Get Off the Treadmill With the 7 Stages of Business Ownership

OK, so you’re building the business of your dreams. But do you have any reference point for how your business actually affects you personally? If you don’t, you just might be building a trap for yourself, not the business of your dreams.

If you don’t have a handle on the Seven Stages of Business Ownership, you’re likely to flame out personally, even if your business is successful.


Will You Be Owned By Your Business?

Just about every business founder/owner makes the mistake of assuming that if they build a great business, they’ll automatically get a life, too. Big mistake. If you’re building a business, you need to be as intentional about eventually getting a life as you are about building the business. Building the business always comes first, but if you don’t intend to USE your business to build your ideal lifestyle, you won’t own the business; the business will own you.

There are plenty of tools to grade what stage your business is in, but none for measuring how your business is impacting you. Here’s one from our book, Making Money is Killing Your Business, that focuses on what the business is doing for (or to) you personally.

As you read through the Seven Stages of Business Ownership, ask yourself,

1) What stage am I in personally, and
2) What stage is my goal? You can stop anywhere from Stage Five through Seven. But if you stop at Stage Four, which most business owners do, you will always be a hostage to your business. Stages One through Four are about generating money. Stages Five through Seven are about ensuring your business generates both time and money for you. Get to at least Stage Five so you can have both.

Stage One—Start Up
Pouring time and ideas into creating the business & getting it off the ground. “This is fun!”

Stage Two—Survival
Survival is everything; funding is drying up. Urgently driving sales. We burn a lot of fuel on takeoff. “I didn’t think it would be this hard.”

Stage Three—Subsistence
Regularly breaking even—woo hoo! But the business is totally dependent on me. Tension… “If I stop, the business stops. Must keep going…”

Stage Four—Stability (& Growth)
Regularly profitable, finally. The “American Dream!”, followed in a few years by quiet desperation. Outwardly successful, inwardly deflated. “My business owns me.”

Stage Five—Success
Now others can “make the chairs.” The business makes money when I’m not around and I don’t have to stitch it back together when I return.

Only 5%-ish of business owners ever get to Stage Five. You can make millions and be stuck in Stage Four for decades because you have no time to enjoy the money. The reason only 5% make it? The Big Mindset Shift. They decide to demand that their business give them BOTH time and money, not just money. It’s that simple. “I’m off the treadmill!”

Stage Six—Significance
Leadership in place. The owner is about vision and guidance, not production. “I’m focused on making a difference, not making a chair.”

Stage Seven—Succession
Leadership in charge_. The owner delegates guidance and focuses on vision, passing the day2day torch of leadership to others. They become “the myth”—when they walk in, people whisper, “Hey, that’s the person who started it all.” Leadership—_”I used to solve and decide. Now I ask questions.”

Beware Stages Four and Six

Stage four is the most dangerous stage. The urge to escape any future risk to get to the next stage keeps us on the treadmill for years, if not decades. But stopping at this stage ensures you bought a job, not a company, and will ensure you regularly fall back into Stages Two and Three.

Stage Six is the second most dangerous stage. If you go off and “play” too quickly at this stage, you will come back to a disaster. Focus for just a little bit longer, and make sure someone else is giving day-to-day guidance, and reporting transparently to you.

Which Stage is Your Objective?

Where are you? What’s the one thing you need to do now to get to the next stage? There’s a hundred things you could do; just do the next one. If you can’t get past Stage Four, it’s head trash. Nobody is as good, competent, experienced, committed, etc. You made that come true. Stop it.

If you’re in Stage Five or greater—congratulations—take the next month off with pay. They won’t miss you!

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The Biggest Thing Wrong With Hiring Is the People Doing It

A growing number of great companies are dumping hiring managers altogether, and putting hiring in the hands of peer teams. It turns out eight to ten brains are better than one.

Harvard Business Review says 80 percent of employee turnover is due to bad hiring decisions, and that those decisions can cost more than five times the annual salary of the bad hire. The problem is largely with who is doing the hiring: managers.


Managerless Hiring Works Better

Managers may be the start of the process, but at a growing number of great companies, they not only don’t do the hiring, they no longer exist, having been replaced with self-managed teams. In many companies with very high retention, hiring is done by peers of the person who is being hired. W. L. Gore (10,000 Stakeholders), Semco (3,000), Barry Wehmiller (7,000), and hundreds more with some of the highest retention in the world, all push hiring to the peer team level.

At Semco, a manufacturing company, with 3,000 people—there isn’t a single manager in the whole place; all hiring is done by the 8-10 person team on which that new hire will work. How does it work to have peers do the hiring? Semco’s employee turnover for the last 20+ years has consistently hovered in the incredibly low 1-2% range.

Barry-Wehmiller, a $1.7billion company, never does a “head count” of retention, they count hearts. How does this culture help them? The data is dramatic. While 88% of employees in traditionally managed companies feel they work for an organization that doesn’t care for them, at Barry-Wehmiller, where peers do the hiring and managers don’t exist, it’s 180 degrees the other way—79 percent surveyed by an outside organization said they believe BW cares about them. Culture matters, and having peers hire peers is a core cultural distinction for BW.

Managerless Cultures See People Very Differently

It’s important to understand why this works. Gore, Semco, Wehmiller and other managerless cultures share a common, simple but very profound belief; that EVERYONE is smart and motivated. Because that belief is deeply held, they have all set up a company business culture where that can be a self-fulfilling prophecy. They attract and retain nothing but smart and motivated people who don’t need to be managed.

In contrast, companies who rely on managers to do the hiring have a culture that believes the manager is at least a little bit smarter and more motivated, more experienced, more committed, etc. And too often, the assumption is the manager is a lot more of all those things. That is also a cultural distinction, but a very negative one.

Such a common but insidious mindset is a self-fulfilling prophecy as well. Those companies have trouble finding or retaining good people. Why wouldn’t they? Who wants to work in an environment where it’s clear I’m not going to be allowed to be as smart and/or motivated as the people up the hierarchy from me?

Can You, Or Can’t You?

If your culture is set on believing people are smart and motivated, you can take managers out of the picture and put the hiring process in the hands of those most affected by the decision—the new hire’s peers. If you think only certain rare people have the skill, experience, smarts or motivation to hire, you’re communicating the worst possible message to those you are hiring, as well as those who are already there.

As Henry Ford said, “Whether you think you can, or you think you can’t, you’re right. Believe that everyone is smart and motivated, and wants to participate in the building of a great company. Don’t just hope it will work out, but intend for them to take the ball and run with it, because you get what you intend, not what you hope for.

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Why Self-Managed Teams Are the Future of Business

Could you build a business around teams of people who have no manager and who report to no one up a “food chain”? If you want your business to thrive going forward, you just might want to

Self-Managed Teams Are Already A Proven Success

A recent Harvard Business Journal article was titled, “Are We Ready for Self-Management?” as if this is a new, experimental thing. The fact is that many large, highly successful companies like W. L. Gore, Semco, Barry Wehmiller and countless others have been structured this way for up to fifty years.


Command and control freaks still talk as if this is some kind of fringe thing. But self-managed teams are time-tested, proven and here to stay, and a tidal wave of companies are moving in that direction, because the data on why you should do it is irrefutable.

It’s Not The Team, It’s Ownership

The magic isn’t in the concept, but in the principle behind it—ownership stemming from the power to make decisions. When people are encouraged to bring the whole, creative, messy person to work, and make important decisions, they take ownership in ways they never would before. That’s important, because ownership is the most powerful motivator in business. A business that motivates everyone to take ownership has found the holy grail.

Responsibility, Not Tasks

The archaic Industrial Age system employed by most companies today would have you believe that a single manager is better at making decisions than the ten people who work under them. But in the emerging work world of the Participation Age, a company believes that the ten people most affected by the decision will be better at making it.

The result of both mindsets are revealing. The Industrial Age manager takes the responsibility to make the decisions, and then doles out tasks for the team to complete. But the Participation Age company delegates responsibility to the team, for them to make those decisions. When you assign tasks (“put this nut on that bolt”), people feel used, but when you delegate decision-making responsibility (“make a great washing machine”), people take ownership.

Of course this only works if you believe that one manager is not smarter than ten people who are closer to the problem. As Janice Klein of MIT found, a few companies attempted a form of this in the 1980s, but didn’t dismantle the management structure that would have reduced their command and control. It’s not a management tactic as they discovered, but a culture shift. If you’re not totally convinced, don’t attempt self-managed teams. You’ll just get hives and make a mess of the whole thing.

More of Everything

Many companies have benefited for decades from giving people back their brains. These companies grow faster, are more productive and more profitable, have lower turnover, and have increased longevity. As more and more owners and investors see the numbers, they will demand that their companies move in this direction.

It’s Simple, Just Not Easy

Are you motivated to enter the Participation Age with self-managed teams? It won’t happen overnight. A century of “bosses” have taught people they are not quite as smart and motivated as managers. You have to reverse that notion, and it will take time for people to trust you really are doing it. Here’s how:

1) Form a team around an objective (i.e. 4-12 people)
2) have them FIRST clearly define the desired result,
3) then the process(es) needed to get that result.
4) Then THEY set metrics for steps in the process and
5) for pay based on the result desired (quality, quantity, speed, etc.,)
6) finally THEY decide what happens if the metrics aren’t met and how to move team members along if they are not contributing appropriately.
7) Leadership approves.
8) Run it.

Safeguarding Your Future

In the Participation Age, people don’t want jobs that just pay the bills, they want work that allows them to be fully human, make decisions and own their stuff. As more companies leave the Industrial Age management structures behind and invite people to decide, they are more likely to retain the great people they have. Giving people their brains back is becoming a necessity for keeping them. Self-managed teams is one great way to do that.

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23 Great Ideas for Growing Your Business During the Holidays

If you’re not in retail, the assumption is that December is a black hole for growing a business – we might as well just relax and make peace with it, right? That couldn’t be more wrong.

Grow Fast During The Holidays

Almost every business-to-business owner claims the period between Thanksgiving and New Year’s causes their business to fall off significantly. But it’s actually more often just a self-fulfilling prophecy. When I started Crankset Group in October 2006, I got all the appointments I needed, even between Christmas and New Year’s when B2B businesses can usually hear a pin drop. It was one of the best pushes I ever did to get a new business off the ground.


Expand Your Business, Not Your Pants

Would you like your business to expand over the holidays, instead of your pants? The holiday truth is that everyone is busy after work and on weekends, so it appears they’re more slammed than usual. There really is something going on almost every night, but during the day, very little business is being done. Why? Because everybody thinks everybody else is busy, so nobody is connecting. Except you.

Getting Their Undivided Attention

For four years straight I used the holidays to push my business forward significantly while other businesses were focused on opening and throwing away fruitcakes. I had very little problems getting appointments during the day. In fact, between Christmas and New Year’s I had three to four high-quality appointments every day, and in most cases, I was the only business activity those people had on their calendar the whole day. They were glad to get out of the house for a cup of coffee and I had their full, rested attention.

23 Great Ideas

So if you’re building aggressively right now, don’t slow down after Thanksgiving, speed up. You’ll be the only one vying for attention (remember, only ask for time during the day). Here are twenty-three great ideas to keep things moving or growing even faster during the holidays.

1. Sales—start now and fill up your calendar right through New Year’s. You won’t miss a beat while everyone else is in a tryptophan stupor.

2. Thanksgiving party—don’t get lost in the December party shuffle. We always host a well-attended party before Thanksgiving to express our thanks to key people in our business.

3. The Holiday Hello forgiveness factor—Have people in your database you’re embarrassed to say you haven’t connected with forever? The holiday hello is a great excuse to reconnect—“Just wanted to say happy…” and you’re off and running again.

4. Teach your key business partners to do the Holiday Hello with their stagnant connections. They’ll appreciate the idea.

5. Give a box of chocolate bars with THEIR Name/logo on it, for them to give out to their strategic partners. You can put your name/website on the back of the wrapper as the “chocolate supplier” or something. Here’s how.

6. Let your clients know they can come by anytime for a couple weeks and you’ll wrap a gift for them (limit the number and size!—us guys would bring the whole freaking tree).

7. Funky Calendars. Yep, old school, but they still work. Be the first, or be the funkiest—they’ll have it up all year.

8. Credit Card Debt Seminar—a friend told me about a guy who sponsored a seminar on December 22 with an expert on how to manage all the credit card debt you’re about to pile up. With only two weeks of planning, he had a hundred people there (during the day, people, not at night!).

9. Annual Planning Event—All kinds of opportunities for strategic planning, tax planning, financial planning, insurance, fitness. You get the idea. You can do these before or right after New Years, but start recruiting for them now (3-4 weeks out is plenty of planning time for most people.)

10. Do charity work as a company and get everyone involved. A local plumbing company asks everyone to work for sixteen hours for their favorite charity, and pays them. TV and radio shows like these kinds of things and just might feature your biz.

11. Make a charitable donation in the name of a particular client(s) and let them know with a nice card or pic.

12. Press Release—Connect a newsworthy idea about your business to the holidays—it’s called “piggybacking” in fancy PR terms. News organizations are notoriously slow during this time—you just might get it picked up by them as well.

13. Give something back. Offer an award for someone you admire, courageous kids, notable givers, create a scholarship—dinner and a ceremony (before December 1).

14. TurkeyCam— has a wild turkey cam. You could pardon a turkey or other “dinner” and put up a live video link to watch it being pampered. Come up with a clever slogan and YouTube it. Could be a sensation.

15. Holiday poll—Do a simple poll to your clients, or on Facebook, Google+, etc., and announce the results. Survey what small business owners really want for the holidays, or maybe their biggest pet peeve about holiday shopping.

16. Hand-deliver gift cards to your clients from a local coffee shop or restaurant. Get an appointment to spend it with them.

17. Send a cheap watch as a gag gift, with a note that says, “Happy New Year! It’s about time we did some business together.” Argh.

18. Send a New Year’s card—don’t get lost in the Christmas card shuffle. And everyone celebrates New Year’s.

19. Send a nice, small crystal office candy bowl with THEIR name engraved on it. Then send refresher candies three to four times a year at other holidays.

20. Offer gift certificates at X% discount for the “slow” time. This is a great idea for photographers, carpet cleaners, etc. Sell the slow time now!

21. Tie your product or service to the holidays—What do people need from me during the holidays? Do they need more balance, a time to relax, a plan for how they’re going to do something better in the coming year? Insert yourself!

22. Organize a shopping trip for elderly clients and let them bring a friend of their choosing. Rent a van or two. This has been a wild success for some CPAs, financial planners, bankers, real estate agents, etc.

23. What great idea do you have to use the holidays to build your business? Share it here!

Hit The Ground Running In January

Bonus points. Most people wait until January 2 to begin calling people and setting up appointments, which means they’re not back in the full swing of things until January 15. Set those appointments up in early to mid-December and you can hit the ground running with a full slate of business the day after New Year’s.

Have a great time growing in December!

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Why You Need to Become a Prisoner On The Road To Business Freedom

Want freedom? First, you must become a prisoner to your business, which is why most business owners never achieve freedom.

Research published in Harvard Business Review reveals something very telling about the way we work; we’re too busy to follow the rules. And ironically, that has a profound impact on whether we will ever stop being so busy.


Don’t Kid Yourself, You’re a Hostage

Almost every founder, CEO and business owner I know is a hostage to their business. I was through six businesses until I learned to move from hostage to prisoner.

Six months as a hostage can have more lasting negative effects on someone than years in prison. Why? A hostage is not in control of anything, the rules are always changing, others seem to be calling all the shots, all we can do is react, and worst of all, a hostage never knows when it will all end. Welcome to owning or running a business.

But it doesn’t have to be that way.

Want Freedom? Become A Prisoner

In Simple Rules for a Complex World, Donald Sull and Kathleen M. Eisenhardt make my case on why we need to become prisoners if we truly want freedom. They found that companies that flourish through hard times, do so because they are following a few, simple rules while others are flailing around with what I call the Random Hope strategy of business.

It makes sense. A prisoner has a few simple rules they need to follow, and most importantly, they know when it will all be over. It’s difficult for a hostage to be encouraged and have hope because the future is a big unknown.

Just a Few Specific Rules

Simple Rules says the fewer the rules, the better. Here are my four simple business rules, which I published in my first book, Making Money Is Killing Your Business. We call them the Four Building Blocks of success:

1) A Big Why—Your Big Why is something you can never check off as completed; being a lifelong learner, being a great mom, giving back to business owners, solving poverty. A Big Why motivates a business owner to filter daily decisions through how they help solve problems and create freedom.

2) A Strategic Plan (not a business plan)—A Strategic Plan will keep you clear about where you want to end up three years, twelve months or three months from now, and will motivate you to figure out the one or two things you need to do this month to obtain the freedom you’ve described.

3) Freedom Mapping—this is where the rubber meets the road. Everyone in our business (especially the founder or CEO) needs to get the brilliance out of their head and onto a piece of paper so others can do it. There have been many copies of famous paintings, like the Mona Lisa, that were so good that art experts couldn’t tell the difference. If Da Vinci can find someone to paint the Mona Lisa for him, you can find someone to train to be better than you.

4) Outside Eyes—You can do the above three on your own, or you can get help and accelerate the whole process exponentially. I was an 18-20 handicap in golf for twenty years. Then I got a coach and in two years I was a two. I can’t imagine how much time and money I wasted doing it myself. I’m talking to you, Mr. Rugged Individualist.

I’ll Get To That Tomorrow…

Here’s the kick in the head. You can go an entire forty-five year career and never do any of these four simple things, and most founders do just that. They don’t know why they are in business, how they plan to use their business to accomplish that, or how to create the Freedom Maps to get them off the treadmill. And they aren’t about to ask for Outside Eyes to accelerate the process.


Founders and CEOs who employ the Random Hope strategy of business will never get off the treadmill. Those that create a very few, measurable, specific rules, and follow them slavishly, can create a business that makes money when they are not around.

He who makes the rules wins. What are your few simple rules? How are they ensuring you will experience freedom? If you have them, and follow them carefully, who knows, you even might get out early for good behavior.

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The 3 Critical Questions That Free You Up to Stop Managing

These three questions, along with The 50% Rule, will free up your time and get you off the management treadmill.

In a July 2014 Inc. article I made this statement, which I’ve used for a long time:

The art of leadership is to know how few decisions the leader should make.

In the comments section, mserra65 said, “I’d like to know what those few decisions are!” It’s a great question that deserves an answer.


What Are the Few Decisions A Leader Should Make?

Leaders will relentlessly pursue taking themselves out of the equation, and instead build a culture that engages other people to make decisions. Ricardo Semler is perhaps the greatest modern example of a business leader. He is materially involved every day in a billion dollar corporation of which he is the majority owner. But Semler celebrated his 10th anniversary of not making a decision—eleven years ago. That’s tremendous leadership.

Ask Three Questions

Here are three questions that can help you move from:
– manager (solving and deciding) to
– leader (training others to solve and decide)

1. Before making a decision, ask yourself, “Is this the highest and best use of my time?” There are so many people who could decide better if we just stopped deciding for them. Train others to decide, and then get out of the way as fast as you can. And with your free time, go do something that no one else can do. You’d be surprised how useful you could be by getting out of the way.

2. Before deciding, ask yourself, “Who is responsible to actually carry out this decision?” Give them the decision to make. If they don’t know how to decide, don’t do it for them; train them to do it, then get out of the way.
Those who are most involved in carrying out the decision have the most at stake and will almost always make a better decision than “the boss”. Discuss with them the required result and the resources available to accomplish it, and then let them figure what is needed to get it done. They will own the decision and if something goes wrong, they will fix it instead of blaming you.

3. If the first two questions don’t get you out of the way, ask yourself, “Who else will be impacted by this decision?” Some people aren’t directly involved in carrying out a decision, but will definitely be impacted by the decision, and how it is implemented. Give them a voice. They may not make the decision, but their input could be invaluable in arriving at the right one.

The Leader’s Goal For Others: Creating Ownership

When you solve and decide, all that is left is to delegate the task. But when you train others to solve and decide, you are delegating responsibility. This is critical because when we delegate tasks, people feel used (“put that nut on that bolt”). But when we delegate responsibility (“make a great washing machine”), people take ownership, and that is the most powerful motivator in business. Giving people their brains back and unleashing them to make decisions is key to them taking ownership, and the key to moving you from manager to leader.

The Leader’s Goal For Themselves: The 50% Rule

A great in-the-trenches metric to know you’re leading is The 50% Rule. I encourage every leader to eventually have 50% of their time unscheduled, and unavailable to be pulled into a crisis. The second part of that is key, otherwise your time is scheduled by crises. Even owners of very small businesses need to aspire to this because it is the key to them getting off the treadmill.

A Day a Week, a Week a Month, a Month a Year

The result? I have nothing scheduled on Mondays or Fridays, and have the last week of every month with nothing on the schedule. And I have a month a year to goof off or envision the future, usually a combination of both. That is 75% of the work year where I’m not in a position to make a decision that others could make better than me. This year I didn’t take the month off, which put me down to only 63% out-of-the-way. Next year we’re heading to Italy for a month.

I’m no Ricardo Semler yet, but I do have it as my goal to regularly not make decisions. What do I do instead? Ask questions, create vision, train, be creative, innovate, guide, make others successful, serve—in other words, lead.

Commit To These Three Questions

Management (solving and deciding) is a tiring treadmill. Leading (training others to solve and decide) is freeing and therefore, invigorating. Do you want to enjoy your business and focus on that which is the highest and best use of your time? Use these three questions every day to train others to solve and decide, and then get out of the way.

That’s leadership.

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