Momentum Podcast: 196

Owner

by Alex Charfen

Introduction

Owner. The next level of the Billionaire Code is owner. $10 to $30 million dollars a year. Only 100,000 owner businesses in the United States. This is a dramatic shift from the last level. And remember, each level of the Billionaire Code that we go up, each new level we crack, the level of complexity goes up exponentially. The level of behavioral change goes up exponentially. The level of commitment it takes from the entrepreneur goes up exponentially.

Episode Description

The seventh level of the billionaire code is Owner. $10M to $30M a year. Only 100,000 in the United States. The level in commitment in ascending each level is exponential. There are dramatic changes in this level that most certainly aren’t for everyone. Are you able to give up your autonomy of time? Your ability to help, inspire and grow your team means everything. You must have a communication structure to to scale leadership systems.

Full Audio Transcript

I'm Alex Charfen, and this is the Momentum Podcast, made for empire builders, game changers, trailblazers, shot takers, record breakers, world makers, and creators of all kinds. Those among us who can't turn it off, and don't know why anyone would want to. We challenge complacency, destroy apathy, and we are obsessed with creating momentum, so we can roll over bureaucracy and make our greatest contribution. Sure, we pay attention to their rules, but only so that we can bend them, break them, then rewrite them around our own will. We don't accept our destiny, we define it. We don't understand defeat, because you only lose if you stop, and we don't know how. While the rest of the world strives for average, and clings desperately to the status quo, we are the minority. The few who are willing to hallucinate there could be a better future, and instead of just daydreaming of what could be, we endure the vulnerability and exposure it takes to make it real. We are the evolutionary hunters, clearly the most important people in the world, because entrepreneurs are the only source of consistent, positive human evolution, and we always will be.

Owner. The next level of the Billionaire Code is owner. $10 to $30 million dollars a year. Only 100,000 owner businesses in the United States. This is a dramatic shift from the last level. And remember, each level of the Billionaire Code that we go up, each new level we crack, the level of complexity goes up exponentially. The level of behavioral change goes up exponentially. The level of commitment it takes from the entrepreneur goes up exponentially.

Here's why. As entrepreneurs, a lot of what we have to do to build a team is counter to how we want to behave. As entrepreneurs, we love to be spontaneous. Well, once you start building a team, spontaneity goes down, and planning goes up. As entrepreneurs, we like to be free. Once you start building a team and becoming a leader, your freedom goes down. As a leader, you can't show up like you want to every day as a leader. You can't just do whatever you want. As a leader, you're now responsible to more people. And so, as you go up the Billionaire Code, your responsibilities go up. Your level of connection to your company must go up, and the way that you appear, and the way that you associate with everyone, must change. And at $10 to $30 million, there are dramatic changes.

Remember, the last level we covered was leader. In leader, with your time you're delegating success. Let me show you the transitions that you have to make to go to owner. Owner. So in leader, you go from delegating to success. Because at three to $10 million, you're asking other people to go create success for you. Now, check out this massive shift. You go from delegating success to an owner? Your time, you give up autonomy of time. So in leader, you tell other people what they should do. You show them how you're going to delegate success. At owner, you give up autonomy of time.

See, at $10 to $30 million, you now must turn your time back over to your team, and ask them where they need your help. At $10 to $30 million, if you're still deciding where to spend all of your time, you will be the biggest bottleneck. At $10 to $30 million, your organization is going to be bigger than for you to just tell them what you're going to do. So, this is a huge shift for time, and one that very few entrepreneurs make, because it's very hard for us to give up autonomy of time. It's very hard for us to give up control over our time. It's very hard for us to give up the choosing of what we will do with our time. But if you're willing to do this, and you coach your team correctly, this will change everything for you. This will take you from $10 to $30, to $30 to $100. And if you don't, it's going to be one of the biggest bottlenecks you feel consistently, on a day to day, week to week basis.

Because at $10 to $30 million ... And I hope you don't go beyond that, without giving up autonomy of time ... what will happen is, your team will know more about where you are most valuable to the company than you will. Your primary focus? Remember, in leader, the primary focus was transformational leadership. How do we become transformational leaders? Because at three to $10 million, you're now leading leaders in your team. You're no longer just leading a team. You're leading a team of leaders.

Well, that was at three to $10 million. At $10 to $30 million, you go from focusing on transformational leadership to culture, recruiting, and team development. Here, it becomes crucial ... As a CEO, this has to become one of your major focuses, because in leader, we were asking, "How does my team get ahead?" At owner, it's, "How does my team get further ahead?" You are now at $10 to $30 million. Your ability to inspire, grow, lead, and help your team improve is going to be everything to the organization, because it's no longer about you, and it hasn't been for a while. But at $10 to $30 million, it is definitively no longer about you. It's about them. It's about how does the team show up? Because in leader, you had a leadership team with teams. You get to $10 to $30 million, you have an executive team, they have a leadership team, and then they have people that they're working with, so you have three levels of leadership. The shift from leader to owner is dramatic because at leader, the ...

So, let's go back two levels. At operator, one to three million, one team? The leadership conversations you're having are one on one with people who are tactically getting the work done. Let's go up one level from that. When we go from owner ... Or, sorry. When we go from operator, one to three million, to leader, three to $10 million, you go from one team, to a leadership with teams. And then when we go from leader to owner, we now have that third level of management. So at leader, you're having conversations with people who are leading teams, and then usually some managers who are still doing their ... Functional managers who are actually working in the position. You get to $10 to $30 million, and now you're having executive-level conversations. You're talking to a person in front of you about a leading a leader that works with them, about leading people that work with them. So, you have now two steps removed from everyone in your organization, beyond the executive and leadership team.

The movement that you're building? Now, you have to create the systems that support the movement. In the last level, we created the systems that grow the movement. Now at owner it's, "How do we support the movement? How do we make sure that everyone who's involved in our organization stays involved?" And those types of things are PR, and how do you get media, and how do you continue to grow your movement, and how do you let more people know about what you're doing? And the biggest need you have at owner is different from leader, because at leader, it was scaling a team to consistently deliver. At owner, it's more complicated. It's scaling leadership systems and duplicated decision making, over a larger population.

How do you scale leadership systems and duplicated decision making, over a larger population? The only way that I know how to consistently do this is with a communication cadence, with a structure where everyone knows what to expect, and when you're going to communicate and why. Because if you're not in a system or a structure at $10 to $30 million, that which used to feel random and haphazard now feels dangerous and precarious. What used to feel, like, a little sketchy, and a little frustrating, now is going to break things, and make people quit. You must scale leadership decisions ... Or, sorry, systems ... You must duplicate decisions over a larger population, and you have to have a system for keeping it all straight.

Because at $10 to $30 million, here's something that I want you to understand, is you will have an executive team at $10 to $30 million, and each of those executives will be doing the same type of job you did at leader, at three to $10 million. See, at leader at three to 10, you learn how to train the executive who's literally going to step into the same size organization you had when you get to owner, because an owner's executive looks a lot like a leader. They're gonna have about a three to $10 million division of your company, or area of your company. They're going to be running a similar sized team to what you were just running. So, you literally are helping them step into the role you were just in. This is behavioral change at its highest.

And to graduate from owner, you have to grow a leadership team to the point where they can create a second level of leadership. That's how it works. At $10 to $30 million, you're no longer in charge of everything. You're no longer doing everything. You're no longer even understand everything. And here's what'll happen. At $10 to $30 million, some weird things happen in your company. I know. I've been there. You'll walk in one day, or jump on a Zoom call, and you'll see someone and you won't even know who they are, but they'll be someone who works for you. And at $10 to $30 million, you no longer understand everything that's going on in every division of your company. What you must do is have reporting systems and a structure, so that you know what's happening, and you trust what's going on.

Every person in your organization is going to have to push information back to you so you understand what's happening, and if you don't have a structure or a system to do this, it won't be chaotic. It will be unbearable. Because at $10 to $30 million, the numbers are high enough, and the system is big enough, that if you haven't put a structure in place, you can't hold it together by force of personality or transactional management for that long. I'm not saying you can't do it. I've seen $10 to $30 million businesses run entirely by force of personality.

Here's what you'll see: Tremendous turnover on the team. You'll see some true believers that put up with everything, a very tired CEO, and a customer base that is constantly frustrated with fulfillment. That's just how it is. If you've got a CEO who isn't putting the right people in place, putting the right things in place, and really becoming an owner of the business ... Giving up autonomy of time, creating that second level of leadership, growing a leadership team to create that second level of leadership ... You will find a company where there's a lot of revenue, maybe even a lot of excitement, but you will see constantly disappointed customers. You'll see challenges in fulfillment. You'll see frustration among the team. You'll see high turnover. And the way to alleviate all of that is to create a communication structure where everyone knows what to expect.

Because here's the fact: As a CEO, what you say will be seen through a microscope, and heard through a megaphone. I say it all the time. What you do is exaggerated, what you say is heard louder. And the biggest challenge with being at the owner level is that now, that megaphone has gotten bigger. It's got a bigger amplifier, and the microscope is far more powerful. What you say will be heard even more dramatically. What you do will be scrutinized even more closely. And as your business grows, what you do as a CEO will directly impact every leader in your organization.

So, at the owner level, this is where you as the CEO can free the organization. Because here's what you're looking to do. You give up autonomy of time. You allow your time to tell you where you're needed. You focus on culture, recruiting, and team development. You make sure that every scheduled meeting happens on time, that everyone who is there has the opportunity to win. There's a clear structure through which you communicate. Everyone in the building knows ... Or everyone on the team ... Knows where you're going, and they understand what the outcomes are. You build your executive team and your leadership teams, and you create the systems that support the movement. And what will happen is, you will scale leadership systems and duplicate your decision making over a larger population of people. You will have an organization that grows through your efforts of getting as much as you can off of your plate, of helping the people around you do as much as they can, of giving up your autonomy of time and showing up as the owner that can run a business from $10 to $30 million.

This isn't easy. If it was, every business in the United States would get there. The fact is, only four out of 1,000 ever achieve owner status, and that could be you. The question is, are you willing to crack the code? Go through each level of the Billionaire Code, make the behavioral changes that are necessary, give up your autonomy of time, recruit the team, and then have them succeed?

Because in just the last three levels from operator, we went from delegating time, to delegating success, to giving up autonomy of time. Those are dramatic shifts, but shifts that you can make. Shifts that any entrepreneur can make. Any one of us can make the decision that we're going to create more momentum, change our behaviors, and do what it takes to crack the Billionaire Code and ascend through each level. Owner is no different.

$10 to $30 million is one of my favorite places to run a company, because at $10 million, here's what happens. The leadership conversations you are having, or the conversations you're having as the CEO, with the people you have to communicate with on a daily basis, are almost entirely strategic. See, when we go down to the one to three million dollar level, almost everyone you will talk to at one to three million dollars, you're having tactical conversations with the people who are getting stuff done. That's really hard for me. I'll be honest with you. I am not a good one to three million dollar CEO. When I find myself in that position in one of my companies, my goal is, "How fast can I generate enough revenue so that I can start hiring leaders, so that I can get out of having tactical conversations?" Because I know I'm not good at them. I frustrate people when I have to have tactical conversations.

When I get to the $10 to $30 million range, it's a little bit better for me. I can delegate success, have some leadership conversations. But at $10 to $30 million, that's where I get comfortable. That's the type of CEO I am. At $10 to $30 million, I'm having exclusively leadership conversations. I'm having strategic conversations other than my executive assistant, that will always be somewhat tactical. I'm usually meeting with vice president or director level, or at least senior manager level people, so I'm always talking to someone who's strategic.

I want you to consider that. If you're one of those entrepreneurs that's been at it for a while, and you're struggling at the lower numbers, or you're wondering if you can really do this, you might be like me. You might be a $10 million plus CEO, which means you have to get there as fast as you can. Ask yourself, are you better at the tactical conversations, or the strategic ones? Do you like to talk to people who are getting the work done, or people who are in leadership? Do you like to have conversations about how someone can do more, or do you like to have conversations about what they're doing? For me, it's all the higher level. I like to be at the $10 million plus. I like to coach and mold and help people grow, and show them how they can do more, and show them where their hidden strengths are. That's where I get most comfortable as a entrepreneur, when I'm at $10 million plus, and having the exclusive strategic conversations. You might be exactly the same.

See, what's interesting about the Billionaire Code is that all of us have special abilities and gifts and skills that will help us get through this. And for so many of us, those skills, those abilities, those gifts, show up much better once we get higher up in the Billionaire Code, and I want you to leave that possibility open and available. Because here's what I've found with so many entrepreneurs today. They will actually tell themselves they're happy with a boutique business. They will say things like, "Oh, I'm okay with just keeping my business small." They'll even say things like, "Oh, I never really want to grow that big." And every time I hear that, I want you to know I literally get a physical pain in my chest.

Because as a business, you're doing one of two things. You're growing, or you're going away. You're either pushing forward, or you're going backwards. There is no stasis. There's no standing in place. There is no lack of movement. You can't just say, "I'm gonna coast here." The market around you is dynamic. The world around you is dynamic. You will get pushed to do more. You will have to show up and do more. And the fact of the matter is that as an entrepreneur, that's exactly where we want to be. We don't want to be in the place where we're standing still. In fact, I describe constraint to entrepreneurs as being standing still, locked in place, not able to move. That's full constraint.

And when you're in a business that isn't growing, you will feel constraint. When you just stay at one level, you will feel constraint. When you look at some of the businesses out there with the highest levels of challenges for owners ... Veterinary services, dental services. A lot of the businesses where you grow the business to a certain point, and then just coast. A lot of the businesses where you get to a place where you're maxed out, and then you can't do any more ... Those are some of the most challenged entrepreneurs. In fact, that's where some of the suicide rates are the highest, is where you get to a level of stable income and you don't grow anymore.

So as an entrepreneur, I want you to disavow any thought of staying where you are, of coasting, of having a boutique business. All of those are just excuses to play small, be small, and have a small outcome. I want you to start thinking about what would you really do, if you could? How big can you really make your company? How fast can you get through this Billionaire Code? Because what you might find is, like me, you're a much better entrepreneur once you get into eight figures, than you are on the way there. So, don't let anyone ever tell you you should play small, stay where you are, or stop growing, because that's what we are as entrepreneurs. We are growth agents and change agents, and it's exactly what you should be doing.

If you haven't achieved owner yet, I want you to understand the possibility is there, and $10 to $30 million is an incredible place to be as an entrepreneur. It's one step below investor, which I'll cover the next time I pick up on the Billionaire Code.

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