Chuck Blakeman, founder of the Crankset Group, a counter-intuitive and no-nonsense approach to life and business; focus on purpose. Chuck is a successful entrepreneur, #1 best-selling business author and world-renowned business advisor who built ten businesses in seven industries on four continents, and now uses his experience to advise others. His company, Crankset Group, provides outcome-based mentoring and practical strategies.
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Chuck Blakeman, Founder Of The Crankset Group, A Counter-Intuitive And No-Nonsense Approach To Life And Business; Focus On Purpose
We’re here with Chuck Blakeman in Crankset Group’s office in Greenwood Village, Colorado. Chuck’s a successful entrepreneur, number one bestselling business author, and world-renowned business advisor. He built ten businesses in seven industries on four continents and now uses his experience to advise others. His company, Crankset Group, provides outcome-based mentoring and peer advisory for business leaders worldwide. Chuck sold one of his businesses to the largest consumer fulfillment company in America and led three other $10 million to $100 million companies. He presently leads the Crankset Group and a for profit business based in Africa, focused on developing local economies to solve poverty. Mr. Blakeman is a results leader with decades of experience leading companies in marketing, import, export, fulfillment, call centers, website development, printing, and direct mail processing. Chuck, it’s a pleasure to have you on the podcast.
Great to be with you.
I must confess, I’m already a fan. I have already read the book more than once, so that was cool. The book, Making Money Is Killing Your Business, is in its second edition. Somewhere in that book, what crossed my mind is you started somewhere before this and then you had a pivot and changed how you thought about business. Let’s dig into that.
The book itself is a compilation of all the stuff I’ve been through. I speak a dozens of times a year, keynotes. I’ve written books that are now college textbooks and required reading. I always tell people I do not see myself as a speaker or an author, I’m just a business guy who speaks, talks, and writes about what he did. That’s why these books have worked for me and worked for other peoples because they come from years of bleeding over and stuff and doing it badly and figuring it out and stumbling and bumbling and mucking my way to what works.
These are all built on real life and not on what can I sit in an ivory tower and pick out and design for people. My first five or so businesses were the same thing over and over again in different industries. I’m a serial entrepreneur, I’m left-handed, right-brained, ADHD, dyslexic, all that stuff. I graduated at the bottom of my class in high school. They barely let me out, actually discussing the day of graduation whether they should let me go or not. That’s how bad it was. I got that classic background. I went through business after business. Once I figured it out, I’d get bored, and then there would be something else that I didn’t understand. I never went into a business I understood. That made no sense at all because why would you do that?
I was doing this stuff, I had no idea what I was doing. Then once I figured it out, I went through the first full iteration of it began to be successful, then I’d get bored and I either kill the business or move on to another one. In that process, looking back after about the fifth business, I was looking at my sixth business and starting this again. I said, “I have to look back and review what’s happened in the last ten years or fifteen years in these first five businesses” What struck me is the BFO. The BFO is the Blinding Flash of the Obvious. We have this thing called the BFO and I was having a BFO with myself. I didn’t have a term for it back then. I got that from another guy.
What I came out with was that my first five businesses we’re all in five different industries and they were all the same result in five different ways. I was in my tenth or eleventh business before I could say I did something that wasn’t going to make money. I always made money at these things, but every single one of them, every time it grew, the more it grew, the faster my life ran. I began to talk and whine about being on the treadmill and it’s this thing I talked about myself and a few close friends. Now I’m on the treadmill again. The hamster wheel might’ve been a better and more appropriate understanding of that. All it did was build a treadmill for myself.
The better the business went, the faster my treadmill. I looked at that after five businesses and said, “This doesn’t make any sense. If I build a sixth business, I’m just going to do this all over again. I’m going to build another fast treadmill. Why? What is this doing for me?” That was a blinding flash of the obvious. It was one of those moments we call it coming to the end of yourself. When I work with CEOs and business leaders and their teams, I need to see that people who have come to the end of themselves or we can’t help them. I’d come to my end and myself and said, “I got to figure this out.” I was in an open place to figure this out and I went into the sixth business saying to myself, “I don’t have any clue how I’m going to get where I need to go. I just know where I need to go.”
That also laid the foundation for a lot of other principles that we built on, on knowing where you need to end, not how you get there. The thing I came up with was I need to end up in a position where this next business gives me a life, and it doesn’t have to give it to me in the first three minutes or even in the first three years, even the first four or five years, but it better gives me a life. Throughout the whole process, it should be giving me life. As I formed that, it came out as I intend to make more money.
This business, every other business, I made more money by spending more time. I’m going to reverse that. This time I’m going to figure out, I don’t know how, but we’re going to do it. We’re going to make more money in less time. The more money we make; the less time I’m going to spend in this business. That will be a driving principle in this business. We’ll make myself replaceable. That began all sorts of business principles, tools and practices that we’ve developed from that. What I didn’t know I was saying at the time was that for my first five businesses, I was an income producer. I was not a business owner.
You were in it instead of on it.
I thought it was a business owner because the IRS kept asking me for money and now I kept having to give it to them and we had employees and all that other stuff, but I wasn’t. I was an income producer and what I learned in the sixth business was the difference and that’s simple. The way you know you’re an income producer is if you’re not there, the thing begins to fall apart or degenerate fairly rapidly if you’re not there. You can leave for a week, maybe you can even leave for two weeks, but if you’re gone for three weeks or more or a month or you regularly aren’t there, you’re only there two or three days a week, the thing begins to fall apart without you. You are not a business owner. You produce income. Whether you produce it directly by making the chairs or you produce it indirectly by motivating the chair makers and creating all the other infrastructure around it and then having that fall on you, if you’re not there, chairs don’t get made, money doesn’t get made, and you’re not a business owner.
That was part of the BFO that they came together for me over time. I have been an income producer. I had one business went from $1.5 million to $9 million in three and a half years and we had to sell it because of cashflow issues. I didn’t understand correct cash flow at the time that the faster you grow; the less money you have. We had wonderful profit and loss sheet, but the rest of it was a mess. What I learned from that was that it’s not about how much money the business makes, it’s about what does it do for the people who worked there.
The research is showing that the more you focus on that thing, the faster your business can grow, the more money you will make. It’s the converse. Stop focusing on the production, the assembly line, the marketing, and all that process. Focus first on your purpose, your principles, and your people and they’ll fix the processes, the production, the pricing, and all the other stuff that comes from that. That was what happened to me to get me started on this journey that ended up years later in me writing this book and as I did that, I had friends who had asked me, “What are you doing? How can you be taking every Monday and every Friday off and having a successful business?” We began to help others and off we went.
Focus first on your purpose, your principles, and your people and they'll fix the processes.
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What was the last business that you had that you were in old school?
It was the first direct mail operation I had. I never ran them old school in terms of how you design an organization. Again, I’m left-handed, right-brained, artsy fartsy. I never went to business school. I never had any interest in doing what somebody thought would work. I only did what I thought would work and what actually worked. I just did stuff. My businesses were always generally flat. Many of my businesses, we never even had business cards because it didn’t make sense. We didn’t have titles, we just got stuff done. There’s 120 people and we got stuff done, but all of them had their negative impact on me of forcing me into a faster treadmill. That’s what had to change.
We’ve gotten much better at that being flatter and totally flat and self-managed and that stuff. We’ve continued to enhance that, but that was always there because it intuitively worked better than the classic top down hierarchy I call the pyramid scheme. We always did that. The real difference was in the sixth business. I made it my objective to make sure that I got off the treadmill as the business got on the treadmill. That resulted in things like what we have here on our board in our training center here. We have this thing splashed across the front of our training center in fourteen-inch letters. It says, “Make your own business rules.”
As I think about the audience and they go, “That sounds familiar. I’m working hard, I don’t know about effective, but hard.” The title of your book, Making Money Is Killing Your Business, I would think that most guys would go, “Say again?” Let’s dig into that a little bit.
A lot of what we do is counter logical, not on purpose. There’s so much of what we think is true is not. We’ve over generations assumed that the last guy had it figured out when in fact he never had it figured out either. We take on assumptions that are bad assumptions, and one of them is that the reason for a business is to make money. It’s a dumb idea, and good entrepreneurs will even tell you that. Robert Hershey back on the sharks, he says, “I don’t go into business to make money. I go into business to solve a problem and to do something meaningful.” Steve Jobs said, “I never got up in the morning thinking about how much money I could make. I got to think about what cool technology could we create next.” That’s the purpose of this.
Most people, when they lose their job, or they have an entrepreneurial spasm and quit because they were making money for the man and they want to do it on their own. Most people go into business in survival mode and they think, “The reason I’m in business is because I have to pay my mortgage,” or “I have to pay my 50 people, whatever it is. I got to get the urgent stuff paid this month and so we make chairs so that we can pay the bills this month.” It all happens again next month. We make the chairs so we can pay the people again and off we go and we are on the eternal treadmill because we bought the assumption that the reason to be in business is to make money.
The reality is and the research shows that people who go into business to make money tend to make very little of it and making money is not an empowering vision. It’s one of the three tenants of what we called the big why. Making money is not an empowering vision. People who go into business to do something bigger than making money are almost always much more successful and make a lot more money. Don’t go into business to make money because that’s the thing that’s killing your business, is your focus is on making money. Figure out what is it that we’re good at, what could we offer the market, who would buy that, and how do we get that to those people. Let’s serve somebody, let’s solve a problem, and let’s do this for something bigger and for something that’s more motivating. I’m going to get a life. They’re going to get a life. We’re going to create a legacy. We’re going to develop cool technologies that will change the world.
Bill Hewlett is a good example of that. Back in the ‘60s or ‘50s, he said, “I stopped getting invited to MBA programs because I told them we didn’t have a business plan. We made this up as we went along.” That’s what he said. One quick thing he said, “What we did know was that we wanted to make a difference in the world of technology.” He was driven by a strong purpose, not by making money. You look at Facebook, Google, LinkedIn, you name all these apps and all these things that are multi-billion dollar businesses and they did not have making money as their primary purpose. There’s something in that for us. What are you doing this for? If you’re doing it to make money, you’re in trouble right out of the gate. Find a bigger reason to do this or you’re in trouble.
There are folks who are going, “This is what’s been bothering me.” You’re describing them in their company. We see it on TV when the guys on the treadmill are going a little too fast and off the back end he goes. There is another component other than book writing. You have 3to5 Club. Can you walk folks through the process of what you do and what you found in a business to help folks? I think it was called business maturity date.
The question that has driven me my whole life is why do what others can and will do when there’s so much to be done that others can’t or won’t? Why do that? That’s an entrepreneurial mindset, filling the holes, looking for the gaps. Why do that? Somebody is already doing that, but nobody’s doing that. This was one of those, 3to5Club. We always had a small business. Our biggest one went to $9 million, some of them were $500,000 businesses and we were always small. Then I’d get bored and moved on until we got to this. In that process, I always saw these small business consultants. I was never a fan of consultants and now that I play that role on TV, but I was never a fan of them because they didn’t seem to have any background in this stuff.
The pattern was this, I’m a small business consultant until some mid-level or larger organization offers me a contract and then I’m out of here. The real message was, “Nobody else will buy me right now. Maybe I can trick the small business people into buying me. Until somebody with a lot of money buys me, I’ll work here.” All of a sudden, I’m not a small business advisor. I’m a big business advisor and off we go. I saw that pattern year after year, people coming in and out. As I did that, the rationale from all of these people was you can’t make money helping small business owners. That’s a conundrum. You start there but you don’t end up there because you can’t make good money helping small business owners, they need it the most and they have the least money.
Nobody was solving this problem. Why do what others can and will do when there’s so much to be done that others can’t or won’t? Nobody could solve the problem of how you make money as well as impact with small business owners. 3to5 Club emerged out of that. For about two or three years, I tested things, I tried things, and I experimented masterminds and one to ones and hooking people and networking people and doing all kinds of things to see how we can help small business owners in the most meaningful way and still make money out of it. 3to5 Club eventually emerged out of that. It’s a very simple concept. It’s not new. Nothing I do is new. I’m an innovator. I’m not a creator. I take good ideas and I change the way they’re presented to the world and move them into different categories. We took business advisory, which happens usually with larger organizations. You have a Vistage and TAB and all these other business advisor groups that charge $1,200 to $1,500 a month for people who are $5 million businesses.
What about the 26 million businesses in America who aren’t at that level? The overwhelming majority, the 98%, we took that concept and we brought it to small business owners, but you can’t just bring it the ways it has worked at that level because it’s a whole different set of problems down at this level. We got mostly income producers who haven’t figured out how to become business owners yet and there’s a transformation that has to happen in there. We brought that in and it was one of the reasons I wrote the book Making Money Is Killing Your Business is to support 3to5 Club.
Here’s a compendium or reference manual for how to build a business based on my, at the time, seven or eight businesses that I’ve built over the last twenty years. He was how I did it. Here’s how you can do it. We used that to help 3to5 Club members. 3to5 Club meet twice a month. We have a maximum of 24 people in a club. They are in a couple of hundred-dollar range rather than $1,500 so it’s very affordable for smaller business owners with under twenty employees, and the objective there is to help them figure out how to build a business that makes more money in less time, gets them off the treadmill, and gets them back to the passion that brought them into business. “I forgot this used to be fun,” and that’s the passion. We’re working with those guys who a lot of times then they’ll grow their businesses and they’ll go on and they’ll get involved in Vistage or something like that in another level where they have different problems.
That came out of that whole thing. Nobody can solve this. We decided we could solve it. We’ve got them in Denver, we’ve got them in Pennsylvania and Virginia, Ireland, Kenya. I’m missing a few places, starting in, in Atlanta, and we intend to have them in every city in the world with more than 50,000 people in them to begin with. We will be the McDonald’s of business advisory. If there’s a function with chamber of Commerce, we should have a much, much better functioning set of 3to5 Clubs for business owners to learn to build their businesses. That’s been transformational for a lot of businesses. We’ve been doing that since we’ve experimented with it from 2006 to about 2010 and implemented it in 2008.
We find out what works and what doesn’t. We found out it’s fairly recession proof. When people are doing well, they don’t mind spending a few hundred dollars learning some things. When they’re not doing well, they’re desperate and they’re willing to spend money on things if it’s going to help them grow their business. That’s been the fun part, is we get testimonials from the book and from 3to5 Club members all over the world. The cool thing about it is that a facilitator can make a decent living off of this. They can own their own business, like owning a McDonald’s franchise. They can own this thing and they can make $100,000 to $200,000 a year doing this and it’s about ten to twelve hours of classroom time a month, ten hours usually, and then you’ve got to recruit people and all that which fills up the rest of your time. Our model is built on people who want to also get a life. We do what we ask other people to do.
Our business advisors, we had one start out and she built for them3to5 Club in a year. That’s unusual. It takes longer than that usually. Then from there on, she had Mondays and Fridays off. She worked three days a week in that business, building those 3to5 Clubs, and pulled down about $135,000, $140,000 a year. You can make money doing things with small business owners and making an incredible impact. She also had the opportunity to build her own business in that area and become an area leader where she could have a number of clubs with her so she could have increased that impact she wanted as well as her revenue.
For the folks who are here in 3to5, let’s dig into the in the ‘why’ of 3to5.
You’ve always heard of apocryphal notions of people coming up with stuff in showers. It was in the shower. I came up with 3to5 Club and the business maturity date in a shower. I specifically remember stepping out of the shower. This was an idea I was trying. I’m all over this problem. How do we do this and what do we do to motivate people and they give them an utter clarity about where they’re going and how they could get there? These things came to me on that. Usually, most of my thoughts come to me on a bicycle. I ride long distances, 5,100 miles on a regular basis and that’s my shower, but these literally came to me in a shower. We ought to be able to have a device that is not a stick. It’s not a tricky thing. It’s a true tangible thing that allows people to move forward with real precision on how to make a business and how to build a business that makes more money in less time.
The 3to5 Club and the idea of 3to5 years came out of that. What I postulated upfront, total intuition, which is very close to BS at times, I made an assumption that any business in the world could be built from a business card to the point where you’re getting at least Friday afternoons, maybe even all of Fridays of, and it’s making money without you in 3to5 years. Not making money every day, but making money. You don’t leave on Fridays like a dentist doesn’t shuts down his practice. You’re an income producer. I’m talking about the thing still goes on Fridays and you’re no longer there. Then you can take it from there. Business maturity was not meant to be the end of your business. What it is is the introduction of a second resource that we never get from our business. What are we supposed to get from our business? Money. That’s what we’re taught. There’s a second resource that our business should give us that it usually takes away from us. Time.
Time for money gig.
Yes, because the price and ethic taught us we trade time for money. In the industrial age taught us we trade time for money. You give me eight hours; I’ll give you $0.50. That’s the trade. You trade those things. If you want more money, you trade more time. You’re on the treadmill. No. We’re going to change that equation. Make your own business rules because he who makes the rules wins. We’re going to decide that your business needs to make you more time, more money in less time, so that your business is now manufacturing. It’s producing money as well as producing time. We believe that a business be producing both within 3to5 years in some degree. Then you raise it up from there, then it’s every year you raise the game.
When you start out, you might be losing $50,000 a year out of your 401(k) to start your business along with your investors, but by the fourth year, somewhere in there, you ought to be making a minimum $40,000 or $50,000 a year and getting Fridays where you are not in the office. You’re doing something else, whether it’s riding your bike, thinking strategically, writing a book, being with your kids, whatever it is you want to do. Then you can take it from there so that seven or eight years, now you’re making $200,000 and you’re working Tuesday through Thursday and you’re taking the last week or the month off.
People who go into business to do something bigger than making money are almost always much more successful and make a lot more money.
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I could hear the audience go, “I want to look at that business plan.”
I’ve never done anything. I’m a big stickler for this. When we recruit facilitators, the first thing we ask them is, “Have you ever owned a business?” We go from there, but everything I teach other people do I did myself. The first person to have a business maturity date was me, and I was writing this book when I came up with this idea of a business maturity date and I put it in that book in 2008. I was writing the book in 2008, first version, first edition. I put in there that on February 18th, 2011, three and a half years from now, I’ve already been in business for a year and a half, I’m going drink my own Kool-Aid.
If this can be done in 3to5 years, I’m basically going to do it in a little over four. February 18th, 2011 at [10:00] AM, I’m going to cross the threshold of my business, it is on page 91 of this book, I’m going to cross the threshold of this business and my wife and I are going to go to New Zealand for a month. We’re not going to check in except to see that there’s money coming into the bank just to prove our point and we intend for this business to make money while we’re gone at the beginning of the fourth year without us for at least a month, because we figured anybody can leave for a week or two weeks and maybe the thing will limp along, but if you leave for a month and you come back and it’s still healthy, you’re a business owner. You’re not an income producer.
That was our goal and I put that in the book and I said the reason I want to leave at [10:00] AM is because at [8:00] AM, I’m going to have a Mimosa with my staff and we’re going to talk about this and have a big cheer and then we’re going to turn the business over to our staff and we’re going to leave for a month. Then next paragraph says, “At the writing of this book, I don’t have any staff. I got nothing,” but I go on and say, “That doesn’t matter, because I know exactly where I want to go on. I know exactly what I want to be there, and those are the right questions and with the right question in front of me, we’re going to be able to figure out the how.”
It wasn’t until eleven months before we left, we hired our first person. Two months into this, she began to figure out what we’re doing, and she said, “You’re never got to make it,” which wasn’t real helpful. “Thanks a lot. I’m hiring you to help me get there and you’re saying we never got to make that.” Then we hired a third person three months before we left. On February 18th, 2011, we had four staff besides ourselves. We had mimosa at [8:00] AM. We crossed the threshold at exactly [10:00], waved goodbye, went to New Zealand for a month, and when we came back, the business is in better shape than when we left for New Zealand.
First weekend. You got the jet lag behind you and you go like, “Huh.” I can imagine in your mind.
It’s exactly what went through on my clients’ little minds. These guys had a law firm that had been for eighteen years, $9 million law firm, they could not break through after five or six or eight years. They’re still stuck at $ 9 million. When I got to these guys, they’d read my book. I asked them, “When was the last time you guys took a vacation?” They looked at each other and they said, “We think it’s possible that we both might have taken a week off in the last eighteen years.” That’s the worst case scenario. One week in eighteen years and you’re stuck at $9 million and you want me to help you build a business, make more money, and get more time off and you can’t figure out how to get past $9 million and you haven’t taken a vacation in years.
In a year and a half, they were up to $15 million and both of them were now regularly taking two weeks every month and a month in the summers, and they’ve been doing it for the last five years. Their law firm is now going to top $25 million to $30 million this year and they’re going to be able to write a book. They started a second business they always wanted to start. The reason I say that story is because when the principal went on his first month, he took his wife and his daughter. They went to Malibu and they rented a house for a whole month. He and his daughter learned how to body surf and surf on a board. I asked him what was it like?
He said, “That first week it went so slowly. It’s like, how am I ever going to survive this for a whole month?” The first four, five days, he’s crawling up the walls and they began to settle in and the next couple of weeks are cool. With ten days left he was saying, “There’s only ten days left. There’s so much I want to do in the next ten days before I go back.” It had reversed itself and he learned how to be a human being again. I said, “What was your BFO? What was your blinding flash of the obvious from that month?” He said, ‘It was simple. I’m 47 years old. My daughter’s nine. I could have gone the rest of my life and never had a week or even two days straight with my daughter. I now get a month every summer and I take her to school. I take my kids to school two weeks of the month. I take my kids to school and pick them up and I get to do that until they graduate. I get to do this the rest of my life. That’s my blinding flash of the obvious.”
The fascinating thing here is because generally, you’ve got listened to, so you’re saying, “Yes, but my business is unique. It’s different. I’m a dentist. I can’t do that.” We work with a lot of dentist. I’m fill in the blank. You fill the blank. We actually worked with pediatric dentist say, “That might work for regular dental clinics, but I run a pediatric clinic and my business is unique so it won’t work like it would for regular dentists.” We all have excuses for why this won’t work for us and I’m telling you haven’t found a business yet and I haven’t found an industry yet where somebody didn’t take a business from zero to freedom in 3to5 years. I can’t find that.
Somebody brought me dog walking once and I went online and found in about fifteen minutes and found a company went from zero to $10,000,000 in two and a half years walking dogs. If the person said, “Yes, but know I don’t want to build a business, I just want to walk dogs, and you’re going to tell me I have to build a business?” I looked and said, “If you own a $10 million business, you can walk dogs anytime you darn well please.” The question right now is; do you have to walk dogs or do you get to walk dogs?
The underlying is intentionality. In reading through the book Purpose Driven Activity on a regular basis and you explore business plans, I used to ask folks, you want a three-year business plan or a five-year business plan? Then your answer is, “Not so much.” We’re all taught, “You need a business plan.” This is one of those things where I have we talked before we went on the air. I never studied other people are or what they status quo said you’re supposed to do in order to do something, how you market, or how you start a business. I never did any of that stuff. I went to what I was good at and what the market wanted and I tried to marry those two things and I kept asking myself, “What are I clients and potential clients need and how do I form that?” As a result, I never did a business plan and all the businesses in the ten plus businesses I’ve done, I’ve never done a business plan. I would get some feedback on this and some flak for that, and I knew intuitively that it was a bad idea, but I couldn’t explain it. I did research on it.
I speak all over the world and I’ve done this many times. You sit in front of a crowd of a thousand people and you ask, “How many of you out there did a business plan?” You’re going to find 3% to 6%, 30 to 60 people out of a thousand that had business plan before they started their business to others. There’s data right there. What that tells us is that in the face of all the pressure we get from the SPA, you go to the SPA and say, “How do you start a business?” They’re going to say, “Do a business plan.” You go to the MBAs. How do you start a business to business? They’re going to tell you to start with a business plan. In the face of all that pressure, only 3% to 6% ever did it. That’s because everybody intuitively knows it’s a dumb idea.
We can onboard with good ideas. Fasten your seatbelt, 90% plus do that. We’ve been educated. That’s a good idea, and it intuitively makes sense. Business plans don’t. Then I ask those 3% to 6%, “How’d that ever work out for you?” The collective response is a giggle. I have yet to find a single person where their business plan worked out the way it was supposed to. That doesn’t mean I’m against planning. What I’m against is planning in a vacuum, static planning, and planning an entire year to five years in a static world is if you actually knew what was going to happen for the next year. You don’t control 80 % of what’s going to come at you. What we need is a strategic plan.
The difference is simply these business plans are functioning on three questions, where am I, where do I want to end up, and how do I get from where I am to where I want to end up. Most of the business plan is wasted on what we called the giant how. “How do we get from here to three years from now?” Voodoo, fortune telling, dumbest thing you could ever do. It’s like taking snapshots of here to the Capitol building, which is nine miles away, and then trying to get to the Capitol building based on the snapshots. That’s what a business plan is. It’s a static foretelling of the future and then you actually try to get to the future by relying on something you wrote six months ago. A strategic plan is what we call a two point one strategy. You don’t get three, you only get two point one.
Number one is valid. Where am I? Number two is the most critical piece. Where do I want to end up? Then you don’t get three. You don’t get hot and get all the way from one or two. All you’ll get is, “How do we get from where I am to two weeks from now or four weeks from now?” Three months is stretching it. That’s how we teach people to plant. Utter clarity on where you are, utter clarity and where you want to end up a year from now, and then what do you need to do in the next two to four weeks to begin to get there for a year from now. You do that for two to four weeks and now you have a new number one. I’m here. Do I like what happened? Do I still want to get there? If that’s true, then I’ll do this again, or I don’t like it, I change it out. It’s iterative planning that responds to a dynamic ever changing world. There’s a famous general from World War I. Germany planned the attack of Europe right down to resupplying shoe laces to the front line. I don’t know if it was him or somebody else after the war who famously said, “No battle plan survives its first encounter with the enemy.”
Mike Tyson said it reasonably well.
Boxers say regularly, “You have a plan until you get punched, and then you figure out, but you still should have a play and you’re still not where you want to end up. I want to win this fight.”
For the guy that comes in or lady that comes in, they’re here, they’ve joined the 3to5 Club, and they’d sit down with the group. What’s the typical commentary that you hear from them about week four to five where they come back in?
They’re drinking from a firehose and that this is a complete reorientation. It sounds like a cult. There are so many things that they’re not used to hearing about how you actually are successful in business, that it just takes a while. We have an orientation where we give them a lexicon and say, “Here’s a bunch of terminology you’ll hear that you’ve never heard in the business world around you that will actually help you begin to build a business.’ They’re drinking from a fire hose and it’s reorienting their view of business and their view of why they’re in business and how you would actually be successful.
It’s a complete rewiring of so many of the things that we’ve learned through the ages that nobody’s ever bothered to test. This isn’t a book I wrote. This is a life I’ve lived. This isn’t 3to5 Club, we have 24 months’ worth of content and most people stay in the groups for four plus years because they want to go through it again. It’s not about the content, it’s about the community. Every two weeks when they come back for twice a month, we have a topic we cover that gives them homework that actually has practical tactical stuff that’ll change their business.
It’s funny, was it? Which you do know that isn’t necessarily so.
It’s true. Our statement on it is adults don’t learn unless we’re disoriented. As soon as I think I know something, I shut down. “I know what he’s talking about.” We have to disorient people. You have no idea what a plan is. We’re not against planning. We’re against the planning you’ve been taught to do. We’re not against process. We’re involved in a completely different process that will create freedom for you. You have to use the tools differently, but you have to wake people up and help them realize that what they’ve been operating on for the last ten or fifteen years was false information.
For the folks that go through this process, there’s some quantity of those folks that won’t adopt or fail. What’s the biggest reason that you see for folks that joined 3to5 where they don’t enjoy it?
We help people on different levels, like with 3to5 Club people who are zero to twenty stakeholders is we call them, not employees, the biggest issue there, I’d say there’s two of them. There are ten or fifteen, we’ve labeled them all, but two big ones pop into my mind. Number one is the craftsperson’s dilemma. The craftsperson dilemma is, “I did not go into business to run a business. I went into business to make chairs. I’m a great chair maker. I made chairs for Bob’s Chairs Incorporated. I made Bob a killing and I got tired of making Bob Inc., so I had an entrepreneurial spasm and wanting to put my name on the building or on the business card. I did that and now I’m making chairs and they’re piling up in my basement. I don’t understand it because when I sold them for Bob, they flew off the shelves.” The reason that happened is because Bob ran a business and you’re running your craft and you don’t understand that. Build it and they will come is not a business principle. It’s a movie.
It’s a movie theme. That’s a huge issue is we have to get people across that threshold. 30% of business is the craft, 70% is business. How do you get these things? How do you let people know that these things are in your basement? How do you let them know that you’re different than the guy, advertising, marketing, staff relationships, leadership, understanding your profit and loss statement? Most people come into 3to5 Club looking at their bank statement to figure out whether they have money. I have not looked at my bank statement in fifteen years. It’s the dumbest thing you could ever do to know whether you have money or not. You look at your profit loss statement, here’s how you read it. It’s stuff like that that they don’t know that kills them.
If you want to know what's in your head, take a look at your business.
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The second thing that kills them, and it’s related to the first, is they never make the shift from income producer to business owner. We have what we call the seven stages of business ownership. Stage four is the classic American dream where you’re actually making money. The problem with that is you’re not making time, and I built five of those that were profitable and all I did was I got a treadmill out of it. The big mindset shift is what lives between stage four and stage five. Stage four is where you get money. Stage five is where the business begins to produce bolts and nuts. It’s a huge let go. There’s ego involved. “I’m the best chair maker. Now. I’m going to have to make other people successful making chairs. This is my baby and I’m going to turn my baby over somebody else to babysit.” There’s all kinds of head trash involved in that and that’s one of the things we have to deal with in 3to5 Club is to get people to where they want.
They want the end result bad enough that they’ll let go of their stupid process for not getting there. That’s a huge piece of this is, “I can’t get past being an income producer. I’m a micromanager. I can’t help being involved in everything. I never get past it.” You see this on a small business level from zero to twenty and you see this with giant corporations. Steve Jobs went through this in this first iteration with Apple. They fired him because he couldn’t let go. He was an income producer and he finally learned who after leaving that he could do this differently. He came back and created a much different organization out of it. Those are two of the bigger ones right there. Mindset shift, it’s all about what’s in my head.
I say this all the time, “The cast is not in your business, it’s in your head. If you want to know what’s in your head, take a look at your business. If you don’t like what you see in your business, it’s because of something in your head, but you got to change your view of the world which will cause you to make different decisions, which will give you different outcomes in your business.” It’s both end. We’re not consultants in our business because consultants come in and make your assembly line go faster and we’re not a coaches because coaches just deal with your head, that’s a false separation. You look at successful people and their heads are squared away and therefore their businesses are squared away and they figure out how to do a better assembly line. It’s both in.
We talked a little bit about the college curriculum and talking about why this is not taught at academic institutions. There’s got to be some level of pushback. What have you run across?
It’s very simple. Academics are teaching what the academic before them taught them, who is teaching what the academic before them taught them, and none of them have done any of this to see if any of it works. There’s this caustic, self-protective mechanism in education called peer review. If you want a PhD, you need to get peer review and what’s peer review? It’s making sure that you conform to whatever everyone before you had said to some degree with your novel new thing, but here’s basically what you have to do. You have to conform to all this stuff. Everybody’s teaching what the last guy taught and they’re always ten or fifteen years behind in what should be taught. Sometimes they are never going to catch up, but people who haven’t done stuff should not teach stuff. That’s just an axiom of life.
That’s teaching marksmanship if you’ve never shot.
Don’t teach how to shoot a gun or how to pull a tooth. If you’ve never shot a gun and pulled a tooth, that’s not a good idea. Nobody is teaching in dental school that hasn’t pulled teeth, I guarantee you, but somehow, we have academicians out there teaching business who have never started or have not made a lifestyle out of starting and running businesses. It’s criminal.
We talked a little bit about planning early on and you have a viewpoint of planning versus a viewpoint of execution. Dig into that a little bit.
We have a lot of principles. We try and give people principles that they can grow from. Here’s one of them. Planning never creates movement. Movement creates the plan. The number one indicator of early stage success in any business, whether it wants to become Walmart or Bob’s Bar &Grill, they both have one thing in common upfront, speed of execution. They don’t sit around thinking about getting started. They don’t theorize. They don’t postulate. They don’t do case studies. Seth Godin years ago said, “Stop doing case studies. By the time you finish your case study, the world has moved on,” so execution finds us the plan. We’re not against planning. We’re against planning in a vacuum.
What do you do instead? You plan while you’re moving and that’s difficult to do. Nobody wants to do that. You either want to plan, which makes you an academic, or you want to move, which makes you a crazy wild-eyed entrepreneur who runs into a brick wall after brick wall and fails often. The combination of the two is, “I’m moving forward at a reasonable pace without running into brick walls and as I’m doing it, I’m constantly taking soundings. Is the water getting shallower? Is it getting deeper? What’s happening here? I’m getting the data and I’m making on-course corrections all the time and I’m flexing as I go.” The number one indicator of early stage success is get moving. Number two is stay moving, and number three is be flexible as you move. Don’t stop moving if you come into a problem. If you come to a fork in the river, take it and because you know where you are, you have utter clarity about where you want to go, you will find out very quickly you’re going up the wrong fort.
Lewis and Clark is my favorite example of how to start a business. They would go up the wrong fork only about 50% of the time because they take it but very quickly, within a half a day or hours, they’d notice the wrong fork. It’s gone the wrong direction based on where they wanted to end up. Planning never creates movement, movement creates the plan. All of that is built on a funny word called conation. It’s the most important business word you’ve never heard, and that’s not marketing. I truly believe I’ve been studying it for years. I found a woman who studied it her whole life and made millions placing NBA and NFL athletes using the word conation. It’s one of the thousand most obscure words in the English language and I’m one a one-man campaign to make it the most common word that you understand as a business owner because it is at the root of being successful combination.
I found this in a book called Self-Made in America by John McCormack. In the ‘70s,he built hair salons in Texas. He’s not a motivational speaker and it’s the only motivational book I’ll recommend because he actually did stuff. In that book, he talks about the word conation and for a little bit, a couple pages, I got into it and realize this is a deep well. I’ve studied it for years. Not just study, I’ve learned how to act on it. A fancy definition for conation is the will to succeed that manifests itself in single minded pursuit of a goal.
Another way to say it is, “I want something so bad, I’m already doing it.”That’s conation. I had a heart attack 125 or so days ago. I was already fit riding my bike, 11,000 miles a year, a thousand miles plus a month in some cases, and I had a mild heart attack and found out there were some dietary things I was eating, things that I was processing, but it was leaving behind bad stuff and I had some genetics I had to deal with and all that stuff, but it was mostly lifestyle. Ironically, I was eating sugar and consuming a lot of sugar on my rides, but I was leaving behind triglycerides and all kinds of other bad stuff.
The normal operative view of this is I got to change my lifestyle. I’m going to spend the next two weeks bingeing on dead cows and sugar and get it out of my system. I’m going to stop smoking so I’m going to chain smoke for the next two weeks. That, right there, tells you that you have no intention of doing it. None whatsoever. Conation says as soon as you figure out something is the right thing to do, you simply do it. You don’t wait for tomorrow. The day after I went and found some things on diet and change my diet, I was already 12% body fat, I’m not seven, I didn’t mean to lose weight, I found out that sugar was bad for me, so I stopped eating sugar that day and I haven’t eaten it since. That’s conation. The will to succeed that says, “I want something so bad. I’m already doing it.” That speed of execution, it’s a combination of speed of execution, of that get moving, and being flexible. All of that is conation.
There’s an opposite word to conation that I found looking at a little book on the thousand most obscure words in the English language. I was leafing through it and I found this funny word, velleity. The reason it caught my eye, because I was literally leafing through this because my word combination is in this book, was because of the beginning of the definition. When you hear an antonym to something, it never starts with the antonym to ‘stop does not’. The definition to ‘stop does not’ start with the antonym to ‘go’. You’d have to figure that out. This book said validity, definition, the antonym to conation. It started with, “Let me hit you over the head with this is the opposite of that.” Remember what conation is. I want something so bad, I’m already doing it. Then here’s the definition in the book, the desire with no intention of doing anything.“Wouldn’t it be great if? Someday I’m going to. I sure hope that,” all of that is velleity. How often do we do that crap?
Every self-help book you buy.
I’m good enough. I’m strong enough. People like me. We had vision boards and we walk on coals and we sing Kumbaya and then we don’t do anything. We play office. Conation is a huge indicator of success. Number one indicator of success. I want something so bad. I’m already doing it or get out of my way. I’ve got somewhere I need to be. You know people like this who are moving in a direction and they’re moving so steely eyed in that direction. They don’t even have to say, “Get out of my way.” You just step aside because you’re going to get run over. That’s conation.
As you bring your groups of 3to5 Club together, I’m thinking about the atmosphere change after a few sessions. What’s the transformation that you see?
Henry David Thoreau said, “Most men lead lives of quiet desperation.”If he’s being politically correct 100 and some years later, he’d say ‘most people’. We lead lives of quiet desperation. As business owners, we get the opportunity to do that twice in our personal life and in our business life. When I ask you your name, the next question to ask you is how’s your business and what do you say? “Business is great.” There are quiet desperations that says, “I don’t know this. This was a huge mistake.” They come into 3to5 Club where we work with them.
We work with CEO is at a level that they’re beyond 3to5 Club, but we’ll do this as well with them and you see that angst, that quiet desperation. “I can’t tell anybody that I’m hurting inside. Either I don’t even have a treadmill, I don’t even have revenue or money, or I’ve got bucket loads of money and I got no time.” In both cases, it’s quiet desperation. Is this all there is? You see them begin to get hope because they get utter clarity about getting somewhere and that changes the quiet desperation to quiet resolve. This isn’t about walking on coals or singing Kumbaya or chanting and vision boards or getting all that motivational stuff.
It was Zig Ziglar who said, “Motivation is like food you needed every day.” I don’t agree. Motivation should not be like food. Motivation is that lifelong thing that you want so bad that you’ll get out of bed every morning for it and you don’t need to channel a vision board. It’s quiet resolve. It’s, “Get out of my way. I got somewhere I need to be.”You do this because you can’t do anything else. You’re compelled. “I want to be Steve Jobs. I want to build cool technologies.” Fill in the blank. That’s what we see happening. We watch people begin to transform, not because their business has changed right away, but because they can see it can. Now they’re beginning to get simple tools and practices and methodologies that will actually allow them to be conative and get where they need to go, so we give them another principle. Success is quite predictable if you’re doing the right things and we can help you do the right thing.
I’m sure that in this conversation, there’s something important that I’ve probably not asked you that I should’ve, that describes what goes on in this organization or in your book. What I’m looking for is for that business person that’s out there that’s maybe in their quiet desperation mode or they’re going, “I don’t know my children.” What else should we have talked about that I haven’t asked you about?
The big ‘why’. We have four building blocks that we say are our fundamentals for a business. The last one is outside eyes on your business. Where do you have to go? Say three magic words. I don’t know. Where do you go to say those three words? 3to5 Club is a place where you get to say, “I don’t know,” or as I’ve worked individually with CEOs in corporations or their leaders, they get to say to me, “I don’t know what I’m doing.” There is a poll back about twenty years ago, Gallup did it. Of the Fortune 500 CEOs they asked one question, what is your greatest fear? The number one answer was, “My greatest fear is to be found out to not know what I’m doing.” These are guys that get tens to hundreds of millions of dollars. They have no freaking idea what they’re doing, so outside eyes are the last one.
Then freedom mapping is another one. Process mapping you’re way off the treadmill. How do you get off this treadmill? How do you get this stuff out of your head, through your heart, onto a piece of paper so somebody else can do it? Then the third one from the top is strategic plans. How do I figure out how to create a plan that will actually serve me rather than me serving it? The top of the pyramid, the top of the number one thing that every business owner needs that almost no business owner is the big ‘why’. Why are you doing this for? It’s not for the money. You think you’re doing this for the money and that’s your biggest problem. Making money is killing your business. You get a big ‘why’ and you will find reasons to make money you never imagined and a big why is very simple.
We have a three and a half hour workshop on it. We do it for two days with companies, but a big ‘why’ is simply something that you have that motivates you to get out of bed and come to work every day that you can never check off as complete. If that’s something that’s driving you, you will find it’s probably not in your business. For instance, I’m going to be a great dad. I want to solve world hunger. I want to build a company that has a legacy that lasts long after I’m here. There’s something much bigger than your business and selling toilet paper that that should be driving you. When that lights you up, you know that you’re off the treadmill. We talked about some of our heroes, had a nice tidy little a mortgage business that he’s making good money off of for fifteen years, but he didn’t have a big why.
He got his big ‘why’ and he came to me a few months later. He said, “I know I’ve got my big why.” I asked him, “How do you know?” He said, “Because it has me.” I said, “That’s cute. How do you know it has you?” He says, “Because now every decision I make in business I make, I filter it through my big. Will that get me and us to that big ‘why’? Buying that copier, starting this new business, whatever it is.” As a result, he sold his mortgage business and he owns five assisted living centers, small sixteen to twenty-bed assisted living centers that he built from scratch because it fit his big ‘why’. He’s making multiples more money from that than he ever made from the mortgage business and having a lot more fun. That would be my closing shot here is if you want to be highly successful, figure out why you are doing this for. Get a big ‘why’. Something you can never check off as complete. That’ll drive you the rest of your life long after your business is gone.
Motivation is that lifelong thing that you want so bad that you'll get out of bed every morning for it.
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For the folks that are out there looking for 3to5 Club, how do they find out if there is one? If there isn’t one, what do they do?
We’re just getting started. We spent five years testing their model here before we rolled it out. We didn’t want to franchise it until we knew that we had something that was time tested, proven, and spent about eight years now, seven, seven plus, and now we have them in Pennsylvania, Virginia, Ireland, Kenya, Atlanta, a couple other places around the world, and we want them in every city in the world. If you don’t have one and you want to get one, first thing to talk about is whether we can help you become a facilitator. A facilitator goes through our training. It’s a very small upfront fee comparative to most franchises. You pay us a fee, you come in for our training, then we work with you for the next six months to help you build 3to5 Clubs where you are locally.
If you don’t see yourself as someone who could be a facilitator, get a hold of this and say, “I want a 3to5 Club in my area and I don’t have any right now.” We can give you some ideas on how to find the facilitator or get us out there. I’ll come out and do workshops for a very minimal amount of money with 30 or 40 or 50 people in the seats because we can get them excited about starting a 3to5 Club. In that group is somebody who might facilitate as well. They can do that. They can go that route and find us all over the world that way. We’re excited about seeing these everywhere.
For the folks that are going to look, where best can they find you on social media?
The first place to look for me is Chuck Blakeman. You can put that in. That’s my Twitter handle. @Chuck Blakeman. If you put LinkedIn, Chuck Blakeman, you’ll find me there. Facebook, Chuck Blakeman. I write on a regular basis for Inc. Magazine. That’s a good way to find us that way. ChuckBlakeman.com. If you want me to be a speaker or do workshops or any of that stuff, work with CEOs and leaders of organizations, you can find me there as well.
I can’t tell you how much I’ve enjoyed this. Thanks so much for being a guest on the podcast.
It’s been fun to represent our crew for doing this.
Thanks a lot.
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- Crankset Group
- Making Money Is Killing Your Business
- 3to5 Club
- Self-Made in America
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- Chuck Blakeman on Inc. Magazine
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