EntreLeadership - #356: How to Build Great Habits with James Clear

Episode Date: January 6, 2020

New year, new you? Not a bad idea after all, according to New York Times bestselling author James Clear, who says the key to behavior change is actually identity change. How you view yourself, he says, largely influences your habits—which are really the building blocks for achieving your goals. Listen and learn how to align your habits with your beliefs, supercharge productivity, and make time an ally rather than an enemy—and reach your big goals this year.   entreleadership.com/podcast Atomic Habits by James Clear James Clear's website Time Tracker Worksheet Review this episode for a chance to win a $25 Amazon gift card   Want expert help with your business question? Call 844-944-1070 and leave a message or send an email to [e-mail]. You could be featured on a future podcast episode! Learn more about your ad choices. Visit megaphone.fm/adchoices

New Year's resolutions do not work. Now, I know that's a little bit of a harsh way. It feels like a bucket of cold water to start off your first podcast of January like that. But it's the reality. It's the truth. And here at Entree leadership, we believe in being real with you. And the reality is that New Year's resolutions do not work. We've seen all the stats.

We've confronted all the facts. And that's because New Year's resolutions are something you make when you've had too much champagne. So what does that mean for the person that wants to grow in 2020? What does that mean for someone that wants to move forward? What does that mean for a leader like you that actually wants to improve? From the Ramsey Network, this is the Entree Leadership podcast where we help business leaders grow themselves, their teams, and their profits. I'm your host, Alex Judd, and today's guest has a plan for you to grow, a plan for you to improve, a plan for you to move forward in 2020. And get this.

It's a plan that actually works. That's because author and thought leader James Clear is one of the world's leading authorities on the topic of habits. And he says that real lasting change in your life doesn't start with what you do. It starts with who you are. True behavior change is really identity change. And what I mean by that is once you start to look at yourself in a new way, in the sense that once you start to ascribe a new identity to yourself, you're not even really pursuing behavior change anymore. You're just acting in alignment with the type of person you already see yourself to be.

It's one thing to say, I'm the type of person who wants this, but it's something very different to say, I'm the type of person who is this. So, you know, like the goal is not to run a marathon. The goal is to become a runner.

The goal is not to write a book. The goal is to become a writer. And once you start to believe in those identities more deeply, I'm a writer, I'm a runner, I am the type of person. who doesn't miss workouts. I think that's ultimately what we're really trying to get to. And the reason that I think this ties so closely with your habits is that your habits are how

you embody a particular identity. So whenever you make your bed, you embody the identity of someone who is clean and organized. Whenever you sit down and write one sentence, you embody the identity of someone who is a writer. If you study biology on Tuesday night for 20 minutes, you embody the identity of someone who is studious. And the first time that you do things, it doesn't necessarily change the way that you look at yourself, but you can imagine that every action you take is like a vote for the type of person you wish to become. So the more that you repeat those behaviors, the more you cast votes for being a certain

type of person. And so early on, yeah, writing that first sentence or doing that first push up, no, that doesn't radically transform how you look at yourself. But as the votes pile on and that. that body of evidence builds up, now we have something to root this new identity and something to base the belief on. This is very different than what people say when it's like fake it until you make it or something like that. And I don't necessarily have anything wrong with fake it until you make it. Just asking you to believe something positive about yourself. But we have a word for

beliefs that don't have evidence. We call it delusion. Like at some point, your brain doesn't like this mismatch between, I keep saying that I'm an early riser, but I press news every day. Or I keep saying that I'm a healthy person, but I'm not going to the gym. And so my argument is to let the behavior lead the way, to let the behavior reinforce the belief. And if you cast enough votes and show up enough times, then you actually have every reason in the world to believe in this new aspect of your identity. And I think that's ultimately the reason why, as the year kicks off, the question to ask ourselves is not, what goal do I want to achieve or what New Year's resolution should I set? But who is the type of person that could achieve the things that I want to

achieve. A common New Year's resolutions is, I want to lose weight. Well, you may realize the type of person that could lose 30 pounds is the type of person who doesn't miss workouts. And so now this year, we have something different to look at. Actually, what we're trying to do is to build the habit of becoming the person who doesn't miss workouts and letting the results fall naturally. And so I think the shift is a slight one, but also a very meaningful one from focusing on the outcome to focusing on your desired identity. That's almost a little bit countercultural because I think it can be super exciting to start focusing on the outcome, especially here in January, right?

Everyone is marketing desired outcomes to us. So what is the first step? Is it sitting down and writing these things down or is it talking to someone about it? What is the first step in identifying what it is that you want to become? And then what do you do after that? Yeah, it's a great question. We live in a very results-oriented society. So we're surrounded by results all the time.

You know, you're never going to see a news story that's like, man eats chicken and salad for lunch today. You know, it's only going to be a story when it's like man loses 100 pounds. You know, it's only once it's become a result six months later, two years later that we hear about it. And I think whether it's because that's how the news cycle runs or that's what we're inundated by on social media, we tend to overvalue results for that reason. And I don't mean to dismiss it. Like, the world is very results driven. But we tend to put the result on a pedestal and overlook.

the process behind it. The outcomes of our actions are highly visible and easy to view, and the process behind those actions is often invisible and difficult to view. I think because it's often hidden, we undervalue the importance of the process. But to answer your question, where does this start? Ultimately, what we're hoping to do is to live a life that's like in alignment with our values, whatever that happens to mean for you. And so it can be useful to ask yourself, what are my principles, what are my core values and so on. But sometimes that line of questioning is difficult because it's a very big, vague question. And so occasionally what I recommend is that people start just by asking, all right, I'm not quite sure what the core value

should be or I don't even really know like how my core value of growth or of grit or of compassion connects with my daily actions. But I do know what kind of results I want. People do tend to know, I want to double my income or I want to get six-pack abs or I want to reduce stress. And so that's fine. We can start with that. Ask yourself, what is the outcome I want? And then the next line of questioning is who is the type of person that could achieve that outcome?

So the type of person who reduces stress, well, it might be the type of person who meditates every day or the type of person who writes a bestselling book. Well, it might be the kind of person who writes every day. And so now rather than we can like kind of put the result on the shelf and focus more on reinforcing that identity or picking up that lifestyle and those habits that reinforce the identity of someone who could achieve those results. We're not going to try to predict the future, but we're going to focus more on what does their daily life look like, what do those daily habits look like, and less on when can I hit this ideal outcome?

It seems like you're bringing these things that can be maybe a little bit ethereal and feel like they're out of our control because they're destinations and you're bringing it more into what we can actually control today. Is that, Fair to say? Yeah, I think that is fair to say. Ultimately, your outcomes in life are influenced by multiple factors. One of them is luck and randomness and uncertainty and the actions of other people. And none of those things are under your control.

But the other meaningful part of the equation are your daily habits and decisions. And that is under your control. And so I think if we're focused just on what we can control, first of all, it's the only reasonable approach. It doesn't make sense to waste a lot of time thinking about things that are outside of your circle of control. But secondly, it gets us to ask maybe a deeper question or a different question, which is, what am I doing now that actually impacts the results that I have? And what you find is that the way that you collaborate in your results, their luck and randomness are also

collaborating in it. But the thing that you bring is that your habits are that main portion. And so I think we actually could like maybe simplify this to just saying the results that you experience in are often a lagging measure of your habits. So, you know, like your bank account is a lagging measure of your financial habits. Your physical fitness is a lagging measure of your training and eating habits. Your knowledge is a lagging measure of your reading and learning habits. Even the clutter on your desk or in your bedroom is like a lagging measure of your cleaning habits. And so I think as a shortcut, it's not to dismiss the role of uncertainty or chance or luck,

but to say that if we want to have a shortcut and focus on what we're, we can control. I think for pretty much any domain, we could say, yeah, the results I'm getting here, they're lagging measure of the habits that I have. And those are under my control. And so that's what I should be focused on improving. So how do you use this method for things that seem less quantitative and more qualitative? We see this with business leaders a lot that they love measuring the things that are quantitative, right? The revenue in the door, the number of customers serve. But then there's these things like, I want to become the type of leader that serves. my team exceptionally well. So how do you take that aspirational identity and start making it

habitual and start making it something that changes the course of your year? Yeah, that's a great question. There's so much of life is in this gray zone. You know, how do I really know at the end of the day if I was a better friend today than I was before, a better spouse or a better leader? It's very hard, very difficult to measure those things. So, you know, if you are the type of person likes to track things. And by the way, I don't think everything has to be measured, but I do think that measurement can play an important role. If you are the type person that likes to track things, then I think you really have to start asking yourself, how can I distill this set down into daily practice that I could track? Like, I could track whether I send one email of praise to somebody

on my team each day. That's something I can track in a spreadsheet, right? Or I could track. There's one leader that I know who does this. They look at their calendar at the end of the week that every Saturday morning, they sit down, look at the previous week. And then they review all those meetings in their head. And if there was anything that they recall saying in a meeting that turned out to not be true as the week went on, they send that person an email to follow up and, like, correct their mistake. So you could make a habit of correcting the mistakes or the missteps or the unintended

consequences of things that you say. But you get the point here. The point is, like, I think we need to distill it into some kind of action that we can actually look at and measure if measure. if measurement is important to you. Now, I do want to make one caveat on measurement, which is that measurement can be crucial for maintaining motivation because what we need in order to stick with anything,

almost pretty much any habit, is that you need signals of progress. You need some sign that you're moving forward. And one of the challenges of building good habits is that there's often this like valley of death in the beginning. You're practicing the habit, like take, for example, my dad. So he likes swimming. But any day that he goes to the pool and does a workout, he gets out of the water, his body looks exactly the same as when he got in. Right. There's no, it's an insignificant

difference from the act of showing up and doing the workout that day. So if he just made it about how he looked in the mirror, then the results, the feedback, that feedback loop, those signals of progress, they're way too delayed, way too slow to maintain motivation. So what he does is he pulls out a little pocket calendar and he makes an X on that day. And then at the end of the the month, he adds up all the X's, just this little habit tracker. That gives him a visual signal in the moment that he's doing the right thing. And so however you choose to measure it, however you choose to measure, am I showing up and being a good leader, am I being a better spouse, a better partner, making it visual, making it something that you can see, a spreadsheet, a habit tracker, an X on

the calendar. That goes a long way to creating a signal of progress that helps maintain the motivation for the long run while you're sort of waiting for those delayed rewards to accumulate. That's pretty powerful. We work with business owners all the time, anywhere from 2 to 200 team members, and a lot of times they feel this stress of needing to go from getting paid for what they do to getting paid for what they know and what they grow with regard to the business. And so they move into a work that's a lot more ambiguous. And they call that working on the business, not in the business. But a lot of times, and I've seen this in my own life, they don't apply the time necessary to that because they always get applause. They always get these visceral rewards for

doing things as opposed to thinking about things or working on the business. So it sounds like what you're saying is create your own reward system for that work that doesn't necessarily give it to you right off the bat. Yeah, I mean, this idea, this concept, I think is so important that in atomic habits, I refer to it as the cardinal rule of behavior change, which is behaviors that are immediately rewarded, get repeated, behaviors that are immediately punished, get avoided. And what you're referencing here is, we know that we should be working on the business, not in the business. We know we should be thinking strategically or thinking more about what the big picture concepts are and the direction we're headed in. But if we get immediately rewarded

for doing some work that's in the business, well, then we start feeling like, oh, I want that praise. I want that recognition. I want that support. And so we find ourselves doing these things because they make us feel good. And as a manager, this is also a much bigger question that you can ask yourself, which is, where do the people on my team feel praise? Where do they feel loved and supported? What do they get rewarded for? What do we reward for in this culture? And this is kind of a broad principle that you can apply if you'd like to, I hesitate to say, shape the habits of others, because I don't want to come across like, oh, we can just change anybody because it's much harder than that. That's a dangerous route to walk, James. Right. But you can nudge people in the right

direction and the method is praise the good, ignore the bad. That doesn't mean that you never correct a mistake, but it just means on average, you're praising the good more. You're focused more on like making them feel great for doing the right thing. And there was an interesting op-ed in the New York Times a couple years ago where this woman was, she was annoyed because her husband and would never throw his dirty clothes in the laundry hamper and just kind of like left them strewn about. And so she nagged him about it and like told him it was important to her or whatever and behavior didn't really change.

And so she decided to start a new strategy where whenever he would remember to put it in, she would make a really big deal about it. She'd run over, give him a kiss, give him a hug, tell him it was like so amazing. And gradually over the course of the year, she ended up like shaping his behavior and rewarding him so much that he was like, even if he never would have said this explicitly,

he was thinking, man, every time I do this, it feels great. I get a kiss. I'm like, I get rewarded for it. And all behaviors are like that. We want to repeat the things that we get rewarded for. And so if we're going to pair that with what we just mentioned a moment ago, making it visible, making the signal of progress visible. One interesting example I came across the company that I was talking to is they wanted people

to feel rewarded for being good team players. And so anytime somebody took an action like that, their coworker could take a post to note, write their name on it and put it up on the wall was this very visible wall in the main hallway that everybody would see. And you didn't know what it was for. You just knew that you were getting publicly recognized for being a good team player. And then at the end of each quarter, they would have an all hands meeting and they would pull a couple of them off the wall. And the person who put it up would tell the story of what that person did and why they were a good team member. And that is, I think, an example of both, of both making it, making the signals of progress

visible so you can see it and you're motivated and of praising good and ignoring the bad or of providing a culture where you're getting praised and loved and supported and rewarded for the behaviors that you want to reinforce. And it sounds like a reward can be something as big as a moment of affirmation like that or as small as literally your dad checking off the thing on the calendar saying, I put in the work today. I put in the time today. Right. Anything that makes you feel good is basically the what we're going for here. So in the book I talk about we don't have time to go into it now, but just high level. Four step process. Then any habit goes through. So Q, craving, response and reward. Well, that last step, that last step of reward, this describes how

a behavior works. Not every behavior in life is rewarding, right? Sometimes there's a consequence. Sometimes it's just kind of neutral. But if a behavior is not followed with a reward, if it's not enjoyable or pleasurable or satisfying in some way, it's very unlikely to become a habit. your brain needs this like positive signal where it's like, hey, that felt good. I should do this again next time. So that's, that's really what we're talking about it. A reward can be anything that feels good that makes you feel like, yeah, I should do that again if the situation presents itself. So as we're kind of laying the foundation for this year, we start with that identity of what is the person that we want to become and out of that identity are briefed certain habits. And then inevitably, all leaders, especially at this time of the year being January, start asking that question. question of, okay, how do I make sure that I'm utilizing my time in such a way that I'm most productive? But I feel like the way that you come out of productivity in your writing and what I've heard you talk about before is a lot different than a lot of the ways I've thought about productivity, but I know business leaders. So can you just define for us? How do you define and communicate

what productivity is? And then we'll dive into some of the tactical of that. Well, philosophically speaking, I think we could say life is too short to do anything thing other than the best opportunity you know of right now. And that could apply on a big or a small scale, right? It's like too short to, you know, read a book that isn't as good as the best one you know of or too short to work on a task that isn't as good as the best one you have on your to-do list. Too short to not pursue a career opportunity that isn't the best one that you know about. So roughly speaking, I'd say that's productivity, is allocating your time in the highest and best use that you know of. You know, it doesn't mean it's like perfect. You're not an Oracle. You can't

see the, you know, everything about the world and how it works, but it's about being efficient. And one of the concepts that I like to think about with regards to productivity is this idea that I refer to as time assets and time debts. So a time asset is something that you invest your time in now that pays you back in the future. It's a commitment that you make to work on something. I think we can summarize it by saying, what is the work that you do that continues to work for you after it's done? So. Okay. So is it fair to say? it delegation, like delegating real responsibility to an individual on your team, that's a time asset? Yeah, I think that is true. So like any, anytime you train somebody, right,

it's the work you do now that will continue to work for you after it's done. So if you are processing your emails and then you train an assistant to process them for you, that's work you now that will continue to work for you every time they go into the inbox. That's also super challenging because it takes a ton of time to train the assistant for you to reap those rewards. for sure. And I think sometimes, you know, as an entrepreneur, so I've had my own business for eight years now. And I think one thing I've realized is that growth in your own business is often not like this linear trajectory. It's almost more like a step change in the sense that whenever you try to jump to that next level where it's like, all right, I'm doing all the emails now, but then I'm

to hire somebody and train them to do it or whatever the task is. In the short run, it's always faster for you to just do it. And so it's so easy to rationalize that. when time is tight or resources are tight or you feel like you don't have enough space anyway. I think one way to consider this is to think more about the frequency of the task over time. You know, it's like, yes, it'll take you an additional 20 hours this month to train the person to do that task. That's 20 hours you're not going to have. But they will do the task two times a week for the rest of the year. And that's going to earn you back 60 hours.

And so it's going to be a huge net positive by the end. of the year. It's just a tough pill to swallow up front. So this idea of time assets, though, I think it does apply to training, but it also applies to strategy. For example, the time that I spent writing atomic habits, that was time that I put those thousands of hours in, and then now it's done, but it's continuing to work for me every day as people buy the book or hire me for speaking or whatever, right? It's like, it's in a format now that that work is still doing work. And if I had written, you know, in my own journal, could have been the same number of hours, writing-wise, but it wasn't in a format that's scaled. And so I think that the ability to scale, the ability to distribute,

the ability to spread that work further, that's why, for example, I tend to like doing podcast interviews rather than radio interviews. I've done quite a few radio interviews, but once they're done, once I'm done speaking, boom, we're off air. It's over. But if I do a podcast interview, that's recorded. And now people can, there are people listening to other podcasts I've done right now. You know, that work is still working for me. I think about this practically. I was on a coaching call the other day, and there was someone that was saying

they were spending so much time individually training people. And one of the other business owners on the call, they said, well, you just need to take a YouTube video of how you change those people, and then you'll have that YouTube video. It's almost like both were time assets, but one was a greater investment

because that YouTube video would live on for the rest of time. 100%. That's actually a very good point. So you're right. Both were time assets, but one was much higher leverage than the other. And so this is kind of this weird challenge that you face as your business starts to grow and things expand and go well. You're never going to have a life that doesn't have any problems,

but you're really just trying to upgrade your problems over time. That's kind of a bleak outlook, James. Well, there's always something to solve, right? There's always any entrepreneur could tell you they're just that, you know, there's always something that's on the list to work on. And so as you move through that trajectory, as you kind of gradually upgrade and move up that line, you're looking for higher leverage uses of time and so on.

So that gives you the idea of a time asset, right? Something that continues to work for you after it's done. But then we also have this concept of a time debt. And this is a choice that you make in the present that forces you to spend time in the future. So anytime you commit to a meeting, you put it down, that's a choice you make right now, that you now have a debt to pay.

You have to give back that hour for the meeting next Tuesday. Anytime that I agree to an interview, same thing. I'm like, I'm now committed to show up and do that. And time debts, this could also be something like poorly written code the first time around. You know, you don't have time to do it right the first time. When are you going to have time to do it better the next time? And so now you've got to go back and revise old work and so on. We see sometimes a leader will, because they don't like challenging conflict or

difficult conversations. Sometimes they'll have a conversation, but they'll take it easy. And in reality, they think they're like, oh, this is much easier, right? We got out of the woods. And in reality, they never actually addressed the problem. So it's almost like what could have been a time asset that could make sure you never have to solve that problem again has now you've turned it into a time debt. Yeah, you now have this social debt that has to be paid back. It's like the underlying tension, the underlying problem among the employees or in this particular circumstance has not been resolved. And it's just sitting there waiting to be paid, right? Is email a time debt?

Email's an interesting one because the more that you send email, the more you get it back, right? If you reply, that's why I hate it so much, James. Yes, I know. So, yes, I would say that it is a form of time debt. Every time you send an email, you are now indebting yourself to the response, at least reading it if not responding to it, well, the next time. So you can already see that it's necessary to spend some time on time debts because of how

things function. But you can also see the value of focusing on time assets, particularly high leveraged ones that really can pay you off and scale in the long run. So the more that you can shift your attention from time debts to time assets, I think the more productive you're going to end up being. How do you kind of evaluate how you are using your time and what is the ideal that you're shooting for or what does a win look like for you? This has been something I've felt much more strongly since atomic habits has come out, this has done so well, I now have more to,

I basically need to be better at prioritizing than I was before. And I'm still struggling with it. It's definitely still something I'm learning to get better at. One challenge that I've noticed that I think a lot of people probably feel is the choice

between doing something that you know is going to pay off more in the long run. So like, for an example, in my case, writing a new article from my site or working on another book,

that's going to build my own email newsletter list, going to build my platform. I know it's going to be a really high payoff in the long run. Like, for example, my own email list was the single biggest driver for the book launch when it came out. Or do I do like a keynote speaking event, which will pay me more money up front.

Like I don't really get any money from writing another free article today. You know, all that payoff is down the line. So there's like the immediate win versus the long term win. And man, it's really challenging to make that choice, even if you know it's better in the long run because we seem to be wired. I actually write about this atomic habits as well, but we seem to be wired to prioritize the immediate gain. We seem to be wired to care more deeply about the short-term win than the long-term one.

And so I think that it's an exercise in continually teaching yourself to think more long-term. And maybe there are ways to get over that a little bit. For example, if you can really envision the big picture thing you're working toward, where you're like, the more concrete, the more almost like you can taste, it, how big the opportunity is if you focus on this long-term thing, the easier it becomes to say no to the short-term one. But I'll give you one tactical strategy that we've used, which is most of the opportunities that come to me, come through email. And if I'm reading my own email inbox and then I just come across an email, it's like, hey, you could do, you know, this thing

doesn't sound interesting and cool. And a lot of it is great. And if I respond right then, I'm much more likely to say yes to things that I probably should not say yes to. So what we've started to do is collect all of the opportunities that come in each week and put them in a list. And then at the end of each week, with my team, I sit down and we review them all together. And then we decide, is there anything on here that we should do? And it's remarkable how often everything is a no. Or there's one or two things out of 10 or 15 that we should do. And maybe I would have said yes to six or seven if I was just judging them individually as they came in. So there's something about gaining a little a space and adding the perspective of seeing how each opportunity fits in overall with your

business. If you evaluate opportunities individually, you're like, yeah, that sounds like a pretty good use of time. If you evaluate them collectively, then you're like, okay, we know what our goals are for the business. Not all these things are going to fit in. We got to cut most of this. It sounds like you're drawing pretty direct link between productivity and prioritization. What is something actionable and small that you would recommend business owners do to start bringing a sense of priority to the madness. What's the action you would recommend? Well, prioritization can only happen if you reflect and review. And so I think probably the habit to build is a habit of reflection and review. And that can look very short term. Like, for example,

in high school, I started making a list the night before of the main things I needed to do the next day. And I should probably do that more now that I do. You know, like that's a very valuable exercise to make sure that you're very clear on what the priorities are for the next 24 hours. Or it can look like a really big picture thing. So one thing that I am a little bit better at doing now than I was before is I have an annual review that I do at the end of each year. And what I do is I have three questions. First question is what went well this year? So kind of a chance to pat yourself on the back. Second question is what didn't go so well this year? And then the third question is, what am I working toward? And it's a chance for me to look back on my habits. Like I write down how many

workouts I did and how many each month, how many articles I wrote, how many new places I traveled to and so on, and whatever the importance of things are for you to track. And then what you start to realize, once you get through that whole exercise, get to the end of the review, is, okay, I've got a collection of habits that maybe are no longer serving me anymore. Maybe those need to go. I've got a collection of habits that are things that I say are important to me, but actually turns out I didn't really show up and do those very much. Maybe those need extra focus next year. And so I think reflection and review on different scales, daily versus monthly versus yearly, that can be really helpful to make sure that your habits are staying aligned with the productive

actions you want to be taking. I think that's probably what prioritization really looks like in the real world is like, let me reflect on what I have available to me and what habits I'm actually repeating and make sure there's a match between the opportunities and my behavior. There are so many parallels to the way we teach personal finance here with regard to playing the long game and eliminating debt and making sure that you're investing in things that compound over time. And I know that that kind of parlays into how you talk about having a continuous improvement mindset. And so I'd love for you to lay out for our audience. What is a continuous improvement mindset?

What does that actually look like in action? Well, the phrase that I like is habits are the. compound interest of self-improvement. So the same way that money multiplies through compound interest, the effects of your habits multiply as you repeat them across time. So if you have good habits, time is your ally. You just need time to pass. Let those gains compound. Let yourself make a little margin of improvement each day and let it work for you. If you have bad habits, though, then time becomes your enemy. Every day that clicks by, you dig the whole a little bit deeper, put yourself a little bit further behind the eight ball. So for that reason, I like to think

about how can I get 1% better each day? And I mean that not necessarily in like a perfectly mathematical way. You know, oh, is this 0.75 or is this 2% or whatever, but just more in the philosophy of improvement of in each thing that I do, can I carve out some small margin here? Can I try to find a little advantage or a tiny foothold, a certain, you know, a small way to do this a little better than I did before. And if you can find some area each day to get 1% better at, what happens is those areas start to layer on top of each other. They start to multiply and compound. And you get to the end of the year and man, you can be really surprised by some of the results you make. And certainly that's true if you get to the end of two years or five years or 10 years.

And I think as kind of an accelerant to this process are some of the things that we just mentioned a few moments ago, particularly about thinking strategically. What are those high leverage tasks? What are those tasks that continue to work for you after the work is done? What are those time assets? And if you build habits on high leverage tasks, well, man, then you can really take off. Because ultimately, the results that you get, if you're not putting work in, if you're not giving a high effort, then it doesn't matter how good your strategy is. Everything goes to zero. But if you are already putting effort in, then if you're already working hard, man, it really counts for a lot to think about your strategy to making sure you're working hard on the right thing. So I would summarize that as saying effort sets your floor, strategy sets your ceiling.

And if you're willing to embrace that idea of we need to work hard and we need to work on the right things, and then you start looking for 1% improvements each day, I think that's what continuous improvement looks like when you really get the ball rolling, get that cycle kind of flowing day in and day out. It seems like it takes a tremendous amount of discipline to have the focus necessary to say, okay, I'm going to continually improve on these few things instead of just throw myself at everything. What do you recommend the leader who has no shortage of opportunity, no shortage of people they can invest in, no shortage of tasks they can accomplish? What do you recommend they do to find the focus necessary to actually apply themselves to that strategy?

That's a great question. I mean, I think this is why the 80-20 rule is so popular, you know, because everybody is faced with that. It's just the process of 80-20ing it again and again and again. You know, what are the minority of my actions that drive the majority of my results? Just keep asking that question to yourself. And if you do that, then you start to separate the waste of time or the good uses of time. That's actually the real key. Separating the good uses of time from the great uses of time.

You know, most people, if they're fairly effective, it's easy to not waste time that much. Like, most business owners aren't like wasting hours a day on YouTube or something or playing to do games or whatever. But if you're not doing that, what you do find is that typically they're spending time working on, say, priorities three through five rather than one and two. And so it's the good uses of time that often act as a distraction. And the challenge is that focus is the art of knowing what to ignore. And only the expert knows what to ignore.

And so focus and simplicity usually only come, at least at a high level, after a period of experience and trial and error. You have to try a variety of things to learn what those minority of actions are that drive the majority of the results. And then you have to practice the 80-20 rules so that you can master that art of what to ignore, master the art of saying no. Steve Jobs has a quote, I'll just paraphrase, but roughly he's saying that I'm more proud of all the products we said no to than I am of the products that we said yes to because it was all the things that we said no to is all the priorities, all the opportunities that we turn down that created the ability for us to focus so deeply and so well on creating a few products that end up

changing the world. And so I think all business owners to some degree need that level of focus, need that ability to know what to ignore and to practice the 80-20 rule. I've never thought about it this way, but Dave, our founder and still the CEO of our 900-person company here, he talks all the time. He says, whenever I get back in the business, the things that draw me back in the business, he says, are things that are brand new, that we've never done before, things that are broken, or things that my face is on and I'm the product. And it's like what he's doing there is he's clearly saying this is my focus, but he's also knowing what to ignore in those moments as well and knowing what to let other people in the organization focus on. That's a powerful

concept. So as we kind of are endeavoring into 2020, what are the things that you think would set people apart in terms of being able to actually implement this stuff this year. What are the actions you would say people should take or the books they should read or the things they should do to set themselves up for a win in 2020? Well, first thing, just let me give you just a practical idea to use. I think particularly when you're talking to ambitious people, driven entrepreneurs, people who are go-getters, you know, like they get things done. It's very easy if you're ambitious to bite off more than you can chew in the beginning. You know, you get really motivated, to think about everything you want to achieve.

Instead, I like to recommend early on, at least for the first week or the first month, it's meaningful to practice what I call the two-minute rule. Two-minute rule just says take whatever habit you're trying to build, whatever this new behavior is trying to instill, scale it down to something takes two minutes or less to do. So, you know, write every day becomes write one sentence. Or do yoga four days a week becomes take out my yoga mat. And people resist that sometimes because they're like, okay, I know.

know the real goal isn't just to take my yoga mat out. Like, I know I actually want to do the workout. So if this is some kind of mental trick, like, why would I fall for it? I have a reader, the name is Mitch. I mentioned him in the book. He ended up losing over 100 pounds. And he had this personal rule for himself where for the first six weeks he went to the gym, he wasn't allowed to stay for longer than five minutes.

So he'd get in the car, drive to the gym, get out, do half an exercise, get back in in the car, drive home. And it sounds silly. It seems like the kind of thing we're like, this isn't going to get the guy the results that he wants. But if you step back and look at it from a high level, what you realize is that he was mastering the art of showing up. He was becoming the type of person that went to the gym four days a week, even if it was only for five minutes. And I think that's a real deep truth about habits,

that a habit must be established before it can be improved. And so whatever the new habits are that you're trying to establish in your company, look for a small way to instill them or in your personal life, right? How can I become the type of person who shows up? And if I master the art of showing up, well, then I actually have some raw material to work with. Then I have something I can expand and optimize. But so often we're focused on finding the perfect business idea, the best diet plan, the perfect workout program. We're so focused on optimizing that we don't give ourselves permission to show up,

even if it's just in the small way. So I think that that's a really effective way to start. Scale it down and master the art of showing up. How do you set expectations for the new year? So I think I've made the mistake before and I've seen other business leaders do this where they set their expectations and their expectation. They would never say this, but they're like, okay, I've got this goal. I've got this plan. And it's all going to go perfectly according to plan.

And so then the one day that it doesn't is the day it all comes tumbling down and falls apart. So how do you set expectations knowing that it's probably not going to be perfect, but here's how I'm going to apply myself. Well, one thing you can do is have like an if-then plan or a plan for failure is basically the idea. You know, like, okay, if my kid is sick and I can't run on Monday, then I have a plan to go to the gym on Tuesday morning. Don't usually do it, but that's what I'll do if I get pulled off track. Or if we can't get these sales reports out by Thursday at 4, then I'll come in early the next morning and get them sent off or whatever it is. But it's having some backup plan. That's just useful to have because things are not always going to go to plan.

But I think from a bigger picture view, there's probably something more useful to think about. And before I say this, I should mention, you know, I'm a type of person. I have set goals for all kinds of things. I've set goals for the weight I wanted to lift in the gym, for the grades I wanted to get in school, for the revenue I wanted to hit in my business, all kinds of stuff. But at some point, I realized that setting the goal was the easy part. And there were all kinds of goals that I had that I didn't achieve. And it was like, well, if you set goals for things you do achieve and set goals for things you don't achieve, then the goal cannot be the thing that makes the difference. right? So goals may be necessary for success, but they're not sufficient for the progress that we want. And instead, what I think is more useful is to focus on the system rather than the goal. And so when you mention setting expectations, how do you manage expectations in the new year for yourself, for your employees and so on? Usually what people think about is, well, I'll manage expectations by telling them what my goal is. But I think instead we could shift and say, let's manage expectations by talking about what the system should be. And I would define the system as,

the collection of daily habits that we get you to your desired outcome, the goal. So often when we talk about changing, we talk about setting bigger goals for ourselves. You know 10x our vision. Let's think big. Let's be more ambitious. And certainly goals can be useful for setting a sense of direction and clarity, determining what to work on. But I think the truth is you do not rise to the level of your goals. You fall to the level of your systems. If there's ever a gap between your desired outcome and your daily habits, if there's ever a gap between the goal you have and the system you run, the daily habits will always win. The system will always rule the day. And in fact, we could say, like, whatever results you have right now, whatever your results are in life or in business or

wherever, your current system is perfectly designed to deliver your current results by definition. And so if you want different results, it's not the outcome that needs to change the system that precedes it. It's not the goal that needs to change. It's the habits that drive it. So, I think if we're setting expectations, a shift from product to process or from goal to system is probably a healthy way to do it and to discuss it with your team. Probably all year long, but maybe 10x more in January, there is a lot of noise that is almost in direct opposition to the path that you are advocating for, right? And the noise is about big change and dramatic improvement and massive results in the future. People losing 40 pounds

in two weeks, right? And it can be so easy to get swayed or persuaded by those messages because they're so prevalent. So what is the final word of encouragement you would give to people just to keep their eye on slow and steady improvement over time? I think, you know, we've covered a variety of things so far, talking about getting 1% better, about every action of the vote for the type person you want to become, two-minute rule, you do not rise to level your goals, you fall to level your systems. All of those concepts, if you can just take one, one of those little ideas, like a little seed that you can plant in your mind, walk around, like maybe just look for opportunities for where you can implement that. I think that will have made the time listening to this, totally worth it. If you just

have one little concept, you can walk around and look for, okay, how can I get one percent better today? Or how am I focusing on my system today rather than my goal? How am I casting votes for being the type of person I want to become? Those questions that you can carry around with yourself, it's almost more about and maybe this is my parting word, it's almost more about having a good question to ask to yourself consistently than it is about knowing the answer because the answers are going to change based on the context.

You know, nobody can tell you exactly what to do in your business or with your life and nor should they because it's yours to live. But having a good question to ask, well, then you can start to, if you have a good question, that's almost like half the battle to getting a good answer.

And so by being able to walk around and ask yourself some of those questions, I think that should be a useful way to implement some of the ideas that we've talked about. Well, James, we're grateful for the work that you've done and for your willingness to share it with myself and our entire audience. Now we need to go put it into action and make this episode a time asset for everyone that's listening. So thanks for your time and for your insight. We really appreciate it. Wonderful. Thank you so much.

That just sets us up to hit an absolute home run in 2020. I'm a big believer in that idea that the things we do daily, create the leader that we become permanently. And I think all of us have probably tried to be super intentional about where we're spending our time, but I've never personally looked at it the way that James described by labeling what is a time asset and what is a time debt. What is the time that we're investing for a greater future? And what is the time that's going to create more waste and more work in the future? And so we wanted to do our part in helping you identify the time assets and time debts in your life by giving you the Entree Leadership

Time Tracker. Now, this PDF is a really simple form that's just going to encourage you to develop the discipline of being intentional about where you are spending or investing your time. Over the course of the week, we're going to track every 30 minutes where our time is going, because if we can identify where it's going, we can eventually move to telling it where to go. And so if you want to download this free PDF resource, you can click the link that's in the show notes and let's start tracking our time. Well, I hope you enjoyed this episode of the Entree Leadership podcast. If you did, please give us a five-star review and tell your friends to subscribe. For a chance to win a $25 Amazon gift card, you can review this episode by clicking the link that's in the show notes.

And be sure to follow us on social media at Entree Leadership. This episode was produced by Tim Hull and it was edited and mixed by Will Rutter. I'm Alex Judd and on behalf of the entire Entree leadership team, thanks for listening. We'll talk with you again very soon. If you enjoy this podcast, you should check out other great podcasts from the Ramsey Network, like Borrowed Future. Not so fun fact, America has a $1.6 trillion student loan crisis and it's out of control. I'm George Camel, host of the Borrowed Future podcast where we uncover the underbelly of the student

loan industry and show you what you can do about it. It'll inspire you to see that it is possible to avoid student loans and graduate college debt-free. Listen to borrowed future wherever you listen to podcasts.