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New Study: Stop Chasing Money. You’ll Be More Successful Pursuing a Big Why

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The Industrial Age factory system designed work around making money. But people who work for a bigger reason are happier and better paid.

A new study, the 2015 Workforce Purpose Index, reveals that 28 percent of people are purpose-oriented, identifying them as “the most valuable and highest potential segment of the workforce, regardless of industry or role.” We call this a Big Why: something that is bigger than making money, that you can never check off as complete.

The 28 percent who express this Big Why approach to life are motivated by two things:

1) Personal fulfillment

2) Serving others

In contrast, the other 72 percent are motivated by

1) Status

2) Advancement

3) Income

Everybody Can Be Purpose Oriented

Some surprising things stand out in the study. The 28 percent don’t make less money than the 72 percent that are money-motivated. They also come from across every industry, every imaginable job type, and every age demographic.

The research says, “By every measure, they have better outcomes than their peers.” They:

– Are much more fulfilled at work

– Do better work and get higher evaluations

– Have much longer tenure in their companies

– Are bigger fans of the company

– Are much more likely to become leaders (and make more money)

The Joy Is in the Pursuit

People in the 72 percent can and do change, but that change usually comes quickly, not over time. A lot of people in midlife seem to wake up and decide they need a bigger reason to be alive than just making money or having a fancy title. The study points to a life principle that too few of us discover. In our business, we say it like this:

The joy is in the pursuit, not in the acquisition.

In grade school, I remember buying a tiny battery-operated beach radio. It was cool for about three months. Then I wanted a bigger one. Over 20 years, I bought a half dozen or more stereos, with increasingly more power, features, and quality. I continue to look at more expensive ones, but I have had a lot more fun pursuing the next one than acquiring it.

A Big Why gives you reasons to do things that you’ll never be able to check off as complete–be a great mother, get involved in a nonprofit, help others get to where they need to be in life. A Big Why isn’t necessarily a huge Why, like solving world hunger (although it can be). Instead it’s a continuous Why–one that will get you out of bed when making money won’t.

Workplace Engagement Is Unrelated

The study also clarified that purpose-orientation is much different than the too-often-used buzz phrase “workplace engagement.” People with a Big Why don’t need anyone to motivate them to be engaged. You really can’t motivate them; all you can do to them is keep them from being engaged at work (they’ll leave if the work environment stifles their purpose.)

Three Reasons to Be Purposeful

In my first book, Making Money Is Killing Your Business, I outlined why purpose-orientation works better than stuff orientation:

1) Making money is not an empowering vision. People who have a bigger reason to work than making money tend to make a lot more of it.

2) A goal realized is no longer motivating. The joy is in the pursuit, not in the acquisition.

3) We are made to be and to do something significant, our whole lives, not just the first two-thirds. There is something for everyone to chase that will get them out of bed every day, that is bigger than making money.

What Does This Mean for Business?

The study recommends that you create partnerships with people, not treat them like “resources.” And employers should measure how work is helping their people in the areas of relationships, personal impact, and growth, not status, advancement, and income.

The bottom line: There is a new war brewing for a very different kind of talent–purpose-oriented people–and companies are scrambling to figure out how to develop hiring mechanisms to find these people.

You could be one of them. This year, intend to be purpose driven. Get a reason to go to work that is much bigger than making money, that is motivating both at work and at home, and that drives you to get out of bed during the tough times. You’ll be more fulfilled, build better relationships, be more likely to advance, and still make as much or more money than someone chasing status, advancement, and income.

The joy is in the pursuit, not in the acquisition. Get your Big Why in 2016, something you can never check off as completed, and run with it.

Article as seen on Inc.com

The Results-Based Culture and What It Will Do For You

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Day 12 of 21 days with Chuck’s new book, Why Employees Are ALWAYS a Bad Idea

There is a growing wave of companies rejecting the front office practices of the 21st century Industrialist. Here’s what a Participation Age company looks like. They come in in all sizes and industries, and are showing us the future of business is already here.

Our company, Crankset Group, has grown 409% in the last five years by building a company on the following business practices:

– Culture is King – Culture is the most important asset in our business. It is who we are at our very core and oozes out of our products and services into every relationship we build. As Peter Drucker said, “Culture eats strategy for lunch.” Great companies do not “have” a company culture. The leadership lives out their beliefs and life principles in their business, and that IS their culture. If our culture is right, we will attract the right people who want to work in that kind of environment. Culture comes from our written beliefs and principles, on which we run our business.

– Vision and Mission – A Participation Age company has a well-defined vision and mission. Our vision: To Live Well By Doing Good. Our mission: To provide tools for business owners to make more money in less time, get off the treadmill, and get back to the passion that brought them into business in the first place.

– Everyone is a leader – Whoever is most effected by a decision should make that decision whenever possible.

– No Promotions – everyone comes in as a “Chief” – Chief Results Officer, Chief Connecting Officer, Chief Relationship Officer, etc. Promotions are time-based constructs of the Industrial Age. Instead of promotions, as people increase their influence in our business, they make more money.

– No management – None of the people at Crankset Group are stupid or lazy, so there is no need for smart and motivated managers. We’re all smart and motivated. Everyone is self-motivated and self-managed.

– Results Based model – We don’t have office hours. People are measured by results, not time spent in a chair. Get your work done and go home. Pay increases are based on the same thing.

– No Vacation Time or Sick Days – Again, get your work done, and go on vacation. We’re all adults and are all owners of our responsibilities, so we can also own our time. We expect people to get more time off than they would in a typical 21st century Industrialist company.

– No Annual Bonuses – Bonuses are “time-based” rewards for occupying a chair for another year. We do “Ad hoc” rewards to reward performance throughout the year. They add up to a lot more than an a bonus and actually mean something to those being rewarded.

– No Annual Reviews – we review each other and how things are going all the time. It makes no sense to store it up to dump it on somebody once a year. We all know how we’re doing throughout the year – no surprises.

– No Annual Raises – As people raise their level of influence and responsibility in the business (they do this, we don’t), we recognize that because raises come ad hoc throughout the years, sometimes a couple months in a row.

– No Departments – people don’t “belong” to someone or some artificial group.

– Direct Communications – without departments, people don’t have to go through gatekeepers to talk to someone. People who need to talk, do so, and stuff gets done a lot faster as a result.

– Profit-Sharing – within 20 months of joining Crankset Group, people begin to receive profit-sharing. They help make the money, they share in the profits, not just a salary (which the owners also get).

The Bottom Line
Ownership is the most powerful motivator we have in business. Stakeholders are treated like owners and expected to act that way. (Note: Because of that, profit-sharing is non-negotiable in a Participation Age company.)

This is a glimpse into our Committed Community business model. If you don’t work for a company like this, start looking for one. Companies everywhere, in every industry, are leaving the Industrial Age, entering the Participation Age, and embracing similar models. We’ll look at a few of those in the next blog post.

This is a summary of a chapter from Chuck’s new book, “Why Employees Are ALWAYS a Bad Idea (And Other Business Diseases of the Industrial Age)”. Click here to pre-order this new ground breaking book at a discount on IndieGoGo.com until July 28.

Contentment is dangerous.

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Pursuit, Not Acquisition

We work so hard to achieve contentment. Be careful, it could be a wolf in sheep’s clothing.

Since the early 1900s we have been taught to pursue the three S’s of the Industrial Age; Safety, Security, and Stability. The three of them together can lead us to contentment, which at first blush seems pretty cool.

The Contentment Fence
But contentment is a kissing cousin of balance, and both of them are like sitting on a fence; you can’t stay there very long. Pretty soon you’ll either fall off or jump off, and the question is, on which side of the fence? Falling off one side begins a downward spiral to victimology. Making the decision to intentionally jump off the other side leads upward to better things, and the fourth S of the Participation Age, Significance.

How can contentment drag us down? Living in contentment (and balance) could very quickly lead to boredom, because you have no vision for how to challenge yourself to take your life to the next level. Boredom is the first step down and it breeds pessimism, doubt, worry, blame, anger, insecurity, and eventually powerlessness – I’m a victim.

If you find yourself content, the best thing to do is proactively get the heck out of there by figuring out the next challenge and chasing it with everything you’ve got. Contentment can be a great springboard to the next challenge. If you get a solid picture of the future and what you want next, then contentment will lead right into optimism, hope, powerful expectation, enthusiasm, and passion for something new.

Jump Or Fall Off
Contentment is fleeting. You are either going to fall off or have to jump off. You can fall off on the side of victimology, or you can take control of your life, and intentionally jump off on the side of chasing something worth catching.

Have you “arrived”? Are you on cruise control with your business or your life? Be careful. It won’t last, it never does. So take charge, jump off the fence, and intentionally run toward something. You won’t be content while you’re chasing it (or balanced), but that’s ok, because the joy is never in the acquisition, but in the pursuit.

A goal realized is no longer motivating.

What’s the next thing you want to pursue? Jump off the fence and go catch it.

Business Buzzword Bingo

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And Why You Shouldn’t Play

Big words are a turnoff for most customers and make our offer sound like a Dilbert cartoon. So why do we use them when short words would do just fine? Who are we trying to impress?

Does monosyllabic really need five sounds? We’re in love with all things “Big”, and just assume big words make us sound more polished. But really they make us sound more like Dilbert’s boss. The worst culprits are vision statements, mission statements and “give-me-money” plans. But I see buzzwords in a lot of fancy attempts to sell things, too.

Dilbert and Woody Allen
Too much biz stuff sounds like it really was written by Scott Adams for a Dilbert cartoon. It’s meant to make us sound thoughtful, but instead it’s funny because it’s either tortured, fake, complex, a stretch, dumb, or just plain baffling. When we string one fancy word after the other, we sound more like a Woody Allen tirade than an expert in our field. It really just cheapens our image and makes us look uptight.

The Rule of Short Words
When writing a vision, mission, plan or sales copy, here’s a writing rule;

Be wary of any word with three or more sounds, chiefly those that contain any of the following letters: u, v, w, x, y, and z.

It’s not that you can’t use them, just be wary; test them and make sure you aren’t playing buzzword bingo and trying to sound smart. If there is a matching word with two or less sounds that works as well, use it.

Sound Like An Expert or Be One – You Choose
Here’s some classic terms used to play buzzword bingo, and simple words to use instead. All are three or more sounds and contain u, v, w, x, y, or z. Some of the worst are words ending in “ize”. The big words make you sound like an expert. The short ones might convince people you really are.

Actualize – Complete
Synergy – Teamwork
Synergistic – Really? Just don’t use it.
Dysfunctional – Broken
Intellectual – Smart
Operationalize – Make it work
Solutioning – Fixing
Empowering – Getting out of the way
Competency – Skill
Validate – Confirm
Conceptualize – Think, Picture, Form a Thought
Reorganization – Change
Monetize – Make money
Incentivize – Reward
Deliverable – Result
Proprietary – Mine, Ours
Recontextualize – move

Distract Them If We Can
In some cases, the buzzword is code for something else and the big word is used to distract you.

Multidisciplinary – Scattered
Adaptive – Uncertain, or confused
Synergistic – Looking for a friend
Analyze – We’re afraid to decide
Analysis – Beating a Dead Horse

By the way, except for the buzzwords themselves, this post was written using only words with two or fewer sounds. It’s not hard to keep things simple, but it’s really easy to make them complex.

Keep It Simple
Keep it simple and you’ll likely sound a lot more secure and a lot more like you know what you’re doing.

The Short Straw of Failure

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One Simple Thing

For years I’ve been hunting down reasons why people are successful, or why they aren’t. In the last few weeks an over-arching single reason seems to be forming for me.

The Long List of Success Attributes
If you break it down to the smaller reasons, there are so many why people succeed – clarity of vision, solid values/beliefs/principles, speed of execution, commitment (never giving up), discipline, getting back up/bouncing back, taking good risks vs bad risks (& knowing the difference), being organized, optimistic, being flexible, embracing challenge, seeing the big picture, rising above offense, seeing yourself as successful, being willing to be wrong often…

…and so many more.

The One Big Success Attribute
But as I look at the long list of things that make people successful or keep them stuck, they almost all seem to roll up under one simple, over-arching reason. I’ve been testing it against all the other reasons for weeks, and can’t find one that doesn’t fit under the one big one.

The reason we get where we want to go or don’t is simply this:

Short-term vs. long-term decision-making.

Not very glamorous, but absolutely transformative if you embrace it.

People who make their decisions based on what will help in the short-term are almost never successful. People who make decisions based on what will be best in the long run are almost always successful. Is it that simple? Let’s test it and see.

Testing It Out
Take a look at the list of success attributes above (or any of the dozens I haven’t mentioned) and ask yourself which ones are based on short-term gain and which ones are based on the long-term gain. Success attributes are all about the long-term.

In stark contrast, the following reasons for failure all help us address short-term symptoms, but keep us right where we are:
– survival: I have payroll to make
– feelings: I don’t feel like doing that right now
– fear: I’m afraid they won’t like me, or I might fail
– lack of discipline: shiny object syndrome – oooh! – let’s do that, TOO!
– being tired: the #1 reason businesses fail
– lack of learning: we’re too busy DOING to be learning
– inflexibility: change is messy, we’ll just row over the falls
– lack of vision: I’m too busy making chairs for that woo-woo crap

…and on and on. We do them all for one very simple reason. We are short-sighted and not thinking about how we will ever get to where we want to be.

Ask yourself two long-term questions:

1) What would I be doing right now if I weren’t (in survival, afraid, undisciplined, tired, etc – put your own short-term problem here)?
2) Am I making decisions based on where I am, or where I want to be?

Decisions based on what helps me now, create long-term failure. Long-term success is based on a life pattern of making many small, daily decisions, one after another, that stack up to success down the road.

Our VALUES determine our thoughts
Our thoughts determine our actions
Our actions determine our habits
Our habits determine our character
Our character determines our DESTINY.

Do you value being on the treadmill the rest of your life, making decisions that address short-term symptoms but never solve the long-term problems? Or do you value getting off the treadmill and living a life of success and significance?

You Are Not a Victim of the Short Straw
In business and in life, the short straw is not a guessing game. Nobody’s fist is hiding it. The long straw and the short straw are both laying on the table right in front of us. If we want to be successful we will see clearly that short-term decision-making is just willingly picking the short straw instead of the long one.

Make one decision today that will make you more successful later. It likely won’t make you any money or save you any time TODAY (short-term). But it just might change your life down the road.

Choose the long straw.

Your Mission is Not Your Vision

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Why you need both.

Vision and Mission are two very different things. And the smaller your business, the more you need them both. Those who have both and live by them always make more money.

Whether you think you do or not, we all run our businesses based on deeply held beliefs. The problem is we don’t do it consistently, but only when it’s convenient. The rest of the time we’re taking on clients, employees, vendors and partners based on the immediate benefit, without regard to whether there is a culture and values match or not. Six months or a year later we’re butting heads with the new staff, avoiding that troubling client, or looking for a new vendor.

Why? Because if you don’t have a clear vision for your own life or business, you’ll become part of someone else’s vision for theirs. Take on a a partner, employee or staff member with a strong direction, and it will overwhelm the weak hold you have on why you exist, where you are going and how you intend to get there. Meandering and random hope are not good business strategies. Get a grip on your vision and your mission, or expect to be pulled in every direction.

Vision = Values
Your Vision statement is for YOU, not for your customers. It is much bigger than your business, reflects your personal beliefs and values and is what would get you out of bed every morning no matter what business you were in. Your beliefs, values and principles don’t change based on your business. Your Vision statement should be the core driver behind who you hire, who you want as clients, and how you will relate your business to the world around you. In most cases, a Vision statement doesn’t tell anybody what you do, only what you believe and value as a business.

This should always be a values-based statement. It’s about your beliefs. Our vision statement for Crankset Group and 3to5 Club is “Live well by doing good.” We could be grocers and say the same thing, because it’s what gets us out of bed every morning. We can unpack that for you for three to four Guinnesses, as to how it impacts every aspect of our business.

Your vision is all about you, and what you believe. It drives you, your staff and all of your relationships forward. You may or may not share it publicly. It doesn’t matter – it’s not for your customer, but for you. Every decision, big and small, should be based on your Vision statement. Every one.

Mission = Marching Orders
Your Mission statement is radically different. It’s not about you in any way – leave yourself out of it. It’s all about your customer and the OUTCOME you expect to give them. Here’s a lousy Mission statement: “We will be the #1 pencil manufacturer with the best quality, highest profitability and the fastest growth.” NOBODY cares.

When people ask “What do you do?” they never mean it. They mean, “What can you do for ME?” When someone reads your Mission statement, they should know exactly what OUTCOME you are going to get them, not what you do.

Our Mission statement, “We provide tools for business owners to make more money in less time, get off the treadmill, and get back to the passion that brought them into business in the first place.” From that, you would never know that we build 3to5 Clubs around the world, have cloud apps, sell books, do workshops and keynote talks and have a sales development series called FasTrak. That’s because nobody cares what we do until they find out what we can do for them.

An OUTCOME is a RESULT expressed EMOTIONALLY. Your Mission statement should give some quick info about what industry you are in, but 95% of it should be about what you will do for me. If I like that potential result, I’ll ask you how you will do it. That’s your cue to talk about your capabilities, quality, growth, etc.

Do you have clients, staff or vendors you’re not happy about? Are you changing courses often? Having trouble finding that one product or service that drives your revenue and growth? It’s almost certainly because you don’t have a clear Vision or Mission statement.

Winging it has it’s consequences. Figure out what drives you (Vision) and what outcome you’re delivering (Mission) and watch your business grow.

Beliefs Matter.

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Your success depends on them.

Every one of us runs our business on our beliefs. The problem is most of us don’t write them down. We’re winging it, so that in the most critical decisions, we wander away from what we believe and decide based on the shiny object in front of us. Success requires that we stay true to what we believe – all the time. What do you believe? Write it down, and make every decision based on it. Here’s our beliefs:

Transformation
We believe in transformation, not education. We are not interested in anyone learning anything, we intend that business owners will change as a result of contact with us. As a result, we lead from our experience, not from our knowledge. Great Crankset Group Stakeholders will have lived what they are asking others to do.

Clarity
We believe in bringing Clarity, which brings Hope, which allows business owners to take measured Risks to grow. – Clarity, Hope and Risk.

Conation
We believe in Conation. Conation is the most important word we train people to use. Even though it is one of the 1,000 most obscure words in the English language, it is far and away the most important word in business. Conation – committed movement in a purposeful direction.

Prisoners
We believe in prisoners. Most business owners are hostages to their businesses for 30 years, then sell their job to someone else who will be a hostage. We intend for Business Owners to build a Mature Business in just 3to5 years, that they can enjoy for decades. They must move from hostage (no business rules) through prisoner (consistent business rules) to freedom.

No Rugged Individualists
We believe the Rugged Individualist is a bad idea. Business owners should live in Committed Community, and those that do make more money in less time and are more successful. We are recovering Rugged Individualists.

Time is the New Money
We believe Time is the New Money. Most business owners only ask their business for money, but our business should give us both Time and Money, which allows us to create Significance.

Speed of Execution
We believe in Speed of Execution. Implement now and perfect as you go. Waiting around for perfection is a bad idea.

Bad Plans
We believe in Bad Plans. “Bad Plans Carried Out Violently Many Times Yield Good Results. Do something.” It’s never how good your plan is that matters, but how committed you are to the Bad Plan you’ve got. Committed people make history. Thinkers write about them later. Stop thinking. Get moving.

Yield Per Hour
We believe in Yield Per Hour – YPH. We expect business owners to always ask two questions “How do I make MORE money in LESS time?”, and “What is the highest and best use of my time?” Make money while you’re on vacation, and do it in 3to5 years.

Trapeze Moments
We believe in Trapeze Moments. We encourage business owners to embrace trapeze moments and take the risk to grow personally and to build a business they can enjoy for decades.

Advisors
We believe in Advisors, not in experts or gurus. We don’t use the words “coach” or “consultant”. We combine them both to advise business owners, and give them the tools they need for success, so they can grow their businesses to Maturity and get to their Ideal Lifestyle.

Own Your Business, Don’t be Owned by it
We believe in Business Owners. Business owners take the risks that make them the best leaders and the best hope for a better world. Nobody pays attention to business owners with fewer than 10 employees. We do.

Employees are a Bad Idea
We don’t hire employees, which the Industrial Age turned into children. We hire Stakeholders who grow with the company, who make meaning, not just money, who share in the profits and take ownership, and who live and work like adults. We hire people who can’t wait for Monday because they are part of something that will make a difference.

Managers are a Bad Idea – Lead!
We don’t hire people to manage people. Adults manage themselves. We hire leaders who focus on being productive themselves, not on making other people productive.

Committed Community
We believe business owners are the most successful when they live in Committed Community with other business owners and have a safe place to say three magic words, “I don’t know.” Together we get there faster.

The Big Why – Doing What Matters
We believe that every decision we make should support our Big Why – we believe we will change the world, and that every business can play a part in doing so – why come to work if you can’t? Our driving force – “Why do what others can and will do, when there is so much to be done that others can’t or won’t do.”

Work and Play
We believe the Industrial Age artificially separated the two – we’re bringing them back together.

Make MeaningWe make decisions based on what we believe. What do you believe? Write it down and then use it to guide you through everything you do in business. Get a compass – a true north – and stick to it. You’ll be a lot more successful if you run your business on your beliefs, on making meaning, not just on making money.

Making money is not an empowering vision. A belief system is.

What do you believe?

Why new pain is better than old pain.

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Misery is optional. Pain is not.

The myth – “The pain I know is better than the pain I have yet to experience”. We avoid risk because it might cause pain, and we’re not sure we can handle it. So we just muddle along with the known and tolerable pain of an unremarkable life.

I’m laying in a hospital bed with six rib factures (a couple are broken twice) and a broken scapula (In my delirium I thought the doc said spatula.)

Yesterday I was finishing one of the best long bike rides I’ve done this year and was pushing hard to stay under four hours. Just a half mile from my house I was climbing uphill at a really aggressive 17-18mph and ran into the back of a van parked in the bike lane (I was looking up, but apparently not often enough!) The van didn’t move.

I woke up an hour ago thinking about a taxi driver I had met last year in Charleston, SC on the way to do a keynote address. I asked him what food he liked, and his instant response was surprising – he jumped right to the negative – “I can tell you I do NOT eat shrimp!”, which of course is big in that beautiful coastal town.

Hanging On to Old Pain
“Why?”, I asked. “Because 30 years ago my cousin died in a shrimp boat accident. No sir, won’t touch the stuff.” This old pain was sitting right there on the surface of this guy, controlling his world. It was sad to see. He had never figured out how to get past it, or better yet, to use it to make him stronger.

I had a cousin die twenty years ago at 42 of a massive heart attack while running. If I reacted like my taxi driver, I would have stopped exercising. But life (and business) doesn’t work that way. Pain is meant to make us better, not stop us.

My taxi driver was heavily invested in his old pain. He had focused on it instead of focusing on what he could learn from it, and as a result it had grown like coral and crusted over his whole life. He wasn’t about to take a risk to move forward. While the pain was clearly not something he enjoyed, it was also clear that he was quite willing to live with it simply because it was possible that more pain might follow if he ate shrimp again. The pain he knew was better than the pain he might yet experience. So he just stopped growing.

Should I get back on a bike?

Using the New Pain to Get Somewhere
A couple months ago Dr. Stephen Covey sent me a signed copy of his latest book, The 3rd Alternative, for having quoted me in it. It’s about solving life’s toughest challenges. Read it.

He died last week at 79 riding his bike in Utah, which is what made me think of him. My accident was scary, too – not easy to do the kind of damage I did at 17mph going uphill. Last year I rode with a friend who I thought had died in the accident he had that day – he recovered fully. I’ve seen other scary accidents as well.

The Purpose of Pain
Should I get back on a bike? Seems like a stupid idea. But I believe pain comes into our lives to make us stronger and wiser for the next time, not to keep us from ever eating shrimp again. Pain is pretty much the best way to grow, if we respond to it the right way.

I’ll be back on my bike as quickly as I can safely do it. And I’ll be a wiser and better bike rider, less likely to crash – and a stronger person both mentally and physically for having fought through the rehab.

Use the Beaver Dams to Get Stronger
Life is a stream running to the ocean, and it’s full of beaver dams. Don’t expect to go around them all. It just might be that today’s beaver dam makes you able to blow through a dozen other beaver dams down the road as if they didn’t exist. Don’t go looking for pain – we aren’t made TO struggle, but we are definitely made FOR the struggle. It’s the struggle that makes us stronger.

When the pain comes, embrace it and work through it. Come out the other side a better person and a better business owner.

Live a Remarkable Life
Ray Kroc – “If you don’t want to take a risk, get the hell out of business.” And maybe this applies to life as well. Don’t be afraid to take risks because something happened in the past, and something else might happen in the future. Avoiding risk only ensures that nothing remarkable will happen.

Live a remarkable life. Get back on the bike.

 

How to make more money down the road.

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Stop trying to be efficient.

Companies tied to Industrial Age mindsets are addicted to something called “efficiency”. But being efficient is a terrible principle on which to run and grow a business. Efficiency is more likely to drive you to bankruptcy than to success.

The business owner’s main game should be this:

How do I make MORE money in LESS time? If a business owner isn’t playing this game, but is playing the “I’m going to work harder” game, they aren’t acting like a business owner. “More money in less time” sounds like an efficiency game. It is not. It’s an effectiveness game.

Effficiency is about the short-term
Efficiency is focused on figuring out how to spend less time and less money doing something, which again seems like the right thing to do. But the problem is that efficiency always focuses on the present. It is about short-term decisions that save us time or money NOW.

Saving time and money now is not the way to build a business. We can almost never save our way to growing a successful business. I worked for one company in the late 90’s that was addicted to saving money, taking short cuts on everything from equipment to employee benefits. They were focused intensely on being more efficient every day, and the main game was always how do we do things in less time for less money? They went bankrupt in 2008, after years of shrinking sales and ongoing atrophy of the business model.

Effectiveness is about the long-term
A focus on effectiveness is quite different. Effectiveness is most concerned with the long-term health of the company. As a result, it makes long-term decisions that may actually cost us more time and money right now in order to make more money in less time down the road. Amazon.com went in the hole $400+ million a year for a number of years by investing time and money in building a company that could handle a very high percentage of the market.

This should be the mindset of even the smallest plumbing shop or realtor – being willing to invest MORE time and money now to get a bigger return in both time and money later. When I talk with small business owners and especially those with no or just one part-time employee, one of the most debilitating mindsets I run across is short-term decision-making, and it’s almost always explained away by “I’m being efficient.” The conversation goes like this:

Me: “Is there a better way to do stapling than for you to do it?”
Owner: “No. It costs $18 an hour to hire someone to do it, and I am saving $18 an hour doing it myself.”

or this conversation:

Me: “Should your sales person invest more time in building relationship with potential bigger clients?”
Owner: “No, we need money now and their time is better used closing smaller, easier accounts until we get enough revenue to go after the bigger ones.”

These are “efficiency” mindsets – making short-term decisions without proper regard for the long-term impact. They will more likely drive you out of business.

Here’s how the conversations should go:

Me: “Is there a better way to do stapling than for you to do it?”
Owner: “Yes, I’m hiring a virtual admin tomorrow because my time is more effectively used building relationships with key clients (or potential clients).”

and

Me: “Should your sales person invest more time in building relationship with potential bigger clients?”
Owner” “Yes, we’re carving out a part of their schedule to invest in these relationships because a few bigger clients down the road will solve all the revenue issues we’re facing right now.”

The Efficiency vs. Effectiveness Mindset
The Efficiency Mindset makes decisions based on where they are right now, “We have x amount of money and x amount of time right now, so we can only do x right now.

The Effectiveness Mindset makes decisions an entirely different way, “Even though we only have x amount of time and money right now, we are going to forego some revenue or production time right now in order to invest in things that have the potential of making us more money in less time down the road.”

To decide whether you are being efficient or effective, the key question to ask yourself is this:

Are you making decisions based on where you are, or where you want to be?

Business owners who make decisions based on where they are, can be very efficient, but will always remain where they are. Business owners who make decisions on where they want to be are willing to invest time and money in the future, even sacrificing some present efficiency to do so.

Are you stuck on the treadmill doing the same things you did last year and making the same revenue? A likely big factor is that you are making decisions based on where you are, which will keep you where you are as long as you run your business on that “efficiency” mindset.

Be effective, not efficient – Make decisions based on where you want to be, not on where you are. If you do, you might lose some short-term opportunities or have to work a little longer each day right now, but next year your business will have moved in the direction of where you want to be.

Make more money in less time down the road, by investing more money and more time right now. That’s being effective, not efficient.

 

Lewis & Clark – Your Best Business Heros

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Maps are over rated.

Don’t look at IBM, Starbucks or Facebook to see how to start and grow a business successfully. The adventures of pioneers Lewis & Clark 208 years ago are the prototype for all of us. Things don’t often work out as we planned. Most often what happens instead is the good stuff.

In May of 1804, Lewis & Clark were given the mission by President Jefferson of finding a water passage from St. Louis to the Pacific ocean. How they approached fulfilling that mission is one of the best business start up examples in history.

Lewis and Clark were masters at planning as you go – what we call the 2.1 Planning Process. They only knew 2.1 things:
1) Where are we? – St. Charles (St. Louis)
2) Where do we want to end up? (the Pacific ocean)
2.1) What are the next few steps? (get a boat, hire a crew, leave)

Just the next few steps
You never get all of step “3)”, which is HOW to get all the way from step 1) to step 2). You only get “2.1)”. Traditional business planning teaches us that HOW you get all the way from 1) to 2) should be planned before you leave. But it’s voodoo, nonsense and fortune telling.

Just like Lewis & Clark, we never get all of step three, and you definitely don’t get it before you leave the dock. All we get is 2.1 – the next few steps.

On the third day of the trip, Lewis and Clark’s main vessel nearly capsized which would have ended the trip. Their experience even on waters others had traveled before was vastly different. Sound familiar? The other guy’s business experience won’t be yours – don’t let him tell you how it should go.

Lewis & Clark planned for the first few miles and could only guess at what they needed to take with them beyond that. All they could do is plan the next few steps and get moving.

Movement beats planning
They took off with 38 men and three boats but could have easily taken 1,000 men and 100 boats. Looking back from the future, we know this wouldn’t have helped them, and all that over-planning would have in fact made it even harder to move quickly, support such a large contingency and survive the winters.

This is where we miss it big time – over-planning before we even get moving. Lewis & Clark only figured out what they needed as each new obstacle presented itself. After planning as best they could for the first few steps, they simply had to be willing to make constant and quick adjustments or they would have perished. Every business has to have the same willingness to get moving and take soundings as you go.

Long-range planning doesn’t work
If you read the adventures of Lewis & Clark it reads like everything from a sappy novel to a National Lampoon comedy to an Indiana Jones movie. No business plan would have uncovered 1/100th of what actually happened.

They thought it would take 12 months, but 2 1/2 years later they stumbled back into St. Louis where people had long since written them off as dead. They thought they would float in big boats all the way to the Pacific but ended up in wagons, then canoes, on horses, walking, back in canoes, back on horses and wagons, all the while hoping they would find locals who they could trade with to get these things. They were making the whole thing up as they went along.

On they way back, only one month from the safety of St. Louis, Lewis was shot in the touche by the near-sighted, blind-in-one-eye Private Cruzatte who thought he was an elk. You just can’t make this stuff up. And you can’t plan for it either.

Pursue the first thing to find the real thing
Businesses almost always find what they will succeed at by failing at their first objective. Lewis & Clark had one main objective, find a navigable passage from the midwest to the Pacific Ocean, connecting the Mississippi to western oceanic trade. They utterly failed in their main objective. Yet pursuing that objective led them to multiple huge successes; mapping thousands of miles of land, treaties with Indians, identifying and naming hundreds of plant and animal species and opening up a whole new land for exploration. They gave courage to a whole generation who would follow in their steps, and rough maps to begin the journey.

And as with any business, those who followed the same route as Lewis & Clark had entirely different adventures. No two businesses can follow the same plan, even in the same industry.

Move the boat, then make the map
But the best correlation between Lewis & Clark’s adventure and your business is the answer to this question:

When did they get their maps?

The answer? When they got back.

Take the first step, then do it again and again
The best way for you to know how your business will unfold is to know exactly where you want to go, leave the dock and get moving, be flexible and adaptable, make it up as you go along, and grab the opportunities as they unfold. The thing you thought would be your main business will almost certainly grow into something you could have never seen from the dock.

Don’t know what to do to get all the way from here to there? Figure out what the next step is, even if it is a guess, and do it. Then do it again and again. Always know exactly where you want to end up, and take a thousand first steps to get there.

We usually find the good stuff by wading through the muck we thought was the good stuff. A map would take all the fun out of it. You’ll get your maps when you’re done.