Rich Christiansen – Parallel Entrepreneur, Entrepreneurial Expert

Eating Our Own Cooking

In our current test business, Curtis and I received a request from a client that wanted to place a large order for high end, specialty products.  We went to the manufacturer of these products and were able to open an account.  However, when it came time to sign the contract with the vendor, it contained language prohibiting our operating a business model that was identical to our business model.  The order we were trying to fill was worth a large sum of money.  And the likelihood of the vendor ever figuring out we were in violation of the contract was minimal.  In our zeal to land this account, Curtis and I conveniently forgot to pay close attention to this clause in the contract.  However, Koral, who is one of my trusted gatekeepers, reminded us that signing the contract would run counter to our values.  As lucrative as this deal would have been to our company, we passed on the order.  It just seemed that if we were going to lose sleep, it would be better to lose it over the loss of revenue rather than the violation of our code of conduct.

In a previous business Curtis and I founded, we did not follow our own guardrails.  We had put a financial guardrail in place stating that we would always keep a $100,000, three-month buffer in place to protect us if the business took a downturn.  We also agreed that if things went south, we would reduce expenses, rather than dip into our reserve, in order to maintain a positive cash flow.

After several years of mind-blowing success, the business did suffer a downturn.  It wasn’t long before we saw ourselves dipping below the $100,000 threshold.  At the time we had a team we felt loyal to, and we did not want to have to cut back.  So we lowered our threshold to $50,000.  In making that decision, we broke our rule and crashed through our guardrail.  But we felt justified in doing so because of our previous success.  Before we knew it, we had crashed through the guardrail again and spent that last $50,000.  At this point, instead of cutting our losses, we decided to create another business plan.  Unfortunately, our team was not a good match for our new venture.  Ultimately, with no cash left, we had to lay off the entire team we had been trying to protect.  We also had to terminate what had been a very productive partnership and part ways.

We would have all been so much better off if we had reduced our expenses and stayed within that first guardrail.  Yes, we would have had to lay off one or two employees or cut back on expenses in some other way.  As painful as that sounds, it would have been so much better than having to kill the whole business.  We could have saved our most valuable employees and avoided a lot of pain and heartache. 

Our blunder led to Curtis and me parting ways for almost four years.  Now we are working together again and building a successful business.  And we’re hoping we will have the good sense not to forget our need to stay within the guardrails we’ve established. 

Summary

As you are traveling toward your beacon in the fog, you will need guardrails to keep you from heading over a cliff or wandering out into the weeds.  For each of your zigs, you should establish a financial number, an allocation of time, a duration of time, and a financial target to control the resources and energy you are going to put into that particular zig.  You then need to create a list of the other guardrails that will keep you out of the weeds.  Finally, remember the need to establish a network of trusted associates who will keep you from heading out of bounds network or drifting toward the edge of a cliff.  These guardrails will grow out of and be aligned with the values you defined in Chapter 3.  They will then have the power to keep you on target as you zigzag toward your beacon in the fog.

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A young man named Tanner Greenwood currently works for me. He’s a fine young man—a hard worker with bright eyes and good intent. This week Tanner has had a hard, rotten, no good, very bad, good-for-nothing week.

It seemed like everything was going wrong for him. He had some car problems, and then some more car problems. The car locked up on the freeway. He had a couple personal issues that didn’t go well. He got a severe case of the flu. Just about everything this week seemed not to be going very well for Tanner. On top of all of that he wasn’t able to come into work this week, and I felt real concern for him.

Then today I pulled up in the parking lot just as Tanner arrived. I could tell from his swagger that he was down just a little bit. I also happened to know that Tanner is really a hard-core rock climber. I whimsically thought, “You know Tanner, we’re going to go up to the Outdoor Retailer Show.”

Then without much more thought, I had him jump in the car and we went up to the show. We got in and he just kind of hung out. It was a fairly good day, and then at the end of the day we went into The North Face booth, and low and behold, who was there, but Conrad Anker.

For those of you who don’t know him, he’s a world premier, high altitude, vertical-face climber. Anker is the individual who discovered Mallory’s body on Everest. He’s also the one who climbed the third step without the ladder. He’s the only one in the history of the world who has ever done that. He also just got done doing an epic climb in the Himalayas that was previously deemed impossible.

So there was Conrad. I recognized him, and went up and talked to him for a little bit and I told him about Tanner. He was so generous. He sat down and talked with Tanner, took a picture, and signed a poster. We were able to hear a couple stories, and ask him if he thought Mallory was able to make it up and over that third step on Everest before he died. (He said he didn’t believe so.)

We just talked and had a couple really delightful moments, and then as we were walking out of The North Face booth, up walks a few other very well-known climbers, including Russell Brice, the very well-known coordinator who is very good at coordinating and helping get people up Everest.

Tanner really enjoying the day and as we were driving back to the office, I heard him mumble under his breath—“The week was worth it!”

I’ve thought a lot about that statement.

I think we all get in these situations where there are horrible, miserable, rotten, good for nothing, hard days (and sometimes weeks). Often just when we get to the point of totally despair, we get these little wonderful cherry-on-top-of-the-dessert moments that end up making all of it worthwhile. Thank heavens for those little cherries that make the pain the misery that we have to go through, worth it.

The reality is that most of our business dealings and most of our day-to-day lives are somewhat mundane. There’s a lot of grinding it out.

Some people think being an entrepreneur is all sexy and hot and flashy all the time. The reality is that more often than not, it’s about slogging it out and just punching it out. Many times it’s just about enduring to those occasions where you get to have your picture taken with Conrad Anker.

My hat is off to you Tanner Greenwood. You’re a fine young man and I expect wonderful things for you in the future. I’m happy you had a wonderful day and that you had this experience. 

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I control the finances of my business

I have learned the hard way that every time that I do not keep my finger on the pulse on the finances of my company, it goes into the weeds.  Once, I returned from a vacation in Nepal to find that my partner had obligated us to a bunch of expenses without our having the income to pay for them.  To cover his commitments, he basically sold off our inventory in a fire sale.  He was so proud that he had sold so much product; but he did not bother to look at the bottom line, and we took a huge loss on the items he sold.  He seemed to have forgotten that sales don’t really count for much if they don’t actually make a profit. 

I really do not love doing the finances, but I have learned that no one else is going to manage my money the way I manage it.  I always pay my bills on time, and I always know exactly how much is in my bank account.  I simply do not spend money I do not have, and if I’m not keeping track of my finances I know I could find myself in a position that would force me outside of my guardrails. 

I will not make personal guarantees on things that I have no control over

Years ago, I was hired as a young CEO of a small startup company.  I did not have ownership, but I was eager to impress the owners and show that I was in the game.  The company needed a batch of new computers for the employees.  I thought I was demonstrating my commitment by volunteering to sign for the lease on these new computers.  So, I signed a personal guarantee that obligated me to a three-year lease.  Needless to say, the business collapsed along with the rest of the Internet bubble.  Here I was without a job, and I had to pay $800 each month toward these computers.  I brought them home and lined them up in my basement.  They had absolutely no value to me, other than my kids learned great computer skills.  I did fulfill my obligation, but I vowed never to sign a personal guarantee on something over which I do not have complete control.

I protect my personal network

One of my guardrails is that I will protect my personal network.  I’ve been offered countless opportunities to get involved in businesses that would have been dependent on tapping into my networks of family and close personal friends.  At times, I would have been looking to them for capital.  At other times, I would have been using them as my primary pool to market to.  For me personally, I’m very protective of my family and friends because I know that they will be very hard to replace if a business goes south.  And, as I consider whether to involve them, I examine the situation by asking a simple question, “What’s the worst that could happen?”

I stay focused on my values

I try to always ensure that my business life conforms to my personal beliefs and values.  Obviously, I will not do anything that is illegal or unethical.  For some, that line may be a bit fuzzy, but my guardrail is whether I would ever have to justify or rationalize my actions to my wife or my children (or my mother!). 

Sometimes, my decisions are made by the simple measure of whether an opportunity feels right to me.  Not long ago, I was approached about doing business with an individual who was manufacturing and selling diet products.  The opportunity seemed promising, so I went home and told my wife about it.  Given her experience as a registered nurse, she examined the product and then told me why she felt it was not safe and why she felt this venture wasn’t something I should have my name associated with.  The product was perfectly legal.  But it was not something my wife believed in, so I did not pursue the opportunity.

Out-of-Bounds Worksheet

List the people who will be your out of bounds network:

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List the out of bounds markers in your life:

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List four or five things of how you will know when you are out of bounds. Is it a gut feeling, panic, scarcity mindset, etc:

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List the things that you consider to be completely out of bounds in your life:

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Identify exactly where you will change your direction on each zig and zag:

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Have a direct conversation with each member of your out of bounds network. Make sure they clearly understand what your out of bounds markers are and what their responsibility is to keep you within those bounds.

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Last night after my family and I finished a meeting in preparation for our trip to Guatemala this summer. Afterward, we stopped into a nearby restaurant for a bite to eat. As we entered the dining room, I noticed the General Manager working at one of the back tables. It was very evident that he was the General Manager, because he had all his financial reports and other documents and reports and details and his reports spread out. Plus people kept bringing him drinks and you could tell that they were rather respectful of this man. 

As I went to the buffet I walked by and I noticed that there on the table was not a plate of food from the restaurant we were in, but instead the guy was eating a big hoagie sandwich and chips from the sandwich shop across the street.

During the entire dinner I couldn’t get it out of my mind. I was just down and out right bugged. Here we are at a restaurant and the General Manager who is supposed to be in charge of the restaurant business is eating a competitor’s food. I kept mulling it over in my mind—thinking, “Is there something wrong with this food? Is there something going on that we customers don’t know about?”

One thing that I have made a vigilant attempt to do in every company I have established is to do what I call, “Eat Our Own Cooking.” We live it, we eat it, we drink it, we sleep it, we drink our own Kool-Aid, we actively behave.

Now are we perfect? No. No, we are not always perfect. But we always eat our own cooking. The reason why is; if you can’t believe in your own product enough to truly endorse it and stand by it, then how is anyone else ever expected to get on board and fully sustain it?

One of the things that I am really proud of in both of the books that I presented and put forth to market is the we truly ate our own cooking.

We learned some things along the way. We had to improve our cooking. But we did it. I give you the same advice—eat your own cooking. It doesn’t matter if you are in a service industry, or if you market a product, or if your business is information based—eat your own cooking. Stand by it! 

Don’t bringing some other company’s brand into your restaurant, spreading it out on the table, and sending the wrong message to your customers. That’s just completely inappropriate. Stand behind what you put forth into the market and eat your own cooking!

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The following are brief elaborations on the rules I have set for myself—the reasons behind each guardrail.  Again, remember that your circumstances and needs are different from mine, just as each ski slope is different.  The key is that you need to define what guardrails you need in your life.

I will not risk my family’s financial stability

Before I took the plunge into full-time entrepreneurship, my wife and I had paid off our home. This was a huge milestone for us, and it provided us with some sense of security as I undertook pursuits that involved a much higher degree of risk.  I have committed that I will not jeopardize my home because I do not want to take risks with my family’s financial security. 

I keep my teams small

Whether I’ve been working for an organization or running a small business, I have always preferred to keep my teams small.  I know myself well enough to know that this is where I excel.  I have found that if I keep my teams under fifteen employees, then I can know the needs, interests, and desires of each person.  I can get to know what motivates them so I can push the right buttons to keep each person going.  I have run much larger teams, but keeping them small results in the highest output for the amount of input I can give. 

I avoid venture capital to start or grow a business

I have a good friend who had the courage to become an entrepreneur fifteen years ago.  He and his family came close to living on wheat and water so he could create his business.  He maxed out credit cards and used whatever he had to become successful.  And, indeed, he did become successful and profitable.  He and his business partner then decided to grow the company even bigger, and they were able to raise a couple million dollars in venture capital.  They continued to work hard and became even more successful.  They were the rave of all of the business magazines in our area.  They won awards and were highly regarded.  However, bit-by-bit, as financial challenges hit, they sought out more venture capital.  But each time, they also signed away a bit more of their lives; to where the venture capitalists had diluted the ownership of a company they had sacrificed so much to build.  Now my friend is at a point where he has minimal ownership in the company, and yet he is contractually obligated to run it for the venture capitalists.  Of course, the venture capitalists demand that he put in the same amount of work and energy as when he started the company.  After years of hard work, he still never gets to spend the time with his family that he was hoping this business would allow.  He is now middle aged, and he is burned out.  If he would have stayed on his initial course and built his business a little more slowly, he could have zigged and zagged his way to permanent success.  He now either has to start all over or continue to work in a company he no longer controls.  There are times and places for venture capital but not as frequently as people think, and it is not my desired funding method.

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In the conclusion of Bootstrap Business, I told a story of a young man named Jonathon. I was deeply touched with his story because he had the support of his wife and was willing to make the sacrifice to become an entrepreneur.

This past week, I was delighted when Jonathon called and asked to come visit me. There’s no way I’m going to turn down a visit from Jonathon because he’s taken the enduring path of entrepreneurship. In deed the last three or four years have been difficult for this man.

I talk about how in the early days; my wife and I lived on potatoes and love. Jonathon had been in that phase too, where his wife had to cut out makeup and their family had reduced the budget dramatically in order to keep the entrepreneurial dream alive.

I was so delighted as I looked at a very weary, very battle haggard, very tired Jonathon. It was very evident as he walked into my office that he had arrived at the first phase of Profitability and was well on the path of a successful venture. He knew it, and I knew it!

Jonathon has turned the corner and is now in the Process Phase where he is developing processes and adding resources. He just wanted a few clarifying pointers.

During our meeting he had made the comment to me, “Rich, I didn’t have any idea that it was this hard.” Then we shared one of those moments that I call an “earning your stripes moments”.

I want to say boldly that it is hard, but that anything in life that is worth having is hard. I still stick to the statement that I know of no better way to control your emotional, your personal, and your financial life and control your destiny, than by becoming an entrepreneur.

Of course I will tell you that figuring out what it takes and figuring out those first few models is hard—even if you have and The Zig Zag Principle or even if you’ve read Bootstrap Business. It takes going into the unknown and it will make you weary, but it is worth it.

And it does become easier.

Well, maybe not easier—but you do acclimate to it, and you will learn to get through the sequences more quickly.

I’m proud of you Jonathon, and I Look forward to seeing incredible thing from you in the future. You’ve earned your stripes.

Now, the rest of you…get with it! Go start something you’re passion about. Maybe even have a couple grand-little failures. Just make sure you follow my advice and fail efficiently. And as you work toward your goal, I’d love to hear about it.

Congratulations Jonathon!

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Weeds are diversions, inefficiencies, and even short-term successes that distract you from the course you have set for yourself.  Weeds can be either negative or positive forces.  They may take the form of being stuck with a large team you just can’t find a way to keep motivated.  They might involve becoming so mesmerized with the profitability you’ve achieved that you forget to move on to your next step.  Your personal weeds might have to do with a tendency to continually react to everyone else’s demands instead of moving toward your goal.

Just as important as establishing the values that will serve as your road map is your need to set up the guardrails that will keep you out of the weeds.  The guardrails you’ll need to keep you out of the weeds are very personal and will differ according to your circumstances and objectives. Everyone should have guardrails in place for the various parts of each zig and zag so that you are always in control of your financial number, your allocation of time, your duration of time, and your financial target.  Your other guardrails will be determined by factors such as your tolerance for risk, your family’s tolerance for risk, your value system, and what portion of your personal network you are willing to expose to your endeavor. 

I’m going to share some of my guardrails, but remember that these are my rules, not yours.  I share them only to illustrate how important it is to give careful, specific thought to your guardrails, rather than attempting to put them in place when you’re in the middle of heading over the cliff:

·                     I will not jeopardize the financial stability of my home or family.  I am not going to mortgage my house for my business.

·                     I like to keep my teams small (under fifteen people).

·                     I will be very careful in taking venture capital.  I want to retain ownership in my companies.

·                     I must control the finances of my business.  

·                     I will not sign personal guarantees on a business I do not personally control. 

·                     I will protect my personal network. 

·                     I will not get involved in a business that goes against my personal moral values. 

·                     I will not do anything illegal or unethical.

·                     I will not work with people I do not enjoy.  Whether it is a customer, a vendor, or an employee, life is too short to work with miserable people.

My list is actually longer, but these are a few examples of my guardrails.  If I find myself getting near the edge on any of these, my wife, my business partner, or my executive admin each knows me well enough to tell me I am starting to cross the line.  And I expect them to not stand by silently.

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Paying it forward is a beautiful concept that I came to enjoy this holiday season. As the Christmas season rolled around I was kind of in a little bit of a bah-hum-bug mood. I hadn’t really had the Christmas spirit hit me.

One night as I was preparing to wrap up an intense week and start moving into the Christmas week and the celebration mode. I got a nail in my tire. Everyone knows that I love my Audi A6, and to top it off, I had just put new tires on the thing.

So I was a little irritated as I took the car into my local Big O Tire store. Of course, they were extremely backed up. I waited and I waited in line to drop off the car, got a ride back to the office, and then raced through the day of work. When I finally arrived back at the tire place, it was past closing time. However, they were completely delightful and kind to me.

The guy at the cash register looked at me and said, “Mr. Christiansen, I see these are beautiful new tires. I know you didn’t buy those tires here, but I know you are a great customer. I’ve met you before. This is what I’d like to do. I’m not going to charge you for the rotation. So it’s just $20 for the flat.” Then he stopped, considered a moment, and said, “You know what? It’s Christmas! Let me just do that for you. Go and pay it forward.” 

Instantly that kindness softened my heart. Most of the interactions I have with people are the exact opposite. They are usually attempting to collect money, not gift it! 

I of course, instantly decided to pay it forward. I since have paid it forward. I do not want to share the specifics of the interactions, but I will tell you that when the time came to pay it forward, I had an incredibly strong feeling come over me–a great feeling that doing this little act of service for someone else was definitely the right thing to do. I was sure and that the kindness would touch someone else as it had touched me that hectic day in the tire shop as the joy and happiness boiled up in my heart.

Now as the New Year kicks off, I want to challenge everyone out there to pay it forward. There is no joy greater than doing private, random acts of kindness. I took a little risk in “disclosing” the fact that I’ve been paying it forward. But I share my story with a purpose, which is to encourage all of us to carry out more service.

There is no greater joy than doing private acts and paying things forward. This how we get out of the scarcity mode. I can tell you this with confidence! Every time I get into an abundance mindset –I can tell you the acts of kindness actually end up benefiting me.

So at this time, irrespective of your financial situation, be abundant. Do kind acts. Do small things. Bake a plate of cookies and take it to someone. Pay it forward. Although I can’t explain why, I can tell you that those acts will not only bless you personally and give you joy, but they will also bless you in your business ventures. 

Being abundant is one of the biggest magic secrets that there is. Now I am not one of these big subscribers to the method of sitting around, holding hands and chanting “ohm” and expecting things to fall out of the sky. Success also requires a lot of hard work. What I can say with confidence is that sharing abundance is a key part of the equation. 

Go forward this year of 2012 and have wonderful joyful experiences.  Building businesses, experience, and grow.

One of my favorite sayings comes from the climber Adrianne Burgess. The first time I climbed in the Himalayas it was with Adrianne. He often said, “We are spiritual beings on a physical journey, not physical beings on a spiritual journey.”  I really believe that. We have much to accomplish. Be good to the people around you. Go forward. Prosper.

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On any given night there are anywhere between 5 to 15 young men at our house for dinner. We manage our home not by control systematic mechanisms, but by total chaos. Last night was the ultimate joy and experience of not only chaos, but just a real, joyful experience. All of you who know me, know that I have an incredible, intense passion for Nepal.

There has been one family in particular that I have become very bonded with, to the point that I consider these young men and young women my children. We first went to Nepal in 2001, met our Nuwang, brought her back to the U.S., raised Nuwang Sera Sherpa as our precious daughter.

Several years later we took our oldest sons, John and Matthew, to Nepal. They became dear lifelong friends with Tashi and Tenzing Sherpa. Indeed this week our ultimate dream was realized as Tashi and Tenzing have done very well in school. They have followed my education requirements and are now here in the United States. Tashi arrived about a week ago and was able to come to our home for the first time, last night.

He will be going to Snow College next year with his brother Tenzing. As everybody heard about it, all of our wonderful friends and the wonderful friends of our children gathered together to meet Tashi and Tenzing and to celebrate. At the top of the list were Scott Harward and Wyatt Earnst, who were John’s dearest friends growing up. Our favorite thing was when Scott would fling open the door and say “I’m Home!” that is exactly what he did when he came over.

Last night we had a huge, blow-out game night expecting Tashi to invite a young lady named Lauren to join us along with a handful of friends. What we thought would be five or six individuals turned out to be 19 young men and one young women, Lauren. As each young man would walk in the door my heart would swell with joy knowing that that was a strong, determined, intelligent, capable young man and I would add the count for Lauren saying, “Now you have 12 adoring fans Lauren, 13, 14,” and the count went until we hit 19.

We had a joyful night of eating pizza, playing games, interacting with these young men and I want to say this boldly “I BELIEVE IN THE FUTURE OF OUR YOUTH!” There are more qualified, capable, incredible young men and at least I know 1 young women out there that will make a difference in this world. I know that things are challenging and this diversification into an international economy is tricky and scary for many people, but I want to, with boldness and with confidence say, “I BELIEVE IN OUR YOUTH!”

I believe that there is brightness in store for everyone. I believe that there is enough positive energy and goodness to solve our problems. I think the next major challenge that we have, as a society, is to end poverty–to bring equality to all the world. We can make the world a better place, especially with the positive influence of our youth. I look to the youth with great confidence, because I observe them everyday! I love those 19 young men who gathered in my home last night. And what a delight it was to also have one beautiful young woman join the celebration.

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The guardrails you create must be closely aligned with the values you set in chapter 3.  You need to have people in your life who will tell you out when you are out of bounds.  I have a good friend who was a successful and well-known college basketball coach until he got embroiled in some politics and lost his job.  We were talking not long after that, and he shared what I consider to be a very profound insight.  He said, “Rich, when I was winning championships, everyone laughed at my jokes.  Now they only laugh when my jokes are actually funny.”  You need someone in your inner circle who knows you and who you trust to tell you if your jokes are funny or not. 

 Alex Mendozian is a teleseminar trainer.  We had discussed the possibility of working on a project together.  Before we began, he called me and said, “Rich, I have some good news and some bad news.  I’d really like to work with you.  That is the good news.  The bad news is before I do, I need to have an intervention in your life.”  I pushed back, thinking, “What is he talking about?  I don’t have a drinking or a drug problem!”  He continued, “Yes, you need an intervention!”  He then got my wife and his executive assistant on the phone and explained he was having this intervention because I had to quit saying “Yes” to everyone and everything.  Warren Buffet once said, “The difference between successful people and really successful people is that very successful people say ‘no’ to almost everything.”

Sometimes, in your zeal to reach your beacon in the fog, everything seems possible.  It’s a time when you’re generating a lot of ideas.  It’s a time when, out of necessity, you need to fire, fire, fire, and then aim.  I refer to this part of zig number 1 as the time I have to weave gold out of straw.  During this time I may not have a lot of resources, and I may find myself holding things together with duct tape and bailing wire. As I’m trying to get something to work that will generate cash, I find myself saying, “Yes, yes, yes, no; …yes, yes, yes, maybe.”

Once I get to the next zag, I have to create systematic and organized processes so I can hire employees and teach them how to make the business work.  During this time, I find myself saying “No” about half the time.  Part of that involves learning the discipline of delegating and letting others do the work for me. 

Getting to the third zig demonstrates that I have achieved success by reaching cash creating an organization that is working.  Now I need to scale it.  This is a much more controlled phase of the process because I do not want to destroy what I have just created.  I finally have all of the gears meshing, and I now need to figure out how to scale the business so it will generate income independent of my direct involvement.  During this period, I find myself needing to say “No” far more often. 

Another guardrail you need to put in place is identifying and empowering those people in your life who will help you say “No” and who will let you know when you are heading out of bounds.  For me, those people include my wife and my executive assistant, both of whom are excellent at letting me know when I am crossing the lines I’ve established.  My children will sometimes even tell me when I am out of line—and I’ve learned to listen.  My business partner is another person I make sure I listen to.  Unfortunately, it’s rare that your subordinates will point out when you’re heading toward danger.  Some see things quite clearly, but many are either making sure they look good in your eyes, or they are afraid of your reaction.  If one speaks up, listen, unless it feels like they’re stoking your ego. 

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