BigDeal - The #1 Reason Why Most People Fail (And How to Fix It)

Starting point is 00:00:00 Two and five Canadians will hear the words you have cancer. That's why every step and dollar raised matters. On September 19th, join thousands in Toronto for the Princess Margaret Cancer Foundation Walk. Challenge yourself, friends, and family to walk 21 kilometers in support of life-saving research. Together, we can carry the fire and help create a world free from the fear of cancer. Register today at pmcfwalk.ca.ca. Do you know how the greatest retail in American history got himself arrested? He was crawling across a Brazilian supermarket floor with a tape measure.

Starting point is 00:00:36 And that was Sam Walton, the founder of Walmart. He was so obsessed with monitoring every single detail that he could fly a two-seater plane over his parking lots to count the number of cars outside of Walmart. But the part that you got to realize is that it almost killed his company. That's the trap most founders, owners, falls into. To put kind of more simply, do become the bottleneck. and that's how good operators actually kill your business. So today, I thought we do something different. I'm going to tell you the three archetypes of bottlenecks to avoid becoming.

Starting point is 00:01:06 And then I got a little four-step test that gets you out. This is the big deal podcast. Let's go. Let's start with one sentence I'd like you to tattoo on your face. Don't be a hero. If you are in business or in life and you think that being Superman is the fun game, you are actually playing the wrong game. Like, you know you should delegate.

Starting point is 00:01:27 And yet, if you're anything like me in the early days of building a business, every week, waking minute basically ends the same way with you solving everything. And I totally get it. You know, when your business is brand new, your heroics are like, that's your only option, right? You're dead otherwise. And if that worked to keep you in business, you think it works to make your next millions. But that's not true. All right. So here's what happens. As your business grows, so does the list of problems to solve. And each time you swoop in and try to fix things yourself, especially where those problems are outside of your unique subject matter expertise, you basically remove the highest dollar use of your time for whatever seems urgent but is really just in front of you.

Starting point is 00:02:10 That's not how you build a business. Because what happens is you keep diving in front of every problem and your brain gets rewired neuron by neuron to prefer being needed to winning, being free, or making more money. And that's not good. Like great owners scale, but they don't scale just with themselves. Your business needs systems and people that run them. And like, I've learned this a hard way so many times. So maybe the, like one of the more embarrassing moments of my life as an entrepreneur happened

Starting point is 00:02:39 years ago. So I got invited by one of my favorite entrepreneurs of all time, Richard Branson. Now, why do I like him? Because he basically lives this adventurous, huge life while also running multi-billion-dollar businesses. So he invited me out to Neckar Island. And it was with a small group of other entrepreneurs. That's what I wanted. I wanted to become sort of somebody who did crazy things and also built some of the

Starting point is 00:03:04 biggest companies on Earth. It's really rare. It's not normal to be like cross-continent ballooning while you have a multi-billion dollar airline. And so when the invitation came from him and his team, like you would think, wow, this is a bucket list item. You're going to drop everything and go, right, Cody? And instead, like, I remember specifically looking, he sent like an agenda of what we were

Starting point is 00:03:23 going to be doing. And it was like water bicycling, whatever that is, bioluminescent snorkeling. He actually had a line in there like, you will spend as little time as humanly possible on your phone. And I literally cringed. I thought there is no way, you know, my company cannot afford to have me offline for that long. And it's still a regret of mine to this day because I thought I was being the hero and I was going to save everything. Everything was fine. I could have been gone for two weeks. But the next time something breaks in your business, I want you to actually say like, why might this be a good thing for me? And how can I turn? train a long-term fix as a system, a teammate to handle this as opposed to do it myself. Because

Starting point is 00:03:59 if a small part of you lights up, like you just get hot and bothered when the phone rings and only you can fix something, you're being the hero. And that actually means you're an addict. You're addicted to your own supply. And so this week, you know, I want you to do something totally different. I like to call it the rescue tally. So every time you jump in to handle something your team should own or that an AI tool these days can solve. I want you to just like have that little sticky note that you wrote the quote on and make a mark. Every one of those marks, I want you to start associating with time. And then you're going to save that.

Starting point is 00:04:31 And you're going to start to think about after saving day after day, what is the cost of all of those little check marks? And this is really important because when you think about one of the most famous manufacturers in American history, we talked about Sam Walton. Well, I've got an even crazier story for you about Henry Ford. Like, we like to think of these people as innovators and incredible builders. and they are. But the same things that made them their first dollars are actually the things that made them miserable. And Henry Ford actually was that. Like in the beginning of Ford, if you don't know this, he owned more than half of the U.S. car market. The Model T was printing money, total innovation. You know, his little face will be on entrepreneur's version of Mount Rushmore. But his instincts were the entire business in the beginning. He was the best engineer in the building, the best salesman, maybe the only one in the beginning, made every decision himself. then the company got big like really big customers then start wanting color you know custom colors and

Starting point is 00:05:28 options and credit but ford kept betting everything on one block model t and the game was changing he didn't realize ford had basically this choice learn the new game or double down on the old one scale his business so it could really thrive profitable crazy or run himself into the ground what did you do he doubled on running everything himself and then he doubled down again and again and at one point he got so crazy about control and maniacal oversight, that he would send inspectors to his own workers' homes to police their private lives. Like, when did they leave? What were they doing in their off time? How many drinks did they have a night? By 1931, so flash forward like a decade, his market share had been cut in half. The company almost died because of the guy who founded it. And, you know, what's cool about

Starting point is 00:06:14 this is you may have founded something incredible. But what you need is a guy called Alfred Sloan. So he basically walked into Ford's biggest competitor, General Motors, and he walked in when that place was total chaos and Ford was rocket shipping. GM basically had all these little fiefdoms and separate companies with little maniacal kings all running their divisions totally different. And he said, nope, we are one company now and we operate on four principles, authority, accountability, reporting, and a predictable rhythm. We do the same thing in Owner Beowned to my book where we talk about we run. on a predictable rhythm, 90-day sprints. We run on accountability, aka your KBI as an operator scorecard. We run on reporting. That's your P&L review and the score of your company. So we run the same thing. And what that did when Alfred started running this was free GM from kind of all these

Starting point is 00:07:09 one-off heroes throwing a massive fit. So by that 1931 date, GM had passed forward. They had the number one spot for how many years after that? 77 years straight. And this fork kind of keeps showing up in every size and every industry. Like, okay, let's say you think you're better than Steve Jobs as an entrepreneur. I know I'm not. Well, Steve got fired from Apple because he couldn't stop playing that same game. He was maniacal in charge of everyone, screaming at everybody on the time, being crazy about if you, if you went up in an elevator with Steve Jobs, he would look at you and ask you what exactly do you do for the company, determine if that was good enough what you did for the company,

Starting point is 00:07:48 and then fire you immediately if he thought it wasn't. And that didn't win. And so he left the company, came back 10 years later and built the most valuable company on Earth. And then obviously brought in people like Tim Cook, who are pure systems guys, no innovation. If you think about like Travis Kalanek, just moved to Austin,

Starting point is 00:08:06 but built Uber into a $75 billion company, and the board had to prize fingers off the wheel. Now, whether that was a good decision or not, I'm not sure because I think Travis is a stud, but the principle here is that your heroics should not be the reason your business succeeds because you're going to add more people and then products and then more zeros. And you're not going to be able to predict what's happening next without a system. So as you scale, this basically means that your business becomes a nightmare for you.

Starting point is 00:08:35 And you don't need Ford's market share basically to hit the same Ford wall. Like, you could be a contractor right now who crosses seven figures and discovers that your next big project, okay, well, I can't do it by myself. I can't do a seven figure project stored in my head. Or you might own an agency and realize that like, oh, wait, all the graphic design work was my personal taste. But now when I'm not the one doing it, it looks totally different when somebody else does the design work for you. And so a question I would ask yourself now is like, how do you know if you've hit the wall? Well, when you become the bottleneck or the choke point, it's usually one of three reasons.

Starting point is 00:09:14 And we call them the three bottlenecks. The first is the decision bottleneck, which basically means every question in your business, boomerang is right back to you. I sort of visualize it like a boomerang. Every approval goes through you. When you disappear, everything stops because nobody's there to catch the other side of the boomerang. The second is the delivery bottleneck. And this is like, all right, the thing that we create doesn't get delivered if I'm I don't do it myself, right? The client asks for you by name. The quality drops if you're not the one

Starting point is 00:09:45 executing. No sales happen if you're not selling. And the third is the direction bottleneck, which is like, you're flying on gut. If right now, this is a hard question to ask yourself, do you have a business dashboard and scorecard? Do you have KPIs and do you run a 90-day sprint on your business? If it's just instinct and hunches and none of those things, then you have a decision bottleneck. And once you understand where this bottleneck exists, that's where you build the first part of the system. So decisions typically need written authority. So people know exactly what they can do without you. Delivery needs SOPs, documented processes. So somebody else can run it start to finish. Not you and you don't have to be miserable all day. Direction needs a scorecard. The whole team can

Starting point is 00:10:30 read and try to figure out, oh, do I understand the vision of where we're going next? And the thing to think about is like if there's a task that touches you more than twice a week, it gets a written system or a named owner, and I like you to do it by Friday. This is really important because most owners, you actually have a ton of jobs, right? You're like, I'm the janitor. I'm the salesperson. I'm the marketer. And if you genuinely can't tell which one you are in business, ask your newest employee, because they'll basically see, oh, well, you're kind of in our way on sales and fulfillment and whatever. And I think one of the things that you probably should be asking is like, if every owner knows the fix is building systems, why do so few actually do it? One, most systems

Starting point is 00:11:14 suck. Just because you have a system, it's sort of like saying, I'm successful in life because I have a system that I run my life on, but I'm not happy or rich and I wish I was happy or rich. That's not what we want. Instead, you need a system that's proven that's been utilized many times and that's been followed through on in your industry and at your size of business. That's actually why I wrote my book, Owner Beowned, because the idea is we needed 15,000 businesses to go through this process. And inside the book, they use the outcome of this process, our 12P diagnostic. So that's where we actually score your business on 12 pressure points that lead to making more money. It tells you which two are killing you right now. Then it helps you fix those in 90 days. And then it helps you figure

Starting point is 00:12:00 out what your next one is. You know, chapter 10 is actually all about bottlenecks what we just talked about. So if this episode, if any part of this, like, sort of stings and you're sitting on vacation and wishing that you could actually take time off, this book is for you. Like, I learned these exact systems building multiple nine figure businesses, and then I stole a bunch of them from Wall Street. So actually, I'm going to give them to you free at our live virtual event. It's called Owner Be Owned. If you show up, You get our free scaling tool, which is really cool. I've never given it away before. And we're given a million dollars in cash and prizes that entrepreneurs will want.

Starting point is 00:12:37 But you've got to be there live to get that. I think the only fair warning I'll say to you is like, if you love being needed, this book will ruin that for you. Like it will stop you being addicted to the heroine of heroism. And so if that is you, I want you there. You can actually hit the link below or hit the QR code. It'll take you right to the launch. And maybe I want to end with like going back to the bang. question. Let's say you know in your business that you need more systems. How do we actually get

Starting point is 00:13:04 you the right one? And underneath this answer lies every excuse you've ever given. So tell me if this is you. I've certainly said it to myself. Nobody can do it as well as I can. My clients need me specifically. Peel those back. And if the fear is actually, what if the business runs without me? What am I even good for? Then you know you're in the right spot. Like somewhere along the I think every owner has this like moment in the dark where your identity gets fused with the company. And you have to remove yourself from this idea that your business is a part of you. We kind of call it the amputation, which means that you've got to cut off these things that stall your company because most owners don't have their business fail because of not enough

Starting point is 00:13:52 cash flow or because they can't generate enough profit. It's because they give up. and this problem has nothing to do with talent. It's really that you're too tired to keep going this way. And I like to look at Michael Jordan for this. I think he might be the most obsessive winner in the history of sports. Like it's a man who took, he would take it so personally when a teammate missed a free throw in a preseason game, which I'm not a big sports person as you guys know, but matters less from what I'm told.

Starting point is 00:14:21 And he would take it so personally when opponents scored on him. And so personally, when somebody didn't actually execute on their part of the play, that he would make them practice more with him afterwards. And one of the reasons that I bring this up is like, even though Jordan averaged 37 points per game, even though he took all of that so personal and made his other teammates work super hard at it, he still couldn't win a championship alone. Like the best individual player alive, scoring at will,

Starting point is 00:14:53 he lost every single year until he got, with coach Phil Jackson and convinced him to trust what's called the triangle offense, which is kind of technical. You don't need to know that, but that let his teammates actually carry real load, not micromanage them every seven seconds. And what happened next? Six titles in eight years, the greatest run of all time, all unlocked by giving up the ball and trusting in the whole team.

Starting point is 00:15:14 And like, what's actually crazy is if you skip ahead a few decades, Jordan actually bought an NBA franchise. And suddenly the man who won six rings by trusting a system, he was a nightmare in the front office, burned through six head coaches, trusted his gut over every expert, and posted the worst record in the league. In fact, Phil Jackson went on to win more rings without Michael, and it kind of shows you that sometimes it's actually the coach and not the player. Like the second the game changed from basketball to business, he reverts right back to his old ways of play in every position. And I'm sure, I don't have to say this, but I'll say it anyway. Like Michael Jordan's a total

Starting point is 00:15:52 stud, obviously, but if he couldn't build a basketball business on his talent, do you really think you're going to be able to do it without following proven systems? Like, this switch just requires something different. And you need to let yourself expand beyond your talents and your skills. So, you know, a good example would be like, I hired a chief of staff this year at Contraring thinking. And I've had chief of staffs for many years, but I had never hired one at Contrary thinking. I had two insistence instead. And what I thought about with this one is I knew I was going to be pregnant. I didn't want to work as much for this last portion.

Starting point is 00:16:27 So I really introduced him specifically as my second brain. And the reason why is I told my team to go to him first before almost ever come in to me. And that was really difficult for me. But the benefits have been amazing. Like before Azad came in, we actually had part of the dev team that was burning, I don't know, 74K a month or something like that. And that dev team was basically. benefiting from the fact that I was too busy and not overseeing it. It went through this like vendor

Starting point is 00:16:56 layer. We were paying agency margins on top of the actual engineers. We were getting slower turnaround for it. And what's interesting is like, I don't think I'm a total idiot of business. I've built a lot of businesses by now, but I just didn't have the bandwidth to manage all of these devs. I bring in a Zod. I'm overseeing a couple other projects, but he handles this one. What does he realize? He finds that he has to immediately offboard the agency. Screens over 40 people to fill out the team, built a team around senior engineers, and does all of this offboarding and onboarding inside of 90 days and gets the cost down from like 74K a month to 12K with internal hires. And I think this part is so important.

Starting point is 00:17:42 He is not a better operator overall than me. I have no ego about the fact that he did this when I couldn't. It's just that your business can only grow to the size of your current self in any sector of the business. So if right now, let's say you run a 500K business, well, you probably can't run a $5 million business with the same habits. Like the higher the altitude, the rare of the air, right? And so you're going to have to learn how to breathe differently. Your team will watch to see whether you'll expand your capabilities before they bother to expand theirs. So if this freaks you out, I'd tell you to go give one of your top clients to one of your best team members.

Starting point is 00:18:25 I'd tell you that nine times out of ten, it's not going to matter. I'd tell you that you want to processize exactly what you do to have this other person hit it. But if you are the only person driving revenue, profits, sales in your business, then when you leave, you don't have a business, you just had a really stressful job with a terrible boss who was kind of miserable. So the difference between your business being worth millions and basically nothing is that. that you think of your business as yourself. And that is actually the worst thing you can do. Most owners don't know how to plan for exit. That means like 80% of the average business owner's net worth is locked inside the business. You guys don't pay yourself enough. And so four out of

Starting point is 00:19:05 $5 that your worth is trapped in an asset that only pays out if a buyer says yes, but they're not going to pay for it because you only have a job. You don't have a business. So if you look at some of the research, like this value builder scored 80,000 companies and found the exact price of being irreplaceable. The businesses that did not have what's called owner dependency, they were worth around four and a half times profit. Like, that's fascinating. And so in your business, how can you actually be worth more by doing less? Isn't that crazy? It sounds like an infomercial, somebody would say. But why does a business owner, why is a business owner, to run a business by doing less and make more because that means you actually know how to operate it.

Starting point is 00:19:54 You're no longer a load-bearing wall. And if they pull you out, the roof doesn't come down. Nobody's going to pay full price for a house that has a dude standing that has to keep the roof up. That will never work. So the distance between what your business makes and earns and is worth and what's your actual valuation gap is, usually the distance between those things is how involved the owner is. And so this idea of can you take one of your biggest clients and give it to another one? Can you remove some aspect of the business so you don't actually have to lift the weights? Can you have your best people make decisions that make you minorly uncomfortable?

Starting point is 00:20:33 If you can do that, your business will be worth more. And that is all in the bottleneck chapter. To close out, I like to write notes to myself. on Twitter. And most of the things I read on there is a reminder to myself of the things I know I need to do in business. And I think one of the most important things for you to realize is that the ultimate life hack is deciding you can just wake up one day and say, I'm not doing that again and completely change your life. And the same thing is true for business. You can just decide right now you're never going to do that again. You're not going to be the hero and you're going to

Starting point is 00:21:02 have a whole slate of heroes who can come in and save the day so that you don't have to keep being the only one to take the punches. That's all owner be owned. I hope to to see you guys at the live event. Let me know what you think in the comments. Two and five Canadians will hear the words, you have cancer. That's why every step and dollar raised matters. On September 19th, join thousands in Toronto for the Princess Margaret Cancer Foundation walk. Challenge yourself, friends, and family to walk 21 kilometers in support of life-saving research. Together, we can carry the fire and help create a world free from the fear of cancer. Register today at P.

Starting point is 00:21:46 MCF walk.ca.

BigDeal - The #1 Reason Why Most People Fail (And How to Fix It)

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