Today Eriks and I are joined by Simon Severino – As well as being the CEO of Strategy Sprints. He teaches Growth, Strategy and Innovation at select MBA courses across Europe.
It’s an interesting discussion on the value of sprints with continuous improvement, that drives sustained business growth and what helps you overcome whatever is thrown your way.
Enjoy this short snippet from the show
Access the full episode below ... enjoy!
Simon has some great resources on his website, you can check out here.
Or connect with him on LinkedIn
Is that how you describe yourself? I have been a systems person my whole life. I just knew it. Yeah. I was just and annoying human being to be around. So, Oh yeah, this is, Oh, this is the routine for that. Oh, this is the standard for that. And then I realized in business, this is what high performers need. I saw it in athletes.
If, if you watch any biography of any baseball player, basketball player, any high performer, they will tell you what's their morning routine was their pregame routine was their training plan. So I realized that in order to have high performance, You need systems and they are the foundations for freedom, for creativity for really standing out in any field.
So yes, I always was a systems person. Now it is, it is my core business. There you go. I actually, on the, on the systems you talk about, which I'm assuming are all very much systems based as your five accelerants. What are they? Can you share those? Yeah, it starts really simple. So service based businesses work with us to double their revenue in the 90 day sprint.
And we start with the five accelerants. It's very simple. Is who is it for? Do you have the right. People do we have the right product? And do you have the [00:03:00] right price? You have the right channels. And do you have the right systems? These are the fiber accelerants, right? So we start by asking, do you really have the right people?
Because you see if you have the right people by some numbers, one of these numbers is the conversion rate in percent. So how many people do you talk with per week and how many of them buy. If that is low, or if it, if it's too high, then you are, you are talking to the wrong people. For example, we have somebody in our accelerator right now.
He has an 80% conversion rate. That's much too pie. So he's talking to the wrong. He's not filtering enough. So are you really serving the right audience? And do you have a filtering system? We are back at systems. Now, do we have a system that really feel out who you spend your time, so you don't waste their time and [00:04:00] they don't waste yours.
[00:04:01] And then we go to product two. You have one main product. One example of our current accelerator clients is they are a big consulting house. In Europe and they have 23 different stores. Wow. Okay. And now we, we focused with them on one of them. They picked the artificial intelligence one. So we go now with one productized service instead of 23.
That's the part. Yeah. Cause if you simplify that the whole communication gets better and you can improve it really every week. Our goal is that everybody has, there's just one main product and one main upsell, because when you have just one product, every time you pass by, you can curate it a little bit.
But if you have a sprint coach like this person has, so they have a one, two, one sprint coach for 90 days, 24 seven, and the sprint coach asks you a series of questions. And one of them, they are all in spreadsheets [00:06:00] and one of them is fill out the list of where's the money coming from. And what's the profit rate per service.
So there, there are a couple of numbers that you have to fill in. So how much time per week goes into fulfilling that service? What's the profitability per piece. So per unit and that, and after this five, six numbers that you put in, you see the numerical situation. So because the sprint coach is outside of your team.
He sees just the numbers. Yeah. So you, with this spreadsheet that you just see the numbers and then it becomes very easy because we have these 23 different items and the profitability was at. Two to 5% for half of them. Then for a quarter of them, it was at five to 15%. And then we had exactly one standing out with a 25% net profit.
[00:07:48] We say the first coach is the market. The second is your sprint coach who helps you measure the market resonance, but you need the numbers. So whatever we do, and we say, okay, this is [00:08:00] important for this week. Our sprint length is seven days and we say, okay, we're going to improve this. What is the main metric?
[00:08:08] And we write them down, it's a number. And then there is a secondary and the third one, very metrics. They are more around the confidence and usage. So user residents in our case, it's the NPS, the net promoter score. How happy is the, how confident is the team? But the first one is a number that comes from the market and it says, I don't know.
So 15 users will be tested and four of them will be 100% happy. For example, that's one thing that we would measure seven days later.
On a continuous basis. So we always analyze where we are at, where we were to be. And then there are two levels of innovation, the very longterm one, and the current, the current is always seventies. So some might say, but that's not innovation. That's just improvement. We would say, this is innovation because.
The focus of our innovation is come from the NPS. That's the net promoters core, our clients what's missing. What's not working. What's working really well. And we ask this every 30 days to all clients based on that we set the focus for the week and the focus for the week is on the one current bottleneck.
And we get that, we get it from them. So if they say. Hm. I wanted to double my revenue, but I just got to 25%, but I didn't get to 100%. Uh, then we know, okay, we have to find a bottleneck in there. We do a short analysis of what's the root cause. And then we start two to five quick parallel experiments that we can measure in seven days.
So we test our assumptions. We write down our assumptions. We test them in seven days. And at the end of the seven days, we have the result. This is how we do innovation week by week. And then there are some bigger longterm innovations. We can get them from our blue ocean strategy. We call it with the equalizer.
[00:10:41] We write down the eight things that we are doing. And then we ask ourselves selves in what our competitors are investing right now. Regarding to that and basic with Zack. So for example, our competitors right now are investing into AI driven data dashboards. Yup. We let them, we let them win that field with that.
[00:11:11] We do something completely different. We, uh, we invest in real time. One-to-one coaches. It's the opposite. Yeah. This is how we will win that field because when they Zig with Zach, so we have a completely own market there. And then we set goals, which are more long-term in our world is 90 days to six months.
Yes, we have the equalizer. So we start with eight positioning exercises, the basic eight positioning exercises. Who is it for? What is it? What does it, what does it, change in their life and, uh, the eight positioning blocks. And then we go to the differentiation with the equals it's this eight things that you who are doing really well and how you can differentiate and neat that down and find your edge inside of it.
[00:13:32] That basically leads to you breaking free from competition. We try. Every single one of our clients that they do not have to think about competition anymore because they found their edge. So I was going to say that there must be another big step in the process because in so many businesses, uh, and, and, and people [00:14:00] are possibly brought up this way, you know, always be aware of what your competitor is doing.
[00:14:04] Don't let them get away with something. But is it fair to say that in your system you're able to filter out, even if a competitor does something that may on the surface seem be, be significant. If it doesn't fit the plan? Okay. So we have a competitive analysis system that we installed, but this is just rather that you should just know what's going on, but we try to limit the time that you think about competition competitors to the minimum.
So don't think more than 20 minutes per week about competition, because you should really think about your clients. This is where the energy goes. Make them super, super successful, super happy, transform their moment and transform their day and transform their week. This is what you should do most of your time.
And then from time to time, use your radar. To just check it's like when you're swimming and you're heads down in operation or you're just swim from time to time, you have to pull your head out of the water and check if you're swimming in the right direction. Who else is swimming around you?
Are there some, some obstacles coming up, but how long do you have your head up the water? Okay. Just a couple of seconds and then go down and swim again. It's about swimming. So that's my metaphor for strategy and strategic. So the full weeks, just a couple of seconds check. Okay. These are still our four competitors. They are doing that. All right. How can we differentiate? And then move forward. And we grew up, we grew up the eight things that come out again in a spreadsheet. And on the left side, we cluster where we are weak and they are better and we just let them, them win in that field in the middle.
We have where we are. Okay. And they are okay. Sometimes we win. Sometimes they win. Okay. We reduce the amount. Of time and budget that we put in there. And on the right side, we have our superpowers. So this is where we win already. We are going to double down on the right side. We will take all the budget and all the time that we cut from the left side and we will double down on the right side.
This is how we help them differentiate. And it's very simple and it goes then directly into the monthly budget. This is where you put your money and your attention into your double down on. And that has two parts. There is the part double down, which is basically what currently [00:17:00] works just to more of it.
And then there is the second part create, and this is the long term one. What can we even create? Which is new, but fits. To these insights and to these patterns that show up here, but that's longer than 90 days. That makes sense. There's another term you use Simon maximize maximize your ROL return on luck.
[00:17:39] Oh, that's, that's a really nice to, can you explain that a bit more? These ones coined by Jim Collins and he started this, it was, I guess, a joke. And he's his question was why do some people win and others don't and [00:18:00] he says, okay, maybe there is some amount of luck going on there. And he started his research.
And he came up with this return on luck. And he said, well, luck is equally distributed the resources, the chances they come and go for everybody, eh, once in a while. But some people execute on that chance on that small luck and others don't. So what's the difference. And he stopped there, but I continued because.
I find this so fascinating. So I, I took this term and continued observing the world and our surroundings, and I see that return on luck is really defined by the number of parallel that you run. Let me give you an example. We will. Compared to our competitors. We win because per week we have five to seven experiments going on.
So we write down our hypothesis in a numerical way. We run five to seven experiments per week. And then we measure now compound that, you know, whole year compounded in three years. By that number of experiment. And that's just execution. If you will execute so many experiments, the probability that one of them will hit and we'll find it, a vein is just higher.
And that's my definition of return on luck. I think you can maximize the chance that luck hits you by maximizing the numbers of parallel experiments that you run every week. That's makes a lot of sense to me. I was going to ask you with, obviously, is there a particular type of personality and a leader that you've like, you know, a business that is likely to embrace, you know, the strategy, your strategy, sprints and innovation.
Is there a particular personality type that you identified? We see some commonalities. I don't know if it's on the level of personality, but I see some behavior patterns. That our clients have in common. One is they are single founders. They are much more effective and happy in our sprints. Then people who call found, I think this has to do with the maturity level of the person, because cause you know, there is this fundamental loneliness in life and it is part and it is part of becoming an adult.
To face it and to embrace it before that you always have some kind of committees, group work, coal stuff going on. And then there comes a point in life where you see, okay, either I lead myself and if I do it well, then it will have some ripple effects on others and I might have a followership. And when you embrace that, you go through.
Your journey with much more clarity and with much more determination. And this creates the speed and the momentum that I would describe as a sprinter. Somebody who thinks with their hands, they do stuff and they learn from that and they collect the information, during the action and through the action instead of dividing the world in analysis.
And then later on, Launch and doing so what I see and what I call a sprinter are people who, who act on their intuition, gathered the data and move forward from there and do not stop and avoid the emotional pain that is in there to not avoid the journey, but rather embrace the journey and say, okay, I'm going to collect the data.
I'm going to show that my hypothesis is right. Yeah. Diesel. So they must be very changed tolerant because you cannot be a status quo type of person that led environment. Exactly and you know, life, life is changed, right?
I think this is one of the basic challenges and maybe things to learn as, as a human being, right. Our body is changing all that my body five years ago was not the same body. Unfortunately. So the same is for all other levels of our existence and our business, we are in a continuous flow and, um, yeah, there are some pros and cons, but if, if I observe who are the sprinters out there, it's the people who break free from meetings.
Break free from committees break free from hiding behind standards. Um, and, and this is how in my industry things are done. They don't hide behind that. Yeah. So are you finding that those type of people now are standing out even more your experience? That they need help because you know, these people, these people are, are lonely.
These people are changing the world. These people are making a difference friends and they get pushback. If they are in corporations, they get pushback. If they are out in the wild. They, they, they get pushed back and when they start showing growth and showing validation, then they get even more pushback and they get attacked and they get legal topics in between.
They need to, to embark other people on that.
That's a great point that bringing other people with you on your vision, uh, would seem to be an important point as well. Absolutely. You cannot create something bigger than yourself alone. So you need to work first on the vision. In the first week we work on the, on the vision, which is always in three years.
But it's, it's like a movie. So we ask them and too bright, five to eight pages of how it looks like, who is there, how do they feel? How do they behave? Why do they do what they [00:25:00] do? How are their surroundings reacting to that word? What are they proud of? What are they bringing into the world? So it starts off with this vision and.
With that vision, you then have to go out and the right people will resonate with it and they will check in and say, Hey, this vision speaks to me. I want to be part of it. Can I move this forward? And this is how you recruit in the first year. That's a great tip. Yes, it is good. And other conduct cause your time pressure that we need to wrap up, but I'd really like.
Just at this time during COVID obviously, and this is going to be hanging around for a little while. Uh, you know, obviously, you know, we have the opinion of change and I really love your continuous change perspective really, because I think that's critical at this stage, but is there anything that, I mean, I guess advice you could give to listeners on how do you manage that?
Change. How do you manage this whole process that we've got to go through at the moment, which is constant change? Yes. Do less reduce the number of activities to your current number one, bottleneck and do only this for this week. And when you have of the debt, then you start the next thing. So, however, the number of project is that you have right now.
Focus on the number one bottleneck. And if, if you're asking, but how do I find the number one bottleneck we have put together a 15 minutes exercise. You can check your bottleneck in 15 minutes. Okay. We have put it on website. It's it's strategist, friends.com/sales. You will find the bottleneck in your current sales funnel because right now in 2020, Everybody needs to build up their, their revenue again.
So this is an exercise. If you're asking yourself, how do I find my current bottleneck strategies, strategy, sprints, constellation sales in 15 minutes, you will find your bottleneck. And then my advice is just solve this one and then open up the next activity when this is closed.
[00:27:44] So if you've got a process to, to examine that, would that help. It's usually not the one that they think. So 99% of the people, when we ask them, what's your current bottleneck, I need more leads. [00:28:00] And when we then ask, okay, let's play through, you'll get 100 more leads next week, what happens? And then we see that the system of how they turn that lead into a user, into an active user, into a super fan.
Is a leaky bucket. And if you put more water into a leaky bucket, it doesn't get better. Accessible. Usually the one thing that you think is your bottleneck is usually not your bottleneck and mostly it's in the main operations in how you onboard your clients and how you make them happy. It's mostly there.
This is why we put together this exercise. So you can find your current ones. And it's interesting how, how we, we usually think. At the beginning of the funnel, we think visibility will change everything. It's not, it's usually not the main point. The main point is what you are doing and does it really change the life and the moments of your users for the better and how you are.