What measures of success matter most? with Mark Graban

Episode Notes

Transcript

[00:00:00] 

[00:00:27] Mark: Well, hi, I’m Mark Raven. I am fortunate. I get to wear a lot of different hats in different ways. So I’m an engineer with an mba. I started my career in manufacturing, but I’ve worked in healthcare since 2005. I’ve been involved in two startup software companies, so I describe myself nowadays as uh, and in whatever.

[00:00:47] An author, a speaker, a consultant, an entrepreneur, a podcaster, and uh, maybe, maybe we’ll just leave at that . That’s 

[00:00:56] Karin: a lot of titles. Does that all fit in like your LinkedIn profile, ? 

[00:01:02] Mark: Barely. Yeah. 

[00:01:04] Karin: Barely. It seems like it would be a lot of scrolling, like all those different titles and all the different things.

[00:01:09] That’s cool though. Mark Gray, thank you for being here. I feel like we have a lot to talk about, um, because. We, I’ll never forget my operations course. When I was doing my mba, it was very interesting and also mm-hmm. , uh, kind of eye opening. I, there was a lot of engineers in there that wanted to take the engineers side of it, and then there was this kind of cool service centered.

[00:01:33] Angle to operations and kind of keeping, uh, an awareness of, um, of all of these things that we’re gonna be talking about today. So, yeah, the, the question we’re gonna talk about today and the question we’re gonna try to answer is, what measures of success matter most? So, I know you’ve got this cool background with, you know, Big C.

[00:01:59] Um, kind of, uh, operational experience. So let’s first talk about that and where the traditional definition of metrics and performance metrics and, and this, um, kind of this idea of, of the clean, um, the clean operational, uh, experience. What, what, Tell us a little bit more about that and, and also how it relates to service.

[00:02:26] Service in. 

[00:02:27] Mark: Yeah. Well, thanks, Karin. I mean, you’re speaking my language. When you start using phrases like operational operations, management, and, you know, my, my undergrad more specifically is in industrial engineering, and that’s a really dusty sounding profession. Yeah. Like industrial, who wants to do industrial.

[00:02:46] So a lot of, um, schools have renamed it to something like industrial and systems engineering. But the, the, the core ideas that come from operations management, if you will, are very applicable into the service sector. It’s not just industry or manufacturing factories, for example. Yeah. I mean, so there, there, there are methods, let’s say like, um, uh, queuing theory.

[00:03:12] I mean, you know, uh, any fast food restaurant that’s really good at managing the line. Um, let’s say, you know, Chick-fil-A is often pointed to, for this Chick-fil-A Sure has a lot of operations management and, uh, industrial engineers working at the company to make sure that the operations flows smoothly, not just the cooking.

[00:03:32] Of the chicken sandwiches or what have you. Yeah. But to make sure, like the, the fact that you, you’ll notice there, or even at a really busy Starbucks or a busy in and out, when the line is long, they have a person come out with a tablet and they’re taking your order much earlier than Yeah. The order box.

[00:03:50] Right. That’s an adaptation. To improve, um, flow and customer service. Yeah. 

[00:03:56] Karin: So there, there typically was the first time I ever saw a double drive through line. Yeah. I was like, Oh, that is interesting. That’s something new and different. 

[00:04:04] Mark: And, and, and you could apply the same lessons to managing, um, you know, people queuing up and being in line at supermarket or at uh, a doctor’s office or an emergency room.

[00:04:16] Sure. So operations management, if we use that broader. As is taught in engineering or MBA programs, teaches us, um, you know, some technical methods. There might be some math involved, but then there are a lot of leadership practices, quality improvement methods that really come down to culture. And whether it’s a factory or a software company, or a restaurant or a hospital, the culture is made up of.

[00:04:41] And one thing I’ve seen in my career is thankfully, if people are open to it, we can take good ideas and good practices from one industry and bring them in and adopt, If not, adapt them to a totally different setting. . 

[00:04:54] Karin: Okay. So I remember from the ops management class that I took that, um, a lot of the case studies and a lot of the things that we were, um, learning from and kind of trying to take those elements that, like you’re describing, to like learn from it and take it and apply to whatever our existing business life was started with the Japanese Kaizen model.

[00:05:19] Mm-hmm. . So for those lawyers out there that. Get an mba. didn’t go through an ops management course. Tell us what that is. 

[00:05:28] Mark: So kan is a Japanese word. It can translate really directly to mean good change. The context of the word kan though is usually in, um, describing continuous improvement or the idea of engaging everybody in an organization and figuring out how to make things work better.

[00:05:50] So ironically, I mean, some of these ideas were actually taught to the Japanese by Americans after World War ii, so I think it would be a mistake to frame it as being just Japanese management, even though Oh, interesting. That does, you know, a lot of people discover it because of the word kaizen. Yeah. Or from companies like, um, Toyota.

[00:06:10] But again, it’s one of these mindsets and, and, and practices that for one Toyota has spread to their factories all around the world, so it doesn’t hinge upon. Being Japanese or speaking Japanese, it’s really more about how do leaders create an environment where, for example, people are actually free and safe to speak up about problems, Right?

[00:06:33] So in a lot of workplaces, leaders, I mean, there’s this old expression I completely disagree with. You know, the people will say, Don’t bring me problems, bring me solutions. Oh gosh, 

[00:06:42] Karin: yes. 

[00:06:43] Mark: If people are jumping to solutions, that, that, that might not be real effective. Or if we think of the classic suggestion box model, right?

[00:06:51] I write something down on a piece of paper, throw it in a box, like the, the slip of paper literally asks you to jump to a solution. Like what’s your suggestion? And then, sorry for the paper noise. That’s okay. You know, it could be done electronically, you know? Sure. There are software systems that are digitizing this kind of old, broken suggestion box model.

[00:07:12] Yeah. So whether you submit. Electronically or into a box. You know, that piece of paper tends to sit there for weeks or months, if not longer. Somebody pulls it out and looks at the suggestion and says something like, Well, we, we don’t wanna spend money on that. That won’t work. We tried that before and 98% of suggestion box systems classically, traditionally get rejected.

[00:07:35] A kan model doesn’t require a box. Like again, there’s different software that helps facilitate a kan model. Yeah, you. Write slips of paper down and put them on a bulletin board where everybody in the firm could see them. And then you have transparency. You can have discussion. Collaboration in effective Kaizen system will implement something like 90% of employee submissions.

[00:08:01] And it’s not because the ideas are better, it’s because leaders. Are collaborating with employees. So if somebody writes down on a a Kai card, as I teach people to use in different types of workplaces, first thing you write down is you know, a problem or an opportunity. Then also write down your idea, cuz here’s the leadership behavior that matters.

[00:08:20] If the idea itself is impractical or too expensive or not workable for some reason, instead of rejecting the idea, we go back and talk about the problem some more and we brainstorm with other things. Yes, that we might be able to try and that keeps things moving that engages people. Other one, you know, suggestion box systems usually end up with everyone just giving up and being deject.

[00:08:45] Karin: I feel like this ties into the way we initially, we’ll get a lot of inquiries for marketing, uh, marketing support, marketing campaigns, you know, whatever kind of marketing inquiries we’ll get from clients where mm-hmm. , they’ll come in with that, what they think the solution. I need SEO or I need social media.

[00:09:09] Um, and they think that that is the solution, but they haven’t really done those initial steps of figuring out, Okay, wait. Why? Why is it that you need that? Let’s, what’s the problem that you’re trying to solve with this thing? Instead of just pasting a solution on top of something that you’re not even really clearly defined, you’re jumping to, you’re jumping way far ahead.

[00:09:31] And then how do you even measure? Whether that’s successful or not, if you haven’t even figured out like, Okay, here’s the problem. Here’s how we’re going to. , you know, and, and then like you said, so maybe that’s not the right solution, but then you can still go back to that problem. If you’ve def defined that and you’ve said, Okay, here’s the thing that we’re trying to fix.

[00:09:50] Here’s the tri thing that we’re trying to do better, or whatever the case might be. If you haven’t defined that, then you, you don’t have it to go back to, obviously. Yeah. Uh, so I feel like. It, it seems kind of like an obscure idea when you’re talking about suggestion boxes. And I’m of course picturing like a factory of a Ford plant, like the dusty, you know, conveyor belts, which I’m sure none of it even looks like what, it’s, what’s happening inside my head.

[00:10:15] Um, but, and then I’m picturing like this old rusty suggestion box with crumbly pieces of paper in there, and. Even though that’s obscure, I feel like it is the way a lot of people approach their marketing. Mm-hmm. . Mm-hmm. . Let’s go back to like this idea of, of, you know, the, what we’re measuring and then like you were saying, and then how to figure out like, which things do we even measure?

[00:10:40] Like what, what are the things that, that, that matter because like, like I was saying, with marketing, there’s so many other wrong roads you can go down. 

[00:10:47] Mark: Yeah. I mean, everything you, you said there was spot on. . So then the question comes down to if we’ve identified a problem or a need for improvement Yeah.

[00:10:59] And we have some potential solutions that we might want to put in place, well then the question is how do we evaluate if it’s better or not? Right? So the root of the word Kazan is good change. Not all changes are improve. Yes. So we don’t wanna fall back on this question of like, Well, I feel like things are better.

[00:11:23] Like, well, come on. You know, in a business, and especially these days in marketing, things can be so quantified, like even to a, a fault, and maybe we can come back to that. But if you are looking, if you, if you have an idea that addresses a problem, like some of the language we’d use in the work I do. It’s meant to sound scientific and not pretentious.

[00:11:45] Like what’s your hypothesis? Yeah. If we do this, then we expect that to happen to what benefit? And then we’ll think about, well, what measure do we think we’re going to impact? And then we would go test. I don’t like the word implement. It’s probably better to say, Okay, we’ve got a solution, we’re gonna go test.

[00:12:09] let’s evaluate against our measures and see if things are better and better. Could mean the difference between like a little bit better and better in a statistically significant way. Yeah. Right. So we, we, we could test something. We see the metric gets better now we, we have. Make sure there’s agreement of like, was there a reasonable cause and effect relationship there, Right between, you know, make sure it’s not just correlation.

[00:12:39] We want to do our, to do our best to try to figure out if there’s good causation. So when we define something that we’re going to go implement or test, we should be thinking that measure might be website. Yeah. Okay. Well, not all website traffic is going to flow through and turn into more 

[00:12:57] Karin: clients, right?

[00:12:58] Yeah. This is a good one because I feel like a lot of people come in and they start talking to me and they’re like, Well, we’ve got good traffic to the website. And I’m like, Do you, How, how do you know? Like Yeah. What’s good? Yeah. And, and how, how do you know if that’s good compared to what 

[00:13:14] Mark: Right. Com good compared to others?

[00:13:17] Good compared. To the past. Right. And, you know, I’ve done work, uh, in digital marketing with a software company and with a consulting firm. The, the, you know, maybe close parallels, the consulting firm maybe is a closer parallel to, uh, a law firm. Yeah. Not all traffic is equally good traffic. Right, Right. So you could write all sorts.

[00:13:39] Uh, you know, kind of, you know, click Beatty popular stuff that brings people to the website. But are they people who need legal services and are they who’re gonna pay you ? Are they the decision makers? Yes. Right. So you, you, you might change some marketing approaches where you realize, okay, traffic. Is going to go down, but if conversion rates go up, that could be a huge win.

[00:14:03] Yes. Because the ultimate measure that pays the bills is gonna be the, the number of customers who are paying their bills, I 

[00:14:09] Karin: guess. Exactly. Exactly. Okay, so let’s talk more about that. That’s the big question. Mm-hmm. . So what other measures of these success and, and, uh, I’m using the word, the, the title, Measures of Success intentionally, because that’s also the name of your book, which we will link to

[00:14:24] Yeah. Thank you. But what other, what, what are these other, so, You’re looking at a website, try to not pay attention to just overall traffic, because that is just way too broad. You could just be suddenly getting a, a boost from a bunch of hackers in the Ukraine that not only does that not, you know, mean anything good, it it might mean something really bad.

[00:14:45] Um, Right. So overall traffic numbers really is kind of a whatever, but what other, um, measures of success really do. . 

[00:14:56] Mark: So you know, you might have some sort of intake form or different intake forms on your website. So part of your funnel might start with maybe even higher up, maybe like, you know, social media engagements.

[00:15:09] Yeah. Website visits, people viewing the page with some sort of intake form of like ask us a question. Yeah. Get a free consultation and then you, then you might measure how many people actually filled out the form. , and then you might look at how many of those people filled out the form actually had a legal question.

[00:15:30] And this happened to me earlier today. Somebody’s trying to sell me, um, housekeeping services for an office. Yeah. Like, ugh. Yeah. That, that filling out of the form is not the same. It’s a waste. Somebody who’s an executive who wants to have a initial consultation. Right. So yeah, we can look at these different measures that flow through to conversions to.

[00:15:52] Clients and then we could even, maybe even get more particular and say at some point, not all clients are created equally. Right? Right. Are we attracting clients who are the best fit for us in our business? Are we attracting clients that are more, more likely to fit a profile where we’re gonna be mutually successful?

[00:16:09] Yes. You know, I think we need to start thinking about, you know, the impact, not forgetting the impact of a metric. And uh, and when we’re measuring something, then we can look at the question. You know, we, we hear a report in a management team meeting that, um, uh, the number of forms, contact forms filled out increased from, uh, 12 to 15.

[00:16:34] Like that is a factual statement. Yeah. Like 15 is higher than 12. I, I have two degrees from mit. I can confirm you. You’re on it. 15 is higher than 12. The question like, here’s, and this is part of why I wrote the book, Measures of. comparing two data points is statistically useless, , and a lot of management reporting is built upon, Here’s the number compared the last month, here’s the number compared to the same month last year.

[00:17:03] Yeah. Like statistically, that doesn’t really tell you anything useful. So, and, and then people get overly excited or overly upset about every up and down. in a particular metric. If the, if, if some meaningful measure to you fell from 20 to 15, are you gonna fire somebody or Right. Are you gonna form a committee to go do some root cause analysis?

[00:17:28] Right. So the, the lesson I learned from statistics that I’ve tried sharing with people is if you have, let’s say 12 data points or 18 data points from the last 18 months chart, those visually. Just, And even if it’s in Excel. Yeah. Draw a run chart. Now you can start looking to say, Does it look like that number is really trending?

[00:17:50] Yeah. In one direction. Has that number really jumped upward in a large and or sustained way? Or here’s what’s happening. Most of the time that number is just fluctuating around a perfectly flat average. Yeah. And that’s a key insight that we can learn from just chart. Then there, the, the, the method that I share in the book measures of success gives us a little bit of math.

[00:18:16] It’s some arithmetic that allows us to draw. You can think of them as some guardrails around that chart above and below. And then we can look visually and say, if those numbers are just fluctuating around an average within these calculated guardrails, we’d, we’d learn, um, to not react to. Single data point, including the next month, which is either gonna be higher or lower or, Right.

[00:18:39] I mean, maybe the same, right? Yeah. We can stop reacting to every up and down, which then ends up actually freeing up a lot of time to do. Like real focused improvement work, if that makes sense. Well, 

[00:18:50] Karin: number one, you can sleep better and then you just don’t freak out. Like we were talking about this before.

[00:18:56] Mm-hmm. , like, uh, how we were talking about what we were gonna talk, talk about on the show, and we just kept coming back to this idea that people look at their numbers and freak out. Mm-hmm. , they instantly. Take them to mean something totally different and then they freak out. They, um, make all these assumptions and then worst case scenario, they start making business decisions.

[00:19:20] Mm-hmm. based on this anxiety and this fear and this freaking out response. Mm-hmm. that probably isn’t accurate and right. Necessary, and it’s definitely not helpful. . 

[00:19:33] Mark: All of that is true. Yeah. Um, and, and, and said very well there, Karin. So, you know, we can learn to distinguish the difference. So like the, the statistician who taught me this approach uses the language.

[00:19:45] There’s a difference if we look at a chart in a performance measure over time, there’s noise. Yes. And then there’s signal. So we can learn to not react to the noise. A signal would be a data point that’s now suddenly and can maybe unexpected. Outside of the usual guardrails or limits that tells us something has changed significantly either because of something we did right, or maybe something that just happened externally in the market.

[00:20:12] Let’s say one of our key competitors shuts down and goes outta business. Yeah, we might see a huge spike. In business. Right. Okay. So things are better, but not necessarily because of something we 

[00:20:23] Karin: did. Right. So when you’re looking at those signals, how do you, how do you define those? Obviously it’s something that’s what, outside of those guardrails, but do you typically recommend to give it a certain number of.

[00:20:35] Um, you know, cuz you don’t wanna just take one outlier and say, Oh, okay, that, well that was an odd month and then it comes back within the guardrails. But you have now changed and done a left turn on your entire marketing plan based on this one like obscure number. Yeah. Do you usually say, okay, give it a couple months, a couple signals, or, or what’s your recommendation?

[00:20:54] Well, 

[00:20:54] Mark: so you know, here, here’s what happens. So, you know, those guardrails, uh, they’re uh, they’re calculated based on historical data, right? Yeah. They’re not targets, they’re not arbitrary. Yeah. If we see and, and thankfully the PhD statisticians, which I am not one, but I’ve learned it from the PhD statisticians, have done a lot of really wonky math.

[00:21:15] The reason we calculate those guardrails or those limits to be where they are is if there is one data point outside those limits, that is a signal, like we don’t have to guess. Okay. that signal though the presence of that signal doesn’t tell us that we understand what changed. Right. And it doesn’t mean that that change was permanent.

[00:21:35] Yeah. Right. So here, here’s a quick example. There was a hospital I was coaching once and they had a goal, they were trying to increase surgical volume and um, at some point then, you know, boom, there was this outlier data point in a good direction. Yeah. And everybody is kind of scrambling to take credit for that because they’re all doing things to try to improve it.

[00:21:55] and it turns out like this was in an area with a lot of valleys and a lot of bridges. A bridge was literally closed for construction . And so if this hospital had been literally second choice hospital to a lot of people who now could no longer drive across the bridge, Hey, good for us. We have a volume increase.

[00:22:14] The problem is you could predict when the bridge is back open and, and working again. Maybe now you’re, you, you’re, you’re losing that business. So they need 

[00:22:24] Karin: to just get some grenades, take out the bridge, and there’s the answer to their

[00:22:30] Mark: I need legal advice. Now. I, I am not suggesting that, but so like, but if we actually really made a change to our, our marketing that is bringing in more customers, that first data point above the limit would tell us, all right, something has changed in a, a statistically significant way. Yeah. Now all we can do is wait for the next data point.

[00:22:50] Okay. Right. And hopefully it is now. Above the, the, that limit, or, you know, at some point there’s the, the, the other statistical rule we’re looking for is eight consecutive data points that are better than the old average. Right? So a lot of times if we’ve, uh, again, there’s a bunch of wonky math behind 

[00:23:11] Karin: it of why seven.

[00:23:12] This is where the PhD guys come in. Why it’s not nine. Yeah. Um, it’s eight. 

[00:23:16] Mark: Okay. But, so if we’ve really made a, a, forget the bridge. But if we’ve really made a change to our marketing that’s bringing in more website traffic and we’re getting more clients, that first data point, the upper above, the upper limit, tells us, Okay, I think we really did something good here.

[00:23:33] Yeah. And then we’re looking to see if that boost has been sustained. If I start seeing a couple data points above the old limit. Um, I, I’m gonna feel really confident that okay, that, that’s, that that’s a real improvement. And it seems like it’s starting to be a sustainable improvement. So there are times where you never have a data point above the limit, but having eight consecutive data points that, that are better than the old average might tell us, Well, if the average number of new clients every month was 10, now we might calculate, Okay, the average is now 13.

[00:24:11] When the upper limit in the number of new clients per month might have been calculated to be 17. Yeah. You know, so there’s different types of signals. There’s only a couple, you know, that we can look at from the combination of our chart and the math that we’ve done to to chart the A, the historical average, and to calculate.

[00:24:30] and chart those guardrail limits. 

[00:24:33] Karin: Okay. All right. So we’re, we’re charting, we’re paying attention to the things that actually matter, not just, you know, broad based mm-hmm. website traffic, but what should we not be paying attention to? What are those things that might make us freak out that we should really just set aside and say, Okay, no, this, this is not Yeah.

[00:24:52] The thing that matters. Yeah. 

[00:24:54] Mark: So I mean, I think there’s two ways of answering that. First off is the question of what we measure. And then second is how we’re reacting to the data points in that measure. Yeah, so there’s, there’s a, a lesson I’ve learned from entrepreneurship cycles. Um, I’ll, I’ll credit Eric Reese, um, the author of, uh, a book called The Lean Startup.

[00:25:13] He, he and others in that field talk about something called vanity metrics. Yes. Vanity metrics are often easy to measure. Yeah. And you know, I’ll make up a scenario here. Let’s say, um, partner of a law firm, founder of a law. Um, starts a Instagram account. Yep. The number of followers. You might feel good that that number is higher.

[00:25:36] Yeah. But unless you really know that more Instagram followers and more Instagram attention then flows through to become more clients. Yeah, the number of Instagram followers quite, in many ways, might literally be a vanity metric is Oh 

[00:25:52] Karin: yeah. Would absolutely. I feel like this is the, this is the crutch of social media.

[00:25:57] It feels good momentarily. It’s kind of like a little sugar high or, you know, whatever else. Um, but once again, if you are tying it to a metric that matters, like you were describing, like actual clients that convert and pay, then it quickly, it, it quickly loses its 

[00:26:16] Mark: lu. . Right. And then we need to look at, you know, when, when, when we have meaningful metrics, we, we, we need to stop reacting to every up and down Yeah.

[00:26:27] In that measure. So, um, I probably wouldn’t chart the number of Instagram followers and I certainly wouldn’t get too excited if I gained a couple or lost a couple. Right. But I would look at things like, um, number of new clients. And maybe we look at the clients who are more likely to become long term yes.

[00:26:46] Clients, right? Any business, whether it’s software company or consulting or a law firm. I would guess again, not all new customers are created equally. Sure. So then we, we think back upstream in our, our flow through our marketing funnel of how do we create content that attracts people who are then more likely to convert and more likely to be our best performing.

[00:27:10] Longest term clients. We can figure that out over time. Yeah. Maybe through some trial and error and some tests. But you know, I think one of the, the things with digital marketing that’s both a blessing and a curse is there are so many things that are measurable and there are so many things that are easily measurable too.

[00:27:28] But it doesn’t mean that they’re all meaningful. And it doesn’t mean that every change in that metric is, is meaningful. So again, if like some conversion. Um, falls from 4.8% to 4.5%. That’s probably not worth having a meeting about . 

[00:27:43] Karin: Right? Oh gosh. I hate meeting so much that, I mean, it has to be a really pretty significant reason to, you know, make me get on the Zoom or even on the phone and like make a meeting out of it.

[00:27:57] Um, we even will put together content, uh, for clients or even for ourselves, that is meant to be a little bit of a, of that troll on the bridge where, um, it’s, it’s talking to the wrong clients and, and mm-hmm. kind of. Persuading them that they’re, this isn’t the right answer. So, you know, we talk about how we’re not the cheapest and we never will be.

[00:28:21] And, um, if that’s what you’re looking for, here’s some resources for you and goodbye . Right? And we do it in a much more subtle way, but, uh, and our clients do that as well. , 

[00:28:33] Mark: that’s much more nuanced marketing of Yeah. Of, of trying to find fit. Yes. As opposed to trying to find just sheer numbers and Yeah. I mean, you know, and the, the website for a consulting firm I’m involved in, um, I mean, we’re not trying to be inflammatory, but at some point you need to make a statement that not everyone’s gonna agree with.

[00:28:51] Right. Maybe that, I think that’s what you’re referring to of like Exactly. If, if, if somebody comes to my website and is completely offended by this thing, which. Sincerely believe, right? Yeah. And, you know, uh, about leadership or culture, and then okay, if they filter out. And so if they decide early on that they’re not a fit, instead of spending a lot of time with meetings, And, um, you know, presentations and pitches to then end up being the third choice of three consulting firms that they were considering.

[00:29:21] I’d rather be ruled out at the beginning 

[00:29:23] Karin: and save the time. Yeah, exactly. On the website where I didn’t even have to have a conversation with you, as opposed to way in the beginning of, of when I opened my agency, I started out just to get off the ground as I, I would promote. That we had these $975 websites and it was very price based and mm-hmm.

[00:29:44] the, the kind of clientele that we had because of that messaging and because of all of that, they were constantly trying to, it was just a nightmare. It was just not a good fit. And so, Repositioning and getting that messaging and, and going through the process where in the middle, when I was going from the cheap Walmart kind of PO marketing to a different, you know, higher end.

[00:30:09] I would get a mixture of, Hey, didn’t you used to have really cheap websites and stuff? And, and you know, I would instantly know like, Oh yeah, you. Old client, like, this is why I’m moving away. And there would be so many red flags and it would be like what you’re talking about, like having these meetings and they’re trying to tell you how to do the work and they’re arguing with you and it’s just a nightmare.

[00:30:29] And it’s like you want some of those filters to get you the right clients. 

[00:30:34] Mark: Yeah. And there’s, there’s a book I’ll recommend, I’m blanking out on the name of the author cuz it’s been a while, but it stuck with me. It’s called Book Yourself Solid. and it is all about how to, and this would apply. There’s probably an updated version for more the digital marketing age.

[00:30:50] I bet there is. But yeah, this idea of that the marketing process is about finding, uh, clients who are the right fit. Yes. And he uses examples in the book, whether you are, uh, a dog groomer or a highly degreed professional. Like they’re similar. Um, ideas that would apply, and part of that might be just personality of like Absolutely.

[00:31:12] Who would you really most enjoy working with? Yeah. Is that person, is it the person who’s going to, um, nitpick and nickel and dime the presenta, the uh, the proposal? Yeah. Um, you might, you know, and, and one lesson from that book is the ideal condition is to be busy enough that you can turn some people away.

[00:31:31] Yes. Yep. If you think they’re not a good fit. And of course, in a. Uh, 

[00:31:36] Karin: in a professional nice way. Yeah, exactly. Yeah. And that’s a scary thing to do. The first few times that I did that, it was like, Oh my gosh, am I walking away from all this money? But I’ve never regretted it. I’ve always been happy and they, you know, oftentimes will come back and, and only proved my point,

[00:31:54] And so, yeah. Uh, yeah, it’s, it’s always, it’s always a good thing. Um, okay, so what’s one thing that, you know that works. , 

[00:32:04] Mark: one thing that I know that works, um, kind of related to continuous improvement culture in different environments that I’ve worked with, then one of the most important things for having a culture of improvement, and I would argue for having a culture of success, is having a high level of, of, of what people call recently psychological safety.

[00:32:28] Um, the safety to ask questions. The safety to say, I don’t know. The safety, Yeah. To point out problems. The safety to bring forward new ideas. I think one of the things that I’ve learned to answer your question of like, one of the ways we can build psychological safety is leaders being willing to admit mistakes.

[00:32:47] Yes. That single behavior sets such a positive example for the rest of the organization. If you’re not doing that, if you are punishing people for human error, and guess what, We’re all human. Yeah. It, that punishment response will do nothing but drive mistakes underground. Yeah. And then the organization can’t learn from those mistakes.

[00:33:14] So, um, I hear here’s the connection of, you know, creating an environment where it’s safe for people to make mistakes allows us to do the things that prevent. That mistake from happening again. Yeah. Right. So it’s, it’s, it’s not to have a pity party about our mistakes or to shrug our shoulders and say, Yeah, we’re human.

[00:33:33] What can we do about it? Well do something about it. Right. But it really, um, starts with that, that culture of leaders leading by example. Um, admitting mistakes, admitting problems, admitting, I don’t know. I guess there’s a lot of behaviors that then, uh, roll downhill in the organization and lead to improvement and a chance.

[00:33:53] Excellence. 

[00:33:54] Karin: Yeah. And honestly, I feel like this starts out as this concept that sounds sort of like something a preschool teacher would say, like, Oh, we’re all pre, we’re all, you know, we’re all okay. Mm-hmm. like, everybody makes mistakes, but I really feel like it’s so, um, not talked about enough in terms of, I feel like this is the critical part of every marketing campaign.

[00:34:17] Every marketing campaign needs the test. The measure and then the revision based on what you’ve learned. So I wouldn’t even call it mistakes, which I mean, in business obviously we make mistakes. I would call it like these learning moments where it’s like, Okay, sure, this thing, this part didn’t work the way we expected it to, or this other part went bananas and we are gonna.

[00:34:40] Focus all of our resources over here, and we needed this other part to be weaker so that this part could be stronger. And this is all just numbers. It’s data. It doesn’t need to be emotional. We don’t have to feel any way about it. It’s just mm-hmm. information. . And so based on that information, we are now going to make these changes.

[00:35:00] This is what Kaizan is all about, right? Because if you don’t make the changes, then this is not a campaign. This is not marketing. This is just like throwing something up against the wall and mm-hmm. , um, and probably failing and then blaming. Who knows . Right. So that, so when Yes. That, that making the mistake and then changing based on that, that is the part that people get most wrong about marketing, 

[00:35:24] Mark: I think.

[00:35:24] Right? I mean, a lot of mistakes could be reframed as, uh, a hypothesis or an assumption that did not turn out to be true. Yes. So, hey, guess what? We learn something. Yep. Let’s adjust instead of being stubborn or lying to ourselves or doubling down on the bad idea that we. Dare admit Yeah. Was a quote unquote bad idea.

[00:35:46] Right. Um, yeah, I mean, the way that Karin, the way you’re describing the thought process is, um, I think spot on. We have to be honest about like, if, if, if we need to be like scientists and Yeah. And, and, and there’s a certain question of honesty or ethics, but if we’re not being honest to our. . That’s, that’s only gonna hurt us over 

[00:36:06] time.

[00:36:06] Karin: Exactly. Exactly. Yeah. And I mean, at the end of the day, it’s business. And so, you know, you just have to kind of take the emotion out of it and say, Okay, here’s the numbers. This is what the numbers are saying. It’s like when people go to sell their house and they wanna list it for $5 million and that house next door sold for like 500,000

[00:36:23] It’s like, okay. Mm-hmm. you can do, can do that all day long, but the market is not gonna reflect that’s an accurate market price. And so the market will tell. Where reality is, and you can listen to it or not, but the market is the market 

[00:36:37] Mark: and, and you bring up a good point. There are certain situations where you may rely on expertise, which might be your realtor.

[00:36:44] Yeah. To say in your situation, Oh well, who’s to say what’s right or wrong? You have a hypothesis. Let’s test the hypothesis and list the house at $5 million. Or you could not waste the time doing that. Right. There’s a lot of things. Business or a law firm that are far less certain. So I think one of the other traits that’s really helpful is to stop saying, I know this.

[00:37:10] Yeah. I mean, there are certain things you can say. I know like if I were to let go of this coffee mug, I know it’s going to fall. Right? But if we were to write these blog posts, uh, around a theme, we don’t know that that’s going to attract more of the right high paying clients to our website. Right. All we can do is.

[00:37:30] The hypothesis. So instead of saying, I know that’s going to work, or the flip side, I know that’s not going to work. Right. Sometimes if it, especially if it’s low cost, low risk. Yep. Go do a small test of change and then evaluate and adjust accordingly. Yeah, 

[00:37:46] Karin: yeah. Absolutely. Okay, so Mark, what is, it’s time for the book recommendation.

[00:37:51] Mm-hmm. and uh, what is the book that you are going to recommend to the audience? . 

[00:37:57] Mark: So the book that I’ve recommended the most during my career and that I’ve given away the most copies of, um, is a book by one of those PhD statisticians I mentioned. His name is, uh, Donald Wheeler, but, but it’s not one of his statistical textbooks.

[00:38:13] It’s it’s thin small book written for managers. Um, it, it’s the most readable book you’ll ever read about, um, statistical methods Appli. to business metrics and, um, his, his book has probably impacted me more than any other book. It’s called Understanding Variation. And the subtitle is, Get this, the Key to Managing Chaos.

[00:38:38] Karin: Oh, that sounds 

[00:38:39] Mark: cool. It’s a, it’s a big promise from that book title. Um, but so it inspired me, My book, Measures of Success gives a lot of credit to Don Wheeler and his book Understanding Variation. He. Uh, the forward for my book, which at least makes me feel like he didn’t think my book was. 

[00:38:56] Karin: Yeah. So is he, so when I think of variation, when he is talking about, you know, the title, understanding variation, I’m picturing those guardrails that you were talking about earlier, kind of understanding that, you know, leaving some cushion in there just to keep yourself sane.

[00:39:11] Mark: Under. Yeah, so understanding variation means, again, understanding the difference between signal and noise. Okay. Is really what he is going for there. 

[00:39:20] Karin: Okay. Awesome. Yeah, that sounds really good. Yeah, and just kind of getting that, that really numbers based, you know, kind of analysis where you can get that into your head.

[00:39:32] What you sh what you should or shouldn’t be freaking out. I mean, there’s really not that many things you should be freaking out about unless like mm-hmm. , everything just drops to zero and the phone’s not ringing and Yeah. You know, like that, you know, that’s freak out mode. Um, but, you know, minus anything a little bit less than that, I don’t know.

[00:39:51] There, you know, there’s so many different reasons that things could be bouncing around a little 

[00:39:54] Mark: bit, right? So, Calls went to zero. Yeah, that might be a signal on this chart we call a process behavior chart. If it fell from 10 to eight, that may very well be noise. But again, there’s some math that helps us determine, we don’t have to guess signal versus noise now.

[00:40:13] And one other point I wanna make real quick is if we have, if we show a. Where that number is just fluctuating around an average. Yeah. That doesn’t mean we’re doomed to that number forever fluctuating around that average. But what we do as leaders is not ask people to try harder. Um, within the existing way things are done.

[00:40:36] We need to change the way things are done, and then the chart helps us understand, are we. Creating more noise or have we changed the system enough? Have we to get a signal made the right changes to, to find that signal in the chart? 

[00:40:53] Karin: Yeah. Oh, cool. I love that. I like the idea of, okay, let’s try some things and, but then we’re gonna come back to this chart and are we bouncing around within those guardrails or, or did we get something, you know, have we caught, have we caught the big fish?

[00:41:05] And it’s throwing up a nice number outside of there. That sounds cool. Awesome. Okay, so what’s one thing that you would like people to get out of this episode? One take. . 

[00:41:15] Mark: Well, I mean, we, we’ve touched on, uh, a number of, of, of my favorite topics and points here. Yeah. I mean, 1, 1, 1 thing to take away, um, I mean, I, I, I, I’ll bring it back to mistakes because I, I think earlier on we’re talking about some of the mistakes people make with metrics, mistakes in choosing what to pay attention to, mistakes and how we respond.

[00:41:40] To the data point. So I think the, the one key takeaway there, there’s not just math here, there’s a lot of psychology. Yes. And I’ve tried learning a lot about this in recent years. So here, here’s one lesson that I’ve learned or really solidified for me recently. When somebody on your team makes a mistake before you jump into analysis mode, like the, the, the engineer, rational mba, logical part of your mind that says, Well, we need to figure.

[00:42:08] What happened and why and how. So we can prevent recurrence before that. The person who made that mistake is probably upset about it. They probably already feel as bad as a yelling and screaming leader could make them feel, right? Yeah. Yeah. So the one thing I’ve learned is, uh, it’s important to step back and just maybe first off, ask, how are you?

[00:42:34] And, and let them process the emotion they, the embarrassment or the shame or the other human emotion that comes with making a mistake. Yes. To tend to that Before we jump into analytical mode. Yeah. 

[00:42:48] Karin: Honestly, I feel like so many of these conversations I’ve been having lately about, um, mistakes and marketing in general come back to these ideas that I’ve got two kids and that I read a lot about in these parenting books.

[00:43:03] When you’re talking to a toddler, you know, before if they dropped a cup of milk on the floor before you start freaking out on them and yelling at ’em. Just kind of check in and make sure that they, you know, they kind of know that, that you’re not, um, that it’s okay, you know, like we can clean it up. It’s gonna be okay and, you know, we’ll figure it out.

[00:43:24] But like, let’s just like take a little human element of it first. And, you know, kind of think of, think in terms of, I feel like for my team, when I think about them as like smaller kids and how their parents might have re reacted to them, all of a sudden I, I kind of. Talk to them differently. And it’s like, you know, there’s a little piece of that, that little kid in all of us that, that doesn’t wanna be yelled at and blamed and all of that stuff.

[00:43:47] And it’s like, come on, that’s not gonna help anything. 

[00:43:50] Mark: Yeah. And, and you mentioned earlier some of these ideas maybe do sound like things we learned in kindergarten, but these are things that we often forget. Yes. Or get kind of drummed out of us either by the education system or the way a lot of workplaces work.

[00:44:05] So in a way, I think we, we can tap into things that are. Um, you know, a little bit more of our human nature. If, if, if, if a kid makes a mistake, does the other child, you know, you know, pat them on the back right. First, right? I mean, you know, um, yeah, exactly. That might be a good lesson and, and something to, um, to think about again.

[00:44:25] But again, so like this, this mindset, it doesn’t mean. Hey, everybody. Go do all sorts of wild, crazy, irresponsible things because it’s okay. Yeah. You’re okay. 

[00:44:36] We’re 

[00:44:36] Karin: all gonna hug, we’re gonna hug it out. , if, if it’s not that, No, 

[00:44:40] Mark: but there’s this middle ground where again, like what gets really dysfunctional is the other extreme Yeah.

[00:44:46] Of shaming and punishing and pressuring people into hiding mistakes. Yeah. That’s more likely to happen. And, and, and that’s gonna be really bad for an organiz. . 

[00:44:57] Karin: I’m gonna, I’m gonna, um, add one last little story from a case study that we had in business school about these operational problems. And I feel like it was during, um, ops management when they were talking about these US based car manufacturers that were finally starting to bring some of the Japanese, um, Concepts in, and it was so dysfunctional in these factories that these guys were, um, taking spare parts like random screws and nuts and bolts and whatever, and putting them inside the doors.

[00:45:28] Mm-hmm. just to piss off their boss 

[00:45:30] Mark: sabotage. Yes. They would sabotage the company. That’s how badly they were being. 

[00:45:35] Karin: Yes, exactly. And so like, imagine that in your own law firm, like the equivalent of someone who is answering your phone and you’re screaming at them because you know you had a bad day or you spilled your coffee or whatever.

[00:45:48] And they’re the ones that are answering your phone and giving that first impression. And, and they’re the equivalent of the people who are gonna throw those nuts and bolts inside the, the door and, uh, you know, make that car unsafe and they’re going to you. They are not gonna care or give a good first impression to those people who are calling in that are your potential clients.

[00:46:07] Yeah, 

[00:46:07] Mark: yeah, Yeah. I mean, the, the, the nutshell summary of that case study you’re talking about, um, goes back to the early 1980s. There was a General Motors plant in Fremont, California that made Chevy products, and the plant was at terrible, quality, bad, horrible productivity. GM said Enough of this, and they shut it down.

[00:46:28] Yeah. Toyota. Was looking to do kind of a small experiment. Um, and there were different business pressures and political pressures to build cars in America instead of just importing them in, uh, from Japan. So a big risky experiment would’ve been building their own factory, right? The smaller test of change was to partner with General Motors in a joint venture to reopen that factory.

[00:46:55] uh, under the name of what they called new me, m u m m i a joint venture that would build both Toyota products and General Motors products. Basically the same car with different labels on them. But here, here are the key things. Um, it was going to be managed in a Toyota style, mainly by Toyota people they hired.

[00:47:16] the workers from the same pool of workers who had been laid off by General Motors, and it was still a UAW union facility. Yeah. So essentially the same workers, new management, similar equipment. This plant suddenly became, within a couple of years, one of the top performing plants in the auto industry.

[00:47:34] Karin: Yeah. Well, I feel like when you’ve gone from one end of the extreme to the other, Uh, you know, all of a sudden, you know how poorly you were treated. I mean, I’ve had bad managers and I now know, like running my own business, I could never go back to working corporate and having those bad managers. But that’s part of kind of the learning experience of life.

[00:47:55] And so for those guys who, you know, went and through that horrible experience, they now know how good they have it. 

[00:48:03] Mark: Yes. And people who learned that that new way. of Leading came back into other parts of General Motors, and that was one of the plant managers I worked under during my two years at General Motors and Oh, cool.

[00:48:16] For people who wanna learn more, there’s a great episode of this American Life. Yeah. Uh, from public radio. If you go search, um, New me, N U mmi, this American Life. Yeah. Um, it’s fascinating and you hear, uh, a couple of sentences from the guy Larry, who I worked under at John, took those lessons to try to go change the rest of General 

[00:48:37] Motors.

[00:48:38] Karin: Oh my gosh. I know exactly which episode you’re talking about with this American Life. I’m a big fan. Yeah. And um, the stories are, it’s really entertaining. It’s good stuff to listen to . Yeah. 

[00:48:50] Mark: So many great lessons. Exactly from that new, from that new me story because again, it comes down to leadership and culture.

[00:48:56] Yep. How do you treat people? Are you blaming them? Yeah. Or are you partnering with them? as adults, are you treating them respectfully like adults? Right, to accomplish the same goal? Um, right. Again, it sounds like kindergarten, but it does. It’s powerful, 

[00:49:11] Karin: but it comes into play. You know, we have firms that hire us as outside, um, marketing agency.

[00:49:18] So it could be people inside your firm, it could be the external people you’re hiring. And I’ve had every, I’ve been doing this long enough, I’ve had every experience under the sun where they. Me or my team, like we are, you know, being micromanaged and mm-hmm. , you know, and that never works. We all know that never works versus the other end where we know, where I know instantly it’s a good fit.

[00:49:41] These are people who really get it. They see the value, they treat us well, and the results are so much better. So it doesn’t necessarily have to be that you’re running this major corpor. These ideas trickle down into however it is your firm is being run with whoever it is you’re working with, whether it’s employees or you know, outside people or whoever it is.

[00:50:02] Like these, the ideas still apply. . 

[00:50:05] Mark: Absolutely. And you, you clearly paid attention in ops management. So that’s 

[00:50:11] Karin: That’s great to, to most of it anyway, . Yeah, I passed. I got the degree . 

[00:50:17] Mark: Well, you seem to enjoy it. So that, that, 

[00:50:19] Karin: that’s good to hear. Awesome. Well, Mark Gran is an expert in operational management and has the book, um, Measures of success, we will link to that book and your website and your consulting firm, um, on the show notes.

[00:50:35] But thank you again so much for being here. I feel like this was a really valuable conversation about not only how to run a more efficient organization, but to kind of consider the human side of it as well. 

[00:50:46] Mark: Absolutely. Because more efficient can also, Higher quality. Yeah, higher efficient work. More more efficient work.

[00:50:55] Yeah. Yeah. Highly efficient work can mean better quality work. That can mean in a more enjoyable workplace, and that can mean more business success for sure. Exactly. 

[00:51:04] Karin: Awesome. Well, thanks again for being here. That was a great conversation. 

[00:51:07] Mark: Thanks, Karen.

[00:51:08]

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