The Variability Trap: Why Your Business Feels Chaotic Even When Everyone’s Busy

Scott Todd (00:00)
Earlier this year, Starlink made a change to their terms of service. They raised the price on one of their plans while cutting the data in half. Prices went up, data went down, customers were furious. Now, here's where it gets interesting. Customers started opening support tickets. They wanted to cancel, but what happened next was a mess. You see,

Some customers got large refunds and personal phone calls, while others got their last charges refunded and their accounts canceled without a call, no conversation, just kind of a message that says, sorry to disappoint. And that's when customers started talking to each other using online forums in groups. They started saying, hey, this is what I got.

And other people were saying, wait, I didn't get that. Wait, you got a phone call? I didn't get a phone call. You got a $200 credit? They just refunded me. The inconsistency made everything worse. It wasn't just that they were upset about the price change. They were. But they were upset at a secondary level by how they were treated differently from each other.

and that is the variability trap.

And today I'm gonna show you how it's hiding in your business, even if you don't think that it is. But first, I want to clear up a misconception about what the variability actually means. Welcome to Fix My Business. I'm your host, Scott Todd. I've built multiple seven figure businesses after leaving corporate America, and this show is dedicated to helping you build a business that you love.

In episode 54, I introduced the four traps, the control trap, the variability trap, the memory trap, and the visibility trap. In the last episode, we went deep on the control trap, how to know if you or a key employee are the bottleneck in your business and how to escape. And today we're going to go deep on the second trap, the variability trap. And I'm going to tell you right now,

that this trap makes your business feel chaotic even when your entire team is busy, even when they're producing stuff. When you fall into the variability trap, it feels chaotic and you can never automate and scale chaos. Okay, so what does this even look like? Well, first of all, what's happening here is that the misconception is that most people think that the variability trap is about people

doing steps, it's about how they do the steps differently. It's not. The variability trap is about the output being different. I don't care if one person does step A and then B, and then another person does step B and then A, if they both arrive at the same result, the same quality,

and the same standard, that's fine. To me, it's like, hey, we're gonna go to this destination. I don't care which route you drive as long as it's not the longest route. I don't care what route you drive. I just need you to get to this destination by this time, okay? So think about it that way. Now, here's the thing. When you have two people that do the same job and they produce different results, that's the trap.

Think about it like a factory making widgets. If two workers, they work on the same assembly line, they produce the same widget, but those widgets look completely different, that's a problem, okay? If I buy this pen, it should work just like every other pen I buy. It doesn't matter how they got there. The output has to be consistent. The same concept applies to services. A lot of you are in the services business or you do knowledge work.

And it applies there, well, equally as opposed to just building a widget. Okay? It shows up everywhere in your business. This very boat shop shows up everywhere. But there's one place where it's especially dangerous and that's anywhere the customer sees it. And that's what happened to Starlink. The customer saw the inconsistency. And once they saw it, they couldn't unsee it.

It wasn't just that I'm upset about the price change. It was, I mean, they were upset about the price change, but it became, I'm upset about the price change and you treated me differently than someone else. That's a betrayal. That's personal. Now, let me give you an example from one of my businesses. I own a real estate investment company. And one of the critical functions in that business is due diligence. Due diligence,

is the research that you do before you buy a property. You're checking different things. You're checking comparable sales, zoning, access, taxes, lots of stuff. And early on, I had two people doing due diligence and I started noticing something. I'd look at a due diligence report from person A and then I'd look at the report from person B and on the exact same type of property, they were completely different, different depth.

different data points, different conclusion. I started giving them as a test, here, I want you both to do due diligence on this same property. Same property, it was the same task that they were doing, completely different results, completely different outputs. That's when I realized that I don't have a person problem, I have a standards problem.

And here's the phrase that reveals whether you're in this trap or not. The phrase is this. It depends on who does it. If you've ever said that or even thought about it, about any of your processes, your business is in the visibility trap. The quality depends on who does it. Think about that one for a minute. If the quality of the work depends on who does it,

or what about the speed depends on who does it, or the customer experience depends on who does it. That's variability. And it's a sign that you don't have a standard. Or if you do have a standard, it's not being followed. Now, most business owners think that it's a people problem. They think, I need to hire better people, or, I need to train them more.

But that's not it. The real problem is something else, something else entirely. The real problem is that you've defined the task and not the output.

you told them what to do, but you didn't tell them what done looks like. I see this in marketing all the time. I see this where people will say, Hey, I need you to write some ads. Okay. And that is completely different from, need you to write some ads that produce leads. Think about that for a minute. Those are two different outcomes. Okay. Yeah. They're both, they're both ads.

but one is just an ad and the other is an ad that produces leads. Now, going back to my due diligence example, I had trained the team on the steps. Here's a checklist. Here's what you look for. Here's where to find the data. Okay, but I never defined what the completed due diligence report should look like. I never showed them the standard. So they each created their own. And

Guess what? Their own look different from each other's. The variability trap isn't a training problem. It is a standard problem. And there's a simple test that you can take to see if you have this problem in any process. And it's very simple. Here it is. Take the two inputs, take the two same inputs and give it to two different people and compare the outputs. So do it with due diligence.

Same property, do both due diligence reports match? Take customer complaints. Same customer complaint, do both responses match? And here's a big one. Take the same patient procedure. Does the pre-surgery procedures match? I sure hope so. As a patient, I hope so. If the outputs are different, you have variability.

And variability means that you do not have a system. You have people doing their best, but there's no standard to hit. Now, let me bring this back to Starlink for a moment, because there's something deeper that happened there. The deeper issue with Starlink isn't just the inconsistency. It's that the inconsistency was visible.

Customers talk to each other. They compare notes. And once they saw that some people got phone calls and credits while others got nothing, the trust was broken. In your business, customers talk to. Even if you don't think that they do, they will somehow find each other. Or if it's not specifically about your company, it's about your industry in general.

They'll find each other. have this way. They compare experiences. They leave reviews. And if one customer gets white glove treatment while another barely gets the minimum, they notice the variability. And that erodes trust. And trust is everything. So how do you escape this trap? Well, there's three parts to escaping the variability trap. Part one, define the output standard.

This is where most people fail. They define the process, the steps, but not the output. For my due diligence team, I created a template. This is what a completed report looks like. These are the required sections. This is the depth of the analysis for each section. If your report doesn't match the standard, it's not done. It's not about how you get there.

It's about what there looks like. Part two, create examples of good. Maybe create examples of great if you can find it. Don't just tell them the standard, show them. I took three of the best due diligence reports we ever produced and said, this is what good looks like. Study these. Your output should match this quality. Examples beat descriptions every time.

Part three, step three, audit the outputs, not the inputs. And a lot of people wanna measure the inputs. Did you go to this website? Did you do this? Okay, most managers check if the work was done. Did you complete the checklist? Did you follow the steps? That's an input audit. It doesn't catch variability. What you need to do is to output

or you need to audit the output. So what you need to is audit the output. Take the finished work from different people and compare it. Are they hitting the same standard? And if not, you have a training issue or you have a standards issue. And this is the key question to ask yourself. Would a customer know who did this? If a customer can tell by the quality, the tone, the experience, which employee

they were dealing with, you have variability. The goal is that your customers get the same experience every time, regardless of who does the work, regardless of the day, regardless of anything. Now, here's how this connects to the scale framework. In episode 52, I introduced the scale framework, and this is the framework that I use

to scale my businesses and to scale my automations. It's the same framework, because you cannot automate chaos. And the variability trap is directly related to the C in scale. Clarify the flow. When you clarify the flow, you're not just mapping the steps, you're defining what the output of each step looks like. You're creating the standard. And when you have a standard,

then visibility and variability disappear. So here's your action for this episode. Pick one process in your business where the output depends on who does it. Just one and create an output standard for that process. Write down what done looks like, what does success look like, and then find two or three examples of good and share them with your team.

Then do the test. Give the same inputs to two different people. Compare the outputs. If they don't match, then you know where to focus. And that's the first step out of the variability trap. Now, in the next episode, we're gonna go deep in the memory trap. This is where one ⁓ failure point creates everything, okay?

because if work depends on someone remembering to do it, you have a problem. And I'll show you why your calendar reminders are a symptom and not a solution. Now, if you have a business question, I want you to head over to scotttodd.net forward slash ask. I read every single submission and I will see you in the next episode.