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Yesterday I Met a Rich, Self-Made Hostage. Are You Becoming One?

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I was stunned when I heard it: “It’s our 30th anniversary, and I’m finally planning a full two weeks off work to celebrate.” This proud declaration from a man who owns a $30 million company is just sad. This is a man who lives in abject poverty, with no freedom and no clue he’s been doing it wrong for 30 years.

I see it all the time. Business owners whose personal lives are train wrecks, with no time to invest in their kids, spouse, or non-existent hobbies, and no time to even think about creating meaning in their own lives. They are hostages to their businesses with no end in sight for their incarceration.

People think this guy is a great business owner because he works all the time and has a lot of toys he doesn’t have time to use. I think he lives in abject poverty.

Riches vs. Wealth

Riches is just money. Wealth is freedom. Freedom is the ability to choose what to do with my time. Time is more valuable than money. It usually takes money to buy time, but unless the specific goal is to buy time, money can make us hostages.

Money does not bring freedom. Time brings freedom. This man has millions and has no freedom. He readily admits that if he is gone from his business for a few days things begin to go awry. He has built a $30 million business that depends on him personally being there every day! He is not a business owner; his business owns him. He lives in abject “time poverty”.

Intending to receive time, not just money

You get what you intend, not what you hope for. You can just hear this man starting his business. He intended to do two things:

  1. “I’m going to work really hard” and
  2. “I’m going to make me some money.”

He got exactly what he intended – hard work and some money. And he is trapped by the hard work. He did not go into business intending to get both time and money from his business, just money. He hoped that getting money would give him time and create freedom, but we don’t get what we hope (wish) for; we get what we intend to get.

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

I built five businesses like he did and was trapped as a hostage every time. With Crankset Group I intended to do something different – I decided this next business was going to give me both money and time, and everything I did from the beginning was driven by forcing my business to produce both.

As a result, I now have every Monday and every Friday off, the last week of every month off, and a month in the summer – it adds up to 73% of the work week.

I use only a few weeks for vacation, and choose (freedom) to invest the rest helping others build businesses around the world, including for-profit businesses to solve poverty in central Africa.

Vacation? What Vacation?

A recent American Express OPEN survey found 66% of business owners haven’t taken time off in several years. And of those few who do take vacation, 68% of them check in daily to try to run things from their beach chair (we don’t call in at all during our month off).

It’s important to get away from your business. The famous Framingham Heart Study found those who took regular vacation are 32% less likely to die from heart disease and 20% less likely to die from anything else. Besides  being healthier, time away from the day to day grind will help you see the big picture and make you a better leader. And you’ll be more productive when you return.

The objective of your business should be to build your Ideal Lifestyle. If you’re proud that you finally get two weeks off, you need to reassess how you are running your business and your life, and refocus on wealth (time/freedom), not just riches (money).

Is this just for special people? No. I built five businesses and never got off the treadmill. The sixth time I simply decided/intended to do it differently, and – what a surprise – it turned out different.

You get what you intend, not what you hope for.

What are you intending to do with your business and your life?

Article as seen on Inc.com

Discipline will not make you successful

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The tortoise wins.

I ran a marathon 30 years ago. While training, my wife, Diane, started casually jogging with me at the end or beginning of my runs. A few weeks before the marathon she ran a half-marathon with me.

Since I had never run more than three miles, I had a five month schedule for preparing for the marathon. I was very disciplined about it, it didn’t matter if it was late at night or raining, I kept to my schedule for those five months and finished my marathon.

20 years later I was only running casually one or twice a week, sometimes less. I was able to keep my exercise going with other sports, but really didn’t have a long term commitment to running. 20 years after the marathon Diane was running four to five times a week faithfully, every week.

Discipline vs. Diligence
I had been DISCIPLINED to prepare for the marathon for five months, but Diane was DILIGENT to keep running a few miles every day, year after year. We hear a lot of talk about discipline, but diligence trumps discipline every time, and is much more desirable in growing a business that lasts.

Tony Robbins says we over estimate what we can do in a month, and greatly underestimate what we can do in a year. Diligence takes the long haul into account and sets us up for long term success. It’s about being the tortoise, not the hare. Diligence keeps us from getting distracted by each new shiny object.

Discipline is motivated by short-term goals. Diligence is motivated by long-term goals, deep values and belief systems.

Discipline is about building a habit. Diligence is about building and sustaining a life and a legacy.

Discipline is about WHAT WE DO. Diligence is about WHO WE ARE.

Things are great; things are not great; things are great…
Why are there so many peaks and valleys in businesses? Too often it’s caused by being too committed to very short term impact (discipline) and not having a good grasp on how to do anything about the long term (diligence).

The priority – the long term
Henry David Thoreau said “Most men lead lives of quiet desperation.” In business, we get a shot at quiet desperation every time we commit to a short term shiny object that we just got excited about. Emotion and shiny objects are a great for recipe for short term shooting stars, but diligence keeps us grounded, stable, shooting for something significant with our business.

Short term goals that aren’t connected to any significant future for our business contribute to quiet desperation – moving from one short term, random, unconnected objective to another. We can look very disciplined about short term goals and never get anywhere. Longer term objectives for our business get us focused on something significant and create quiet resolve.

Investor owned and publicly traded businesses rarely get the opportunity to actually build a business on what would be good for the long term. As a privately owned business, you have the ability to build something that will make an impact for decades to come and create a great legacy by simply being diligent to make decisions that are best for your future, not just your present.

The tortoise really does win. Keep moving, plod along, never give up, stay the course – be diligent.

Diligence beats discipline every time.

Kids and Businesses should both grow up.

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Within a few weeks of the birth of our first child, Diane and I were already imagining and anticipating how it would be when he was all grown up, had graduated from college and was out on his own. We had these same conversations after the birth of all three kids.

From very early on we really looked forward to having adult children whom we could enjoy, and with whom we could build adult relationships. We’re now reaping the rewards of those early years of investment and simply couldn’t have better kids to be around.

We haven’t stopped being parents (we were never fans of being “your kid’s best friend”), and will continue to always play a role in giving unwanted advice and meddling where we shouldn’t. But we fully expected and looked forward to that point in our relationship when it would change from one of complete dependency to what we have now, a reciprocal relationship with our young adult children where they now give back to us on a regular basis with their lives.

Maybe Diane and I are weird. From the beginning we thought of our kids not just as kids, but also as adults in the making. We were very aware that at some point the great amount of personal time, emotion, and money invested in guiding our kids would eventually grow into a more of a two-way street. We hoped that as adults, we could all invest in each other, help each other find significance with our lives, and simply enjoy each other for decades.

Maybe that perspective is why I see business differently than other people. I think businesses should grow up, too. I don’t mean “it would be nice if it happened”. I mean we should all, every one of us, expect our businesses to grow up and start giving back to us and to the world around us.

We should assume that at some point our business would move from survival right through success to significance. Everyone would agree that we should intend for our children to grow up, leave home, and become grown-ups we could enjoy for decades, and yet when was the last time we had a similar conversation about our businesses? It’s normal for children to grow up, so why isn’t it normal for businesses to do the same thing? Frankly, we’re in charge of both of them at birth, and if you have had kids, you’ll know that you’ve got more control over the maturity of your business than the maturity of your kids.

And yet most businesses never grow up. We spend decades changing the diapers in our business and reporting to the vice principal on a regular basis to get it out of detention. Twenty years after we hung out our first sign we seem to be spending as much time, emotion, and money on our business as we did the day it was born. Why would we so eagerly anticipate the maturity of our children and never expect the same for our business? Shouldn’t we expect to be able to enjoy our mature business for decades as well?

I would enjoy your thoughs on this.

Conation – The Most Important Business Word You’ve Never Heard

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I have somewhere I have to be.

The only motivation book I will recommend to others is Self-made in America, by John McCormack. John introduced me to an obscure English word that I now use as a cornerstone of my daily activity – conation.

I’ve truncated John’s working definition: Conation – the will to succeed that manifests itself in single-minded pursuit of a goal. – to:

Committed Movement in a Purposeful Direction

Social scientists have long talked about the Three Aspects of the Mind. Cognition (doing), Affection (feeling) and Activation (doing) are the three legs. Conation is when we take all three of these and figure out where we want to go, then start going there. Conation isn’t thinking, it isn’t feeling and it isn’t doing. It’s having crystal clarity on where you want to end up, and doing anything you have to in order to get there.

I find it fascinating that almost everyone I know has a good handle on what cognition, affection and activation are, but virtually no one I know is familiar with the word that puts them all together – conation. The most important of the four words, the one that creates action as well as results, is nearly unknown. Why?

Our educational system has promoted thinking and feeling almost to the exclusion of even activation – doing. Conation is most closely related to doing. If you don’t do, there is no conation.

We are all taught that if we just get enough information into our heads and feel good about it, that we’ll eventually do something about it. I believe the reason this valuable word hasn’t gotten much attention is because we’ve all bought into that idea handed down from the ancient Greeks on through that

We think our way to a new way of acting.

We see cognition – thinking – as the all important fundamental on which the other two swing. And of course we all like to feel stuff. So affection gets plenty of attention, too.

But we do not think our way to a new way of acting.

We act our way to a new way of thinking.

Even Einstein supported this when he said, “The intuitive mind is a sacred gift and the rational mind is a faithful servant. We have created a society that honors the servant and has forgotten the gift.”

Want to grow a Mature Business? Add “conate” to your daily verb count. The will to succeed that manifests itself in single-minded pursuit of a goal, or

Committed Movement in a Purpoesful Direction

Clarity – I know my goal. Hope – the will to succeed, that comes from knowing my goal. Risk – singleminded pursuit.

How do I know I’m conating? I’m already moving in a purposeful direction, with complete commitment to getting there.

Get out of my way, I have somewhere I need to be.

Clarity, Hope and Risk – growing a successful business.

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In the big picture there are really only three things we need to grow a Mature Business.

Clarity

Successful business owners know where they are going and when they intend to be there. They have a vision for the future that drives everything they do. Do you know where you’re going? What does your business look like at Maturity? Get clarity on where you’re going – it’s the first step in growing a Mature Business.

Hope

When we get Clarity on where we’re going, that creates Hope. We know where we’re going and we have something to begin to invest in mentally and emotionally that gets us excited about the future. He who aims at nothing hits it every time, but those who have a clear direction are busy getting after it. Do you have Hope for your business? If not, you need more Clarity on where you’re going and when you expect to be there.

Risk

Clarity brings Hope, and Hope allows us to take measured Risks to get there. Bob Parsons says “Get and stay out of your comfort zone.” It’s the only way to grow a business. Ray Krock was a little more blunt – “If you don’t want to take risks, get the hell out of business.” If you aren’t taking Risks, you don’t have Hope, probably because you don’t have Clarity on where you’re going.

Clarity creates Hope, and Hope allows us to take Risks. Successful business owners have all three.

How to Get Your Business to Grow Up and Run Itself

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Ray Kroc, the founder of McDonald’s, understood that to have his business grow up and run itself, he would need to pay attention to all of the Seven Elements of a Business – so he did.

Kids need to grow up and stand on their own two feet without leaning on you – that is maturity. Your company should do the same thing.

We assume we should wait until we’re big enough before we figure out how to make the business run itself, but – where we start is where we end up. No matter what size your business is, you should be manically focused on getting yourself out from behind the steering wheel from the gitgo. Pay attention to all Seven Elements of a Business, like Kroc did, and watch your business grow up.

Element 1: Vision and Leadership

“I was 52 years old,” recalled Kroc. “I had diabetes and incipient arthritis. I had lost my gall bladder and most of my thyroid gland in earlier campaigns, but I was convinced that the best was ahead of me.” And when he first saw the McDonald’s brothers’ restaurant, he saw what they didn’t, an opportunity to create an international business, not just a restaurant.

“If you’re not a risk taker, you should get the hell out of business,” said Kroc. What risk is holding you back? Get clarity on your vision to take more risk.

Element 2: Business Development

Kroc had to create the need for his product! Fast food was not an existing market – tough job! He clearly knew his niche, learned how to communicate that niche, and stuck to his knitting – he didn’t get sidetracked trying to make great food. And he didn’t let ego get in the way of making money – a very common disease.

Element 3: Operations/Delivery

Work from the result desired. “I didn’t invent the hamburger,” said Kroc. “I just took it more seriously than anyone else…We take the hamburger business more seriously than anyone else.” He built a small business into an international empire by focusing on the operational details and the desired result.

Element 4: Financial Management

When Kroc was asked “What’s the #1 priority for McDonald’s?”, he responded, “The bottom line!” To Kroc, efficient meant most profitable. He didn’t want the best hamburger in the world, he wanted the one that would make him the most profit per fat molecule.

Element 5: Customer Satisfaction

CONSISTENCY of EXPERIENCE was key, not QUALITY of EXPERIENCE. He didn’t need the best food, just the most consistent presentation of it. And if there was trash in the parking lot, that was “a gross affront to me.” A great customer experience was everything.

Element 6: Employee Satisfaction

“None of us is as good as all of us,” Kroc said. A strong believer in teamwork, Kroc knew his growing company could only grow if he had dedicated people. Kroc treated everyone with respect. Every new employee got a badge with the title “Management Trainee” to let them know they all needed to participate in making McDonalds great. His Suggestion Box was legendary.

Element 7: Community/Family/Self

Kroc was an astute businessman who understood that community involvement was a key part of an effective marketing strategy. This tradition of giving back that Kroc initiated so many years ago remains an integral part of the McDonald’s corporate philosophy. Through community contributions, Kroc also established a corporate tradition of creating a positive presence in society.

What did McDonald’s have going for it? Kroc paid attention to all Seven Elements from the gitgo. As small business owners, we’re usually good at a few of the above, and have big holes in a few. Which are you really good at? Whatever you answered, you’re business probably needs help in the opposite ones.

Your business may not be running itself yet. That’s not the question. Are you setting it up to be able to do that at the earliest possible opportunity? If not, you’ll be babysitting it for years to come, and won’t know why every time you come home, your business is there waiting for you!

Let’s learn how to wean our businesses – pay attention to all Seven Elements of a Business. We deserve an empty nest at some point, with a business that can run itself.

How I bought 10-15 days off, 21 mths from now.

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We had five days straight of overcast, rainy, sloppy weather Friday thru Tuesday in Denver, something we almost never see. It dominated Memorial Day weekend and kept us all inside for the most part.

Finally Wednesday was a gorgeous “Chamber of Commerce” day. Not a cloud in the sky, no wind, no humidity, and no appointments the whole day. Seemed like a great day to “reward” myself, play some golf and ride a bike. Why didn’t I? Am I workaholic? No, to the contrary I worked Wednesday because I want more free time, and sooner.

I manage my business using a Two-Page Strategic Plan. The central pulse of my Strategic Plan is my Business Maturity Date. I know very clearly what my business looks like at maturity, and much more importantly, exactly when I expect to get there. Everything in my Strategic Plan is tied directly to the centering influence of my Business Maturity Date like the kiddy chair ride at a carnival – everything spins from that center – my BMD.

As a result, I know exactly what I have to do this month to build a business that makes money while I’m on vacation.

Wednesday I could have easily rewarded myself for having worked hard the last few weeks. The Monthly section of my Strategic Plan told me I needed to get the first draft of my book completed by May 31. Wednesday was a writing day, and I could have blown it off because I am right on schedule. I wasn’t under any pressure, I simply had a choice to make. Do I want to goof off today or gain a day in pursuit of my Business Maturity Date?

I believe that every day saved on the front of an objective can save us 10-15 days on the backend in not having to “catch up”, similar to investing money on the front end creates more on the back end. I made the decision to get ahead on the book to help ensure I meet or beat my BMD, with the belief that I will get much more time to goof off later if I get to my BMD sooner. I’m not a workaholic. I was still able to take a great bike ride late that afternoon.

My Business Maturity Date and my Strategic Plan run my business, and keep me focused on creating a business I can enjoy, with a lot more time to goof off later if I stay focused now. My BMD and my Strategic Plan have made me “ambitiously lazy” – working hard to create more free time, sooner.

My Business Maturity Date is Friday, February 18, 2011, at 10am (see “Is there a Business Maturity Date ticking in your business?” for more on this). I expect to get there a few days earlier because I wrote Wednesday instead of golfing. I expect I’ll get to golf a lot more, a lot sooner because I’m so focused on beating my Business Maturity Date.

What’s keeping you moving and on track?

Why Systems Focused Owners are better business builders than business starters.

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Last week we tried to give perspective to the idea that being the classic Market Focused entrepreneur isn’t all it’s cracked up to be. This week we’re looking at why Systems Focused managers are great business builders but aren’t such great business starters.

There are three basic business owner profiles:

  1. The Market Focused owner
  2. The Systems Focused owner
  3. The Product Focused owner

Every owner is a mix of all three, but we all lean heavily on a primary profile for the way we manage and make decisions.

Systems Focused owners are just that – focused on systems, process, procedures, routine. They look at business from the inside out – from the point of view of operations and delivery, not from the point of view of the market or the customer. Make a consistent product at the right margins and you’ve got a good company, so the Systemizer thinks. They’re not always passionate about the particular product or service they’re selling, but they are very passionate about operations itself.

They’re big on research and planning, usually wanting to make sure they’ve thought of everything, and as a result, are usually very risk averse and slow to make decisions. Speed of Execution is not their forte’. They make great managers, administrators, academics, scientists, and engineers. They are absolutely vital to a business growing to maturity, but it’s rarely a good idea for a Systems Focused person to be strike out on their own to start a business.

The Systems Focused person is usually very good at understanding how a business should run, so they think that translates to being good at starting a business.

Rarely.

Because Systems Focused owners are such great planners, this ironically works against them in starting a business. That great research and planning instinct also contributes to their usual great aversion to risk. These two things usually combine to make Systems Focused people very bad at starting a business.

The #1 indicator of success in the early stages of a business is not how great the planning was, how perfect the product is out of the gate, how knowledgeable we are about our market, or how much money we’ve sunk into the project. The #1 indicator of success in the earliest stages of a business is Speed of Execution, which, along with risk aversion, is the biggest challenge for a Systems Focused owner.

Systems Focused owners will miss opportunity after opportunity making sure their operations are well oiled, their marketing is perfect, and their delivery mechanism is seamless. And until they get it right, they won’t pull the trigger. Their unwillingness to move until conditions are perfect (risk aversion) will drain their startup capital and leave them miles behind their competition at every step.

The Systemizer lacks vision for the future (too busy researching the past) and urgency for today’s production. If the Systemizer recognizes their strengths, they’ll get the influence of a Market Focused person to help them keep tomorrow in focus, and the influence of a Product Focused person to help them get a sense of urgency about today – Speed of Execution. If they can do this, their likelihood of starting and growing a mature business will go up exponentially. FYI – they do much better buying a franchise (with good systems in place) or existing business, than starting a business from scratch.

Next week, we’ll talk about the third profile, the Product Focused owner; the one who starts the overwhelming majority of businesses, and has a better track record doing so than the other two. But growing a business to maturity? That’s another story.

Deciding when your Business is Mature, and How To Pick a Date to get there.

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As a business owner, Business Maturity isn’t about how big your business gets or how much revenue it generates. It’s about 1) your own ability to choose what to do with your time, and 2) the ability to walk away from your business for weeks or longer and have it still make money while you’re not there.

You could decide that it means that the leadership is completely turned over to others and the business is ready to be sold. But at a minimum, a business is not Mature if you are still necessary to the daily production of products/services (there is a difference between being necessary and being able to choose to personally produce.)

Here’s how to paint a good picture of what your Mature Business looks like:

  1. Know your Lifetime Goals. (Why are you doing this? To what end??)
  2. Calculate the cost of the Ideal Situation for living out those Lifetime Goals.
  3. Decide WHEN you want to be in that Ideal Situation. Stop reading here if you don’t want to put a date on when you get to your Ideal Situation. Growing a Mature Business won’t matter enough to you to actually do it.
  4. Decide what salary/cash you need to support your Ideal Situation.
  5. Make your best prediction of how much revenue your business will need to generate to allow you to pull the salary/cash you need to support your Ideal Situation.
  6. Make your best guess at how your business will do this. There are three ways to make money when you’re not around.
    1. Talent – The painter Renoir bought his massive French villa w/ two paintings, and his car with a pencil sketch. If you have unique talents then you can charge enough per hour to work very few hours. The problem with this approach is that it’s a crapshoot to have your talent recognized at this level, and your business really never matures because it still relies on you to produce. If you get sick or injured or worse, the revenue stream stops.
    2. Employees – this is the most common way to make money when you’re on vacation – buy someone else’s 40 hours a week at a discount, and resell it to your customers at a premium. The difference creates profit for you even when you’re not there.
    3. Products/Services – If you don’t want employees and you’re not über-talented, you can create products or services that you can license to others to produce. Or you can franchise your services for others to deliver, or create online software, products, or services that need very little maintenance.
  7. Paint as clear a picture as you can of what your Mature Business looks like in terms of the salary/cash it provides you, the time it allows you to use in other ways, and how the what will produce the revenue (Talent, Employees, or Products/Services), then
  8. Pick a Business Maturity Date – the single most important step in the process. If you don’t want to do this, don’t bother with Steps 1-7.

Don’t torture this – you’ll know you have a good enough picture when you’re excitement level for getting there has gone way up. If you have an Objective that is motivating enough, you will figure out the steps required along the way to get there.

Do you know what Business Maturity looks like for your business? Are you completely committed to a Business Maturity Date that you’ve gone public with? If so, welcome to the 3to5Club (see earlier posts)! Describe your Mature Business and your Business Maturity Date here – let’s get moving together!

 

How we got on the business treadmill and why we can’t get off.

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Our business trains us to focus on the wrong thing. And we buy into the lie.

There are Seven Stages in the Maturity of a business. Today we’ll focus on the first four, because they tell us what happened that screwed up our understanding of how to grow a business and why we can’t get off the treadmill.

In Stage 1 (Concept and Startup), we need money. To get money, we need clients. So a Stage 1 business teaches us that it’s all about making money via Sales.

In Stage 2 (Survival), we’ve been mucking along for a while and the outside funding is beginning to dry up. We need money even worse. To get money, we need clients. So a Stage 2 business confirms to us that it’s even more important to focus on making money via Sales.

In Stage 3 (Subsistence) we finally have done enough sales to get enough clients to break even. But we have to produce for these clients, because if we don’t produce, we don’t get paid, and we need money. So a Stage 3 business teaches us that we have to focus on making money via production, or our Craft.

And finally, a Stage 4 business (Stability by Hands-On, focused on the producing the “Craft”)) allows us to buy a hot tub and go on vacation a couple weeks a year, confirming to us that the owner’s purpose is to make money.

But what our business taught us in these first four stages is exactly what keeps us on the treadmill for 30 years and never lets us off. Our business taught us that we should make money, and it is that misconception that keeps us from building a business that makes money when we’re on vacation. We’re on the treadmill of making money.

Unfortunately our bias toward the treadmill of making money is confirmed as we look around and see most other businesses stuck in Stage 4 as well. So quiet desperation sets in – this must be all there is. And to add insult to injury, at some point we realize that if we had stayed at IBM, we could still have bought a hot tub and gone on vacation a couple times a year, except in that case we would not have lost money while on vacation or had to wake up nights wondering how we’ll pay off the debt we incurred in Stages 1 and 2.

Why did we do this? How was it worth the trouble and the responsibility we’ve taken on? Why did we decide to buy a job and become employees of ourselves?

We did it because 1) our business taught us to make money, and 2) we see that most other small businesses have gotten stuck on Stage 3 or 4, confirming that this is actually normal.

Stage 3 and 4 are not normal at all, they are merely average. Most businesses have stalled there, but the normal business will break through to Stages 5-7 and make money for the owner when the owner is not there.

Stop being an employee of yourself, get off the treadmill, and get back to the passionate that brought you into business in the first place. Next week we’ll talk about the clear simple actions that will allow us to do just that.