The only 4 skills you need to build a $1B company…
Summary
TLDRThe speaker shares insights on scaling businesses and leveraging time effectively. He emphasizes the importance of understanding leverage through the formula 'time multiplied by leverage equals output' and identifies four master skills: capital, code, content, and collaboration. The talk delves into strategies like the 'buyback principle' for hiring to free up time and the '131 rule' for empowering employees to make decisions, ultimately aiming to create a fulfilling life and business through transformational leadership and personal growth.
Takeaways
- 😀 The importance of understanding leverage in business: Time multiplied by leverage equals output, emphasizing the need for efficiency and maximizing the use of resources.
- 💡 The four 'Master Skills' for creating leverage are Capital, Code, Content, and Collaboration, which are essential for an entrepreneur looking to scale their business.
- 🛠️ The 'Buyback Principle' suggests that hiring should be done to buy back time, focusing on the calendar and capacity strategy to avoid reaching a 'pain line' in business growth.
- 🔄 The 'Replacement Ladder' strategy for hiring, which starts with administrative tasks and progresses to customer success, marketing, sales, and finally leadership.
- 📈 The concept of a 'Complexity Ceiling', where entrepreneurs hit a level of difficulty that they believe they cannot surpass, often leading to stagnation or the desire to sell their business.
- 📚 The significance of 'Transformational Leadership' over 'Transactional Leadership', focusing on empowering employees to achieve outcomes rather than just completing tasks.
- 🗂️ The '131 Rule' for problem-solving and decision-making, encouraging employees to present one specific problem, three viable options, and one recommendation.
- 💼 The empowerment of front-line workers with a '50 to Fix It' budget, allowing them to solve minor issues quickly without needing managerial approval.
- 🌐 The role of systems in creating leverage, with the acronym SYSTEMS representing 'Save Yourself Time, Energy, and Money'.
- 📈 The emphasis on building an 'Empire', defined as a life of unlimited creation where one never has to retire, highlighting the mindset for continuous growth and innovation.
- 🤝 The need for empathy and understanding in leadership, recognizing that employees have lives outside of work and should be treated with respect and consideration.
Q & A
Why did the speaker move to San Francisco?
-The speaker moved to San Francisco to understand how 20-year-olds built billion-dollar companies.
What is the concept of 'leverage' as discussed in the script?
-Leverage in this context refers to the ability to maximize output for a unit of time, with the formula being time multiplied by leverage equals output.
What are the four 'Master skills' for creating leverage according to the speaker?
-The four 'Master skills' for creating leverage are Capital, Code, Content, and Collaboration.
What is the 'buyback principle' mentioned in the script?
-The 'buyback principle' is about hiring people to buy back your time, focusing on calendar over capacity strategy, ensuring that you delegate tasks effectively to free up your time for more important activities.
What does the speaker mean by 'pain line'?
-The 'pain line' refers to the point in business growth where expansion becomes painful, often due to the entrepreneur reaching their capacity to manage without delegating effectively.
What is the 'replacement ladder' strategy?
-The 'replacement ladder' strategy is a method of hiring where you start by delegating administrative tasks, then customer success, marketing, sales, and finally leadership roles, ensuring that each level is established before moving to the next.
What is the '131 rule' and how does it apply to leadership?
-The '131 rule' is a leadership principle where team members are encouraged to present one specific problem, three viable options they've considered, and one specific recommendation for resolution, fostering autonomy and decision-making at lower levels.
What is the speaker's view on the role of an entrepreneur in growing a business?
-The speaker believes that entrepreneurs should focus on building an empire, which is defined as a life of unlimited creation, and not just on making money or selling their business.
How does the speaker define 'transformational leadership'?
-Transformational leadership, as defined by the speaker, involves hiring for outcomes, setting clear expectations, measuring progress with a single number, and coaching team members through principles and personal stories.
What is the speaker's advice on handling issues with team members?
-The speaker advises to coach team members by focusing on the violated principle, sharing a personal story related to the principle, and discussing the takeaway from the situation, rather than simply pointing out what was done wrong.
What is the '50 to fix it' policy mentioned by the speaker?
-The '50 to fix it' policy allows frontline workers to solve any problem they see, costing less than $50, without needing prior permission, as long as they report it to their leader within the next seven days.
Outlines
🚀 Entrepreneurial Growth and Leveraging Skills
The speaker shares their journey to San Francisco to learn from young entrepreneurs and discovers the concept of leverage from Naval Ravikant. They emphasize the importance of time multiplied by leverage to achieve high output. The speaker identifies four master skills for creating leverage: capital, code, content, and collaboration. They discuss common pitfalls entrepreneurs face, such as stalling growth, self-sabotage, and the desire to sell their business at the first sign of difficulty. The speaker introduces the 'buyback principle' and the importance of hiring to free up time, advocating for a strategic approach to overcoming growth barriers and creating a scalable business model.
🛠 The Replacement Ladder and Empire Building
This paragraph delves into the concept of the 'replacement ladder,' a strategy for hiring employees that can take over tasks and allow the entrepreneur to scale their business. The speaker argues against the idea of a '4-Hour Work Week' and instead promotes building an 'empire,' which they define as a life of unlimited creation. They encourage filling newfound time with meaningful work to continue growth, rather than falling into a cycle of stagnation. The speaker also discusses the importance of mindset and the need to let go of tasks to others to create leverage, using Richard Branson's management style as an example.
🗂 The Art of Delegation and Leadership Development
The speaker focuses on the importance of delegation in leadership, advocating for delegating outcomes rather than tasks. They introduce the '131 rule,' a method for leaders to empower their team to solve problems and make decisions within a certain budget. This approach is designed to push decision-making down to the front lines, allowing for faster response times and growth. The speaker emphasizes the need for leaders to build people who can build the business, creating a scalable and efficient company structure.
🌟 Becoming a Transformational Leader
In this section, the speaker discusses the transition from transactional leadership to transformational leadership. They explain the process of coaching team members by focusing on principles, sharing personal stories, and extracting takeaways from experiences. The speaker stresses the importance of empathy and understanding in leadership, as well as the need to create a culture where team members are encouraged to take ownership of their responsibilities and contribute to the company's growth.
📈 Scaling Businesses Through People Building
The speaker concludes by emphasizing the importance of people building in scaling businesses. They argue that by focusing on building up individuals within the company, leaders can create a strong team that drives business growth. The speaker shares their philosophy of empowering frontline workers to solve problems within a budget and the benefits of this approach, such as increased speed and leverage. They also introduce the concept of '50 to fix it,' a budget given to employees to address issues promptly. The speaker encourages leaders to adopt a mindset of building people to build the business, ultimately leading to fulfillment and success.
Mindmap
Keywords
💡Leverage
💡Pain Line
💡Buyback Principle
💡Replacement Ladder
💡Transactional Leadership
💡Transformational Leadership
💡North Star
💡131 Rule
💡Empire
💡Resourcefulness
💡Coaching
Highlights
The importance of understanding leverage in entrepreneurship: Time multiplied by leverage equals output.
Identifying four master skills for creating leverage: Capital, Code, Content, and Collaboration.
The challenge of growing a business and the common pitfalls entrepreneurs face, such as stalling growth or self-sabotage.
The concept of the 'pain line' in business growth and how to recognize when to scale or delegate.
The 'buyback principle' for hiring, focusing on buying back time as a strategic advantage.
The 'replacement ladder' strategy for scaling a business by progressively hiring roles that create more time for the entrepreneur.
The significance of hiring an executive admin as the first step towards delegating tasks and creating leverage.
The transformational leadership approach, focusing on outcomes rather than tasks, to empower team members.
The '131 rule' for problem-solving, encouraging team members to come up with solutions rather than just problems.
The empowerment of front-line workers with a '50 to fix it' budget to address issues proactively.
The role of the CEO in setting clear outcomes and expectations for team members to drive towards.
The importance of coaching team members based on principles and personal stories to foster growth and understanding.
The concept of 'becoming the person you needed most in your darkest days' as a personal development goal.
The idea of sharing the best version of oneself with the world as a means of fulfillment and impact.
The ultimate goal of creating a life of unlimited creation and the mindset required to achieve it.
The emphasis on building people to build the business, highlighting the importance of people development in business growth.
Transcripts
I moved to San Francisco because I
wanted to understand how these
20-year-olds built billion dollar
companies and I meet a guy named nval
robicon remember I was talking to him
once about leverage the best
entrepreneurs have the biggest output
for unit of time time multiplied by
leverage equals output and this is what
I learned the ball taught me this
there's only four Master skills to
creating leverage once I understood this
I understood I only had four things to
go become world class at and I could
have anything I want in my
life most
entrepreneurs when they're growing their
business it doesn't matter if it's their
first 100K or 300K or million they get
to a place where growing is painful and
in that spot they usually do one to
three things they either stall okay they
say to themselves this year I made more
money last year than this year I'd
rather slow down right and um and and
just not grow the problem with that is
that the Market's growing right gross
domestic product grows
your customers will demand more from you
this year than last year and the the
worst part is your top people if you
don't create a future that's big enough
for them then they will go find somebody
else can do that does that Mak sense
your dreams right this sound your dreams
have to be bigger than everybody else on
your team's dreams and goals write it
down so that's St number two sabotage
this one's fascinating some of you guys
don't even know you're doing this
I have a friend of mine
Tracy business was going through some
challenges 6 months of Hell we've all
been there it's tough and in that storm
Tracy tells herself I need to give
myself a break and she decides to take a
4-we
sabatical do you think a company that's
struggling the CEO of the company should
take a four-week sabatical yes or yes no
perfect you guys are on the same page
this great but she didn't realize she
was sabotaging her success she had
opportunity to keep growing because when
we're going through the worst just so
you know this when we go through the
worst we're actually developing our
skills to get to the next
level huge okay so understand when
you're challenged you should say thank
you wey opponent this is going to shakee
me to become the person I need to become
to get to the next level instead Tracy
went on to sabatical she missed the
opportunity to grow the third is sell
my buddy Jason calls me one day and he's
like hey man I think I'm going to sell
my company he has an agency 2 million in
Revenue been doing it for about seven or
eight years and it just became really
tough and I said Jason write down all
the stuff that you don't like about your
business today and he made me a list and
I said if those things weren't true
would you sell the business he's like no
I said well let me invite you to
consider a different perspective I know
you want to go do something else you
think the grass is greener here's what I
know you've just hit your new complex it
ceiling we all have them write down
complexity ceiling complexity ceiling
anytime it gets hard I want you to look
at that term I said it doesn't matter if
you solve it now or you leave and start
something else you will hit the same
level of complexity where you decide I
don't want to grow anymore it's your
pain line so what I want to share with
you today are three strategies to
overcome that pain
line the first principle that I want to
share with you and it's a universal
principle it's the buyback principle
we don't hire people to grow our
business we hire people to buy back our
time it's a calendar over a capacity
strategy see most entrepreneurs when
they're growing they go well now I need
to hire another logo designer I need to
hire another real estate agent I need to
hire another um you know electrician and
I would say no you start with your
calendar first because here's the deal
if you do the second you get the first
but if you do the first you definitely
don't get the second most entrepreneurs
get to about 1.2 million about 12
employees where their life starts to get
really painful that pain line is
screaming at them every day because they
violated this
rule this is the framework draw this
Loop okay it's a loop you need to go
through these three steps to move
forward so every time I hit a pain line
okay today I own dozens of companies and
my calendar completely shifts two or
three times a year so I'm going to teach
you the exact same thoughts of how I
look at my calendar every time I hit my
pain line first step is we got to audit
we got to audit our calendar for time
and energy it's not enough to just look
at what we're doing that we could pay
somebody else to do it's what are we
doing that sucks our energy what I call
green or red stuff if we can replace
that with green we will transform Our
Lives then transfer is the ability to
give what we're doing today the work to
somebody else but check this out without
taking any extra time using the
camcorder method and then the third the
problem with Phil is most people get to
the first and second step and then they
decide to do a 4-Hour Work week I ain't
here to do a 4-Hour Work Week okay I'm
here to teach you guys all how to create
an empire and that word might scare some
of you but let me share with you my
definition of empire you want to write
this down a life of unlimited creation
you never have to retire
from a life of unlimited creation you
never have to retire from that is an
Empire if we fill properly that new
found time then we continue upward if we
don't know what to focus on when we find
that extra time then we will just repeat
that cycle and some of you guys have
been in that spot you grow you go down
you grow you go down maybe not you maybe
the people out
there maybe somebody you know out there
right up down up down they oscillate if
you follow the buyback Loop you'll
continue to grow and that's what we're
here for today million-dollar companies
were not built off $10 tasks write it
down this is math 101 there's not enough
hours in the week for you to grow if
you're doing $10 task and we have a lot
of mindset monsters and beliefs that
just won't support us to actually
scale the first key strategy I want to
teach you about is the replacement
ladder so I want to ask everybody to
write down if you are starting from
scratch today and you had the ability to
hire your first employee who would they
be write down the answer who would you
hire first I want everybody to write it
down who would you hire first that lower
go all right we're going to start over
here I want to hear some answers what do
you guys
gotes sales anybody
else what do we got copyrighting
cool sheet metal roofing so somebody can
do sheet metal roofing perfect and
anybody
else VA anybody else cold
callers assistant anybody
secretary recruiter I love
those here's here's the fun
part is uh I can tell the maturity of
your business Acumen by the hire yeah
they're Versa and it's because I've been
doing this for 25 years there is a
strategy that I learned from this guy
Richard Branson okay now here's the cool
thing about Richard Richard's the
billionaire every billionaire wants to
be like it's just true he whatever you
think he is how he is is exactly who he
is in 2016 or 15 I got a I got a cold
email from my buddy out of the blue hey
Den um I'm getting together with Richard
Branson in verbi Switzerland do you want
to join hm let me look at my schedule
yeah clear of course I want to join
like I grew up reading his books it was
so funny cuz it was I got the email in
May and I thought it was an April Fool's
joke but I'm like it's May it's not
April like and it honestly it wasn't
until I was in Switzerland at his house
AKA Lodge 16 bedrooms 20 staff massive
in that living room sitting in that
couch and Richard comes out from the
back and actually comes in and says hi
to everybody blah blah blah that I
actually believed he was showing up like
you guys got to understand you want to
talk about impostor
syndrome it was so strong in that group
of people was Tim Ferris the the founder
of square you guys know Brian Johnson
the blueprint guy right now he's doing
all those like weird life hacking stuff
he was there he just sold brain tree for
600 million and there's this Canadian
kid that I got invited because some guy
that invited to a dinner liked what I
was building at the time and said you
want want to
join and I was just like Dan just don't
say anything stupid it's you can only go
downhill from here you made it in the
house don't get kicked out so I just I
just shut up and paid attention and I'll
be honest you all I was looking for I
wanted to understand how does a guy some
of you may not realize this Richard
Branson has 400 companies in the Virgin
group of businesses that virgin group of
businesses that hold Co has two CEOs
I wanted to understand how he thought
about scale and leverage and I just
watched I watched how he interacted with
his staff I watch how he manages time
and this is what I saw that I didn't
expect at the time I had a virtual
assistant I had assistant over the years
right we've all had them what was
different was watching
Richard essentially anything that came
into his life went through his assistant
Helen and every morning for breakfast
they would sit there for 60 to 90
minutes depending on what was on Helen's
list she would review only the things
that she didn't know how to deal with
she didn't know how to route she thought
Richard would want to know about and
they just had breakfast they talked and
then the rest of the day he came skiing
with us that's how he ran 400 companies
do you guys want to learn the other
stuff that I learned from Richard yes or
yes perfect this is the replacement
ladder we start at the bottom we work
our way up why let me tell you two
different things one it's the lowest
cost to pay somebody to do the work for
the biggest time purchase back in your
life if you do it right so that's why
there's the outcomes so level one you
might be feeling stuck in your business
is because you don't have somebody to
support you on your account and your
your in your admin work but the key is
to do like Richard did and give your
inbox and calendar to your
assistant some of you guys are getting a
little you guys does that make you
nervous a little bit
anybody no you guys are all good just
giving up your inbox and your calendar
to somebody else and letting them figure
it out and hopefully you show up at the
right meeting at the right time does
that make you nervous anybody trust me
my assistant laughs all the time she's
like Dan I could tell you to show up at
the edge of a cliff and write in the
description jump and you would do it I
go well don't do that but I mean I trust
you and it's because I realize that if I
can give up the the inbound your inbox
is nothing more than a public to-do list
of other people's goals on your time
write that down your inbox your email is
nothing more than a public to-do list of
other people strangers request on your
time and you allow yourself to be
addicted to that so Step One is admin
number two is your customer success your
fulfillment this is where you have
somebody that helps you but the key is
you got to give away your support and
onboarding so when I enroll somebody in
any of my companies okay now I have CEOs
at run them but when I was doing it the
first first hire after admin would be
somebody to help me take the deal that I
just closed and move it forward in real
estate is a transaction coordinator
right like you need somebody that'll
that'll work with the customer and do
all the stuff you can still be the
specialist but give that to somebody
else level three is marketing right now
you want to start building and designing
a Playbook to generate leads okay
because if you don't do this I'll tell
you what happen sales is four because
you as a CEO will always be able to sell
better than anybody else you hire and
you know it you know it some of you guys
are world class sales people 70 80% win
rates nobody's going to ever be able to
to sell like that and the challenge if
you hire too quick and you don't have
the systems underneath what happens in 6
months is you either fire them because
they're not performing because they
don't have enough reps and they don't
have enough deals or they quit because
they're not making any money anybody
resonate with that anybody have yeah
exactly it's literally the six-month
Mark depending how much they like you
four months if they they like you six
months and the highest level is the elt
write this down executive leadership
team some of you guys call call them
leaders and managers here's my rule do
they come with
playbooks do they come with process if
you hire people or or you know promote
people up that has no experience then
you're just create more work for
yourself so when I say at that level
everybody else the first hire in
marketing and those are all people you
can hire train Etc because you're going
to give them a play
but when you start hiring leadership
they should come into the company with
knowledge okay that's the replacement
ladder and if you follow these five
steps some of my clients that I coach
they'll get there in 45 days they see
this they go got it and they execute
admin free up their time sell make
Revenue next hire success business is
starting to grow they hire somebody to
support the success buy back that time
out of their cter reinvest that now into
marketing they build a marketing
strategy they hire somebody execute the
strategy generates leads every day
consistently then they hire they do the
sales then they hire a salesperson that
person comes in goes through the scripts
that they've built or the calls that
they've already done they've recorded
give it to the salesperson now they're
coaching the team so you can do this in
45 days or some people are a bit slower
and they'll take
years right because they try to skip
levels you know what happens if you go
straight to the top how many people have
you heard say I need to hire a
[Music]
COO you don't even have an Executive
Admin that's the silliest thing in the
world if you can't even work with your
admin you are not going to work with the
COO you need to start at the bottom and
build the capacity and know how to move
up here's my philosophy if you don't
have an
assistant you are
one I know it stigs right I'm GNA I'm
going to take the dagger and just a
little bit more the other parts of this
is you're overpaid
and you kind of
suck okay a great executive ad admin
they're worth their weighting gold okay
so if you don't have one you are the
person and you're overpaid you're not
very good at your job so what do we do
with
that I want to talk about leadership and
I'll tell you
why I know CEOs and entrepreneurs are
crazy you guys agree yes or yes we're
nuts think about it the reason why we're
in business in the first place is cuz
we're able to deal with a level of risk
that most people would puke on
themselves and pass out like you do
understand this so just admit to it and
then try to develop the leadership
skills and protect your team from you
some of you guys expect your team to
show up like you and that's just silly
they aren't you and if they were guess
what they'd be building their own
company so what happens is the way we
lead our teams have to shift okay so I
moved to San Francisco in 2008 this is
after selling my first company I became
a multi-millionaire at
27 and I it crushed me like I I worked
easily 100 hours a week for four years
first two companies failed when I got
out of rehab tried my first company
failed after two years did another one
was 21 failed after that it wasn't until
it was 24 that I gave it another shot
and my dad would beg me even though I
grew up and had a very colorful
childhood he would just beg me to get a
normal job it's like Dad I can't do it
I'd rather you know as long as I'm not
in prison and I didn't relapse like you
should be really proud of me like I'm
doing something I know I'm not making
any money but I think I'll figure it out
and it wasn't until I was you know
almost in my early 30s that I figured it
out
so I moved to San
Francisco because I wanted to understand
how these 20-year-olds built billion
dollar companies does that ever make you
wonder these Tech entrepreneur you read
about them on the news like how do they
do this how do they convince these old
white guys to give them hundreds of
millions of dollars to build these Tech
platforms to you know and they're like
barely old enough to drive like it
fascinated
me just real talk right I grew up in
east coast of Canada so that world was
foreign to me even though I was in
software and I built a big company that
world was fascinating as an outsider and
I get there and in the first few days I
get invited to a party and I meet a guy
named nval rant this is 2008 nval today
has been on Joe Rogan he's an incredible
like just philosopher honestly but I met
him earlier on and he kind of became a a
mentor of mine I I call him one he would
never say that but I share that because
I remember I was talking to him once
about leverage so you got to understand
in
business the best entrepreneurs have the
biggest
output for unit of time so if you think
of the the qu question okay write this
down
okay time multiplied by leverage equals
output and output could be money
resources Etc but time multiplied by
leverage equals output so I want to ask
you guys all a question what are ways
that we can create leverage write it
down if I say what are the tools to
creating leverage write it down I want
you guys to answer that just one idea
the number one tool for creating
Leverage is is write down the answer I
want to hear from
everybody all right let's hear from over
here what do you guys
got raising money 8020 I like that
anybody
else social media
AI delegation
yeah leverage people I like that anybody
else automation what
else what
I can't hear you system systems oo I
love systems do you know what systems
stands for save yourself time energy and
money write that down systems equals
save yourself time energy and
money here's the fun fact everybody's
answer was relatively
correct and this is what I learned the
all taught me this there's only four I
call them Master skills to creating
leverage okay write these down the four
system the four Master skills are number
one Capital if I have money I have
incredible
leverage okay takes money to make money
it really doesn't but it takes res
resourcefulness all you guys in this
room have to be more resourceful okay
what do you guys need to be more
resourceful doesn't take money but money
creates opportunity okay so capital is
one number two is code some of you guys
said Automation and AI that fits in that
bucket code
software three is content somebody's
talked about I think podcast and social
media content I can create a system an
sop and it takes me an hour to create
and if I have 100 employees that one
system can train 100 people without
extra effort from me does that make
sense yes or
yes the fourth is collaboration it's
people okay so the four C's write them
down once I understood this I understood
I only had four things to go become
world class at and I could have anything
I want in my life code Capital content
collaboration so specifically I want to
talk to you about how to lead people the
collaboration side most entrepreneurs go
on the left side transactional
leadership they tell people what to do
they check that they got it done and
then they they tell them what to do next
that sounds pretty straightforward yes
or yes yeah everybody that's I did that
for 15 years 15 years of starting
companies at 17 till I finally made some
money at 28 I mean not 15 but a lot of
lot of
time I just thought that's how you did
it the problem with that is around 10 to
12 direct reports you wake up in the
morning with all the pissing vinegar in
the world I'm going to dominate the day
I've got my list of projects and we're
going to have a productive day anybody
ever wake up that way you're like I'm
going to kill it today yes okay the
first thing you do is you check your
email and there's fire fire fire fire
crap then you think oh I wonder if Bob
Jade Mary is is working on that right
thing so you start calling people on
your team you tell hey are you doing
this are you doing that did you think of
this and then there's like fires and
issues and all that stuff and it's not
till 7:00 at night that you finally sit
down to start doing the
work anybody relate with
that yeah that's how it works if you
have a half dozen people work for you
anybody body and you tell them what to
do check what they got done you tell
them what to do next this will become
your reality that's why I call it the
pain line the opposite of that is
transformational leadership okay so I'm
going to explain it to you but I want
you to think of an example in your life
that's tough for you right now and apply
this principle to that situation that
person so the first thing when I hire
somebody let's say my assistant okay the
first day I talked to her about a few
principles but the first one is you are
the CEO of my inboxing calendar
who's the CEO of my inboxing calendar
you are my assistant exactly and I I
don't mean to be a ding-dong but I will
actually ask her to repeat it back who's
the CEO I'm the CEO who's the CEO I'm
the CEO you're the CEO yay yay what does
that mean and I asked them to describe
to me what does it mean to be the CEO of
my inboxing calendar is it my
responsibility to put stuff in my
calendar or yours mine yay we're wi you
know like it sounds foolish but I'm
trying to make a little entertaining for
all of you guys keep you awake and
focused but I'm not it's not that far
off when I hire people I look them in
the eyes and I said I hired you to
create this outcome I don't tell them
what to do I hired you to create this
outcome and then I describe the outcome
so I got to tell them what does a 10 out
of 10 look like my calendar has
everything in there it's structured in
the description is this everybody's
confirmed like my this is what a 10 out
of 10 my my travel schedule's figured
out all my flights are booked
International 6 weeks domestic 2 weeks
whatever it is
right and I get really clear at
describing the Mountaintop that's the
way I think about it some of us hire
people and we don't think about telling
them what it's going to look like at the
Mountaintop right we just say hey can
you start climbing this mountain they're
like okay where's where's the path
you're like I don't know it's over there
it's in the corner and they go over this
way they call you the next morning I
couldn't find that path yesterday I'm
like what are you doing no you say
that's the mountain top see it right
there that's Mountain Top you figure out
how to get there what resources would
you need so then we
measure okay so then I explained to the
person I hired I gave them the outcome I
said here's how we're going to measure
your progress every person in all my
companies have a number my social media
person has a number my CFO has a number
my Coos have a number my CEO have a
number they have one number how many
numbers one number now do they use other
numbers to understand if they're making
good decisions yes but there's one
number that we've all agreed on if
you're in the automotive space the
number is called the absorption
absorption rate I'm a software guy and I
know this stuff because I love I love
nerd not on business absorption rate
it's the number that tells you the ratio
of of the service department and parts
covering the overhead of the the car
dealership and that number tells you how
efficient it is okay so there's
different aspects into it if I'm in the
hotel space it's the uh the average
night of a room you know booking right
that tells me how efficient the hotel is
so once I tell my assistant the the way
I'm going to measure them okay which is
response time that's the number how
quick do you respond to people okay and
it's a simple tool you put in your email
and they respond then when I have issues
somebody asked me this today what do you
do when you have issues with people on
your team anybody else run into that
issues with people on your team there
are humans they're supposed to have
issues some of you guys expect people to
be robots like I just can we okay some
entrepreneurs are expectations for their
people are up here can we just pull it
down a little bit can we all realize
that they have lives that don't revolve
around
us and that's okay and awesome can we
show up with a little bit more empathy
100% so what happens is anytime I see
something that isn't great I ask I write
it down okay on my phone all my direct
reports I have a Google doc okay and it
says at Agenda it's got all their names
and I just write down a
bullet once a week for most of my direct
reports every two weeks at minimum I sit
down with them guess what's the first
agenda item in that
meeting
guess review my
list literally the other person's
meeting or one-on one's is review Dan's
list so I pull up my phone because I
forget what I wrote in there and I pull
it out literally every meeting I have a
daily meeting with my assistant an guess
what she's like hey Dan what's on your
list and I open it up because I I forget
I like to just write stuff
down let me pull it up here discuss
podcast when traveling to optimize
flights example Charleston podcast
that's the first item on the thing I
just wrote it down now here's the kicker
though
coach the way you coach somebody isn't
to tell them what they did wrong and
tell them how to do it right which is
what most of us do the way I coach is is
number one I ask myself what is the
principle that was
violated what expectation do I have and
what is that principle most often times
with leaders why you I want to teach you
to become a transformational leader is I
want to teach you the process of um
creating other leaders
okay and the way we create other leaders
is by coaching them up but most of us
have never trained other people or know
what a coach does I'm going to give you
the three steps first step write this
down we go to principle what is the
principle they
violated okay so in that situation for
an one of the one of the um there's five
core S so my Sops or things it's called
North
Stars actually you guys just want the
Google Doc that I work with for my
assistant would that be helpful all
right here's the deal just cuz you guys
are friends of Carlos follow me on
Instagram Dam Martell TW Martell write
it down at Dam Martell or you can pull
out your phone do it now
and then message me Freedom EA and
that'll tell me to give you that
document okay because I'm not giving it
to anybody else and if you're watching
the recording it's not for you just for
you guys in this room cool yes or yes
awesome in there you'll see I have
Northstar principles damn Martell is my
name in case you guys are the Northstar
principal one of them is that the
calendar is a work of art incomplete and
always uh optimizing for Revenue that's
my calendar okay and that is one of the
things that was kind of violated she may
not have known I got to coach her up so
the first thing I said the thing I want
to talk about is the fact that my
calendar wasn't at 100% the second part
to that is a story that's why I always
write down examples okay give them a
story of when you learn that
principle okay so if you let's take
something simple people have to show up
on time that does that bug anybody else
when people will show up late for
meetings perfect okay principle if
you're on time you're you're late does
that make sense that's my principle you
may not even know you have these un
unexpressed expectations so we got to
document them we got to codify them if
you're on time you're late so if you're
late you're super late that's the
principle I learned this the hard way I
had a client I was supposed to meet them
I didn't show up on time and as soon as
I showed up they said you missed the
deal I'm going with your vendor nobody's
late for meetings ever again and I
embarrassed myself you tell your
personal
story okay you can do a two-minute story
you can do a 10-minute story so
depending on the executive I might tell
a 10-minute story to really make it land
and at the end this is the third part so
first part is principal second part is
story third part is takeaway I'll ask
them what did you take away from that
story what did you learn and they'll say
to me in that example if I'm not 3
minutes early I'm late that's awesome
then commitment will you make a
commitment that in the future it'll
always be on time yes if I did that with
somebody what's the probability that you
think they're going to be late in the
future low because they understand that
it comes from my heart and that I
learned this the hard way and I don't
want to have you learn this right now
it's low stakes we just start working
together I need you to know most people
don't follow this process for coaching
okay so this is the transformational
leadership we start with the outcome
where are we going then we go to measure
what is the one number and then we coach
them whenever we see them violate
anything and we teach them our thoughts
and our stories our experience anybody's
had a great leader in their life a great
boss anybody have a great boss I had
this guy Darcy who was just awesome
exactly they probably did this to you
and you didn't even realize they were
doing this that's what made them great
here's my big belief delegate the
outcome not the task write it down
delegate the outcome not the task stop
telling people what to do start telling
people where we're going and let them
figure out how to get there and Coach
them along the process and that's how we
build people that's how we coach up the
third and final hot principle is the 131
rule this will absolutely transform your
life anybody that has a team of people
and you're frustrated that your phone is
always blown up and they're always
calling you and they're always emailing
you and they don't seem to know how to
figure anything out I'm going to solve
this for the rest of your life do you
want to learn how to do that yes or yes
awesome here's how it works you know why
they call it a
bottleneck cuz it's at the
top so you think the problems your
person on your team I'm telling you it's
the person you're looking at when you
look in the mirror so you've taught
people this and I'm going to teach you
how to unte them this okay
so few years ago I the 131 Rule and I'll
tell you how it works is culture in all
my companies like you won't meet anybody
at any area of the business that doesn't
understand what it is because we use it
as language and I remember I had this uh
director of HR this recruiter on the
team and he he messages me he's like hey
we got a problem I was like what's going
on dude he goes we need to hire a a 12
people in the next 30 days I go yeah he
goes well I don't know how to do
that
wow
well what do you think I should do oh I
don't
know well I've never done it I said I
said Adam I mean I hired you the
director of HR I hired you to do that
job I I don't know how to do that
job out of both of us who do you think
should learn how to do that job and he's
like well I mean do you have any ideas
and I said what's your
131 and he goes oh man I don't know like
I don't have time for this and I said I
I don't I don't know how to help you
okay write this down if you want to be
rich be lazy if you want to be wealthy
be
incompetent
okay if you want to be rich be lazy if
you want to be wealthy be
incompetent I said Adam I didn't hire
you to tell you how to do your job I
hired you to tell me me what to do does
that make sense Steve Jobs said this he
said it's easy to hire other people tell
them what to do it's hard to hire people
and have them tell you what to do so I
said what's your 131 he said I don't
know I said how long will it take to
figure out he goes give me give me a day
so how about the same time tomorrow we
meet up and we review goes that sounds
great it was like 4:00 that day next
morning 10: a.m. he texts me I'm
good duh like and I'll I'll share with
you why here's how the framework works
one specific challenge when somebody
comes to you with problems okay and I
love you women but you're the worst you
guys I love okay I love you most of my
team are executive are women but you
guys come to me with a hurricane of
stuff it's like a tornado I love it it's
creative and then but I'm like what are
we talking about and they're like this
is wrong and this is wrong I'm like one
thing at a time so one specific
problem what are your three viable
options that you've considered I want to
hear them tell me how you research them
and then give me your one specific
recommendation if you teach everybody in
your team the 131 rules I'll tell you
what will happen one you'll start having
your front uh Frontline people solve
problems that never make it up to your
attention okay you will teach people
this is another big idea that we teach
people how to treat us okay we teach
people how to treat us so if we teach
people every time they have a problem
they come to us guess what they're going
to do when they have a problem come to
us so that's why it's a bottleneck cuz
it's at the top cuz you taught them how
to do this this is how we fix
it
so 98% of the time somebody comes to me
with 131 they recommendation is what we
should do and over time they build their
confidence and I push down all the big
decision making to the front line okay
and I've got time I'm going to give you
guys you guys want to know the ultimate
hack this is this is like the I don't sh
share this
often Frontline workers I give them a
$50 budget to fix any problem they see
as and all they have to do is tell me
about it after it's called 50 to fix it
so anybody in my company at the front
line they can solve any problem they see
if it's less than $50 without getting
anybody permission the Only Rule is they
have to tell their leader within the
next seven days okay so they can spend
their credit card expense it it's always
approved they get to tell their leader
next 7even days so they can coach
against it leaders managers it's
$500 directors it's
$5,000 and for my executive leadership
team my CEOs my C my Coos is
$50,000 what did I just do I just
created a framework to push decisions
and issue problem solving down to the
front line so we can move faster I'm all
about leverage all about speed all about
growth most of you guys are walking over
dollars to save pennies it's hilarious
let your people solve the problem and
then Coach them up that's how we unlock
the 131 rule in a more tactical
level so here's my
philosophy this is how we scale
companies doesn't matter if you're a
company of one or two we build the
people the people build the business we
build the person the person builds a
business we build a team the team builds
a business when you shift your lens on
your role in the company as a people
Builder it will unlock massive growth
okay this is how I do
it so with that this is my book buy back
your time bestselling book continue to
sell more copies every week here's the
movement I'm trying to create I want to
rid the world of companies failing
because the CEO builds a business they
grow to hate does that make sense I
think most businesses get built to a
place where the entrepreneur grows to
hate it and then they want to do
something else I want to get rid of that
as being the reason the companies fail
and I want to end with this big idea for
every person in the world for human for
entrepreneurs for sure but everybody I
think we're all here to not only buy
back our time to grow our business and
we do that through the strategies I tell
you with the buyback Loop and the 131
and the transformational leadership
that's all awesome that will create
resources and wealth for you fun I think
we're here to do two things
one become the person we needed most in
our darkest
days become the person you needed most
in your darkest days every day you wake
up and try to create that person that
would have had the opportunity to speak
to that kid for me to have the character
and the resourcefulness to talk to the
15-year-old version of
Dan and then well while you're doing
that every day this is the second part
is share that person with the world give
that person to the world and your world
may be your kids your world may be your
community your church your CrossFit gym
I don't care if maybe social media and I
think that would be the best place
because I think that if you wake up
every day to become that person and
share that person that you will create a
life of fulfillment that you can't even
imagine to feel so with that everybody
thanks for having
me you guys are awesome than you thank
you
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