Taking a Holistic Approach to Your Business - Part 2

Hey, welcome back to the Business Freedom Podcast. This is part two of taking a.

Holistic approach to your business where I'm really blessed to let Dave hook into your world. If you missed the first part of this, you've got to go back one podcast episode. It's not going to make sense to jump into the middle of this conversation, but Dave really digs into how he measures growth, the different areas of his business and his life that he uses as metrics for growth. And it's not what you think it is. Our industry has failed us in that regard in terms of everyone is just focused on top line. And while he's tripled, almost quadrupled his business in the last four or five years since we've been working together and again, I haven't done the work, I've just sort of given him the roadmap and guided him along the way. But our industry measures success only by top line. Nobody's talking about bottom line or date nights or time with your family or your spiritual journey or your physical body. It's just kind of a broken model. And he really does an awesome job of explaining that. So stay tuned for part two. My only ask is for you to share the podcast with everybody you know in the industry because we're letting you into our inner circle. Our members only content here, here by sharing these sessions.

And also leave us a five star.

Review on the podcast. Be super helpful. So stay tuned for part two of taking a holistic approach to your business.

So why listen to me? Quite honestly, I'm not sure. Lars told me to put some good stuff up here. So I did help to build a brokerage to 800 sides and 150 million in sales and exited the partner active partner position. Built a team through the real estate B school model with the help of Lars and the great team here and exited production relatively quickly. Currently owner help operate four profitable companies. The biggest reason I think is because I failed forward in everything that I've done since the age of 23. So I want to talk about today's plan real quick. We're going to spend about 10 to 11 minutes on each item about how to build a business that's going to serve and give back to you and not steal your life. First is the structure of a business like that and how we measure growth. Second is the people of a business like that. And third is the legacy of a business like that. Raise your hand if you have transaction side goal team members or team leaders or GCI goal. I do, I do. I'm not saying you shouldn't. Okay. How many people here have an annual days off goal or a date nights with your spouse goal? Lars, raise your hand. A few of us. Awesome. My spouse is next to me.

Just remember, when we focus on things.

That don't matter as much, we lose sight of the things that do. And this is a talk about when what we measure is what we focus on and what we focus on expands. And what I measured in all my businesses was the one component of business structure that I understood, which was sales, because it got me from 0 transactions to 50, but it won't get me from 50 to 150. Real quick, we're going to break down how to look at the structure of a holistic business. The first couple slides is understanding that structure. The second is changing our mindset around it. And the third is how we measure growth and success of our business. And it's that third one that I hope you can take a couple notes on because it's what has changed my life this time around. The structure of a holistic business. This is a graph from Richard Swanson in the book Margin. It's a great read if you haven't read it. Richard says in all his demographic studies in the Western culture, we focus all of our attention and measurables on career. I know that I have. It's what we value. It's what makes us feel good. It's what. It's what gives us our identity. But if there's 24 hours in a day, the reality is there's other components of our life that will suffer if we focus all of our attention on career. You can see in this graph. In his studies, he says family, church, spirituality, rest, emotions, nutrition, are suffering a good bit. Gino Wickman in the book Traction Again says there's three components to a business. Sales, operations, and finance. I would add a fourth to that and that would be ourselves. If I'm not rested or I have addiction issues or I'm not present with my spouse or I'm not hydrated or aren't eating well, it's going to affect how I show up and it's going to affect the rest of my business. It's a real component of our businesses. It's a reflection of the health of our business. So it would behoove us to put a measurable around it just like we do sales. This is what most of my sales business looked like. I focused all my attention and measurables on sales and what I focused on. The reality is I had high sales, but I didn't necessarily have a healthy business because I was measuring or at least putting all my attention on the wrong thing. This is what a holistic business might look like. Sales might actually be lower in a holistic business than it would be in a sales business. But operations, finance, and ourselves would be more healthy. Likely our balance sheet would look better and profitability would be higher. With a business like this, Gino says that one's not more important than another. In the book Traction, he says that a company with strong sales and weak operations is going to have a lot of people coming in the front door and you're going to lose them all out the back door. And a company with strong operations and weak sales is going to have a bunch of customer service people sitting around waiting for people to show up. And so not one of these isn't more important than another. Now that we understand a little bit about the structure of a holistic business and that there's four components to it, I want to change our mindset around whether our business serves us or whether we serve it. The best analogy I can give is that one of the components isn't more important than another in my business, in a holistic business, but there is an order to them. See, it makes sense, you guys, that we have all of our attention on sales. At least it made sense to me at the time because what got me from zero to 50 transactions was being a good salesperson. And that feels comfortable to me because I learned it and I know it and I can teach it. When I learned there's operations and finance is another component to the business, I learned that I had to get uncomfortable and learn those things and measure them as well. And so if we look at a structure, a house, as an example of what our business looks like, the bedrock, what the structure the business is built on is ourselves and how healthy we are. And above that's the foundation of the business. If our finances are in debt and a recession comes, it's going to wipe our business out. And next is operations. If we have systems and processes in place that can support a lot of sales, we won't have our hand in everything and our lives won't be stolen from us. And so there is an order to them. And the challenge for me is learning where my bedrock is weak and putting a measurable to that and where my finances are weak. If I don't have six months capital reserves in my business and personal account, my finances are weak. And if my operations are weak, I need to put a measurable to that. Maybe Even pause sales before I grow sales again. Just like a house, if you neglect a house and you don't fix the furnace when it breaks, and you don't fix the foundation when it's bowing, it'll come crashing down when there's wind and rain. And just like a house, a business will fall down in a recession or when there's trouble if we don't show up in a healthy way, if our finances aren't stable and we have measurables around them and if our systems and processes in place. So I want to talk about the third point here. It's measuring growth and success by all business components. What we measure is what we focus on, and what we focus on expands. This isn't a talk about taking measurables off sales. It's just a talk on putting measurables on other things. So what would it look like this year, you guys, to put a measurable on date nights with your spouse or time with your kids and put it in a tracker and tell it to your coach and your team and ask them to hold you accountable for that. Because if you can do that, your business will be healthier by the end of the year. What would it look like? If you have some debt personally or in your business to maybe even next year, think about pausing your sales goal or maybe only increasing it by 10% and putting a tracker around, cutting expenses in your business by 10% and reinvesting the difference to pay off your debt. Because at the end of the year, your balance sheet will be healthier, your business will be worth more, and it'll be healthier as well. Or what would it look like? Like two years ago, I was on a coaching call with Lars and I'd done about 150 transaction sides. And Lars said, what's your goal for next year? And I said, I don't know. What do you think it should be? And like. Like a good coach. He said, well, I think he should grow by 50%. That's doable. So we set a transaction goal to 225. And then I stopped myself. I said, wait a second, why am I doing this? And like a good coach, he said, I don't know. Why are you doing it? I said, I don't know. I don't really need the money. And I think what my business needs right now is more systems and operations that'll support more sales for 5, 10, 15 years in the future so I don't have to have my hand in everything. And so Lars and I set a goal that I Would only increase my sales by 20 transactions that year. Totally doable. So we paused sales growth and we put a measurable on operations. And we said the success of the Dave Hook team this year is going to be by how many systems we're able to put in place by the end of the year. Systems that will work for 10, 15 years in the future and support sales of 400, 500, 600 sides. So what would it look like to do that? Tell me how many people have goals to hire more people by a certain date? Raise your hand. And this goes for team members too. I have team members on my team that want to hire goals. That's right, a good many. How many leaders have measured goals for team members that are documented on scorecards? And I do as well. You, when we focus on things that don't matter as much, we lose sight of the things that do. I want to talk about people for a moment and how we measure people growth. We're going to talk about helping team members with a vision for their future. Using systems and accountability to provide traction and training and providing team members the tools to measure their growth by the three business components that I just talked about measuring our growth with. So number one, well before I say that, how are we measuring people growth? It's funny, when people ask me how big's your business? I always talk about the brokerage. I'm like there's 110 people in that business. And people say how profitable is your business? I talk about the team. There's nine people in that business. There's not much of a correlation to top line transaction count, GCI and profitability for the health of the business. There's really not as much as we think. There are huge companies with thousands of people who are in the red this year with toxic work environments that are sucking the life out of their communities and the people in it that will file bankruptcy this year. And there are three person organizations with healthy balance sheets that are giving back to their communities and the people the two or three people in them love working there. There isn't much of a correlation. What would it look like to measure the growth of our people not by the quantity of people in our business but by the development and the growth of the people already. This is an example of a way to do that. It's a way to create a vision for team members future the people in our organization that have committed their lives to building the thing that we love. This is just an example. You can get one from real estate B school and make it Your own. Ours has junior buyer specialist position at the top, and then you can graduate to a buyer specialist, senior buyer specialist, senior buyer partner, a listing specialist, senior listing partner, an expansion partner, or a sales director or team lead. There's a couple other positions in there as well. And this isn't a handout for people that come on the team. This is for people that are committed, that are strong core values fits, that are doing the work of lead generating, that are being empowered into leadership and really on mission in the thing that we're building. If they're committing their lives to us, let's help them find a way forward in business. But for me, it's not enough to build a holistic business and include team members in that and just say once a year in a personal development coaching talk, where do you want to be on the career track next year? And they say, yeah, I like that vision, I want to shoot for it. And I know there's certifications required to get there and I know I have to do the work and I know I have to do this transaction count to graduate and to be promoted within the organization. But it's not enough for leaders to, to just set a vision. What would it look like to create traction with systems and accountability, to show the people in our organization how they're doing every week in getting to that vision? So this is just an example of a basic scorecard. We have a lead management policy, and we know that for our agents, there's certain things they need to do every day in order to move the ball forward to get them to the next phase of the career track. If they want to do a certain amount of transactions, we know that there's inbound leads that they need to work on and there's inbound activities that if they do these things well, just like the lead management policy says, they're likely to get to their goal and outbound activities as well. What would it look like to show them how they're doing if here's the bar of excellence, how they're doing every single week and getting to that goal. About two years ago, I was working off a Commissions Inc. Platform. We don't use them anymore. They're a great platform, but I was working off that platform. And on Saturdays I would have a little bit more time and I would not have appointments and I would look at my phone, I would take out my phone and I would look at it and a lead would come in and I would see that the lead was new and I would look at it and I would wait 1 minute, 2 minutes, 3 minutes, 4 minutes. And then steam would come out of my ears and I would be looking at the lead like a vulture and nobody would get it. And I would send like a passive aggressive text to the agent and would say, did you get the lead?

And I knew they didn't get the lead, but I wanted him to know that I knew that I didn't get the lead. So I didn't say, you didn't get the lead. I said, did you get the lead? And then I would excuse myself from.

The dinner table and run to the.

Bathroom with my phone and see if they got the lead. And my wife was always like, are you okay? And I said, yeah, I'm fine.

She'd say, what's wrong? Nothing. And then she'd say, yeah, you're really consumed by something. And I would say, yeah, they're not getting the leads. And I was running my business off of emotion. What would it look like to do the work and show our team how they're doing every week? Not on emotion. An average high school basketball coach has somebody on the court tracking how many foul shots, three point shots, layups, rebounds and pass passes players are making. An average basketball coach when somebody's shooting foul shots, isn't shaming the player in front of the stadium. Why aren't you making foul shots? What's wrong with you? An average coach is encouraging their players during the game and an average basketball coach is looking at that data. They might have had an off week, but if three or four weeks go by, an average basketball coach might see a trend and sit down with their player and say, hey John, I noticed if you worked on your foul shots and increased it by 20% next year, you could probably get that scholarship to that college you've always wanted to go to. You know, John, we should probably practice some foul shots. Recently somebody here on my team was using a scorecard and John's met to sign conversion rate was 18%. And I love John. I admire him because he just has this way of taking a mindset shift and anything. He just really coachable. And we noticed that he needed to practice foul shots getting buyer's agency signed. We talked about it a little bit and role played a little bit. And he went out and within six weeks, that six week period, his conversion of met to sign went to 92%. Average by the end of the year is going to be from 18% to an average. Now of 80 or so percent is probably going to come out in the 40 to 50 range. I'm positive. Next year it's going to be north of 60% because we practice foul shots. What would it look like to set a vision with a career track and then every week show our agents a scorecard as to how they're doing and then train with them so that we can help them do a little bit better? What would it look like to measure team growth and success not by the amount of people on our team, but by the development of people in our team and have an agent performance agreement that exemplifies and models that. At the beginning of the year, we have conversations around how many transactions each person's going to do and how many contacts they're going to make to get there and how many appointments. Set, met, signed. And we focus on those measurables. It's the portion of the iceberg that everybody can see sales. And this is the part that I need to work on. And I was challenged when I was asked to prepare this speech because I, I don't think I do this well. I don't think we do this well. It's one thing to set a vision and get to it and provide traction with a weekly scorecard, but what are the measurables that our agents are actually looking at? Are they just contacts? Met, set, and signed, the part of the business that just represents sales? The truth is that if you're a team member here, you own a small business within the team you're in. You have ourselves, you have a spouse or relationships, you have your health, you have finances, you have operations or systems or leverage, whether you know it or not. What would it look like to put measurables in place to measure the success of our team members or team members to measure their own success, which is what this is about by all of the business components as well. We don't do this very well, and that needs to change. We have a little personal and professional development section on the bottom of our APAs. And we need to do a better job of focusing on other components for our team members. A couple weeks ago, I had a team member who's in the room here. She does a really good job with her business. She met all of her listing goals. She's shooting for 100 or 110 transactions this year and met her listings. Taking, listing, appointments, goal, exceeded it, listings taken, signed, goal, listing, sold, goal, take, home, pay, goal. And we dropped the ball with a client and the client was upset and they called and this doesn't happen all that often. And this agent doesn't experience it that often. She called me emotional and she told me I could share this today because I think it might help somebody in the room. And she was upset and she said, I feel like a failure. She said, I'm doing everything I can to serve our clients at a deep level and hit my goals and I'm failing. And I said I was confused. I said, what do you mean you're failing? I said, you've hit all of your goals. She said, but that expired goal that we review in our weekly listing meeting, I didn't hit that. I said, that's a leading indicator. It's not even the stuff that I mean, you hit all your other stuff, your take home pay is there, everything's there. She said, I just feel like I'm failing. And then she said, and my son told me that he's not sure if I was going to remember to pick him up from school because I worked so much. When we focus on things that don't matter that much, we lose sight of the things that do. And what we measure is what we focus on and what we focus on expands. And as a leader, I was focusing on the same things in my team members business as I did in the businesses that sucked the life out of me. This isn't me advocating for taking our eyes off sales and not having sales goals. It's just me advocating for putting measurables around the other business components as well.

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