Episode 171 – Five Things you can do to run a successful business and thrive personally
Steve Shallenberger: Welcome to our Becoming your Best Podcast listeners, wherever you might be in the world today. This is Steve Shallenberger, your host, and I’m excited to talk about one of the 12 Principles of Highly Successful Leaders, today. Happens to be Principle Number 10: Apply the Power of Knowledge, and this, specifically, in five key factors in running a successful business and thriving personally. And imagine the confidence that comes from having a clear pathway on things that you can do to run a successful business. I mean, just think about the mortality rate of new businesses, start-ups. 50% are no longer in existence within five years. One, out of two, will fail. And that’s 75% within 10 years. So the question is, how can we be one of those, the 25%, that are still thriving after 10 years? And it’s not easy in the world’s economy, but I’m gonna talk about five things today, that you can do, in running a successful business.
Steve Shallenberger: Now, I’d like to give a little credit to my business partner, Dave Clark. We’ve worked closely together for 40 years. He is one of the best business people I’ve ever met. He is considerate, he is thoughtful of others and has developed outstanding business acumen and standards of how to run a successful business. These five basic factors, we have used over, and over, and over, again to keep us on track, and the results are consistent about standing high performance. This is the endgame. This is what we all want to achieve, right? We want to prosper, we want to be successful. So, what are those five factors that contribute to that type of an outcome? And you may tweak these, depending on your industry, but they are as dependable as night and day, and they apply to large firms, multi-billion dollar firms, small firms, 500,000 whatever it might be. They apply just the same. Let’s just get right into them. Here are the five, first I’ll give you a quick overview and then let’s just talk briefly about each one. The first one is Having a Strong Economic Engine. The second is High Quality, third is Safety, fourth is Customer Service, high customer service, and the last one is Control your Cost.
Steve Shallenberger: So let’s go back and hit the first one. Let’s hit the business side first, and then we’ll just make a reference to the personal side because it applies on both ends of the spectrum. What we’re really talking about, when we think of economic engine is that you have a product or service that can produce a reliable income stream for you. And it’s understanding, from beginning to end, how to deliver that widget, and that you can do it successfully. So, for example, if you’re running an organization, you know it takes 10 contacts to produce one sale, and the average is $10,000, and that you know how to consistently do this. You know what contributes to every part of that. Now, you can start scaling that idea. That would be a proven economic business, economic engine. In other words, we push the button here and the results come out here. And it’s predictable. And once you have a successful model, you expand the model. So, I’d like to invite each one of you that’s listening today, if you’re running a business, or a Division Manager, or a Department Manager, what is your economic engine? The mindset, here, is to maintain real growth from year to year. So, I invite each one of you, when we think of economic engine, not just now, not just this week, this month, this year, but also think out into the expanded future. And how does our economic engine look in two years from now, five years from now? And we want to build with this mindset, in the back of our mind. We call it, maintaining real growth, having an economic engine that we tweak, we build, we produce additional engines and different channels, that gives us this type of result that we hope to have, an ongoing successful organization.
Steve Shallenberger: Let me give an example of this. One of my early companies was a publishing company. Our products were educational products, were sold to the home, and we recruited college students who would sell during the summer, and that this was a proven model. We knew that the average rep, could do X in volume, sales volume. Let’s say it’s $50,000 per rep. That’s a good number. From that, we knew that we could produce the product. If we had so many reps, here is how the production look, and that we would have Z left over. It was the operating income. So we understood, from beginning to end, every aspect of the delivery of that product. As a result, what we were able to do, over a six-year period of time, is we scaled from having 30 reps, to the next year to 60 reps, to 120 reps, to 175, to 300 and ultimately, to 500 reps. And this is how we built the economic engine. And this is what we saw. Now, with time, we also wanted to think in terms of diversification. So, when you think of your economic engine, how do you diversify, so that you strengthen your capacity to maintain real growth over time? And this is diversification related to markets or products. And we’re trying to spread the risk if a particular market channel becomes attacked through disruption or competition, or Government regulation, or whatever it might be, that we have other legs to stand on, and we can diversify by industry products, services, location.
Steve Shallenberger: One of the standards that we set up for ourselves, is that no division would be greater than 35% of our revenues. This is part of our diversity program so that we can have an economic, combined economic engine that was healthy, and strong. And as you think of the spirit of maintaining real growth and innovation, and bringing on new products, whether it’s taking what you’re good at, and applying it to another area, or adding a new product or service, to an existing core set of business, what you want to do is really allow 12 to 18 months to develop a new product line where possible, or service, before phasing out the old lines that you had, or the existing markets. And this creates much more of a predictable process so there’s less disruptive to your business. So, that’s what I’ll say, that’s number 1: Economic Engine. You wanna build strong economic engines and if you look at your organization or your business, just say, “Wow, I’m not sure I can really say, if I push this button, I’m gonna get this result.” Well, the advice is to really work to understand every facet of your business, even if there’s small business channels, to say, “Do I have anything that gives me a dependable result?” Well, that would be an economic engine. From there, how do we expand that, and how do we build multiple channels that protects our business over time. And, just keep pushing, until you find that dependability that you’re looking for in an economic engine, so that you’re not disrupted.
Steve Shallenberger: Okay, well good enough. And as you think about this aspect, let’s just switch to the other end of the spectrum, which is personally. Remember, you are the product and the service, as far as it comes to an economic engine. Your ability, your self, your energy, your attitude, the skill base that you have, all gives you the capacity to make a difference. What makes you unique. Whether you’re in sales, or leadership and management, you could be in IT, a technician, administrator side of the team, so what you want to ask yourself is, how can I be the very best at what I do? If I’m an HVAC technician, how do I become one of the very best HVAC technicians in the United States, or in the world? That’s the idea. That’s the mindset, but now build the skills set, so you’re always learning, reading. Let’s say that you’re in sales. This is one of the things that you can do, you can say, “Okay, one of my goals for this year, my vision is to be one of the best sales reps in my organization.” So, the goal, whatever year you’re in, but your annual goal would be, “I am going to read 12 books on sales. I’m gonna take to lunch the top salespeople.” So, this is a way, then, to build this economic engine, your capacity to make a difference. “I’ll listen to podcasts, rethread my skills.” I was just talking with a friend the other day, and we also discussed this on a recent podcast, that if you have an IT student, that’s in technology, that’s a freshman at college, by the time he becomes a senior, many of the things that he/she learned, as a freshman, are already outdated. So, if things are changing very quickly, we need to stay ahead of the curve and be determined that that is exactly what you will do. Okay, that’s the number one factor, is having a reliable, strong, predictable economic engine that we’re always cultivating.
Steve Shallenberger: Second, is have High Quality. Do it right the first time. And whether it’s a product or a service, provide a high-quality product or service, that you stand behind. Peter Drucker, such an inspiration, he became one of the very Chief Consultants to Japan, during reconstruction. And, there was a time that I remember, when, if it said, “Built in Japan”, people would laugh, because of the poor quality. Well, that is no longer the case. Peter Drucker helped inspire the entire reconstructed industry of services and markets to build in the product or the service that you had, processes of high quality, right from the get going. The high quality is built right into the whole system, so that’s the result of it. And the result is, Japan completely transformed the end result that they got, in terms of their economic apparatus. It became a high-quality apparatus. That was the norm. And if you think about Japanese products today, where there’s technology, automotive, financial, etc., these are all very well thought of with high quality. This is what we want to do, building high-quality services, right from the beginning. On the personal side, imagine what you would like to have your employees do in terms of delivering high quality. What’s the mindset and the skill set? What do they do? Both think and do.
Steve Shallenberger: I think I can illustrate this with the determination of being a finisher and developing a high-quality result, of doing the job 100%. Leaving things better than when you found them. I’m gonna use an example of our fifth son, Daniel, who is really an extraordinary individual. After graduating from college, he worked for Becoming Your Best for about five years. And it was close to have, he and wife and children lived fairly close and so they helped on a number of projects. I remember one time, that Dan went up on a roof with a ladder. When he was done, I came out at the end of the day, and the ladder was left out. So I thanked him later for helping with the job, but I asked him why he wasn’t a 100% finisher? In other words, why didn’t he finish the job and put the ladder away? And he has become outstanding, at high quality, and being a 100% finisher. We really laugh about that. Right now, he’s getting his International MBA at Thunderbird, in Phoenix, Arizona, and what a resource he is. He’s amazing! But in all of your work, this is what we ask ourselves: how can you be a 100% finisher and leave things better than when you found them? And this takes SA. SA is Situational Awareness. And asking the question in the first place. Have I left anything out? How do I wrap this job up, so I’m leaving it better than when I found it? So that there is personal pride in the work that you deliver, and that someone doesn’t have to follow you around to be sure you’re delivering the right kind of results. Seek feedback, and have a becoming your best type of attitude. So, how can I always improve?
Steve Shallenberger: Okay, that’s the second one. We, as highly successful leaders, the five factors we focus on to run a successful business, number one is Have our Economic Engine in place, a vital healthy one. Number two, we deliver High Quality. Number three is Safety. Safety is a huge factor in successfully running a business enterprise, and the most successful organizations have a safety plan in place. And remember, unless you have safe behaviors, safety is luck. And so, what you really wanna look at, is safe results come from safe behaviors, and how can we be sure that we are teaching and reinforcing safe behaviors so that we can have a more dependable outcome? So, a few examples are safe driving habits. A safe speed, the three-second rule of so much distance between you and the car in front of you, changing lanes always looking over your shoulder when you change a lane, not holding and talking on your cell phone, or texting, while you’re driving. How catastrophic that can be. Or if you are at the stop light, or stop sign, even though your light turns green before you enter the intersection, you look both ways to see if somebody is coming. How many of you have actually had an experience where you’ve done that, and looked and saw somebody coming at high speed and ran the red light right in front of you. And if you would’ve entered that intersection, there could’ve been a terrible accident and crash. That’s just an example of safe behaviors.
Steve Shallenberger: There are so many wonderful courses, by the way, on the Internet of safety plans that you could put up. One of the things that we do in our organization, is we work on daily stretching. The statistics show that if you’ll stretch every day, and there can be a regimen of, like, eight different types of stretches that you do, that you can reduce injuries by 60%, by just daily stretching. These are things that you can do. It’s a mindset. Our mindset is that safety is not a program, it is a way of life. And our vision for our organizations, is that our employees can come to work, wherever they might be, whether it’s in sales and then out with the public, they’re technicians, visiting people’s homes, doing work or administrated, that they can come to work and go home at the end of the day, safe, to be with their loved ones. And this is an important vision. It impacts so much of a successful operation.
Steve Shallenberger: Number four is Customer Service. Many of you are quite familiar with something called, “The Net Promoter Score”. Net promoter score is a way to be able to asses or measure the level of customer satisfaction that you have. One of our companies, we have an entire office, and one of the primary things they do, is they help us with customer data, customer feedback, they call 25% of all of our customers. We work on measuring our level of customer service and we wanna know it before anybody else does. As a matter of fact, we measure it, not only as a company but by every single individual technician that we have. How do the customers see their interaction with them? In this way, we can provide feedback, we can reinforce and recognize those that are stellar, and if there’s some that have problems, then we can take action on that, and go to work on it and try to fix the problem.
Steve Shallenberger: And then, how about your customer service policy? At least, in our business, in energy efficiency in one of our companies, we call in thousands of homes every month. If there’s an issue, customer service issue, we have an ironclad policy, we just fix it. And we fix it as fast as we can. We have wonderful partners that we work with, in this industry, utility partners, who are fabulous, amazing organizations, also municipal power companies at local communities, same thing. These are people, a delight to work with, and the program managers for example, if there’s an issue, their reputation depends upon us. And so, we have decided that it’s not about the cost, we’re gonna make it right. As a matter of fact, is our opportunity and rarely do customers take advantage of this policy. To the contrary, they’re grateful and relieved for a company that has their best interest at heart. Our company vision is this: We treat people right, whether it’s customers, employees, and this is a great gold standard if you will. There’s a lot of research on this, and companies that prioritize their customer service show that they consistently have higher profits than those companies that don’t. Well, we see this all the time.
Steve Shallenberger: I had an experience, this is just an example of this. A client of ours, his name is Michael, we’ll say. Some years ago it contracted with a training and consulting firm out of Europe. They had agreed to a number of in-house trainings, coaching with their key employees and this was a longer-term contract. And Michael was going to have a critical meeting one night, having to do strategic issues, and this consultant happened to be in town, and so Michael asked if he might go to dinner with him and this other party with whom they are going to work on a significant strategic issue. It’s very interesting, because afterward, when the meeting was over, the consultant said, “Well, Michael, how shall we arrange for payment for me coming to this dinner, to provide you the services?” Well, Michael, in his mind, said… We’re thinking about customer service and at Becoming Your Best, anyhow, our vision is to over deliver, with outstanding customer service. How do we over deliver? Well, in Michael’s mind that night, without knowing us, or anything else, he said to himself, “We are done! Are you kidding me? After all we’ve done, you’re gonna sit here and try to dime me to death? I just wanted your advice and counsel here as a friend.” That’s a fair request, nothing wrong with that. So, anyway, when we came along, he was excited to have a fresh, alternative, that he thought was a better fit, in this case. Over deliver, with outstanding customer service. This is the spirit of it!
Steve Shallenberger: So, let’s just review the first four. First one is to have a strong economic and dependable, diversed, economic engine. There’s a lot of disruption out there, and so be very aware of having an ongoing program of maintaining real growth. Number two is build high quality into our processes. Number three, safety. Safety is every part of what we do in our business and in our personal lives. Number four, High level of customer satisfaction. A high net promoter score. And last of all is to Control Your Cost.
Steve Shallenberger: Now, there’s a lot of ways, quite a few dimensions on this particular item, but it’s a big deal. And one of those is that, in terms of financial aspects, you should have accurate and timely financials. By the 10 or 15 of each month, following the previous month, so that you can benchmark where your costs are going, and especially the large costs. You’re always thinking about our fuel, our energy, our rent. What are ways that we can be more responsible in operating our business? So, for example, if you are a long term tenant, you can look at your rent versus buy option. And as a result, we’ve ended up buying all of our offices that we’re in, really. Because long term, and now we have an asset at the end of a couple of decades. It’s pretty amazing, it adds up. And this, by the way, can have a huge impact from many different dimensions, and because it’s your own building, then you can say, “Okay, this is a long term investment, and how about solar versus ongoing electric cost? And can I do better with solar?” So we have installed solar on most of our buildings. These are ideas that you’re always thinking about. How can we run our business more efficiently? Sales service. You look at the big costs we just talked about and then benchmark them. How can we do better? Also, really work and have a solid cash position. About 10 days ago, I was at a Global Leadership Conference, in South Africa, in Cape Town. One of the speakers, Harry Clark did a great job, fun to be together with him, and he talked about mistakes that millionaires make. And he had built a company, had the opportunity to sell it, with time things went south, then he said, “I just couldn’t even give my company away.” So, he developed a list of 19 things that are risk for our business and 8 personal things that are risk for us, financial. And if any of you would like those, just write to firstname.lastname@example.org. We’ll be happy to send those along, to you.
Steve Shallenberger: And I might add, that we’re thrilled to announce that we have recently launched, based upon a lot of our customers and clients asking, the Becoming Your Best Online University. This is an awesome university, that has a host of free programs, and resources available for you. There are also some resources that you can invest in, to go much deeper, to help individuals within your company, family members, to be able to take advantage of these resources, which really puts you on the cutting edge of making a difference. If you would like to have information about that, simply go to our website, becomingyourbest.com and you’ll get there and see that it’s a great resource. Very exciting!
Steve Shallenberger: Well, let’s get back to finishing up on controlling your cost. One of the things that we wanna look at, is our account receivables, account payables, and inventory. Being sure that we’re collecting the money as fast as we can, we have a good account payable’s policy, not stocking up too much inventory of the wrong things, so managing this aspect well. Another is that when we think of controlling our cost that we manage, our workman’s comps issues, efficiently and quickly. So, if somebody has an issue, let’s say, on the job, it could be a first-day issue, but that very day, the very same day, we connect them with the medical resources and help them get back on their feet. But these responsible type of management ideas, also, really drive down your workman’s cost, and workman’s cost expenses, over a long period of time, and your moderates of all of these, have a big impact. Something else that helps us control our cost is really abide by the three-bid rule. Get in three bids for things that we need to do. And don’t forget that a great resource is buying used equipment. Especially in today’s world, it’s so easy to find used equipment, that’s much more accessible, that can work just as fine, depending on your needs and your wants. But we can keep working on these.
Steve Shallenberger: Well, these are the type of things that we can do, to run successful businesses. Number one, Have a Strong Economic Engine. We continue to work on, all of the time. We always monitor it, just like any other engine, daily, weekly, monthly, quarterly, thinking throughout the future. Number two, we build High Quality into all of our processes and products from the get-go. Number three, we have a Safety program. Safety is a way of life, it’s not a program, okay? But we do have a program! It’s a plan out there, and here are the things we do, and here’s how we teach it, every single week in our meetings, we talk about safety. And we stretch. Number four, a High Customer Service. And we prioritize this, within our organizations, and last of all, we work on ways to Control our Cost in over a long period of time. These are the things that help you run a successful business. And as you apply them in your own personal life, think about this, “I am the economic engine, so what do I do to keep myself current and make a difference? How do I deliver, be a 100% finisher? And deliver high quality. It’s what I do, right?” It’s a mindset. And these are great questions to discuss with your employees and imagine the impact when you discuss them. Are you a 100% finisher? Do you leave things better than when you found them? How do you renew your skills? How do you become the best at what you do? Safety, customer service, and last of all, controlling the cost. We do each of these. How do we control and manage our finances well? How do we get out of debt, how do we pay off our credit card debt and quit using the credit card, unless it’s we pay them off every thirty days?
Steve Shallenberger: So these are wonderful, powerful principles. As you do them, you make a difference. That’s the way it comes down. And this is what leadership is all about. It’s the leader that really sets the tone for everything else, in your families, in your relationships, and these are sound powerful processes. Today, we’ve talked about one principle out of the 12 Principles of Highly Successful Leaders. It is Apply the Power of Knowledge. And these five simple steps, are ones that you can use to apply, to make a big difference as a leader and a manager. We wish each one of you the best, as you are making the difference. What an honor and a privilege it is, to have you listening to this podcast, to be associated with you! We are so grateful for you, and I wish you, a good day!