# Copy This Strategy to 10X Your Business (Fast)

Channel: Dan Martell
Video: https://www.youtube.com/watch?v=9Cf416w4JJI
Duration: 26 min
Language: English
Words: 5634
Transcript page: https://viewrankai.com/tools/youtube-transcript/9Cf416w4JJI

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[0:00] There will be a point where your business feels completely stuck. It doesn't matter what you do, how much you change, [music] the business doesn't seem to grow. Even a couple months ago in one of my companies, the business hit a wall, slowly declining. And then we implemented exactly what I'm going to share with you today, and we just finished having a record month. Every business I've worked with hits a wall at some point. Even the biggest entrepreneurs face this exact issue. And what I found is there's only one way to unblock your business, and it starts with finding [music] the one thing that's holding the business back. Today,

[0:31] I'm going to show you how to find that one thing and fix it, so that you can get your business moving forward again, and build a machine that works even when you're not there. Step one, we need to figure out why growth is stalling. If you don't have a process for fixing things, you will feel like a chicken with his head cut off. I felt like I was

[0:50] working, it just didn't change anything. Then I realized being busy doesn't solve the problem. So, I want to draw a picture that's going to make this clear as day. You have a lot of things in your business you could be doing. You could be doing marketing, you could be doing operations, you can do even sales. The challenge is is that your business is like a pipeline, it flows. You have ideas, you turn them into products, people buy the products. It's like a flow of traffic. But what if all of that ends up in a constraint? If you have all these ideas producing, but there's this one point in the middle that is a

[1:27] constraint, think of it like water. If the water flows in the left, this is your team working really hard, but then it gets pinched in the middle, then the back side will be limited. See? You can't have it flow because of the constraint. And what people do is they keep saying, "Hey Dan, I got to do more stuff here, I got to do more stuff there." And I'm like, "But you don't even know what this is." And throughput

[1:51] is the narrowest point of any workflow. The mistake is making the other steps faster. You're like, "Oh, we need to do more marketing. We need to do more sales. We need to do more automation. We need some AI." But, what if the delivery team is the bottleneck and they can't onboard clients? So, everybody else gets faster, faster, faster, and then it just

[2:13] stalls. That becomes the bottleneck. That is the focus. When I started to write software and I realized that, "Hey, I can write all the software I want, but if I can't get people to buy, the business doesn't have any money." Writing more code didn't make me more money, but as a software developer, it felt safe. And that's usually what happens is your team will do the thing they know how to do. But, that's not necessarily the right thing to do to increase the output. If there is a workflow, I want to figure out where the work is piling up. Usually, wherever inventory or work is piling up, usually

[2:46] the step after it is your constraint. If you don't know where to look, just walk down the process. It could be that you're involved in having to approve every invoice. It could be that somebody else on your team is waiting for another person to do something. It could be that decisions or approvals or processes are just not automated. I've seen it where customers are upset because they only want to deal with you, and that's the constraint because of a sales script that doesn't communicate that they're going to work with somebody on your team. So, there's a little bait and switch. It can happen all over the

[3:15] place. I just need you to understand there's only one problem right now in your business that needs to be solved. Running a business really comes down to one job. We got to find the bottleneck. We have to solve it, and we got to repeat that process. Solving the right thing in the wrong order is still a loss. Like, we don't polish a car if the engine is on fire. So, we do have to fix

[3:36] what's stopping it from moving forward. So, how do you find the thing that's limiting your growth right now? Step two, this is how we find your bottleneck. And the best way to do that is we got to check the numbers before deciding what to fix. For example, one of my buddies came to me a few years ago, and he's like, "Hey, man, I need to redesign my whole program." I said, "Why?" He goes, "We lost some customers." How many customers did you lose last month? I lost three. How many customers you have total in your business? 300. Hmm, let's look at the percent of total customers that left in

[4:07] regards to the ones you have. Three out of 300 is 1% on a monthly basis. You could have up to 2 or 3% and still have an incredible business. Let me ask you a question. How many people on your marketing team? I got to be honest with you, Dan. Nobody. Yeah, not surprised. What I knew in his question and the assessment of the data is that he didn't have a product adoption problem. He

[4:29] didn't have a product quality problem. He didn't have a retention problem. He had a marketing problem. He misdiagnosed it. He was about to go down the path of spending the next 3 to 6 months redesigning a program to reintroduce new things that could have cost them way more people canceling than the ones that left because he didn't know that he had a marketing problem. This might sound simple to you. I will tell you every day entrepreneurs are making decisions around the bottleneck they need to fix and most of them are wrong cuz they don't understand this process. One of my beliefs around this is that every

[5:01] bottleneck is just a hidden KPI. Meaning that if we measured the right things in the business, then we know exactly what we need to fix. If we don't have the right measurement, then we don't know what to fix, then we just start guessing. And that's what unfortunately business owners do every day. If you want to go deeper on this, it's called the theory of constraints. It's an incredible book that was written for manufacturing that I learned through my dad because my dad worked at a big company called Siemens and they brought in experts to talk about black belts and six sigma and lean manufacturing and it

[5:34] was just something that I saw on the shop floor that they talked about all the time. The way I look at it is that a process not well defined is a process I can't solve. In the process of theory of constraints, the first step we have to do is we have to map the steps. So, for example, maybe you've got leads. That's

[5:51] your first step. Then it goes to qualify. Are these people the right people? Then you've got book. This is getting them on a call. Then you have show. Did they show? And then you have close. Did the person enroll them into your life? That gives us the simple mapping. If you have a team member, ask them to go to a whiteboard and draw something that looks like this. But you want to have the

[6:14] distinct steps in the business outlined. Then we ask the magic question. This is my favorite question to ask cuz it usually gets to the point of the problem incredibly quick. I ask the question in any workflow, if I 10x the volume, leads in this example, what breaks? Cuz when you do that, all of a sudden I'm pushing water through the system and it becomes very evident that the issue to solve, as an example in this step, is book. It wasn't the show rate. It wasn't the close. Those are relatively good for the industry, but the amount of qualified people that we got to actually book a call isn't high. And that's where

[6:53] we have to get the data. That's where the numbers don't lie. If you don't have a spreadsheet that outlines the steps in the conversions in each step, then how are you going to know? Yesterday, I walked into one of my offices and there was 1 [music] 2 3 4 5 6 dashboards in that one room. That's the level of measurement that I like to see. Now, do you need it to be on a TV on a dashboard? No. Should it be in a spreadsheet? Mhm. Can I ask my AI

[7:18] to help me design that? You sure can. So, a lot of people used to ask me, they'd be like, "Yeah, but Dan, how do I know what is normal and what's abnormal?" Ask it what the industry norm is. But just ensure that you're measuring the same way that the industry's measuring it. So, here's a

[7:30] pro tip. I have what's called a GrokBot. It's an AI agent and [music] it's called Business Constraint. And the only thing this agent does is he monitors every company that I own. He looks at the data. How did he get that? I told him the slurp in Slack. And then [music] twice a week, he analyzes on Sunday and on Thursday the data, the process, even the meeting recordings of those teams to figure out what is the number one

[7:56] business constraint in the business. [music] It posts it on Slack, tags the people involved in that business, asks them to reply if they agree on the constraint, and then if there's a disconnect, that's where we have a conversation. So, even in the process I'm sharing with you today, you can set it up. I use Grok Bot and a few other

[8:13] AIs, but you can use Claude or ChatGPT. Once you understand the philosophy, and you can't do any of that if you don't map out the workflow and collect the data to know what's broken. And by the way, if you're a business owner and you want to walk through all of this and implement it into your own business, I have a free scale your business workbook that has in there the whole philosophy of theory of constraints, how I implement it to my business, [music] how I use it in all my different departments, and all you got to do is scan the QR code or click the link in

[8:39] the description to download it. It's yours for free. So, now we know where the bottleneck is. The next step is to attack it and solve it as fast as humanly possible. But how do we actually do that? Step number three, we have to surge on the bottleneck. One of the challenges when we do this is some people make assumptions about what's possible. Couple weeks ago, I was speaking at the Vault Conference and I was listening to Steven Bartlett, and he told an incredible story about this. How he had an editor on his team that was editing animations, and he'd been doing it for 5 years. And somebody, out of the

[9:09] blue, asked them, "Hey, what would it take to get you to double your output per week?" And they were thinking that it was this big elaborate process and change, [music] and his response was simple. "Oh, I would just need a new laptop." Nobody had ever asked him this question. He didn't even consider it for himself. He just assumed, "That's my laptop. They're not going to buy me a new one." Here's a solution that might have cost two or three thousand dollars [music] that would have doubled his output. That story, for me, exemplifies why it's important that when we identify the bottleneck, we have to challenge every

[9:42] assumption. And sometimes solving the bottleneck is a lot easier than you think, but you never thought to ask. For example, last year, as we're scaling my venture studio, where we're launching a new AI company every month, it got crazy. And it became very evident that the bottleneck was on recruiting, was on talent. So, I decided to surge on it. [music] It turned out in my Instagram DMs there was over 2,000 people who had reached out to me saying they wanted to work with me, and my team or myself just

[10:11] didn't see it or didn't engage with it. I gave everybody on my team incentive to go through their emails, through their chats, through whatever system they have to identify top candidates and reward them for moving that pipeline forward, no different than I would do in a sales process. We even gave each person a $5,000 referral bonus if it came from my existing audience. I didn't care. I needed the talent. [music] What did that do? It allowed everybody to feel empowered to come together and surge on the problem. And within 6 weeks, we solved that bottleneck. That's why we call it a surge. It's one bottleneck, one area of focus, and we

[10:45] fix it fast. I think [music] the biggest challenge that you might be doing to yourself and your team is that you don't focus. Most owners, unfortunately, are spread way too thin across 10 problems. If you actually got rid of the other nine and went all in on the one, it would actually get solved today. Most entrepreneurs are incredible problem solvers [music] if they know what problem to solve. We've already done that part. Now, we got to surge on the

[11:07] problem. Here's how we run a surge. [music] The first thing we got to do is we got to give it a name. Names matter, language matters. We give it a good label that helps define [music] and identify it for everybody involved. Not bad with a broken hand. For example, in the talent one, the problem was I didn't have enough people to hire, but the actual bottleneck was is I didn't have high-quality applicants. [music] Just like on the sales example I gave earlier, it wasn't actually the qualified leads, it was getting them to book a call. Once we name the bottleneck, because we have the data, we

[11:39] have to find ways to capacity. This is all about focus. If not enough people are booking, maybe we need to start making phone calls. If there's people doing marketing, but the sales team can't get enough people on the calls, maybe the marketing people should stop marketing a little bit and get on phones to get the people to show up for the calls. It sounds crazy, but that's the whole point. Remember I drew the [music] diagram for the constraints and there's all these people in your business that are busy, but the thing that is the constraint isn't getting enough resources to actually solve it. If you got everybody to do a little bit less

[12:06] work to focus on the constraint, then the thing gets solved. Step three, get other teams to swarm on the problem. To me, it's a swarm. Think about getting attacked by a bunch of killer bees. You're probably not happy about it. Imagine if your problem in your business is getting attacked with the same level of ferociousness. [music] One of the most powerful things that one of my mentors taught me in San Francisco, which is the four C's of leverage. That when we solve problems, there's only four major ways we can solve it to

[12:33] create leverage. The first C is capital. Do we have the problem well capitalized? The example with the laptop, for a couple thousand bucks, we could have bought him a laptop. Problem solved. Some people just don't think they have a budget to solve problems. The second C is content. Are the systems dialed? Is everybody following the same process? If I'm trying to get people to call to get somebody to book a call and there's no step or process outlined, then the system is broken. I need to outline the content strategy. Maybe it's a training video for everybody involved. This is all part of content. Huge leverage once

[13:06] you do it once. The third is collaboration, which is essentially people. There is a whole world of people in your life that can help you solve problems. It could be your friends, it could be your partners, it could be other people in business that you know. Don't limit it just to the three or four or five or 10 people on your team. And then the fourth C, which is my favorite

[13:27] cuz I'm a bit of a tech nerd, is code. What is the software or automation or AI we could leverage, this is the last one, not the first one, to swarm on the problem. I think right now too many people are using AI to solve problems that aren't actually the right problem to solve or to solve it in the wrong order or to avoid this process to only spend a bunch tokens, token maxing, to not make any progress. And the last one is attack until it's done. When I say done, I mean obliterated. I mean that you know that that will never be a problem for a while, because business is

[14:02] always broken. No matter what you do, there's going to be a bottleneck. Once I solve a bottleneck, then we assign it to somebody and that person becomes the DRI, the direct responsible individual to monitor the measurement, to ensure everything stays up to code, and to make sure that what we call service level agreements or what's your commitment to

[14:20] that problem never reintroduces itself. There's nothing worse than like [music] having a problem, solving it, go over here, solve the next bottleneck, only to have that fall apart because nobody owned it after you solved it. And if you want a little bit of Dan pro tip, one of my favorite things to do is asking somebody how long will it take you to do that step or solve that problem. Usually

[14:39] the answer is like two or three hours. And then I say, "Well, what are you doing for the next two or three hours?" Because if it is not more important than what we just talked about, how about you go do that and then come back in three hours and we can review to see if it actually made any change. That is how you attack the problem [music] and you stay on it until it's done. So now, we did all this work, we attacked it, we swarmed on it, but how do we know it actually worked? Step four, we got to check the result, then repeat. Fixing

[15:06] the bottleneck is only the beginning. Checking whether the business got better, that's the whole point. The bottleneck is just a part of an outcome we're trying to achieve. But if it gets cleared and it kind of like creates other problems, then actually didn't solve the problem. So we have to stay on it until the bottleneck moves. You could do all of this and honestly still after weeks of surging not actually solve the problem because of the way you're doing the measurement. Most teams will say language like I tested and what I hear is I guessed or I tried. It's not a test, it's a try because they don't have

[15:43] a place where they've written down the one variable that they change. That's why it's really important that when we surge we understand how to do the changes or you'll have seven people make changes and all of a sudden not know what specific change actually improve thing. But that's why when you solve a bottleneck then you move to the next thing that's broken and then it breaks again is because you didn't actually learn how to solve those problems in the future. It might have generated more money, it might have solve the problem in the short term, but it will slowly slide backwards because you didn't use this method for testing. And you've

[16:14] probably felt this, right? Lots of change, lots of moves, I thought we surged, I thought we fixed a bottleneck and then somehow it's happening again. You could do the test and it actually work, but did it improve the business? Did it make you more money? Did it increase your gross margin? Did it allow you to recruit better? Did it get more people to show up for a call? The test doesn't necessarily mean that the outcome you're after got solved. That's why we have to use this approach to make sure it's a line. This is the testing

[16:42] method. Very simple, very powerful. Number one is we got to make an observation. For example, if I double the amount of leads, will I get more revenue? That's a great question. And this is where it becomes really fun with the team because everybody can throw ideas. Now once I have an observation, I got to create a hypothesis, also known in my world as a guess. The third part is we now have to run a controlled experiment. An experiment does follow a very structured process because if not, it's not a test, it is a try. The key is is we want to isolate what we're measuring and change one variable at a

[17:19] time and we have to run enough information through it to see if it has statistical significance. I hope I didn't lose you. Stay with me here. Meaning that there was enough attempts at the information that you're monitoring to tell you if it's statistically accurate. For example, if I take a coin and I flip it three times, 1 2 3 and it's all heads, does that mean that it's always going to be heads? No, because if I flipped it 50 times, I would get a 50/50 calibration of the coin. I just didn't have enough information that went through flips to

[17:52] be able to get statistical significance. That alone is probably a lot of the reasons you're dealing with people saying, "I tried this, it didn't work." Did you really? How many times? Number four is we got to analyze the data. And for me, I want to capture it in real time and I want to review it every day. So, when I'm surging on a problem, everybody comes around the table first thing in the morning and we're looking at data to see if we have enough data to make decisions based on the test. And it becomes a daily rhythm. Sometimes I'll go twice a day, depending on how big the

[18:23] problem is, we might do morning and right after lunch. And number five is we got to decide, is there enough data? Do we all agree? And if so, let's deploy. If it didn't improve anything, this is the key, we reverse it back. Because if I made a change based on a hypothesis and it didn't change anything, we have to reverse it back so that we know that adding a new change is an isolated change so that we're evaluating the right thing. Because I'll tell you, if you start making a bunch of changes and you leave them in the system, you will wake up to a ball of complexity and that

[18:54] is not a fun business to run. That is the game of business. Lock it in and then rinse and repeat. In marketing, we usually call it like the control versus a test, meaning that the control is the best performing funnel that's working, we introduce a new one, if the new one beats it, make sure we have enough data, then we switch the control. The new one

[19:13] that beat it becomes the control. Everybody's playing the game of trying to beat the control. If you're doing this process, you already do it. It's like, "Dan, I'm already doing this in my business." And every time you do it, you're the one that comes in, you find the bottleneck, then I'm going to invite you to consider you may be the bottleneck. So, how do you actually get your team to get involved to do this for you? Step five, build a team that find and solves problems using the theory of constraint. You might have the best people, but if your best people don't know how to solve problems and make

[19:42] decisions, then you'll always be stuck being the person that can. And this is where most owners get stuck. It's why he wrote a whole book that's focused on the philosophy of learning to let go, but empowering people to make decisions on their own. For example, in all of my media, I have an incredible team that supports me in doing this because I've taught them this process, they can go in and evaluate where they have opportunities to increase their throughput. Last year, when they were looking at our production timelines and we're looking at increasing the volume of content we put out to the world to getting to four and 500 pieces a week,

[20:16] they realized one of the bottlenecks in that process was finding the right B-roll to add [music] to the footage. That's why if you've watched these videos and you just see like, "Boom, awesome B-roll. Boom, boom, boom." You see all that? That's the team that easily found it because they realized there was a problem, so they solved it. How did they do it? They created custom software. It was called Turbo B-roll that analyzes a few hundred terabytes of footage and allows [music] the team to search anything. "Dan with wife on beach." And it allowed the team to

[20:45] double their throughput in production. So, think about it. Same team, double the output. I don't have to hire more people cuz the current team can do twice the work cuz they weren't spending all their time on something that software could do. Again, the four C's. And I was zero involved. I only found out after they did it and they wanted to show it

[21:03] to me. And I was like, "Yes, thank you. More of that." In our organization, we've created a culture of doing this, of solving problems using constraints and learning how to surge on them until they're solved as a team. Your real job is actually not the business you're in. Your real job is building the people. Cuz when we build the people, the people build the business. People solve the bottlenecks without you. And I've shared this so many times, but when I first started as an entrepreneur, I didn't know any better. Maybe you can relate to

[21:29] this. I used to tell people what to do. I'd check that they got done, and then I came back and I told them what to do next. And then, I learned from one of my mentors, very smart guy, he's built 5,000 person organization. He said, "Oh, that's the bottleneck. You need to learn how to define an outcome. But you got to give them the resources to do it." For example, you might have to delegate their ability to make spending decisions. When you do that, then they can make decisions faster, and then you

[21:52] stop being the bottleneck as a leader. We have to define the outcome. I consider it the heat-seeking missile. That's what I need the person to do. In many ways, it's asking ourselves the question, "What does done look like?" And describing visually, emotionally, experience it. Sometimes if I'm doing a big event, I'll explain to the team, "Here's how it's going to feel to be an attendee at this event. Here's what they're going to learn. Here's what they're going to say to their team after the event." I'm very clear at creating [music] a picture of that outcome so that it it becomes the North Star. And then the next level, as I mentioned,

[22:23] financial decisions. This is all about budgets because most business owners, everything goes through them. So what I do is very simple thing called the financial trust ladder. Depending on the role of the business, they can there spend $50 to fix it. They can spend $500, so this would be like team leads. They at director level, they can spend

[22:40] $5,000. I know that's a scary one. Or my executives, C-levels, they can spend up to $50,000 without my approval. The only thing I ask them is that they let me know they did it afterwards, and every leader has their team tell that. So if there's a problem at the 50 level, anybody can spend 50 to fix it, they can expense it. I just ask them to tell their leader so that they know, cuz usually whatever somebody spends money on, it's actually

[23:05] the bottleneck that needs to be fixed. That's the crazy part. Your frontline workers know exactly what problems need to be fixed. If you empower them to just solve them themselves, you will get a data point to then go "What's that smell? What's going on over there?" For example, one of my editors didn't want to wait for the designer, so he went and spent 50 bucks to get the design done himself. Well, turns out bottleneck, the designer, didn't have enough capacity because he only had 10

[23:29] hours a week. He was on contract. Leader, "Hey, how about we give him 20 hours a week?" Perfect, bottleneck solved. And then third, this is measure. This is where we create a scorecard or a metric on what we're going to measure to ensure that we know what is the problem. I do this all day long. One of my favorite things to do is I walk around, I look at a dashboard, and it tells me exactly in all my companies where

[23:52] I should be asking better questions. Every one of my dashboards has a name next to the metric of the person who owns it, DRI, as well as their cell number. I know, next level. But once I have that, then we go to the last level, which is my favorite, which goes around all of this, which is to coach, coach to success. We have to remind ourselves that [music] there was some moment in our lives where we didn't know how to do the thing that we do that we're pretty good at today. And somebody taught it to us. We either read a book or we went to

[24:21] a seminar, we hired a mentor, we hired a coach. And I think it is the coolest thing to remind ourselves that when we work with people on our team, our job is to develop them. Our job is to empower them. Our job is to show up and let them know like, "Hey, this thing I saw you do, I used to do that. Here's what happened to me. Somebody pulled me aside, shared this with me. Does that resonate with you?" Yes. "What did you take from that?" This. Perfect. Can you make a commitment in the future you'll

[24:47] do that? Yes. Do that. Okay, I will. That is coaching. And I get it, it can feel slow. But what will happen when you start building your people, you'll wake up one day and you'll realize that they started coaching your [music] other team members and they start saying the same thing that you said to them and you don't have to repeat yourself. And at some point you'll wake up and you'll have a team of badass people building problems, solving bottlenecks for you and you're not there. And that is how you get unstuck in your business by you stop being the bottleneck and implementing this process. And I just

[25:21] want to share this. I understand that entrepreneurship is hard. Things will always be broken. They're never fixed by definition of being in business and being an entrepreneur to go on a journey of preneur-ing, which means to create, that we're always solving problems. What I want to invite you to consider is maybe the process of how you solve

[25:39] problems in the past has been flawed. This hopefully introduces you a different approach, but I need you to make one commitment. And just let me know, out of everything I shared with you, was it the testing, was it the coaching, was it the process of finding constraints, was it the measurement? Whatever resonated with you, leave me a comment below and let me know. And for those that are looking for my support in helping them grow their business, I do have that free scale your business workbook. You can just click the link or the QR code to download it for free. And the coolest part is that whole workbook,

[26:08] I created a whole video walking through the entire thing step-by-step and it's one of my favorite videos and I want you to watch it. So just click here and I'll see you on the other side.

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