I’m grateful for the enthusiastic response given to Episode 3, Building Enduring Wealth. I hope each of you are having fun saving and designing a dynamic investment plan. Today, we’re going to talk about adding value. I read recently an article in BBC News on July 24th about an international team of researchers who reported that in the March through May period during the lockdown of the pandemic, that it represented the longest period and most prominent global anthropogenic seismic noise reduction on record. So in plain English, that means that that earth movement caused by human movement from everything we do—from driving our cars to operating our factories—produces ground motions that can be detected by seismometers. In some cases, the noise was reduced by as much as 50%.
Normally, this human noise needs to be filtered out to detect low magnitude earthquakes. So at first, we think, “Yeah sure, New York City kind of shut down, so the noise levels did drop. If you’ve ever been there, you know what I mean. The horns honking alone would reduce the noise level. But it also occurred in places like the Black Forest of Germany, even in quiet areas like boreholes 700 yards below the ground and quiet places like that. Just think of the stillness. This is quite a phenomenon. When I read about this phenomenon, my first question was, “Well, what noises do I make that cause a stir?” Well, aside from snoring at night or cheering at a sporting event, I reflected more upon this question and I thought: it is in our actions and service to others that we can make the biggest difference to those around us. We can move the earth, so to speak, to benefit the lives of others.
From this thought came the self-examining question that I think is worth spending time to reflect honestly, and answering to ourselves. And that is: what value do I add to my service or product that makes the biggest difference in the lives of others, so much so to the extent that it changes the very ground upon which they stand? Let’s call this difference “adding value.” In fact, let’s call it “adding exceptional value.”
As I consider some life-changing and life-enhancing moments I’ve experienced and value-added moments from people who’ve interacted with me, I’d like to share a few that have made the earth move in my life. When I started my CPA firm in 1987, my father-in-law offered what proved to be life-enhancing, profit-boosting advice. I guess I could say he really added value to my life. I’m sure his concern was for my wife to make sure that I took good care of his daughter.
Whatever his motivation was, it was a life changer for me. He shared with me an experience he had in his life when he was working for the IRS. He did accounting work on the side at nights and on weekends for clients around town to bring in extra income for the family. Of course, he went on to become the president of a bank and was very successful in his own right, I’m sure because he applied the same advice to his professional life. He said, “Craig, as you get busy doing work for your clients, don’t get too busy to take an afternoon off each week from office work and go out and visit your clients at their place of business.” He told me he did that and he seemed to just grow in clients as a result.
I viewed my father-in-law as having had a successful career and chose to follow his advice. For me, I chose Wednesday afternoons to visit my clients. Over the years, I watched not only my CPA practice grow to over 700 small business clients, but its revenue per client soar. The fact was a simple request. The impact was tremendous. Not only did I gain the trust of my clients by taking time to show that I was interested in their success, but that trust grew to produce two outcomes. The first was that they would refer their friends and family to me for help. And the second was that at the end of the day on a Wednesday, I would not only head back to the office with unsolicited referrals, but also with additional work from the clients I visited. Some of this work benefited me in other ways. For example, one of my clients was considering an investment in a startup bank. He shared with me the investment prospectus and told me he was considering making an investment and wanted my opinion.
I took the information and a few days later, we met to discuss my thoughts. I shared with him that I thought it was a good investment opportunity and asked if I could join in the investment with him as well. He said he was hoping I would say that, because really he had planned to only invest if I did as well. What a great experience to help start a community bank and be one of the founding board members alongside one of my respected clients. Some of our listeners are not business owners and as such, I thought of one of my sons and how he is an example of the ideal employee.
As our family grew and the businesses I founded became more successful, we moved into a larger home on five acres. This home was a lot of work to maintain as you can imagine. I would assign my son, Matthew, to do certain chores outside. Without exception, he would not only do the work assigned, but when he was finished with the assigned work, he reported back to me saying, “Is there anything else that needs to be done? And, oh, by the way, when I was out there, I saw this and this that needed to be done so I went ahead and did that too.”
You can imagine how any employer would feel to have an employee that makes the earth move so deeply by doing not only what is expected of them, but doing more without even being asked. These types of employees enhance the profits and pleasure of doing business. They add value and are a treasure to have. You can imagine having the same interaction with your clients or customers going above and beyond their expectations.
As you take time to be quiet and ponder your steps, think about how your service or product can enhance and change the lives of others. The steps you take, if taken with care and attention, can really make things move for other people. As you figure out how to add value to those you interact with, as my father-in-law did with me, you too will experience greater success and fulfillment from the small and simple steps of seeking to understand the needs of others and taking the time to meet and exceed those expectations.
Let’s talk about how you add value, and to focus on that question, why don’t we all go back to our first job interview? Mine was at McDonald’s. I think it went something like this. “When are you available to work?” “After school.” “How much money do you want to make?” “How much are you offering to pay?” was my answer. In other words, it was quite a simple exchange, right? They had money that I wanted and they needed help working, so if I worked, they would give me money. Very simple. But is this really the basis of our interactions? You need to match your unique characteristics, or your product’s unique characteristics or your services, to the needs of your customers so that their perception is that you offer the best value, not necessarily the lowest price. Of course, I went to work for McDonald’s for minimum wage, so I did offer the lowest price.
Let’s look at your customer’s needs. How do you fill those better than anyone else? This is where you take the dollars and cents out of the equation of business and add a tangible and an intangible value beyond what others can do. How do you know you’re making a difference in the lives of your customers or clients? A few weeks ago, I was golfing with James Stevenson, a friend of mine in Park City, Utah. As we golfed, he shared with me some thoughts and reactions to the first episode of the Biz Sherpa Podcast.
He said, “Craig, I get this, looking at what I do best and how I spend my time is great. In fact, it got me out of my investment banking job and into owning a vacation rental management company in Park City.” What could be nicer than that, right? He said, “I want a scorecard so that at the end of each day, I know I’m on track.” I’ve contemplated James’s question for several weeks and found the key to keeping score in my life takes time and honest evaluation.
Let me share with you a brief experience of selling a product for 30 percent more than the competition in half the time across the street. My development business was selling their product for 30 percent more per square foot than our competition. What caused this? We knew that the value to drive up to the front door and walk in and having your name on that building was more valuable to a business owner than having their clients park on the outside perimeter of a building that was courtyard-oriented, only to have them walk through the courtyard, trying to find the front door to the business they were going to solicit. You have to understand that when you go to school for two to eight years to get a college degree or become a professional, you want the look of a professional office that makes a statement about you. Normally, in business school, you would think that the answer to the question of who’s going to sell out faster—the one with the lowest price—will always win. I say the product with the greatest perceived value will have the highest demand.
This type of success doesn’t happen by accident. It takes time, deliberate focus, and effort, and of course, some luck. We took three months and looked at our very first project and looked at who bought our office buildings and what were their needs. Then, we surveyed those needs and put together a successful ownership proposition that also made the location more valuable to the business owner than just another building. In other words, the enhancements we built into it made their business operation more successful and more profitable. This study and taking this time put us over and above what anyone else was doing. It meant we spent more money, but we were able to sell for more money and probably at a greater margin, certainly when you consider the time factor. If you don’t take the time to figure out and deliberately have your plan, it’s like ordering take-out, running in and picking it up, being in a hurry to get home, and you get home to unpack the take-out and you realize you have the wrong meal. You ordered chicken fried rice, but you get home and you have beef with broccoli.
As I’ve pondered my friend’s, James, desire for a scorecard, I’ve discovered in looking back at my life, how I achieved as a CPA and growing from one client to over 700 small business clients in eight years; and as a real estate developer, I grew from our first 8 million dollar project to developing over 750 million dollars worth of real estate over the next nine years. The key is to exceed expectations and add value at every interaction on every level, and you will not need to advertise. Your customers will do it for you. Remember, this process takes deliberate time and focused contemplation. By taking time to score your progress, you will avoid the trap the world uses to measure progress, which is growth in sales or other metrics. The world wants to use metrics and compare price per pound, or in real estate, price per square foot.
We have all been to the grocery store and found that the most expensive meat, Prime, the prime quality of prime cut, is many times more expensive per pound, and sometimes 15 to 20 dollars per pound more than the Choice cut. So what kind of steak do you want to grill? I like bone-in filet that is Prime. So to answer my friend James’s question about a scorecard, the ultimate scorecard that focuses on measuring personal performance, evaluating results of your performance, and setting objectives to elevate your performance is where I have focused my career and my life.
So I’m excited to share with you my scorecard. My personal trainer asked me a question at the beginning of the year. He said, “Craig, what are your personal fitness objectives this year?” To be honest with you for a minute, I couldn’t even think of an answer to that question. I’m not planning on running in a triathlon or a marathon, and last year I won a World’s Championship in the Amateur Gentleman’s Fine Harness, and so I had some objectives, but I had got caught flat-footed at the beginning of this year. It took me a minute to think of an objective. So I made one.
So, on the scorecard that you can find on our website at www.BizSherpa.co, you’ll find under the tab, “Resources,” the scorecard. The scorecard, you should start off each week with a personal performance objective. Don’t be caught like me without one. Define that objective. An effective objective should be well-defined, and be able to be recorded in one sentence. For example, “Determine why my delivery times this month have doubled, and resolve the production or fulfillment problems so that our customers receive timely fulfillment to their orders.” Or, “I want to build my sales pipeline so that I have a hundred potential orders for next month.” Those are all worthy objectives in your business.
Then, the next thing you should do is at the end of each day, look back and measure the percentage of your time spent each day working on your personal performance objective. I would say that if you’re distracted more than 20 percent of the time, then you’re not able to adequately focus on your key objective. For example, you may have a 50 minute workout plan, but you’re interrupted by telephone calls and texts for 14 minutes of that 50 minutes. So now you’ve only achieved 72 percent of your workout, unless you extend the time. By focusing and using 80 percent as an objective, you’re able to then set aside some of the things that become obstacles to you in business. And believe me, I’ve owned a number of businesses, and I’ve seen 700 clients get distractions, as well as a CPA watching them. I know how to learn to focus, and I think it takes that focus to be able to enhance your personal performance.
The next step after you measure it each day is to evaluate what obstacles you faced. Then next, you’ll identify what you can change, or who you can empower, to help remove those obstacles, or delegate to, that stand in the way of you achieving your objective. These are key principles. I can’t stress enough that, to avoid getting burned out and having a business own you, you need to be able to focus, and you need to be able to have an objective in mind to spend 80 percent of your time on what you feel is your key objective on any given week.
The next area I think you should focus on is exceeding expectations performance. This is an area where you get to receive emotional currency and accumulate that to give you energy and power, and help you know where to focus. So to do it, you need to measure the feedback from your clients, customers, and employees. If you don’t receive any, then that might be your 80 percent objective, to get on the phone and get some feedback. I think it’s important to a business to be able to measure their feedback they’re getting. I’m not talking about the survey like you get when you buy a car and they say, “Hey, please give me a good rating.” I’m talking about honest feedback about your product, your service, and your performance. Some of these come unsolicited, and that’s the best kind of feedback that you want. But if you’re getting no feedback, then you need to start reaching out so that you have something to make changes and evaluate and to enhance your performance.
After you get the feedback, then you need to evaluate it, write it down, and rate it. Is this a positive thing? If it’s positive and saying that you’ve gone above and beyond, then go ahead and give yourself 100 points. In other words, if you’re exceeding your customer’s expectations, then you should be able to give yourself 100. If you have negative feedback, don’t be too hard on yourself, but don’t give yourself more than 50 points. I think it’s important to score this so that you can see where you are. And if on any given day, you got no feedback, then put in a zero.
The next step is to take action. Outline the changes needed to enhance the performance. If you have a positive, exceeding-expectations feedback, then you need to highlight that in your social media campaigns. If you had an employee go above and beyond, then you need to take action to reward and encourage that among other employees as well.
If you had negative feedback about a product’s functioning, then you need to be able to contact those in your business who are responsible, to enhance and fix the product’s performance. If you’re getting negative feedback about fulfillment, then you need to talk to operations, and help them understand that you’re getting negative feedback so they know what to fix. When you do this, then you are aligning your actions. You’re aligning the other 20 percent of your time that you’re spending on areas where you can tweak and enhance the overall performance of your company. And I would dare say, if you do this, your customers will take care of themselves. Your profitability will soar.
Then I would take the score of all five days, add up all five days, and rate yourself. This really does focus you, or your company, on getting daily feedback. Know where you stand with your customer satisfaction and employee satisfaction. Again, not like the car surveys you take when you buy a car, where they say, “Please rate me well.” They’re trying to have the company win an award, or the sales person is trying to win an award. I’m talking about honest feedback with detailed information about what you’ve done well, and maybe what you haven’t done well. And sometimes this is done by survey, but the best thing is to have a conversation.
The last area that I think should be measured on a weekly basis, and certainly monthly basis, is how are you doing at building your enduring wealth? You should measure and record the amount you transfer to savings on a monthly basis, and then calculate that as a percentage of net income from the prior month. That way you can evaluate each month, how you’re doing.
The next area is, you need to evaluate what time did I spend, and what investment options did I identify this week, and how do they play into my overall long-term plan to have a recurring income stream independent of my business? The action you should take is figure out what your next steps are on the investment vehicle you may have chosen or found. If you do this, you’ll be well on your way. Now to score yourself here, I would say 16 to 20 percent of net income, you’re a champion. If you’re 11 to 15 percent, you’re a pro. And 6 to 10 percent, you’re an amateur. If you’re 1 to 5 percent, you’re a beginner, and I have hope for you because you are starting. This scorecard will focus you on what’s important and allow you to elevate your performance and enhance customer satisfaction, which alone will increase your profitability more than any other factor, as I’ve mentioned before.
Now, I would go back to number one and you do need to total up your percentage for the week, the area where you’re having your personal performance focus, and there you need to score yourself. You need to look at it. If you’re getting between 320 and 400 points, then you’re a champion. If you’re getting 280 to 319 points, you’re a pro. And 280 and below, you’re an amateur. I think it’s important to score yourself at the end of each week, and then evaluate and take time to look at those three aspects of your performance to determine what your objectives should be the next week. You may find that they fall out from these things. I certainly wouldn’t make the investment the number one objective, but I would look at your personal performance focus and certainly your exceeding-expectations performance, and see what you can do the next week to enhance that performance.
A friend of mine, Tommaso Cardullo, a fashion designer, told me that a way to quantify to track performance creates excitement, and energy, and drive. And that scoring your progress is a way to elevate your performance.
If you don’t take the time to contemplate and look beyond a dashboard or a set of financial metrics, you will lose sight of the enhanced value you, your company, your employees, and in turn, your products or services, can add to someone else’s life. You will know you are making a difference in someone else’s life when you start anticipating their needs before they recognize they have the need. The Biz Sherpa scorecard will liberate you from the day-to-day business rigors to free you up to focus on doing just that—enhancing value for others. Scoring your progress will bring excitement, energy, and drive, and above that, it will elevate your vision and eventually your performance. Remember the month the earth stood still. Take time to be still, measure, evaluate, and set elevated objectives. As you do, you will make the earth move for someone else. This is why I created the Biz Sherpa scorecard.
It will look a little bit more like a journal. You need to take time to contemplate, evaluate, and record your thoughts and feelings, what is working, and what is not working. It’s a creative process to focus on these areas of your life, not a quantitative approach, or there would be an app or a software that would analyze all of your business and give you recommendations. You are unique. You’re a unique individual with talents, vision, and drive, that no one else has. Use those to customize your performance and set your objectives.
Consider this thought as you do from British novelist, Jon McGregor: “Pen and paper is always at hand. Writing on the page stays on the page, with its scribbles and rewrites and long arrows suggesting a sentence or paragraph be moved and can be looked over and reconsidered. Writing on the screen is far more ephemeral. A sentence deleted can’t be reconsidered.”
“For decades, my own journals have been incubators for creative projects. Each time I start a new book, workshop, or business expansion, I use my journal to work out questions, obstacles, details, procedural notes, and deadline management. I also benefit from the safe container for my own self doubts; uncertainties, frustrations, and other feelings that are part of the creative process.”
And the nice thing about this scorecard, you don’t share it with anyone else. You can put in here your personal doubts. You can look at your weaknesses. If you don’t encourage employees. If you’re not spending the kind of time encouraging the right actions to be taken in your business. This is a time for you to be quiet and evaluate, and improve yourself. I wouldn’t use it as a time to beat yourself up. This is a time to set objectives. And then at the end of each week, turn around, and set a new objective that will help you enhance your performance.
I look forward to your feedback as you use the Biz Sherpa scorecard. Go to www.BizSherpa.co, and click on “Resources.” You’ll find it under Episode 4.
Oh yeah, in two weeks, you will join me for my first video podcast in the Sherpa’s Cave, with the king of the Reset Button, Warren LeSueur. Warren is a two-time stage IV cancer survivor, who established a family-owned and operated used car dealership in Tempe, Arizona in 1975, with barely over 50,000 a year in sales. Now, today it has grown to over 38 million. We will be discussing how he manages a family-owned business, and how his life’s experiences of hitting the reset button have led to success in business, and fulfillment in life.
I’d like to give special thanks to Tommaso Cardullo and James Stevenson for their thought-provoking discussions about scorecards. I hope you use the scorecard and find it rewarding for you. I can’t wait to meet you next time in the Sherpa’s Cave. This is Craig Willett, the Biz Sherpa.
Be sure to go to our website to access the resources related to this episode at www.BizSherpa.co. If you enjoyed this show, tell your friends about us and be sure to rate our podcast. Craig would like to hear from you, so share your thoughts in the Facebook community at BizSherpa.co. Follow us on Twitter @BizSherpa_co and on Instagram @BizSherpa.co.