Full transcript
0:00everyone say Mervyn's here and in
0:02today's video I want to talk to you
0:05about the true cost of communication and
0:08this is a this is a topic that I'm
0:12really interested in right now because
0:13with my company consulting.com we grew
0:18pretty quickly over the past two years
0:19and we got up to the point where we had
0:23almost 50 people we had 40 something
0:26employees and what I had noticed is that
0:30you know somehow some way we were going
0:35a bit slower well we were actually going
0:37considerably slower it with more people
0:40then we were with less and this I
0:45couldn't really get my head around it I
0:47was like what if we used to have you
0:49know less people and we were paying them
0:52less money because there was less of
0:54them then how are we doing better then
0:57than we are now because we've got more
0:59people working so surely more people
1:01working means we should be getting you
1:04know more work done and that wasn't the
1:07case and so this really fascinated me
1:10and I dug into it and I've really been
1:12researching a lot over the past six
1:14months and I've made some pretty radical
1:17changes to my company as well and so I
1:20just want to walk you through what I've
1:23found what my findings are and how I
1:27used to run my company in the structure
1:29and then what the problem was that
1:33occurred with that structure and then
1:35how I've rectified that problem and what
1:37my plans are for the future and my hopes
1:39and doing this is that you as an
1:43entrepreneur or somebody that's starting
1:44a business and becoming an entrepreneur
1:46when you go to hire people and form a
1:49team you know you don't make the same
1:50mistake so let's jump right into it so
1:55let's make this real simple you know if
1:57you're just one person working on a
2:00project well you're just one person and
2:03there's zero lines of communication
2:05right but then as soon as you've got two
2:09people there's one line of communication
2:12because you need to talk to this
2:13person that person might need to talk to
2:15you there's one line and then as soon as
2:17we've got three people there's three
2:18lines because this person might need to
2:21talk to that person and so on but this
2:25is where it gets interesting
2:26as soon as we add in four people we get
2:29six lines five we get ten six we get
2:32fifteen 7:21 eight twenty eight nine
2:35thirty six 10:45 and by the time we get
2:38up to fourteen people there's 91 lines
2:40of communication so this is quite
2:43interesting because you know when we're
2:46at one there's zero - there's one three
2:49there's three and so everything's kind
2:52of good up until three and then we start
2:54to get more lines here and it gets
2:57exponential and what really goes on here
3:01is this is what happens with teams and
3:04companies you know the more people you
3:06add to the team it's simple at first and
3:08communication is relatively easy but the
3:11more people you add in the more the
3:15exponential the more communication lines
3:19there are and it grows exponentially so
3:22it's not linear and this is what kills
3:25most companies is they can't tame this
3:28thing and it blows up and how this
3:32really happens is you know there's a
3:34formula that you can use so if inners
3:36people and so if we take people and then
3:40multiply it by people minus one and then
3:44divide it by two we will get the total
3:46number of lines in between the number of
3:50people right so here's a formula you can
3:52use to figure out figure out exactly how
3:55many lines of communication there will
3:57be with any number of people in a group
3:59or a team and what I did is I plotted
4:03this out in a Google sheet and you can
4:06see what I did here I plotted the number
4:08of people then I figured out the the
4:11number of lines using that formula which
4:13I just showed you and you can see it
4:16growing up here and then the total
4:20number of hours
4:21they work so you know I assumed let's
4:24just say these people are going to work
4:2650 hours per week each
4:27right now the communication hours
4:31because this is total hours that they're
4:33at the office but communication hours
4:34how many of those 50 hours are spent
4:36communicating well when there's just one
4:38person by themselves is 0-2 there's one
4:41and I basically just used the number of
4:44lines as the number of communication
4:49hours but I think I yeah I at 90% now
4:54obviously this could be different but
4:56I'm just using this to to make a simple
5:00illustration and then we've got our net
5:03hours so the total hours the the people
5:05put in less communication hours equals
5:09net hours and net hours is basically the
5:12number of hours that are spent working
5:13and doing things versus just talking to
5:17people because talking isn't really
5:19doing and doing isn't talking and so
5:24these are that this is the output net
5:26hours and then the efficiency so how
5:31many net hours as like a percentage of
5:34total hours that's the efficiency and
5:37then what the total cost is and so if
5:41I've got if these people who are working
5:4350 hours per week paid roughly a hundred
5:45grand per year then 450 for the total
5:52cost of them for one week would be
5:55roughly that much money
5:56mm and then the cost per net hour so if
6:02we've got one person paid a hundred
6:04grand a year then per week they're
6:06getting paid one nine to three
6:07and then if the communication hours are
6:10zero and their net hours are fifty in
6:11there at 100% efficiency then the cost
6:13per net hour is 38 right but look what
6:17starts to happen as we add more people
6:19to the team so at two people were at 98%
6:22efficiency and our cost per net hour has
6:25gone up by like two and then by the time
6:30we get to three people we're at 95%
6:33efficiency and our cost per net hour has
6:35gone up a lot and then by the time we
6:38get down to like by
6:41the time we get there's a real steep
6:43drop-off pretty much right at the number
6:47five mark so at five people on a team
6:51we're at 82 percent efficiency but as
6:53soon as we go to six we drop quite a lot
6:57and then we drop again rapidly and then
7:00it starts going really rapidly down and
7:03by the time we're at 11 people on a team
7:05we're at zero percent efficiency and we
7:08don't even have any net hours and it's
7:1110 people on a team we're at 18 percent
7:14efficiency and efficacy at hour of two
7:19thousand dollars and this is actually
7:22what happens at companies and they don't
7:25really understand how this works and to
7:28see it plotted on a chart to show you
7:32how this works is here across this
7:37x-axis we have a number of people right
7:39what most people think is that you know
7:43if we just add an additional person then
7:46we should be able to get twice as much
7:47work done or if a project is moving at
7:50you know at a certain rate if we add
7:53another person to the team then it
7:55should move at twice the rate that's
7:58what people think but that isn't what
8:00work that isn't what happens and so here
8:03we can see this red line is the linear
8:07increase in the number of people but
8:10then here this blue line this is the
8:12number of communication lines and it
8:14grows exponentially in relationship to a
8:17linear addition of people and what you
8:21really have to watch out for isn't the
8:23number of people but the number of
8:26connections between the people because
8:28this is where the inefficiency happens
8:31and the communication happens and this
8:35is really where all of the cost gets
8:37absorbed and so net hours as we add more
8:43people goes down this is the green one
8:45so you can see as we add more people
8:48communication lines increase and net
8:52hours goes down
8:54and then the yellow line we can see
8:58efficiency right and so we start going
9:03down with this as well and so this is
9:08what happens when you add more people to
9:10a team your total number of lines
9:14communication lines goes up
9:15exponentially your efficiency goes down
9:19the toilet and the net hours they're
9:22spent building things goes down and this
9:26is basically how companies blow up and
9:28this is what I started to experience
9:30with consulting comm I'll give you a
9:33perfect example so in our engineering
9:38team as we added you know when we had
9:40one person working we were moving pretty
9:43quick and then we added more people to
9:46the team and then we started going
9:48slower and I couldn't really understand
9:50why I was like what we added more people
9:53to the team how are we going so this
9:55doesn't make any sense but then I
9:58started to look closer at what was
9:59happening and you know when you when you
10:02add more people to a team they have to
10:04be brought up to speed the person who
10:06has to bring them up to speed is the
10:07person who was productively working so
10:09now that person who was working has to
10:11stop and teach this other person how to
10:13work and then if that other person
10:15they're teaching how to work eventually
10:17learns how to work and then starts
10:19working then if they're not as talented
10:23as that first person or as productive as
10:26that first person then all of that was
10:28just for waste because now you've
10:30distracted your productive person and
10:32you've taken everyone off the work just
10:34to teach someone else how to do it who
10:37isn't going to be able to do it as
10:38efficiently as the first person and
10:40you're paying twice as much money and
10:43now these two people have to communicate
10:44and you can see what happens very
10:47quickly it turns into a mess and this is
10:50what happened at my company within some
10:52of the teams they got an efficient but
10:53then also what I noticed is that the
10:56teams started to interact with other
10:59teams and that all got inefficient and
11:01I'm sure you'll probably notice this at
11:04a company you know when people start
11:05saying oh we have communication problems
11:08and look we need everyone needs to
11:10communicate better you know these are
11:13signs that you have this problem going
11:15on in your business and it's not really
11:18that people should just be communicating
11:20better the truth is it's just damn
11:22impossible to get everybody on the same
11:25page once you've got more than about 15
11:26people it's impossible
11:28everyone would spend their entire day
11:30just telling each other what they're
11:32doing and what they're planning on doing
11:33and what they're thinking about doing
11:35and everyone would just be talking the
11:38whole time 15 of them and still no one
11:41would be on the same page so it's stupid
11:44when communication is totally
11:47inefficient and this is how most
11:49companies die because they're
11:51exponential cost in communication ends
11:54up crippling them because they're
11:56spending more money wasting more time
11:58and delivering less work so that's the
12:04problem and you're probably thinking
12:05well what do you do about it and what
12:09the way to really fix this problem is
12:11with something called information
12:13architecture and IA information
12:18architecture this is what I've spent a
12:20lot of my time digging into over the
12:21past six months there's really three
12:25main components to information
12:27architecture you've got your people your
12:29context and your content and so people
12:32are like the talents the people you've
12:33got on your team the individual people
12:36and then how those individuals come
12:38together to form different teams and how
12:40those different teams come together to
12:43form the overall organization structure
12:46and then the physical environment that
12:49those teams sit in and work in each day
12:54so your office whether it's open plan or
12:57whether it's private or virtual or
13:00whatever and then you've got context
13:02which is like the business vision
13:04mission goals and KPIs so when you've
13:09got some people working then they need
13:11some context like what are we trying to
13:13do here what's the goal what's what are
13:16we measuring right they need to have
13:18these yet they need to know like what
13:20they're actually trying to which
13:22Eve and then once they understand what
13:24they're trying to achieve and they know
13:26what team they're in and how the whole
13:28company is structured then they start
13:31needing content they need specific
13:34pieces of information and feedback so
13:36that they can optimize their inputs
13:39to better achieve this KPI and you know
13:44content can come from communication my
13:46asking someone else data looking at a
13:48report or asking someone to pull a
13:50report and feedback feedback from other
13:52people customers teams financials things
13:57like that
13:57and really one of the best things a CEO
14:02can do or an entrepreneur can do is
14:04engineer this properly so how do we best
14:10how do we best engineer the
14:13communication lines in the structure in
14:15the architecture between people context
14:18and content it's a very difficult
14:21problem but it is so extremely important
14:25and what I'm going to do right now is
14:28just walk you through each one of these
14:29three people context content and tell
14:31you what I've learned from my experience
14:35so far and you know I'm sure this will
14:39help you a lot so with context you want
14:41to start with context everything must
14:44start here if you don't start here you
14:46don't even know what people you should
14:48have on your team and you don't even
14:49know what content those people need to
14:52achieve this context right so it starts
14:53with context everything starts here and
14:57really if we look at it from its first
15:00principle was the first thing you want
15:02to do is identify like what problem are
15:06you solving because really at its core a
15:10business is a produces solutions to a
15:14problem who has problems people so for
15:18who who are the people we are helping
15:19what is their problem define that and
15:23then what is the future you aim to
15:25create you know it should be in the
15:28short medium long term to what degree
15:31are you going to have solved this
15:33problem and what is the future going to
15:35look like
15:36with their problem solved what is the
15:39future you're creating what's your
15:41company's vision and mission and then
15:44what principles underpin your philosophy
15:47what philosophy do you have in the
15:49people who are going to be on your
15:51company have in order to care about this
15:54want to solve this problem for these
15:56people and build this future right very
15:59important and a philosophy is a belief
16:02system built from components of
16:04principles so you need your principles
16:08like ten and five to ten of these
16:10together this forms the philosophy this
16:13philosophy cares about solving this
16:14problem for this person and building
16:16this future and then what's your Polaris
16:20star metric this is like your TrueNorth
16:22your guiding star like what is it is it
16:26growth and is it engagement is it
16:29revenue like what is there metric and
16:32what are your company and team's KPIs
16:37key performance indicators so overall
16:39how are you going to measure the
16:41performance of your company as a whole
16:43and then how are you going to measure
16:45the performance of the individual teams
16:47and the individuals the people on those
16:52teams how are you going to measure all
16:55of these different dimensions of the
16:58system and you want to start here and
17:01really think clearly about this first
17:03and you want to define these things and
17:05you want to write them down and if you
17:08want more help thinking about this stuff
17:10here
17:11if you go to the consulting com blog you
17:14go to resources I actually created a
17:18good video on this the other week called
17:21tools to plan for the new year
17:23and in here I if you scroll down these
17:27resources I show you how to set your
17:29vision mission and principles I give you
17:32examples and then I also show you like
17:37our principles vision and mission at
17:40consulting comm and I also share some
17:43other tools with you to help you you
17:46know form this first part
17:49of the equation the context and I'll put
17:53a link beneath this video in the
17:55resources section to that particular
17:59post that I did a few weeks ago so you
18:01can find it and it'll help you flesh out
18:03the rest of this now let's talk about
18:06people so people are a company's
18:09greatest asset and talented people are
18:1210 times better than average people you
18:14know we've got this we've got this kind
18:17of belief that someone who's really good
18:20and really smart is only just a little
18:22bit better than someone who's average
18:24it's not true the difference between an
18:27A and a B not in school I'm talking
18:30about like an a player and a B player in
18:32real life is exponential it's ten times
18:36it might be more it might be fifty times
18:38and I'm not joking someone who is very
18:41smart is worth fifty average people when
18:45in a company and you you have to learn
18:50this you can't have anyone average in
18:52your company because that there's just
18:56no way it can work with mediocrity
18:59because A's higher A's and B's higher
19:01seas so if you have B's they're gonna
19:03hire C's and if you've got C's they're
19:05probably going to hire DS and if you've
19:07got DS what you're screwed actually if
19:10you've got B's then you're screwed
19:11because they're going to eventually turn
19:13into an entire workforce of DS and so
19:17not only a talented people about ten
19:19times better but if you have a person
19:22who's the equivalent of ten and one then
19:24you also save on your communication
19:26costs because remember that we don't
19:30want to add more people to the team we
19:32should do everything we can to not add
19:33people to the team so then if we want to
19:37leverage our output then we want to
19:40leverage talent because talent gives us
19:43ten times the people in one individual
19:45person and it's better to have to smart
19:49people than twenty average people and
19:51it's better to have two people working
19:5360 hour weeks than four people working
19:5640 hour weeks this is another thing
20:00because
20:01you know if you just have people working
20:03short amounts of time but you have more
20:06people to make up for that then you've
20:10got more people communication costs it's
20:13better to have a smaller group of people
20:15working harder that is more efficient
20:18because remember the main thing is the
20:21communication costs and the ultimate
20:23would be having extremely talented
20:25people on small teams working hard that
20:30is the best that's how you like that's
20:33how you add a force multiplier upon a
20:36force multiplier upon a force multiplier
20:37and that's how you make like a lot of
20:41progress and throughput happen and when
20:47it comes to structuring teams small
20:49teams work best three to five people max
20:52don't go more than that if you need to
20:56have more than that then break them out
20:57into two individual teams seriously you
21:01cannot go more than three to five people
21:03on a team because it comes back to this
21:05remember as soon as you get to three to
21:08five efficiency you're you're at at four
21:12you're right you're at 89 and then at
21:15five here at 82 and so you don't want to
21:18go six because you're dropping right
21:19down it's best to actually stay three to
21:22four at max five and you also want to
21:32have no people managers so never ever
21:35ever hire people that just manage people
21:38you only want to hire doers and so
21:42you're probably thinking well who
21:43managers then well you get the best doer
21:47on the team to double as a team lead so
21:51let's say you've got a team of four
21:53people that team needs a leader one of
21:56the Dewar's the best to it would be the
21:59team lead they're not a manager they
22:00just manage the small team as well you
22:04see as soon as you go up to more people
22:06like a 10-person team now you need a
22:09full-time manager because there's so
22:11much management to do they can't
22:12possibly do any work so now you've got a
22:15body on you
22:15team that doesn't do anything they just
22:17manage and so and they're also not very
22:20good at managing because all they do is
22:22manage and they don't do so you get
22:25royally screwed but if you keep it to
22:28three to five then you can have everyone
22:31doing and everyone managing best and in
22:35your org structure this is like all your
22:37org chart it should be decentralized in
22:41flat and every team should have a lot of
22:43autonomy and independent decision-making
22:45ability and your probably if you're
22:49thinking what is decentralized and
22:51autonomy mean well here's a good way to
22:54think about it so a lot of companies
22:57when they're starting off their they
23:00have a centralized kind of structure so
23:02they might be the CEO or the the founder
23:04in the middle and then they might hire a
23:06bunch of contractors around the side or
23:08maybe a couple of employees and
23:09everything has to route through this one
23:11person and this works great when you
23:13first start but then as soon as you add
23:15a few more nodes to this thing it just
23:17blows up and you're in the middle of it
23:20and really what you want to do is you
23:23want to use distributed or decentralized
23:26and really you want to start if you've
23:29been here you want to go here and here
23:32you want to break out all the different
23:34kind of you want to partition your
23:37company into its different functions so
23:40like might be customer support and then
23:43it might be a particular product and
23:45then it might be there might be a sales
23:49team and then there might be marketing
23:52right and you want to break it out into
23:54its different pieces and then you want
23:56to appoint someone in there as the team
23:59lead and then you now you've taken
24:02everything routing through one person
24:04and you've broken it out like this so
24:07now all of these people on this
24:09marketing team can just go to the
24:10marketing team lead instead of everyone
24:13on the marketing team having to go to
24:14you and then everyone on the support
24:15team going to you they just go to their
24:18team leads and then when you need some
24:20information or if the team lead needs
24:22something they can come back to you
24:24right and this is what you want to move
24:29- and some more thoughts on this you
24:35know when it comes to people in teams
24:38open-plan offices a really bad idea and
24:42I know this because I had one of them
24:46and this is this was our office in New
24:48York and you can see it's kind of like
24:51the look school looks pretty lots of
24:54open-plan people looking like you know
24:58here's RIT talking to someone here and
25:01it looks like really nice and friendly
25:02an open-plan nice computers and things
25:05but it's terrible because it's just
25:10there's distractions you know if
25:12someone's focused working on something
25:14here and then someone starts a
25:16conversation over here this person's
25:18going to hear it and now they're
25:20distract it and thinking about that and
25:22then whatever happens in here if one
25:25person starts talking about something it
25:28basically takes everybody off line and
25:30so it's very hard to focus and people
25:34hear things that they shouldn't and
25:36there's also very low barriers to people
25:39talking to other people because you
25:42don't have to get up a walk around
25:43somewhere you can just say something so
25:46this is a really bad idea to have open
25:49plan offices and I know this is kind of
25:52controversial because pretty much every
25:54company and startup these days that's
25:56its fashion it's the trend to all this
25:58make everything nice and open plan and
26:00this was kind of the layout of my office
26:02back in New York we had some desks desks
26:05dis desks and then kind of like a couch
26:09area and a kitchen area and then we had
26:12one meeting room and then a private
26:14office here and this kind of worked okay
26:19but it really didn't and you're probably
26:22thinking well if we don't use open plan
26:23like this then what do we do and I've
26:28thought about this a lot because since
26:29I've moved to LA over in California now
26:32I'm looking at our next office and I'm
26:35really thinking how am i best going to
26:38structure it and how can I structure it
26:41so that
26:42everyone is as efficient as possible and
26:45they don't get distracted but at the
26:46same time there needs to be
26:48communication and what I thought is I
26:52really need to build a hybrid a hybrid
26:54of private and open and so I pretty much
27:01call this project the human Collider
27:03project and what it looks like is you
27:08just got to imagine it like this so you
27:13walk in here there's only one entrance
27:14one exit so everyone must route through
27:16this one place and then there's a
27:19reception and then you have a cafeteria
27:24here and why a cafeteria is important is
27:27because you know I really watched how
27:30much time people spend going out and
27:32getting lunch it's huge and they don't
27:36necessarily like going out and getting
27:38lunch because it involves walking and
27:40then it involves waiting in a long line
27:42because everybody goes and gets lunch at
27:44the same time and then involves spending
27:46their own money for something that might
27:47not even be very good and not good for
27:49their health and then they got to walk
27:50back and so I thought well you know I
27:53don't next office I'm definitely gonna
27:55have a cafeteria and make sure we have
27:56catered lunch every single day so that
28:00people can eat healthily they don't have
28:02to spend their own money and they don't
28:05have to waste times waiting in lines I
28:07can't believe all businesses don't do
28:10that seriously if you just watch how
28:13much like look at how much money you pay
28:16for like talented talented people on
28:20your team and look at how much time they
28:23waste waiting in line now they don't
28:26want to be waiting in line it's not a
28:28good use of time so and then they have
28:31to spend their own money for food that
28:32isn't good for them so it's all waste
28:34whereas if you do it like this it's much
28:37more efficient and it's better for
28:39everybody and so I thought there's going
28:43to be one entrance the reception
28:45cafeteria where everyone can eat lunch
28:47and in conference rooms are going to be
28:49in the middle all glass so that you know
28:51you want to limit the use of meeting
28:54rooms because meetings in a
28:56I hate meetings and I want to make sure
28:59that if anyone's ever having a meeting
29:01in my company everybody can see them so
29:04the cafeteria every single person in the
29:08office and the reception and everyone so
29:12you're fully there and so it makes you
29:15think twice about using a conference
29:17room because meetings are a huge waste
29:20of time and that's why I put them here
29:22and then what I've done is I'm thinking
29:26of partitioning out four main areas so
29:29there would actually be a wall here wall
29:31here wall here wall here and so when you
29:34walk through you have to go past and
29:36this is how you'd get into one part then
29:38you get into another part here and
29:39another part here in another part here
29:41and why I wanted to break it out like
29:44that is because there's just some parts
29:46of the company that never really needs
29:48to talk to other parts and so it's kind
29:51of silly to put them together you want
29:54to put in the same compartment here you
29:58want to put like teams that have
30:02symbiosis with each other like two teams
30:05that have a symbiotic nature should be
30:06closed so if two teams they say there's
30:10four teams in this special partition
30:13here and this team and this team have a
30:17lot of symbiosis and same with all of
30:20these together then these should all be
30:22in one partition and then if this if
30:25this one partition has most synergy with
30:29this other partition then they should be
30:31close to each other but still separate
30:33so it's all about getting each dimension
30:37of this right you know how do you
30:39configure the disks how do you configure
30:41the the islands of disks in the end
30:44their structure and in the different
30:46partitions and then the conference rooms
30:49and things and the cafeteria and you
30:54might be thinking whoa if you if you
30:58split out these different teams in there
31:00behind different walls then they're not
31:02going to mix with each other and that
31:03might cause silos and that's true that
31:07might happen
31:09so the my way of combating that is to
31:11make everyone route through a central
31:14entrance so everyone has to come through
31:16here everyone is to go out through here
31:18if you want to have a conference room
31:20you've got to use one of these and you
31:23have everybody has lunch here so people
31:27have people work away in their little
31:30teams but then they come together at
31:32these different times and that's like
31:35why it's a human Collider because you're
31:37kind of colliding everyone in the middle
31:39and then when they don't need to be
31:40collided you you partition them back and
31:44then there's another dimension of this
31:49as well and you can see there's a lot of
31:52these pio things like what the hell are
31:54these little pio things well they're
31:55private offices and so this is something
31:58no one does these days everyone does
32:00open-plan offices like like this and you
32:06know a lot of companies and startups
32:07they look like this on the left here but
32:10what I want to do with this new office
32:13and I honestly think this is going to be
32:15a lot more productive is teams are
32:20supposed to work out in the open plan
32:23areas right that's where everyone has an
32:25assigned desk out in the open plan and
32:28by default you're supposed to be working
32:30in these open plan areas however we also
32:34have a lot of private offices basically
32:38enough private offices for 70% of the
32:43people in the entire company so that
32:45means if there's a hundred people in the
32:47company there's 70 private offices
32:51because I don't think ever there needs
32:54to be more than 70% of the of the
32:57company focused solely on one task at
33:00one moment in time so that handles that
33:04now why people went away from private
33:06offices is because they were worried
33:09about silos and people not communicating
33:11right but now that we have these open
33:14offices the problem is everyone there's
33:17too much damn communication all right
33:19it's just like social media and all this
33:20crap like so
33:22Media was great because a lot of people
33:24weren't communicating very often but now
33:27there's too much communication and so
33:29it's productive to delete your social
33:30media same sort of stuff is going on
33:33with this whole private office
33:35OpenOffice thing and so teams will have
33:39an assigned desk here and when they need
33:42to focus they will just go into one of
33:45these private offices and no one will
33:47distract them when they're in there and
33:49they might work in there for you know
33:52two days and then come back and start
33:55sitting back out here with their team
33:58it's basically like when you need to be
33:59focused and executing and in the zone
34:01you leave your workstation you go to a
34:04private office you close the door and
34:06that's where you work but when you are
34:10done with that kind of sprint or project
34:12or whatever you come back to your main
34:14workstation and so this is like a hybrid
34:17approach we get the openness and we also
34:21get the focus in the distraction free
34:24and then we partition the teams like
34:27that too so the teams are separated from
34:28each other but we're out everyone
34:31through one place and they meet here for
34:34lunch and meetings and things like that
34:36so this is what I'm planning for our
34:40next office and I came up with this kind
34:44of idea from one having this problem at
34:48this workplace and to really looking at
34:53centralized and decentralized and
34:55distributed systems and how they are
34:58best structured and partitioned you know
35:02you don't when you're sitting at an open
35:04plan office you don't need to hear
35:06something about a department that has
35:10nothing to do with you hearing that
35:12piece of information distracted you from
35:14your task and is completely useless and
35:18there's nothing worse than distractions
35:20because not only is the person who's
35:23distracting the other person distracting
35:25them now you've got two people not doing
35:27any work but now if you're in an open
35:29plan office the whole office all 10 or
35:3220 people weren't doing any work so one
35:35little trigger
35:36set off an avalanche of distraction and
35:40so this is why it's important to
35:43partition things and this is why I've
35:45come up with this design now let's talk
35:50about the third component of this in its
35:53content so what I've learned about you
35:56know information people in communication
35:59transparency removes the need for
36:01communication you know a lot of the time
36:03when you're communicating with someone
36:04you're asking them a question because
36:06you need a piece of information from
36:08them that you cannot get without asking
36:10them so if people share different things
36:15and make them public with other members
36:16in your company then they don't need to
36:19ask you for it they can just get it it
36:23make me give you a perfect example
36:25so my calendar that shows what I'm doing
36:27every day and my warm app and everything
36:29I share it with people in my company so
36:32they don't need to ask oh hey
36:34what are you are you going what are you
36:36working on at the moment they know so
36:38they don't have to ask me and then
36:40everyone in our company has access to
36:42all of our financials and sales data and
36:45tracking and attribution data basically
36:49everyone has access to everything except
36:53for a few sensitive things because you
36:56don't want everyone to have access to
36:57absolutely everything because it is one
37:00it isn't necessary
37:01and two it can cause some issues but
37:03most companies kind of hide a lot of
37:06information and so the employees are
37:08constantly in the dark and then they try
37:11to use communication to get out of the
37:13dark and now they're not working because
37:16they're communicating and they can't get
37:19that piece of information anyway because
37:20it's hidden and so they're all
37:23communicating with each other trying to
37:24achieve an endless goal and you want to
37:28make things transparent you know instead
37:31of having an open office just make open
37:34information like share your calendar
37:38share your financial data and stuff with
37:40your employees instead of bloody making
37:43everyone sit in an open area most
37:46companies have adopted the open plan
37:48office but they still
37:50not open with information and this is
37:52mindless and in interrupting somebody is
37:55not okay you need to sit standards in
37:59your company that you know you're not if
38:02someone interrupts someone that's not
38:04okay especially if that person is you
38:08know someone that really needs to work
38:10on a particular project then get it done
38:14and I'll give you a prime example of
38:16this once someone in my company who
38:19worked on our support team they don't
38:21anymore partly because of this they were
38:25they were receiving an email from a
38:29customer and the customers would say hey
38:31I don't want to be on this email list
38:33anymore can you please unsubscribe me
38:35and so what this customer support person
38:38did is they went behind through slack
38:42without asking anyone and started
38:44messaging our one of our engineers who
38:47was building product and then was
38:50getting the engineer to unsubscribe
38:51people from this list and I asked one of
38:55the our engineers hey what are you doing
38:56what have you been working on he said he
38:58was spending most of his time I'm
38:59subscribing people from a damn list so
39:02here we have someone who's highly paid
39:04one of the highest paid people in the
39:06company who's working on one of the most
39:08crucial most important projects in the
39:10entire company and he's not doing
39:13anything of value
39:16he's just unsubscribing people from a
39:18list and that was assigned to him from a
39:21customer support rep and when I traced
39:23it back and I looked at the email that
39:25the customer support rep was getting our
39:27engineer to unsubscribe people from it
39:30had an unsubscribe link at the bottom so
39:33all that support rep had to do was just
39:34reply back to their person and say just
39:36click the link but no they had taken one
39:39of the most crucial components of how a
39:42company offline and that's a perfect
39:46example of this you cannot have that
39:49happen
39:50you shouldn't have customer support
39:51making your engineers tell it like
39:55unsubscribe people from a list you
39:57shouldn't have that sort of going
39:59on and I can tell you that most
40:01companies have this stuff go it's like a
40:03vicious disease that's just just ripping
40:07through their company and you've got to
40:10make sure that people there's basically
40:12walls and barriers like different people
40:15aren't allowed to talk to other people
40:17and different teams aren't allowed to
40:18talk to other teams and if they are
40:20caught doing it they're warned if they
40:22do it again they're gone because there
40:25is nothing more costly than
40:27interruptions in communication and
40:31communication must have rules and
40:34protocols so that kind of goes back to
40:37interrupting somebody's not okay or if
40:39you need to get a piece of information
40:41from somebody else
40:42you go to your team lead and that team
40:45lead will tell the other team lead right
40:47and then that team lead will get it for
40:49you and bring it back what you don't do
40:50is go over to another team and interrupt
40:53all of them and ask for something so it
40:57needs to have rules and everybody
40:59doesn't need to be on the same page you
41:01know I hear this all the time oh but we
41:04need to know what's going on or I need
41:05to know what's going on here or hey why
41:07did you make that decision Sam you
41:08didn't tell me you were going to do that
41:10and it got to a point where I was like
41:12look calm the hell down if I had to tell
41:16all of you what I'm gonna do and what
41:17I'm thinking about doing all the damn
41:19time then I wouldn't do anything and you
41:23guys can just adapt like if I do
41:26something and you see that I've done it
41:28adept like you don't need to have
41:30everyone on the same page all the time
41:32and thinking you need to is just gonna
41:35end you up dead you won't be able to
41:39innovate fast enough move fast enough
41:41you did and so you need to make sure
41:44that teams can make decisions and act
41:47without informing others and that it's
41:51okay
41:52and you don't have to have everyone on
41:53the same page you know different
41:55departments don't even need to know
41:56what's going on in other departments the
41:58same way you can run your business
42:00without watching the news and that's a
42:03perfect example you know when I was a
42:06kid I was told all you need to watch the
42:07news Sam I never watch the news it's
42:10and I run my company quite fine
42:12without knowing what the hell's going on
42:14with the government in
42:17so that's absolutely fine same way
42:20different departments in your company
42:22can run their departments without
42:24knowing on without knowing what's going
42:26on in other departments or what's going
42:28on on the news or the government right
42:31it's just not important you don't need
42:33to know and then it teams must adhere to
42:38and report to a single source of truth
42:40and what I mean by this is you need to
42:43agree on some KPIs and some metrics and
42:46you also need to agree on how you're
42:48going to calculate those KPIs in those
42:50metrics for example we have like a
42:54Facebook media buyer and we have someone
42:57who buys ads on YouTube and we also send
43:00out emails and we also have people who
43:04refer friends sometimes we have
43:06affiliates we also do some SEO we've got
43:09a bunch of different ways customers can
43:11buy from us now when it comes to
43:14figuring out hey we did this customer
43:16come from there's lots of different ways
43:19someone could do that they could look in
43:20Google Analytics they could look in
43:22Facebook or YouTube and they might be
43:25like no no this thing says that I have
43:26it no this one says I have it right big
43:28chaos so we must adhere to a single
43:31source of truth and we agree on what
43:35that is so we actually have like an
43:38attribution system and the the actual
43:42arguments for that algorithm are
43:44expressed explicitly and the person who
43:48conducts that he doesn't audit our data
43:50scientist said he doesn't audit at 10
43:53a.m. every day on the previous day's
43:55sales and checks through every single
43:58attribution and our algorithm assigns
44:01most of them but then if there's some
44:03that aren't assigned then he will go
44:05through and manually check them and
44:07every single sale is personally checked
44:10by the same person at the same time
44:12using the same rules and then that
44:16person assigns what the official
44:17attribution is and then that's the
44:19single source of truth that our media
44:22buyers use for completing their reports
44:25in figuring out what their ROI is on
44:27their respective channels now that kind
44:30of sounds complicated
44:31and it really is a real royal pain in
44:34the ass and don't worry about it you
44:36won't need to build anything like that
44:37that's that damn complicated but that's
44:40just an example right and then teams
44:45must adhere to standardized language
44:49concepts and systems and what I mean by
44:51this is you know if you're talking about
44:53different things in your company or
44:55different products you should have
44:57standardized language for that like a
45:00customer is defined as this or a lead is
45:03this right sometimes people are talking
45:05about leads prospects customers and you
45:07don't even know what the hell people are
45:08talking about and also what's the
45:11difference between revenue or cash or
45:13accounts receivable you know what's a
45:16write-off
45:17like all of the different things and
45:19actions and metrics and numbers and
45:22objects that are in your company you
45:23want to make sure that you come up with
45:26a standardized language and this is
45:29important because if people start saying
45:31different things and that that means
45:35that people get confused and if you
45:37think this is one of those small little
45:39things that isn't really important
45:41well Elon Musk got an email from someone
45:45at his company and they used an acronym
45:47you know they took her they took a
45:49four-letter phrase and they turned it
45:53into a they took a four-word phrase and
45:56turned it into a four-letter acronym and
45:59we Neal almost saw that acronym in that
46:02email he sent out a broadcast saying
46:05this is not okay never ever ever use
46:09acronyms and the only acronyms that are
46:13approved are these and he made a list a
46:15master list of acronyms with what it
46:18actually means and he said if either for
46:20you if anyone in this company ever wants
46:22to use an acronym
46:23you must get written approval from me
46:26and I will add it to our master list of
46:28acronyms now you might be thinking this
46:30is pretty crazy why would some well -
46:32CEO like Elon Musk who's building
46:33Rockets care about an acronym because
46:36it's that important if you think about
46:40it if someone won't hear is an acronym
46:42in a meeting and then that acronym is
46:43repeated throughout the company
46:45and it gets adopted and then new
46:48employees come in and hear it and they
46:49think something else well now you're
46:52going to have people hearing the same
46:53thing and perceiving it in two radically
46:56different ways and that's how you end up
46:58with a catastrophe it's so important
47:01that you have standardized language
47:02standardized concepts and standardized
47:05systems and a single source of truth and
47:08a way of measuring everything and that
47:11you partition your teams out and you
47:14know all of this all of these
47:15intricacies that I've been talking about
47:17content office structures and layouts
47:22all of this stuff here people context it
47:26is so important because all of this is
47:32how every component of your system and
47:36when I say system I mean your business
47:37you know a business is really like a
47:39system and within it there's components
47:41there's machines there's information
47:43transfers there's humans there's
47:46customers there's all of these different
47:49components how do they all come together
47:51and connect and operate to form a whole
47:55and that is pretty much one of the most
47:58important things in all of business
48:00because if you get this right then you
48:04should get everything else right and
48:05it's something no entrepreneurs talk
48:08about when I listen to entrepreneurs
48:11they're mostly talking about marketing
48:12or like how to get more likes or
48:16something but this is really important
48:19stuff and as you grow hire people and
48:23form a team remember that communication
48:25is a cost it's something that you should
48:29avoid doing because it is a cost now I'm
48:34not saying that you leave people in the
48:36dark and then they can't do their job
48:38because they no one told them what to do
48:40no I'm not saying that I'm saying you
48:43need to re-engineer your company so that
48:45they know what to do without being told
48:47all the damn time and it's your job as
48:54the entrepreneur to architect the
48:55structure of everything and as you grow
48:58always reverse
48:59the structure of your company to ensure
49:01it remains efficient so that's it for
49:05today's video
49:06I just thought I'd share what I've been
49:09thinking about a lot recently
49:12and that is how to best engineer these
49:16things and I hope this helps you on your
49:20journey especially as you start hiring a
49:23team and trying to orchestrate all of
49:27this because it's one challenge to get
49:29started and get your first customer and
49:30it's another whole challenge to deal
49:33with this and this one's harder than
49:35getting your first customer but this is
49:38when you master this one this is what
49:41really enables your business to fly and
49:43start scaling and it's something that
49:45not enough people talk about so if you
49:48enjoyed this video just click that like
49:50button and let me know what you thought
49:53in the comments section was all of this
49:56clear to you was this valuable did it
49:58help you have any questions just give me
50:00some feedback and thanks for watching I
50:03will see you in the next one
50:06next week