Saturday, November 5, 2011
Very few books have have been good enough and contained enough content to require two posts. However, Dave Ramsey's new EntreLeadership fits the bill. The book walks the reader through Ramsey's idea of an EntreLeader. It's a mix of an entrepreneur and a leader. I think it has kind of a nice ring to it.
Ramsey is mainly known for his work with starting Financial Peace University and his radio show about personal finance. But, Dave is clearly an expert in another field too, starting and running a successful business. Ramsey's story is that he made his first fortune with real estate and quickly borrowed his way to having a net worth of millions of dollars, but when bad went to worse, the debt worked against him with a vengeance and he found himself bankrupt and at rock bottom. He went on to pick himself back up and build his second million dollar business, but this time without using debt. His advice about starting and running a business comes from years and years of experience.
I wish I could cover everything from the first half of this book because it is just filled with excellent content. However, I will encourage you to pick up this book for yourself. What I will discuss is goals and decision making. I talk a lot about goals on this blog, but that's only because I think they are incredibly important to being a successful business person and human being.
Goals are broken into 7 main areas:
Ramsey writes about the importance of having very specific goals with a time frame. If you don't have both, you don't know what you are going for or what time frame to which you are confined. Let me use the example from the book that illustrates excellent goal setting in all it's glory.
A young salesman that worked for Ramsey set his goal as making a $100,000 a year (Very specific and has a great time frame). The salesman worked on commission of 10% so he needed to bring in $1 million in revenue in a year to hit the goal... meaning $83,000 a month, or about $21,000 a week. The math was really easy for him to figure out because everyone knew what the average ticket sale contract went for so he could easily figure how many contracts he needed to sell a week to hit his goal (He could even break it down by the day if he needed). He needed 64 quality contracts a week to hit his goal. Since the salesman knew exactly what he needed to do to hit his goal, it made the choice clear when he needed to stay late and when he needed to come in early. "Winning is hard work -- there are no substitutes."
Within the same story it mentioned that after several weeks of over-64-quality-contract weeks, the salesman's numbers started to drop. So then it became Ramsey's job to follow up with that salesman and give some teachable wisdom. And then his numbers shot back up. It's a leader's job to be aware of a team's goals and supervise, encourage, and coach.
Another thing Ramsey says about goals is that they need to be your goals. If you don't own your goals then you won't be passionate enough about them to make it through the obstacles. And most goals worth having will have obstacles, the bigger the goals the bigger the obstacles. If you care deeply enough about what you are doing than you will work your way anything that comes your way. It's also important to be a leader that leads with goals in mind. If you don't have goals then you can't expect your team to have goals. It's extremely important to have specific goals for your organization and then to believe in those goals enough to take action.
"I think there is something more important than believing: Action! The world is full of dreamers, there aren't enough who will move ahead and begin to take concrete steps to actualize their vision." - W. Clement Stone
Decisions is the other topic I want to talk about this week. The book makes an excellent observation, that a decision becomes more obvious, the more information you have. Think about a time when you have two things you are deciding on, like, you are looking at two houses for purchase. The more information and investigating you do the more obvious the right choice becomes. Additionally, the bigger the decision, the more information is needed to make the right decision. Picking out what flavor of gum at checkout in a grocery store = small decision (although sometimes you'll be driven crazy by the people that hold up the line because they can't decide on this) and on the other end making a $20,000 advertising decision = big decision. (However, it is the hope that one day you will get to the point that deciding on a $20k anything is no bigger a decision that choosing a pack of gum today).
Ramsey also makes the observation that there is nothing that freezes progress within an organization like indecisiveness. After working in the 'real world' for some time now, I have concluded that there is no more valuable trait within a person than the ability to make a decision. It's shocking how difficult it is for some people to make a simple decision. Indecision is a killer of organizations. It drives the best people in the organization crazy, and away from the organization. And it destroys relationships. Indecision happens to all of us to some degree, but that's why it is important to lead a culture of decision making. Identify what causes the indecision and cast it out. Fear and criticism are the main proponents of indecision. When you identify which of these it is and work through it, you break down your barriers. Identification of the causes of indecision is part of the information process, and now we know that the more information you have the easier the decision. I like the worst-case scenario the most. When you are having a tough time making a decision think about the worst-case scenario if you make the wrong choice. A lot of the time the worst-case scenario does not end with a life or death situation. Making the wrong decision happens to everyone, the important part is that you acted. And when a decision goes bad, remember that bad decisions are something to learn from. The greatest Greats had the most experience and you don't get lots of experience without learning from bad decisions.
Alright, Prepare yourself for some more information next week from this same book. We will be talking about Ramsey's philosophies of funding a business. Get excited!