Have you ever thought about creating checklists for your business? In this series you will learn from Clay Clark the importance of creating and using checklists to ensure overall quality in your business.Sign Up to Watch
-Paige Taylor here, and today we're with Clay Clark and Thriver of the month winner, Mykhaylo. Mykhaylo's business is American Hybrid Homes, and he specializes in making homes more energy efficient. So today, we're talking about mission and developing a mission statement and vision for your company. Mission statements are important, and our only mission right now is to watch this episode.
- Welcome to the dojo of mojo here at the Thrive 15 headquarters, my friend. How are you?
-I'm good. Nice to be here.
-Hey, you were the Thriver of the month, in what month?
-January. And rumor has it you were going to be here. We were all excited, by the way. But then the plane you were supposed to be on, I guess, did what now? What did it do?
-It went off the runway. It was hovering over the Hudson.
-The nose of it was over the Hudson, and they had--
-Hudson River? In New York? It was just-- because of the snow it was just sliding off?
-It was just ice and a couple inches of snow on the runway. They were still trying to get the flights in.
-Well, there's a new, notable quotable that we're trying to make famous here at Thrive. It says when the tip of the plane you're going to be on is hanging over the Hudson, don't get on that plane. That's just a new quote we're developing. Anyway, today we're talking about checklists. And specifically, the name of the business that you're building right now, t your startup is?
-American Hybrid Homes.
-American Hybrid Homes. Now a real quick story here, you are originally from the Ukraine. Is that correct?
-Yes, I moved here when I was 13.
-13. And why did your-- what motivated your family to move here? What was the deal?
-We have four-- well, we-- my parents had four kids. And my dad was an orthopedic surgeon, and he couldn't afford to support us. So he gave up his office and everything to move here and become a carpenter. So he lived here three years before we moved. The rest of the family moved here.
-What's inspiring to me about your story is that your dad obviously sacrificed a bunch to--
-Eight years of school.
---to move to America where he thought it would be a better opportunity. But then you, rather than just squandering that opportunity, you decided to build your own business. And it's, to me, the most inspirational-- like when we first started making Thrive, as I was telling you, I had this vision. I'm like, we can help people all over the world who want to know this stuff. And business colleges are $30,000, $40,000, $50,000, whatever they are, per year.
And when I heard there is a guy who moved from Ukraine when he's 13, who's now here, when you posted your story. And now he's here in America, and he's starting his own business, second generation immigrant. Or first generation--
---immigrant. I just thought, this is awesome. So I'm excited for you, my friend. I'm also pumped that you named your company American Hybrid Homes. That's awesome. So I'm pumped.
So we're talking today about checklists, though. This topic right here of checklists is probably the most important operational episode that will ever be recorded on this website. Now, I'm a guy who always says, well, this is a great movie, this is the best movie ever, this is the worst movie ever. And I know I'm a kind of a polarity guy. I did it to the best movie or the worst movie ever.
But seriously, this episode, operationally, this is probably the most important episode that we're ever going to record. Because checklists is what-- a checklist is a thing that can solve so many problems. And it's so obvious, and it's so needed, and it's so important. But yet, people don't do it. So we're first going to break into why people don't do it, then we're going to talk about why people need to do, then we're going to talk about how to make it.
So why don't people do it? I'll tell you, and we'll add a notable quotable here. I want to add it to the screen. But Dale Carnegie-- and I don't want to butcher the quote. But Dale Carnegie talks about-- he's the guy who wrote "How to Win Friends and Influence People." He talks about how that when you're working with humans, you have to remember you're dealing with creatures of pride, and greed, and all sorts of emotions, not just logical. They're not just creatures of logic.
So what happens is, we know we need to make a checklist. But yet we have this big thing that's in the way called "pride." So we know over here, we know step one, we need to make a checklist. Step two, we know we need to do it. But this step two, pride, gets in the way, and we never get to three.
So we need to cross out the pride, and we need to just make a checklist. So let's give an example. When you go out there, and you're going to install your materials because the service you provide makes homes more efficient, right?
-So let's say you book your packaging A, your smallest package. What are you-- actually, what kind of service are you delivering at that point?
-Just air sealing. Basically, you stop the air from leaking out of house.
-Air sealing. So it's "air seal." And this is a service that you're delivering? Now what are all the steps that you need to do this?
-Well, first you perform tests, which is an analysis to find these holes. So the first thing is test.
-Test the house.
-When you say the house, where in the house?
-The front door.
-OK, so the front door. Next one, where else do I test?
-Attic. Where else do I test?
-Just room by room pressures.
-Room. Is it possible that a guy who would work for you might forget a room?
-No, because it's on the list.
-That's right. So you just tricked me. Unicorn. Awesome. Leprechauns. When I get befuddled on camera, it's amazing.
-So yeah, so here's the thing is. You're like the only person, by the way, who's ever said that. No, because I have a frickin' checklist. This is great. So you know why people need a checklist, right here. We need one. Why don't we use one though? Because pride gets in the way.
MYKHAYLO PANCHISHAK: Yeah.
-And then why do we need one? Because it's going to ensure the quality, if we have a checklist, right? And we, every single time so, if your guy goes out and installs this service, he does the air seal test. If he goes through and he tests door number one, the attic room. Room number two, whatever. If he does that, at the end of it he's going to have to put his signature here-- that he actually went through each room.
But then, the next step is you are going to need to follow up to make sure that it happens, OK? So you're going to have to have the manager, you're going to have to follow up. So let's get through this. Again, why don't people use checklists? Pride gets in the way. Why do we need a checklist? For quality control-- without a checklist, the quality-- you can't scale it, unless you nail it.
So I used to have DJs work for me, OK? We used to all these-- we did about 4,000 events a year. And I'll never forget this. I sent a DJ out to a wedding-- imagine how horribly mad you would be if you were a bride-- I sent a DJ out.
I said, hey, you got all the songs? Yep. You got the lights? Boom. You got the sound? Yep. You got the equipment? He goes out to the wedding. And he shows up at the wedding without a-- want to guess?
CLAY CLARK: Yep, no speakers.
-Now was I smart enough to realize that, man, we forgot speakers for a wedding. I should probably put that on a checklist. Was I smart enough?
MYKHAYLO PANCHISHAK: No.
-No, no, no, I had to have it beat into my skull, why? Because I had--
MYKHAYLO PANCHISHAK: Pride.
-Pride. Now I go to another wedding, sent another guy out. The guy says, hey dude, I just showed up at the wedding and I don't have a--
MYKHAYLO PANCHISHAK: Microphone.
-Microphone. And was I smart enough to add it to a checklist? No. I get to a wedding-- now these are things that are unbelievable. One of our guys gets to wedding, doesn't bring the song for the first dance. Was I smart enough to put it on a checklist? No.
Each of these cases resulted in either being sued or have to do big refunds. And each time I'm like, it's common sense. Why can't people have common sense? People don't have common sense.
MYKHAYLO PANCHISHAK: Common sense is not so common, right?
-Yeah, common sense is not so common. But here's the thing is, I was being an idiot. So let's think about this for a second. You know you need a checklist, but people won't do it because of pride. You know without a checklist, you can't have quality control, right? But, yet, we don't make it.
So I just keep going out there. I'm booking weddings. And I'm ruining weddings. Just bam-- ruin a wedding, bam, ruin a wedding-- about once a month, ruin a wedding. Terrible. You know how horrible I felt?
There was a girl who worked at Barnes & Noble until like-- she probably still works there. But she was there at least a couple years ago. And I go in to get a book, and she was a girl whose wedding I ruined like a decade ago. No, I can't make this up, true story. She kind of dresses Goth and stuff. She's very memorable. And I walk in, and she's like-- And I'm going-- and I've got my daughter with me, my daughter's like eight. And I didn't have a daughter at the time, when I did her wedding. And I'm just like--
And then, I have to check out. And the way it would work, this big guy gets in front of me. I'll never forget. It was like it was yesterday. This guy gets in front of me, and he takes this aisle. This person, he says, I'll help who's next. And I'm like-- And then she's like, I'll take who's next. And I'm like. Sir, sir? And I'm like, and I walk up, and I'm like, oh, no. And there she is. And she was like "You ruined my wedding." And I'm like, "What?" You know, how do you play that off? I mean, it's just, it's a bad deal. And like as an adult man this is like, this had to have been at least maybe the last five years or so. I mean I ran into this person again.
Now with your service could you imagine if you charged somebody to make their home more efficient and then you actually set the house on fire. Does this kind of stuff happen?
-All the time, because people are operating without a checklist, right? So let me read this quote to you. This blows my mind. This is from the book called "Checklist Manifesto." And, by the way, if you're watching this and you've not read "Checklist Manifesto," you got to do it. It just blows your mind. It's a study of John Hopkins University Medical study there. This guy studies them. He studies master builders. He studies a variety of industries. He studies the airline industry.
And why is it that like a 737 plane that's being flown by Southwest Airlines has such a ridiculously low crash record? I mean they almost never crash. They crash like this amount of time. Do you know what I'm saying? It's like almost never. Why do those planes almost never crash, but people crash cars all the time? Well, because it's like a system. It's a duplicatable, scalable process that Southwest uses to ensure the quality.
-Wouldn't you hope that if you're flying your plane, that your plane doesn't run out of gas?
-Have you ever driven in a car with someone who's run out of gas? I personally drove a car that ran out of gas. So I was the one driving. And I'm driving back from a bridal show, and I didn't have it on my checklist to get gas, and I'm all pumped up about life. And I'm driving, and I remember looking over one of our guys, Jason, and I'm like--
Now all the guys are sleeping, trusting that I'm going to drive us to our location while not running out of gas. And I'm like, uh-oh. Jason's like, what do you mean? "Uhhh-- I think we're out of gas." He's like, you think we're out of gas? How could you think we're out of gas? And I'm like, I don't know what had happened. I don't know what happened. I don't know what happened. And he's like, how do not know what happened? What happened is you didn't-- Nothing happened, and that's why we're out of gas.
But this happens all the time. And so, if I'm not making a huge case for why checklists matter, let me read from this excerpt from this book.
"Nonetheless, that know-how is often unmanageable. Avoidable failures are common and persistent, not to mention demoralizing and frustrating, across many fields, from medicine to finance, business to government. And the reason is increasingly evident. The volume and complexity of what we know has exceeded our individual ability to deliver its benefits correctly, safely, and reliably. Knowledge has both saved us and burned us. That means we need a different strategy for overcoming failure, one that builds on experience and takes advantage of the knowledge people have but somehow makes up for our inevitable human inadequacies."
I don't know who would have these inadequacies. Me, you know. "And there is such a strategy, though it will seem almost ridiculous in its simplicity, maybe even crazy, to those of us who have spent years carefully developing our more advanced skills and technologies. It is a checklist."
And there is all sorts of stats, which we are going to add to the screen right now. But John Hopkins University did a study on what percentage of infections that patients were getting were caused by accidents. It's scary. Doctors not using checklists, scary. DJs not using checklists, scary. Guys who are making homes more energy efficient without a checklist, scary. So we need a checklist for every aspect of the business.
And so I'm going to go ahead and put these up on the screen, because we want to have the kind of efficiency and the kind of quality that Boeing has with their airplanes. So here we go. One is your marketing. You're going to need a marketing checklist for marketing. So what does every print piece need to have on it? You need to make a checklist for that. Social proof, phone number, website. You think I've ever done a mailer and forgot to put my phone number or website on it? Yeah. I have, right? That's stupid. It's a dumb tax. You don't want to pay those taxes, OK? Dumb tax.
Marketing, sales systems. Do you think you want to have a system in place, for after you make a sale, you charge the customer's card, you deposit it here, you send them an invoice? Yes, you do.
Service delivery, the actual service delivery. The next is accounting. Is it important to make sure that you deposited money, that you paid your team, that you paid all your bills, that you-- Yes.
Follow up. Is it important that you have a checklist that says after you've installed this energy-efficiency improvements into someone's home, doesn't it make sense that you would then call them every two months after, or maybe every six months, to see how it's going, or to check in with them? Would that not increase your sales if you did that?
AUDIENCE: Yeah, I mean-- one leads into the other one.
CLAY CLARK: Now, human resources. When you hire a guy, don't you want to make sure that he's not a rapist, a terrorist, a drug addict, a felon, a-- Right? So you're probably have to have a checklist for checking on your human resources, right?
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