Many aspiring entrepreneurs believe building a wildly successful business will just happen with a snap of the fingers. However, vision without execution is hallucination. This course will teach you the step-by-step process of building a successful business.Sign Up to Watch
- Alright, we are coming back with Business Startup 101, phase seven. Flaw-finding system enhancement. We're gonna start it off with a notable quotable. "The entrepreneur is not really interested "in doing the work. "He is interested in creating the way the company operates. "In that regard, the entrepreneur is an inventor. "He or she loves to invent "but does not love to manufacture or sell or distribute "what he or she invents." Michael Gerber. - Michael Gerber's the guy who wrote the book, E Myth, and he has a phenomenal book series called The E-Myth Revisited, The E Myth, Awesome author. You really need to own that book, or at least have a really deep understanding of his writing. What he's really talking about is a business is just a vehicle to help you get to where you wanna go. It is not the destination. And we talk about that a lot here at Thrive15, but a lot of business owners, they build a business that's a vehicle that they kind of, like, view that the business is the destination itself. But the truly successful entrepreneurs build a system that can operate without them, and that's what we're talking about today is how to do that. - Alright, we're gonna go through steps one through six of how to do that, starting with step one. Create a linear and physical product, service, delivery map, or workflow. Unpack that a little bit for us, Clay - A workflow, it's like a linear, it's a step-by-step how do you get from point A to point B. So, an example would be like if I wanted to make this cup. Okay? That's what my company, we make cups. Step one is, homeboy needs to take the clay, let's say, and actually shape it into the shape of this cup. So we have one guy, all he does all day is he shapes it, and we would have a checklist of how much clay is used, how much water is used, what materials are used. Very, very specific checklist. Step two, they pass it down the row, and now it's to my desk, and now my job, or my station, my job is to put it in the kiln. Okay? Now, you put it in the kiln, which means put it into the, it's like the fire where you heat it up. But this guy over here, he had a very detailed checklist about how to make the actual cup and form it, but mine just says put it in the kiln. The problem is, I don't know what temperature to set the kiln at, so I put the cup in, the cup explodes. So we need to go, okay, we need to probably write down the temperature that we need to keep it at. So then, he does his thing to specifications. He passes it to me. I put it in there at the right temperature. And that's a line. It's a linear path from here to here. So step one, you need to draw it out. It's a physical drawing, and Thrivers, I want you to make sure you put this in the notes, We have a workflow document for you. I'm knocking over my cup. We have a workflow document here for you that will actually show you a specific step-by-step how to do it. But step one is you want to talk how many, what materials are needed to make the actual cup, how to mold it. Step two, what temperature to heat it at. Step three, it comes out of the kiln, then my job is to cool it, right? To cool it and to paint it. So what are the specifications? What colors do I use? And you say, "Um, paint it with like a red and a blue." Well, I paint it, but I don't paint the same blue that you wanted. So now we have to figure out what actual color of blue that we want, right. - [Brown-Haired Man] Specifics. - Very specific. Now step four is I have to put it in a box. What size box? Where do I buy that box from? So really, step four is to put it in the box, right? But it's not to buy the box. Step to buy the box is actually before you even make it. - [Brown-Haired Man] 'Cause you'll need it beforehand. - So now you'll have to check and change your timeline, your workflow now over here to have step one of where do you buy the box, right? So you're over here, where do I buy the box from? How much does it cost? What paper weight? Then, what materials and supplies do I need to make the cup? Then, what are my steps to actually produce, to actually mold and shape the cup? Then, what temperature to do the kiln, and then what color to paint it. Then, we have to sell it. So now, the next step is, what websites do I put it on? Specifically. When do I put 'em on the websites? And then the next step is when do I put it on social media. The next step is, and it's all these steps, and you have to make a linear workflow. It's a specific line items, step-by-step process designed to create predictable and repeatable results. That is the goal. Nobody does this. You need to do this. Almost no one does this, 'cause they're like, "Well I'm so busy. I'm watching. I'm on Facebook." Very few people are gonna spend the, I would estimate probably forty-five to fifty hours needed to make this system.
- Step two, break every aspect of your product and service delivery into a very detailed linear and physical product/service delivery map or workflow. - What we're talking about, we hear the word workflow a lot of times we go a bit... Workflow is very durable but a workflow, hope for the definition up on the screen here, but a work flow is simply describing the flow of the work, it flows from here to here. You have to do it. The workflows that I have for like elephant in the room, for our photography business are so detailed, then allows me to go back to them time and time again. That's how you do it. - All right. You're saying that you need to be detailed? - You have to be because if you don't, first off if you don't have it written down, how are you going to change it? Remember the guy over here is trying to paint this cup, he paints the cup wrong, the wrong color, and most small businesses and most businesses for that matter, they just say, "Gary, you painted the cup the wrong color," "Sharon, you painted the wrong color, it's obvious, common sense." - [Voiceover] Common sense. - "That's stupid." Maybe Gary is color blind, maybe Sharon is color blind, maybe they thought it was a different color. Just stop doing casualness, casualness causes casualties. - [Voiceover] Pay attention here folks. - I'm just making sure we're getting this, casualness causes casualties. Boom! - Big one, big one. Moving on, step three, add your wow in the raving fun creating steps to your workflow, create systematic wowing. - What happens is in the workflow is you've procured the box, you procured the materials needed to make the cup, you've made the cup, now you figured out what temperature to heat the cup, now you've gone to the system where you put the cup in the box, you figured out you sell the right product, you put on this website, this social media, but now you're just selling it, you're selling the product in exchange for the monetary compensation you seek. You're selling the services and products in exchange for the monetary compensation you seek, the problem is what's wrong with this? - Fill me in. - Everyone says, where it's a successful company, "Most of our business comes from word of mouth." How do you generate word of mouth if everyone doesn’t have the same wow standards that you have. I want to make sure you put this on the notes here, there is a thing called the net promoter score. The net promoter is a score that Harvard has developed that allows you as owner to predict how likely your business is to receive ongoing word of mouth. The companies with the highest net promoter scores in the world, do you want to speculate on some with the highest ones? - [Voiceover] Apple. - Apple, keep going. - Let's think, we've got Apple, maybe Southwest Airlines. - Yes, and Trader Joe's. - Trader Joe's. - Starbucks, these are companies that wow people every time. In my office, you've seen this, we have a new client, we have a swag box we give them with the copy of my book, sometimes we'll get a nice sculpture, you've probably seen a lot of things, or maybe theme the music to match them, we'll change the flat screen, there is moves we can do to wow them, and they come in and there is a flat screen image that wows them, they're like, "Oh my gosh, you put my face on the screen," or there is something. - [Voiceover] Uplights that match their colors for the company you're in. - Uplights that match their colors. It's a wow. With the DJ company that I grew back in the day, with the haircut business I grew, you need to have a predictable wow, you need to have something where every single time somebody comes in they're getting something they didn’t expect which makes them wowed. One of the examples that I, it's amazing to me, I think it's very exciting, is if you go into, there is a fresh market down there in Dallas, and every time you walk in you're just hidden dead with samples, tons of samples, generous samples, a lot of samples, smoothies, beverages. Then whenever you walk back to the area where they have the fish, the guys always go, "Fresh fish," and they throw the fish and they ring the bell, and so you walk in, you walk in and they say, "Would you like a sample?" you're like, "Yeah, sure," but it's unbelievably generous samples, then you walk around the corner there are samples of wine, there are samples of candy, there are samples of meat, there are samples of. Then you walk into the section the guy goes, "Fresh fish," you go over to the chips sections, they've got samples of chips, you go to the meat, they got samples of meat, they have a guy putting on a cooking show in the store. A cooking show, it's really cool, you see him with the pans here and stuff, flames going everywhere, it's a wow. When you are wowed what do you do? - [Voiceover] Buy - You? - You return. - You? Tell your friends. - Tell your friends, you promote. - Plus for psychological reasons when you're wowed you want to refer now, maybe when you're wowed you want to refer now, so a lot of businesses we don't have, we're not putting in a wow into our workflow. We have to put it into our, and what a workflow? It's a line, it's a linear path, it's a step by step, it's a physical document. If you go into the workflow, if you go into some of the bigger companies in America, maybe you had a chance to consult with some of them, I've literally gone into some of the businesses, they have a wall as big as the wall behind me and on it, it shows you a service map of their entire process, and it's like 15 feet long. Step one, step two, step three. That is how you build a scalable success system, you don't do it by being general because you can't go back and fix something, you can't edit and make it certainly better if you don't remember what it was and the complexity of our world is become too much for the average human's mind, and so we're going to put thescreen here from Atul Gawande, he wrote a book called The Checklist Manifesto which is actually on your desk and he is the guy who used to work with the World Health Organization, he's a famous surgeon, and he talks about this, the complexity of just the life right now over the world, it's too much. You have to build a linear workflow or it won't get done. - [Voiceover] All right, that was good stuff.
- On to step four. Every time you have a problem or an issue during the week with the execution of your product or service, write it down on the linear workflow map. It must be visual. - You have to go back to when there's a problem, you stop and say, what part of our system is the problem? You ask yourself, you don't pick on the person. This is where small business owners are getting it wrong, probably not you, probably just other people, but they're running around saying, hey I need you to try harder, you need to be more motivated, you need to be more accurate. Stop having that conversation. Make a checklist and make sure people follow the specific steps in the checklist. That's how you have success, that's how you achieve a status, I want you to write it down. This is how you achieve a thing called Lean Six Sigma, or Six Sigma, we'll put the definition on the screen. But Six Sigma is basically where you have so few errors per million. Think about this, if you're doing the same process one million times, your error rate is down to less than less than a percent. That's what Six Sigma is when you only make less than one error per million, it's like almost no errors at all. That's pretty awesome. And that's the kind of quality standards you need to have if you're gonna build the next Intel, the next Google, the next Microsoft. You have to have that level of detail. - So basically you don't want to settle for anything less than perfection. - Yes exactly and you need to document it in a very specific, line item way. So whenever you have an issue what do you do? You immediately write it down. Then you go back to your master workflow, and you fix it. - Okay moving on to step six, or step five, excuse me. Refine your system to make it easier and easier to repeat for new, honest and diligent team members. What's that mean? - After you get the system very detailed, you then wanna go through it and you wanna ask yourself, is there a way to eliminate a step? So this week I was working with a small business owner, it's a fitness company and if you go online and you request a two week free trial, the current system was this, see if this makes sense to you. I'm gonna cue this up real quick because this is So what happens is, this is the current system Customer, they search online to find the company. They find the company online, they fill out the form, they fill out a form for a two week free trial That email gets kicked out to person A. Person A has to call person B who works at the company to make sure that they know they've received the lead. Person B has to call person C to make sure that they are in fact wanting to schedule an appointment. So person A gets the lead, sends it to person B, and then person B has to call person C to make sure that they can actually do a fitness consultation with the person. Person A receives a lead, person B calls person C, to make sure that Person C can in fact do the appointment. Person C calls said customer D to see if they want to come to the meeting. If the customer does want to come to the meeting, person C notifies person B and A to send the person an email verifying they can come. - [Man with Beard] Seems a bit convoluted. - Yes and that is how many systems are done, and they're just done because of redundancies. And what happened is, work with me Person A who really should be the person just calling the customer doesn't want to work the hours needed to answer the inquiries. So the entire system was made because person A doesn't have the freedom in their schedule to call people during the day, and person B is trying to help out, and so they're the one that has the phone during the day. And person C is the one who is actually at the fitness place available to meet with people. And these are the systems that you shouldn't have. So I created a system this week. I sat down with them, we made a work flow. And I said, here's the new move. A lead comes in, it comes in to person C. For accountability everyone is blind copied, on the email everyone gets the email, but the emails come directly into person C. A and B can get the email if they want just to verify, but person C schedules with the customer, done. Email comes in, that's how it needs to work, it's very simple. So once you build the system start looking through the levels of complexity and figure out how can you make it more and more simple. And it's usually because you have too many different people who aren't cross-trained, they don't know all the different skills. So you have one person who knows this skill. This happened in our office the other day, we were trying to choose a video clip for our website, and one guy says, I don't know I gotta wait for the video guys to choose a clip. Well why the freak do we have to wait on a guy to choose a video clip? Well we do because we've always done it. So we have to make it less and less complex. Complexity does not scale. - Okay on to step six, never stop. These processes are what gives the business its value. You wanna define, act, measure and refine. - Four step process you never stop. You define what your goal is, you wanna wow. So in this case, let's go back to the example of the cup. Your goal is to sell a bunch of cups, a copious amount of cups to make a copious amount of cash by wowing customers, that's your goal. So you have to define, okay, This is the kind of cup I think people want. Then you have to measure it. How many people are buying cup A? How many people are buying cup B? How many people are buying cup C? Oh my gosh, everyone's buying the cup A, wow. So you measure it, then you refine after you define it, you actually, so you define, right? Then you act, you do it. Then you measure and you go, wow everybody is loving cup A, no one is ever buying cup B and C. So you scrap cup B and C and replace cup B and C with a new cup, D and E. Pretty soon you discover, you define, you act, you measure. Man everybody loves cup D, people hate cup E. So you get rid of cup E and you keep doing this until you end up having three cups everyone loves. That's how you do it, you never stop until you achieve perfection, and you know when you achieve perfection? Never, so the thing is you have to have that sort of mindset that you're trying to make an unbelievable system on behalf of your customer. Because you know what? The more that you wow, the most selfish thing you could do is to wow a customer. Cause when you wow a customer, they're gonna tell their friends. So the more you wow, the more they refer now. So the most selfish thing you could do for your wallet is to wow customers. You can never be content, ever never. - I hope everybody's listening to that. So important, so important. - Bang - Alright, thank you. - Hey, are we done on this incredible train, are we done? - We are that is phase seven with a big boom. - You're gonna let me go out like that? - Big boom. - Fine I'm gonna dedicate point number seven to Kevin Mitchell, former San Francisco Giants left-fielder who is famous for catching a baseball with his bare hand. And for banging out forty seven home runs one year. So Kevin Mitchell, this goes out to you. - Way to go, Kevin.
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