Your Next Five Moves: Master the Art of Business Strategy

by Patrick Bet-David

Master the Ability to Reason THE INCREDIBLE POWER OF PROCESSING ISSUES 1. Moving forward, take 100 percent responsibility for anything that doesn’t work out. See your role as the one who created the issue and has the power to solve it. Apply the Investment Time Return (ITR) formula in order to make better decisions and stretch your resources. Reflect on any possible mistakes or weaknesses, and make your next move(s) accordingly. HOW TO SOLVE FOR X: A METHODOLOGY FOR EFFECTIVE DECISION MAKING 2. Share the Solve for X methodology with your leadership team and use it to process three problems you’re currently facing. The Solve for X worksheet can be found in Appendix B. Make sure you identify their true causes and the reasons they happened.

Instead of being selfish and looking to see what I could take from other people, I learned to focus on what I could give them—and I improved my own worth in the process. That paradigm shift—that one decision—changed my life for the better.

1. What benefits are you currently offering to others? 2. In what way do people improve by associating with you? 3. How many lives have you changed positively in the past year?

Questions That People Will Ask (and You Must Answer) When They Are Deciding to Work for You 1. What makes your company distinct from your competition? 2. What separates your leadership from that of others? 3. Do you have a code of honor? Do you embody it? 4. What benefits program will they get from being associated with you? 5. Do people constantly see you growing? Can they tell that you are evolving?

Five Questions You Must Answer Before Making Any Big Hire 1. How many and what type of references did you call? Did you talk to other people who worked with the hire about what type of individual he or she is? 2. Is this person likable (the reason you hired him or her) but lacks a significant skill set? 3. Did you conduct a background check to determine if there’s something in his or her past that might be a red flag? 4. Did you question anything iffy on his or her résumé; for instance, if the person was on sabbatical for two years, did you dig deeper to determine why? 5. Does the contract you offered include a 90- to 120-day probationary period? This will give you enough time to evaluate the new hire’s performance. It will also give the new hire time to learn what he or she needs to improve and make an effort to do so.

It’s true of anyone who is ambitious, dreams big, and possesses talent. I always give people working for entrepreneurs this advice: Go to the top person, and ask what you can do to own a piece of the company. If he or she says, “Nothing,” leave. If he or she says, “Something,” stick around and hit the goals you set up together as a condition of ownership.

Granting equity to your team is more art than science. When it’s done correctly, you will accomplish three objectives: 1. You’ll transform your team members’ thinking from an employee mentality to an ownership mentality. 2. You’ll incentivize your people to work harder and smarter to increase your company’s value. 3. You’ll increase employee retention by structuring compensation intelligently.

What You Must Recognize in Order to Retain Talent People want to be compensated properly for their efforts. Outstanding performers want to participate in the success of the company. People want to know that they’re part of an organization that’s making an impact. People want to be recognized in front of their peers for the work that they do. People want to know that there’s an opportunity for them to grow within the company. People want to be judged based on a clear set of expectations given to them without the goalposts constantly changing.

Without shared values, you can’t sustain what you’ve built.

My Business Principles Never compromise our nonnegotiables. Micromanage until there is trust. What brought us here won’t take us to the next level. No one has 100 percent job security, including the founder or CEO. Create positive peer pressure by challenging one another. Beat your prior best. Treat the company’s money like it’s your own. Be radically open-minded but not easily persuaded. Fight any temptation to lower expectations and standards. Create an environment where our team is taken care of financially and professionally. In

If you’re going to establish a culture, you have to let people know what you stand for. Have a clear code, a guiding set of principles, and make sure everyone knows, without any ambiguity, what the consequences will be for violating it.

The less your business depends on you, the more valuable it is. The more your business depends on you, the less valuable it is. There’s no exit opportunity if the business relies on your personality.

Many are so egocentric that they can’t fathom the idea of anyone but themselves running the company. If you have that mentality, it will keep you in control and prevent you from scaling the business.

Another pitfall is thinking that your key people won’t ever leave. Or you believe that if someone does leave, someone else can just slide into his or her role. Neither belief is true.

Entrepreneurs need to play a continuous replacement game, replacing parts of themselves.

“Keep figuring out how to replace yourself because your time is most valuable in this process.

If you constantly praise a particular skill or character trait, a person will manifest it more often. The praise, in turn, is repeated by that individual and becomes part of his or her character. Let’s

Make saying positive things behind your teammates’ backs a habit, not just a once-a-year behavior.

What you want to know is what makes them tick. I do everything I can to get to know my team members. Mainly, I ask a lot of questions to get to the root of who they are. In this way, I avoid jumping to false conclusions about them and can understand what drives them, what their goals are, and how they like to work.

That knowledge is gold, because it will allow you to think several moves ahead in terms of how the person fits into your game plan.

“Do unto others the way they want to be treated.”

You need to stop asking what motivates people and instead ask: What motivates a person?

Do you want to excel as a leader? Show people that you take the time and care needed to understand what they want.

The mistake most of us make is that we give love and appreciation the way we like to receive it. If you like to receive praise, you’re probably good at giving it. If you’re more of a “money talks” person, you probably have a great comp plan. The truth that you’re going to run into is that everyone on your team is motivated by different things.

Questions to Ask Yourself to Reach Each Individual 1. What makes this person tick? 2. How does this person want to be loved? 3. What makes this person feel appreciated? 4. What’s the most effective way to show that I care? 5. What action will best “land” on this person?

1. WE NEED YOU

2. RECOGNITION

I don’t care how confident a person may seem, everybody needs recognition.

3. PRAISE: THREE DIFFERENT TYPES

1. Private: The first type of praise is given privately. It could be over a meal or during a casual interaction. It can also be done using text, email, or Slack. It may look something like this: “Listen, I just want you to know that you’ve grown a lot, and I want to recognize you. I see the work you’re putting in and the way you’ve been improving. None of it goes unnoticed. Thank you.” 2. Public: The next is public. This plays on recognition and works best with people who like to be in the limelight. You want to call special attention to their contributions in meetings. 3. Behind their back: The last type of praise is given behind a person’s back. You recognize people behind their backs when you praise them to others when they’re not present. I talked about the power of back talk earlier. Again, know the individual to use this effectively.

4. CLEAR DIRECTION

5. VISION

6.

DREAMS

7. INVOLVEMENT Constantly ask people their opinion and solicit feedback. Constantly ask people what they think you need to do next.

Master Building the Right Team THE MYTH OF THE SOLOPRENEUR: HOW TO BUILD YOUR TEAM 1. Identify the types of team members you want to attract. Create the right value proposition (benefits program) to attract and retain the right team members. Be even more selective about whom you allow into your inner circle. CREATE A PRINCIPLES-BASED CULTURE 2. Establish and communicate your values and principles—both for your business and as an individual. Don’t compromise your nonnegotiables, or else they will be only words on a piece of paper. TRUST = SPEED: THE POWER OF RELIABILITY 3. Inspect every skill needed in each department to make it transferable to any new hire in order to develop new leaders. Inspect the language you use to communicate with your teammates and leaders. Is it one that creates trust or doubt? Ask questions to understand what people care about most, and speak the language that moves them. Make a list of your top five team members, and identify their key motivators.

Exponential growth depends on your ability to develop other people into effective leaders. Identify the next leaders you’re going to groom for more responsibility. Make a list of your top three, five, or however many you have. Then start assessing them. Look at their strengths and weaknesses, and how they respond in different situations. Then look at their level of competitiveness, their ability to come up with ideas, and how solid they are. Also ask them if they believe in the company and want to step into a leadership role. Next, sit down and identify what they need to do in the next six months, twelve months, and two years. Challenge them to grow. Figuratively speaking, pour water onto them as though they were plants.

Identify the next leaders you’re going to groom for more responsibility. Make a list of your top three, five, or however many you have. Then start assessing them. Look at their strengths and weaknesses, and how they respond in different situations. Then look at their level of competitiveness, their ability to come up with ideas, and how solid they are. Also ask them if they believe in the company and want to step into a leadership role. Next, sit down and identify what they need to do in the next six months, twelve months, and two years. Challenge them to grow. Figuratively speaking, pour water onto them as though they were plants.

“It’s because the market determines our value. We can think we’re worth more, but if the market isn’t willing to pay for it, then maybe you’re overvaluing yourself. That number you wrote, you have to go out and get it. It doesn’t happen just by luck. Do you want to be a supervisor? Do you want to run a department? Then you have to ask yourself what you need to do to increase your value in the marketplace. The people who stay with us long-term are constantly improving themselves. We encourage improvement. And if you don’t improve, others are going to outimprove you and become your boss.”

Organizations such as Vistage and YPO (Young Presidents’ Organization) can provide a sounding board and advice.

The number one product of all is human capital. You have to know what happens when one person is down, why another is not all in, and why a third is being a little forgetful. Take a person who is having problems out to lunch and talk to them and ask, “Is everything okay? How is your wife doing? Are the kids good?” Good business is about relationships.

When you think about the various functions of your business—sales, hiring, customer service, whatever—what can you do to compress your time frame? It may sound difficult or even impossible, but I guarantee you that there’s a way to reduce the time it takes to perform any function.

Create a committee of savvy people and task them with figuring out how to make a function faster.

Examine how you can eliminate one of the steps. Assess which steps you can shorten.

A Seven-Step System to Compress Time Frames 1. Choose a process. From buying a house to ordering a cab to sharing pictures online with your friends, there is a process to follow. In fact, one of the great ways to identify a potential business is to find a flawed process that you can improve upon. 2. List the steps of the process. 3. Remove a step. This is where the magic happens. See if you can remove a step. How would the process function without that step? This is where disruption is born. If you’re not convinced, turn back a few pages and see why my company spent more than $2 million to accelerate its processing speed. 4. Minimize the steps. Take the remaining steps and condense their time frame. Condensing the remaining steps will help streamline the process, which is now missing one of the original steps.

5. Beta test the new process. Find a subset of customers to test and see how the new process functions. How does the market respond to it, and where do improvements need to be made? 6. Adapt the process. Based on the results of your beta test, adjust your process. This is where you adapt the process to fit a specific need. 7. Refine. You’ve beta tested, and the adjusted process is ready to be unleashed. Sell your product faster to all corners of your market, and don’t forget to repeat these steps again and again to create exponential growth.

Jeff Bezos, the founder of Amazon, talks a lot about regret minimization—about projecting himself forward in time and then thinking about what, theoretically, he might regret not having done.

Are you putting too much weight on revenue and not enough on margin? Does your compensation structure incentivize opening new accounts at the expense of selling more to existing accounts?

“What’s the best investment I can make to scale my business?” My answer to that question has changed as I’ve evolved. Now my answer to this question is always the same: “Spend six figures and hire a predictive analytics expert.”