How you see wealth affects how wealth arrives at you. At its core, it is the human behavior that drives the kind of wealth we will have. In this episode, Patrick Donohoe talks about why wealth is in direct proportion to your human behavior. He discusses the importance of identifying your reasons for pursuing wealth, taking us into the results, the purpose, and the action plan. At the end of the day, everything is about how we understand ourselves. Follow Patrick as he explores the ways we manifest ourselves into the wealth we’re seeking after.
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The Pursuit Of Wealth And Human Behavior
Thank you for reading this episode. I’m grateful that you’re here. I hope you have enjoyed the last couple of shows. I’m excited to share it. There’s a lot on my mind and I feel it would be beneficial and helpful to you, readers. I’m going to get into my topic. My topic is, I would say a summary of a lot of the episodes that have been done and it speaks to the individual regardless of what stage of life you’re in. The topic is how your wealth is in direct proportion to your understanding of human behavior, starting with your own? I look at the pursuit of wealth and the reasons and purpose behind it, the actual results that are desired. Oftentimes it’s narrow, especially for me and the pursuits I’ve had in life.
The reason why I say that is an understanding of what it is you’re after first is paramount. What you’re after is a status or signaling, meaning you want to achieve wealth because of how it makes you look or how it positions you in the pecking order of the hierarchical order. I feel sometimes that’s a good igniter potentially at the same time, it’s not a lasting igniter and I’ll give you an example. I’ve had the opportunity and fortunate to have met, consulted, and advised hundreds from thousands of people. In conversations with a client of mine, he is successful in business. Investing incredibly well for himself and that was not necessarily the result that he wanted, but he didn’t realize that until it was too late. He achieved so much more than his parents and siblings. He got to a point where he had wealth that would last beyond his lifetime and his kids’ lifetime, but he lost his marriage and relationship with his kids. There was a huge concentration on achieving a financial and wealth outcome, concentrate on financial wealth. It was not until the end where he realized that the results he wanted were to have his money, provide a certain lifestyle, and experience with his family. It’s important to understand the results upfront. I feel that there’s always a drive behind what we’re after and identifying what that is will help us to better prepare.
The results are important first. The purpose of the results is second. Third, it’s the action plan behind it. Human behavior, as you can see, it’s the understanding starts with understanding yourself, being self-aware. I look at the lifestyle that we all get to live in the United States in this day and age and comparatively speaking to those that lived 200, 300, 400 years ago, we’re celebrating the 400th anniversary of the Mayflower landing on Plymouth Rock and the lifestyle that those individuals led are incomprehensible to us. If you’ll understand the history there they had an incredibly rough time coming across the ocean, as well as surviving in those first few months, the majority of the party died. I look at the lifestyle we live now and how things are progressing. We are fortunate. We have the technology, sustenance that continues to be cheaper and cheaper, communication, experiences, movies, entertainment that’s endless, and yet a lot of people are not satisfied. They want more and I include myself in that. The reason why I wanted to do this show is it helps me articulate and create some accountability for myself by understanding what I want.
Understanding the result that’s what I want. Is it signaling and status, or is it truly to live a lifestyle that is fulfilling and meaning? I get to number one, understanding of human behavior, your own, but then understanding human behavior, the others’ behavior. What makes them tick? Why did they act? I feel there are a couple of examples that are timely. Number one, it’s, what’s going on with the quarantine, with COVID, the divisiveness of our culture, politics, I would say also it’s demographic divisiveness, the young versus the old that’s going to grow as well potentially. I look at what’s being done to combat this and I’ll first talk about the government and their intervention into human behavior. Based on the quarantine, the shutdown, people not able to go to work, there was a Band-Aid of unemployment benefits and stimulus. I believe that Band-Aid stifled what I feel is one of the most incredible aspects of human behavior, which is figuring out solutions during difficult times, but when a safety net exists, that safety net prevents that innovation and growth. Although I understand why the government did what they did, I also understand that human behavior where we shine as a human was prevented and we’re not going to understand the opportunity costs of that.
At the same time, I look at the unintended consequences of keeping people at home and specifically the unemployment benefits that were spread almost equally throughout the entire country that gave some people more than they needed, some people less than they needed. Also, what it did is it provided a choice and the choice was to either accept those benefits and not go to work, or to not accept those benefits and to continue working. Those that had opportunities to continue to work did not in many cases. There was a financial incentive to not work and that is also something that is paradoxical where our natural tendency does not experience difficulty, challenge, hardship, and pursuing comfort. At the same time, pursuing comfort will end up making us uncomfortable because it’s in the uncomfortable situations that we grow and find meaning. It’s interesting to see what’s going on in markets and with employment. I look at the unintended consequence associated with a stimulus with unemployment benefits is companies are figuring out how to operate more efficiently. You have companies that are operating remotely now. I know Facebook announced that they will have 100% remote employment until the summer of 2021. Google, Twitter, and a lot of other companies are doing the same thing.
There are also companies that I would say do not have deep pockets like those tech companies that are understanding that they can operate, be more profitable without office space or less office space, as well as not hiring back. Employment is coming back. There was a jobs report that almost two million jobs were added back, so unemployment is at 10%. At the same time that is a healthy number. There are businesses that are gone for good. Looking at what’s to come, we don’t know, but I would say what gives you signals? What gives you signs? The identification of opportunity is by understanding human behavior, understanding what people are going to do. I look at the understanding of this, markets, freedom, and independence but my understanding is not the same as others. Looking at what’s going on with regards to divisiveness, I see capitalism being demonized. I understand why, at the same time I look at when it comes to those that have, and those that don’t have. There is an overwhelming influence to punish those that have, and to reward those that don’t have to create equality. Equality is not based on equal opportunities. Equality is based on outputs, and that is extremely unfair. Equality of input, I understand. Equality of output, that is where it goes sideways because in the end, financial wealth is a function of results and value if done honestly and ethically.
Wealth And Human Behavior: One of the most incredible aspects of human behavior is figuring out solutions during difficult times, but when a safety net exists, that safety net prevents that innovation and growth.
All people are wired differently and some are motivated to do a lot of work. Some are brilliant and can work in teams. Others don’t do and therefore people want equality of output based on inequality of input. That’s destructive and harmful to a growing and innovative economy. If you want more information on that, you can go and read the episode I did, it was 2018, maybe 2019 about capitalism. I understand there’s a definition difference with people not understanding necessarily what capitalism truly means. They confuse it with other ideas but I look at now there’s a war going on. Those that understand the principle and the true nature of what a capitalist society brings are their voices is being drowned out and that’s unfortunate. At the same time, I’m hoping that it provides an opportunity through disruption for those too to understand at a different level. The youth now have that opportunity. It’s going to be interesting to see how things play out. The last thing I want to talk about is when you understand human behavior, when you understand how people respond to certain events and activities, what it does, it puts you in the position of opportunity.
Number one, it’s the opportunity to provide value to serve, to help. It’s the opportunity to purchase assets at discounts and make a profit. It’s an opportunity to start a business and merge with another business because in the end, all human beings have their short-sightedness and they make mistakes. During times of massive disruption, that’s more prevalent. I look at something that is important to me, which is trying to figure out what’s going to happen in the future. What are the likely outcomes so that I can understand what to do? On the video, you can see that Wayne Gretzky is above my right shoulder. I have that up there not for the reason I’m going to explain but I had that up there because Wayne Gretzky was an average build, speed, strength, yet he understood his environment better than anyone, and that’s what made him good. That’s a whole other episode, but he has a statement that is glib and over and used all the time, which is, “It’s not about where the puck is. It’s where the puck is going.” If you understand human behavior, you’re going to be able to identify where things are going and with regard to jobs, employment, and in college.
This is on my mind a lot because my kids are at home. I’m sympathetic to all of you out there. They’re trying to navigate kids being home, even more, their education, the experience they have keeping them occupied and productive. There are many distractions and I know it’s a full-time job to keep kids on point. I did a webinar with a good friend of mine, Tom Wheelwright. Tom and I talked about the drive parents have to provide for their kid’s futures. I look at the love and care I have for my children and also kids that are not my children, whether it’s good friends of mine, my niece and nephews. I have one niece and everyone else’s nephew, although those are boys. The care and love I have for them and their wellbeing instinctively makes me want to provide for them. Give them what they need, whether it’s shelter, gifts, or an awesome birthday or Christmas experience. On one part, I understand where that motivation comes from I feel I am putting my kids in a worse situation because they don’t experience much scarcity. They experience a lot of abundances. That’s the case with most children these days.
The reason why I’m saying that is with regards to wanting what’s best for our kids, education-wise, we are following a cognitive bias of status quo. It’s what society says is the right thing to do. It’s what everybody else is doing. I look at our pursuit of education for our kids and this education continues to be less valuable, relevant and is essentially going to set our kids up for more unlearning in the future than learning. This is what I’ll end with and this comes to human behavior. If you know where the puck is going, what people trend too, and what they try to do collectively, then hopefully this will resonate. I’ll make that statement first, which is if you think about 400 years ago, the Mayflower landing on Plymouth Rock until now, all innovation and human behavior have been to the hierarchy of needs that I’ve spoken about in numerous episodes. It’s to figure out a way to provide for the most efficient way possible, food, shelter, clothing, your physiological needs, and that I would say, the expense as far as physiological needs are nil. You go to safety, providing a safe environment then you go to relationships. Look at the social media movement and how much people thrive on understanding the lives of someone else and how driven they are to spend enormous amounts of money and time being involved with other people’s lives, even strangers through social media and where that has gone.
The next level of the hierarchy of needs is the self-interest or ego, self-important, self-awareness, there are a lot of different subcategories to that. This is also prevalent in social media where it is a platform, so people can feel important. That is a natural drive that we all have. All of these areas are continuing to get less expensive. The future as far as our sustenance and our safety, there’s innovation, there’s money, resource, mind, and ideas going into energy, transportation, computing power, and robotics. The list is endless, which is going to drive down the cost of sustenance. What this does is it puts human beings in the position of the careers, jobs that no longer exist in the future. As Tom and I were talking on this webinar, as I prepared for it and thought about it, I identified some areas of employment and industry that are timeless. The pursuit of these, especially by children, kids, is going to be infinitely more valuable than any formal education will provide. The first thing I talked about which is leadership, understanding how to work in teams, especially how to work with people that are strangers that may have a different cultural background. That’s huge. Being able to do that effectively allows the leverage and maximization of individual gifts, abilities, and talents so that they all come together like a puzzle, individual pieces.
It’s profound when a team works together when they have a leader that is able to motivate, empathize, and give vision to an objective. The second thing is sales and communication. Being able to communicate a point, being able to find what a person wants and give them what they want. I would think within sales and communication, copywriting, creative writing storytelling is some of those subsections. Marketing is a fascinating science and it applies to everything and we’ll apply it to everything. I’m almost done with the book by Brian Kurtz, who is a marketer that started out in the ’70s and is still marketing now. He has gone through all the different platforms and mediums of marketing, yet teaches in his book Overdeliver timeless principles of marketing that have not changed even though technology and platforms have. Computer programming, everything is driven by computers yet there is rarely meaningful education and understanding by those that teach in the formal education system. It’s improving. At the same time, computer programming does not require elementary school, middle school, high school, or college. There are six-figure positions, both from a consulting, freelancer, self-employed standpoint and the demand and need is growing yet, the amount of education that goes into it in the formal sense is it’s nowhere.
Wealth And Human Behavior: It’s profound when a team works together, and they have a leader that is able to motivate, empathize, and give vision to an objective.
A computer program, it could be application development. It could be UX and UI design, User Experience, User Interface design, which is essentially how we experience technology. Computers are essentially running everything whether it’s a website, it’s hardware or its software, computer programming in the future. I’m even going to take some fundamental courses because computer programming has to do with thinking models and understanding how a sequence of steps and events relate to certain outcomes. It’s a fascinating science that I’m going to dive into a little bit. I also believe that within marketing, within computer programming is the understanding of how relationships are formed, both professional relationships and friendships. There is something worth researching, which is the 12 Levels of Intimacy. Ryan Deiss who’s the Founder of DigitalMarketer.com sold me on something and it hit me smack dab in the middle of my forehead and it’s the 12 Levels of Intimacy. He didn’t come up with this. This is by someone that has long passed, but it talks about the steps and stages a relationship must go to, or else it’s considered harassment or assault if you skip steps.
Many people skip steps in relationship building. The 12 Levels of Intimacy is profound and it’s helped me to understand the relationship with my wife, better relationship with my children, and strangers, where relationships have to go through steps. If they don’t, then it’s considered a turnoff. It could even be harassment or assault. It’s fascinating to understand how people experience relationships in that degree of psychology. The final thing that I’ll say is social media. Social media is here to stay. It’s a part of business and relationship building. Although there is a lot of evil and bad things that happen on social media, there’s a lot of good that’s created. That is going to continue to be flushed out. Typically, the principle is what ends up being the equilibrium. At the same time, it’s going to oscillate back and forth into the evil, bad, to the good and profound but social media is part of the business. Branding, relationship building is here to stay yet it’s not taught in schools. It’s not taught in the formal sense. My charge to you through all of this is understanding human behavior at a different level is in direct proportion to the amount of wealth you’re going to have. It’s not financial wealth. It’s also your experience of life. We live in a blessed time. At the same time, we are experiencing challenges that have never been experienced in the past.
This is how life is where it is not linear. It is volatile and the volatility and the challenge allow people to rise to the occasion and figure their life out, figure problems out. I look at, what I’ve studied, what I’m intrigued by, what I’m fascinated by is our experience of life and what we wake up and do every day. How are our habits formed? How are our passions created? How did we start to identify what fulfills us and makes us happy? This is the last thing I’ll say and even though I say this, I’d be lying to say that I practice this all the time. It’s difficult to practice, but there are three degrees of relationship. The first degree is a selfish relationship. The second is horse-trading or exchange base. That means that you’re in a relationship as long as somebody gives you what you want, you’re willing to give them what they want.
The final, I would say the more enlightened level is unselfish. The others’ needs are your needs, but they come first. This is the key to the ultimate fulfillment, being able to be motivated all the time by blessing the life of somebody else, whether it’s a spouse, partner, friend, child or colleague where you put others’ interests before your own and try to serve them at the highest level possible. That ultimately seems counterintuitive, at the same time service always brings more fulfillment than self-service. It is the ultimate self-service if you think about it. Thanks for letting me riff. I appreciate it. I hope you learned something. It helped me to express myself and understand what I’ve been reading and thinking about. I appreciate those that have read and I would love to hear your feedback. Hit me up on social media, email at Hello@TheWealthStandard.com. I’d love to hear from you. Continue to have a positive mindset. Look for opportunities to find ways in which you can help others. I know it’s going to improve your overall wealth, success, fulfillment, and happiness. That’s it. We’ll see you. Take care.
We are right smack in the middle of a crisis, and we are yet to see some ripple effects that will profoundly impact almost every aspect of our lives. Now is the time to be prepared and take some essential financial actions that will allow you to seize the opportunities that come once the worst is over. In the first episode of this two-part series, Patrick Donohoe elaborates two of the five things you can do to make the best, financially speaking, of the opportunity the current crisis presents. He talks about having the right state and mindset and creating a structure from which you can anchor your goals on. Join in and be prepared to make the best out of the situation and thrive in the post-crisis world.
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Top 5 Financial Actions You Can Do During Times Of Crisis (Part 1)
I’m doing this one solo. There are going to be two parts. The first part is going to be probably number 1 and 2 of what I consider the Top Financial Actions to Take During Times of Crisis. Part two will consist of the Final Three Actions During Times of Crisis. I felt it was important to speak about this. The guests that I’ve had on before, we’ve all spoken to what’s going on with regards to COVID-19. The disruption to the economy. As I’ve had some time to digest, to think about, what is going on? What are the ripple effects based on this rock in the water? How long is it going to last? What are they going to be? What to pay attention to? I’m finally ready to start speaking to that. Things that you as an audience can do to prepare yourself to capitalize on the situation. That’s what I’m going to start into. There are a lot of updates that we’ve been making through the show. We’re creating our resources page for you. You can find it at TheWealthStandard.com. It consists of some of the businesses of guests that we’ve had. It also consists of courses that I’ve done. Let’s go ahead and get into it.
As I look back the world has changed dramatically and it’s happened quickly. I remember 2008, 2009 where I was in some pretty rough shape. I was starting a business and having the financial crisis in sue, it felt quick. It was one week after another week, and it continued to get worse then it gets better. It was one step forward, three steps back. I look at where we’re at as a society and it’s been interesting. It’s easy to talk about the things that you can’t control. It’s easy to put blame on media. It’s easy to say this or that regarding where the virus came from and what China did or didn’t do? What the president should or shouldn’t have done? There are many things that we focus our attention on that we have no control over.
I got caught up in that and I get it. These are some dire times and often when we start to hear statistics and soundbites, it engages this unconscious part of who we are and we start to react to things. I’ve caught myself to that a number of times. At the same time, the guests that we’ve had on and what we’ve talked about, as well as some of the material that I’m reading, videos that I’m watching with a lot of time to study and reflect that I didn’t necessarily have before. I’ve come to at least conclusions to the point of, “What can you do to influence your life?” Some things that you can do, you can control things to be aware of so you can make the best of this and you can capitalize on this opportunity.
Firstly I’m going to dive into is, we’re going to be experiencing some ripple effects. What’s a ripple effect? Ripple effect is, a drop us a stone in the water or rock in the water. You can even have an earthquake under the ocean and you have a tsunami. There’s obviously a spectrum of how big a ripple could be, the magnitude of a ripple. We don’t realize that it wasn’t an earthquake of sorts. It wasn’t a pebble or a rock in the water. It was an earthquake. The earthquake waves are still coming. Some of the statistics that represent this is, if you look at quarter one January, February, and March, we only had disruption to the first quarter in the latter part of March. If you look at productivity, there are different measurements of productivity of people.
The Bureau of Labor Statistics has a couple of them. It was down in quarter one by negative 2.5% which is huge. You have the velocity of money not to get into the complexities of it. When I spend $1 at a coffee shop, the coffee shop then pays their employees and the employers spend money, and then the businesses that the employees spend money. There’s this money multiplier. M2, which is one of the common ways to measure the velocity of money has also gone down significantly, and the stimulus that is done. Whether it’s quantitative easing since 2008, whether it’s what they’re doing now, it’s not working at all. It’s keeping things at bay.
We had some employment figures out, which were shy of 15%, but it didn’t take into consideration some critical weeks. There are estimates that unemployment’s 20%, 25%, maybe even more when you count underemployed in there. GDP is going to take a massive hit because nobody’s out. Nobody’s spending. That right there is going to be a big indicator as to how severe, what the magnitude of this earthquake is. The psychological impact that we’ve experienced. I was talking to my parents, they live in Massachusetts and it’s different here in Utah. I’m from Connecticut, partly from Massachusetts. There’s a term called “maskhole” and it’s coming out when it comes to the masks.
My dad got shootout by these old ladies when he was standing in line and he goes down the wrong aisle or doesn’t go the right way in the aisle. The psychological damage where people are afraid. Whether there’s a reason for that or not, it’s the fact that there is psychological damage associated with people washing their hands, wearing a mask. There are some psychological things that are going to inhibit business, whether it’s theaters, transportation, going to stores in general, people interacting, which is going to have long-term effects. You also have travel. We’ve become this connected world.
This idea of globalization where different countries are doing different tasks. We’ve created a global supply chain because of it. Demand comes from this country, but yet a piece is manufactured in China, in Europe, in South America, Africa and everything comes together. That’s all been disrupted. The earthquake is hit but we haven’t seen the waves. We’ve seen some ripples or maybe some signals as to what’s coming. There are many different reasons why we could be concerned for all of this. These are things that are outside of our control. On this show, I’m going to keep repeating this, it’s based on things that are within our control, having the information that we have.
It’s powerful to look at this from how I view things because I’ve gone through some difficult times, but these are difficult times and nobody’s ever gone through. It will be interesting to see how humanity rises to the occasion. We’ve talked about the idea of creative destruction. Joseph Schumpeter, the idea that, “When there are massive disruptions, humanity rises.” Humanity is going to rise. I know that they’re going to rise. They’ve done it for millennia, they’re going to do it again and figure out ways to be more efficient, ways to create a product, and ways to create the new ways of being entertained and the list goes on and on.
The biggest thing I would say is as this disruption occurs, it’s in a person’s mind as far as what they think something means. The meaning of things is being created by the populous and collective. That’s why it’s important to have your own individual perspective information, trying to prove and disprove not just your opinion, but other opinions so that you can come to the truth. If you could do this, it is known that these are the times where the greatest opportunities are. There’s a field of study called Behavioral Economics, which talks about how people behave around money. It relates to everything.
Financial Actions: The psychological impact associated with this crisis is going to have long-term effects on business and human interaction.
It’s behavior in general as far as stimulus and then the response, what a person does given a set of circumstances that they are exposed to. There is a curve. The curve that I’m going to post is the investor mentality, but I’d also say it’s the business mentality because, during these times, there’s a story going on in people’s minds. We’re going to go back to the way it was. We’ll be able to hang on for a month and then we’ll do a lot of business and be able to pick up there. Businesses are going into the hole. It’s hanging on, hoping that things come back. This curve states that the point of maximum financial risk is where there is maximum euphoria. The whole idea of nobody buys low and sells high, everybody buys high and sells low.
I often post at my other company Paradigm Life our eLearning in our courses called the Dalbar Report. Dalbar is an independent research group. It studies the average returns people receive. It’s mainly alluding to the impact of human behavior when it comes to rates of return, not necessarily market indexes. These emotional stages that you euphoria where everyone thinks everything’s amazing this is leading up to 2020. 2019 was an amazing year for people, investors, markets, businesses, capital, and liquidity. This is the next stage of the curve, which is anxiety and denial. There’s some anxiety now. You started to see sell-off, but there’s like, “I need to get back to work.”
You see people protesting. Denial that this is going to have a long-term impact. Fear is the next stage and then it’s desperation. These three are the ones to pay attention to, denial, fear, and desperation because they can oscillate back and forth. After desperation is panic. I don’t think we’ve seen desperation yet. There’s the next stage, which is the capitulation. Maybe the investment and this business isn’t right for me. You start to see people file bankruptcy and retire early. You have despondency and between despondency and the next phase, which is depression, this is the point of maximum financial opportunity.
State And Mindset
There are other perspectives as far as this is concerned but this curve is consistent with how humans behave. Most of our behavior is unconscious. It’s pre-programmed and we operate in a similar way. That’s why this field of study has been created. That is number one, as far as what you can do to prepare yourself to capitalize on this opportunity, which is state and mindset. I consider this being the watchman at the gate of your mind. What does that mean? I’ve tried to structure the way in which I lead, do podcasts, speak, show up for my family, and show up for myself, is in a sequence. The sequence is state, story and strategy.
State is something I’ve discussed in the show. State is a function of our physical well-being, where we’re focused, and the language that we use. It’s how we describe things. There’s a difference between like, “Crap,” and “Wow, this is interesting.” Even though it can be applied to the same situation. I also look at focus. It’s what I have, not what’s missing. What I’ve gained, not what I’ve lost. You can look at anything, any situation, any circumstance, and find that there is something you will gain from it. This is all unconscious, at the same time most people gravitate toward what they’ve lost. For me, what I’ve focused my attention on and improving is my leadership capabilities, my leadership state.
Being in a zone so that I show up for my team, the audience, and my family because I know that most people are not going to respond in a strategic way. They’re going to respond in a carnal instinct way. How do you do this? First off, you’re going to recognize that there’s going to be way more bad news than there has been already and a lot of it is going to be economic. The economic is going to cause even more ripple effects. It’s a main ripple effect and then multiple ripple effects. As some of you know who’d been reading, when we started to shut down, I sent my office home when we had an almost 6.0 magnitude earthquake. I was here in the office. I was the only one. The building was shaking and swaying back and forth. It was crazy.
The reason why I brought that up is that there have been aftershocks and there’s still going on. It freaks my wife and dog out. For me, I look at, “We’re going to get a lot of aftershocks.” When the earthquake hit, we’re going to have a tsunami, ripple effects, and aftershocks. Those are going to carry ripple effects as well. The worst has not been seen yet in my opinion, from an economic standpoint. I look at being prepared, being in the right state of mind, is going to position you to create a tremendous amount of value for people and capitalize on some amazing opportunities. People will identify leaders more in this environment than in any other environment. In the euphoria environment, it’s difficult to stand out as a good leader.
In times of crisis when difficult decisions need to be made, that is when true leadership steps up and is identified. It’s the yin and the yang. The more severe the state of things in the environment, the more it creates like, “That person is an amazing leader.” The other end of the spectrum is also extended. We’re seeing murders, suicides, home invasions, and tons of crime. People are going stir crazy. The emotional intelligence that exists in people is low. What that does is present a huge opportunity for you to step up as a leader and help a lot of people with who you are in the state that you’re in.
The idea of state leads the story. When you’re in the right state when you’re looking at the glass half full as opposed to half empty. What you have versus what’s missing, what you’re grateful for as opposed to what you haven’t been given or what you deserve or you feel entitled to, it’s also one of those ideas of words because words describe what our story is. What words are we using? Are you using unbelievable or are you using, “This is horrible?” Unbelievable is a word that can connote whether good or bad. At the same time, it doesn’t have the tone or the psychology piece to it to be bad. It’s carefully choosing your words.
Being the watchman at the gate, not letting those thoughts come in, knowing how to position yourself so you can do something about it. The final thing that I would say in regards to a state in mindset is another sequence. The state that you’re in, your physical well-being, what you’re focused on, the language that you’re using, the story that you’re telling. What is going on? It’s disruption. This is a great opportunity. I have a lot of opportunities to serve. Finally it’s strategy. It comes down to the how. First define what the how is, what is the outcome that you’re looking for?
Financial Actions: Being in the right state of mind is going to position you to create a tremendous amount of value for people and capitalize on amazing opportunities.
You start to create your game plan based on that, but you don’t create the game plan before you’re in state and then have the right story associated with it. The final thing is, another sequence that I’ve been using a tremendous amount, especially when it comes to financial advising, are principles, processes and products. Principles are laws of sorts. Gravity is a principle of nature. Honesty is a principle of morality. You also look at other principles when it comes to finance, interest rates, and evaluations. There are principles out there that can be identified. There are also principles of commerce exchange, exchanging with one another, exchanging your services and getting something in return. You also look at principles in people.
People are the true assets. I look at relationships as some of the most valuable assets. Its processes, which is the structure of things. This is going to be number two. Number one is state in mindset. The reason why I want to use structure is because there’s only so much energy we have during the day. It’s an allotment of energy and keeping yourself healthy, keeping your head and I’m going to get into some structure and some strategy as far as how to do that. Being able to have energy focused on the dynamic. Not the approach reoccurring or recurring, but the dynamic, it’s powerful. That’s why structure is powerful because you can set yourself up so that you don’t have to think about things.
Things are done in a certain way. You have a routine, you have habits that allow for all the energy to be focused on dynamic things the day-to-day decisions that you maybe didn’t have to make the day before. The decisions for an opportunity, new content, and ways in which you can be a better leader and do those things. It’s establishing essentially a structure so that all of the routine things you do on a daily basis are pre-programmed. You don’t have to waste your energy on that. An example I heard maybe to illustrate this point is, when we get up in the morning with an alarm clock, the buzz when that goes off, it ignites in every human being an adrenaline rush.
Our DNA associates that sound the same way you would associate being attacked by a Saber-toothed tiger 10,000 years ago. When that happens, it jars us out of bed and expands the majority of our adrenaline, testosterone, those chemicals that have our body respond that way are expended for the day and they’re gone. There’s a strategy there as far as waking up with peaceful music, which doesn’t necessarily waste those valuable chemicals that you expend and allows you to apply those at different points during the day. What I would challenge you to do is, start to establish a structure for this summer. The next few months are critical. Some of the hardest times are going to come after the reportings from Q2 or quarter two ends in June. The reports usually come out mid to end of July. Creating all of this now is going to prepare you. When a lot of these things go sideways, you have structure, you’re not trying to figure it out then. It’s optimizing your energy.
Craig Ballantyne who wrote The Perfect Day Formula is applicable. Some of you maybe had your routine and it wasn’t necessarily as valuable as it should be. Revisiting daily routine, structuring your day, and your priorities. Perfect Day Formula from Craig Ballantyne is ideal for that because Craig is a genius at that. He’s done that with many entrepreneurs and business owners. It’s a short book and it’s simple. Perfect Day Formula as a resource there where you can start to structure your day and you systematize the predictable. There’s a saying that we started using with my other company Paradigm as how we’re operating and what we’re looking for as far as opportunities are concerned. It’s a saying by the Four Seasons Hotel, which is called “Systematize the predictable so that you can humanize the exceptional.” What that means is, it’s all those routine things that you do on a daily basis. It’s the setup structure for those things. One way in which I have re-evaluated my goals to finalize the redo of some of my annual goals. The way in which I’ve done that is using what’s called the Wheel of Life, which is a self-assessment.
The Wheel of Life is essentially a wheel in which you rate the different aspects of your life, your physical well-being, financial well-being, mental well-being, spiritual, relationships and physical situation. You rate yourself there and it starts to help you evaluate where the areas are that you can make the biggest difference in. You start to create your goals and your routine around that.This is important because the goals that you may have set, they’re probably not realistic anymore given that the environment has changed, at least not all of them. That’s why I’ve reevaluated all of my goals. Looking at establishing where those goals are, that’s going to help propel the daily routine.
Craig talks about it in The Perfect Day Formula, you can start to chip away at some of those goals and have something simple to do on a daily basis and make those micro improvements toward the end results. The morning routine as far as structure is concerned is huge. I’ve redone my morning routine. I come to an office and there’s nobody here. It’s completely quiet and dark. Everybody’s working from home. We have a daily standup with my team, but it’s given me the opportunity to not have any distraction or disruption. I always get the knock on the door when I’m in the middle of something. I don’t turn people away. It’s one of those things where it’s allowed me a lot of time too to be consistent with some of the things that I find valuable.
What I started using is a neurofeedback device called Muse. Muse is a feedback part of meditation. What it does is it allows you to see where you’re at when it comes to your mindset. It’s not expensive at all. I do it on a daily basis. What it does is it shows you where your brain activity is with sounds. When you’re active, all over the place and thinking about this and this, you’re in an active mindset and it measures that by the severity of weather in the environment. You have to wear earphones associated with it, but you’ve got the desert, the rainforest, and the ocean. There’s one that’s general sounds, but when you are active, not calm and not focused, the weather is all over the place. What it does is, the weather and it gets less severe and calm the calmer you get. Eventually, you have birds that start chirping when you are calm and in the zone.
There are days where I don’t get any birds or 1 or 2. There are days where I get 50, and this is in a ten-minute timeframe. What it does, it gives you feedback so that you’re not telling yourself stories. It gives you actual feedback so that you know where you’re at and you know how much time and attention you have to focus on your meditation, your gratitude getting in the zone. That’s one thing that I’ve started doing. Now that I have my goal is getting restructured, I’m sitting back and once I’m in the zone, I start to ask myself strategic questions.
These questions, you don’t have to ask them all in one day. I usually ask 1 or 2 per day. I learned this from Keith Cunningham, Keys to the Vault and there are a few other books that he’s written. The questions are insightful and asking yourself these questions in the wrong state can be catastrophic. That’s why being in the right state, doing meditation, getting in that zone is powerful. The questions are like, “What do I want? What in my control is preventing me from achieving that? What don’t I see? What if I’m wrong? What is the result that I would be ecstatic about? How can I make the biggest difference? How can I be the best conversation on somebody’s day? Who do I need to call? Who do I need to write? Who would benefit from a conversation with me?” This is a big one. Maybe a whole thinking session dedicated to this. “Why am I paid? What must I believe about myself to be paid more? What are the ways I can go above and beyond what is expected that I am not paid for?”
Financial Actions: Structure is powerful because you can set yourself up so that you don’t have to think about certain things.
Here are a few others. “What is the least amount I can earn and live an unbelievable life? What am I spending money on that is not producing the result I want? If I could devote time to one thing, what would it be? What about if my life gave me tremendous enjoyment many years ago but doesn’t now? Is there an opportunity there?” These are a few. These are profound, insightful questions that you can find online. It may not feel like it’s that significant, but asking yourself these questions creates tremendous breakthrough and insight as to where opportunities are. The reason why I wanted to start here these first 2 of 5 things to do in a financial crisis, is because being in the right state, having the right mindset and then structuring your day so that all the different routine, things that you do, don’t expend any unnecessary energy. It will position you for making the best decisions given what’s going on.
The next three are going to be cash and cashflow, dry powder and investments, and assets. I wanted to cover this again because it sets the stage for where the opportunities are, as well as a dry powder, which is more opportunity fund. If you are familiar with the language I use in the book, Heads I Win, Tails You Lose. Finally, investments and assets and we’re going to revisit the financial, the behavioral economics curve when it comes to most the collective state of mind. Where in that state of mind are the best opportunities and the worst opportunities to make a decision or take action on something? Thank you for reading this episode. I will talk to you next time. Take care.
As we near both the end of the year and this show’s season on entrepreneurship, host Patrick Donohoe brings in with Craig Ballantyne, a remarkable guest who talks beyond theories and information about entrepreneurship and goes straight into the implementation, integration, and execution of those information. Craig is a bestselling author, a coach, and the founder of a multiple seven-figure fitness empire and more. Today, he talks from his information wisdom and experience wisdom about establishing an entrepreneur’s drive and passion for his business, correcting efforts that burn them out, and getting rid of bottlenecks and forming some new beliefs. He also shares the key thing that he has discovered among successful entrepreneurs as they continue on their journey this coming 2020.
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The Entrepreneurs’ Formula To Execute Business Information With Craig Ballantyne
My guest is Craig Ballantyne. He’s a good friend of mine. I’ve known him for several years. First, it’s an incredible interview. This guy is so smart not just because he has the information, but because of how easy he’s made it. He’s been on the show back in 2017. You can read that episode as well. Craig figured out an easy way through implementation and there are these little things that get in the way. I know that if you guys read some of the details, you’re going to get a lot out of it. Make sure you get the book. He has some online stuff too that you guys will benefit from because we’re going into 2020 where we can take the ideas that come from other episodes. We take the ideas and lessons from 2019 and have a better you in 2020.
We are right at the end of this intense season on entrepreneurship and I hope you guys are excited, especially going into the New Year. We are essentially having some reset especially 2020, some iconic year. I have no one better to be on the show than this guy, Craig Ballantyne. First of all, Craig is the author of The Perfect Day Formula. He is also the author of the Wall Street Journal bestselling book, Unstoppable and The Perfect Week Formula. He also does workshops. He’s a coach for entrepreneurs and business people. He is also the founder of a multiple seven-figure fitness empire, Early to Rise, and more. Craig, it’s amazing to have you on. I wanted to have you here because I’ve talked a lot about information and ideas and had guests on that talk about the power of having your own business, being an entrepreneur, and what that can do to your life. At the same time, it’s all been information. I wanted to talk about the implementation, integration, execution of information.
You probably don’t know this as well. Our meeting was super serendipitous. It happened at a point in my life. I went to your workshop right after Christmas in Denver. The day that I left that workshop, I went to the Denver Hospital. My brother lives in Denver and my niece was diagnosed with cancer. My niece is the same age as my oldest daughter. Thankfully, she’s a survivor, totally in remission. That year, I could use expletives, the right lane that year for me both from a business and a personal perspective. I look at what’s transpired since then and I put much credit to what I learned from you both in that workshop as well as the Perfect Life Retreat down in San Diego. Thank you sincerely, Craig. You’ve made a huge difference. I appreciate all you do. I know you’ve continued to preach your message. I’m excited to have you on so that you can impart not just information wisdom, but your experience wisdom with the audience. Welcome.
It’s going to be a lot of fun. One quick point on that is you take a look at almost everybody in life and there is an inflection point. You call it hero’s journey where if you don’t go through the down, if Luke’s parents didn’t get killed, if the hobbits don’t get kicked out of their little hobbit world and have to go on the journey, there’s no journey. There’s no greatness that comes out of that. You went through yours. I went through my anxiety attacks. Tony Robbins went through being broke. Brendon Burchard went through his injury. My friend went through traumas. Everybody does. You got to come up the other side and you come out stronger. If anybody’s going through something whether it’s marital problems, financial problems or whether it’s like, “I’m not at my best self,” you fight through it. In a few months or a year from now, you’re going to be in a great spot.
It’s the duality of life. There’s a saying that I came across which talks about the depth of sadness or the depth of experience from a negative standpoint that gives you the ability to experience that on an even deeper level on the other side of the spectrum.
My shirt says 11/10. The reason why I made it is because when you went through the program with me, one of the things as we do these weekly accountability updates and I always ask my coaching clients, “On a scale of 1 to 10, what was the last week?” I’ve found that there are three types of people. Let’s start with the negative person first. I call them panic button hitters. Let’s say a person in their company left, they got a refund request and they’re like, “It was a 1/10.” I’m like, “If that week was 1/10, what are you going to rate a week when something bad happens?” There are normal people who rate it between 7 and 9 every week. I then have this group of people who it’s a 16/10. When theirs is 12/10 or 11/10, I know they’ve had a bad week.
After doing this for so long because I’m naturally the guy who would rate everything 7/10. “I made $1 million.” It was 7/10. “I got hit by a truck.” It was 7/10. I’d always be in that melancholy state. I decided, “I’m going to make my new baseline 11/10.” I’m going to have that new mentality that every day above ground you’re grateful for. When we got on a call, you said, “Things are amazing.” I’m like, “That’s an amazing answer.” I got to say amazing more often. I got to be that 11/10. It’s a mindset for everybody reading, the duality of life. Even if it’s a bad day, I’m still grateful for the chance to have a bad day. It’s always 11/10. That’s the new baseline.
Nature doesn’t work on a straight line. Nature is everything. You have storms and your different weather patterns. We know that internally, but then when we’re in the experience because most people don’t necessarily anticipate how they’re going to react to certain circumstances. It becomes difficult at the moment.
It’s easy for you and I when it’s somebody else going through it to say, “You’re going to get through this. You’re going to be okay. It doesn’t matter if it’s a family illness or if it’s a financial loss or whatever it is.” We always say, “We know you. You’re strong, you’re going to get through this.” When it’s us and we’re emotionally attached to the problem whether it’s a team member who’s outstayed their welcome on the team and we should have had a conversation with them a few months ago, but we dread that conversation. You’re going to get through it. You have to be emotionally unattached from your problems. Look at them with outside eyes in an objective manner. All those things that seem like big problems become less of a problem and something to go and fish right away. I’m sure you’ve read Traction by Gino Wickman or his book How to Be a Great Boss.
He’s got a great phrase in there. If you need to have a difficult conversation with somebody or let somebody go, it’s 36 hours of pain. Most people avoid that 36 hours of pain and will go through another 36 weeks of pain, of passive-aggressive, hiding it, not leaning into the conversation. It’ll go on and on. You got to suck it up and go through the 36 hours of pain. It’s going to be a difficult conversation. There’s going to be some emotions, but if you don’t do that, things are going to get worse. This is not just related to letting a team member go or something in entrepreneurship, it’s the same with negative environments or negative people in our lives. We got to have those conversations and step-up to be the best person. It’s easy for us to tell somebody, “You got to go and have that conversation.” When it’s our turn to have that conversation, it’s not easy.
The emotional attachment is huge. That’s where this notion of correction. There’s a concept in economics called the S-curve where you have compounding and growth, but then you have a plateau and even a decline. During that, you’ve grown, but at the same time, you’re still trying to use the same principles and the same processes as you’ve used before. They’re not working. It’s this re-characterization of what the purpose is so that you can have another growth curve. The same happens in life. You see what’s happening and you experienced it emotionally, deal with it. You have to learn to get over that and then you start to rebound again.
The same happens in the gym. You’re talking physiology 101. You’re talking to hockey training 101 from back in the day. You go and you skate or you squat or whatever and your legs are sore the next day. If you don’t go through that, they don’t get stronger. You don’t get fitter. If you practice halfheartedly, you’re left behind on when the actual game comes around. You have to go through that S-curve where you got better but got worse at the same time. When you recover properly, you super compensate what it’s called in physiology and you come back. The next thing you know, you’re playing for the New York Rangers like a certain stud here.
Let’s get into the topic. You have had an incredible entrepreneurial journey and even better, you’ve been able to experience thousands of other people’s journeys. You’ve seen common patterns. Let’s talk through your formula, where you establish this passion and drive to help and transform lives with being able to have a way in which you can simply execute on ideas on business and life in general.
One of the things that drove me from a young age as I got frustrated seeing whether it was family members or other people not getting ahead as quickly as they should have. I then spent the rest of my life since then trying to figure out the fastest way to success. First of all, it was in the fitness world. I went into fitness because I loved hockey and I wanted to be a strength and conditioning coach in the National Hockey League. I started writing for Men’s Health. I then got into creating programs online for people because I saw a lot of people are going to the gym and then I get these emails from people like, “I don’t have time to spend nine hours a week in the gym.” My mind was blown. I was like, “What do you think you have to do to be in the gym nine hours a week to lose weight?” I was showing people how to do it in two hours a week maximum. That was what set me apart from many people and I built that business.
The Perfect Day Formula: How to Own the Day and Control Your Life
Around 2006 and 2007 when my business started taking off, it was like, “I got to do something about my own life. Otherwise, I’m going to be working twelve hours a day, seven days a week and I can’t be doing that. That’s not healthy. That’s not what I want,” all that stuff. I wanted to start building what I call an intelligent business. What’s an intelligent business where you’re doing the things you love, you’re building up a team? It took me a long time to make the full transition from fitness to business coaching. I was able to make that over time. You were part of the journey and a lot of great people like you, written the books from the experience of it. It was all driven from how can we help people get more in less? It’s all about efficiency for me, but efficiency and doing the right things because there’s a whole other world where people are efficient and productive at doing things that don’t matter. That’s one of the biggest wastes of time in life.
You have these natural laws of how things work and there’s a lot of opposites sometimes. In 2018, we bought this used golf simulator in my office. I bought Jack, who’s five, a little set of clubs. I was taught that golf was a game of opposites. It’s not the best story about how strong you hit your swing. It’s about your whole body movement, but also it’s the inside out. In order to hit left, you want to hit the ball going right. It’s an interesting thing. I often reference Seinfeld opposite George when George does the opposite completely. Things start to work out. The less is more concept huge for me. When it comes to the entrepreneur and they have ideas, drive, and passion. What is it about the efforts that often get them to burn out? How do we correct that?
One of the things I’m seeing a lot with the influx of everybody’s got a podcast and the morning routine focus is that people have turned a lot of great things, things that are helpful, into perverse forms of procrastination. I use that phrase in The Perfect Week Formula book. For example, I’ve had clients send me messages at 7:30 in the morning and they said, “I’ve been up since 5:00 AM and I’ve done meditation, gratitude journaling, freeform journaling, yoga, and exercise. I haven’t gotten anything done and I’m all stressed out because I got to go to work.” I’m like, “You did all these things,” and they’re all good things in and of themselves. At some point, you got to draw the line and you got to go, “If they’re that important to me, I’ll do some of them later.”
You do a short routine to get your mind right. This perverse form of procrastination is stealing time from people’s lives. I talk a lot about it in the book because I quote Daniel Pink’s book. It’s called When: The Scientific Secrets of Perfect Timing. He says, “You have the greatest willpower, discipline and intention first thing in the morning.” If you’re getting up and doing nineteen things before breakfast and there’s an article in Inc.com called the 14 Things Successful People Do First Thing in the Morning. It takes 4.5 hours to go through that entire routine because someone made fun of it. If you’re doing that, you’re going down rabbit holes.
In the book, I talk about the farm boy morning miracle routine, to paraphrase from Hal Elrod, our friend. The farm boy morning miracle is I grew up on a farm. What does a farmer do? The farmer gets up and they go to work. They go and do something substantial that has to be done. They feed the cows because the cows don’t have a day off from eating. They definitely don’t take a day off from eating. Most entrepreneurs, “We’re going to have some habits, rituals, and routines.” If you’re finding yourself with way too much busy work and not enough accomplishment, it’s time to take an evaluation of that. The second thing on that side of the equation is that people are over-consuming information. I love books and I don’t like listening to podcasts because I only like to read my content. I don’t like to watch videos and I don’t like to do audio. I’m a little strange. “I listen to Ed Millets. I listen to Patrick’s. I listen to Craig’s. I listen to Craig and Bedros. I listened to Jen Sincero. I listen to Rachel Hollis.” Slow down here. You’ve consumed and gathered all this information and that’s great. If you are not implementing and executing on the information, you’re a walking library. There’s not a lot of money in libraries, unfortunately.
I would urge people reading to do an audit and this is a great time to do that. In fact, one of the exercises in the book that I talk about is the billionaire time matrix. It was a worksheet that I invented Christmas 2018. I invented this worksheet because I had a chocolate lab. He was 12.5 years old and he died in August of 2018. When you have a twelve-year-old chocolate lab, they’re like a piece of furniture that needs a twenty-minute walk a day. It’s a little time. He passed away. It was sad. After a couple of months, I’m like, “I sit on my butt way too much here. I need to go and get some walks. I need a new dog. I miss the dog.” Having a puppy that needs three hours a day outside is exponentially different than having a twelve-year-old chocolate lab. At Christmas time, I’m like, “My schedule would not allow me to have a puppy. Let me figure something out here.”
At Christmas time, I love to sit around and not do any work and think. I came up with this exercise, four quadrants, four questions. What do you hate doing? Think about this. Do this with a pen and paper. Sit there and think, “What do I hate doing? What do I hate doing in my business?” It might not be that you can stop doing the things that you hate, but you can rearrange your schedule. What I have found, Patrick is that I was doing sales calls in the morning or I was doing coaching calls in the morning.
The morning is my magic time for writing. I hated it. Not only was I missing out on that 30-minute block or hour block, I was also thinking about it the night before. I was ticked off. I was like, “I got that call. What was I thinking?” I’m losing mental energy. I’m thinking about it during non-work time. Instead of it being an hour-long call, it’s 2 or 3 hours of mental bandwidth because I’m doing something I hate at the wrong time. All I had to do was get a Calendly link. Calendly is one of those things where you set up, schedule times, and not allow anybody to book in my morning. I fixed that problem. It opened up my mornings to accelerate all my other greatness.
I have more time for the dog. That’s just one question. The second question that I have people ask is what you should stop doing? What should your team stop doing? If everybody stopped doing this and we all have stuff in our businesses where if nobody did it, the business wouldn’t suffer. In fact, the business would get better. It goes in our personal lives as well, with gossiping or watching five Netflix shows a night instead of 1 or 2. If you stopped doing it, life gets better and nobody takes it up. It’s not delegated to anybody. It’s not replaced with anything else. Stop doing it. For me, when I wrote the first book, I was doing everybody’s podcast. I had to. I had to learn how to tell my stories, become a better speaker, all that great stuff and sell the books.
It gets to the point of diminishing returns. There’s some young kid in England who has ten listeners and you’re like, “I was once like that young kid. I want to do that kid show to be a great guest for him.” You got to draw the line. You can’t do every kid who’s doing a podcast in his mom’s basement who has twenty listeners. Otherwise, I’m doing sixteen hours of podcasts a day and I don’t get ahead in life. I had to stop doing small podcasts of audiences that weren’t a good fit for me. It’s unfortunate, but you can’t do everything.
It’s a principle of focus. You have this distribution of energy throughout the day. Sometimes there’s a higher distribution in the morning, mid-day, end of the day depending on the situation. I’ve heard all the theories. It’s determining what you’re best at, where you’re good at, what you like doing and focusing efforts there. You use the 2 to 3 hours of the deep work. I did the magic time. It could be in the afternoon. It could be mid-day. It’s essentially taking inventory of your day to determine what that time block is.
That’s one of the time journal exercises, which is another thing that I described in the book and it’s another great exercise that when people match their energy, their focus, and their major activities. All of a sudden, you can go from working twelve hours a day to getting more work done in 7 or 8 hours a day. When you get everything, the stars align, the dots are connected. It’s classic self-reflection. It’s the same with your diet. You could follow somebody else’s restrictive diet and then all of a sudden if you knew about your own physiology, about the things that help you feel full and the things that got you into trouble, you could probably eat more calories on an individualized diet, feel satisfied, lose more weight and be healthier because you aligned what works for your body, energy levels, likes, and dislikes.
That’s essentially the way it is for everything in life. That’s part of this exercise. Those are the first two. I’ll go through the other two. In the bottom left quadrant of the four questions is what is not your job? That’s the question. In this case, we don’t stop it and not delegate it. This is a case where we identify something that you’re doing that you’ve either hired somebody else to do or that it’s simply not your job and you have to go and get somebody else to do it. There are two ways of looking at this. For me, I was doing some sales calls because I was like, “That was a referral or this is an important major client. I don’t want to lose them.”
I was like, “If I’ve hired a good sales guy,” and I got a great sales guy and he’s a great person, “I shouldn’t be taking the calls. I should be coaching him up to the point where he can take on any call.” I put my efforts somewhere else and then he took way more sales calls and it’s been a win-win. I was doing some other stuff where I’ve hired these people on my team. I came from a blue-collar background where when my mom finds out that I don’t do half this stuff and all these other people do these things, she’s like, “You can’t do this. You’re better than that stuff.” Not that she gives me a hard time, but she doesn’t understand it.
The other thing is on the personal side. If there are female entrepreneurs reading, I want you to pay attention to this one because for guys, it’s easy. I’m like, “I’m not cooking at home. I’m not doing this. We’ll be fine to get a person to come in and do the laundry. I’m not doing that. I’ve got a business to run.” For most women, there are societal things there. I have a lot of female entrepreneurs who struggle. If my mother-in-law found out that I didn’t make all the sandwiches, do all the laundry, and make all the dinners while I’m still trying to run my business, there’d be a lot of stress.
Here’s the thing, I say to them, “You weren’t put here to clean the house every week, to make every meal, and to cook every dinner. It’s okay. I give you permission to let that stuff go because you were put here to run a business.” Imagine Oprah like, “I can’t do a show now because I’ve got to go and do the laundry or everyone’s going to think I’m a bad person because I don’t do my own laundry.” That’s not how she thinks. She only does what she can do. She finds somebody else to not only do the personal stuff but to come in and make sure that the catering for the guests is great and the audience has great gifts to give away and all that stuff.
We find what’s not our job and we get rid of it so that we can go back to that 5% as my friend Bedros calls it or your unique ability as Dan Sullivan calls it. Everybody’s got it. The one thing Gary Keller and you do it. Finally, the last one is what your distractions are? We all have them. Social media is my number one distraction. I got to set up boundaries to stop myself from wasting time on it. Some people watch too many television shows or it’s time for you to give up watching too many pro sports. Once you get past the age of 27, you got to let that go because you’re older than most of the players. That’s when I let it go because I thought, “This is ridiculous. I’m getting emotionally involved in a game that I’m not even playing in.” It’s those types of things. Good exercises of mental thought because you’ve opened up all this space to do what matters. That’s where you move mountains in your life.
There’s something I’ve thought about quite a bit, which is the idea of uncertainty. There’s the saying, “The quality of your life is in direct proportion to the amount of uncertainty that you can comfortably live with.” It’s establishing essentially some certainty associated with your life of the foundation, whether it’s boundaries and rules that you establish yourself. These aren’t rules imposed on you. These are establishing rules, establishing processes, establishing ways of doing things. It’s the idea of constantly growing the area of your life that you’re best at and should be focused on, which is not going to be the same now as it will be in three years or a year. It’s that constant refinement of what you’re doing because in those zones is where you essentially establish the most fulfillment. It’s the stuff that you love doing. It’s that degree of uncertainty that you’re able to start focusing on and pushing the limit because you have the certainty associated with your foundation in check.
There’s an analogy there that is important for people to understand that should make some light bulbs go off. If you think back to 2007, that’s when the first iPhone came out. Imagine how different the iPhone operating system is now. They’ve gone through eleven iterations or even more of iPhones. That’s the same with our readers. When you started your business, you were the original iPhone. You then developed more high-income skills. You develop world-class capabilities as a leader and every year your operating system changes and improves. You have new parameters that you operate by.
One of the cool things I heard, I was reading some books about Warren Buffett and Charlie Monger. They have a thing that they try and do a challenge where they try and destroy one of their deeply-held beliefs every year. Maybe it’s about investing in a certain area like airlines or it’s about management strategies. They’re always testing their beliefs to either increase the strength in their belief or to realize like, “That may have been true before and it served us, but it doesn’t serve us now because something has changed,” or, “We got lucky because it wasn’t that true and we need to move on.” That’s how you build your operating system up and that’s how you build your world-class expertise in a certain thing. It’s only through getting rid, cutting the fluff so that you can focus on that thing that matters. That’s where you start to shine.
Execute Business Information: If you are not implementing and executing on the information, you’re a walking library. Unfortunately, there’s not a lot of money in libraries.
This is where we’re getting into the execution of things. With what you’ve written about, the workshops that you put on, you essentially are helping clients, people establish the purpose behind it, the foundational elements that will lead to what they’re going to execute. Maybe talk about some of the content of your book that helps in that regard, but then also some of the workshops, live events, and things that you put on around the world that help people to essentially establish like, “What is that belief that I have that needs to be squashed? It might’ve worked before my business. It’s not working as well now.” How do you establish that and then start to confirm some new beliefs?
One of the things we always want to ask people is what’s not working? What is not working in the business? What’s not working in your life? You have to do classic deeper dive in. “Our sales team is not working.” Why is the sales team not working? What’s the bottleneck? Is it the offer that you have? Is it a group of people that you have? Do you have the right people on the right bus in the right seats? Do you have the right systems for your sales? Do you have the right follow-up? Do you have the right leadership in place? There’s a whole bunch of things. You have to do a lot of Socratic questioning.
Maybe you get to, “We have great sales systems and processes. We’re always doing training. We have good follow-up. Our offer is as good as the last time. I see the problem is the culture within the sales staff. We had this guy and he’s been here for a few years. There are a lot of new people on. Our manager of the team is newer. He’s been with me since day one.” You then start to dive deeper and you go, “What would happen if he quit?” It’d probably be better. I got these two questions from Verne Harnish in his newsletter. When you think about somebody who’s not great, question number one is what would happen if they quit? How would you feel? What would happen if you had ten people like this on your team? I’m saying that might be an issue or it’s the leadership. We brought in a manager and we try to start a new style of leadership, but eventually by asking the questions and always looking at what’s the bottleneck? We’re flowing energy. We’re flowing leads. We’re flowing focus. It gets bottled up. What is it that’s bottling us up there? We can break free.
As soon as you break free and you can leverage that, all of a sudden your business can grow. It’s interesting how quickly things can take off for people when they are able to get rid of those bottlenecks. Is there a couple of questions that we ask everybody? No. It’s around that theme and then we have to get specific on it. We can do that for sales. We can do that for marketing. We can do that for leadership. We can do that for personal life. We can do that for our health. We can do that for our personal development. We can do that for everything. As long as you have that growth mindset and not a fixed mindset around everything in your life, then you will constantly evolve. You’ll constantly upgrade that operating system. The sky is the limit. It’s been amazing.
Our growth in our company’s been good. I have some friends who have skyrocketed, total moonshots in their business and you’re like, “Wow.” One of my bottlenecks, Patrick, to be brutally honest and vulnerable is that I don’t receive advice well. I have a big ego and I need to learn to take my ego and put it aside. I was talking to a woman named Shanda Sumpter, a successful female entrepreneur and business coach. She’s had rapid growth. We started off around the same spot. She used the word receiver. She’s become a better receiver. For a lot of us, when feedback is given, we’re good at resistors.
It’s like, “That won’t work because I’ve tried that before. No. Where does that get us?” I was like that for a long time. I want to be a receiver of information and I want to resist saying, “I want to be right. I want to be the smart guy all the time.” Being right versus being a receiver are two different things. That’s what we all need to be. That will help you overcome bottlenecks in any area of your life. To our audience, whether it’s personal or professional, if you become a better receiver of information and less of a resistor and you’re willing to answer difficult questions, your world can change dramatically.
Do you see that ability to receive feedback, receive constructive advice about you as one of the common reasons why some of your friends and businesses are thriving? Is there something else that you would add to that?
The only modification I would add to it is from our friend Matt Smith. He says, “You got to be curious.” The receiver is a naturally curious person. They would go, “That’s interesting that you would give me that advice. Why would you say that?” Whereas the resistor, they’re protecting their ego and they might be curious. They might read lots of books and that stuff. If they’re a resistor to the information, they’re not curious about getting better themselves. I also see the more the person is studying leadership and the more that person is reading biographies and the more that person is checking out their competitors and reverse engineering funnels or whatever it is. It’s important to do that because the more knowledge you have, the more dots you connect. Be a receiver and be a curious person in life. That’s a great characteristic to encourage your children because you become curious about other cultures and be curious about that. I know it’s a great thing to be. You’re going to be overall a better person. The more that you can set aside your ego in life, the better off you’re going to be too.
I love Matt’s perspective on life. There’s a book we were discussing a few years ago around how the educational system in the business world of the West has created this idea of good and bad, right and wrong, or success or failure based on a grade or pay scale. I look at the curiosity side of things. We see ourselves in a certain way, the way other people see us. I’ve connected the same thing. That’s why I’m bringing up this point. I’ve listened to a lot of successful people talk about some of the things that are challenging to them and they were stuck. It was amazing. Everyone else understood where they were at. They didn’t understand what was in their way. It was typically them.
It’s that emotional attachment which we talked about way back at the start.
Execute Business Information: Your world can change dramatically when you become a better receiver of information and less of a resistor.
It’s seeded. As much as deep working condition, new behaviors, we have conditioned behaviors from our childhood, from our upbringing, from our harder experiences. It’s difficult sometimes to revisit those, but they’re already there and it’s the unwinding or the untying the knot associated with where those are. First start with, I would say self-love, a self-belief and a realization that even the most successful people have jacked up beliefs. Warren Buffett and Charlie Monger, they’re doing it. The most successful people are doing that because they realize that there are things that they’re not doing perfectly. There are things that may have worked or are not working anymore. The first thing is to let down your guard and not necessarily be defined by other people, instead define yourself.
The more open and willing you are to that, it’s great. If you think about it in terms of your kids, your kids are naturally curious. The curiosity is drummed out of them because when you go into high school and you go into college, it’s right or wrong. Is it? It’s not the best place. The education system does fail the entrepreneur in that way.
As we conclude our thoughts and then I want to give you some time to talk about some of the stuff you have online, things you have on social media, events that you have coming up. We’re approaching this iconic year, 2020. Another decade and movies had the 2020 date in them. 2019, the end of the year. What have you discovered in successful entrepreneurs, those that you’ve worked with, you yourself? What are they doing in December 2019? What are some of those consistent things that you see or habits that people have to prepare for?
That’s the magic billion-dollar word, prepare. Patrick, the most common trait among the most successful people and the more that I work with people, the more I am blown away by how prepared the most successful people are. If you’re preparing for a negotiation, the billionaire has always done more preparation than the millionaire. Whether it’s the entrepreneur that’s leading a specific industry, they do more preparation the night before than their competition. For the people, most high performers have already done the preparation for 2020. We have the annual event that prepares us for 2020. We get all of our clients prepared well in advance. If you’re waiting until January 1st, it’s like waiting to make your to-do list in the morning when you have the greatest willpower, discipline, intention and you’re wasting that time on figuring out what you’re going to do in the day.
To our readers, if you are a little bit behind, get on it now because you have to be prepared to hit the ground running as quickly as possible and not kind of, sort of we have a plan for it. No, deeply prepared, step-by-step to get a fast response, to get a quick victory, to get momentum and motivation. When you have that in place, the results come faster. When you and your team see results, you start to work harder. It’s like going to the gym. If you don’t see results, you get down and you get out of there. If you see results, then you’re like, “I’m going back and I’m going to stay consistent with this.” Those are the people that stay with it.
I had a business coach and she was at Amazon, T-Mobile, and these big companies. I remember her once she was talking to me about annual planning. This was a decade ago. When she did her annual plans and presented it, she would start on the day after she presented on that one. I’m glad you’re saying this because that’s the thing. I would say those that are successful do have this idea of anticipation and preparation. They realize that not everything is going to go 100% plan. It’s that constant refinement as you’re executing. The preparation has done well in advance. That’s one of those characteristics that I value. I wish I could say the same for me all the time. At the same time, I recognize that pattern many successful people preparing well in advance.
I want to tie this up with a little book review. I’ve started reading a book called Eisenhower. It’s a biography of Dwight D. Eisenhower. He spends most of the time talking about him as Supreme Allied Commander in World War II. There’s much that I didn’t know. They wanted to do the D-Day landings all the way back in 1942 and if they would’ve done it, they would’ve got slaughtered. They would have made many mistakes. They learned all this stuff by going through North Africa and then into Italy. They learned, “We don’t know anything.” They learned all about amphibious landings and all the preparation and planning that went into it.
For the Germans, it was a comedy of errors. Hitler sleeps until noon and no one wanted to wake them up on D-Day. That’s a great example of bad leadership. Those companies were like, “I don’t want to tell the boss, he’ll get mad at me.” That’s what happened to the Germans. It wouldn’t have saved them or anything. They had the absolute worst leadership on the German side and then they had all this planning and all these screw-ups from North Africa and Italy on their side, which then made them better for the day that they finally attacked France. It became the greatest military expedition of all time. It’s an amazing story and you can’t make this stuff up, but it applies so much to everything we talked about. I want people to understand every single person is messing up, but they’re planning in advance, they’re going to get punched in the face, they’re going to get up, they’re going to readjust course, and they never stop. To our readers, make that your mission for 2020.
Talk a bit about some of the resources you have other than your book. What are some online resources that you have, social media? What are some of the other things you’re doing to keep this mission moving forward?
We do a lot on Instagram. People that use Instagram, I’m @RealCraigBallantyne. We have a Facebook group called The Perfect Business Formula. It’s a free Facebook group. We’re putting great content out every day. We have the books and then The Perfect Day Formula Kit, which is my life’s work in a box that’s helped a lot of people like yourself. We have some programs that we help. We have online coaching, it’s called 2X – 10 Less. It helps you double your income and work ten fewer hours per week, which is another program that we’re helping. That’s our mass-market program to get as many people into our world and you can get all of these tools and systems so that they can make that big leap and big growth. If anybody wants to ever contact me, through those channels is great or Support@EarlyToRise.com. You can always email me there, too.
Craig, this has been amazing. I appreciate your willingness to come on. I appreciate what you do. It makes a huge difference and it’s a side of the entrepreneur business world that there’s not much of. The passion you’ve shown over the years is inspiring. I appreciate all the things that you continue to do because it is making a difference.
It’s interesting because it’s like you do financial stuff. You make smart decisions with your money and by talking about all this stuff, I have to push myself to live a better life every day, make the right decisions, walk the talk, talk the book, and all that stuff. It keeps me on the straight and narrow too. It helps me as much as it helps everybody. To our readers, I’m looking forward to hearing from you, giving you some tips, and that leverage point that can make a huge difference to overcome those bottlenecks for you.
Craig, it’s been a pleasure.
Thank you. Best wishes to all the family. We’ll talk soon. I can’t wait to hear about 2020.
Every project and every major endeavor needs a leader who will make the tough calls, the big decisions, and steer everyone towards success. But what qualities make for a good leader? Using a broad range of examples, Cameron Herold explores the stories and backgrounds of leaders in various fields and industries. Cameron is the host of the Second In Command podcast and the bestselling author of several books, including The Miracle Morning for Entrepreneurs, Free PR, and Double Double. Is there actually small, specific set of qualities that make for a strong leader? Or do we understand what a leader is not? It probably depends on who you want to look at first.
Watch the episode here:
Listen to the podcast here:
Qualities Of Leaders Past, Present, And Future With Cameron Herold
Cameron, let’s focus on the idea of an entrepreneur and what makes up an entrepreneur, not just in the early stages but as they grow. Firstly, what do you often see as the common attributes in an entrepreneur that leads them to long-term success?
Strangely enough, a lot of the attributes are the ones the school system and the medical community have labeled as diseases. A lot of entrepreneurs have Attention Deficit Disorder or ADD or a lot of entrepreneurs are on the spectrum for bipolar disorder. I’ll explain why both of those are traits that are found in most entrepreneurs and why they’re superpowers, not diseases. In terms of attention deficit disorders, I have seventeen of the eighteen signs of ADD. I am hyper-aware of everything that’s happening. I see what’s happening with my customers, suppliers, the market, the economy. I noticed the little tiny things on the website. Patterns jump out at me off spreadsheets. I’m hyper-aware of time and return on investment and everything that’s going on in the business landscape within my company and around me which gives me a superpower because I’m seeing everything that’s happening. Because I’m seeing everything, I get a little bit distracted, which gets me passing stuff off to people, which is delegating.That’s a good thing.
If I was so hyper-focused, I would miss everything. If I was like an engineer, a doctor or a lawyer, I’d be so hyper-focused on one thing, I would miss all the important stuff. It’s almost like the absent-minded professor. That’s a terrible trait to have as a business person. The school system and the medical community thinks that having this disbursement of attention is a bad thing when it’s actually really good. We’re not supposed to be teachers, doctors, engineers or lawyers. They think that there’s something wrong with us but we’re not supposed to be like them. You don’t find a whole lot of inspiring teachers who are running companies. They’re not like us, we’re not like them but we also don’t have a disease.
The second thing is the bipolar. Bipolar is the manic depression or hypomanic episodes. Ted Turner had it. Bill Gross had it. Two of the founders of Netscape, Steve Jobs, Henry Ford, Richard Branson, all bipolar. Those aren’t diseases after all. The mania of bipolar or the hypomanic periods are often what gives us the energy to start things. They give us the enthusiasm and the energy, the quick start nature of doing an acquisition, opening up in a new market, hiring somebody before we’re sure of how we’re going to pay for them, taking what people see as risks. We get very calculated bets because we see everything going on around us. They see it as risky and we see it as momentum creating momentum. No one’s going to join you if you’re a flat energy. You are controlled, calculated like a teacher, a doctor or an engineer, it’s boring.
That crazy manic energy is why people join.It’s why they quit a company. It’s why they invest. The depression and stress is simply a course-correcting moment when we’ve got too much stress in this zone and we don’t have a network of people to speak with or talk to that we can share how it’s going. You can’t tell the employee that you’re recruiting, that you’re not quite sure how you’re going to be the payroll but you’re the best company in the world. You can’t tell your spouse that you’ve leveraged everything to make that next big bet. You can tell her when you’ve made it successful but it’s hard to tell them about the stress that we’re under. We often live in this zone that causes the hypomanic periods or the stressful depressing.
Bipolar disorder has been nicknamed by the medical community as the CEO disease. If 3% of the population are bipolar and 3% of the population are entrepreneurs, maybe it’s a correlation of success, not a correlation of a disease.That’s what makes them successful are traits. That’s the thing one. Thing two, our nature is the traits. The nurture part is strong leadership skills, strong sales skills, strong business planning skills, strong understanding of skills. Nowadays, more than ever, we no longer have to be the smartest person in the room. We have to be in the right room. It’s about the networking and the ability to network, mastermind and connect to with others who can solve the problem for us. It’s a who problem not a how problem. Thirty years ago, you had to memorize everything and learn it and know it or hire people. Now, you just have to know who can do it for you.
Where does leadership fit into that? The principles, the attributes of leadership, is that on the shoulders of the entrepreneurs or on the shoulders of a different position or both maybe in different ways?
Leadership is a soft skill that allows you to attract people. It allows you to align people, allows you to inspire people. That’s with customers, suppliers and employees. In all three, if you’re not a strong leader, you’ll fail. In fact, 30 years ago, I was in an organization called College Pro Painters. I recruited and hired Kimbal Musk, Elon’s brother, to be a franchisee for me and then also his cousin who built Solar City. He worked for me back in 1993 as well. One of the other guys who worked for me, I won’t use his name, but my VP came in and he said, “This guy will not be successful as a franchisee. He will fail.” I was like, “No, he’s got it. I can lead him, coach him, manage him.” He said, “He’s an alien. He does not fit. He cannot lead. He will not be able to lead himself. He won’t be able to lead his employees. He won’t be able to inspire. He’ll work hard. He’ll have the tenacity, he’ll have goals, but he doesn’t have the leadership traits or skills to be able to lead others or himself.” Sure enough, he was completely right. This guy completely failed. It’s not about having the skills, it’s about having the ability to lead, inspire and align others as well.
Is that innate or is that something that can be acquired?
No, it’s innate. Leadership is something that you noticed in kids. It’s the kid who is basically told to sit still and pay attention in class because they’re disrupting class. The reason we’re disrupting is everyone’s following us. That’s an energy field that you have. A leadership is more of an energy field and an EQ. It’s the ability to notice the top kids, the captain of the teams, the top Cub, the top scout, the kid in a church youth group, the one who calls all of his friends and they follow, the people who they hang out at your house, that’s leadership. That’s innate. It’s a magnetic field and an energy trait that people have or don’t have. You can learn how to be a better leader but it’s really hard to shift the energy in a way that gets other people to be attracted.
The seed has to be there first and then you nurture that seed in order for it to grow.Stepping back one moment, the mold of an entrepreneur and these attributes which are essentially alienating people from the mold of what society considers successful, whether it’s education or the medical community. What are the ways in which entrepreneurs acknowledge this, identify it and then escape it? I’m not sure if escape is the right word but handle it because part of our human nature, we want to have friends, we want to be in community, we want to have fun with other people not just ourselves. What are the ways in which entrepreneurs identify who they are, that they’re different from the common mold and then are good and okay with it?
This is changing now since the last number of years but since 1998, 1999 when the first rise of the first dot-com era happened, entrepreneurship started to be cool. Through 2008, 2009 the second way it became very cool because people realized, “It wasn’t this flash in the pan crash. It’s back. It’s not going away. You can be an entrepreneur. You could travel the world, you could work from anywhere remotely with a laptop. You could make money in your sleep or you could make money remotely.” All of a sudden, entrepreneurship became cool. Prior to 1998, a book written in 1955, the only book where the entrepreneur was a hero. Otherwise, the entrepreneur was a capitalist. They were greedy and were materialistic. Even when I was growing up, the rest of my family thought negatively of our side of the family because we were all entrepreneurs. That we were greedy, profit-centric, only concerned about money. It wasn’t true. I was raised to be an entrepreneur to control my time, that I could have my free time, not about money.
There’s so much similarity in the word capitalist and entrepreneur as far as what they describe. At the same time, those words in most people’s minds have completely different meanings. That’s a very interesting point. Would you consider from how society views on the entrepreneur more of the value creator, the innovator or someone that’s making life a better as opposed to the capitalist, which I would say is construed as the exploiter, someone who takes advantage of others for gain?
Qualities Of Leaders: Leadership is the skill that allows you to attract, align, and inspire people.
It’s both but I don’t think they’re exploiting. This is what we realized even in the book, Atlas Shrugged, was we don’t need a government or a union to teach us what we need to do. We’re going to do that out of profit and greed alone. We’re going to build a great company because it gives us more cash and gives us more time. We’re going to take care of employees because they make us more money. We don’t need anyone to tell us to do that. That’s what we will do. If they don’t, we have a bad company. I don’t think there’s anything wrong with being a capitalist. Why shouldn’t we be able to make money and have the profits from what we are? Anybody else out there can take risks too but most don’t. More people work for government, either Army, Navy, Air Force, Marines, teachers, doctors, lawyers, City State, Federal government. More people are paid by the government that are paying taxes into the government. All of those people who sit and complain about capitalists in greed have a choice but they don’t want to make it. They don’t want to be an entrepreneur. A lot of them get a pension for life and they can retire after 25 years. That’s great. That’s not the path I choose. I choose to be in control of my life, my profit and my time.
The philosophical angle that you could take on the nature of an entrepreneur, nature of the capitalist is how long has it’s existed and how evident it is and in so many different aspects of history but yet still, the view on it continues to be misunderstood. We don’t need to go down that path because there are a few things I wanted to get into. I associate these things with your expertise and what you’ve taught and what you’ve written about. When it comes to the entrepreneur and maybe the seed level where an idea is planted and a value proposition is created and then scaling into leveraging a team, what are some of the common challenges as entrepreneurs go from those initial toddler stages into the teenage, young adult years? What are some of the common challenges they face that they must overcome?
I’ll tell you one trait that we’ve noticed with most entrepreneurs is that in grade school or high school, they had at least one venture and it might only last for a day. It might last for a week, but at least one time, they were buying stuff and selling stuff for more. They were buying a box of business or hockey cards and selling them for more. They were buying candy and selling it for more. They were selling their Halloween candy. They were buying low and selling high. That’s a trait and this isn’t necessarily a good thing but there’s an extraordinary amount of entrepreneurs that sold pot at some point in their life. They bought something, they split it up and they sold it. They understood the hustle, the value. They understood that there was a need and they can satisfy it.
Also the margin.
That’s a trait that you see. Something that a lot of them struggle with is a lot of kids are recognizing that school is not that good, not that valuable, that it emotionally is beating up a lot of kids unless you’re a pure A student. The other 95% of the kids are told every day, “You’re dumb. You’re not good enough. You’re not very smart.” That emotionally takes a massive toll on people. I went to school for eighteen years and was always told I was a C student. I was always told I was a 65 percenter. I would struggle and work really hard and let down again. That emotionally destroy somebody’s confidence over time. A lot of kids are wondering why they’re even in school in the first place. I was listening to a couple of girls that were going off to college and they were saying, “I’m going into college but I think I might drop out after first year. I just don’t see value.” I’m like, “Good for you.” You can’t run the ROI and make sense of this anymore in most cases.
You’re familiar with Robert Kiyosaki. He wrote the book, Why ‘A’ Students Work for ‘C’ Students and ‘B’ Students Work for the Government. It’s very relevant to all the comments you’ve made. Again, going to society and how society through the school system has objectively in a sense measured a person of their identity, their intelligence. That’s extremely debilitating for people, for students as they grow up.I do love the thing you said with regard to entrepreneurs. The ideas becoming more renown and there’s more of the hero element labeled as the entrepreneur rather than the black sheep or the person that’s a little weird. It’s growing in popularity because people have seen the results of what ideas have done to improve the lives of everybody.
The struggle that a lot of them have is that they don’t realize that entrepreneurship is a lot tougher than they think. It’s not that easy to go out and plug up your website and all of a sudden get sales. They get sales, but they realize they’re spending so much on affiliate fees, marketing, advertising and overhead that they not making enough margin. A lot of them don’t slow down enough to think through the little bit of the business model and how much work or time it’s going to take to scale to replace their job. A lot of people are moving more to the gig economy, which is still very entrepreneurial but then the gig economy, what they’re doing is that they are able to do a great job that they’re great at but do it for a number of companies. Instead of being a copywriter for one company, they might be a copywriter for ten. Some of those people are able to make that transition into turning that into a company, which is amazing.
Would you comment on the dynamic of getting to the stage in which a team and employees are required, business units are required. Going off of some of the challenges that entrepreneurs face, what are those common ones when it comes to building a team, building those around you that have certain skillsets that help to maximize yours?
Sometimes it’s a requirement but sometimes it’s more of an opportunity. The opportunity is that you’re leaning out into the future and deciding to build something that’s bigger than you, that allows you to make money from other people. It replicates yourself. As an example, when I was running my first business, I was 21 years old. I had twelve full-time employees. They were painting houses for me. I was making $3.52 per labor hour. I knew that if I had all twelve people working, I was making about $38 an hour. That was better than me working as a painter and making $15 because if I could have them making $38 an hour and I could take four hours off during the day, I was making money and I controlled my time. It was about, how do you replicate yourself to move yourself out of the equation so that other people are making money for you and they’re still doing well?
Could that be characterized as leverage?
Yes. It’s leaning out into the future and deciding what you are building. A lot of people don’t sit and craft what their life looks like. I talked about this in my book, Vivid Vision, about deciding what your life looks like, deciding what your business looks like and then working it backward and figuring out, “How can I make that happen?” If you want a business that throws off free time and throws off the money, that’s what you have to do, reverse engineer that. You’re not hiring people because you need to, you’re hiring people because it logistically makes sense.
I didn’t plan on asking you this because Vivid Vision is something that I connected deeply with when I read your book. I haven’t finished the second one but wrote the first one from 2017 going into 2020. It was one of the worst points of the business since 2008, 2009. What I was writing down and going through the different exercises that you recommend, it’s this idea of being pulled into the future. Most people are living by looking in the rear-view mirror as opposed through the windshield. I am not sure where that comes from. It’s evident in a lot of different circumstances. The idea of looking into the future and specifying things, thinking about things and visualizing things that pull where you are right now into that vision. Would you maybe comment on that?
A lot of this that people don’t think strategically about what they want to build. They’re thinking strategically of how to build it. Those are very different things. How to build something and what you’re building are two very different things. What people need to first think about is, “What am I building? What does it look like in that future? How do I build that?” When Elon Musk acquired Tesla, he bought Tesla from the founders and investors and then he decided he was going to build something. Do you know why the Tesla Model S has the seven-seat option?
He’s got five kids. He’s got twins and triplets. If you’re going to build a car company, it may as well fit your family. Secondly, he’s got five kids. Elon is 6’5″ and he’s an inch taller than I am. When he sits in the front seat, the person sitting behind him has a lot of legroom. It works for him. It is a really sleek, fast vehicle like his former car, the McLaren F1 was. It’s fast, sleek and fits his family. He said, “We have to price it in a way that people can buy it. Who wants to help me build it?” That’s somebody who was leaning out into the future and reverse engineering it. Most people try to make what they have a little bit bigger.
I’d love to keep going on that topic, but I wanted to address one of the big projects that you have which is the COO Alliance. Would you talk about the difference between a CEO and a COO? How they work in harmony to carry out this vision of the future?
Qualities Of Leaders: Entrepreneurship is a lot tougher than you think. It’s not that easy to go out and plug your website and all of a sudden get sales.
The COO’s role is to play the balance to the CEO. The CEO is the visionary and the person who’s thinking about where to go, the COO figures out how to make that happen. It’s almost like if you had a traditional family, it has a husband and wife raising kids. If you asked her how did you raise your kids, she’d have a very true story. If you ask him, how did you raise your kids? He’d have a very true story, but they’d be different. They’re in sync together as a team. It’s a yin and yang. The COO has to be good at and love to do all the stuff the CEO doesn’t like to do or sucks up. It’s very different from different companies. In some cases, the CEO runs finance. In some cases, they run marketing. In some cases, they run ops. It’s very different.
As you work within the COO Alliance, which is training these leadership positions to be better leaders and of course, be the yang to the yin of the CEO. What are some of the common light bulb moments you see when you’re taking them through your curriculum, the exercises, meetings and so forth? What are some of those common things of like, “I never realized that worked, that makes total sense and I can’t believe I didn’t see that before?”
First off is getting the COO aligned with the visions that they understand what their building, coming up with a plan and ensuring the CEO signs off on the plan and then working on the skillset of the COO to keep increasing their skills so that their skillset is ahead of the curve of what they need to be good at. They’re always getting better because the company is going to be getting better as well. They’re always going to be leaning out into the future and working on those.
As you’ve developed like your curriculum and what you’re teaching these COOs, what are some of the initial things that you want to ensure they have that service a foundation for some of the future things that they can stack onto that?
It’s less of a curriculum and it’s more of a mastermind community where they are meeting and connecting with each other, where they’re sharing information and ideas. I give them the topics and they’re sharing the suggestions and best practices with each other. It’s giving them a forum to share with each other versus me sitting and talking and teaching them.
Talk about what you’re working on right now, what you’re paying attention to, where you see opportunity for entrepreneurs to take their games to the next level. What are some of the things you’re paying attention to the books you’re reading? How can our audience follow you, learn more about what you’re writing, what you’re speaking on and so forth?
One of the things that I’m looking at and thinking a lot about is artificial intelligence, autonomous vehicles, automation, robotics and the massive amount of layoffs that are coming because of that. If you think about autonomous vehicles, here’s an interesting example and most people are completely clueless on this. They keep going with Tesla has a lot of competition now. There are a lot of companies building electric cars. Tesla is not an electric car company. Tesla is building the largest autonomous vehicle network in the world. Their entire model has already jumped the shark of building cars. Do you know that the Tesla Model 3 is impossible to purchase at the end of your three-year lease? All of those vehicles go back to Tesla, which means in the next eighteen months from now, all of those Tesla Model 3’s become the initial cars in the rollout of the first autonomous vehicle network in the United States.
Nobody’s even paying attention to that. Once this rolls out over the next few years, every taxi driver, limo driver, shuttle driver, car company, car rental companies, parking lots, gas stations, driver’s Ed programs, car insurance programs, all of these people are getting laid off. The amount of ripples that this is going to cause instantly. People are saying, “Those people can learn how to code.” There’s no way that a taxi driver is going to learn how to code. There’s no way that shuttle driver, a guy working in a parking lot is not going to become a programmer. We’re going to have a huge amount of layoffs coming. That’s going to be a big ripple. The second one is how do you leverage all of these things into your business? How do you leverage AI? How do you leverage robotics? How do you leverage autonomous vehicles? How do you leverage outsourcing? We’re trying to become very protectionist and that’s going to hit us in the head really hard.
Are you more in the discovery phase of seeing how it’s going to make an impact or have you identified opportunities that would serve a role in various types of industries?
Yes, with all my coaching clients, we’re looking at how do we leverage the tools that exist and start plugging them into our businesses. I attend some conferences specifically for this. I go to Abundance 360, which is Peter Diamandis, the Founder of Singularity when the X Prize started, I would be going back to TED for my ninth year at the Main TED Conference. I’m going to TEDWomen in about which is about 900 TEDsters that are going to see what’s happening in that space. I’m plugged into a couple of very futuristic mastermind groups for the purpose of seeing what’s coming and being able to be ahead of that curve. It’s almost like what’s happening with China. The United States thought it was a military war and China decided to out-think us and out-strategize us into about several years ago shifted to be a financial war. They win. Literally, they won. They out-thought, out-maneuvered and out-strategized and the US is now becoming very protectionist and still trying to fight wars on oil when they’ve already jumped the shark and they’re now buying us up. You can either now get on that way or you can try to fight against it.
Who would you say are thought leaders in that space?Other than Peter Diamandis, some thought leaders that you’re paying attention to and leveraging their visions and seeing what they’re trying to see what they’re seeing.
It’s going to the events and listening to the speakers that are brought in or it’s going online and watching the videos like watching TED and going on and seeing what’s happening. Subscribing to the newsletters and reading what comes out. There’s a lot of that information resources that are there. It’s less than about one person. It’s more about watching the themes of what’s coming regarding podcasts I’m listening. I told one of my kids that the Elon Musk, Joe Rogan’s podcast, everybody’s talking about is one of the most brilliant insights to Elon that I’ve ever seen. I was a reference for Elon in this first round of funding in January of 1995. I have known him for several years. It gave insights into first the humanity of Elon Musk but secondly, his thoughts around AI, autonomous vehicles, robotics and space. He is really concerned about the singularity when computers become smarter than people and governments aren’t listening. That is stuff to listen. Instead of watching another football game or another baseball game, let’s wake up and start devouring the content of what’s going to change the world. I’m an optimist. This is all exciting stuff but the change is happening very fast.
People can look at it from a very pessimistic perspective but there’s not much they can do about it at this point. The train has left the station. It’s more a matter of time and where it starts to make an impact first. It’s exciting because it’s going to make life a lot more efficient, calculated in a sense. It’d be good for people if that’s how they look at it and what they can do as a result as opposed to being afraid, blaming and demonizing some of those advances, which I definitely think is going to be coming down the road. I want to see yes in last year and it’s amazing to see all the different innovation that’s happening. It’s not just in the United States, it’s around the world.
It’s global. You’re thinking about the iPhone is only twelve years old. This device that we now take for granted is only twelve years old. How has that changed the world? Think about how fast AI is coming and how fast autonomous vehicles are coming. I drove in the very first Google experimental car a number of years ago at TED. It will be ten years this spring. Several years ago, they were doing a demo on video and everyone in the audience was like, “This is the main TED. Bill Gates is in the audience and Bezos is in the audience. Steve Jurvetson is in the audience.” The guy from Google said, “If you want to go try it, it’s out in the parking lot.” Eighteen hundred people got up and went running for the parking lot. No one had seen it. It hadn’t come under wraps. To be able to go ride in that vehicle a number of years ago and now think that in 2018 my Tesla drove itself from Scottsdale to Vancouver, it’s extraordinary how fast this is coming. We’re testing electric autonomous helicopters in four cities and it said the roller to those will be in every city that Uber exists now. An electric autonomous helicopter by 2030 in every city that Uber exists.
Aren’t they building like heliports on a lot of the new high rises with residences as well as commercial spaces?
That would be some of the next hottest real estate will be the heliports on tops of buildings because now you go to one of those that you’ll take an Uber to one, you go up to the top of a building, you fly back to the next building and you go home. The video phone that we now take for granted, like you and I are talking over video but when I was growing up watching The Jetsons like, “That would be cool if you could talk to somebody and see them,” that’s what we’re doing. All of this stuff is coming. What I’m thinking about and working with my clients about is how do you get ahead of that curve. It’s like trying to fight Amazon right now. There’s no point, just get on board.
Qualities Of Leaders: Lean out into the future and decide to build something that’s bigger than you, something that allows you to make money from other people.
It’s a testament to a few things. First off, The Jetsons and Star Wars, the ultimate vivid vision for how people have or how the entrepreneurs had been pulled into that future, which I think is pretty fascinating. The other is not hesitating to think big, dream big and explore the question of what’s possible because that’s what we’re wired to do. It’s what sets us apart from all the living things is we can think, we can imagine and we can dream. It may seem crazy to some people. At the same time, those are the ones that may have changed the world.
That’s the old Steve Jobs’ advertisement.
Would you tell the audience the best way to get your books, learn about you, follow you, see what you’re up to?
The Second in Command podcast, which they can listen to and everyone is interviewing the entrepreneur. I only interview the COO. I want the rest of the story. All five of my books are available on Amazon, Audible and iTunes, so they can look up my name and get any of my books and I would get a copy of the book Meetings Suck for every single employee. That’s one that you buy for every employee. You invest $15 and it’s a game-changer for your company. CameronHerold.com has all the rest of my resources, the blog and all the rest of my contacts.
One of the parts of the interview that I wanted to dig it into was business rhythm and meetings and that structure. That’s something I implemented right from your book almost line by line.I can’t tell you what type of difference that structure makes but we will save that for another time.
It sounds great.
Cameron, thank you so much. It’s been a pleasure to talk to you and thank you so much for sharing. I appreciate it.
Cameron Herold is host of the Second in Command podcast and bestselling author of The Miracle Morning for Entrepreneurs: Elevate Your SELF to Elevate Your BUSINESS, Meetings Suck: Turning One of the Most Loathed Elements of Business into One of the Most Valuable, and the new books Free PR: How to Get Chased By The Press Without Hiring a PR Firm and Double Double: How to Double Your Revenue and Profit in 3 Years or Less (in its seventh printing).
Herold is the founder of COO Alliance, which helps COO’s become better leaders. He is the mastermind behind hundreds of companies’ exponential growth and has built a dynamic consultancy, including his time as COO of 1-800-GOT-JUNK?. His current clients include a ‘Big 4’ wireless carrier and a monarchy.
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When asked to open a new law firm office in a different market, business leader, problem-solver, and health care attorney Tom Donohoe shares how he was able to apply basic entrepreneurial principles to establish their business. As someone who’s not averse to doing the leg work, he was able to build a client base in a new market and entice other lawyers to join the firm by running around forming relationships and connections. Together with his brother, host Patrick Donohoe, they discuss the role of mentorship in business progression. They also talk about the qualities that effective business leaders possess and how they affect positive work culture, morale, and the overall rhythm in the workplace.
Watch the episode here:
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Mentoring And Shaping Effective Business Leaders with Tom Donohoe
I am with my little brother, Tom. I wanted to have Tom on because we’re going to talk a little bit about mentorship. We’re also going to talk about business rhythm and also ways in which you can identify friction in business rhythm to capitalize on opportunities. I’m going to give you an idea about why I chose this topic for the week, especially as we’re talking about entrepreneurs. First the book, we still have our free website up. It’s FreeBook.HeadsOrTailsIWin.com. You can get a free copy. All you have to do is pay for the shipping. Also if you’ve enjoyed this season, then go head over to iTunes. They’ve changed up a bunch of stuff with the podcast. Go ahead over there and give us a review. We would appreciate that. We are in Yarmouth, Massachusetts on Cape Cod. This is where my brother and I grew up during the summers. It’s been many years that we’ve been out here with our kids. It’s an amazing place. It’s going to be important for Tom to be on this episode. He is in a different industry and not necessarily the entrepreneur type of role but definitely entrepreneurial based on what he’s done with his career in law. Why don’t you introduce yourself to the audience and tell them about your background?
I’m an attorney by trade. That’s my professional path. I was in private practice for about ten years with a couple of the country’s largest health law firms. That’s where I focused. My practice has always been representing hospitals and health systems for the most part on transactional regulatory matters. A few years ago, I went in-house to a mid-size regional health system headquartered in Denver, Colorado but it has operations in Denver, Kansas and Montana. It sounds like this is an audience of entrepreneurs. I may not make sense to be speaking to that crowd given I’ve taken a little bit more of a traditional route in my career. I would say that some of the principles that I’ve applied in the entrepreneurial space, you can also apply and be equally successful in the legal space as well and some of the more traditional settings.
On that note, I did start in the traditional law firm setting. For one of the firms that I worked for the longest, I opened their Denver office. In some cases, it’s a startup, a new market, new client base, new potential for people to come in, both to join me to practice but also to receive services in that area. In that setting as part of a larger law firm, we had to act like entrepreneurs in the way that we were trying to develop a business, bringing people along and then also refine our craft. It was a great experience in doing that. I can certainly talk a little bit about that and some of the different principles we applied in doing that.
I’ve looked at the conversations we’ve had over the years and with what you see typically in the corporate world. I would say the legal world is business that is essentially in a chokehold because of clinging to old habits, ideas, ways of doing things. I remember when you started up the Denver office, it was interesting because you hit the ground running. You did things that other attorneys weren’t willing to do. You went out and do business development and establish new relationships. What was cool is even though you were in Denver, you were in Salt Lake quite a bit. You were able to establish relationships with big hospital networks out there that already had representation. You were able to go out and sponsor dinners, go to golf tournaments and network.
Ultimately, most business, especially when you’re doing business to business transactions, there tends to be frustration at times, whether it’s lack of experience, whether it’s timeliness, whether it’s focus, whether it’s organization. You’re able to capitalize on relationship opportunities because you had done a lot of that networking. When those frustrating things happened, they remembered you and remembered your firm and subsequently started to do more business with you. Talk about where did that come from. As you opened the Denver office, was it your idea to do the business development or was it something that the hierarchy up the chain was insistent on?
There’s a fundamental perception, particularly of lawyers, that there’s this body of legal work that sits out there waiting for some lawyer to do it. You go to a firm and there’s a pile of work on your desk and you are there for hour after hour doing it. That’s not the case. In some cases, it may be but in mine, it never was. It was, “Here’s an opportunity to develop a new office, a new service. We’ve got some work for you but you’re going to have to find that on your own.” It’s similar to any startup or any entrepreneur’s situation where you’ve got a new product or new service and you’re trying to find buyers and you’re trying to sell that to them, grow your business and all of that. That’s exactly what this was.
In my case, I had some foundational clients I developed relationships that I had some work, but it was going into those markets. I was in Denver for the most part but in that market, developing the relationships, pitching the service that we provided, why we do it differently, how we do it differently and why we could do it better and then expanding to new markets and doing that too. To your point, sometimes I drop into Salt Lake. I have a handful of lunches or dinners scheduled and no real prospects, but you have to grind and make those contacts time after time with people. When you’re given that opportunity, you can knock it out of the park.
It seems like a simple recipe, but I feel like that’s a recipe for success in any industry. It’s having a relationship. It’s building that relationship. It’s once you get a bite based on that relationship, being responsive and doing a good job. It’s not rocket science in a lot of cases. It’s astounding to me in any industry how unresponsiveness, lack of communication, apathy or something like that can be pervasive. For people that are willing to put in the work and to develop those relationships and to focus on those simple things, how much success you can yield by doing that.
Mentoring Business Leaders: Building relationships with the people in your market and other individuals working in the same field is essential in the growth of a business.
Let’s segue into a few topics. I wanted to do this podcast with my brother because as I was thinking about what to speak, we had a couple of guests and we had some travel conflict and so we’re doing this episode on the fly. Some interesting things happened to me. I had an old business coach of mine reach out and he is an incredibly successful entrepreneur. He started several businesses. He ran over a 1,000-person publishing company. He and another individual coached me for a few years. That coaching helped me understand the importance of business rhythm and organization. This business coach reached out because he’s starting a podcast and wanted to know a couple of the ways in which his coaching impacts my business, some of the things that we’re using. It caused me to reflect on a few things.
I wanted to talk about that, but I also felt it would be appropriate to run what I had learned as some of the friction points, the inefficiencies, the blind spots of my business. I wanted to know from a corporate standpoint if there were some similarities. I didn’t brief my brother in any of this stuff. It might backfire. We will see but one of the things that’s connected with me in regard to this idea of growth as well as business progression is the whole plus-minus-equal idea. I don’t know if you know about this but plus-minus-equal is essentially where you stand. There’s always somebody that you can look to as a mentor. Someone that’s doing more than you. Someone that has more experience than you. Also, you have minus, which is someone that is coming up the ranks that you can mentor and teach.
The equal is essentially having somebody that is in a very similar situation as you so that you remain competitive. You have that type of edge. I consider the mentors that I’ve had, this individual in particular, as someone that has gone down the path that I was going. Someone that could help me see some of the pitfalls, some of the things that I would be approaching and how to essentially set up my business, set up my structure in a way where I don’t necessarily avoid them. When they’re presented, I can essentially identify the opportunity and be able to proactively respond as to impulsively react. Tom, talk about the importance of mentors to you and then also your ability to mentor others. I know that you’ve had mentees and mentors throughout your career.
The whole mentorship thing, unless you’re intentional and you seek out one that fits what you’re looking forward, is a product of chance. My first partner that supervised me was very old school. It was a sink or swim. I had very little interaction with him. At the time, I didn’t think that’s what I needed. In some case, I felt I wasn’t getting what I needed. I had expressed that and I can always remember where he would be in meetings all day and would have sent me a couple of things that he needed help with or questions he needed to be answered. He gets back to his office at the end of the hall. I slowly popped my head out of my door in my office and I gave him one look. I could tell he did not want to talk to me. I go right back to my office and hold my questions until the next day.
There were also times when it was late in the day, he was in a good mood and we could talk through some things. It was a very sink or swim type of relationship as you explained it to me a few years ago when I ultimately transitioned from that firm. I came back eventually but as I was departing, he said, “That was my style and my style was to give you as much as you could handle and then see if you can survive or if you thrive.” Fortunately, I did okay. I don’t know if thrive is the right word but I certainly didn’t sink. At that moment I resented it a little bit but as I look back, it did prepare me in my career to deal with harder personalities but not the people that coddled you or protected you.
It helped me navigate some more difficult personalities both internally at the other firms or companies I worked with but also externally as I negotiated with other parties with difficult personalities. It helped me manage those. I was very grateful in the end for that mentorship. That’s a little bit of non-traditional path. I think those are important. You can do two things by chance. You can have the mentors that you get or assigned to you and make do what you can and try to find the best benefit that you can in those relationships. You’ve got to understand the parameters of those mentors and how they operate and try to leverage what benefit you can get from those relationships.
The other way to approach it is to seek mentors not just in your companies or in your businesses but around you or the one that Patrick suggests as these plus ones that are in the industry. They’ve been successful and that’s a path that I want to follow. You get in touch with them and establish that more informal mentorship path. That’s a little bit of a roll the dice because they may have been successful, but they don’t want to teach anyone. They don’t have the patience. That’s not their personality but that’s certainly something worth exploring. As far as the minus one, my experiences with mentors or lack thereof however you characterize it has driven me to want to go above and beyond in terms of the people that report to me and that I work with on a daily basis. I’ve done that in my current role, part of the task that I was brought in to do, I was to build an in-house department. I did it in what I would characterize as a vertical way. I’m the number two attorney in my company and I developed layers beneath me.
That’s not necessarily to have a hierarchy for having a hierarchy sake but it’s so that the people with certain skill levels could have access to people that have the higher levels, with additional skills or experience that they can leverage or go to when they have challenges. It also creates a path for those people to progress. I have a particular attorney who she worked with me at the firm and then we worked a little bit together there and she ultimately left to take in-house role. I stole her back from that role and I came in and I’ve had the opportunity to try to push her as hard as I can but also be a mentor to her. We meet on a weekly basis and go through her projects, any questions, the concerns that she has. I try to push her as much as she can and I feel like she’s progressed. She’s given the feedback to me that she’s certainly stretched the most that she can but not to a point where she’s put in a position that’s going to compromise her success or make it difficult for her to be successful in her job.
Mentoring Business Leaders: Mentorship can be very beneficial in determining the path you want to take in your career and in establishing your foothold in your chosen industry.
It’s interesting when you look at growth in general, just the principle of growth. You have an environment in which growth is taking place. The environment has to be conducive to certain variables. One of them is pressure because if you don’t have the pressure to perform, then you’re not going to be pushed. We also have this notion of a team where you can push the limits but yet the fear of failure, it’s not like you’ve burned all boats and you’re forced to do it, even though that could be a viable strategy. You still have team members. One of the things we didn’t talk about with regards to your background is you’ve been part of several hundred-million-dollar mergers, acquisitions, buy-outs.
These are big transactions, whether it’s hospitals merging, buying private practices, merging of private practices. These are very important transactions especially in the healthcare and the medical world because there’s so much regulation. The pressure is almost baked into the process. The idea of having a vertical is intriguing to me because you have an environment where you can’t make many mistakes. The mistakes have pretty big consequences and opportunity costs. You’re essentially entrusting someone to do work and be in that environment. You have parameters built-in so that they can fail but the failure is going to get caught so that there aren’t these dire consequences of not dotting the I’s and crossing the t’s and what that would do to the specific transaction details.
I have a couple of thoughts on that. First to your point, they’re trying to create failsafe within your structure so that people can be pushed and can go to a limit, yet they’re not too far out there that they’re exceeding their bounds. You’re right. In the legal industry, if you provide the wrong legal advice, it could potentially end up with pretty significant consequences. We don’t have a lot of room for error in most cases. That is certainly one. You also mentioned the concept of team and culture. Those can be buzzwords and clichés for different companies or if you’re reading inspirational books and all of that but they matter. I think about the department I came in and as we developed structure, one of the things we had to do was develop a culture where people were empowered to collaborate with each other. Where there were good communication and some people were good at it and some weren’t.
As you develop that culture, you lead in that respect and that’s how you act, people tend to fall in a lot of cases. To your point on a transaction, on a heart issue on something, if people are aligned and communicating, your ability to resolve any given issue or get through a transaction is increased significantly as opposed to if you’ve got internal dynamics or cultural barriers. The transaction itself could be hard and now you’re making it even harder because of the way that you are operating internally. That’s an incredibly important thing and sometimes very difficult based on the personalities that you have. They emphasize within an organization in order for it to be a success. It doesn’t matter how good the product is or the service or what you’re doing. If your culture isn’t good, you may have short-term success in some respects, but it certainly leads to the disadvantage to your long-term prospects.
Unconsciously, human beings make judgments about who they want to do business with. They don’t sit down and say, “Here’s how I want to do business.” The unconscious side of them is looking for what culture is, looking for what the relationship will be especially at those levels. At smaller levels, you can probably get away with it. At the same time, when you’re talking about big transactions, the big corporate world. In some cases, small business where you’re merging or doing joint ventures, understanding that there is that unconscious side that’s looking for, “What is this relationship going to be like?”
I know that it’s not necessarily with one person. It’s not with Tom but it’s with his offices and with his team. I remember the conversations we’ve had over the years is you’ve been at a couple of two different firms before you went to the in-house atthis healthcare network or hospital network.Talk about where you saw in these big organizations some of the unintended consequences of not necessarily bad culture but let’s say maybe mediocre or stagnant culture. If you’re not growing, you’re dying. There’s not this neutral place that you can stay in. The Law of Nature compels you to grow. Talk about that briefly.
It does have consequences. The most apparent consequence is always in good people leaving. You lose good people. The firms that I’ve been, in some cases it’s to another firm. In other cases, it’s to a client. They go in-house. That’s what I did. Some of the attorneys in the firm choke that up too, that’s good. He or she went to a client and now we will get business from them. In a lot of cases, those employees are disgruntled. They don’t look at the fact that “If that person was a good person and a good asset to the firm and they left, did we do something wrong?” There’s definitely a consequence in that. That means something. If a smaller or large company has put resources and time into developing an individual and they’d become a good asset, you lose that. That’s tangible capital to the company. Maybe not in terms of dollars but that’s capital.
That’s time that’s been invested and put into that person. You now lost it and now you’re going to have to invest in someone new. The more you see movement in any industry, the more people realize that that’s certainly not a good thing all around when a person leaves. I’d say the other effect that I’ve seen or consequences of some poor cultures or some idiosyncrasies that weren’t necessarily productive in a firm or a corporation is the morale. You want people showing up. You want them making an effort. You want them engaged. You want them invested in the business. When they’re not getting the mentorship or when the culture of the department, the company or the corporation is not good, their ability to be positive and to work hard is significantly diminished. You need those people, particularly at the leadership level, to show up and influence others and to set a good tone that they can’t do that. You’re going to see some of the foundations of a company crumble because the people aren’t the foundation in a lot of cases.
Mentoring Business Leaders: Individuals in the leadership level should want their people to show up, make an effort, and be engaged and invested. This can only happen if you set the tone for them as their leader.
From the business coaches that I brought on, I have two business coaches. Both happened to be women and I did that intentionally because it has provided a different perspective for me. All my business coaches of the past had been male. I’m not going to get into that right now, but I wanted to get into some of the things I thought about when it came to this particular business coach. He’s reaching out to me and me going through our notes, going through our sessions over the last several years. I stopped coaching with him a few years ago. It caused me to reflect on some of the main things that impacted my business.
This is where we will go back to this narrative that we’ve been on with culture and team. One of the biggest things that I learned from them, it was one of the first things they told me, which is the objective of the leader is to do nothing. What that means is when he was coaching me, what he was trying to say, at least that’s how I interpreted it and thought about it over the years, is that having a good team in place allowed me to do what the leader does, which is maintain the psychology of the team. I learned that the chokehold of all business comes down to the psychology of the leader or leadership. That’s where you look at if you want growth in your business. The leadership first has to grow, expand their psychology, expand their understanding of howto take a team from one level to the next level.
It’s caused me to reflect and allowed me to restructure my role in a way where I’m performing actual leadership things. It is not something that I studied or understood because I read a few books but it’s something I had to work on, which is connecting with people, building a culture, setting principles, setting values and setting business rhythm and then continually improving it. Tom, talk about that. You’ve had some leadership role being second in command at this network. You also ran the Denver office. You were a partner at the firm, which is based out of the Midwest. Talk about the good leadership that you’ve seen, the bad leadership that you’ve seen and then how you have essentially taken that information and honed in on your leadership style and how you’re leading.
First of all, fundamental to all of this is a leader’s understanding of what leadership is. It might seem that’s intuitive, but I don’t think it is in all cases. People aspire to leadership or become leaders for various reasons. Some because they want a title and they want to tell people what to do, others because of pay. Others because they understand leadership and want to be in that role and influence people.
Are you saying there’s a difference between a leadership role and a leader?
Absolutely. There’s no doubt. If there’s something I’ve seen is many people put into leadership positions that don’t know how to lead. Fundamental to any leader being successful is understanding what their role is. You talked about and I’ve reflected on it over the years as well because as a lawyer, no one pays me to be a leader. Clients, particularly in private practice, pay you for your work so you have to work twelve hours and produce good work and be competent with that. At the same time, I had leadership roles as the managing partner of an office and all of that stuff. At some point, I had to understand that in order for the office to be successful, I was going to have to take additional time to the legal work I was doing to step back and influence people in the office and see where their gaps were, where the gaps of the office were, so that we could ultimately be successful as a team as opposed to just individuals.
That’s the plight of any law firm. You incentivize an individual, for the most part, to be successful but not necessarily for the firm to be successful in all cases. What I’ve seen and that compelled me to go into an in-house leadership role because I feel like there’s a greater appreciation in some cases in the corporate world. Generally, they pay people to be leaders. You’re putting in a leadership maybe sometimes because there are the skills that you bring but also because they’ve recognized that you have leadership skills and you should be leading a team. I struggle with that at first. I said, “Why are you paying these people money to lead? They should be doing something.” I want them drafting an agreement or I want them at the table negotiating. I’ve come to appreciate that if the company be it big or small, recognizes that someone has a skill in influencing people and bringing them together as a team and helping them function at their highest level, that is something worth paying for. That’s why you may have seen the news, the CEO of GE goes to be the CEO of Johnson & Johnson where their product lines are entirely different.
I don’t know what they do but what I’ve come to appreciate is some of these CEOs transfer industries where they have no experience. They’re not getting paid because of their knowledge of that industry and in certain cases but their ability to lead and bring a company back from a certain situation that transcends industry. I give those examples because going back to some of the points that you’re making, I do think the most effective leader recognizes what their role is and what they’re there to do. They get into the work of how they do that, how they influence people, how they create rhythm within a department, within an organization so that people are functioning at their highest level. They’re happy, they’re getting the mentorship and the tools that they need to be successful. That stuff in my career I thought was intuitive but now I’ve come to appreciate it’s not, particularly as you grow the number of people in a company and the department. That tone needs to be set by an individual and then passed down to others so that those constituencies can be successful.
Mentoring Business Leaders: If someone has a skill in influencing people, bringing them together as a team, and helping them function at their highest level, it is something worth paying for.
What would you say are maybe the top two to three characteristics of a leader that you have tried to embody?
First of all, the biggest character is that they have the ability to be influential and I use that word, influence. I know there are plenty of literature about this because I’ve seen some leaders who say, “I’ve got a title. I’m going to tell people what to do and they’re going to do it.” If we are all robots, that would be a wonderful thing but we’re not. You need people to join your cause to be on your side, to want to achieve the same objective you are. In order to do that, that’s influencing them. It’s scoping out the personality and say, “What is it going to take for that person to get on board and to do what we need them to do?” Sometimes that’s setting an example. You do have to get your hands dirty a little bit and do that. Once they see that, they will follow you or deploy other skills. In some cases, they’re not going to get there. It comes down to that leader making the hard decision of letting that person go for the benefit of the department, the corporation or the company, whatever it is.
The ability to influence is probably a big characteristic. Humility is another big one that is huge for me. A leader who wants to put others before themselves, wants to see others succeed, wants to see the company succeed. That leader will be successful and that’s hard. I can’t say that I’m always the best at that. That is certainly something I work towards. The humble leader that we hear, the servant leader in some cases, those are the people that want to see other people succeed. They’re the ones who will put in the work and will do the things necessary to try to accomplish something bigger than themselves. There are certain charismatic leaders throughout different industries that we hear about in the news and otherwise that they get big headlines or whatnot. They might have successful companies. I go back to that. I think eventually those companies will stagnate if the ego gets too big, if that stuff gets too big because they will lose sight of who is important to make sure that enterprises are successful.
I think it’s Confucius but it’s one of those counterintuitive paradoxical ideas. If a person looks at a leader and leaders are the ones that tell everybody what to do but that’s not the case. It was Confucius that said, “Leaders who are soft are strong.” It’s the idea where they’re able to essentially take the situation at hand, take all the emotions involved and objectively or as objective as possible analyze those and determine what to do. At the end, who is the person’s best asset and the number one thing in their life, it’s them. If the leader doesn’t understand that, then it’s very difficult for them to get them to do things past a certain point. From a long-term standpoint, being able to have a lasting impact, lasting influence. You have to understand human psychology, what makes a person tick and then evaluate if they’re in the right role.
We can probably talk about that, which is people that are in roles that they have no business being in. Not necessarily based on them being incompetent. They well could be but it’s not because of them as a person. It might be because of their experience. It might be because of their conation, their natural tendencies, their strengths. One of the biggest things a leader can do is to get a team together, identify certain strengths, identify the roles where they’re going to be able to operate efficiently and make an even greater impact than if it was one or two people. This is something where this business coach made me understand. It sounds so fundamental but yet I look at human nature and without this, people get super frustrated, anxious and concerned which if you combine all of those things together, you have emotions that don’t allow people to do very good work. That’s the ability to create business rhythm.
I’ve understood there’s a brainwave pattern of your flow state. It’s right in between your Alpha and your Theta. There’s this flow state where you’re able to have complete focus. You have no distractions. It’s like you’re in that zone. I look at business rhythm. An ideal business rhythm is creating the structure in which a team operates, which has that very flow-like state. Talk about where you’ve seen clunky rhythm, maybe some of the previous firms where stuff didn’t get done. It wasn’t because people were incompetent but because this person didn’t know what that person was doing or what this step was or there wasn’t necessarily guidance by leadership. Talk about some of the clunky situations, the friction you’ve seen in the past. Also talk about some of the good business rhythms and then maybe how you’ve taken your new role in the last few years and established your team and established its rhythm.
In terms of where I’ve seen some clunkiness or some disruption in rhythm or barriers to establishing any rhythm, to begin with. It goes back to these organizations that I’ve either been involved with or they’ve been clients, whatever, where I’ve seen a fractured state of operations and leadership. There are certain functions within an organization that are dissatisfied. Maybe its marketing is always unresponsive and they don’t send the right stuff or they’re not up to par as similar competing organizations or your HR function is not helpful. There are these constituencies or services that reside within a company that seems to exist and no one seems to pay attention to them. That gets people frustrated and other things so that they can’t do their jobs or it ruins their day. You get out of the rhythm of sorts. As I’ve seen organizations overcome that, it’s been around first identifying that. You’ve got to have the appropriate feedback loops, whether it’s leadership or operators that understand how those different constituencies and the disruption that they’re causing are being disruptive.
The things we’re talking about are not intuitive for people. I keep on using that word as if everyone speaks the same language. I don’t think it is. People complain about HR and most people, leaders and otherwise saying whatever, that’s HR, marketing, “We’ll fix that, but we like our guy and that’s our guy and that’s how it is so deal with it and grow up.” That’s an antiquated philosophy. The more sophisticated leaders, the more sophisticated managers will step back and say, “As I look into different pieces within my organization, where are the barriers? What are the sources of frustration?” It’s not just identifying and say, “Go fix that.” We all have jobs. We all spend a lot of time. It’s not like you can tackle it all in the first place or one single meeting or get together and everyone’s good and you’ve re-established where you need to be.
Mentoring Business Leaders: Feedback helps you identify the gaps that disrupt workflow.
They’re like, “We’ve got one issue. We’ve got five or six issues and five or six got pieces that maybe disruptive. Let’s take this one. Let’s look at it, let’s fix it, then we will get to the others as well.” It’s having a plan to do that. We do an example, I set this up as we have some standing meetings within our department which we call legal operations meeting and we’ve done exactly that. We’ve said, “What are the things in our day that are challenging? Is it our contracting processes? Are our IT flat boards conducive in helping us do the work that we do?” This group of us are going to be meeting to identify those particular pieces that are creating barriers within our department. We’re going to fix them, move on to the next one and then the next one so that we can create those efficiencies and create that rhythm that I think gives us the job satisfaction and gives us the tools that we need to be successful.
Most people become overstaffed because of bad rhythm.
Throw more people at it. To me, identifying what the fix is. Most people have the dumbest solution that I’ve seen as well but it’s understanding the process, thinking through it and then taking the steps to fix it.
A very well-created and then managed the business process, your start to finish whatever that flow looks like. When there are hand-offs in between these impact points of each department or business unit as you have handoff, it’s the clear understanding of both the party that’s giving and the party that’s receiving. That is typically where you find the most friction. If you don’t have a clear understanding, then it bottlenecks everything else going forward, especially if you have ten processes through your business process or your business flow. As you look at entrepreneurship, entrepreneurship interestingly enough is finding friction. All wealth and opportunity exist where there’s friction. Whether that’s making travel more convenient, whether that’s making communication more convenient, entrepreneurs are always looking for friction. What I find fascinating and it’s very ironic where most entrepreneurial-driven businesses fail because of their own friction.
That is the failure to understand what the business process is and assume that everybody else knows what it is. Properly documenting it, properly managing it, improving it, that requires a series of meetings and a series of reporting and objective measurements of what is expected, what is being handed off. The feedback loop that you mentioned, Tom, is as important in a very small two to five-person office or 5,000-firm if there’s more of it. Typically, those rhythms are very much the same. There are a few other things I wanted to get into, but I want to say that for another time. Thank you for reading. Tom, thank you. We will see you next time.
Tom Donohoe is a proven leader, problem solver and teamwork-oriented health care attorney who focuses on assisting business partners and clients in achieving their goals in a compliant manner consistent with their mission, vision and values.
Tom advises health care providers on a wide range of transactional and regulatory matters, including hospital/physician joint ventures, physician practice acquisitions, physician alignment and clinical integration. Tom also assists health care providers in complying with the Stark Law, Anti-Kickback Statute and other fraud and abuse laws and regulations.
Presently, Tom is located in Denver, Colorado where he is serving as associate general counsel for a regional health system. Tom graduated cum laude from Indiana University Robert H. McKinney School of Law in 2008 with a concentration and honors in health care law. He is admitted to the bar in Indiana and Colorado.
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Patrick is the President and CEO and started Paradigm Life in 2007 after learning from his mentor Kim Butler about financial strategies outside of Wall Street.
With a background in economics and marketing, Patrick immediately realized the opportunity to teach investors, business owners, professionals and families on a large scale using modern digital media and communication technology. Since 2007 Paradigm Life has worked with thousands of individuals in all 50 states.
Run-of-the-mill advice is everywhere. But in order to achieve different results, your strategy has to be different.
In this book, you're going to learn about a hundred year old strategy that's tried and proven to give results. Are you ready to
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Once in a great while, a person comes along who can explain financial concepts so clearlu that all of a sudden,
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that person was Patrick Donohoe when he first explained what you're about to learn in this book.
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Author of Tax-Free Wealth, of the Rich Dad Advisor Series
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Founder of Capitalism.com
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ABOUT THE AUTHOR
Patrick Donohoe is the Founder and CEO of Paradigm Life and PL Wealth Advisors. Patrick and his team teach thousands how
to build wealth, create lifetime cash flow, and leave a meaningful legacy.
Patrick was recently honored by Investopedia as one of the Nation's Top 100 Most Financial Advisors. He is a highly sought
after presenter and speaker at financial-based events around the country and is the host of The Wealth Standard podcast.
Patrick grew up in West Hartford, Connecticut, and attended the University of Utah, where he received his bachelor's degree in economics.
He lives in Salt Lake city with his wife and three children.
WHAT'S INSIDE THE BOOK?
THE CHAPTER LIST:
1. ORIGINS OF THE AMERICAN DREAM
2. THE PERPETUAL WEALTH STRATEGY™
3. QUESTION EVERYTHING
4. BREAK AWAY FROM WALL STREET
5. AVOIDING THE INVESTING AND LENDING TRAP
6. THINK FOR YOURSELF
7. A SOLID FOUNDATION
8. B ELIKE THE WEALTHY
9. MYTHS AND TRUTHS OF INSURANCE
10. SAVE, BORROW, INVEST, AND BUILD WEALTH
11. START, BUILD, AND PROSPER YOUR BUSINESS
12. YOUR FINANCIAL FUTURE
13. MAKE THE SHIFT
14. TAKE BACK CONTROL