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-My name is Caleb Taylor and today we're going to be sitting with Clay Clark, the pale visioneer and CEO of Thrive 15 dot com. Clay is going to be teaching us a little bit about quality control and customer service training, specifically explaining to us the meaning of the Lean Six Sigma. He's relating it there for dummies. So don't worry. We'll learn all that we need to learn on this subject today.
Here at Thrive 15, we believe that knowledge without application is meaningless. So always be asking yourself, how can I take these words that Clay is preaching to me and apply them to my life and to my business? Because if you don't, you'll be wasting your time and you'll make this episode more meaningless than toe socks.
-Clay, I just value every moment that I get to sit next to you and just pick your brain. It's a glorious honor.
-Well, to quote Miguel, one of my favorite R&B artists, "I adorn you."
-Wow. That's wonderful. Thank you. I also just want to say that a lot of how you conduct yourself and things you do puzzle me. I think you're a strange man at times.
You're wearing a basketball Jersey right now, are you not?
-Yeah. So he's always wearing jerseys under his suits. But I want to talk to you today about another topic that confuses me a little bit.
-And this is the Lean Six Sigma for dummies.
[MAKING NOISES WITH MOUTH]
-So we're going to pretend like I'm the dummy. We're just going to pretend I'm the dummy here. And I want to be able to understand the ins and outs here of this Lean Six Sigma. Do you want to explain something?
-Well, I want to say real quick, well, usually when I talk to someone who I perceive to be dumb, we all tend to do this. We tend to talk loud. So if it's OK, I'm just going to talk a lot louder--
-At you, and slower.
-So hopefully you'll understand it.
-Beautiful. OK, so I've compiled a couple definitions here. This is for defining the Lean Six Sigma. And I've got this definition from combining two definitions.
The first definition is the Six Sigma. This process is defined as one in which 99.99966% of products created are expected to be statistically free from defects. This definition is actually coming from the Business Dictionary dot com. And then, when you combine that definition with lean management-- stay with me-- definition of lean management also from business dictionary says, doing more with less by employing lean thinking. Lean manufacturing involves never ending efforts to eliminate or reduce muda, Japanese for waste or any activity that consumes resources without adding value, in design, manufacturing, distribution, customer service, the whole process.
So it's cutting down on the errors of this process, correct?
-Yeah. And I'm going to tell you this. Sometimes people joke with me in the office about like, they say things like, Clay Tron. Clay Tron, well that's based on that I'm sort of robotic, robotic, and that I like to do the same thing every day.
-The idea of Six Sigma, the idea of Six Sigma, that refers to the pursuit of perfection. And just to give you an idea of what I'm talking about, at the time that Jack Welch took over as the CEO of GE, he was fanatical about quality. And he moved them from making refrigerators and toasters into making jet engines. So this company shifted for making toasters to jet engines.
Well, just throwing it out there for you. If you're on a plane, wouldn't you want 99.99966% accuracy on the overall quality of the engine?
-Wouldn't you want to know that it was going to work? Now, in small businesses it's typically- and this is for an exaggeration-- but at a local sandwich shop, you might have a 75.2% satisfaction quality rating. So it means that only three out of four sandwiches they make are good, but yet they can make a jet engine with 99.99-- unbelievable.
-So why is it that you go into the local DMV, not in your city, I'm sure, but in my city. You go in there and one out of four customers leaves upset.
-Why is it that they can't ever get the paperwork right one out of four times? Why is it that there's a hair-- because I own a hair business, I spy on other hair businesses all the time. Why is that I go into hair businesses, and I'm only getting one out of four that actually do a good job?
Yet, we can make jet engines with 99.99-- I'll tell you why. Because this is a document. This is a written document. A document can be improved upon over time.
A little bit here. A little bit there. A little bit here. A little bit there. Little bit, but an oral tradition cannot be improved upon over time. Does that make sense?
-So what I'm saying is like, I could make it a little bit better, a little bit better. So if I took this picture and I was trying to draw this picture with 100% accuracy, I could draw it and then if I could make a photocopy of it and make it a little bit better and then a little bit better and a little better, eventually I could probably draw it exactly this
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-So you're saying the Six Sigma is a process that you write down and improve upon?
-It's an idea that's-- it's the pursuit of perfection. It Is a business process defined as when you are almost 100% accurate. And I can tell you with the DJ business, the last year I ran it, because I surveyed customers, we operated at about a 98 point whatever percent satisfaction rating. Meaning that for every wedding that we did, 98% of the brides returned a positive feedback. And that was not good enough for me.
And I wanted every script to be answered the exact same way. So literally, I had my guys answering the phone the exact same way. Every email, looking the exact same way. Every DJ, setting up the exact same way. And you have to hate variation.
-But people will say that's boring, right?
-Well, boring to me is consistently losing because you are basically creating predictable failure. That to me, that's boring is having predictable failure. To me, what's exciting is the pursuit of perfection. You give me Tim Duncan and 20 years of basketball success any day over the upside and downside of some of these morons in the NBA who are fascinated with having a good game and a bad game. I love the consistency of Tim Duncan, "The Big Fundamental."
-Oh, yeah. So you've mentioned a couple different businesses. Can this be applied to any different kind of business?
-Yes. Now, Six Sigma in the true sense, where you really get into the craziness of 99.999%, it'll be a little bit easier to achieve in manufacturing, because there's automated machines that do things. But in a soft business, like a soft selling business, like a service where there's a lot of humans, not a lot of automated processes, I believe you can get probably in the 98%, 99%.
-And that's by just creating those workflows, the checklist, the systems.
-And being an intense manager. I remember I used to tell guys, get off the phone. They're like why do I have to get off the phone? You didn't say it right. Hang up. Why do I have to hang up? You didn't answer the phone right. Call again. Call again. Answer again. We're going to drill again. We're going to record your call again. Make your call again. Say the call again. Improve the call. I mean, a fanatic about it. I got to the point where at my own DJ shows, I was tracking my own shows to see if I could hit perfection.
-And I've seen you and experienced you doing that here in Thrive. I mean, you have specific call scripts set up. And if somebody says the general idea, but doesn't quite say the exact words, they hear from you.
-They hear from me because it's not replicatable. It's not duplicatable. It's a waste of time. And the variance, the degree of errors, the margin for error is too high.
-Right. And I mean, that's why people stress. Like, nobody can sell like me. Nobody understands. Nobody's as good as me. Nobody's as talented as me.
-You can't replicate that.
-You can't replicate awesome.
CALEB TAYLOR: [CHUCKLES] But when you've got it on the workflow, the checklist, you're able to hand it to somebody else and say, say these words exactly, it can grow.
-So if you're watching this right now and you own a small business, I encourage you to write down every single process that you have and turn it into an operations manual. For every single thing you do-- the phone script, the email, the accounting systems, how you answer the phone, how you greet people, how you do appointments, how you ship stuff. Have diagrams, pictures, have it documented. Write it on the tablets.
-Or else, it'll be forgotten.
-There's no way to do it another way. So those would be the essentials then of this Six Sigma, is writing that down, is evaluating every single process?
-How about this? It's defining every single process so there is a definite right way and a wrong way. The right way is the way that it's documented. The wrong way is anything else.
CALEB TAYLOR: Hm, there you go.
-And this is an example, like on Thrive, we're making videos. And we have-- what's this loop called?
-That is the broadcast loop.
-The broadcast loop. Well, if you don't make a broadcast loop, it's the wrong loop. Why? Because this is the way you do it. Who says? The operations manual.
-Yeah, the workflow.
-Boom. In my face-- my pale face.
CALEB TAYLOR: [CHUCKLES]
-Back to you.
-All right, Clay, now let's jump into examining here in more depth the principle and the language of the Six Sigma.
-OK. Well, the idea is Deming is-- if you get a chance to just google Deming and quality control, he's kind of like the father of quality control. And what Deming talks about is if it's not measurable, it's not manageable. So what you're going to have to do is have a measurable, quantifiable number for everything.
So if we're talking about a video team, how many videos per day should a person be able to edit per hour, or per day. And once you define that number, you hold people accountable to it. If we were making cakes, we would say, how many cakes per day should this person make per hour, per shift? And then we'd say, what is the exact circumference of each cake top? What is the actual weight of each ingredient we add to the cake? Everything has to be measurable, otherwise it's not manageable.
-And you have said Thrive up-- I mean, to follow that principle exactly, you mentioned the editing. You know exactly how long each edit should take, each video should take, and you hold people to that.
-It will be a lot better, and it's going to continue to improve. By the time we finish improving it, which is when I'll be like really old and crazy, but when we finish our system, I would predict that in six months from now we will be four times faster than we are now.
-Wow, but you've even set that up with the sales floor, right?
-I mean, you've got it so that we've got a big whiteboard, and on that whiteboard you can tell how many calls have been made, and you've set out a clear standard that you have to get this many calls made. You have to set this many appointments, and you have to land this many deals. And it's up there for everybody to see, so you can measure it.
-If it's not measurable, it's not manageable, and that's just what it is. Another thing is some other language you want to talk about here is you want to put the numbers out front. The numbers need to be out front. Because if not, then they kind of go into that weird-- it's basically, if it's not quantifiable, it's justifiable. So if it's not quantifiable, it's justifiable.
So if you say, how many videos did you make today? And if somebody says, oh, I did pretty good, then it's justifiable. I did pretty good. You did pretty good. I'm sure you did. I did my best. You did your best. That's exciting. Well, now if it's quantifiable, how many did you do? Seven.
-There is no excuses.
-There's really no story there because all you're looking for is a number.
-You did seven? Well, there's--
-You never suck the emotion out. You need to do that. It's very important. The final thing I wanted to talk about this, because we have other episodes that we really mine into this, is that if you own a small business right now, what you want to do is go through every single part of your business. We talked about in phase one is you want to document everything. Phase two is put a number on everything. Find a measurable, quantifiable number for every process.
-Not just the sales.
-If you have a sales team, how many calls should they make before they produce one appointment? How many appointments should they make before they produce a deal?
-Right, because then you could walk in, like you said, and you eliminate excuses.
-If you have a cake, how much sugar should be added? How much flour? What's the weight of it? What's the circumference of the cake? What are the number?
-How long should each cake take to make?
-It's the only way to measure it.
-Measure it, yep.
-Good, well, and then the last thing is just pinpointing the essentials of the Six Sigma. Is that kind of what you were just saying with that last point there?
-What I want you to do right now if you're watching this, I want you to go ahead and think about just one basic process in your business. We're all going to start with something we can all relate to. It's going to be the phone. I'm going to walk you through the steps, OK? So on the phone what we're going to is we're going to, first off, make a script about what should be said on the phone when the phone rings.
-When the phone rings-- that's step one. Step two, what should you say when you're calling on the phone. So inbound and outbound, what should you say?
-So these are two different scripts. One script for the call coming in, one for the call going out.
-Yep, and then what we're going to do is we're going to come up with metrics for each one. So we're going to say, what should my conversion percentage be on my inbound and outbound? So if I make an outbound call, how many deals should I get for every call it place out? How many deal should I get for every call I get in?
Then the next thing is how long should it take to make an outbound call? How long should it take to do an inbound call? That's a number. Just do that basic system, and you are starting to begin to make a quality system. Now, what's awesome is every week you want to try to beat those numbers by just a little bit.
So every week you're going, gosh, you know what we want to do? We want to increase that closing percentage, that conversion percentage, just by 1%. Let's make it our goal this week-- 1%, 1%, 1%. And you get fired up about it. That's how greatness happens. You're focused on getting 1% better.
-You can't focus on making 1% better. You can't focus on improving if you don't know where you're at right now.
-That's the point; if it's not measurable, it's not manageable. This is what it's all about. Don't be overwhelmed by the language. This is something that you can do.
-Good, and that's what we do here at Thrive is break it down and give you specific action steps, and we've done that-- evaluate every aspect of your business and start with the calls-- inbound or outbound-- make the script, find what that conversion rate is.
-At Thrive we break it down like those old school B-boys, where like you had the guys who-- there's the girls who wear the knee pads called the fly girls. And then the B-boys, these guys had like the massive stereo system. It's like how about this big, and they carry it while they're walking around.
-Oh, yeah, I know what you're talking about.
-It's something called a ghetto blaster,
And then they throw down that linoleum, and they start doing the break dancing. That's how we break it down at Thrive. We break it down like old school B-boys and fly girls-- holla.
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