Entrepreneurship

Knowing when to Hold ’Em or Fold ’em is the Key to Scaling your Business

Right up front, I’m no Kenny Rogers fan, but he definitely got that line right.

At its most basic level, the game of poker is all about knowing when to keep your cards and when to abandon them.

I find business to be a lot like poker — every decision is a calculated risk. Not every risk pays off, some cost you dearly, and even those bets that have a 99% chance of paying out aren’t guaranteed.

In poker, it’s your cards and how you use them that determines whether you win or lose.

In business? — it’s your customers.

Customers are a deck of living, breathing cards. And like any deck of cards, some of your customers are going to be aces and some are going to be jokers, with the vast majority falling somewhere in between.

Aces are the Holy Grail. They’re trump cards that provide lots of staying power and big-time rewards when used properly. So — if you’re lucky enough to get a few in your hand — you generally want to hold onto them for dear life.

But sometimes that unyielding desire to hang on to those aces can hurt you.

Aces can cloud your judgment and make a hand seem stronger than really is. And that illusion can deceive you into making a stupid decision you’ll soon regret.

Which is why sometimes you need to fold your aces.

As an owner, there will be occasions where “folding” a client becomes necessary, no matter how great (and profitable) they’ve been for business.

HERE’S WHY…

Remember, the customer-company relationships is just that…

A relationship.

It’s not a dictatorship where one-party gets to rule with exclusivity over the other, it’s a mutually beneficial exchange…a partnership.

When a customer stops acting like a partner and starts seeing things through a one-way lens, it’s time to consider terminating the relationship for the greater good of your business.

Now, this isn’t a license to throw customer service to the wind — far from it!

You should take every reasonable measure to deliver on a client’s request. After all, they are giving you their hard-earned money.

But there are times when a relationship is simply a bad fit.

That’s why it’s crucial to set limits for yourself, your employees, and your company.

Draw a mental line in the sand and do not stray from it.

Saying goodbye to an overly-demanding customer will sting in the short-term. You’re intentionally letting revenue walk out the door, but in the long-run, it will pay off in a hassle eliminated and time saved.

TURN A NEGATIVE INTO A POSITIVE

When you are forced to fold on a client — and if you’re an entrepreneur growing a business, this will happen with more often than you think — don’t despair!

The terminated relationship isn’t a total loss.

In addition to freeing up some company bandwidth and eliminating a source of stress, intentionally parting ways with a customer is an incredibly valuable learning experience.

Make sure you extract at least one lesson, even a small one, from the failed partnership and use that lesson to build a better business.

Learn enough of those lessons over a long enough period of time and that business you’ve been building will evolve into a powerhouse.

So remember…

In the words of Sean Connery, the best Bond ever, (I’m prepared to fight you on this, BTW),

“A key to success is playing the hand you were dealt like it was the hand you wanted.”

Do that and you’ll be more than alright.

The market is saturated with really innovative books and philosophies about growth; how to find new opportunities, how to create new content and marketing, how to identify and nurture customers. Entrepreneurs especially have endless choices these days when they are pursuing those solutions.

My book, “The Replaceable Founder”, is not that book.

This book will assist you in uncovering what is holding you back, and find where your constraints hide.

It will show you the relevance of becoming replaceable.

It’s a daunting word, for sure, but it does not mean what you think it does.

My methodology does not seek to make you disappear; it aims to give you the time and space to truly lead.

It is, after all the bottlenecks we are trying to avoid as we nurture our vision. The truth is excellent ideas shepherded by brilliant people will usually succeed. In Latin, ceteris paribus which translates to “all other things being equal.”

So this book is about the constraints that impede progress, and it’s been my experience that the obstacle is usually the founder. It is this person, the one who came up with the brilliant idea, the one who wants to get it done, yesterday, that becomes their own worst enemy.

They may rush to bring their aha moment to bear, and then bring in the wrong people to help. They buy cumbersome and ill-fitting software, and they don’t put the proper systems in place first; processes that reflect and support the mission of the organization.

These hasty decisions mar progress and erode the company’s DNA and those breaks in the DNA multiply untethered throughout the evolution of that organization.

What remains, several months or years into a venture, is an overwhelmed founder with too much to do, not enough time to accomplish anything significant, and an attitude of defeat which will surely spell the demise of a terrific idea.

If the founder is spending their time like this, they are detracting rather than adding value to the initial offering. They will fail, and more importantly, they will not know why.

The solution lies in a fundamental shift in mindset whose hallmark is, “Everyone should be as replaceable as possible.” I do not mean personally, I mean professionally.

It doesn’t mean firing; it means optimizing processes so that people, especially the founder are free to drive their vision forward and this is impossible to do if they are mired in the daily grind of putting out fires.

The objective must be to replace the “how” not the “what” and the “why”.

Naturally, the founder should be spearheading the mission of why but the how needs to focus on replacement, making everyone as replaceable as possible, without actually replacing them.

Remember, the founder’s team has a wealth of knowledge and experience.

They wouldn’t have been hired to help grow a business if they didn’t possess these talents. Their unique gifts continue to be more and more valuable every day they are with an organization. The core team is invested in the vision, has a passionate and proprietary interest in its success, but like the founder they are spending too much of their time doing things that could be done by someone else, faster and for less.

If the founder is paying his Marketing guru to post on Instagram, they are wasting money. If their accounts person is personally answering customer queries, they are drowning in inefficiency and if the founder is unable to relinquish control to anyone outside the core team, productivity halts.

I realize that to many people, this may sound like a paradox, a double edge sword. “If I make myself replaceable, I’ll just replace myself out of a job!”

Admittedly, in many organizations I’ve worked with, there are those who can’t or won’t see that finding an optimized solution enables, rather than disables, but the people who do embrace the notion can fill that empty space with new and better opportunities.

It’s the opposite of the Peter Principle, the satirical book about incompetence, written by Laurence J. Peter and Raymond Hull in 1969, that heralded the notion that people rise to the point of their incompetence.

Peter and Hull uncovered the lunacy of traditional corporate structures that only promoted based on a person’s ability to do the job they currently held, which left many within the organizational structure over their heads in positions they were incapable of mastering, rendering them obsolete.

My view and I’ve seen it work countless times, is to get to a position, through optimizing, automating, and outsourcing, where the founder, in particular, is now able to step up into that void and get shit done. Real shit. Substantive shit. Shit that turns that great idea into a brilliant triumph.

The mantra must be:

Become replaceable.

Seek out the constraints.

Remove the bottleneck.

Allow the natural growth to happen.

The case for the on-demand everything and the dedicated nothing

My mantra is “Become Replaceable” and that can freak people out.

“But I’m irreplaceable”, say some founders.

“Yes, I know, and that’s the problem.” is my standard answer

So I whipped out my dictionary to allay some fears in the hope of bringing a bit more clarity to the paradox.

What’s the difference between irreplaceable and indispensable?

Webster’s can help.

Note how the word was hardly ever used before the Industrial Revolution.

Again, common word usage tells us that before the Industrial Revolution, indispensable was used frequently.

Today, indispensable is at an all-time low.

Ideally, though we want to use that word a lot more. We want entire teams of indispensable people.

We don’t want a single irreplaceable, anything. Because, according to the dictionary and my experience, it or he or she is impossible to replace if lost.

And worse, if your business thrives or dies on a single point of failure, it’s a huge liability. It should scare you, should keep you up at night, especially if that single point of failure is a dedicated anything.

So you shouldn’t have a dedicated VA, you shouldn’t have a dedicated graphic designer, you shouldn’t have a dedicated coder.

If you have an opportunity to outsource to an on-demand service, you need to have access to as many people as you need whenever you need them. Plus, you should have the freedom to “turn out the lights” as well, without remorse or regret.

No attachment.

Now it may sound heartless, but it will make your business sustainable and allow you to sleep at night because a single point of failure is literally just that a point of failure.

But what about the replaceability thing? I bet you’re thinking.

If you’re replacing yourself with somebody else that is in a dedicated role, you’re really just taking the bottleneck from you and moving it to someone else. But it’s still there. It’s just someone else’s bottleneck.

You haven’t cleared the path, you’ve just pushed the dirt along.

Here’s another way to look at this paradox. Look at an engine, like it’s your business. The carburetor is irreplaceable because the car (your business) cannot, will not run without a carburetor.

Indispensable is the nitrous oxide that makes that engine go faster, accelerate better, and be more efficient and effective. You can still operate, you can still grow without nitrous oxide. You can still get from point a to point b, but if you really want to do it the way you want to do it, then the nitrous becomes indispensable.

So fill your life and business with indispensable and do everything you can to avoid irreplaceable.

I don’t know if you’ve noticed, but there’s a lot of personality tests out there.

We’ve all heard about some of the most popular ones like:

• Myers-Briggs
• DISC
• Kolbe
• Strengthfinders
• Colored Brain

There’s a lot of them, right?

But before we jump into using them, there’s a couple of things to clarify when it comes to using personality tests to hire people and work within teams.

Using them to be able to say: “Oh, I’m an INFJ” is not the same as giving them to potential employees and understanding how that’s going to reflect on our business or our teams.

When it comes to understanding personalities, I love the boots on the ground approach.

I want to understand how someone acts in an actual situation.

Now, don’t get me wrong — we see a lot of Kolbe tests in strategic coaching. I even know my score — I’m a complete 8–4–3–4.

What Do Personality Tests Really Mean?

According to Kolbe, getting that score means that I’m quick to start things but I’m probably not going to finish them.

If you ask me a question, I’m going to say: “YES!” even before I’ve heard the end of it.

So, what does that mean? If I were to work at your company, what would you deduct from those results?

1. He’s quick to start things
2. He’s not good at finishing them
3. He’s good at simplifying things and getting them going (but not getting them done)

Who would you have me work with?

Logically, the answer would be someone who finishes things. It’s a natural match.

But here’s the thing: I don’t need a huge personality test to tell me that. Most of our employees know what their strengths and weaknesses are, so the question really becomes…

How Do You Identify Different Personalities when Hiring?

The obvious solution is using these kinds of tests and using them consistently.

However, I’ll repeat myself: I love the boots on the ground approach. I think it’s important to get to the core of how people react when things are not going their way when they’re not the perfect picture of themselves.

Let’s say I’m hiring a writer. I could ask them for their portfolio, but they’d show me their best articles. This is similar to testing someone with a personality test.

Personality profiles give us people in ideal situations.

What I’d do with writers is give them a horrible piece of copy and say: make it better. Or if I’m hiring a developer, I’d want to give them a broken page and have them fix the problem.

That way, they’re not starting out with an ideal situation. They’re starting out with your regular, run-of-the-mill scenario that occurs every day.

You want to see how people react when things are not ideal, and they have to make lemonade.

Real Personality in Real Situations

When it comes to personality profiles when hiring, the best thing you can do is come up with actual situations that are going to require certain characteristics to perform a task well.

That’s why so many companies have questions like: “Describe a situation when you were faced with a crisis, and you successfully resolved it.”

A lot of companies use machine learning to gauge this. Say we need something written. By analyzing the paragraph, we can see how long someone was writing it for, what kind of attention to detail they had.

Now, that’s a very high-tech solution.

But at my former virtual assistant company, we conducted personality tests by creating tasks that required a candidate to actually pick up the phone and get answers.

That was how we tested if someone was proactive. And we could actually see three groups of people:

1. People who googled the answer and got it wrong
2. People who didn’t understand the task
3. The people who went the extra mile did the work and got the answer.

Now, we could’ve used a personality test, but most people would check the box next to “Are you proactive?” and we wouldn’t know for sure until we’ve taken the jump and started working with them.

So even though personality profiles gauged through tests can be useful, there’s nothing like real situations. In most cases, you just need a little creativity to get there.

Using Personality Profiles for Teamwork

Sometimes the only way to know for sure is by having the potential candidate work with you for a certain amount of time.

This is especially true if you’ve got a specific company culture, and the quality of your work depends on the integration of each team member.

You want to really understand who you’re bringing to your team, and there’s no way to work around that with shortcuts.

And, of course, remember the Peter Principle: most people perform worse after they’ve been hired.

You want to see them on the spot to really understand their personality.

Should You Use Personality Tests for Hiring and Teamwork?

Yes, definitely. They are an important piece of the puzzle.

However, they don’t show the whole picture. For me, personality tests are great once I’m working with someone and running the business.

You want to see people on the spot to really understand their personality, but having them take personality tests helps a lot — especially if you’re hiring for specific positions.

For example, I’m great at idea generation as a quick start (according to Kolbe), but you’d want someone who’s a long-fact finder to run the actual operations.

So it all boils down to one thing:

Understand who you need, and find the best way to determine who that person is.

There are no shortcuts, but the ride is worth the time it takes.