Balance is key to increasing business
The following is based on one of The Covenant Group’s clients. All of the names and telling details have been changed.
Don’t max yourself out in one area of your business, only to forsake the rest of it.
Carl Hayle had recently realized his best month ever -- $8 million of new investment money and $207,000 of life and disability premium. Though thrilled at first, a vague sense of worry soon overcame him. Carl had recently completed one of our programs and decided to enrol in an advances program, a more exclusive program for advanced advisors. His numbers certainly made him eligible for the program, and it was his intention to grow a business that ultimately qualified him. During the program’s coaching sessions, we got to know Carl better, and what was disturbing him. When we eventually got to the root of his problems, we discovered he’d broken one of Nature’s fundamental rules – the principle of symmetry.
In our first coaching session, we zeroed in on Carl’s source of worry. He said he felt like the sprinter who, having run his absolute personal best to achieve a 10.01, resigns himself to the fact that he’s not built for an under-10 sprint. He desperately wanted to improve on his great results but was at a loss for what to do. He readily agreed that growth would come, not from working harder, but from working smarter. But what exactly did that mean? Our next step was to explore his current business, and it was there that we uncovered Carl’s mistake.
A few years ago, Carl determined to go after the high net-worth market. He spent a number of years cultivating key relationships, earning introductions to top business people and centres of influence. As he worked on complex business cases, his expertise grew, and he found it easier to gain access to the affluent. He attributed his success to his keen sense of how to relate to this market. Highly successful people, he explained, need special attention, and he designed his business around this concept, spending a high percentage of his time and money on activities that enabled him to give his clients the attention they need. He’d transformed his home into a luxury entertainment center. In the plush, comfortable surroundings of his home, Carl was able to get to know his clients intimately -- their unique personalities, needs and values. Carl had transformed more than just his home; his whole life revolved around this idea of creating a world where the rich could unwind and reveal themselves. He drove a car that cost him six figures, the leaseholds in his office evoked Donald Trump, and the courtship of the wealthy was a seven-day-a-week affair. His overhead was massive. Indeed Carl had been working hard, but certainly not smart.
“Carl,” we explained, “one valuable way of looking at growing a business is by comparing it to how nature evolves organisms.” Carl looked perplexed. “Take the human body. An extremely, almost impossibly complex system. Millions of parts working together to get it right. It’s truly a miracle when you consider the minimal resources required to run the human body. Similarly, your business has to run on the limited resources of time and money; and all its organs, its systems, functions, departments, must work together.
Carl nodded, still puzzled, but intrigued.
“In the human body, you have some truly key organs: kidney, brain, heart. Let’s imagine nature evolving a super powerful human heart – one that could last up to 300 hundred years without failure.
Carl laughed, “Could I have one of those, please.”
“But would you want one?”
“Sure, why not?”
“What would happen to the rest of the organism?” He was stymied. “When the human body reaches its average life expectancy of 85 years or so and dies, what good would the 300-year heart be? When the kidneys and liver fail, having superman’s heart makes no difference. Actually, it does make a difference, but not a positive one. With the body expending resources, nutrients and energy, building the perfect heart, the rest of the organs get short shrift – death would come earlier, rather than later for the organism.”
Carl nodded knowingly. “So everything, all the organs, are designed to expire at the same time. It doesn’t always work so perfectly, but it’s interesting that nature’s goal isn’t to build perfect organs, but rather a set of organs equally good.”
“Exactly, it’s the principle of symmetry. Engineers follow this principle. When they design a car they don’t want to build a carburettor that’s going to last a thousand years, when the rest of the engine will collapse after ten or fifteen. Every part is designed to degrade at the same rate.”
Carl wasn’t exactly sure where we were going, so we said, “This principle of symmetry is something business builders have to learn to apply.”
Carl squinted his eyes. “But my business isn’t like a car – I want it to run far into the future; in fact, I want it to run even after I’ve gone, with my son at the head.”
“Yes, but that’s not quite the meaning of the analogy. In order for the car company to continue in the future, it has to expend its resources wisely and that means anticipating the obsolescence of a particular model of car. That’s why it doesn’t make sense to build a perfect car part or even a perfect car. The car company must distribute its limited resources, its capital, and manpower, appropriately across all the parts of its business.”
Carl nodded.
“Carl,” we explained, “your focus on entertainment and image is a 300-year heart.”
Karl responded “but I need to do that for my affluent clients. They expect it. It’s my added value. It’s what makes them comfortable, helps me establish confidence. They see me as a peer.”
“Karl,” we asked, “is this why you’re successful?”
“I think it has a lot to do with it, yes.”
“It has something to do with it – but only something, and probably a small something. Your clients work with you because they trust you and have confidence in your expertise and ability, not because you have a beautiful home and office. Right now, your business is lop-sided -- asymmetrical. You should be looking for the leverage areas in your business, and how to allocate your resources appropriately. Right now, you’re maxed out in one particular area. You’re stealing resources that should be spread across the rest of your business. We need to work on bringing symmetry into your business by developing four systems that are in balance: business management, marketing, relationship management, resource management. That’s how you’ll build a healthy business and lead a more vital life.”
Lessons Learned
Carl agreed his business was lopsided and determined to pull back on his excesses and re-examine his business.
“I suppose you can do something too well,” Carl said.
“Imagine the consequences of a 300-year heart. Beyond hogging limited resources, you have the strain such a powerful heart could put on a weakened system. The system could collapse – thriving depends on symmetry.”
We saw Carl bow his head thoughtfully; we knew what he was thinking. The focus on image was a strain on Carl’s business and on him as its key resource. The cost of maintaining his lifestyle was exorbitant, diminishing profits, and only viable so long as business was booming. And the impact on his family was extensive. Carl had appropriated his home for business purposes; for the rest of his family, it wasn’t really home anymore. He was entertaining clients seven days a week, and foregoing family vacations, making business his main priority. This wasn’t a good long-term strategy. And more than this, it wasn’t what Carl sincerely wanted. He valued clients who value their families, and he valued his own but wasn’t demonstrating it.
The relief Carl expressed in our meeting told us he’d been waiting for someone to tell him he’d gone too far.
Over the next couple of weeks, Carl worked on his plan, exploring the levers of his business, and began re-allocating resources. He realized his focus on image was largely personal, not business based. He thought he was bolstering his self-esteem, but in reality, the strain on the business and his family was doing significant inner damage. Within a few months, Carl had cut his overhead by 25%, had relocated his office, this time with a more modest executive suite and a number of smaller offices and workstations for the new hires he was making. He’d made it a priority to invest in technology systems and hire on specialists and support staff. This indeed was a growth strategy, and Carl proved to himself that he truly was a business builder.
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The Covenant Group is referred to by many as where entrepreneurs go to become Business Builders. They are considered to be thought leaders and authors of the best-selling books, The 8 Best Practices of High-Performing Salespeople, The Entrepreneurial Journey, and The Business Builder.