Momentum Podcast: 592
Decision Making in a Crisis
by Alex Charfen
In the midst of a global crisis, entrepreneurs around the world are overwhelmed with decisions that must be made in order to survive. In 2007, I faced a very similar situation with the U.S. economic collapse that sent my wife and me spiraling into bankruptcy. That situation was one of the most humbling and devastating experiences I’ve ever gone through, but it taught me the importance of decision-making in crisis situations. Within a year, Cadey and I were liquid millionaires once more, and by 2011 we had built a company that was #21 on the Inc. 500 list of fastest-growing companies in the United States.
In this episode of the Momentum Podcast, I want to share with you the exact process and framework we used in the midst of the financial crisis of 2007 to make decisions on a consistent and recurring basis. Not only did this framework save us and make us millions of dollars, but it is also still changing the lives of entrepreneurs all across the globe through our coaching programs. You can and will get through this, and when you can make the right decisions, you can continue to grow your business even when the world is in a panic.
Full Audio Transcript
This is the Momentum Podcast. In the early two thousands, my wife Katie and I were running several real estate firms in Florida. We had massive cashflow. We were building a ton of wealth. We thought we were on our way to retirement. Right up until 2007 hit. Within a very short period of time, we had lost all of the cash reserves we had. Tens of millions of dollars in equity and properties and we ended up bankrupt. It was one of the most humbling and devastating experiences of my life, but I wouldn't trade it for anything. Because within 12 months we were back to liquid millionaires and in 2011, only four years after bankruptcy, we were number 21 on the Inc. [500 00:00:39] list of the fastest growing companies in the country. I want to share with you the exact framework we used to make successful decisions over and over again throughout the financial crisis.
The same framework we show our clients internationally today who are in our membership programs, and our coached with us. And the framework we have shown thousands of businesses to navigate financial crisis and successfully make decisions. You can get through this, you will get through this. When you make the right decisions, it'll make it even easier. I'm looking forward to helping you in just a second.
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.
The financial crisis of 2007, 2008 threw the entire country, and let's get real the entire world off track. We didn't expect it, we didn't know it was coming. It was one of those things that when it finally got here, it was completely and totally overwhelming for most people, but here's what we need to understand about the financial crisis that we've just been through.
Fortunes were made. In fact, people became extraordinarily wealthy, took advantage of opportunity, built businesses, made entirely new organizations during that crisis and it's not just people out there. Katie and I did it. We actually put our company, number 21 on the Inc.500 list in the middle of an international recession. We it through successful decision making. And I want to... On this podcast I'm going to share with you why as entrepreneurs we make such challenging decision making, how you can make better decisions and then the actual framework we use with our clients in detail so that you can start using it right now. Because here's my goal, my mission, my hope, the love and light that I'm sending you is that I want you to not only get through this crisis, I want you to get through this, to navigate it to make a massive impact, to come out of it and change the world because that's what we do as entrepreneurs.
In fact, if you look at the history of crisis throughout the world, one of us, an entrepreneurs stood up and said, "I have an idea. I have a way for us to do this. I have a better framework. I have a better system." I stood up in 2008, 2009, started training the banks, the government, real estate agents on how to work through foreclosures and we pulled the foreclosure crisis forward. Entrepreneurs are the most consistent source of positive human evolution and we always will be and we will be in this crisis as well. Now, here's the issue with the entrepreneurial brain and crisis decision making. Our brain, when there is pressure and noise on an entrepreneurial brain, when we feel pressure and noise, we want to do one of two things and entrepreneurs and people in general do one of two things. When there's high pressure and noise from a crisis, we are the freeze or we start making emotional and irrational decisions.
So let's look at the both of them. First, high pressure and noise. What happens to that first group of people? They freeze, and what happens when you freeze in a crisis? We watched it during the financial crisis that we've just had, over and over again. We watched it during the mortgage crisis. People would freeze, they wouldn't make decisions. They would put their head in the sand. They would pretend like nothing was going on. They would just, I mean, let's get real. A lot of people started drinking, ignoring the world, not really paying attention to what they needed to do, not making the right decisions. And when you freeze, here's what happens. The decisions will eventually be made for you in the middle of a crisis. The world will make decisions for you. If you don't make the decisions yourself, you will have them made for you.
So decisions are going to be made. It's up to you, as to whether you want to guide them or not. We saw people do it all the time. Their house would be going into foreclosure, they'd have trouble with their finances. They would just freeze not to make any decision, not do anything about it, and end up in a really challenging position. I do not want to see that happen to you or anyone else who follows us in this crisis. I want you to come out on top. I want you to be able to make a massive contribution, make an impact, help resolve this thing. Help keep, people stay in momentum. And so the second thing that most people, most entrepreneurs do in a crisis. When you feel high pressure and noise instead of freeze, people get reactive. That means they start making emotional or irrational decisions and they make them fast.
Well, here's what happens. You get high pressure and noise, you start making emotional, irrational decisions, and then the next thing you know you have to change those decisions because you made them irrationally. There wasn't a lot of thought behind them. So then you're in a crisis, making decisions, changing decisions, going different directions and that wastes time, effort, energy, focus and cash. In a crisis, you want to make decisions so that you can serve all five of those. You can serve your time, your effort, your energy, your focus, and your cash so that you can be as productive as possible. So here's the switch you need to make. When you feel the pressure and noise of a crisis, make decisions within a framework. Make decisions within a system. Do not just try and make the best emotional or irrational decision. Just making the decision off the top of your head.
When we shoot from the hip, when we don't analyze first, that's when we really get into trouble. The framework that we teach, high level for planning, high level framework is, it's A analyze, prioritize, commit, execute, and renew. And here's what I mean by that. Analyze where you are and understand the situation and what you could do. Prioritize the things that you could do so you know what should happen first, and get them in a stacked ranked list. Then commit to what you should do first, and commit to an execution period. You have that list of priorities. Commit to for the next week, two weeks, three weeks, four weeks, we are going to execute like crazy. Then once you've committed and taking a look at it, then once you've committed and executed, then renew. Go back and start over by analyzing again, so analyze, prioritize, commit, execute and renew.
Now that's our high level framework, but I want to show you a deep dive on that first step. Analyze, that you can use in a crisis to make decisions. How should you make decisions for your business? It's simple. When you look at the customer journey within your business. When you look at what creates money in your business, it is the five core functions that we share with all of our clients and I want you to understand something about this content. This is foundational to the coaching memberships that we have. This is the same content I use in my one on one coaching. When I take on private clients, this is the exact framework we show people to use, to consistently analyze their business and make the right decisions moving forward. So here's our five part analysis framework. It is the five core functions, lead generation, lead nurture, conversion, delivery, retention, resell and upsell.
Let me take you through these and here's the way you use them. Right now, get a sheet of paper and write down lead gen. then next to it, write nurture, then next to it, write conversion. Then next to it, write delivery, and then retention, resell and upsell. And rank yourself one through five. Lead gen is the act of getting a lead that you can sell to. Nurture is everything you do with that lead until they finally buy. Conversion is the act of conversion. The sales page, the sales call, how do you sell your leads? Those are your conversion... That's your conversion function. Then delivery is everything you do to deliver your product. And then retention, resell and upsell that last of the functions, it has three words. It's one function. That is everything you do to get somebody to retain, so not return the product.
Resell. Buy something more, an upsell by something that's more expensive. You go through these five core functions and you analyze where am I on lead gen, nurture, conversion, retention, resell and upsell. Stack rank from one to five in each one. And here's something I want you to know about the five core functions. You are not trying to get all fives. So if one is being the not very good in a category and five is being the best, what all entrepreneurs do is say, "Oh, I want all of my five core functions to be at a five." You don't. And I want you to understand why, this is not a win lose framework. This is an analysis framework so we understand where to put resources. Let me explain to you how it works. When you sit down and you look at lead gen, nurture, conversion, delivery, retention, resell, and upsell, and you stack rank them one through five. You look at where is your lowest number and that's where your resources need to go no.
Especially in a crisis, I know other people are going to tell you to focus in other places. I know there's going to be consultants and coaches out there telling you to do all kinds of different things, but here's what I want you to know about your business. If you maintain your focus on the customer journey of becoming a lead, being nurtured, converting to a purchase, getting your product delivered to them, and then buying from you again. And you focus your efforts on how are we doing in lead gen, how are we doing in nurture? What's our conversion process? How well is it going? Are we delivering at the highest level and are we retaining, reselling, and upselling our clients? If you continue to focus on those five things through this crisis or through any market, you will continue to put your time, effort, energy, focus, and money to exactly where it's going to move your business forward the fastest.
When you commit to a framework, here's what happens. If you consistently analyze the five core functions in your business, you will have a measurement framework that will give you feedback over and over again. As you make decisions in this crisis, as we get new information, as we find out about what's going on, as we find out about what's happening, rather than get a piece of information and make a decision, because that's what our brain wants to do. We have to hold off that reptilian brain. We have to hold off that unevolved part of our consciousness that says in a crisis, get decisions... Sorry, in a crisis, get information, make a decision, act fast, decide fast, move fast, do it all at once. We need to be careful there. See, we're evolutionary hunters and our brains are programmed for a fight. This crisis feels like a fight.
We need to understand that we're not in a fight. We need to understand that we're in the middle of a massive opportunity to make a difference, to contribute, to stay grounded, to be present, to be aware, to be one of the entrepreneurs that gets through this, creates opportunity, and makes a massive impact. And the way you do that is by maintaining your decision making process. By creating or... And if you don't use one by using this decision making process so you know exactly where you should apply resources in your business. Because if you consistently throughout this crisis, make certain that you are focusing on generating leads, nurturing those leads so that they know you better. Converting those leads so that they buy from you, delivering to them at the highest levels so that they buy again and they share with their friends that they've worked with you. And then retaining, reselling, and upselling them. You will not only survive this crisis, you will make a massive and make a major difference in the world. If you want help with this. If you'd like to understand how to analyze, prioritize, commit, execute, and renew throughout your business. If you'd like to do a much deeper dive on the five core functions and understand how they're affecting your business, you should talk to us. Go to Predictablebusinessolutions.com predictablebusinesssolutions.com and let us help you understand the systems, the tools, and the frameworks that will help you consistently and predictably grow your business, in any market. Fortunes are made in distress markets. There's more opportunity in a market that's going up or down then there is in a market that is stable. When you have the right decision making frameworks and the right perspective, you can take advantage of this market and come out on top, make a massive impact and help us get past this.
Go to predictablebusinesssolutions.com right now answer a few questions for my team. Jump on a call with one of us and let us show you how we can help you. Predictablebusinesssolutions.com and remember, even in a crisis, if you make decisions with a framework and you consistently analyze where you are and you are improving the five core functions of your business, you will come out on top, you will be in the lead, and you will make a massive impact. Go to predictablebusinesssolutions.com and let's get started.