We Are Born Liberal and Need to Be Raised Moral, Mature, Wise and Responsible

We are all born liberal. We need to be raised Right in order to be moral, mature, wise and responsible.

The average 15-year-old in 19th century America and earlier was engaged in what we consider adult responsibilities.

  • John Quincy Adams started his political career at age eleven traveling as a diplomatic assistant in Europe; he then served as an ambassador assistant in Russia at the age of fourteen.
  • David Farragut, the famed 19th-century maritime officer, started his naval career at the age of nine and was given command of a captured British vessel at twelve.
  • Laura Engels Wilder was a public school teacher at age fifteen.

The maturity that earned these three adult responsibilities was not unique among young people but was typical of most teens throughout world history.

At some point, parents confused maturity with “independence” and granted their immature children autonomy early in life without having taught them the three elements of maturity: Self-control, Wisdom & Responsibility

Today’s kids may learn “survival” skills and increase in sophistication, but they do not grow up as mature, responsible, wise adults.

A self-controlled person has all the normal passions but is not ruled by them.

Wisdom is not the same as being smart; A wise person learns from mistakes, makes sound decisions and handles stressful problems with reason and a level head. People with wisdom are rational because passion does not cloud their thinking.

Responsibility means accepting personal accountability for your own actions.

We have a moral problem today for one simple reason, a lack of self-control. The inability to say NO to every whim and passion.

[Source: Born Liberal, Raised Right by Reb Bradley]

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The Goose and the Golden Egg

Almost anyone can deliver results for a quarter or two but the real challenge is to create a business that can sustain both the Goose and the Golden Egg, year after year.

Delivering superior performance while building the production capability to deliver it, again and again, is the very definition of greatness in any enterprise.

Why is this so?

Aesops Fable: The Goose and the Golden Egg

There once was a country farmer who discovered in the nest of his pet goose a glittering golden egg. At first, he thought it was some kind of trick to deceive him. But he decided to have the egg appraised and to his surprise discovered the egg was pure gold.

He becomes more excited the next day when the goose lays another golden egg. Day after day, he continues to find another golden egg. He becomes fabulously wealthy.

But with wealth comes greed and impatience. Unable to wait day after day for the golden eggs, the farmer kills his goose in order to get all the golden eggs at one time.

But when he opens the goose, he finds it empty. There are no golden eggs – and now he has no way to get more.

The farmer destroyed the very thing that produced them.

Within this fable is a key principle to sustainable success.

Sustaining success is a function of two things: What is produced [the golden egg] and the capacity to produce [the goose].

If you only focus on producing the golden eggs and neglect the goose [building production capacity for tomorrow] you will soon be without the golden egg.

The key lies in balancing of Achieving Results and Building Capability.

Operating from your 80/20 Sweet Spot is one way to achieve this balance.

We approach the goal of superior performance by helping you focus on and deliver specific results and build more sustainable production capability.

Under these two areas [Achieving Superior Results and Building Sustainable Capability] we work with you in three areas:

Achieving Results 

  1. Execution of Getting the Right things Done. Achieve specific results like increasing sales, improving quality, scalability, clarity of marketing messaging, or other specific initiatives that are in alignment with your overall goals, guiding principles and mission.

Building Sustainable Production Capabilities

  1. Developing Principle-Centered Leaders. We help build sustainable leadership capabilities based on principles, character, alignment and the ability to achieve consistent   We build principle-centered leaders.
  2. Individual effectiveness. We help small business enterprises to increase the personal performance of their staff.  We build personal greatness.

 

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Word of mouth

Whenever I speak to a business owner about how they market themselves, the most common answer is – Word of mouth.

That answer tells me this business has very likely plateaued and become mired in the status quo because while “word of mouth” marketing is great, it’s also painfully slow and a very unreliable way to build a business.

Word of mouth is the equivalent of a free lunch.

It’s great when it comes your way, but do you really want to rely on it to feed yourself and your family?

It takes a lot of blind faith to build your business on this method and is a very dangerous path to take.

Referrals have to be proactive, orchestrated and systematized.

Once you understand the psychology behind referral marketing, you’ll never take a passive approach again.

Think back to a time you recommended a restaurant or car dealer to a friend.

Did you do it as a favor to the restaurant or car dealer or did you make the referral because it made YOU look and feel good?

You did it because you wanted your friend to have the same great experience you had.

Keep that psychology in mind when proactively orchestrating your own referral marketing system.

It has to be reliable and deliberate.

When I first got into the car business I learned my automotive marketing and selling practices from the worlds greatest salesman – Joe Girard.

His system was created because of his “Rule of 250” he learned by observing the average attendance at a funeral was 250 and for weddings, the average number of guests was 250 for the groom and 250 for the bride.

He realized that if every person he met knew an average of 250 people then every person he did business with represented a potential 250 referrals.

So systematizing your process of delivering your product or service so that it was an exceptional experience and systematizing your nurturing and referral process is critical to growing your business.

Word of mouth is nothing more than a hope and a prayer method.

The optimal strategy for referrals is to have a system of consistently asking for one.

By putting a system in place for generating referrals, you dramatically increase the reliability and constancy of word of mouth marketing.

Relying on the goodwill of others is a fools’ errand.

The best referrals come from your ideal best customers so build your referral system around two things.

  1. Target your ideal best customers – the 5% to 20% that generates 65% to 80% of your business.
  2. Focus on the specific problem this group of potential customers has that you have a unique solution to.

If you are a B2B Biz, we have a technique called “Vendor Well” that is a unique and effective word of mouth referral system.

 

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Cash Is King

Remember this statement: Cash is King

Here’s an all too familiar scenario.

At the end of the quarter, your accountant calls and says “I have good news and bad news.”

The good news is you made a profit.

The bad news is you owe $50,000 in taxes and you don’t have the cash available to pay.

Now what?  You either borrow money from a bank or you can go to your investors and ask for a cash infusion.

Neither are pleasant nor long-term solutions.

How many small business owners actually understand their financial statements well enough that they can and do make intelligent meaningful decisions so they can make more money?

I would venture to say less than 20%.

Successful businesses do two things

#1 they make money and #2 they generate cash.

How many of you understand the difference?

You can make a profit and still go out of business because you have a negative cash flow.

Cash flow will keep the doors open, long after profitability will.

Making money is about your profitability and cash is about the wealth-generation of your enterprise.

You can’t spend profit; you can only spend cash.

I heard a great analogy from a man named Mike Holly.

In the financial statement story, there are three characters: Vanity, Sanity, and King.

Revenue is Vanity

Profit is Sanity and…

Cash is King

Everyone wants to grow their business but they mistakenly believe growing revenue or sales is the end-game. It is not.

Those that chase growth based on Revenue are on a fools’ errand. It causes you to make bad decisions because you are operating from the notion that everyone is your market and there is nothing further from the truth.

When Revenue is your end-game and everyone-is your-market is your mind-set, you spend money foolishly on things that don’t matter for customers that don’t matter.

Things like inventory for the 80% that are generating little to no profit.

Sanity is looking at the world in black and white. Sanity hates being in the RED.

Sanity manages costs and expenses so that margins are high – both gross and net margins are important to Sanity.

So, here is the short Story-line for the characters:

Vanity goes out and generates sales or revenue. From that revenue, we deduct the cost of the product or service which leaves us with gross profit and that’s where Sanity steps in.

Sanity’s role is to manage those costs and the overhead expenses associated with running the BIZ; things like rent, utilities, wages, employee benefits, insurance, etc, etc, etc. So, we deduct these additional expenses and that brings us to net profit.

But wait, the business then has to pay taxes, and sometimes distributions to investors. What is left is called retained earnings or for this simplified version – cash.

The King hates surprises. The King wants consistent positive cash flow.

Bottom line: You want to be operating from your 80/20 Sweet Spot so that not only are you making a healthy profit but you have a consistent and predictable cash flow month in and month out year-in and year-out.

Implementing our Profit First system will cure this.

Cash is King.

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Seventy to eighty percent of all small businesses are unsaleable on either the terms or timetable the owner wants because they’re not operating from their 80/20 Sweet Spot

80/20 Sweet Spot Rule of Thumb:

If the owner IS the business, it’s worth nothing.
If the owner runs the business, it may be worth something.
If the owner cashes a check from his yacht, and the business is totally independent of him, then it is worth money.

Think back to when you first started your business.  You were driven to create something out of passion or a particular talent. The vision probably included not only providing a good life for you and your family but probably also leaving some sort of legacy for your family, employees or community.

It is unlikely you even thought about your Exit Strategy; about focusing on growing the value of your business as well as making it saleable.

But you should have.

Maybe now you are one of the 6 million-plus baby-boomers who own a business and the thought of saleability is just beginning to loom.

Here are some sobering thoughts: [source: Exit Planning Institute]

One: 70-80% of all small businesses are not saleable for the terms and/or timeline the owner wants because it won’t pass the due diligence test. One of those tests is whether the business is dependent upon a single person or small group of people – lack of systematization.

No sophisticated buyer is going to even want to purchase a business like that.

Two: 80 to 90% of an owners financial wealth is locked up in their businesses.

Three: 63% of the business owners indicated they needed the income from the business to support their lifestyle.

Four: 56% of the business owners indicated they needed to harvest the value of their business to support their lifestyle post-transition

How devastating can these scenarios be to an owner who is planning on the sale of his business to fund his retirement?

How valuable would your business be if you had the following:

  • Great customers who spend 4x’s, 16x’s and even 64x’s the average. Who are a joy to work with. Who refer others just like them. Who pay on time with no hassle. Who fit perfectly into your culture, values and Guiding Principles.
  • Employees who are motivated and engaged.
  • An offering or offerings that are unique enough to differentiate you from your competition.
  • Teachable Processes & Systems – so that the success of your business is not dependent on any single person or team, most specifically, you the owner.
  • Profitability and cash flow far above industry norms.

All of these things happen when you are operating from your 80/20 Sweet Spot and can all happen within a very short period of time.

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What are your Guiding Principles?

Guiding Principles are the core values, laws and rules we each live by. They define who you are, how you make decisions and they define your business.

In business, just as in life, eventually you will come up against a lot of people and situations that challenge your principles and core values. It’s vital to your success and emotional sanity that you never lose sight of who you are.

Guiding Principles are a blend of your personal ethics, core values and the personal rules of success we have defined for ourselves, on what is right and what is wrong. What is acceptable and what is not. What makes you happy, and what doesn’t. Your Guiding Principles hardly ever change. They are the “voice” that guides your every decision for life.

Guiding Principles trigger that nagging voice in your head that punishes you when you break them and give you the reassuring pat on the back when you follow their guidance. It is the conscience that keeps you on the straight-and-narrow path to right decision and becomes the very soul of your business.

If you want to leverage their power, make them part of your daily conscious thought. Start paying attention to your emotions in different situations. Every time something triggers strong negative emotions (like anger), ignore what triggered it for a moment and think about what Guiding Principle of yours has been broken. Similarly, when you feel strong positive emotion (like giddiness) think about why that incident made you feel good. Those inner thoughts and feelings are your Guiding Principles.

Some examples of Guiding Principles are: [note how each is written out and clear to understand; no one word platitudes!]

  • Honor all Commitments – both the spoken and unspoken ones. If you say you are going to do something and 30 seconds later you realize it is going to cost you more in time, effort or money than you thought, tough! Do it anyway. There are few things more valuable than your own reputation and integrity. (Note: One of the easiest ways to Honor every commitment you make is to Under Promise/Over Deliver).
  • Compatible: Do not spend an inordinate amount of time trying to convince someone who does not want what you have to offer. Life is all about relationships – the right relationships. Surround yourself with people who support you, support what you are doing, and root for your success.
  • Be Honest and Transparent – Clarify Expectations (make sure everyone fully understands including yourself) Avoid platitudes like the plague.
  • Win-win or No Deal thinking: This is why I implemented One Best Price. Life’s too short to deal with a ding dong. I don’t mind honest negotiators but I have no time for win-lose negotiators.  That is someone who not only feels it’s okay to leave nothing on the table for the other side but thinks they have to take the table as well.
  • Under Promise/Over Deliver: Go the Extra Mile.  Always do more than is expected of you. 

    You want people like you, to like you.  So, create and nourish relationships who have your same “Speed of Trust”.

    Choose to work only with the 20%!!

    Your best customers share your same worldview and Guiding Principles

    Write down your own principles. Over time, as you get to know them better, refine them. Make them concise. Make them conscious. Your Guiding Principles will keep you on track.

 

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How to Develop Good Judgment

Good judgment never comes from book smarts but rather from street smarts. The school of hard knocks. There is a huge disconnect from what our schools and universities teach and what the real-world demands.

People with high IQs can and often do make some really stupid decisions.

What is it, then, that smart people do right? What qualities do they have that set them apart from the rest?

Mostly, they make better decisions, especially when it really matters.

“In life you only need to make a few good decisions, so long as you don’t make too many bad ones.” – Warren Buffett

Here are three effective strategies you can adopt in order to improve your judgment:

Be Honest about Current Reality: Although as created beings, one of the ways we are created similar to God is the attribute of rationality, we are also created with emotions, and almost always poor judgment is a result of being driven by our emotions without any regard to our rational side.

The very first thing we need is be honest about our own assumptions, prejudices and biases if we are going to be able to overcome them.

As created beings, we are created in the image of God with four common characteristics.  We are:

  • Rational – we have the ability to think and reason.
  • Volitional – we have the freedom to choose.
  • Emotional – we feel.
  • Relational – we long for relationship.

Be Proactive: People with great judgment are proactive in that they assume responsibility for their decisions and thus can live with their mistake. They are not self-deceived and do not seek to deceive others. People with good judgment are not afraid to make a decision because they have the integrity to be able to live with the decisions they make.

Learn from your Experiences: Once you are aware of your own assumptions, prejudices, and biases and accept responsibility for your decisions it then comes down to learning from those decisions, whether right or wrong.

 “Life is a series of experiences, each one of which makes us bigger, even though sometimes it is hard to realize this. For the world was built to develop character, and we must learn that the setbacks and grieves which we endure help us in our marching onward.” – Henry Ford

The best decision-makers in the world succeed because they have the ability to capitalize from their mistakes, keep refining their judgment, and set their emotions in the rightful place. It’s this self-awareness and self-coachability enables them to become known for having world-class judgment. Every decision they make is another opportunity to learn and get better.

Whoever is wise, let him understand these things; whoever is discerning, let him know them; for the ways of the Lord are right, and the upright walk in them, but transgressors stumble in them. – Hosea 14:9 ESV

 

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