Momentum Podcast: 58

What Only 1% of Companies Have

by Alex Charfen

Introduction

 I want to share what it is with you and why the 1% of the companies that have it are the ones that grow. Those are the ones that create massive outcomes in the world, and they're the ones that lead their field. It's the companies that we know. It's the names that we're familiar with. It's Tesla and SpaceX and Apple and Google, and the very small tiny 1% of companies.

Episode Description

Only 3% of businesses will ever eclipse $1 million in gross revenue year. Only four out of 1000 businesses Will ever grow to over $10 million dollars a year. There is a reason. In order to grow foreword and get the help you need, you need to know what you're going. Most businesses work on a project by project basis deciding what to do in the moment and then trying to get everything done going forward. The most successful organizations in the world are able to plan forward, know clearly where they are going, gain perspective along the way and most importantly share all of this with the entire team. If your company is not doing this, regardless of how far you've gone, you are not reaching your full potential.

Full Audio Transcript

I'm Alex Charfen and this is the Momentum podcast, made for empire builders, game changers, trail blazers, shot takers, record breakers, world makers, and creators of all kinds. Those among us who can't turn it off and don't 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, and 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.

This episode of Momentum is about this illusive tool that only 1% of companies have. I want to share what it is with you and why the 1% of the companies that have it are the ones that grow. Those are the ones that create massive outcomes in the world, and they're the ones that lead their field. It's the companies that we know. It's the names that we're familiar with. It's Tesla and SpaceX and Apple and Google, and the very small tiny 1% of companies.

Now when it comes to business, there's an argument that we're getting a lot of things wrong, and I think this is one of the biggest ones in most businesses. This is one of the biggest things that challenges growth, challenges stability in most business. But I want to give you some statistics first to prove that we're doing it wrong.

50% of businesses fail in the first five years and 70% fail in the first 10 years. In the United States, there's 29 million businesses and 22 million are under $100,000. Only 3% of businesses will ever get over one million dollars in revenue a year, and only four out of every 1,000 will ever grow to over 10 million a year. When you look at businesses, everyone has this dream of having a seven figure, eight figure, nine figure business, but it's just the odds are stacked against you. So where are we missing?

There's a lot of places. A lot of it has to do with business models. A lot of it has to do with pricing. A lot of it has to do with all different types of things, but I think this is most endemic in companies. Organizations don't have a forward planning system that allows them to plan where they're going to go, communicate to their team where they are on that journey, like what the measurement is, and understand exactly who should be doing what to get there.

That is the major differentiator between successful teams and teams that struggle, because on a team where you don't have a forward planning system that tells you where you are going, perspective along the way, and then who's doing what clearly, what happens is on teams like that, people just work every day trying to get everything done. They don't have a destination. They don't have a clear outcome, and if you go back and listen to the podcast on understanding how you create momentum, you'll know that it takes three things. It takes a clear outcome, transparency, measurement along the way, and then accountability. You need to know what you're doing and who around you is helping you. Like who's doing what.

Let me show you the difference between two organizations. You go into an NFL locker room and you talk to anyone in that locker room ... I've had some experience with teams, with players, and when you look at the communication systems in those teams, it's absolute. Let me show you. Everyone in an NFL locker room knows exactly the outcomes. One, you want to get to the Hall of Fame. That's the most important thing as a player. You want to see if you can get to the Hall of Fame. Second, you want to win the Super Bowl. Third, you know exactly what you're doing, what your schedule is. You know that month what your assignments are. You know that week who you're going to line up against, and you know that day, what your workout is, what you're going to do, what exactly is required of you.

When you look at NFL teams, usually those are players made up of disparate backgrounds, probably wouldn't hang out unless they were paid a lot of money to be there. They can be incredibly hard to manage or lead, but why do NFL teams consistently do so well? Because they have this forward looking system. They know exactly where they're going.

Now you look at the average entrepreneurial organization and the opposite is true. Very few people know the Hall of Fame goal. Sometimes it's communicated in this elusive thing called a vision, but it's usually for most teams, I'll be honest with you, the vision is usually more intimidating than anything else. And then as far as knowing what the Super Bowl is, most companies don't have clear stated annual objectives. As far as knowing the schedule, most companies don't really understand, like the quarterly objectives. What are the projects? What are the things that have been pulled out and committed to for the quarter?

And when it comes to understanding how all the way back to the day, like an NFL player, that's where things absolutely fall apart, because you can take your quarterlies and understand what you'll do in the month, what percentage of that quarterly project or target you're going to do each month. Then you assign resources, and then each week you create your commitments for the week and you sit down and you look at what do you need to do that day to get there. And that gives you that same experience as the NFL team. But here's the challenge.

Less than 1% of companies do this. Less than 1% of leaders understand how to go through that process and how to do it effectively so that quarter after quarter, you don't just set quarterly targets. You exceed them. So that you're doing quarterly planning more often than every quarter because you've done so well, you've exceeded all targets.

Now, if you just take what I just spelled out and you add it into your company, it's going to change things, because in most organizations here's what happens. They decide they want to make a lot of money or they want to have a big impact, and then they start creating projects that they believe will get them there. They introduce a product and then they introduce another product and then they do something else and then they have a promotion and maybe another product and then ... but here's what happens. Eventually, some companies under a million, some companies over a million, some companies over 10 million, some companies can get to 30, 50, 60, 70 million without a forward planning system.

However, if you don't have this, then you're not getting your full potential because as entrepreneurial personality types, as evolutionary hunters, we are in momentum when we're in the hunt. When we're in the hunt, when you're in that feeling of momentum, it's when you know your outcome, when you have perspective along the way and you know who's doing what and what you're responsible for. Like we are tribal. We hunt in packs. We go out on that hunt, and that's exactly what gives us that feeling of being in momentum. That's what makes you feel like you can do more. You're cognitively more clear. Your physiology's charged. You're chemically charged.

And that is exactly how your team will feel when you share that forward planning with them, and they know exactly where the company's going and they know, instead of that hard to understand mission or vision that in so many companies is confusing, you come up with a client-centric mission, like who are you going to help? How are you going to help them? What's the change you're going to make and how will you know you're successful? Those four questions, if you just sit down and write them out and write down who are you going to help? What's different about your clients? How are you going to help them? What are you going to do to help them? What is it you do that's different? And what's the change you're going to make and how will you know you're successful?

I'll share my client-centric mission with you just off the top of my head. This is how easily you can answer those questions. We help visionary entrepreneurs who can't turn it off and want to make a difference just as much as they want to make a living, and we help them by creating frameworks and systems and memberships and communities that help them lean into their strengths so that their weaknesses aren't even an issue. And the change we want to make is that entrepreneurs build teams, get the leverage that they need and create their greatest contribution, and we will know we're successful when we are the destination for entrepreneurs who are growing and scaling multimillion dollar companies and building teams and our clients are growing. That's our client-centric mission.

We recruit people based on that mission. When somebody asks me what's your elevator pitch, I tell them that mission. When somebody asks me what do you, I tell them that mission. And that way everyone on our team knows the Super Bowl.

And so for your business, do an evaluation right now as you listen to me. Do you really know that long term? Is it clear or is clear in your head, but not so clear that you could write it down on paper? And do you know where you're going this year and what you're doing in a quarter and how to measure the months and how to set up the right productivity. This is what we help people with, assigning the commitments for the week, and then your daily planning and understanding that if you go through that process, here's what magical about it. This is why everyone gets into momentum. This is why you get more accomplished. This is why your company will move forward faster because you go from not really knowing if you're contributing to something bigger to being able to tie down your long term client-centric mission, the massive change you want to make in the world, all the way back to your day-to-day activity. Imagine what that would do for you.

And now, imagine what it would do for every single person on your team. That's why you want to do it. Less than 1% of companies do this. Most CEOs are terrified of any forward planning and those that aren't, blow it off. But those who figure out this discipline and the series of meetings and interactions with their teams that keeps this all going forward are the ones who we read about. They're the ones we have the most respect for and they're the ones whose companies are making the greatest impact in the world, and yours can be one, too.

Thanks for being here with me on this episode of the Momentum podcast. If you haven't yet, download my book, The Entrepreneurial Personality Type. Go to freemomentumbook.com. Freemomentumbook.com. It may tell you more about yourself than anyone ever has.

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With gratitude,

Alex

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