Drive Profitability By Operating In Your X Factor
(My initial version of this article was originally published on Forbes.) What is your experience of your business? Is it fulfilling and profitable, or is it stressful? Do you feel you are trading dollars? There are some common patterns that contribute to the difference. The most successful leaders in the world operate profitably without stress. In this article, we address how accessing your X factor impacts sustained business profitability.
Our company has the privilege of working with many outstanding leaders. In this work, we see a consistent, powerful trait. Profitable leaders create organizations that allow them to focus on and use their own unique talent. These leaders arrange their business and teams so that the leaders only do what they do best. As simple as it sounds, it is fascinating the value it creates when people harness it.
Sometimes, the thing that you do best may be something quite simple. A particular self-made billionaire I am close to has a peculiar trait that has proven uniquely effective. I will call him Frank. Frank possesses a powerful ability to mentally process deal values and numbers. His specialty is acquiring a unique type of properties, especially in distressed situations. While these skills are very valuable, there is a more basic thing that he does best.
In Frank’s own words, it is “Taking action. Now.” Frank has arranged his world to be free to focus on one thing. His one thing is finding, evaluating, digging deeper, and closing transactions before others would even know they are in play. The key is that this is true no matter when the opportunity arises. It is obvious that Frank's fortune is linked to his disciplined protection of his time. When opportunity strikes, he is available to play.
Answer these two questions:
• What is it that you do best in your business?
• Do you do it with regularity?
What special talent do you have that is not replicated anywhere else in your business? A key element of performance is doing only this and nothing else. Use your team or some other form of delegation and outsourcing to handle the rest. It is not your highest and best use to handle the day-to-day details. This is especially true if those details drain you.
There is a subtle and critical point here. When you only do the things you are best at, you will be much more productive, as well as more fulfilled. For many business owners, this is oftentimes the very action that created success in the early stages. We often see the opposite dynamic has developed in a struggling business. As the business grows, the managerial demands on the owner’s time expand, and they lose focus. As a result, the business becomes less competitive -- and the leader more frustrated and stressed.
It is worth addressing another point here. In the case you are not fulfilled in your business even when you are doing what you do best, ask the following question. “Should I be in this business and/or should I make a change to the way it runs?” True performance shows up when people are clear about their "why" and access the drive it provides. If this is missing, take a close look at what would have to happen for you to access it.
Often when we share this topic, we get the rebuttal, "Yeah, it would be great to do what I do best and have others do the rest, but you haven't seen my team." If this sounds familiar, here is another question for you:
How committed is your team? Can you trust them -- fully?
If you can't count on the people to do what you have asked, then you must take a closer look at the business dynamics. Do you spend mental time and energy wondering, "Did Joe do that thing I asked yesterday?" or “Has Sally finished the project we discussed last week?" If this describes your daily thought process, then you do not have a team you can count on.
One of our "seven deadly sins" of a business owner is the sin of having to constantly keep the team accountable. An owner cannot lead the business if he or she is preoccupied holding others accountable to past requests. This points to a prerequisite of accessing full performance. You must have certainty that if you ask someone to do something, it gets done. The first time. Only then can you consistently move initiatives through the organization. We call this "operating by agreement." Operating by agreement is a fundamental aspect of powerful organizations. Imagine the peace of mind and lack of "open loops" in the back of your mind by operating this way.
A profound truth is that when you are doing the things you do best, you bring the most "rain” in the business. Moreover, you can observe the high-level dynamics of the business because you are not stuck in the day-to-day minutia. Being “above the clouds” enables you to sidestep many of the situations that could have caught you off guard. Business owners who operate this way have less stress and frustration.
In summary, powerful leaders have extraordinary teams enabling them to do what they do best. Take these three actions to access profit, performance, and peace of mind:
1. Take the time to get clear on what you do best.
2. When you know what that is, do it.
3. Create a team that protects your time to ensure action No. 2 happens.
Are you doing what is best for you and for your business? Do you have a team that allows you to access your X factor? Take a close look and be real with yourself. If not, what is getting in the way? Spend time and get clear on it. Then do something about it. Find the resources to assist you in creating a fully committed team if it is in the way. The effort here often pays off in multiples on your bottom-line profitability.
P.S. Whenever you’re ready… here are three ways I can help you stop profit leaks and surprises and maximize the value of your company:
1. Take a deeper dive into The Private Equity Perspective™ in Part 2 and discover the next steps to create more predictability which puts the fun back into owning your business. Just private message me "PE Part 2" to receive it.
2. Join Our Implementation Program and be a Case Study: I’m putting together a new consulting case study group inside The Boardroom for Profitable Leaders™ this month… stay tuned for details. If you’d like to work with me on minimizing stress and surprises while blowing up your bottom line… just send me a private message and put “Case Study” in it, and I’ll get you more info.
3. Work with me and my team privately: If you’d like to work directly with me and my team to increase your profit margins by multiples and only have A players on your team… just send me a message and put “Private” in the first line… tell me a little about your business and what you’d like to work on together, and I’ll get you all the details.
About the author: Prior to focusing on Main Street private equity investments, Dan Smith worked as a Wall Street Private Equity advisor and investor. He evaluates businesses in which to invest or buy using a very specific process unique to the field. Whether on Wall Street or Main Street, once an investment is made, Dan and his investment funds used key processes to maximize the returns. As a whole, we call these processes the Private Equity Perspective. We created The Profitable Leader™ to partner with select businesses. We share the strategies with business owners to expand their profitability and maximize value.