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-So what I do? What are my action steps now? If I want to set up this big goal that attracts A players, what do I do now?
-Ask yourself right now, what do I need to do this year to double the size of my business?
-What do I need to do this year to double the size of my business?
-Yeah. This is the difference between A players again, I'm just throwing it out here for you. Gosh, I hate to do this, but if I don't give you personal examples, I think you're going to feel like I'm being vague.
-Like your preaching from up high and everything like that.
-Talked to a girl a while back, she says-- I said, I want to double the size of this business. And she's like, well, I'd kind of like to leave though early on Thursdays, because there's this show I like. I'm like, oh, you want to leave early on Thursdays because there's a show?
-We're trying to-- d-- I mean, it just-- you got to have a goal that big and a big goal will force people to decide whether they're in or they're out. Either I'm in it to win it, or I'm out.
-So the first action item is just to define what that goal looks like.
-Oh, make a big goal.
-OK. OK And then what do we do? We've made the big goal. Then what do we do next? What's the next thing?
-Now that we've made the big goal, what we're going to do is, we're going to basically dedicate the time each month to evaluate the progress of where we are versus where we want to be. So you need to break that goal into 52 small parts. And so each week, you want to make sure you're getting 2% of the way there. So you gotta take your big goal, break into weekly, you know, small parts, and each month, look at all the data.
Neat story. This morning I did a conference call with a guy. And we discovered that his business did a 17% increase in profit in the last six months. That's pretty cool.
-So his business is about three months away from franchising in terms of revenue. So if he can string together three more months of consistent growth he can start franchising all over the world. Boop, boop, boop, boop, boop. That's pretty cool.
-But just saying every month, like I want to grow. I want to be big time. Stupid.
-Instead we say, if we sell 15 memberships a week, 15 gift cards a week, and we get the occupancy of this business up to 60% occupancy, 60% full, then you're going to get your goal. Every week you have to sell 15, 15 and 15 per location. Can you do it? 15 and 15.
-So you need to define the big goal and then you break it down and make sure that you measure how you're doing to reach that goal on a monthly, weekly basis, your saying.
-Yes. You want to-- you want to break it down like the old school guys. Like in the '80s, there was this song, I would like to queue up this song if we can real quick. These Are The Breaks by Curtis Blow. These are the breaks. Turn it up, turn it up, turn it up. You get the linoleum, you throw out that linoleum and the big-- the guy starts break dancing and he starts doing the move and-- that's what-- we're going to break it down like that.
-That's good. That's move number two. Move number three here is to commit to creating incredible products that wow your customers.
-Again we're talking about how to inspire your team. Why is creating an incredible product gonna inspire my team?
-There's a book called "The Service Profit Chain" that was written by Harvard. It's a case study. And one of the companies they study is USAA. They're an insurance company. They study Southwest Airlines. They study top level companies. The thing about it though, is when FedEx came out with this system where they can deliver something overnight, it just blew people away. Like what? You can actually get something overnight?
Anybody's who's ever been to Walt Disney World, especially if you've been there with a family, you're like, man, this place is awesome. Every bathroom is so clean. It's just-- it's a great experience. When you make something that's awesome, people can't help but share it. The movie "My Big Fat Greek Wedding," it didn't have a big budget, but it hit home with so many people, that they couldn't help but share it. So you're going to find that a budget will be dwarfed by an-- a big advertisement budget can get beat every time by a great product. The great budget gets beat by the great product.
-People want to work for something that's producing those great products.
-Apple, like the products are insanely great. And so when Steve Jobs was there, they attracted great people because they wanted to be a part of something great.
-Right. Well here's the quote from your book here, OK, this is again, quoting you from your "Will Not Work For Food" book, you said, "Top people want to work where the best and most incredible products on the planet are designed, produced, and sold. Mediocre people are those that are offended by the accountability that is required to produce great products and services."
-Yeah. I mean, ultimately you have to be accountable if you want to make something great. And so, I will just tell you this, on Thrive, we listen to the feedback of our Thrivers, and a lot of them have said, I'd like a training on this. I'd like a training on that. Hey, could you make a training on this subject?
Well, if I'm annoyed by it, and I'm like, you don't need a training on that. Or jeez, these people want-- all they want is more trainings. But if I'm excited, and I want to make an insanely great product, then I'm energized by the feedback. The thing is, you want to seek criticism, not praise. You want to seek criticism, not praise. Only top level people will do that.
-And as an employee, I love working for something where I can say, hey did you see Thrive? Check out those videos. They're top notch. They're funny. There's a ridiculous looking pale guy on it. It's fun to be able to refer people and feel good about the product.
-So if I'm watching this, I'm ready to inspire my team. And if I want to inspire them by producing a good product, what are my actions steps?
-I'm going to give you a few here. One is you want to let your employees know right now, here and now, you will no longer tolerate anything less than a great product. You will no longer tolerate sub-par products and services. Period.
-No matter what I've been doing in the past?
-No matter what you've been doing. It's time to-- the past is the past. We're moving into the future. Tell them, moving forward I'm not going to accept a sub-par anything.
The next thing you want to do is you want to select somebody on your team to be, like, your quality guard.
-So they need to be-- anytime that you get feedback on social media, quality control surveys, mystery shoppers, people just saying something, any time that you catch something being less than awesome, they need to be able to be the kind of whistle blower. The next thing is you want to schedule weekly meetings to inspect the quality of your products or services.
-OK. Every week?
-Every week. Every week you want to have a quality control meeting. You have to have a weekly meeting. If you don't have a weekly meeting, it's going to be too far.
You can't have a biweekly. You can't have a monthly. You can't have a daily. Just do it weekly. Every week just adjust and say, are we making the products that are as great as we want them to be?
-These are huge, by the way. This is what we're talking about. This is not the theory. This is the, hey, practical, do this today to improve the quality of your product.
-Here's the part about a start-up that stinks. We're building Thrive. Everything is urgent. Build the website. Raise the capital. Make the trainings. Shoot the videos. Build out the office. Hire the guys. Fire that guy. Who's that guy? Everything's urgent. But as your business begins to grow, now we have the luxury you say every week we're going to have a meeting to talk about this.
-That's the scheduling the meeting. OK, perfect.
-Now, the next one is you want to create a quality control system that requires the signature of at least two people to verify that something is incredible before it goes out.
-This sounds exhausting.
-Is it important?
-It's huge. Well, the thing is you want to have a thing-- W. Edwards Deming, if you get a chance to read any of his stuff, we'll talk about it on Thrive too-- he developed the quality control circle that became big in Japan. People don't realize this. You know, American made cars forever, right?
-Then, all of a sudden the Japanese became great at making cars. Who taught them this? W. Edwards Deming, OK? And what he came up with was a quality control circle where the whole idea is if I write a paper, I shouldn't be the only one who edits the paper.
If I make the product, I shouldn't be the only one who quality controls the product. There needs to be a system of accountability.
-So that's what you're doing by setting up two different people who have to sign off on something.
-That's doing that circle.
-Uh-huh. And ultimately it will save you time in the end. That's what's funny is it seems like it's a lot at the time--
-And it'll inspire your employees.
-Absolutely. Now, next thing. You want to set up a program that aggressively solicits feedback from your customers.
-What does that look like?
-You want to have mystery shoppers. Action item one, you have mystery shoppers. Two is you want to do surveys, incentivize the surveys. Tell us how we're doing and win a free iPad or something.
-And for your companies, you always do this on a 1 to 10 scale?
-On a scale of 1 to 10, rate our performance. And I always give my employees bonuses based on how highly people review us.
-Yeah, like, if you got a 10, multiple tens in a row or whatnot.
-Yeah. Back with one of my businesses, if the customer gave us a perfect 10, the person who delivered the service always got the bonus.
-And the final thing is you want to set up a system that allows your team to see the raw feedback from customers, good or bad.
-They have to see it every week.
-Oh yeah. We had an email that came in today from a Thriver, and he had some very, very, very just awesome positive things to say. But then he had some critiques about the functionality.
-I love it.
-And we're pushing the updates that are coming out with getting out of the Beta version. And all of the issues that he brought up, we're dealing with. And it felt good to know that like, hey, he caught it, and he told us. But at first, before we knew there was those problems, the only way we knew is these people were telling us.
So you want to let people know, hey, I appreciate your feedback. Don't try to justify.
-What you're saying is don't keep that to yourself as the owner--
-Share it with the whole team.
-Share with the whole team. I love it. So that's the secret-- that's the super move number three here.
-(SINGING) Super move number three.
-The move number four to inspire your team here is implement a merit-based pay system. We touched on it here. This is kind of your notable quotable from your book. You said, put in a merit-based pay system and watch as the poor performers get irritated and leave and while the top performers become more and more eager to come to work every day in an environment that pays them well for what they do-- for what they're worth.
-I recently worked with a business that did-- we'll just say they did-- they basically helped beautify people's homes. And they put in a system where at the end of the service they would walk up to someone, like my wife, let's say, and they would say, rate our service on a scale of 1 to 10 in this area, on a scale of 1 to 10 on this area. And then, they'd say at the end, if there's anything we could do better or yada-yada, email here and you'll get $150 off your bill.
So the customer's now like, well, I want to save $150. I might as well fill it out. Now, they don't fill it out in front of-- the customer didn't fill it out in front of the employees.
The service provider would walk up to the customer and would say, hey, if you'll fill out this survey on your own time and send it in, we'll take $150 of your bill if you just send it in the next seven days. Well, the customers started filling them out. Now, before they weren't incentivized. Before they just asked them to.
-That's what you mean by aggressively solicit feedback.
-And what happened is the customer wrote, one of the individuals urinated in my lawn every single day. So I thought-- so I talked to the owners.
CALEB TAYLOR: That seems like a negative thing.
CALEB TAYLOR: OK.
-Talked to the owners and they're like, where else are they going to go? And I'm going, well, maybe to a competitor?
CALEB TAYLOR: Wow.
-So I said it to them, I said a competitor. And they're like, look, man, we're not-- OK. The next customer gets a survey, says one of the employees peed on our toilet seat. I guess they have carpeting on their toilet, like, there's decorative carpeting on the toilet seat or something.
-And they apparently left human fecal matter on the carpeting of their toilet.
-So they didn't get a big bonus or how did that--
-Well, the owners said, well, where else are we going to go? So even though they had a merit-based system, even though they were top in Google, even though their phones were ringing off the hook, they were peeing on people's lawns and defecating on their stuff in their house.
-So the merit-based pay system then wasn't dramatic enough to--
-Well, what I'm saying is that the owner didn't believe in it.
-So not only was he not making a big deal, he was justifying it. Then another example. I worked recently with a guy in the medical care profession, and every single time that a customer would have to wait for more than an hour and a half, he would send them an email chastising them for complaining. Like, that's insane.
-Now, real quick, I want to hammer this out.
-So you have these in here, then you look at a company like QuikTrip, that is a place that serves, its a convenience store, They're like the Taj Mahal of gasoline convenience stores.
CALEB TAYLOR: That's beautiful.
-Or you look at Disney World. Based on the survey of the customer, that actually determines how much you make.
CALEB TAYLOR: Really?
-So if the customers are really happy, then you as the employer are very happy, you make more money. So the best practice is I would make sure that fully 1/3 to 1/4 of the entire employee's paycheck is based on customer feedback.
-To 1/4 of their paycheck is completely reliant on the feedback.
-So right now, if you're watching this and you pay your employees $20 an hour, then I would cut their pay immediately to $15 and give them a bonus to $25 and hour. So I'd say, if you do a bad job, you shall make $15 and if you do a great job you shall make $25.
-Do I need to implement this, or can I implement this, with every kind of business, or only certain types?
-I would find a way to implement this in any kind of business except for-- are you ready, are you ready, are you ready, are you ready, are you ready, unless you're a tenured college that doesn't give a crap about quality, which is probably most of them.
CALEB TAYLOR: Interesting.
-So real quick, I was at one college recently where they had tenured professors who are terrible.
CALEB TAYLOR: Awful.
-And the head of the school says to me, well, you can't fire them because they're tenured, and so we really don't do a lot of survey, we don't survey the students, because you know, they're tenured. So the student is the customer and you're saying we don't want their feedback because, you know, the teachers we have here can't be fired.
-So did you always have an merit-based pay systems with all of your companies?
-I did not until I met with a one Chet Cadiex. Chet Cadiex is the CEO, the president, of QuikTrip.
CALEB TAYLOR: OK.
-I believe he's the president of QuikTrip, is his actual title.
CALEB TAYLOR: OK.
-And I met him, and breakfast with Chet, I wrote about it in my book, "Make Your Life Epic", and the breakfast was just epic.
-We didn't eat anything, we just talked about business.
-And that's when you started implementing it.
-I'm like, how do you do this? I mean, you've got thousands of locations, how do you make it awesome every day? How do you keep every bathroom clean? How do you make sure that when someone pumps gas out of the big gas truck, that it doesn't explode? How do you make sure that the place is always clean? How do all your employees always say hi to new customers?
CALEB TAYLOR: Right.
-He's like, my man, we have mystery shoppers that come in every day, no one knows who they are.
CALEB TAYLOR: Ding, ding, ding, ding, ding.
-And then when they get back in their car, they write reviews. And if the review is favorable, the person who's working gets a bonus, and if not, they get a pay dock of some kind.
-So is that the action item? What's the first action item in your mind here? Is it setting up the secret shoppers?
-One is you've got to decide, are you going to tolerate this, or are you going to make a change?
CALEB TAYLOR: OK, commit to it.
-Because I'm just saying, this, I mean, this is so funny. There is a school that I'm very familiar with who has very, very limited funds. And another school that I know that has massive funds. And then there's David Robinson's school.
CALEB TAYLOR: Right.
-So the Carver Academy that David started. This school is one of the top in the country. David had never been in education, but he understood the value of merit-based pay.
CALEB TAYLOR: Yeah.
-David-- this is crazy-- David was the top player in the NBA and at a certain point, they drafted the best basketball player in the country and for college for the same position as him.
-And he's like-- so they drafted somebody who's going to be his replacement.
-But he understands merit-based pay enough to understand, you know what? They're going to draft somebody to take my position, so I have an opportunity to either help this guy become great, or to get bitter. And he decided to basically make the guy great and to mentor the guy.
Well, David then takes that same mentality, because in the pros, once you get to a certain age and you can't perform, David was getting a little bit older.
CALEB TAYLOR: Yeah.
-He was no longer the top option, so he decided to bow out gracefully and realized, I can no longer perform at the level that I used to.
CALEB TAYLOR: Yeah.
-So I'm ready to move on. You know, I think it was 14 seasons and he decided to do that.
-Yeah, an incredible success.
-Yeah. Now, David brought that same attitude though to teaching.
-The merit-based pay system.
-And he says at Carver Academy, we are going to completely change the lives of the students.
CALEB TAYLOR: Right.
-We're going to make sure that these kids who are all coming from mostly impoverished areas, we're going to make sure they get the best education in the state, regardless of their ability to pay. And you, it all starts with you as a teacher. And so you as a teacher have to be the best teacher in the state.
People were like, well, other people get paid more at this school or that school, or they get-- I don't care about that. We're talking about having the best education in the state.
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