Michael: Hello and welcome to HaBO Village Podcast. I'm Michael Redman.
Kathryn: And I'm Kathryn Redman.
Michael: How are you today? We're glad to have you with us and thanks for taking the time out of your day to join us and listen to what we're going to talk about today, and that is going to be the beauty of iteration.
Kathryn: The beauty of iteration. That's a strange title.
Michael: It's a strange title. What do we mean by beauty of variation? Well, you know what, business and life is full of iterations and for a lot of people that's really frustrating.
Kathryn: Could you define iteration? It is not a word we use all the time.
Michael: It's a college word. Yeah, it is. So, okay, iteration meaning that we do something again and again to improve, so the double helix or the corkscrew, if we're thinking about it as you go around in the same circle, you go deeper and deeper, and that deeper and deeper in this concept of iteration hopefully is the goal of improving. And sometimes it doesn't feel like improving.
Michael: Actually, one of the things that inspired today's podcast was a conversation that we had recently with a fairly new friend of ours who is close to a dear friend of ours, so we kind of built some relationship, had a connection through some relationship and hopefully we're going to have him on our podcast in the future. His name is Mark. Mark is a producer at?
Michael: Pixar, which was really cool. You know it's fun, as you get to build relationships and get to know people and stuff like that, you start to know people with really interesting jobs, and obviously for us here in the studio, but some of you may not know, I have always been a super big fan of making films and videos and dreamed of being in the film industry, and we've done our share of production work and documentary work, but that was not our path, at least at this point.
Kathryn: No. But watching Michael talk with Mark was like watching a kid in a candy shop. It was super fun.
Michael: Oh boy howdy.
Kathryn: He's just like question, after question, after question about, "What's this like and how does that work?" It was very fun.
Michael: Mark is just such a neat guy. It's funny, because we found out last night that Mark and I worked for the same small landscaping company in college and I didn't even realize that, and the friend we have in common, who is a dear old friend of ours who's also our pastor, worked at the same landscape company, and that we were referred to as a lawn dogs. Because we were worked like dogs, but we all have lots of memories and it was a great job in college. One of those great jobs in college. And so, we were at a family event and got a chance to talk more and more.
Michael: One of the things that came up as we all just kind of chatted about some of his new projects and stuff, and maybe when he comes on the podcast, because we talked about that last night, that we'll be able to talk about actually what his newest project is, we can't name it today. But we found that the project that he's been working on has been a five year process. It's a film that's taken five years to come to fruition. And the first three, three and a half, we're building the story as he describes it. I would say it's writing the script. Getting all the pieces and parts together. Is this story going to work? Does it have a beginning, a middle, and an end? Does it have the proper tension? Does it have a proper resolution? Is the dialogue working?
Kathryn: Yeah. Does this character fit? Is this placement of this particular piece of the puzzle in the right place? He told lots of really fun stories.
Michael: Yeah, he did.
Kathryn: But the thing that most stood out, especially for me because I don't study film and I don't know how it's done, so this was like, "You do what?" was through that process, they go through multiple iterations of creating a 90-minute film through storyboarding.
Michael: For those of you who don't understand storyboarding, basically what they're doing is they're not animating all the things, they're creating a hand, a pencil sketch usually, of the scene, and sometimes what happens is there's four or five key positions or images within a scene, and so that's all they do, they're key frames. That happens a lot. I don't know if that's exactly how they're doing it, but that's very common. What they'll do is they'll have all the dialogue, all the music, all the sound effects, and then they have these pencil illustrations kind of flipping through and working on it. They may even fill in the middle, especially with computers these days and stuff like that. Then they do what? They would do this-
Kathryn: Yes. They start this process, and then they sit down as a team, and they watch this 90-minute thing they've put together. He said at the end of it you go, "Oh my gosh, that's so bad." And so then you start picking out the biggest things, and you've fixed those things, and then you do it again, and then you're like, "Still bad." You're figuring out who you need to call back in for different voiceovers because whatever you did didn't work. All of these things, and they did this 10 to 15 times I think on this particular project, and I was like, "Oh my gosh. So, you're creating basically a 90-minute story, 10 to 15 times over the course of three and a half, four years before you actually land where you're going and move into full production animation." Stunning.
Michael: Really stunning. There's a couple of things that really stood out to me in the midst of this conversation. One is, I forget, because I don't live in in the production world all the time, especially I never live in the A films category. That was the dream. But I'm not all too old to have it. I mean, there is that that feature film we want to do at some point. Anyway, totally different issue. Sidetrack.
Michael: What happens in the midst of this process is there has to be some process thinking to where you actually are okay with going through the entire process, and working on it, and it being bad and then saying, "Okay, we're going to go back again." It has to be allowed. It has to be part of your thinking going in. There's so many aspects, because psychologically this concept of iteration, which let's tie it over really quick to business because some people might be going, "Okay, this is really nice information about filmmaking, but it has nothing to do with my company."
Michael: What does it have to do with passion and provision companies, because that's what this podcast is all about, is how to build and grow passion provision companies. That said, it is about the idea that you rarely hit something out of the park the first time.
Michael: We're not just talking about when you start a company, but there are iterations, there are phases of companies where you start to hit a season where you're hitting a ceiling, you're hitting a glass ceiling, you're hitting a wall, it's like the company is matured to a phase and then it doesn't go, and it turns out that there's actually a lot of phases that are really normal for a lot of companies across to a lot of different industries. One of those is the $1 million barrier. Can you get past a hundred thousand dollar barrier? Can you get past a million dollar barrier? Can you get past a $10 million barrier?
Michael: There's kind of these in-betweens and it's amazing how you can hit these ceilings, hit these places and like, "Okay, the way I did this worked to here, but for some reason I'm doing the same thing, and I'm working harder, and I'm putting in more hours and I'm not getting to the next level." There's a practice and a process of iterating and practicing what's new so that you can actually move to the next level. Well, that's that we're thinking about in this film-making process. That just stood out really big to me of that first thing of this is a really big psychological tweak.
Kathryn: Well, and to make it even more finite than the whole company level, I mean one of the places where iteration matters a lot is in marketing, right?
Michael: Mm-hmm (affirmative).
Kathryn: Because you're testing things and it's really easy, I think psychologically, and people fall into this trap of being like, "Well, I tried that and it didn't work, so I'm not going to try that again." As opposed to, "I tried that and it didn't do what I hoped it would do, so I'm going to adjust it and try again. I'm going to iterate on this concept." Especially if it's a proven concept that people have shown works, how do I not get discouraged or believe that they just lied to me and it doesn't work just because I didn't get it right the first time, or get it perfect, or it didn't have the ROI that I wanted it to have.
Kathryn: And I would say out loud, personally, that's a really hard one for me, because when things don't work and I've put money into them, I'm like, "Well, I'm not doing that again."
Michael: I'm glad you said that out loud.
Kathryn: Well, you were going to call me out on it, so I figured I may as well just own it.
Kathryn: So, it really is important psychologically to allow for, "We're going to do this and it isn't going to be perfect, and then we're going to refine it, and we're going to keep refining it until it becomes what we want it to become." And that might not be just one or two tries. That might be continued tries.
Michael: I was working with a client yesterday and talking about the fact that when we look at the Myers–Briggs, it's really helpful to look at the temperaments part. If you're familiar with Myers-Briggs, this will make some sense. If you're not, go with me, I'll try and make it as generic and accessible as possible. Myers-Briggs has four letters and there are what we call temperaments and there are four different temperaments, and based on a calculation in the way they do the psychology and stuff, there's four different categories and there are two letters each. Those two letters are NT's, which we have a nickname for them, we call them competitives. There's spontaneous people, and those are the SP's. Those are in NF's, and we called them-
Michael: ... humanists, and the humanists are are really focused on community. They ... Well, we'll go into that a second. Then there's the SJ's.
Kathryn: And they're methodical.
Michael: Right. What happens is this whole thing isn't a, you are like this 100% all the time, it is your preference to start with it like you're right-handed or left-handed, and some people are so right-handed or left-handed that they can't do anything that requires any coordination with their other-hand, and some people are that way with their left-hand and some people are that way with the right-hand, and right in the middle of that spectrum are people who are ambidextrous. They're just really good with both-hands. Well, most of us aren't ambidextrous and most of us aren't extreme to the left or right, but we're on some level of that spectrum, whether we're right-handed or left-handed.
Kathryn: I'm drinking coffee with my left-hand right now and I'm right-hand.
Michael: It's very, very impressive.
Kathryn: I know. I feel really coordinated.
Michael: Like, wow. And it hasn't spilled all over your shirt yet?
Kathryn: Not yet. The day is young.
Michael: Why is this important? Because it's a preference just like your temperament. So, you are competitive, or a humanist, or spontaneous, or methodical in the way you first reach. It's the thing you are most comfortable in doing when you first approach a problem, a situation in real life. It turns out that 75% of people in the western world have an S in the first. They're not an N. There's either an N or an S in front and they have an S. What does that mean? That means that they're more concrete. They don't think about the future as much. When you start talking about the future and everything else, they don't think about implications as easily or as quickly.
Kathryn: Right. They're very present tense. We are very present tense.
Michael: Yes. Kathryn's an S and I'm an N. N's can think about the future, and imagine the future, and imagine multiple futures much easier and faster, and we actually tend to gravitate towards that first. What are the implications of this? Where's it going to go? The S's are typically going, "What does that mean for today? What's happening today? What are the implications for today?" It's also very concrete to be an S, five senses. Well, I'm talking to this client, who's also a friend, and I'm reminding him that we're NTs. And I'm reminding him-
Kathryn: Which is the competitive.
Michael: We're competitive. There's only 10% of us in the population. We occupy a huge percentage of leadership roles. We have a much easier time of envisioning kind of where we want to go, but we can struggle greatly with how do we apply that today and talk about really tactical things: how do we set action items, how do we set goals, how do we set deadlines, things like that. Then even when those are set, having enough attention, we want to drift off to other things, do projects. We don't usually find it enjoyable or easy to make sure that people are accomplishing those things. We don't create lists easily. We don't enjoy, get super excited about checking off lists as a natural automatic thing. And we don't usually organize.
Michael: Now those are general rule of thumbs, but what I was telling him was, "You've got to remember when, because so many people are S's, that they're thinking about now, they're thinking about them for today. In this iteration process and all of these different things, especially in marketing, here's what happens. We can talk about the fact that with your people that you want to iterate, you can talk about the fact that you want to test or optimize marketing. The first key is that you have to have buy in from everybody. They have to understand what's going on. What I'm telling you right now is the reason I'm going off on this, what appears to be a tangent, which is not, is you have to think about as a leader, your people, if you're going to iterate and optimize, and you want to iterate and optimize because the power, the magic sauce, is often found in that.
Kathryn: I would say so-
Michael: I didn't really finish my thought, did I?
Michael: Do you want to finish it for me?
Kathryn: No. I want to illustrate it, but I want you to finish it.
Michael: Let me wrap it really quick on this. I apologize for this tangent, folks, but here's what I'm saying. They're going to get frustrated if you want to iterate. Everybody gets frustrated at some level, but the S's are like, "Yes, I buy into it at some level," and then all of a sudden you come back and you go, "We've done that." And everybody threw their blood, sweat, and tears in and they're like, "I don't want to fix it." I mean, it's not that it's broke, it's like, "But we want to make it better," or, "It's good enough." There's a frustration in there, right?
Michael: Go ahead with your illustration.
Kathryn: Well, I was going to illustrate with you know this because having led a company for now 17 years, we have hired our share of obviously a lot of S's but a significant amount of SJ's along the way who are methodical, who grab ahold hold of a project, who march forward with the project, get it done, and when it's done, it's done. And if you're not positioning those folks to understand that just because we've finished it and rolled out essentially version one, that doesn't mean we're done. We haven't always done a good job, I think, and I'll pick on you because I'm one of the S's, but you haven't always done a good job of positioning that, especially early on-
Kathryn: ... so that the folks who are doing the blood, sweat, and tears part don't feel like, "Okay, so it's not good enough. We didn't do a good enough job." You know, there's a sense of frustration that we have to work at it again, there's a sense of we didn't do it well enough, we're not good enough or whatever. There's all those different pieces in it, and we have frustrated people, and it's just a challenge.
Michael: Well, and here's what it makes me think of. It makes me think of labor and toil again. Let's go back to the Pixar illustration because that was what we started with, it's pretty concrete. How many times did he say they rewrote the story or the script in that three and a half years?
Kathryn: Well, I know they said they went through multiple writers, and fired at least five along the way, which is an interesting thing, because they're writing part of the script, but they can't take it the rest of the way.
Michael: Yeah. The writers would stick around a minimum of 10 months and sometimes, in the longest three years, but there was lots of good writing, but they needed a team of writers to make it happen, there's all these different characters, so not one author, not one script writer per se. But they would do it about every three to six months is they did a new one. I think there was seven or eight versions minimum that they did.
Michael: Okay, here's the labor toil. We do this work, we all sit there and we watch it for 90 minutes, and we've just made a feature film, right? We made it with pencil drawings, but we did all the music, all the sound effects, all the dialogue from everybody over, and over, and over again. It's all there. We put it in. We watch it. So we've made this film, all these different people put all this energy into it, and then you basically treat it like a piece of paper at the end. You crumble it up, and you throw it at the trash can in the corner, and you go, "Let's do it again." Then the next one comes out, and you take it, and you throw it away, and you say, "Okay, scrap the whole thing. Let's do it again. Scrap the whole thing."
Michael: Okay, with something like that, it's not just like, "Well we've got 10% there, and now we're 20% there, and we're 30% there." This whole thing's not jelling, and it doesn't gel in certain ways, and you make one move and everything else, and that doesn't help. Well, how often can something like that feel like toil? But it's not. It's labor when you understand the process. And the folks at Pixar, this is one of the pieces of their magic sauce. It's any filmmaker's or script company is like, you've got to invest in the studio. You've got to invest in making sure the script is right.
Michael: It happens in different ways and different companies have different paths to it, but that iteration process of is the script good enough? Is the story good? Is there really something there? Do we have to tweak it? Do we have to rewrite it? Scripts get bought and then they get rewritten. There's a very fine line between labor and toil sometimes.
Michael: And in passion and provision companies, you want to be and you want your team to be laboring 51% of the time or more because it provides a certain amount of motivation, and morale, and actually it increases efficiency and everything else when you can get people to think, "I'm doing something that has value, and purpose, and meaning, and it's not a waste of time."
Kathryn: Yeah, and it really is a mindset. You know, Michael has been trying to train my mind to for, well probably since the day we got married, maybe starting when we were dating, about the fact that just because you do something and it doesn't work doesn't mean it was a waste of time, that everything builds, and you learn from everything. And so you know, the kid's saying, right, if at first you don't succeed, try, try again, is really powerful. I think that for me, my frustration has been sometimes we do something and I get really, let's just talk about branding, and words, and marketing. I get really attached to what we did. Like, I like it, and I think everybody else should like it, and I love it, and then when it doesn't work, it's like, "What's wrong with all of you?" Right? Because we've worked really hard to get to that, and we thought it was really good, and we thought we'd landed the plane, and now you're saying, "No, we haven't landed the plane. We've circled the tower." And I'm like, "Dang it!"
Michael: Let's talk about email sequences for a moment.
Michael: This is marketing, and if for those of you who are using email marketing, you may get this. A lot of you are not using email marketing, you're not even using it well, at all or well. And when I say well, I mean to its fullest potential. What can happen is we use email marketing in our sales and marketing process, and when we do that we have different places in the buying process, or in the getting to know a client process, a prospect process that is where our emails go out. So if this is a first contact email, then it's a whole different type of introduction. It's more formal, we're trying to figure out how to word ourselves to introduce ourselves, and some of our email lists might be cold calling. Basically in a sense, we're sending out emails to a list that we sort of have, but we're introducing ourselves. It's not an opt-in list. They didn't come to us and say, "I really want emails from you."
Michael: Then we have others where along the line there's, you know we have a few thousand people on an email list that are just, they've signed up to want to hear from us and our email comments and everything else. Okay. So we have this one sequence going out that's an introduction. We actually created three different emails and we're sending them out to ... We took this list and we divided it into thirds and as we get new people, we send it out to these new people and we've been testing all three of them. They're introductory emails. Email number one and email number two are getting almost identical responses.
Kathryn: In terms of the open in terms of open rate.
Michael: In terms of open rate and click through rate. And you want people to open your emails. Email number three is getting somewhere between seven and 10 times the open rate and click through rate. Actually, it's more than 10 times the click through rate as the first two. We've been doing this, running this now for about four weeks, three or four weeks, and we've been watching this. Well, what it says is number three is doing great. Number one and two suck.
Michael: They're not working. As in our friend Mark, he's like, "You watch it, you do all this work, there was a lot of time in it." We didn't just hammer out an email. We spent time doing several things getting ready and stuff like that, and then our copywriter wrote the emails, and then there was iterations, and editing, and stuff like that. I often want to get it as perfect as possible because of my NT. I don't want to come back to a project. ST's, or SJ's, or SP's, S's more often than not, they like what they've done, they've created the list, it's done. I'm just bored. We all struggle with iterating, we all struggle with optimizing, and the frustration.
Michael: Another one that gets in the way is it is, and this happens for business leaders, that sounds like the most inefficient process in the world, and I need a business that's going to be efficient, and we all know that businesses that are profitable and successful are efficient. That's just common knowledge, and we all know that, and those conversations are said, things are said, I've had those conversations. And actually it's a true statement. In context, because the reality is, what Pixar does. Let me say this very clearly. Pixar has never had a dud film. Up to this point, it has been over 25 years, I believe, over 20 years for sure, it has never put out a film that didn't make a profit. The film industry has roughly a five to 10% success rate. Five to 10% of all films that are made are profitable.
Kathryn: Make a profit. Yeah.
Michael: Now, the pros have a better average, you know, the main studios have a better average than five to 10%, but it is almost unheard of that a studio has 100% profitability record on their films. It just doesn't exist. But Pixar did it.
Kathryn: So it does exist. As our friend said, "So far, so good."
Michael: So, it exists there. Right? And he's very cautious. It's like, "Well, you know, we're very thankful for, you know. It's always you're only one movie away from that not working." This iteration process does work.
Michael: So assumption, ergo, iteration is efficient. Iteration, or optimization of your marketing, or optimization of your sales process, or optimization of your products, and what you go to market with, and how an iteration and optimization of your management style and everything else has to continue to grow, and growing requires that you look at it, you evaluate, and you continue to refine the things that are good. Try and keep the things that are good and refine the things that aren't as good. Or maybe it's good, but it's not hitting the results that you need. Maybe it's not hitting what really should be minimum requirements for competency, and you've low balled minimum requirements because you don't believe that it's possible to go any farther because you haven't seen it done. That's a really big deal is a lot of times we haven't seen it done, so why should we believe we have to do it again? Or we get real attached to what we have, and we made it, and I think everybody should love it whether it's a product, or a service, or my leadership style, or whatever.
Kathryn: Yeah. I think we could do an entire podcast on just the power of having a learning attitude, especially in the marketing realm. Good grief. And in leadership. I mean, there's so many things to learn and it's easy to get settled into a way of doing it, a style, one approach and not be willing to expand beyond that because you're comfortable with it.
Michael: Well, and one of the 13 behaviors of trust is to get better. You have to have ability to trust. You have to earn trust. You have to be committed to getting better. That's one of the 13 behaviors. To building trust with somebody else, they have to have trust in you that you're somebody who is growing. Because if they know that you're somebody who is constantly paying attention to growing and getting better in the areas of their life, they can trust you in that area of your life. And let's face it, some areas of our lives, we're not as good at getting better as other areas of our life.
Michael: This is the iteration process. It all really was intriguing and got exciting when we were talking to Mark and really thinking about what that looks like in something that is proven enough at business as the Pixar model or that model that has existed in the film industry for quite some time. You may say, "We don't have time or three years before we can launch a product because we're a small company." You may not, but you do need to be able to, as a small company, be more flexible.
Michael: Sometimes you need to, we need to say, "I'm going to slow this process down and not rush it and I'm going to allow for the iteration." You have to be able to say to your staff, "I want to set parameters and I want to set expectations that we're looking for something that may not be easily measured, but it's got to work and we've all got to agree it works." It's all got to be good, not just okay, it's got to be good, maybe great in what we're doing, and we're not going to stop until we get there. And sometimes you do a little bit of that iteration before you launch a product, an email, or whatever, but you've got to test and then you're willing to come back and change it.
Michael: Part of that is willing to put that into your management style and in your systems and help people understand that. when you get your team to there, and you have expectations, and you set expectations for yourself with iteration and improvement, amazing things can happen in your company from the joy of putting out great products and services. The satisfaction of being really financially successful because all that work, when it refines, it can do well.
Michael: And it's amazing how often you're like that cartoon character on the barrel that is either falling back and just trying to keep up and not fall off the back of the barrel, or spinning too far the other way or the log in the water, and going the other way, and you don't want to land in the water. That person running on the log, you know that cartoon? The idea is to be balanced in the middle and to either lag or rush will get you in trouble, and you want to do that, and iteration and having the right attitude towards the integration can really change your company.
Michael: So, Kathryn what do you think about the final thought on that whole idea?
Kathryn: For me, it's just the encouragement to really evaluate your mindset and begin thinking where are you on this process of iteration? Is iteration something that you welcome and that you do? Is it something that you struggle with? And if you're leading a company and leading people, how well are your people positioned for iterations that would lead to continuous improvement in what it is that you're offering?
Michael: Absolutely. Hopefully this has been helpful today as we just continue to talk about on this podcast what it looks like to build and grow passion and provision companies, where you have the provisions for today and for the dreams of tomorrow, and that you'll have the fulfillment of understanding this, "I really enjoy what I do, at least 51% of the time." Those companies have proven to be more successful, more financially successful, more rewarding, and greater culture and greater morale in those companies, and the values and the benefits you get when working with your team also just go through the ceiling. It's really cool. Thank you very much for joining us today on the HaBO Village Podcast. I'm Michael Redman.
Kathryn: And I'm Kathryn Redman.
Michael: And we hope you enjoy the rest of your week. Take care.