Operating Systems for Building High-Performance Teams with Thanh Pham
Thanh Pham is the founder of Asian Efficiency, a company that has helped over 15,000 people live productive lives through online courses, programs, and workshops. Thanh is the co-host of The Productivity Show, a weekly podcast with ten million downloads, and is a prolific writer and public speaker on the topics of productivity, efficiency, and time management
Thanh joins Chris Sparks to discuss building a high-performing team and how to systematically design smooth and efficient operations. They share their principles and strategies for onboarding hires, streamlining processes, and getting the most out of your team.
See below for audio, resources mentioned, and conversation transcript.
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Topics:
(00:00) Intro
(01:37) A CEO’s primary function is resource allocation
(03:53) How to identify where an influx of resources would be most effective
(09:53) Onboarding to incorporate values
(15:42) Friction when implementing policies and principles
(20:21) How to get better at delegating
(29:19) Holding people accountable and skills grading at Asian Efficiency
(40:06) How to set aside time and create accountability within the company
(46:20) Q&A
Conversation Transcript:
Note: transcript is slightly edited for clarity.
Chris (00:05): Welcome to Forcing Function Hour, a conversation series exploring the boundaries of peak performance. Join me, Chris Sparks, as I interview elite performers to reveal principles, systems, and strategies for achieving a competitive edge in business. If you are an executive or investor ready to take yourself to the next level, download my workbook at experimentwithoutlimits.com. For all episodes and show notes, go to forcingfunctionhour.com.
I'm really excited to introduce my guest for today, Thanh Pham. Thanh is the founder of Asian Efficiency, a company that has helped over fifteen thousand people live more productive lives through online courses, programs, and workshops. Thanh is also the cohost of The Productivity Show, a weekly podcast with ten million downloads. He's a prolific writer and public speaker on the topics of productivity, efficiency, and time management. I couldn't think of anyone better for our topic today. Thanh is one of the most systematic entrepreneurs that I know, and he's had a huge influence on the way that I hire and delegate here at Forcing Function, so you guys are in for a treat.
Today Thanh and I will be discussing operating systems for building great teams. This is a conversation designed for founders and business owners who want to both increase their leverage and have a maximally efficient distributed team.
Thanks for joining us, Thanh. Always a pleasure to see you. Very excited to dig in today.
Thanh (01:35): Yeah, thanks for having me, Chris.
Chris (01:37): Before we went live, we were talking about the roles of a CEO, and you told me that you think that a CEO's primary function is resource allocation. And I thought this was a really important idea. Love to hear a little bit more about what you mean by that.
Thanh (01:50): I think most of us have been in this position before where we're starting a business, we have to do everything. We do the accounting, we maybe even mop the floors, depending on what kind of business you have. We do the customer service, we do the selling, we do the product development. And in the beginning, you literally do everything, and as your business starts to grow what tends to happen is that you start to hire people, you have maybe more money coming in or more money in the bank accounts, hopefully, and as your business starts to grow, you can't be doing everything anymore. Now you have to start making sure that all the people who are hired are doing their jobs and that you spend your money wisely, that you're investing your money, you're re-investing your money wisely. What happens over time is that as the CEO of the company and the one that's leading the company forward, you go from this person who does everything to now making sure that all the resources around you are allocated in the best way possible.
What constitutes a resource, then? An example of resource that I like to think of is starting with yourself: it's time, energy, and attention. So this is something that I teach at Asian Efficiency. As a personal productivity thing, you have to make sure that your time, energy, and attention are allocated in the right way, because if you have all three misplaced it's very difficult for you as the CEO to be productive. On top of that, when you run a business, you also have to worry about money or cash flow. That's a resource that you have to be careful about and manage properly, because without cash your business simply dies. The other thing is the people in your company. So, are all the people working for you or working with you doing the right things? Are they performing at the highest level? A big part of being a good CEO is making sure that your money is flowing in the right direction and allocated properly. Also the people on your team, or in your company. If you can focus on those two areas, it will take care of a lot of the challenges that we have, so that we can make sure that we as a CEO can move forward and focus on working on the business and growing it, rather than just being so involved in the day-to-day process, which I'm sure we will unfold here.
Chris (03:53): The common challenge is that there are so many opportunities, so many ways the business could grow or run more effectively, it's really hard to know what to prioritize. You mention this role as resource allocation, sending resources to where they have the most leverage, where they can be utilized most effectively. What are some ways that you help to uncover currently where are we most resource-constrained? Where do we need to redirect resources from one place to another? Do you have a way of looking at things systematically to help identify where an influx of resources would be most effective?
Thanh (04:33): One of the things I teach in my personal productivity courses that also applies on the business level is what I call “the three-times rule.” And it's a really simple idea of if something annoys you three times or more, you have to figure out what the root cause of it is, and then fix that. So to give you an example, one of the things that annoyed me in my home was that the fridge, the door of the fridge wouldn't always close or seal properly. Every now and then, it would stay open or there would be a little panel be misplaced. So the fridge was sometimes not as cold as it could be. It happened one time, and I said, "Okay, it's not that big a deal, I'll just push harder next time." A few days later it happened again, and then a few days later it happened again, and I realized, "This has happened more than three times now, it's probably not because I'm not pushing hard enough, there's something wrong with the seal." So I said to myself, "How do I actually resolve this issue now, so that it doesn't happen again moving forward?" So eventually, I got the refrigerator replaced so that it didn't happen again.
This idea also applies in your business. If something annoys you three times or more, there's probably a systemic root cause somewhere in your business that's holding you back from growing or scaling or from having a really smooth operation going on. Many of you might have two-factor authentication set up. So as you're starting your business, everything is texted to your personal phone number. As you start to hire people, people can't log in because when they try to log in ,they text you, the owner, the code, and you have to tell people, "Oh, this is what the code is," but then maybe you see the message fifteen minutes later, so it's not valid anymore. That happens multiple times and you go, yes, you can deal with it in the moment and try to synchronize, but that's not very efficient. The solution to that is making sure that there's some sort of system in place where the codes get sent to a centralized number, or everyone has their own separate logins, and so on.
Anytime I'm having a team meeting, I always ask people, "How did we apply the three-times rule in the past week? What annoyed you three times or more in the past few weeks, and how can we find a systemic solution to that?" If you start asking that simple question to people on your team, you'll start to uncover a lot of little roadblocks and challenges that people have that might not seem that big of a deal, but when you start to tackle them one by one over time your business becomes a lot smoother and there's fewer complaints and there's fewer bugs to uncover over time, fewer customer service emails coming in, and so on.
Chris (06:53): Something I think that's worth emphasizing there is it seems you've built a culture around excavating these annoyances, as you put it. Sources of friction, where people on the team are incentivized and rewarded for bringing these things to the surface which might not get caught. Something simple like a two-factor authentication could easily be swept under the rug, because it's easier to just not worry about it because it's not that big of a deal, but by having people bring these things up, that's how they get solved. Otherwise, if there's a culture around sweeping these things under the rug, they tend to accumulate. What have you found works to make sure that this is a culture that goes company-wide of bringing these things to the surface so that they can be solved?
Thanh (07:40): A big philosophy I always talk about—and this is my personal philosophy as the owner—growth doesn't always require new initiatives. If you go into the new year, a lot of times all of us set new goals and new initiatives and projects and we want to grow more revenue, we have a new marketing campaign and everything. That's the default mode most people get into, and that's great, that's one way to grow. Another way to grow or think about growth is, "How can we eliminate all the bad things in our lives?" Everything else being equal, that still means that we're moving forward in the right direction. To give you a personal example, if you got rid of all your friends who drain you of your energy, who are always complaining, suck the life out of you, you do nothing else differently, guess what? Your life just improved maybe ten or a hundred-fold. By just eliminating stuff.
Well, the same thing applies in our business as well. We don't always have to create a new project or launch a new initiative and do all these big, grandiose things to have a better company or a bigger business. We can get rid of a lot of the small things that take away money from our bank account, people that might not be as productive as they could be, processes that are really inefficient, maybe those things that people don't know how to do and oftentimes are stuck at. If we just eliminate all those things moving into the New Year, guess what? You're going to have a bigger and better business as a result of that, and happier people, people are going to stay longer. There's just so many side benefits that come with that.
A big way to push this into your company is as the owner you have to believe in that philosophy yourself, because you're the one who's selling this idea to everyone, and if you don't believe it yourself, it's hard to translate that into everyone else. That's something that I've really instilled in my company culture, but also it's a personal reflection of me, and oftentimes the company culture is a reflection of who heads the company. If you're trying to instill this in your company, you have to believe this in yourself. I'm a big believer of the idea of Kaizen, continuous improvements. How can we make small tweaks here and there, make a one percent difference every single day that's going to lead to big results. The Toyota Way is a great book on this. The Goal, which is by Eli Goldratt which talks about the theory of constraints. I'm a big believer of those philosophies. It's just another way to think about building and growing your business.
Chris (09:53): Great recommendations. I have those as part of our onboarding at Forcing Function. It feels like this type of culture starts from day one, where someone walks in and they know what these philosophies are, they know what the expectations are in terms of their responsibilities. I would love to hear a little bit about your onboarding process when you bring someone new on the team. How do you teach them in the way of thinking that is inherent to Asian Efficiency? How do you help them understand how to make decisions and incorporate values? What's that process look like?
Thanh (10:27): Anyone who comes onboard goes through several steps that everyone goes through, and that's the same for everyone, and then we have role-specific things. The process that everyone goes through, one, is I want to encourage everyone to listen to the podcast. We have a podcast—that's one of our benefits that we have as a "media company"—where we release new content every single week. I want everyone to be subscribing not because we want to increase our subscription numbers, but also we want to make sure that people are always learning on a continuous basis, which is one of our core values, continuous growth. Having them subscribe to the podcast, having them read some of our best blog posts, oftentimes those two things, if they just follow them on a regular basis—and we want to make sure that they do—the continuous education just follows naturally without us really doing anything different.
But the other thing is, and this starts way before you bring people on board, is we always want to make sure that they're a good fit. Everyone has heard of this idea of, "We want to make sure everyone's a good company culture fit and that they match our values," and I can't emphasize that enough, because if you bring someone on board that doesn't really match that, it doesn't matter how good your onboarding process is, it's not really going to work out over the long run. Setting that aside, having them subscribe to the podcast, having them follow the blog, there's a couple books that I always recommend as well. One of the books we recommend is "An Introduction To Scrum." We are using Scrum in our company. For those who don't know, it's basically a project-management philosophy that originally started in the software world and is now becoming more popular outside of the software world. So, the idea of agile principles, of allowing team members to work iteratively to a product or an outcome.
We want to make sure that everyone reads all those books. Depending on the role, we have then more resources for people to go through as well. Because we have a huge education component to our business, we help people become more productive, we want to make sure that everyone on the team is productive as well. We also ask them to go through some of our courses so that they're up to speed on some of the basic time-management philosophies, basic productivity principles that we teach. The benefit of that as well that people get from going through that is that, one, they become more productive, but also they get the company culture and the idea and the vibes of that. That's a really simple onboarding process, and this happens day one, day two. So about a seven-day process, Monday through Friday, and then Monday and Tuesday again.
But then there's a lot of ongoing education, whether you are new or someone who's been with the company for a while as well. So, one of my favorite things is what I call a DNA meeting. A DNA is something—I got the idea from Scaling Up, which is an operating system for running a business. Some of you might have heard of Traction, or The Four Disciplines of Execution. One of the things that they talk about at the Scaling Up event that I went to five or six years ago was just this simple idea that we want to make sure that the founder and the upper-level management has a regular meeting where the founder simply talks about how he or she makes decisions and how he or she thinks about what happens in the last two months or something in your company, and how he or she would do things a little differently.
I have this meeting once a month, and I call it the DNA meeting, where all of my senior people come on and we review some of the retrospectives that we have. And the retrospective's simply a meeting where you review what happens in the past sprints. And we go through some of the retrospectives together, and I would say, "Based on this this is how I would have done things differently," or, "This is a decision that I would have made." And when we do this once a month, over time people get this sense of, "This is how Thanh would do things," and then over time they can make their own decisions as well.
A couple documents that also are related to that, something I forgot to mention during the onboarding process, is we have a page inside of our Confluence, which is the software we use internally for housing meeting notes and operating procedures and so on, is decision-making guidelines. DMGs. It's a name that I borrowed from Tim Francis, which is a mutual friend of ours. But Sam Carpenter wrote a book called Work The System that's a great book on systems and operational principles. He calls them operational principles, but I think "decision-making guidelines" is an easier term to remember. I basically laid out ten things in there of how I make decisions that I want to make sure that everyone understands as well. A really simple version or an example of that is, "The simplest solution is the best solution." So any time we're having a meeting, whatever the simplest solution is is the one we should go for, and that's always my default go-to mode whenever I'm thinking about solving a problem. So that's one DMG that everyone knows in the company.
Another example is, "If it costs less than a hundred dollars, just purchase it and you'll get reimbursed, no questions asked." So now people don't have to ask anyone, "My keyboard just broke down, it's sixty-nine dollars, can I purchase this or not?" If it's less than a hundred dollars, just go ahead and purchase it and you'll get reimbursed no questions asked. If customer service team has a problem and they're trying to send flowers or something like that to a customer to make up for a mistake that they made, if it's less than a hundred dollars, just go ahead and do it and you'll get reimbursed for it as well. Whether if they're personal funds or the company funds that they used, it doesn't really matter. As long as it's less than a hundred dollars, you don't have to ask for permission to solve a problem.
When you walk everyone through some of those decision-making guidelines that you have, it makes it really easy for everyone else to then move forward without interrupting anyone.
Chris (15:42): What's been the biggest pain point or source of friction over the years as you implement some of these policies, some of these principles? What types of resistance have you encountered?
Thanh (15:54): On a personal level is, one, having people to speak up and say, hey, this is what's not working or what's wrong or this is not as good as it could be. One of my favorite books on this topic related to that is The Five Dysfunctions of a Team, by Lencioni, I believe is his name. The basic idea behind the book is that you want to build trust with your team, and there's certain levels to measure how good the level of trust is that you have with your team members. For example, one of them is, are you able to hold other team members accountable? If you can't hold people accountable, you can't have a high-performing team. Another level is, are people able to speak up and share what they're thinking or feeling? And if people can't do that, then holding them accountable is not even remotely possible.
So there's all these different levels that everyone can assess their team at. That's something that I had to work on in the beginning, to be able to say, "How do we build trust in the team so that everyone does feel comfortable to speak up and then over time feels comfortable holding each other accountable?" Not just me and them, but they hold each other accountable as well.
So that's a work in progress. Not something that happens overnight, but one of the favorite things I do every year is I always do a book review of that book with everyone in my company. We always are reminded of the different stages of the pyramid that they have in that book. Holding each other accountable, trusting each other, being able to have conflicts with each other without making it personal. We always want to reassess where are we with different teams on this. If something is off, what can we do to make sure that trust is being built and growing over time?
That's something that I had to work on, but when I see other people or other entrepreneurs, a lot of times they struggle with letting stuff go or having other people do stuff for them or being able to delegate something or having perfectionism issues around other stuff that people are doing, which oftentimes hampers their growth. I have personally no problem with that. I would love to delegate and just give everything away as much as possible. I always joke that I'm a pretty lazy person, but it comes from the idea of I want to leverage things as much as possible.
Chris (17:54): What recommendation would you give to someone who's having a hard time releasing control of their baby? Maybe they find themselves having a hard time handing things off or wanting to be involved or being a little bit perfectionistic—what advice would you give this type of founder?
Thanh (18:10): I would always start it off with something that is low-impact and low-stakes. I find that if we delegate something that has high impact or high stakes and there's a lot of pressure around it, it doesn't allow the person who is delegated to do the work, to do a really good job, because typically the founder is on top of it monitoring and micromanaging—whereas if you allow someone else to do something that is low-stakes, doesn't have a major impact, there's no pressure, maybe there's no tied deadline around it, and to let them do a good job of it, and you see that they do a good job, then you see that proof of success. And once you have a taste of that, it's like a ladder of doing it one task at a time to the point where you feel comfortable that this person can do it up to your standards.
Pick something that doesn't have a lot of pressure around, because that makes it very difficult even for learning, but especially around delegation. The other thing is, don't expect everything to be perfect the first three times someone does this for you. So if you delegate something, don't expect it to be up to your standards the first time. Give them at least three times to do something before you make an assessment or a change in something. The way you delegate and the power of delegation comes from you, first. You have to do a good job of delegating. If you do a terrible job of delegating, you have no shot of having this person succeed at it.
What I'm hoping over time, as people delegate more often, especially if it's the small stuff that people don't sweat, is that they do a better job than you could ever do. And once you see that one time, then you go, "Why didn't I do this earlier?" And now you're opening up the floodgates to go, "What else can I give away?"
The first time you do this, don't have any high expectations. Again, give them three times an opportunity to do it for you. Think of it as an operating or a working relationship that you're trying to build. When they come back to you for the first time, you're probably going to give them feedback of how things might be done differently or how you would like things to be or how it should look or how it should feel or what the process should look like. As you give them feedback, guess what? They get better at it over time, and then over time the more they do it for you the more trust you have with them, naturally, over time it becomes a lot easier to let them do stuff for you.
Chris (20:21): I think that framing of delegation as a skill that needs to be built iteratively over time is really important, because there's a lot of this impostor syndrome for founders, and, "Oh, I don't know how to delegate, it's never something I've done, it's just easier to do myself." It seems like a commonality in a lot of this culturally is having a long-term orientation, that you're investing in your business for the long-term, because in the shortest term it's always going to feel easiest just to do it, or just to figure it out or just to overlook the thing that's broken, but the longer-term your orientation, the longer the payoff period in these types of investments. For someone who doesn't feel like they're all that good at delegating, what recommendations would you have to someone to get better at this skill?
Thanh (21:08): I have a bunch of podcast episodes on that. I also have a course on delegation, but there's a really simple structure you can write down. One is what is the actual task, or what is the story. Two, what are some resources that they need to succeed. Three, what is the definition of "done"? And if you can fill in the gaps of all three, then you have a structure to allow someone to succeed at the task. Let's fill in one at a time, and then you'll see how simple the structure is. Once you can get a handle on it, you'll start to notice how simple it becomes to delegate.
Let's just say that I'm traveling to California, which I'm actually doing in a few days, and I need to have my flight booked. So I might go to my executive assistant and I might write an email to her and ask her, "Hey, Juri," (which is her name), "I need to have a flight booked to Los Angeles Thursday and coming back on Sunday. Here are the exact dates. I want to make sure I fly between 6:00 AM and noon and that I arrive back in Austin before midnight. Here's the budget, I want the flight to be less than four hundred dollars round trip." That's the task itself. So it's relatively simple.
The second section is, what kind of resources would he or she need to succeed? In this case, my executive assistant has to make a purchase, so she has to have access to funds somehow. I would write down, "Use my company credit card ending with 1234." In this case, it might be, "Use the PayPal account that we have and use your own login and use the company funds for that." Maybe it's an emergency, nothing is working, and I would say, "Could you use your own personal funds and I would reimburse you two months later," or something like that. Whatever resources she needs, that is something we always want to make sure we provide. What kind of resources would this person need to succeed?
Another way to think about this is, what could be holding this person back from succeeding? If I ask myself that question, I might say, "Okay, she needs money. Maybe she needs to know my preferences. Do I sit window or do I sit on the aisle? What are some of my preferences?" I happen to also have a document where I have my preferences laid out of high I like to travel. Do I need to check a bag or not, yes or no? If I know that in advance, I would put a note in there. Say, "Hey, I'm not checking a bag," where if I do know, then I would say, "I'm checking one bag," so that she knows what kind of ticket she needs to purchase.
We want to give her resources and documents and logins and funds and whatever resources he or she needs to succeed. That's the resources section, the second section.
The third section, as we're delegating something, is the definition of "done." And this is the thing that I see most people struggle with. If you've ever delegated something and you got something back and you go, "This is not what I asked for," it's oftentimes because you missed this piece, "What's the definition of done?" How does this person know that they completed the task up to your standard? My definition of done for this would be a plane ticket is purchased and it's according to the specification that I mentioned above, meaning I'm flying out on Thursday, landing back on Sunday. That's it. So now when she makes that purchase, she knows, "This is what the definition of done is. Did I purchase the plane ticket? Yes. Is it on Thursday? Yes. Is he arriving back on Sunday? Yes. Check, check, check, we're good to go." And then when I'm reviewing the outcome I can look at the task that I just wrote down and look at what she produced and say, "Does this match up?" And if it does, great.
Doing this a few times in written format forces you to really think through the steps, because if you do it verbally a few times I find it less effective. I always recommend people to write it down the first few times, 'cause it really forces you to think about everything. Once you get comfortable doing that, then you can do it verbally. Things become easier over time.
Chris (24:45): A cool meta-point of having this structure for delegation is that you turn delegation into a process that can be improved over time. If you have this consistent structure, you can see the results, the output of this process, and identify ways that the process can be improved, or the implementation or the following of the process. It creates affordance, in design terms, to improve your ability to hand things off.
I thought a really interesting thing was that within Asian Efficiency you track how many SOPs are added or updated on a regular basis as a way of elevating and prioritizing this creation and improvement of processes. Would love to hear a little bit about why you decided to do that and what some of the outcomes of that have been so far.
Thanh (25:35): A few years ago I wanted to systematize my business where I had to work less and could do more stuff outside of my business. I said to myself, "What do I need to do to make this happen?" As part of systematizing a business, I realized you need documentation. We want to make sure that the owner is not the one holding all the keys to the kingdom. We want to make sure that the owner puts as much information out there as possible, especially if he or she is the only person that knows how to do something. We want to eliminate those roadblocks as much as possible.
As your company starts to grow, you start to realize it's not just the owner, but you have other team members as well who only know how to do specific things. We want to make sure we get out of their heads as much as possible. But once you externalize all this information that some people only know about, then you allow yourself to systematize your business that way. Another way to think about this is to say if someone left your company, how do we make sure that if this person left, things would still move forward?
Sometimes people hold that as leverage to say, "I'm the only one who knows how to do this so you can't fire me or you can't let me go." But we've always taken the different approach, which is we want to document stuff as much as possible, and before you even get promoted we want to make sure we document everything. In order for you to actually move up in the company, we want to make sure there are no black holes before that process happens. It's like another incentive model for people to document everything. But when I was talking to my COO about this and I told him, "This is the goal, I want to make sure that within a few years or so I can work less in the company and that you can work less and that everything is documented, how do we make sure that the business is systemized, how do we measure the success or growth of that? Or what's the leading indicator so that we know we're getting closer to that?"
And after brainstorming a few ideas—One idea was, "What's the downtime of our business or our website? Can we measure that, and would that be a successful indicator?" Not really, 'cause it's a lagging indicator, because downtime happens after all the things were messed up. It doesn't really show us if we're actually doing a good job of systematizing a business. So we're starting to experiment with all these different metrics, and one thing I realized is if we can create new SOPs every single month, I know that we're getting closer to having a systematized business. Over time, I said, "Let's give this a try, see how it goes." And we did this for a year, and we start to notice that, one, by having this metric in place, there was a focus on doing this and making sure that there was always something that I could hold this person accountable to and say, "Hey, where are we with this?" every single month.
I didn't know how many was a good benchmark. Is it one a month, two a month, ten a month, twenty a month? I had no idea. We just played it by ear, to be honest. After one year we averaged out nine or so a month, and I said, "Going into year two, let's just go for nine a month. Let's just hold it at that pace." As the business grew and evolved over time, we also had to realize that we're kind of running out of SOPs at one point. And so setting the bar at nine doesn't make much sense anymore. So we evolved that now to say, "Some SOPs are now outdated, we need to make sure that they're updated as well, because that allows other people to be more effective in making sure that they have the right information." Now as part of the metric, it's not just having new SOPs created, but now also updated SOPs, making sure that they're always being documented and updated.
By having this leading metric in place, I know that every single month, as long as this number is hitting the benchmark and we're doing it, that over time, other people are doing less and less stuff, or something goes off, or someone goes away for a little bit, things can just move forward, because we have now the documentation in place.
The whole idea behind this is to say, "I want to work less, how do we measure the success of systematizing a business?" And it resulted in forcing ourselves to focus on, "Let's actually start documenting everything."
Chris (29:19): It's wild when you think systematically how one small change of an incentive changes all the behavior of everyone on a team. So if you're clear on what you want, you can think about ways to measure, "Am I making progress towards this vision?" And by incorporating it into the conversations, you automatically create that accountability where everyone's on the same page. This brings up a question that I get very often. "I know that I'm supposed to be doing one-on-ones, but I don't really know how to run them, or I have a hard time holding people on my team accountable or even knowing what they're doing. How can I help them perform more?" It seems like you guys have stumbled upon this solution of skills grading and the individual scoreboard. Would love to hear you talk a little bit about that and how you use it at Asian Efficiency.
Thanh (30:09): One question that I want everyone in my company to be able to answer is, "How do I know if I had a productive day or not?" That is not because I want people to be productive. If people are able to answer that question, it gives them a sense of clarity that they know what they're supposed to be doing. If people can't answer that question, there's something missing there. So, how do I know if I had a productive day or not? For example, if you're in customer service I might say, "Are all tickets cleared?" If the answer is yes, then I know I had a productive day. And if they aren't, then maybe I didn't have a productive day.
Now, that's not a good version of that, but I want to give people an example of, "How do we make sure that every single person in my company can answer that question?" The question in itself seems very innocent and simple, but it actually is very difficult to build structure around, because if you think about every single person in your company, what do I need to put in place or what do they need to have in place to make sure that they can answer that question? And what starts to unfold about that question is that they need to know what kind of benchmark or what kind of standard you're aiming for so that they know that if they hit it they had a "productive day." And if there's no standard or there's nothing there they can't really answer that question.
When I thought about that, and I said, "Okay, how do I know that every single person had a productive day?", I had to realize we need to put some standards or benchmarks in place. Some people can answer that question to themselves and know that when they're logging off they feel good about thesmselves or they know that maybe today wasn't as good, so I'll make up for it the next day or some other time. With the COO, we said, "We want to make sure that we have at least nine SOPs created or updated every single month." Right? That person might then say, "How do I know if I had a productive day or not? Did I do anything related to making sure that this metric is on pace to be completed?" That's a really simple thing that they can ask themselves.
And it doesn't always have to be numerical in that sense. Right? As long as they're focusing on it, they know that they're working towards that. Once everyone knows what a productive day looks like for them, you'll be able to see that everyone can perform at a much higher level than ever before. But it takes you as the owner to really sit down and think, "How do I make sure that everyone in my company can perform at a high level and make sure that they hit a standard that is expected of them?" And that requires for you to think through, "What's the standard for every single person? What do we need to do to make sure that they succeed at this?" Whether it's more education, clarification of what they need to do, or even specializing and say, "I want to make sure that you do this on a consistent basis." And that's how you're gonna get the most out of people. We want to make sure we always have that in place.
Chris (32:44): What comes across is that it allows people to self-monitor. You can give them a lot more rope and trust because they know that North Star that they're heading towards and they can evaluate their own progress. I agree, it's pretty wild how often people haven't done the hard work of thinking about what does success look like in this role, how do I know if this person is performing, and if that is very clear and there's an open channel of communication about that, that prevents a lot of these future disruptions or miscommunication around what the expectations in the role are. It starts with, "What does success look like and how will we know if you're succeeding?" And if that's really clear, it creates this easy litmus test for someone to come back to. If it's between doing two things—You mentioned the customer service person. "Is this thing that I'm doing leading me towards closing more tickets? Then yes, I will do that. If not, no, it's probably a distraction." It makes this decision-making at scale flow much better.
Thanh (33:45): Anyone that's listening or watching this, there's basically two situations that people find themselves in. One is, maybe you have a business right now where you have a ton of people working under you, and you don't have this structure in place, so now you have to figure out, "How do I make sure that there's a structure in place and a benchmark so everyone knows what success looks like?" You have to reinvent things a little bit to make sure that gets distributed. And another can—and this is like the ideal situation, which makes things a little easier moving forward, is anytime you make a new hire, you want to have a very clear idea of what success looks like before you even hire that person. For example, if we're looking for a customer service person, it's the first time ever you're hiring someone like that, you might say, "My definition of success for this person is that by the end of the day, when they log off, there's no outstanding tickets." If you get really clear on that, and we both agree when we're hiring, this person comes onboard, that this is the level of success that we're seeking, now this person knows, "At the end of the day, did I have a productive day or not? Are all tickets closed? Yes? Great. I had a productive day. I'm feeling good about that."
When you're having one-on-one meetings with this person or you're reviewing performance, you have something to look at right away, and you already agreed upon it before you started working together. That would be the ideal path moving forward, but I know many of you who are watching or listening to this might be in a situation where you already have people in place, and now you need to put the structure in place on top of it, and have that agreement and buy-in from people as well. My advice there is definitely get the buy-in from people. Actually have a conversation with them and make sure that they understand what they're working towards, because if you put the structure in place but you don't get the buy-in from people, it's very difficult to have them rise to that standard. It's really important to make sure that they agree with what we're trying to accomplish here. If you can, then you are on track to have a high-performing team.
Chris (35:31): This is a real red pill for me. I want to hear from you on when you go on vacation why it's important that you go completely offline, not only because going offline you'll enjoy your vacation a lot more, but that it'll have a lot of positive effects with your team. Tell me about that.
Thanh (35:47): I remember us having this conversation when we did our digital detox, and we had a few people there too. The idea came from when I was in Tokyo a few years ago and I was completely off the grid. I enjoyed my time in Tokyo, I had a great time eating sushi and everything, and by the time I came back, I asked my team like, "What are all the things that went wrong or couldn't be done because I was gone?" Turned out, it was actually a really long list of things that couldn't be done. It had some negative consequences and side effects, but nothing drives change more than having a pinpoint there. So once I saw that laundry list of things that needed to be addressed because I wasn't there or I was not available, that gave me an opportunity to say, "Let's fix this so that it doesn't happen again in the future."
And what I learned from this a few times, is any time I took a trip and went completely offline or I was telling people, "Hey, I'm not available, figure it out," multiple things happen. You'll start to uncover very quickly which processes are heavily reliant on you. The other thing is you'll start to be able to see, are people able to solve problems on their own and make decisions on your behalf? It's actually a really powerful thing, because over time, what we want people to be able to do is not only bring up all the stuff that was reliant on "the owner," but also are they empowered enough to make decisions on your behalf, even if you maybe didn't explicitly give them the permission to do so. If they know how to make decisions on your behalf, we're one step closer to having a business that can run without you, which is ultimately what we all want.
Now I view trips as a way to stress test my business—where as long as I go away and I don't make myself available, every time I come back I always ask the same question. "What couldn't we do while I was gone?" And anytime there's something that comes up we'll just try to address it and fix it, and over time that list becomes smaller and smaller and smaller up to the point where maybe there's nothing that happens. Now you can extend that trip, to go from two days to three days to four days to five days to over a week. Ultimately, what you want to work towards is, are you able to take five weeks off? And the reason I say five weeks is, it's one monthly cycle plus some additional days, so that for example if your payroll is once a month you're forced to figure out a solution that it runs on its own without you actually being there. There are certain processes that happen very cyclically like that. You wanna go a little bit beyond that to make sure we stress test everything that's cyclical in that sense.
It's just a step-by-step process. So starting with one day, two days, three days, up to, let's say, thirty-five days. And once you can hit that benchmark you go, "All right, if there's no list, then great. You guys don't need me anymore. I just need to be here every now and then, and you're good to go."
Chris (38:21): This really blew my mind, because there's no way that you don't have a positive outcome from this. Outcome one is, something breaks. Now we know this thing needs me involved. Let's try to fix it so that I no longer have to be involved. We found a bug, let's celebrate this and try something and see if that fixes it. Maybe if we hadn't put it to the test, we wouldn't have encountered this issue with our processes. The other outcome, even better, is nothing breaks. Congratulations, you no longer have to be involved with that thing. You can release it, you don't have to worry about it. You weren't there. You were unreachable, and everything went just fine, and that's a pretty cool result as well.
Thanh (39:04): To take it even a step further, this not only applies to the owner, but everyone else in your company as well. I would love for all of my team members to be able to go away for a week (and some of them definitely do) and enjoy it. But also when they come back, we all ask the same question. "What couldn't we do when this person was away?" That's another opportunity, again, to create more SOPs or update SOPs or fix processes. Over time, this hub and spoke model is completely gone, where then someone can take time off and not feel guilty about it whatsoever, because now things are going to be taken care of, and if something did break down or we couldn't do it because this person wasn't there, it gives us another opportunity to fix something or to update something.
This goes back to the idea which we were talking about earlier of continuous improvements. This is just another example of that, and the more we can push it out there and celebrate it, like you said, the more refined things become over time.
So again, baby steps. This doesn't happen overnight, but every time we have an opportunity, let's fix it and address it, and over time we're going to have a really smooth operation.
Chris (40:06): I always get pushback on this. Business owners, founders, executives always feel super busy. When you think about making these long-term investments, there's always a ready excuse at hand. "I'm in the middle of a launch right now," or, "We have all these customers we have to serve," or, "Our cash flow isn't where we need to be, and maybe I can deal with this once we actually get our numbers to where they need to be." Somehow, conveniently, the time is never now. The perfect time is always distantly off in the future. As we all know, the timing will never be perfect. What antidote do you have for this? How does someone set aside their own time, set aside the team's time, so that these long-term investments have the opportunity to grow? How do you recommend someone set aside this time, create the accountability within the team so that these important but not urgent things can happen in the present rather than in the infinite future?
Thanh (41:01): Most people think that major change requires drastic differences of how we do things and how we operate, when in fact major change can come from small, consistent changes done over time. It's the one-percent rule that I'm a big fan of. So it's the idea that if you make a one-percent improvement every single day, by the end of the year you're almost thirty-eight times better off than where you started at the beginning of the year. If you run one mile a day, that's the equivalent of running fourteen marathons in a year. That's pretty crazy when you think about that. Nobody starts waking up saying, "I'm gonna run fourteen marathons this year," but if we run one mile a day—and if you're into running, that's a really easy thing to do—you run the equivalent of fourteen marathons in a year. If we can make small, consistent changes over time, that is going to lead to big results.
So even though we might be super busy right now, cash flow is not where it's supposed to be, what's a one percent difference that we can make in our company today? What can we do tomorrow or next week or even one change every single week? Over time, that really starts to add up. It doesn't have to be drastic. A really simple example is, if you just fix all the typos on your website, that's a relatively small thing, and it might be on the bottom of your to-do list of things that might need to be done. A typo that needs to be fixed, you might say, "Oh, that's not that big of a deal." But if you just fixed all the typos and you spent ten minutes just fixing them, it might improve the conversion of your product or service, because now you look more authoritative, and you're actually not unselling people as much. That's a really simple example. What about changing the logo of something? Instead of completely redesigning your website, what if you just change the color scheme? Just do it iteratively over time.
We're all busy. I know that there's a lot of things going on, but if we can break a big vision down into smaller steps, do one step at a time, over time you're going to get to that big vision. So don't worry about making drastic changes all at once. That can be really overwhelming and seem like a big deal. If we can break it down into smaller things and just do one thing per week, over time that's gonna get you the results that you're looking for, especially if it's not that urgent.
Chris (43:10): Last question from me, and then I'm gonna hand it off to Q&A, I think it would be cool to hear some examples on the process side. I found it actually useful to brainstorm processes cause sometimes they become completely invisible to us, things that we're doing over and over again that could be streamlined, could be automated, could be handed off. Just brainstorm together some of these processes that you've come up with at Asian Efficiency, how do you bring these to the surface, essentially identifying opportunities for improvement? Any examples that come to mind?
Thanh (43:44): My first question is, what are we optimizing for? Is it saving time? Is it faster outputs? Is it better quality? Before we start looking for stuff, what are we optimizing for? What are we trying to accomplish here? And if we can't answer that question, then everything looks equally important. If your to-do list is fifteen things and everything feels equally important, nothing truly is. We want to make sure we have absolute clarity about what is it that we're really trying to optimize for. If I know that I want to save more time by having more free time in my life, then now my focus can be on all these different things where time is being wasted. I can look through my business through a certain lens and say, "Okay, where are we wasting a lot of time here?"
If you are familiar with Scaling Up, one of the things they talk about is a process map. The idea is really simple. If you had to summarize your business in ten processes or less, what would these processes look like and how can we simply explain how they work? It could be something like payroll, it could be customer service, it could be a webinar-to-sales funnel. It could be someone comes on the podcast who's subscribing to your membership. There's all these different processes, and every business is a little different. If you can distill it down to less than ten processes, you'll have the fundamentals of your business laid out there.
That's a great place to start. And then we can say, "What are we optimizing for? Is it for speed? Is it for cost? Is it for time savings?" And once we know what the answer to that question is, we can then narrow it down to the processes in our business and say, "If we're optimizing for cost, we're trying to save money. What's expensive in this process, or where are we wasting money?" And money couldn't necessarily be limited to actual money flowing out, but also labor time, because if someone's spending four hours on something, that's going to cost you four hours of money, of that person's time. How can we distill it down to two hours? We have a podcast just like you, and we have an editor. We used to have an in-house editor that would take about four or five hours to edit the podcast. We would pay this person a certain amount of money, and I said, "Instead of you spending four or five hours doing it, I would rather have you do this other work, which is something you're more suited for. Editing is not really your thing." I found out that if we gave it to someone else externally, they could do it in less than an hour and a half, or two hours, and would be cheaper as well.
We're optimizing for cost there, but also we're saving time there as well. As we're laying down those different processes, what are we optimizing for? Is it cost, speed, or time? Those are always three questions I always look at things through. And then we can start to break things down and say, "Where are we slow? What's expensive? What's taking so long?" And if you just focus on the first ten you'll have some major wins in your business.
Chris (46:20): Thanks, Thanh. Let's hand it off to Q&A. First question comes from Nick Milo. He's wanting to know about your use of Confluence, I think focusing on the use case rather than the app itself. What do you think is so important about having this central information hub that everyone can access, and what types of things are you putting there?
Thanh (46:43): Confluence is literally the central hub for everything that we document. It would have our meeting notes on there, our SOPs, internal blog posts. Instead of sending emails to everyone, we actually have internal blog posts that people can publish and then tag people in if they want to. All sorts of preferences of people, everything that is written is typically in there. If I need to search something in a Google Spreadsheet, it would have to be linked somewhere in Confluence. I don't want to be able to go to different inboxes or different servers to find something, I want to make sure I go to one place so that I can find everything that I need there.
We typically collect MPS results in a Google Sheets, however that Google Sheet is linked from a page in Confluence that says "MPS 2021." And then it would say something like, "Here are the results," or, "Here's a summary, here's some graphs, if you want more detailed info here's the link to the Google Sheet that will have all the individual results as well." So I know if I'm ever looking for the MPS results, I just need to go to Confluence. That's the one place where everything is being housed. And I'm forcing everyone in my company as well to say we can use external services. That's fine. If you want to use a My Map, a Google Sheet or Google Doc or whatever, that's fine as long as it's linked from Confluence and we can find it in there. That works fine for me. When everything is in there it makes searching for things so much easier and so much more efficient because now people know that something could be in Dropbox, for example, like a file, but as long as it's linked in Confluence people know where to find it.
Chris (48:10): That's so important to emphasize, this optimization for retrieval. None of this stuff does you any good if you can't find it when you need it, and confidence of knowing that it's there and knowing that you can find it goes a long way to making sure that these things are used, that you have one central place that you can check. Especially thinking about search, because that's our primary use case. And a cool thing too about having this centralized place that everyone knows about, everyone knows that people are checking, is it creates this common knowledge, because not only do I know how to do things, but I know that you know how to do things as well, and that comes back to creating this sense of trust that everyone has a clear idea of what's going on.
Thanh (48:53): A couple of other things that come to mind that we put in there is everyone has a daily to-do list that they post. We actually publish it as a personal blog post with their daily to-dos. So everyone can actually see what their to-do list is that day. That makes management really easy, because I can "walk around" to see what everyone is up to without asking them. When you have multiple team members working on the same stuff, they can check in with each other without actually messaging each other and say, "I see that this is already on this person's to-do list, I know I don't have to touch it that day." That's a really simple thing.
The other thing is we have a team calendar in there as well. We have all the company events on there, so it's not like on a Google Calendar, everyone has their own Google Calendar for personal things and work things. But major events are always on there as well. When people are off, when certain emails are going out, or when certain launches are, when certain surveys are going out, some people know if there's a company event or some sort of live thing going on, they can always go to that particular calendar in Confluence and know that with a hundred percent confidence that is up to date. So it's not on a singular calendar of any particular user, it's all in there. So again, it's centralizing everything as much as possible. It makes retrieval, like you said, so much easier.
Chris (50:00): Next question comes from Andrew Chan. Andrew's running a venture fund at startup, and they're in the process of their first bout of hiring, and they're going through some growing pains to try to improve team communication efficiency and focus. Andrew wants to know, Thanh, can you give an example of a good framework on how to find the right processes to implement? How do you figure out what to put in place first?
Thanh (50:23): It's really by design. So if you're building out your company and you're hiring people, processes usually follow results, and what I mean with that is if you're launching a product, first of all we want to make sure we actually go through the whole process first, and once the process is done once and we know we're gonna do it again, the documentation and the processes are being built after that. We don't want to design a hypothetical process or an outline of how things should be. Let's do it first, let's actually do it, once it's over sit down with the team and say, "What went well, what didn't go so well, what could we do better next time?" And once we know the scope of everything, then that's when we start documenting and then building a process around it. So as your startup mode—the most important thing is actually just shipping and doing stuff. The documentation of processing should really be done as an afterthought after it's all done.
This is something that I made a big mistake of as someone who loves to optimize, I would say, "Let me just design the ultimate process, this is how we're going to do things." And then as you start executing, you realize, "Actually this whole plan is not going according to plan." What's actually most important is shipping and getting customers into a happy space rather than optimizing for what we're trying to do.
Chris (51:34): You touched on this concept of a feedback loop where it's really important to close the loop while the project is still fresh. So that basic format of a retrospective. "What went well, what didn't go so well, what did we learn?" Really important to do that right afterward so that you're not paying tuition for the same lessons multiple times. It's leaner, it's faster to do that afterward when you have all these learnings, but important to incorporate those learnings into the process, into the next time you do something similar, so that six months a year down the line to try again, "How did we mess up last time, what were the ways we identified to improve," and not making those same mistakes again.
Thanh (52:13): A simple thing before we get to the next question, any time we finish a sprint we have a retrospective. We have—in Jira they call it an "issue," but it's basically a task that we put into the next sprint, and we summarize all the lessons we learned and all the ways we could make improvements. And we always limit it to five, so if we have a long list, we capture it in Confluence, and we have a running list of things. Every time we start a new sprint, we'll take things from that list and putting into the next sprint. It's technically not a task, but it's mostly a reminder for us, or sometime it is a minor improvement that we're asking people to do, but as we're then going over the board together as a whole team and we're saying here are all the what we call "sprintizons," five things we're trying to improve the sprints. By the end of the year we have done twenty-four sprints or so, and we've made twenty-four times three or five improvements as a company.
And that's like a major change from where we are at the beginning of the year towards the end of year. And oftentimes these small changes don't seem that big of a deal, but when you do hundreds of them you start to realize at the end of the year when I review all the changes we've made, I'm always so impressed by not only the number of things we improved but also the results that have come from that.
Chris (53:20): This next question comes from Dan Lardy. Thanh, you mention that the CEO's primary responsibility is resource allocation. Curious how you would describe a COO's primary job? Shoutout to Brooks. I bet you have some thoughts here.
Thanh (53:32): I would say it is making sure that the business is running like clockwork. That's the main responsibility of the COO. What does that entail, especially for an online business? We want to make sure we're never down. That things are always running up and up and up, so there's always high uptime. Related to uptime, there's also the team uptime, meaning how do we make sure that the team is always producing at a high level. If someone goes away, how do we make sure that everyone else can take over or that there's no roadblocks coming up? If we know that this team member's going to be off on Thursday and Friday and it's Monday today, what can we do today? Let's prepare for this. When this person is gone, what do we need to adjust to make sure that things are moving forward?
The COO's role is really making sure that the business runs like clockwork, and if it's not running like clockwork, what are the things we need to put in place so that it does run like clockwork?
Chris (54:19): Cool. Last question. This one comes from David Aquino. I love this one. What advice do you have for individual contributors who work for founders or managers who have difficulty letting go and delegating effectively? So imagine you're on the other side of someone for whom, perhaps, delegation is a growth area.
Thanh (54:38): This is something that my executive assistant does a really good job of: especially when they're really busy, just doing it for them without asking for their permission, ask for forgiveness later. Oftentimes, when she does things for me without me even asking for it, and it made my life better and simpler, I usually recognize that as, "This is great, it can save me so much time, thank you so much for doing this." When she prompts, "What else can I do for you?", now after you've done it for me, I want to give more stuff to you. If someone has a hard time letting go or delegating stuff, what is something that's relatively easy to do, low risk, low impact, but still makes their lives a little easier?
Start with that first, because if we're taking on the big things, we're gonna run into negative feedback loops, which is what we want to avoid. We want to start off that initiative with positive feedback loops as much as possible, so if you can take something on that's relatively small. Even if it means, if they're really busy, just bringing them a cup of coffee or something. Over time, as you start to build that relationship and they start to trust you that you can do the stuff they want you to do or ask you to do over time. We want to make sure we've built that trust and relationship. Oftentimes if someone has trouble letting go, what can we do on a relatively small basis first to win their trust and earn it so that we can, over time, do the bigger things?
Chris (55:52): Thanks Thanh. Before we wrap, is there any final thoughts, anywhere you'd want to send people if they wanted to learn more and develop on this?
Thanh (55:59): We have a website called asianefficiency.com, so you can always go there and subscribe to the newsletter. We also have a podcast called The Productivity Show, it's a weekly show every Monday. You can subscribe to that as well.
Tasha (56:11): Thank you for listening to the Forcing Function Hour. At Forcing Function, we teach performance architecture. We work with a select group of twelve executives and investors to teach them how to multiply their output, perform at their peak, and design a life of freedom and purpose. Make sure to subscribe to Forcing Function Hour for more great episodes, or go to forcingfunctionhour.com to sign up for our newsletter so you can join us live.