Momentum Podcast: 174
Evolution Of Leadership Levels
by Alex Charfen
Last week, I had massive, overwhelming anxiety. Here's why, I was sick. I was actually sick from before the 1st of July, until about Saturday or Sunday, so over seven days.
The level of conversation you have evolves as you grow a company.
When you start a business, there is no real strategic conversation because you’re doing everything yourself. However as you continue to grow and scale your business your discussions become more important.
It’s easy to want to stay in familiar territory when it comes to communication. Businesses that don’t adapt and grow in this area remain stagnant.
There is a better way. If you’re willing to commit to driving the conversations you have from tactical to strategic, you’re on your way to becoming a transformational leader.
Full Audio Transcript
I'm Alex Charfen. 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 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.
Instead of just day dreaming 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 evolution of leadership conversations.
I want to tell you about the evolution of leadership conversations. I'll share with you first what triggered this conversation that you and I are about to have today, was spending time with two of the brightest business minds on the planet, Alex Hormozi and Taki Moore.
Taki is just an incredible business guy. I know his wife and his family. [Kiri 00:01:30] Marie was here. His daughters, [Jucinta 00:01:32] and Aurora were here today. He has an incredible family. We've hung out with them before. He runs a company that helps coaches expand their reach, coach more people, build a bigger business. He gets crazy results.
He actually coaches hundreds of people and gets incredible results, because he's so committed to his client outcomes. I work with Taki. Right now, I'm getting help with my business, and I'll explain why in a minute. It has to do with the evolution of leadership conversations.
Alex was also here. Alex Hormozi is the CEO for Gym Launch, which is exploding. They're working with almost a thousand gyms in the United States. We are at the point now, in the gym industry, if you run a bootcamp, or a crossfit, or any type of gym where you are not one of the big box, 80,000 foot, here's all our equipment, but if you're one of those independent gyms out there ... there's two types of gyms in the country right now, those that are working with Alex and Layla, and those that are about to feel it if they're not.
They are completely changing the landscape of that entire industry. Entire franchise groups are folding into Alex's Gym Launch organization. His second tier group, the Gym Legacy group, it has hundreds of gym owners in it. If you compare what Alex and Layla have done this year to the history of the growth of any gym or fitness franchise in the history of the country, they are beating them by hundreds of percentage of growth a year, over 100%, way faster than anybody else has by several times over.
Having those two guys in a room today, coach me and help me, was incredible and I need it. Right now, Cadey and I took a company that before, our company was up to $13 million in information products and real estate, and coaching and information products, and we decided ... we made this decision one night ... that we were going to exit the real estate market, that we wanted to be out of it, completely out of it.
What we could have done is pivoted into the real estate market and become a real estate coaching company, or a real estate products information company. The reason that the certified distressed property expert did so well was because I had a very high level, a very high evolved leadership conversation. I'll explain in a second. Building a real estate coaching company was very hard for me, because it was a much lower level of leadership conversation. Again, I'll explain in just a minute.
It was intense with the two of them helping me. At one point, I said something to Alex about how for me, it's really marketing is a challenge. It's not something that I ever studied when I was younger. I'm not an online marketer. I know marketing at a very strategic level.
Again, at a high level, I'm very good at marketing. It's very hard for me to get people to execute on marketer to do it myself. We do pretty good, but we're about to do a lot better, 'cause I'm now having strategic conversations. I found the right person.
Alex mentioned how well our high end mastermind was going, because he's in it. He said, "You're just chillin' with 30 people at a high end mastermind." We have no marketing. We haven't put it out there in any way. We haven't talked to anybody about it. Those are almost 100% referrals from our first five or six clients, or people that I've talked to at events, or just people that we've met since April.
Filling a high end mastermind with million dollar plus companies, for most people wouldn't be easy. Alex was joking about it, but it's hard for me. I tried to explain to him, it's hard for me, that initial growth of a company, that early tactical conversation stage, is very difficult. In my first business in my 20s, I blew through that stage. I had to hire leaders almost immediately, because I got overwhelmed with very high level Fortune 500 contracts.
When I started having strategic conversations at the level ... my clients were at a very high level of conversation and my team was at a higher level of conversation. Let me explain the evolution of leadership conversations. Here's how it works. As you grow a company, the level of conversation you have evolves. In fact, it changes dramatically.
Let me take you through this. In your early stages of a company, you're just doing everything yourself. There is no leadership conversation whatsoever. In real estate, 90% of the market is in that position. They do all the work themselves, no leadership conversations. I'll tell you why that's significant in a second, and why Cadey and I had to make the change that we did.
It's hard for people to understand that I walked away from a business that was that big, with that big of a list, with that much notoriety. When I went to real estate conventions, I couldn't get from one side to the other because everybody wanted a picture for social proof.
I was on TV in real estate more than anyone else on Fox, or CNN, or CNBC. I was on there two or three times a month, at least, talking about distressed real estate, between 2009 and 2012 or '13. We were incredibly well known, but we had to move on.
The reason is, I'm not used to having conversations with the person who's doing all the stuff. That's not a conversation I really had a lot in my entire career. I learned how to do it when Cadey and I went into real estate, after I got out of ... For a while, we also ran an investment company, before we had the information products company.
When I was buying and selling properties, I was having a lot more direct conversations. It was really difficult for me, because I was talking to the person who was doing the stuff. I was talking to the painter or the cabinet guy. Eventually, I figured out how to use contractors, and it was a more strategic conversation, because here's the second level of conversation.
First, you're just having zero leadership conversations. If you're doing everything yourself, within your business, there's really no leadership conversation. The second level is, you start to have tactical conversations. You might get some contractors, some outsourcing help, some virtual help, part time help, but it's all tactical.
It's like, "Hey, do this thing for me. Help me with this thing. Take this off my plate" type conversations, but you're talking to the person who's actually executing. I haven't done that a ton in my career. In fact, when you look at my track record, I've spent the majority of the percentage of my time in the next level or above.
When you go to the next level, you're now talking not to the person who is doing the thing, you're talking to the person who's managing people who do the things. You're also talking to some people who do it, but you're talking to the person who's managing other people. For me, that first level of strategic conversation, where you're talking to someone who's managing someone else, that's where I start getting comfortable.
Today, I coach million dollar plus entrepreneurs. This is a conversation that I've been having for over 25 years of my life, talking to the person who manages other people. That's the conversation I'm used to, that and above, the more strategic, second level conversation.
As your business continues growing, the next level of conversation you'll have is, now you're gonna start talking to at least one or two in the dollar ranges is in the $100,000 to $300,000, you might start having those tactical conversations, where it's just, take some stuff from me. Really, up to a million, it's usually mostly tactical. It's people as process.
Then it will kill you if you keep people as process. Go listen to my podcast. People as process will stop you. The reason is that you have to stop seeing people as process, and now you have to start having the conversation that's strategic.
Then you have those early strategic conversations with people, where you let somebody fill a role for you, take a department for you, just handle customer service. You're not telling them just to make the calls. You're telling them to make the decisions too.
Then the next level is, that person gets to hire people in customer service. No you have someone who you're talking to about having the leadership conversation. Then the next level after that is, you're hiring someone who now runs a department, so you have a second tier leadership conversation.
That's where I spent most of my early career. My business ramped up to over $250 million. I was used to having very high level conversations in my team. I talked to mostly people who managed huge parts of my business. Then I was used to talking to, in my client world, very high level people. Most of the time, most of my conversations were with VP executives, C level executive, or higher most of the time.
I'm used to that level of conversation in business. For you, for any entrepreneur, here's what we need to understand. In our early conversations, they are tactical, and we want to drive them to strategic as fast as we can. How quickly can we start having a second level strategic conversation? How quickly can we grow our team to where we have a third level conversation?
When you get to start talking to people who are managing the person who are leading the department, where they have a manager, and then that manager might have some managers and some team members. Now you're getting into the eight, sometimes nine figure range when you're in those conversations.
Guys, if you want to go all the way up, if you want to go to nine figures plus, if you want to go to that three comma club in the sky, billionaire status, you have to commit to constantly having this constantly evolving level of conversation. In fact, that's something that I've watched Alex and Layla do better than, I think, any entrepreneurs I've ever worked with.
I think it's part of the reason that Gym Launch is doing as well as it is. I think it's why they've had the impact they've had, is because the two of them have almost seemingly, from watching them, seamlessly jumped through these levels of leadership conversation.
For you, this is something to think about. Here's what happens to a lot of business owners. They get into this conversational comfy spot, and their business becomes like a bean bag chair. You know how you get into a bean bag chair? It's comfortable, but it's a pain in the ass to get out. You're comfortable, but maybe after a while, you don't really want to sit in the bean bag anymore.
Let's be honest. After a short period of time, you're in a freaking bean bag. It's not the most comfortable thing in the world, but getting out's really uncomfortable. That's what happens to business owners. They get to a plateau, and they stay in this comfortable spot, and a lot of the time, it's because they're afraid to have that next level of leadership conversation.
Early on, they're afraid to hire anyone, or ask anyone for help. Or they tried it a few times, and it fails, and then they just don't want to ever do it again. With the right systems, with the right strategies, anybody can go through these levels, but you have to have a communications system.
This is why, as a company, we teach a communications system called the Charfen Cadence. What it does is, it shows you at each level how to have those conversations systematically, where everyone understands what you're saying, where all the trains run on time, where your team knows what to expect. They're not waiting from word on high.
They know when you're gonna communicate, how you're gonna communicate, what their outcomes are, what's being measured. They understand exactly how to grow, because here's what happens. You look at someone like Alex and Layla, and I can tell you, Layla's been through this journey up close and personal since July ... since July.
In July, it was she, Alex, and one person helping them. Since then, she's now gone to the point where she went first to hiring that initial team around her, but the company was growing so fast, she immediately had to transition to having the conversations with people who could hire people around her. Then the company started growing so fast, she immediately had to transition conversations to the person who could hire people, who could hire people.
Literally, she almost overnight had to go to that second level of leadership conversation, where you're talking to the person who's managing people, who are managing people. We had to bring in ... actually, she brought in her sister, Mimi, who's absolutely brilliant. Talk about a true believer who's committed to the cause, and who was tailor made for a position. It is such an incredible position person fit at Gym Launch.
Now Layla, she's literally in that second tier, but in under a year. Gosh, she blows me away with how ... I told Alex, there's visionary entrepreneurs, and then there's visionary operators. Layla is a visionary operator. She proves it when she seamlessly switches through these levels of conversations.
For you, if you look at your business, I want you to ask yourself, are you in a comfy spot? Is part of it because you're having the same conversation and it's comfortable for you. It's a known quantity.
Here's why I believe so many entrepreneurs stay at the sub-one million dollar mark. 97% of entrepreneurs stay at sub-one million dollars because they get comfortable somewhere, or intimidated by the next step.
Here's what I want you to understand as an entrepreneur, is that you've always wanted to have a bigger influence, and a bigger impact, and make a bigger contribution, and have more revenue, and more influence, and more affluence. The way that it happens is, you change the conversation you're having. You elevate past doing it all yourself. You elevate past talking to that first level of team.
You elevate to where you're talking to leaders who are helping you grow your business, because that's where people like us really take off. I know, because I help entrepreneurs do it every single day. You should see, not only how their business, but their lives change, how their interests shift. They suddenly start taking care of themselves differently. They see the world differently. They see opportunity differently. They start seeing the people around them differently.
They have a different, richer level of conversations, and a different level of experience, and a different level of engagement, and a different level of relationship in their lives because they're in momentum, growing the empire that they've always known they wanted. Let's be honest. For most of us, it's also needed.
It's incredible to watch. For you, if you want to get past where you are now, it takes the five core functions of a company. You can go listen to that podcast. It takes lead generation, nurture, conversion ... what is your sales mechanism, delivery ... are you delivering what you said? Are your clients happy? Then your retention, resell, and upsell. Those are the five core functions.
The level of leadership conversation you have that addresses those will show you how fast your company grows, and will indicate how fast your company is going to grow, or is the precursor for you to have a much faster company growth.
If you have the right system and the right structure, any entrepreneur can go through these levels. Let's be honest. Haven't you always known you were meant to do more than you're doing right now? Haven't you always had that suspicion you should be doing more, contributing more, giving more back?
If you have, then you're just one of those natural born leaders who's always been getting that spiritual, energetic push, telling you to go towards that level where you start having the right level of strategic conversation. If you're ready to do that, reach out to us.
If you haven't yet, download my book, The Entrepreneurial Personality Type. It will show you how I see the entrepreneur, and it will also help you understand yourself better. If you've ever had trouble explaining yourself to a spouse, or a girlfriend, or a coworker, or a team member, it might help you do that also.
If you have kids who have been called a behavioral challenge, it will probably help you understand them way better. It will help you stop limiting behavior and create unlimited momentum. Go to freemomentumbook.com and check it out.