. Not only does this protect your business from the loss of a key employee, but it also allows you to replicate this formally expert-level-only process in a coherent system.

This means you can scale an expert system because one person is no longer the bottleneck. It also means you can lower your costs as you push down the level of expertise needed to reliably produce the desired result, perhaps even automating a large chunk of it.

Because you are freezing the formerly impromptu process into a formal process, you can also optimize it, increasing the speed and value of the output. And finally, because you now have a readily reproducible recipe to focus your efforts on, you can control for consistency and quality, even creating simple business controls to ensure the process runs right.

In a perfect world, you’d love to have a business that runs by itself; while you’re at the pool, your company takes orders and delivers products. While this fantasy may not be possible, using this filter to look at your business prompts you to constantly find ways to automate, streamline, and improve operations instead of just adding more people when more work comes in.

For example, in an earlier business coaching and training company I founded in January 1997, initially my business partner and I did all the training and coaching services. We capped out at roughly 30 clients per quarter. But as the business started to grow and we retained our existing clients, we faced a major hurdle—finding a way to deliver a world-class business coaching service that didn’t rely on us to personally do the coaching.

This required that we create a formal process where we “froze” our process and expertise for working with a coaching client to deliver great results into a collection of tools. These tools included:

• The process to find, hire, and train new coaches;
• The diagnostic tools to work with a new client;
• The accountability tools to keep clients on track;
• The ongoing training process to continually grow his coaches over time;
• The technology to automate many of these processes;
• Etc.

Collectively, all these tools and processes evolved into our expert system for producing coaching services. The most amazing part was that once we had built this expert system that essentially replicated and replaced my partner and I from direct client coaching, by every measure of success (e.g., growth in client sales, growth in client profits, client satisfaction ratings, client referral rate, etc.) the expert system produced a better results.

While I eventually sold this company in 2005, at the time of sale we had scaled the coaching division to work with over two thousand clients a year.

Here is a six-step formula for building your core expert systems.

Step One: Define All Deliverables
A deliverable is any result your expert system needs to produce to meet the expected promised outputs of your system. This is just a fancy way of saying that you need to clarify what exactly your system is supposed to produce for its customer.

This may include getting a certain number of physical products to your customer by a certain date, making a report or recommendation on a course of action to your client on how to best handle a specific challenge, or some other output your expert system has promised to fulfill.

As you can imagine, the more complicated the expert system you are working on, the more deliverables you’ll capture on your list. While this may seem overwhelming at first, this should actually comfort you. You’ve already been producing all of these deliverables, but you were doing so in an informal way that one or two key people in your company just “did.” By concretely defining your deliverables, you’re taking that key first step in building out a system that will effectively produce them. After all, how can you produce what you haven’t consciously identified you’ve promised to create? And without documenting all these deliverables, how can you get customer sign-off that you are actually doing your job well and delivering on your promises?

Step Two: Lay Out the Process
Now the fun begins. Grab a pad of yellow sticky notes and your list of deliverables. Placing one “step” on each sticky note, lay out the process your company will use to create and deliver on all those deliverables. Using sticky notes keeps you fluid and loose as you design and document your process, allowing you move them around, add steps, combine steps, or delete steps.

Once you’ve got a rough layout of your steps, it’s time to ask yourself a series of questions to refine your draft process.

• Which deliverables really matter?

• Which deliverables are nice but not essential?

• Which deliverables do your employees think your customers want or asked for but didn’t?

• How can you eliminate these deliverables that actually just get in the way and are not wanted?

• How can you reduce the steps and still generate the desired results? And generate an improved result?

• How could you decrease the resources needed and still generate the desired results? And generate an improved result?

• How can you speed up this process?

• How can you automate or template this process (or part of this process)?

• How can you lower the costs of doing this process without impacting the value of the output?

• What simple changes or improvements can you make to increase the value of the output?

• How could you marginally increase your cost to produce but in a way that so enhances the value of the output that you can get a price increase for the value you’re offering now?

• Who else in the world has a related process or tool you can learn from to help you better design this process?

• Could you outsource any parts to this system? Does it really make sense long term to do this?

• How could you make the system more robust? More stable? Less prone to error?

Once you’ve thought about and answered these questions, return to your sticky notes. Based on your questions, move, add, delete, and play with the steps of your system until you lay out a process that promises to be faster, cheaper, of better quality, of greater impact, and more scalable.

When you’ve drafted these improvements into your sticky notes, you’ll lay out the finished process into a complete and neat recipe to produce the desired outputs. This recipe will be a simple longhand list of each step in the process. (e.g., Step One . . . Step Two . . . Step Three . . . etc.)

Step Three: Determine the Optimal Level of Expertise for Each Step
As a business, you want to find ways to relieve your most expensive and experienced employees from doing lower value work. To sustainably scale your business, you must work to push as much of the work of each expert system down the value chain so that your experts do less of your expert system. Not only does this immediately increase your capacity because your expert can be spread over a larger volume of total work, it also drives down your costs as the work performed at a lower level is much less expensive.

There is a hierarchy of expertise for each step in your expert system. At the bottom, you have those steps that can be automated, semi-automated, or made into a template. Next, you have those steps that require a person to complete them, but not necessarily a skilled person (e.g., clerical, administrative, unskilled laborer, etc.). The next level up is for those steps that need a semiskilled team member to perform them (e.g., paralegal, nurse, journeyman, etc.). Above this is the level of skilled, which requires a basic expert to produce these steps. Finally, the top level of the pyramid is for those steps that require a top expert to produce for the business, which in most small businesses is the owner or one or two key employees.

Let’s look at an example of how this hierarchy of expertise plays out in a law firm to make these levels clear. Automated, semi-automated, or templated refer to things like the standardized engagement letter that gets sent to any new client or the library of boilerplate contract templates they have on the company’s server. Non-skilled tasks include those tasks that a clerical worker without legal training could handle, such as scheduling meetings, collecting client data, and gathering historical documents to give to the attorney. Semiskilled tasks in this context would likely refer to those items that a paralegal could produce as opposed to an actual attorney. Basic expert tasks are those that only a licensed attorney could do, although they could be done by a less expensive, less experienced associate attorney. Top expert tasks are processes and functions that require the best legal talent at that firm in that area—things that likely need years of experience to understand and do properly.

The goal of your expert system is to match up with each step of your Expert system with the appropriate level of expertise.

For most existing businesses, the biggest immediate reward of drafting their expert system in a given area is how this exercise reveals where they need to push steps down from the top two levels (Basic Expert and Top Expert) to lower levels. In many cases, a business can quickly increase its capacity by 30–50 percent or more simply by staffing down many of the steps in its expert system to a lower level in the pyramid.

In the example of our hypothetical law firm, this would include things like getting clerical staff involved in scheduling meetings and reminding clients of information they need to get to the firm prior to that meeting, better software that automates or semi-automates the invoicing of clients for work performed, or standardizing the core legal services to allow a less experienced attorney to do tasks previously performed by the senior partners of the firm (but that don’t require the latter’s deep expertise).

From all our years coaching business owners, we consistently see that most businesses have their best, most expensive “experts” doing too many of the steps of their informal expert system. As a result they struggle with capacity issues and poor margins, and are vulnerable to that “expert” getting hurt or otherwise leaving the business, taking with her all the know-how and institutional knowledge she gained from years of being the wizard inside the black box producing in this area of the business. If you want to scale your business exponentially, then you must reduce your company’s reliance on any one expert with formalized expert systems upon which you have trained and cross-trained your team.

Step Four: Control for Consistency
Now that you’ve got your written process, and have identified which level of expertise optimally goes best with each step, it’s time to refine your process to control for consistency. This is just another way of saying that you now need to look for ways to improve quality and reduce variability. Here are several key thoughts to help you do just this:

The more you can automate, semi-automate, and template, the easier it is for you to control for consistency. All it then takes is a sharp review of your template or automated steps to make sure they are accurate. These processes become great “embedded controls” to protect your business. Streamline the process. The fewer the steps in any complete process, performed by fewer people, the fewer the potential problems.

Pay particular attention to the critical linkages. Script out the critical linkages between tasks and reinforce them.

Standardize wherever you can. This will help you accelerate the process, increase efficiencies, lower costs, increase impact, and improve quality.

Create your three “master” documents: your master timeline, your master checklist, and your master budget.

Capture institutional knowledge in a structured, searchable place. This includes detailed client notes not in the heads of your staff, but in searchable text in your CRM. It can also include an organized file of the associated documents for a specific project or client. If you don’t take steps now to capture this essential past history, there will come a day when a key team member leaves your company and you’ll have to scramble to re-create the institutional knowledge they took with them. Not only will this be financially expensive, but will also be incredibly stressful and emotionally painful.

Train and cross-train your team. Make sure that every key role in your Expert system has at least one fully trained understudy. Redundancies aren’t sexy, but they give you incredible peace of mind and business depth.

Step Five: Map Out the Key Components of Your Expert System to Refine First
Likely you don’t have any formal expert systems established right now, but you do have an informal collection of best practices that are in the heads of your key team members. Now that you’ve followed steps one through four to formally lay your expert system, it’s time to flesh out the system with the tools, training, and controls you need to enhance your expert system.

Don’t worry—I’m not suggesting you sit down and do this in one go, but rather to flesh it out over time.

Pick the piece of your Expert system—the “block”—that you think would either be easiest to refine, or would have the biggest impact for your business. Picking a block that you know you can successfully model in an expert system gives your staff a visible example of the value and operation of expert systems, and increases their confidence in attacking the next, more complex block.

Give this block a name (e.g., The “New Client Launch,” the “Quality Review Process,” the “Bid Selection Step,” etc.) to make it easier for you and your team to talk about.

Approach this block from four specific directions:

Critical Knowledge to Institutionalize: What is the critical know-how about this block of your Expert system that is locked in the heads of one or more key team members? Identify this institutional knowledge and brainstorm the best way to capture, store, and share it.

Tools to Enhance and Leverage: What tools, templates, and automation would make this block of your Expert system faster, cheaper, better?

Training to Design and Implement: What training and cross-training will team members need in order to be successful in using this expert system (or at least this block of your Expert system)? How could you formalize or “freeze” that training in easily accessible, updatable, and scalable systems?

Controls to Monitor and Ensure Quality: Consider what internal controls (visual, procedural, or embedded) would best help your business ensure that this block of your Expert system consistently works exceptionally well.

Step Six: Each Quarter Reevaluate Your Expert System to Prioritize the Next Block to Enhance and Refine
Each quarter, revisit your expert system and pick the next “block” to focus on and refine. It’s normal to take three to four quarters to really nail down a complete expert system for your company. Because these are the processes that produce the most value in your business, you’ll find your company greatly benefits from the time and attention you invest on each block as you and your team iterate and refine over the long term.

That was a lot I know.

For more ideas on how to scale your company may I suggest you access our free business owner toolkit. To access this free toolkit, including the 21 in-depth video trainings to help you scale your business and get your life back, just click here.

Business David is a Wall Street Journal and Business Week bestselling author of 11 business and financial books. A syndicated columnist for and, David’s articles have appeared in over 6,500 publications. As the founder and CEO of Maui Mastermind®, David has worked with 100,000+ business coaching clients and community members to buy, build, and sell over $5 billion of businesses.