I was excited to get confirmation recently that Rasmus Ankersen will be speaking at the EO Argentina University in November. I saw him speak at the EO India Conference a few years ago and his discussion stuck out in my head. Matt Stewart and I, as Learning Co-chairs, along with Joy Hayes and Leslie Baum at EO Global, discussed how he would be a good fit for our theme for the University of “Tango with the Unexpected.”

I have written about Rasmus a while back, with his research being very interesting on how to spot talent. He will share some of his new material with us. I found some of his recent blogs posts insightful and thought I would give a taste of what will show up at the University.

You would probably find it contradictory, as I did, that some of your happiest employees are your worst performers. Ramsus was looking at a study that said the lowest performers were even more likely to recommend your company over others in the organization. Wow! Does that make you stand up and say, “What!?”

Rasmus attributes this to a lack of managers’ courage to confront employees who are just not making it happen or getting it done. We seem to want to block it out and not confront their performance, thus avoiding conflict. This acceptance of low performance or ignoring it doesn’t serve any purpose, except to keep the low-performing person happy.

Does not managing these low performers serve the company, organization or other members of the team? We know the answer to that, but what we may not know is that this drags down the culture to accept lower standards. I just wrote a blog on how culture is the most important thing in great companies, so does this motivate owners and managers in dealing with low performers? Rasmus sarcastically asked the question, “Do you help people perform better or do you help them to feel better about performing bad?”

These universities are an amazing experience. This one was a little different for sign-ups, in that each region of the world was given different time zones to register. We signed up 415 members and have 160 on the wait list. Registration went as fast as 3 minutes, to up to 4 hours in other regions. This is a great experience to be on board, helping to create one of these amazing events.

One of my by business idols is Sir Richard Branson, whom I have had the pleasure of meeting. My close friend Joe Hollingsworth has spent a week with him on his private island in the Virgin Islands and heard many interesting stories. What makes him really stand out to me is that he has started over 400 businesses and has had great success with many of them. He also has dyslexia, which resonates with me because so do I. Some may see this as a handicap, but I see it as one of the reasons he has achieved much success. If you would like to understand more about why, read my blog on my experience with dyslexia.

In a recent article, “Richard Branson’s Six Secrets to Productivity,” I found some important truths that I would like to share:

1) Exercise. It is key to having the energy to be productive. It is difficult to fight the good fight in your business life if you are not keeping yourself fit and energized.

2) Keep lists. He says, “I have always lived my life making lists: lists of people to call, lists of ideas, lists of companies to set up, lists of people that can make things happen.” I love that last one! If you are around me at all, you will hear me say to my team, “Let’s make things happen!”

3) Love what you do. This cannot be emphasized enough if you are going to be productive. You need the passion that only loving what you do will bring into your activities. Branson says, “I don’t think of work as work and play as play. It is all living.”

4) Don’t get the lawyers or accountants involved too early. It slows down the action. Make things happen and don’t waste unnecessary time in this area until the vision and strategy are thought out, and things are moving forward. Figure out the details as you go.

5) Step back and delegate. Hands-off delegation is important to Branson because he wouldn’t be able to handle all 400 companies and the details that go with them. He says, “I have to be good at helping people run the individual businesses and I have to be willing to step back.”

6) Set up big audacious goals. This way, even if you fall a little short, you have accomplished significantly more than you would have otherwise. Also, pay attention and focus on the few things that make a real difference.

These all sound so simple, but they are really not that easy to implement. Think about just half of those points: Delegate, focus on a few things, and exercise. It’s not easy to let go of things when you, as a gung-ho entrepreneur, really want to take control and push to make them happen on your own. Most of us business types have an attention deficit brain and find it hard to focus on just a few key things. We are all busy and know we need to exercise, but do we build a routine around making sure we actually do it?

Great thoughts! Now, we all need to just go Make It Happen!

Since the material in Greg Crabtree’s book “Simple Numbers, Straight Talk, Big Profits” has been so enlightening, I want to share more from his book to help us all out in the financial arena. This is not the stuff they teach you in school. It has real world understanding of how to look at your business financials from an entrepreneurial perspective.

As I read the book, I was most recently struck by his comparison between businesses and the NFL. Like the NFL, we as business owners have salary caps. The NFL created a salary cap to max out what each team can spend on their players in an effort to create a fair shot amongst all the teams. Now, you may have not thought that you have a salary cap. I didn’t either. However, in reality, we cannot pay ourselves more than we generate in revenue, and we also shouldn’t pay out more than what would be a respectable profit margin.

Greg points out that every business needs to strive for profit. In general, a company with less than 5% profit margin is on life support. One that is greater than 10% is a good business, and a profit margin above 15% reflects a great business. You need profit to pay your debt and to have cash flow to grow the business.

Let’s look at an example of how this works to determine what your salary cap would look like:

Revenue $ 1,000,000

Salaries $ XXX,XXX

Non-Salary Expenses $ YYY,YYY

Pre-Tax Profit $ 100,000 (10% of revenue, the percentage you want to have to be a good business)

Now you can determine your business’ salary cap. Start by adding up all your non-salary expenses and plug them into Y. Then, subtract your pre-tax profit and the non salary expenses (Y) from your revenue, and the number you have left over is your salary cap (X). This is the number you don’t want to exceed in order to maintain the appropriate profit margin to increase your business. Remember, breaking even is dying, and having less than a 5% profit margin means the business is on life support. If this is not clear, get his book, and it will break it down for you very clearly.

What do you do if your salary number is higher than what it should be to maintain an appropriate profit margin? You go back and look at the productivity of your people and determine who is getting it done and who is not. As we grow, we tend to hire quickly and sometimes hire people into roles that do not meet their strengths. As business owners or CEOs, we need to make sure we have the right people performing in the right roles for optimal productivity.

What is your salary cap, and does it give you the profit margin you desire and one that will grow your business?

I have been working on putting together some content for a breakout session I’ll be doing at the EO Nerve Conference in Atlanta next week. This content was created for Insignia and Quantum leap EO programs to help Forums engage in more stimulating discussions around your businesses with the other business owners. I really enjoy these events, catching up, and sharing with my existing EO friends and meeting new ones.

The topic has to do with discovering your X-Factor, which is not an easy task. Your X-Factor is a decision or strategy that solves an industry bottleneck and gives you 10 to 30 times the competitive advantage. This is something that is not visible to your customers. In fact, you don’t want to share it with anyone outside your organization. Treat your X-Factor like your company’s top secret magic ingredient, which will greatly increase your profitability compared to your competitors.

What are some of the industry bottlenecks? Bottlenecks can come from delivery, largest cost, innovation, process flow, customer retention, employee retention, selection, or people reduction. There are so many options, the ones listed and some that may not be thought of right now. That’s the beauty of it! Seize the opportunity to seek out and develop your X-Factor.

Now, what are a few examples of X-Factors? Outback Steakhouse created a compensation plan to retain restaurant managers (an industry bottleneck), keeping them for 5 years or longer when the average was around 6 months. AutoNation offered all the brands of the various cars to break the bottleneck of customers not returning four out of five times. Starbucks focused on higher prices, giving them unbelievable margins.

So, what process can you follow to help discover your X-Factor? This takes some analysis and digging. Sometimes, you discover it at the industry trade shows. Looking at all the breakouts, you will see the problems they are trying to solve, and that may be just the clue you need. You can brainstorm around these questions: What is the biggest cost in my industry? What are the people problems? Where is innovation not happening? And how do I keep my customers and employees happy? Once you think you have a handle on it, then ask yourself, “Why?” five times and watch the onion open up and reveal itself.

When you latch onto your X-Factor, you will be ready to jump on and ride the rocket, so be prepared to hang on. What are you doing to discover your X-Factor?

Anti Herpes

How many times have you heard “I spend so much time in meetings, I don’t have time to do all the things I say I’m going to do in those meetings”?  It’s a constant battle I face, trying to improve our meetings so that they are as productive as possible in the least amount of time, and ultimately beneficial to our business.  After all, business is about bringing a group of people together to accomplish something, together.  So you could say that these gatherings are one of the most crucial parts of business.  It’s difficult to align people without that infamous word “meeting”.

Imagine a US football team in a huddle.  Before each play, the offense and defense take a few seconds to analyze where they are, what down it is, what they think the opposing team will do and their own next play options.  Next the coach or quarterback will call out a play that takes everything into consideration.  In the same way, when people are brought into a meeting they discuss what they are trying to achieve, what is in the way of achieving that and any progress they have made.

We work diligently to make our meetings productive so that they keep us moving forward, but I find that we still manage to drift a little along the way.  Last week after our usual Monday morning meeting with our Team leads in India via video conference, I kept the team together and asked one question.  What is standing in the way of us becoming a better company?  I set the timer and everyone had 3 minutes to write down their thoughts.  

At the end of 3 minutes, one at a time we went around the room, each team member and team lead providing one idea.  As we gathered ideas I started a list of them all, and then went back around and each person ranked their top 3.  For their first choice, I put 3 marks, second I put 2 marks, and third I put 1 mark.  At the end, the ideas with the most points are the most pressing issues, and therefore are the ones that we will begin discussing.  As a group we brainstorm possible solutions to the barriers, then finalize what our next step is towards making our company better in that area.

In my experience, meetings provide the best opportunity for true collective intelligence…where ideas feed other ideas, and new ideas grow.  Taking the time to talk about pains, stucks, competition or even opportunities, you are supporting the work of your team and making meetings productive.  Research shows that one of the biggest motivators for employees is progress.  When you have a productive meeting, your team feels that accomplishment and thereby leaves the meeting more motivated.

Another aspect to execution is in the day to day – how to manage your time effectively and have productive days that add up to your longer term goals. We all struggle with getting tied up in so many things we must be reactive to, and not making time for those things where we must be proactive.

In Chet Holmes’ book “The Ultimate Sales Machine” he discusses time management secrets. The first chapter digs into an effective daily routine that will increase your productivity several times over. The first step is to make a list of the top 6 things you need to get done. Maybe you already make a list, I know I do, but the key here is to pull from your regular to do list and only focus on the top 6 things.

Next you take those 6 things and figure the amount of time each task will take. The total should not exceed 6.5 hours because you want to leave time for the “unscheduled stuff” – time to be reactive. The last step is to prioritize…putting the most important items at the top to be completed earlier in the day when you have the most time and energy. His process forces the majority of your day to be proactive, and less reactive, thus getting more done. I’m trying it right now and so far, so good!! How much of your day is spent being reactive, instead of proactive?

What are you worth per hour? What is your company worth per hour?

Are you doing the things in your work that are allowing you to bring the most value to your role, team and company?

There is a way to analyze this and you do it by using the law of 1920. I have done different forms of calculations to look at hourly worth before but Joe John Duran simplified this for me when he discussed this at EO Barcelona University. So here we go. If you assume that with vacations and holidays you have 48 work weeks a year and you multiply that by 40 hours a week you get 1920.

48 weeks X 40 hrs = 1920

Now divide your annual income by the 1920 to get your hourly value. Let’s use this example below:

$100,000 of annual income divided by 1920 = $52 per hour

With that said, if you are doing work that is worth less than $52 an hour, you are hurting your productivity and profitability! Do you fix the copier when it is broken, file a bunch of papers, or spend time with a bum computer? All these services can be valued and compared to your hourly worth.

This same exercise can be done to determine your Corporate Hourly Value: Corporate Annual Revenue / (1920 x team members) = Corporate Hourly Value

Example:

$1,000,000 / (1920 x 5 team members) = $104 per hour.

This is a great way to determine if you need to hire others to do the things that you should not be doing given your strengths (see Maximization blog). The more time you spend doing the things that you have a natural strength or core competency to do, the more energized you become as determined in Marcus Buckingham’s research on strengths.

Joe John says “Revenues are directly linked to the size, depth and breadth of your client relationship and profit margins are directly linked to the size and productivity of your staff”.

To sum this up the law of 1920 says that how and what your team works during the average work hour determines the success of the practice!

As this year ends like all the ones before it, we strive to go into the New Year with a fresh outlook and usually one or more resolutions to improve our lives. I often ask others around me about their resolutions and usually find that at least one always has to do with improving health. For an entrepreneur whose world is filled with constant changes, ups, and downs, health and energy are key to pushing forward.

We often hear about how much time we need and how there are never enough hours in a day and so on. We cannot add time. We all have the same number of hours in a day. The level of effort and energy we put into that time can be changed. Much is being written about our need to manage our energy and approach our day and schedule with an energy focus instead of a time focus.

The book  blog, I experience the best results to my resolutions and goals when I create a habit or ritual around them.

By the way, if any of you are doing your yearly planning around this time and would like a free tool to help, go to