Momentum Podcast: 380
The CEO's Dilemma
by Alex Charfen
When I talk to entrepreneurs, I always share that success creates deficit, and volume creates complexity. As a CEO, you have to do the near impossible, you have to continue to make increasingly important decisions with less and less information.
This is why having a communication structure in your business is so important.
I say it all the time, growth creates deficits and volume creates complexity. When you're alone in the organization you have the most information you'll ever have, you're the only one who knows what's going on. The second you hire just one person the amount you know diminishes slightly and it keeps going down as you grow. That's why It's so important to have structure and systems in your business. As a CEO you have to make increasingly important decisions with less and less information. For your business to succeed you need to be making the right decisions the majority of the time.
Full Audio Transcript
Speaker 1: When I talk to entrepreneurs, I always share that success creates deficit, and volume creates complexity. As a CEO, you have to do the near impossible, you have to continue to make increasingly important decisions with less and less information. This is why having a communication structure in your business is so important.
I just got off my grow and scale call, that's my high end mastermind where I have some of the most talented entrepreneurs on the planet. And I love those calls because I get pushed to answer questions, I get pushed to support the entrepreneurs that are in our group. And tonight, one of the things that came up was the dilemma that we all have as CEOs. And why it's so important that we have a structure to our business and we have a structure to when we have meetings, we have a structure to when we do financial reviews. We actually do financial reviews. We have a structure to how we meet with our team, we have a structure to when we meet with our team. Here's why structure is so important. As a CEO, you have to do the impossible, you have to make increasingly important decisions with less and less information, and you have to right most of the time. That's how your business is going to succeed. There is no other way that this works. And for anyone who says, "Well I'll just get more information." Well understand, you will make increasingly important decisions with less and less information, there's just no way to avoid it.
See when you are alone in the business, you have more information than you'll have at any other time, 'cause you know everything that's going on. The second you hire one person, there is a diminishing amount you know and it just keeps going down as you grow and create volume. Because growth creates deficit and volume creates complexity. It also gets harder over time. And the challenge is, is that as you know less and less with each person added, you have to successfully make increasingly important decisions. So you need to have a way to analyze what's going on in your business, in a successful way, knowing that you don't know everything and you won't after you hire the first person. Even if they sit in your office and you're reading every email and listening to every call, you still don't know everything, you don't know what they're doing when they leave. So you have less and less information about the people in the business, and as you grow, it just gets more in that direction, it gets worse.
And so, when you have a structure to when you're meeting with your people, when you're doing a monthly financial review, and here's why monthly financial reviews are so important. Sitting down and looking at the results you have in any given month, and then looking at what the financial results were, so the results within the business, then looking at what it cost you to get those results and then what the results were in your profit and loss statement in a rolling six month PNL. That is so crucial to understanding what's going on in your business and to making increasingly important decisions with less information. Because when you understand the finances of the company, you can start making a more informed decision than you do when you don't understand the finances. When you're meeting with your team within a structure, within a cadence and the same meetings happen at the same time, you start to develop an entirely different level of perspective as to what it means to have that meeting. How much can you get accomplished in the meeting, how much can get accomplished in the interim timeframe from one meeting to another.
What team members are capable of what, how your team works together. So you get a much greater perspective when you take the chaos of the human interaction out of the game. And when you create process and structure around how you communicate and how you receive and evaluate information, you end up as a CEO who can do the impossible. To make increasingly difficult decisions with less and less information, because if you're one of the few CEOs out there who is actually meeting with your team and getting real intelligence from them and involving them in the process, it's not just you doing it anymore. And when you meet with them within a cadence, within a structure like we recommend, the same meeting feels the same way over and over again. And people are evaluated in the same way over and over again. And you set up outcomes and try and knock them down in the same way over and over again, and what that creates is a level playing field for your team. They understand what one day means in comparison to the next. They also understand how they're going to be evaluated over time and that level playing field allows your team to play at a higher level because now they understand the rules of the game.
And the vast majority of entrepreneurial CEOs, it's sad what happens to teams. They set up meetings and they cancel them at the last minute. They set up meetings and they're 20 minutes late. They don't set up meetings at all, they just don't meet with their team unless there's a problem and at that point, all you are is the person who talks about problems all the time. And so when you set up a structure and a process through which you do these things, everything in your business will change because you will get better at what you do in the business, 'cause everything else is process. And your team will feel more confident because you're now communicating with them in a process. It's not them waiting for word from on high, for you to finally tell them what's going on, it's you communicating within a process which makes everybody feel more confident and puts everyone in momentum. Because if they have clear outcomes and clear accountability and transparency, they understand the scoreboard, what does it take to be in momentum for any evolutionary hunter? Clear outcome, an understanding of your responsibilities and what everybody else is doing, so you have mutual contribution, and a scoreboard to let you know you're winning.
If you go back through any period of momentum in your life, you'll realize you had those three things. And if you create that for your team, where you give them clear outcomes, clear accountability because you're communicating within a cadence and everyone knows what to expect and understands; and clear scoreboards because you're looking at the finances and you're reviewing the numbers and you understand what's happening and your team has seen those things as well. Everyone in your business will get into momentum and so will you, and when a whole team is in momentum, that's when you truly become unstoppable. So the way you overcome the CEO's dilemma of having to make increasingly important decisions with less and less information, is you create a structure that as time goes on, you increase the strength of the structure, you increase the strength of the process. So when I say that the CEOs we coach never would miss a meeting or be late to a meeting with their team, it's because they've put the process in place.
They understand how important it is and they can't imagine ever missing time with their team because now they're seeing just how much more you can get done when an entire team is in momentum. And when you put this in place, your business will grow in an entirely different way, because when every person has confidence about what they're doing, the amount of noise for a CEO goes down exponentially. And the amount you can get done goes through the roof. If you're anything like me, your business never grows fast enough, but if you follow these types of processes, you will have a business that grows at a pace that you didn't know it could. And that starts feeling like the most incredible momentum in the world. We help entrepreneurs do this every single day. I just got off my coaching call where the average person in our program this year has more than doubled their business. In both finances for some of them and in people for others.
And if you created an opportunity that's bigger than you can handle on your own, and you are ready to start building a team and understand the processes it takes to grow that team and put a communication structure in place so everybody does know what's going on. And you can overcome the CEO's dilemma and make better decisions with a higher percentage chance of success more often. Go to billionaireco.com/apply, fill out the quick questionnaire that we have there and me or a member of my team will jump on a call with you and we'll see if you qualify for one of our programs. Sorry for my dogs in the background, they're crazy. Again, that's billionaireco.com/apply.