MBA1533 Guest Teacher – Rich Allen – How to Explain How Your Business Works Using a Bike

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Hey everyone, Rich Allen here. Thanks for joining me today. Today I'll be teaching you how to explain how your business works using a bike. And we're going to do this so you can engage your team in making your business better so they understand exactly how your business works. Are you ready? If so, let's get down to business. Let me start by telling you a quick story. Several years ago, I had the opportunity to run a small manufacturing business. It was my first opportunity at leading a team of people. And as I entered the business on the very first day, walked around and met many of the workers, many of the folks working in the business, it quickly dawned on me that most all of them were there simply to do their job. And they didn't really think much about how the business worked or the strategies we were going to use to make the business better. And I wanted to get them engaged in the business. And so I was trying to find a clever way to do that. I came up with this great idea to use a bicycle as a metaphor for a business. And so I rounded up the entire team. I put a bike at the front of the room, and I asked everyone, what's this? Pointing to the bike. Some of them said it was a bike, others said it was stolen property. And I shared with them that this wasn't just a bike, that this was our business. And if we could understand how our business is like this bike, we could tune up our business and make it go really fast. And that's exactly what we did. Over the next seven years, we used a bike as a metaphor for a business and our business grew rapidly. It got incredibly powerful. And ultimately, seven years down the road, our largest competitor made A bid to buy our business. So let me take you on a quick lap around the bike because I believe you could use the bike as a way to explain to your team how your business works as well. Let's start with the handlebars. We steer a bike using the handlebars. So how do you steer a business? You do it with three things. One, you have to paint a picture of the future. The vision you want for the business. It has to be compelling and inspiring so that your team will want to come along with you. Secondly, you've got to set your performance standards, the level of performance that you're going to expect in demand from your team so that your customers get what they need and deserve. The third piece is you have to have a mission or a purpose, a passion that your business is going to support so that everybody can rally around and support you in that. That's how you steer a business. Now, let's talk about the frame. The frame of the bike is what holds all the component parts together. Everything attaches to the frame. So what's the frame on your business? I believe the frame on your business is made up of three major components. Number one, your organization structure or your organization chart. I have three fundamental rules to structuring an org chart. One is it ought to be done by function, not by person. The second is that there should be only one person in each box. The third fundamental piece is that your org chart ought to reflect your business as you see it three years in the future. In other words, make it a forward indicator of what you want the business to look like. The second component of the structure is your position agreements. It's a way to define the job responsibilities for each individual box. The third component of the structure is your accountability system. How are you going to, on a systematic basis, hold everybody accountable? Have people take ownership for their responsibilities in the business. Those three components will give you a solid frame for your business. So let's talk about where the rubber truly meets the road. On a bike, the rubber meets the road in two places, the front wheel and back wheel. Likewise, in business, the rubber literally meets the road in two places. In our business, the front wheel of our business is represented by our ability to win new customers. And the ability to win new customers is made up of three components. The hub of the wheel represents the definition of our ideal prospect. We need to understand that clearly the spokes on the front wheel represent our marketing strategies. And we have to have multiple strategies. We can't survive in business with just one or two marketing strategies. We have to have multiple, so we have a steady flow of leads. And the tire on our front wheel represents our selling process, the process we use to take a customer from not knowing us at all to being so comfortable with us that they'll pull out their wallet, give us their credit card, and buy our product or service. Now, the back wheel of our business represents our ability to serve our customers. It's delivering on the promise we made on the front wheel. And so the back wheel, we've got to have processes in place to be able to efficiently process the products and services that we promised. So we're delivering efficiently and accurately. You'll also notice that there are oftentimes gears on the back tire of a bike, and those are so we can change speeds. Oftentimes in business, whether it's seasonal changes or economic changes, we need to be able to efficiently change speeds in our delivery processes while still being efficient and cost effective. Now, how do we keep the both wheels on our bike going at the same speed? Because it's very important that they go at the same speed, otherwise we're headed for a crash. So on a bike, we use our brakes to keep our, our wheels going at the same speed. We have one for the front and one for the back. Our brakes on our business are represented by our financial controls. These are the documents that we use to understand how well we're using our funds, our resources in our business. So if we're not using things like a profit and loss statement, a balance sheet, a cash flow forecast, and a budget, then we're not using the brakes properly. In our business, we've got to have those and use those so that we're making smart decisions to run and operate our business. Now, on my bike, there's also a monitor on the handlebars that can, that tells me my, my pace, my cadence, my heart rate, how well I'm burning my fuel. In business, the monitor is our key performance indicators, our dashboard that tells us our predictive indicators of how we're doing in the future. These may be things like how many prospects we're generating, what's our conversion rate, what's our average ticket price? Those things that'll help us predict the future of our business. We need to have a solid dashboard to be able to make that happen. And the last and important part of our bike is the seat. The seat is where the rider sits. It's got to be positioned well so that the rider can put maximum power to the pedals. And in our business, our seat represents our people, programs, and we have to have people programs that will motivate and inspire our team to pedal hard for us. Things like having a solid hiring program so that we're hiring only the best qualified candidates. An onboarding process so that our new hires can get up to speed quickly. A compensation plan that is competitive and allows us to retain good talent. A rewards program that is motivating and inspiring and is tied to the success of our business. A communication plan that, that keeps everybody informed of the things, the important aspects of things going on in our business. All these things are important so that the seat is positioned properly. So can you see how a bike is a perfect metaphor for a business? It's amazing. And people understand how a bike works. And so it takes the mystery out of how a business works. So if you want to get your team radically engaged in your business, suggest that you use a bike as a metaphor for that. Because it's a powerful way to inspire your team to get them involved in the business and to create what we need in our business is a radically engaged team. All right, guys, this is Rich Alan. Now, if you want to continue to learn about how to use a bike as a metaphor for a business and how to create a radically engaged team for your business, you can simply visit my website. It's www.tourtoprofit.com. just like Tour de France. One word. Tour to profit. T O U R D E P R o f I t dot com and if you go to backslash100mba, I put some free resources there that you can use. Take advantage of those. Thanks again for joining me today. Back to you, Omar.

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Share and share alike with the 20 piece McNuggets from McDonald's for just $6 limited time only. Price and participation may vary. Cannot be combined with any other offer. One of the things I learned as I was growing my business Webinar Ninja because this business is the biggest business I've had in terms of employee numbers, is how important it is to communicate to everybody what the business really does. People get hired for positions, they know what their job is going to be, they know what the responsibilities are, they know their KPIs, all that kind of stuff. But it's important for them to understand the big picture, understand why they're doing this and how their job contributes to the greater goal. So this description, this method that Rich Allen shared with us today is gold, especially for a new hire. Somebody comes to your team in the first couple of weeks. This is a good time to communicate this to them. It gives them a good understanding of how all the different departments, all the moving parts in your business work together to actually drive the objective of your business home. This also allows every teammate to have a greater appreciation for what everybody else does on the team. It also reinforces how dependent we are all on each other. When I was listening to Richard's lesson, I thought this is a great idea. I would love to just sketch out a bicycle even with just a paper and pen and label each part and then have that in my doc so I could share that with anybody on the team at any given time or even with the whole team. In an all hands meeting, a visual really can speak a thousand words. If you want to learn more on this concept and get some free goodies, Rich Allen was generous enough to give us a special link toward mba. Go ahead, head over that link and take on Rich Allen's free gift. Thank you so much for listening to the Hundred Dollar MBA show. If you love it here, hit subscribe right now and whatever you like to use to listen to podcasts, whether it's Stitch Radio or Spotify or Apple Podcast or Himalaya or whatever it is. Also, by hitting subscribe you get access to over 1500 business lessons in our archives. It's the only way to get access to our archive lessons. Go ahead and hit subscribe and get access. Before I go, I want to leave you with this communication. Clear communication is essential for great leadership in your business. If people don't know where they stand or they're unclear on what they need to focus on or why they're doing what they're doing, you're going to pay that price in the long run. You need to make sure you you're constantly communicating clearly and frequently. It's not enough just to say something once or to remind people of something once, especially things in terms of the bigger picture in your business, your aspirations, your goals. Repetition is key, so don't be afraid to share these analogies, like Rich Allen's analogy with the bike more than once, maybe once a quarter, and especially if you have a visual. It's a quick, easy reminder. Thanks so much for listening and I'll check you in tomorrow's episode. See you then. Take care. Momento, seno frecido porriquea encuentre en supas interior ordenando suropa interior.