Here is a fascinating read about the podcast ecosystem in 2019.
Fact: 1/3 of Americans listen to podcasts and for those who listen weekly – they average 6.5+ hours!
What I Learned from Publishing 30 Podcast Episodes
Starting The FORT Podcast has been one of the highlights of my year. It has connected me with a lot of great people, both podcast guests and listeners. I said from the beginning, if no one listens, at least I will have archived content for my kids to listen to one day—to show them what their dad was like “way back when”. I have always felt like I have a lot of great business conversations that I wish others had the chance to be a part of, and now podcasting has made that possible.
Here are some key takeaways from my first 30 conversations:
1. The perfect time to start anything you want to do is NOW. In essence, there is no perfect time, because it’s always the perfect time.
2. When you love something and are passionate about it, doors will open. Several episodes are with people doing things for the first time. That doesn’t slow any of them down. In fact, it accelerates their desire to learn quickly.
3. The goal isn’t to be perfect; the goal is to learn quickly—because failures are guaranteed along the way. In most conversations, some of the biggest ‘breakthrough’ moments were after a failure, not after a success.
4. The tax rate, the stock market, and politics play ZERO influence on whether someone starts a business. While these are talked about highly in the media, I’ve found they have no influence on an entrepreneur’s desire to create something.
5. Small businesses aren’t all the same, but they do rhyme. We ALL deal with the same issues in some form or fashion. Don’t be scared to admit something to someone—you’ll be surprised to learn that they have probably experienced it or are experiencing it themselves.
6. Surround yourself with the right people. In every episode, there is an outpouring of gratitude from founders who have moved forward because of the advice, encouragement, sympathy, and kindness of those they surrounded themselves with. Don’t be scared to ask for advice or direction. It can help propel you forward faster than you can imagine.
Hosting a podcast has helped me understand how much larger the world is than we tend to think. I have learned more about not assuming everything I believe to be true and that asking the right questions can unlock a whole new world. Literally one great question might change your life—it can help you overcome any bias you might have had that was holding you back. Morgan Housel has a great quote, “Your personal experiences make up maybe 0.00000001% of what’s happened in the world but maybe 80% of how you think the world works.” Hosting The FORT has made that quote ever more true in my journey.
The FORT has also reminded me that success comes in all shapes and forms AND that we all have shit to overcome. There is no “perfect” destination—the journey is the destination.
-CJPJ
The Importance of Tough Conversations
The toughest thing about tough conversations is that they are tough. They may be hard, but they are effective and efficient. At the end of the day, these conversations will create more trust, instead of decreasing trust. I truly value people who can have tough conversations. It tells me that you think like an owner, take accountability, and want what’s best for the company, not yourself.
I’ve always wanted Fort to be an inspiring place to work. A large part of this is creating a culture that allows and encourages these tough conversations. Disagreements can exist and different opinions are allowed to exist. It helps create the culture of iron sharpening iron—we will all rise together.
Tough conversations give us a chance to learn, improve, and move on—and do it all quickly. They come in all shapes and forms, but at the core, they come from a place of honesty. When had genuinely, the tough ones are the conversations that will create the most progress, clarity, and growth as you move forward.
There is a quote from IBM’s CEO, Ginni Rometty, that I will never forget hearing:
“Growth and comfort don’t coexist.” If you are in your comfort zone, it’s hard to grow. As soon as you move outside your comfort zone, you grow.
In looking around at my closest relationships, I’ve noticed that these are the relationships where transparency and honesty flow freely, both with the easy stuff and the tough stuff. As long as someone else has to have the conversation for me, I’m cheating myself and those around me. I’ve also learned that if the person receiving the tough information can’t handle it, that’s on them, not on me.
Honest feedback and conversations are a gift to those looking to grow and improve. Even if you don’t like conflict, these conversations must be had, so it’s important to learn how to do them right.
-CJPJ
The Case for Class B Industrial: Cannabis Sector Growth
No matter what side of the issue you stand on, the facts are the facts, and data shows that the use of cannabis, both medically & recreational, is legalizing state by state faster than ever before. At the turn of the century, 63% of Americans were against the legalization of cannabis vs. 31% who were for legalization. Fast forward to 2018 and the tables have turned—34% of Americans are against legalization vs. 65% who are for it.
Even Republicans are rapidly converting to believers in the legalization of cannabis. In 2018, the Texas Republican Party amended its platform to include three separate cannabis planks, support for industrial hemp, decriminalization, and expansion of the state’s existing medical marijuana program. It’s progress.
So what does this have to do with real estate?
In states that have already passed laws legalizing cannabis, growth has occurred dramatically in Class B industrial districts where warehouses and factories are being converted into cultivation / manufacturing facilities and even retail shops. CBRE published a research study in 2017 stating that in Denver, Colorado, warehouse leases signed for use by the cannabis industry exceeded market rents by 2-4x.
Innovative Industrial Properties (NYSE: IIPR) is up 272.5% in the last 12 months. “IIPR is the pioneering REIT for medical-use cannabis industry. Founded in December 2016, we are the first publicly traded company on the NYSE to provide real estate capital to the medical-use cannabis industry.” (IIPR Website)
At Fort, we believe the cannabis game is still in the very early innings. In fact, we might still be on the practice field. There is a lot of reason for us to believe the tailwinds in cannabis are strong and will be around for many years and decades to come.
Please keep Fort Capital in mind as an aggressive purchaser of these assets. If you’re a broker, we’d love to tell you more about our Broker Incentive Program for off-market purchases. Please reach out to Hunter Harrison (hharrison@fort-companies.com) or Steve Wolff (swolff@fort-companies.com) for more information.
-CJPJ
13 Simple Steps to Creating a Killer Investment Memo
At Fort, we have written countless investment memos to raise capital over the last 15 years. A great investment memo should be written in a fashion that virtually anyone with basic business knowledge can understand it. Warren Buffett often talks about writing his annual letters with the intended audience being his two sisters—both of who are savvy, but certainly not financial wizards. Keeping the memo simple, transparent, consistent, and to the point is always the best policy.
We are constantly learning and evolving better ways to present information to our investors, and we treat our memos as a representation of who we are as a company. We take a lot of pride in making these the best possible, and I highly encourage others to do the same, especially for those raising capital for the first or second time. A polished memo goes a long way!
Here are the 13 things we always include in our memos:
1. Company Overview / Track Record. Who the hell are we, and why do we deserve your trust and hard-earned dollars?
2. Investment Overview. For those that only like to read Page 1, they can leave with all of the highlights of the deal, financial summary / returns, and why we are buying it.
3. Reasons to Acquire. What are 4 to 5 key reasons we are acquiring the property?
4. Location Overview. Details about the sub-market.
5. Property Overview / Specs. Details about the property and its specs.
6. Tenant Overview. Details and characteristics of current and future tenants (if applicable).
7. Market Overview. What is going on in the market with which your property sits? Absorption, occupancy, key deals, growth, etc. Ideas here include:
- a. New construction in the market,
- b. Sale & lease comps,
- c. Market occupancy & absorption,
- d. Any key deals or additional market info, and
- e. Competitor analysis & current listings.
8. Sources and Uses of Funds. Where is the money coming from, what are the terms of that money, and how will it be used during the investment period?
9. Financial Summary. If all goes as planned (and it rarely ever works out exactly as planned), what can investors expect in return?
10. Partnership Terms. What is the legal structure, waterfall structure, risks, fees, our skin in the game, etc.?
11. Five Year Pro-Forma & Cash-flow Summary.
12. Return Summary. For a lot of investors, this page combined with the investment overview is all they want to read. This page shows the return metrics our investors can expect to make. (A shortened version of this is also found in “Investment Overview”.)
13. Property Photos / Map. We show detailed photos and a map of the sub-market with critical market information.
What other information have you found helpful to include in Investor Memos? I’d love to hear in the comments below!
-CJPJ
The Case for Class B Industrial: On Demand Delivery
To say I am excited about the opportunities in front of us through ownership of Class B infill / light industrial real estate is an understatement! My goal is to write a series of articles that take a more detailed look into the trends that are backing our thesis of wanting to own more Class B industrial.
Please keep Fort Capital in mind as an aggressive purchaser of these assets. If you’re a broker, we’d love to tell you more about our Broker Incentive Program for off-market purchases.
I’ve constantly asked myself, “What asset class offers the most ’optionality’ long-term for different use cases?” The answer is clear to me: Class B industrial. At the most fundamental level, it’s the least expensive asset class of them all, usually comes on larger plots of land, more in-fill locations by nature of when they were built, rezoning for higher and better uses is historically easier to achieve, offers lots of potential space & parking, can easily be redeveloped, and all of that leads to being an innovator’s dream.
On-Demand Food Delivery
When Travis Kalanick, the founder of Uber, starts buying core industrial buildings in major metros for his new startup(s), Cloud Kitchen & City Storage systems, I have to believe something big is emerging. I also have to believe that Travis hasn’t blindly walked into this venture—he knows something, because Uber is one of the biggest data companies of our generation, and nobody knows the data better than Travis. Travis invested $150M of his own dollars to purchase these companies—he’s putting his money where his beliefs are.
Gloriafood.com released some great data on the numbers behind food delivery.
Here are my key takeaways from the article:
- 1. Nigel Travis, CEO of Dunkin Donuts, says the holy grail in the next few years for restaurants is building an efficient food-delivery model.
- 2. Between 2014 and 2016, online deliveries grew 300%.
- 3. A survey done showed that 86% of consumers use a food delivery service at least once a month.
- 4. By 2020, restaurants who don’t offer online food ordering will lose 70% of their customers.
- 5. The top reason most people don’t order food online is cost.
The trends behind food delivery are growing every day, so why do restaurants continue to cook their food in high dollar kitchens, rather than to outsource some, if not all, their cooking needs to a lower dollar facility? If they did this, they’d have a significant cost savings (which could help mitigate the top reason most people aren’t ordering online more often). Lowering production costs can be passed onto the customer and help retain the 70% of customers who by 2020 would be going elsewhere.
What Cloud Kitchen is already proving is the arrival of “delivery only” brands. These companies are coming to market with a delivery only strategy which helps them focus 100% of their attention on food quality, cost, and delivery speed. Check out this article written by TechCrunch. Companies like McDonald’s and Taco Bell are investing heavily in outsourced kitchens to minimize costs and create more focus on their delivery business.
Convenience (aka time) is what we are all wanting more of. Today, adults ages 18 to 24 have lived the majority of their lives in a tech-driven world that consistently aims to deliver goods faster and cheaper. No matter the product, delivering it conveniently will continue to be table stakes if you’re looking to compete. It is hard for me to believe any argument that refutes delivery & convenience being the pathway way forward.
As this trend accelerates, the case for Class B industrial will as well. Fort Capital has secured long-term, value-oriented investors who have the patience to watch this (and other) trends play out. As the demand grows and supply shrinks, our investments will deliver exceptional returns to our investors.
The next question I’m asking myself: what other industries are ripe for outsourcing key elements of their business into core Class B industrial locations?
-CJPJ
Becoming More Self-Aware
My main goal this past year was to become more self-aware. While most goals have a key metric for defining success/failure, this goal wasn’t one of them. As I’ve learned throughout 2018, becoming more self-aware doesn’t happen in a year. Instead, it’s part of a lifetime journey.
What has begun to take shape this year is my understanding and ability to ask myself the right questions. Knowing what questions to ask is a HUGE step forward – it is a competitive advantage. Asking questions is one of the most powerful things you can do – but first, you must accept that you know very little. Knowing very little, by nature, makes you curious, and turns you into a learning and question-asking machine. Thinking you know everything is a huge disadvantage because it’s not true and it disincentives you to learn and grow.
When most people think of learning, they think of school. School sucked for me. Why? Because most of it had nothing to do with what I was interested in. Instead, it was a forced curriculum that made learning ‘not fun’. Now, learning about things I’m interested in has become my favorite thing to do. It’s challenging, rewarding, and helps normalize this planet.
Becoming more self-aware and understanding how to ask questions of myself has made me realize what things I need to figure out in order to live a happy life. (After all, we only get one!)
Here are some questions I asked myself this year on my journey to become more self-aware:
- 1. Which relationships are most important to me?
- 2. Who are the five closest people to me and why?
- 3. How am I managing my time? How is it effecting my closest relationships?
- 4. What isn’t important to me? Am I wasting time on any of those things?
- 5. How do my actions make those closest to me feel?
- 6. What do I want my wife, daughter, family, and friends to say about me on my 80th birthday?
- 7. Am I doubling down on my strengths, or am I spinning my wheels trying to overcome my weaknesses?
- 8. Am I asking for help when it’s needed?
- 9. What does balance look like for me?
- 10. Why am I so passionate about business?
- 11. Am I valuing others’ opinions too highly?
- 12. Am I thinking for myself or ‘going with the flow’?
- 13. What can I be doing to be a better leader?
- 14. What are the biggest obstacles in my way to accomplishing my goals?
- 15. Am I spending time reading and learning in order to build a long-term competitive advantage?
- 16. Am I dedicating my time and energy to a couple of big things, or am I spreading myself too thin by trying to do it all?
- 17. What should I quit doing, and what should I start doing?
- 18. Where are my blind spots?
- 19. Where are my bias’?
- 20. What are my principles?
- 21. What am I willing to sacrifice in order to reach my goals?
- 22. What things am I doing just to ‘fit in’ instead of actually wanting to do them?
- 23. What makes me uncomfortable and why?
The list goes on….
Asking these questions opened up my mind, and in turn, the opportunity to read, learn, and discuss things that will help in my journey to continuously answer these questions. In short, you know a good answer when you see one – because you’re subconsciously preparing yourself to take one in.
I’m excited about the foundation I’ve built this year. I have a long way to go, but it’s exciting nonetheless. I’ll always have a long way to go – because at the end of the day, I don’t know shit. I just know that I need to keep learning and getting better. We aren’t called to be perfect. Instead, focus on stacking one good day on top of the next, and when it’s all said and done, hope it adds up to a winning score. Upward and onward!
-CJPJ
Focus.
One of my best friends told me years ago “Be stubborn about your vision, and flexible in how you get there.” In today’s fast-paced world – it can seem impossible to predict where we will be in 5 years, much less 50 years. I believe all great companies & people have an idea of where they are destined to end up. What guides that idea is FOCUS. If you stopped reading here, my underlying message is:
“The best companies and people find value in staying focused, therefore making it easier.”
As Fort Capital has grown and achieved success along the way, the need to remain focused has intensified. I think that can be said for all successful businesses. Success breeds options or as we say “shiny objects” that can derail you quickly. One of those options is always the option to stay the course and keep getting better and better at a few things rather than become average at a lot of things. The best companies and leaders in the world are the ones who find value in staying focused. In my opinion it is easier said than done, staying focused is f**king hard! Technology, the internet, the constant sources of information can create a lot of distractions and noise if you allow it.
I am the first to admit that I have to focus on staying focused. The difference between me today and me five years ago is that I recognize the power of staying focused. I am far from perfect – let me make that super clear. Having said that, I am now more than ever hyperaware that staying focused and having the courage/belief in saying “no” is ultimately keeping myself and our team on track for that big “YES”. Filling up your plate with distractions or “shiny objects” takes you out of practice and hence, not prepared for game time.
I have been a victim of trying to do too much. It is overwhelming, it is defeating, and it can quickly feel like you’re 3rd or 4th place in everything you’re trying to do. There is a reason why the #1 company seems to always be in the right spot at the right time, or innovate at the right time, or pivot at the right time – it’s because they are in the game practicing harder than anyone, so when it is time to play in the Super Bowl, they are always ready. That comes back to focus.
The goal is to build Fort Capital into a world-class investment company with amazing people working on amazing investment ideas. To do that, we value focusing on work that maximizes our time and our returns to investors. We are now hyper aware of making unfruitful decisions that will lead to a heavy workload that yields little value. We are focused on developing our team to the be the best they can be and are intentional with decisions about how we spend our time.
If you’re reading this and feel that you’re losing focus, now is the time to write down your vision/goals and the things you need to be doing at the GREATEST level to get there. Be focused on the people you want to work with, the customer, the market, the risks, the opportunities, etc. Everything else is noise. Tiger Woods was the best golfer of all time because he relentlessly practiced his game, he knew he wanted to be the best, and when it was time to play on the big stage, he was the most physically and mentally prepared. Those that hold the #1 position in any field of work always practice harder than anyone else and even more importantly than that, they know exactly what to practice. They are focused.
-CJPJ
The Never Ending Journey of Seeking Wisdom
Today’s world moves fast, very fast. At times, to me anyway, it can be overwhelmingly fast. Trying to keep up is tough, and trying to stay ahead can sometimes seem impossible. As I continue to grow as a person and in my career, it is important to me that I stay ahead without spending every waking moment “grinding.” While there are many things that can be done, I have identified one thing that can not only keep you ahead, but that can save you from making many mistakes along the way – and… it is free. Like all things in life, you will get out of it what you are willing to put into it.
What I am talking about is the power of having a MENTOR. What is a mentor? Google defines it as “an experienced and trusted adviser.” Webster’s defines it as “a trusted guide or counselor.”
One thing that has always come naturally to me is seeking wisdom from people I admire. It has always been a no-brainer – why would I not surround myself with people that can offer advice and feedback that almost gives me a glimpse into the future before it happens. (Disclaimer: you cannot literally see into the future, but with a great mentor, you can come pretty damn close). If there’s one thing I’ve learned, the world isn’t as difficult as we can sometimes make it seem. History repeats itself, and certain situations produce very similar, if not exact results, even if those situations occur 20 years apart from each other. If we can agree on that, keep reading. If we can’t, good luck!
I don’t care who you are, what you’ve accomplished, what you’re interested in – YOU SHOULD HAVE A MENTOR OR MENTORS.
“Without counsel plans fail, but with many advisers they succeed.” Proverbs 15:22.
A great mentor is like being able to get the answers to a test before you take it, but in this case, it’s not considered cheating, well, it is, but ethical cheating. You get to obtain wisdom ahead of time so that you can make informed decisions about things you’ve yet to experience. This can lead to a more efficient life, with fewer mistakes, which keeps you ahead, without having to work 24/7. Pretty cool.
All public companies come with a Board, which is essentially a group of trusted advisors that help share wisdom to impact the business, hopefully positively. In team sports, the captain of the team or coach is often a mentor to the rest of the team. Why not use these same tactics for you as an individual?
How do I find the right mentor?
The right mentor for me isn’t necessarily the right mentor for you. First and foremost, as described above, you should seek out someone that you admire greatly who has lived a life that you anticipate living. In other words, find someone who has walked the walk. In business, if you want to be a real estate developer, your mentor should be a great real estate developer. If you want to drill oil wells, find someone who has been great at drilling oil wells. If you’re interested in starting an app, find someone who has built great apps.
Mentors aren’t only for business – there are also what I call life mentors. Similar to a business mentor, these are people who have lived a life that you strive to live.
Once you’ve identified or made a list of people you would hope to be your mentor; now you have to close the deal. For a solid mentor/mentee relationship, there should be a deep commitment from both parties, which isn’t always easy.
Once I’ve found a potential mentor, how do I establish the relationship? What are our duties?
Once you’ve narrowed down a person(s) that you would like to mentor you, you have to ask them and tell them your intentions for the relationship. This relationship takes a solid commitment from both parties for it to be valuable and effective. Time is valuable, and your mentor should understand that you are fully aware of that. Asking a person isn’t enough though. After you’ve asked, let them know your wishes for the relationship.
1. An allocated period of time per month, quarter, semi-annually, etc. E.g., “I’d like one hour of your time each month.”
2. The goals you hope to achieve out of the relationship. E.g., I’d like to learn how to build a company, be a better husband/father, learn how to develop real estate, learn how to build an app, etc. In reality, you will have a series of goals and tasks that you accomplish bite by bite.
3. Let them know that you will plan out each meeting and come with a structure/agenda if that hour is to be used deliberately to answer questions about a situation you’re facing or hurdle you’re trying to overcome.
4. Confirm that they have agreed to be your mentor and fully understand all your intentions.
*Just because you want someone to be your mentor, doesn’t mean they will. This is a big commitment for the mentor (who is usually a person that already has a lot of commitments in life). You will be more successful in achieving a “yes” if you can prove to them that you are 100% committed, and this isn’t just a relationship you’re using to “check a box.”
I have had my same business mentor since I was 18 years old, and to this day, we regularly speak about a range of topics. My business mentor is one of the largest privately-held owners of real estate in Texas / New Mexico and built his company from scratch, similar to Fort’s road. Over the years, I can honestly say he’s helped me learn how to raise capital, manage investors, learn business terms, meet people, structure our partnerships, learn how invest, learn how to look at a deal, how to negotiate, what points to negotiate on, taxes, hiring, employee compensation and bonuses, firing, the power of long-term thinking, lease structures, etc. Since I’ve never worked for anyone longer than a month, my only way to figure out anything is to read about it or ask. I am not afraid to ask anyone anything, and you shouldn’t be either. When asking someone a question, make sure you are asking a person who you think will deliver the best possible answer. Mentor or not, ask the best possible person available to you, always, if you want the best answer.
Here is a quick blurb in an article that was written, where I talk about the relationship I’ve had with mentors.
I can honestly say that I wouldn’t be where I am today without my mentor. Like, nowhere close. I believe I would have eventually gotten here, but not nearly as quick, and with a lot more pain. I bypassed a lot of that by having an open and transparent relationship with a person I admired a ton and trusted.
I also have a life mentor. This is more recent, but as my business has grown, I’ve gotten married, and had a daughter – there’s just a lot going on. One thing my life mentor always asks me is, “If you died tomorrow – where are you going? And what will those left behind remember of you?”. Those are very powerful questions. Very powerful. (To me anyways.) A lot of what we talk about, and the wisdom I seek, is from his experiences along the way. I have written out on paper the type of person I aspire to be like, and my life mentor helps me in little ways to get closer to being that person. How to be a better husband, how to be a better father, how to balance time, how to leave time for my faith, how to deal with tough situations, etc.
I have a third mentor, actually mentors, that have come into my life over the past two years. This group is my forum through YPO (Young President’s Organization). This group is compromised of 8 – 10 business owners that meet once a month for 5 hours to talk business, life, family, relationships and everything in between. These are peers of mine who are all in similar roles. We share everything with each other, and I’ve derived so much value from listening to their stories and learning from their wisdom.
This type of mentor group is something you can find by looking for an organization of like-minded people – similar to you. Most industries offer these type of small group settings for different positions across their industries.
If there is one thing I’ve learned from both of my mentors is that everything worth having will not come easy, and it’s not forever, unless you work at it, and work at it, and work at it. A mentor can help you in the short-term, but a great mentor will be helping you make decisions that will have a long-term impact.
A great mentor can be the key ingredient to navigating the road ahead. I think it is fair to say, while we try and see the road ahead as clearly as possible, it can often be very difficult to navigate, and comes with a lot of unexpected twists and turns, unless of course, you’ve had someone tell you what to expect.
I truly believe this is some of the best advice I can share with anyone – whether you’re young and just getting started in business and life, or as someone who is more seasoned but hasn’t yet experienced the benefits of having a mentor. It’s never too late, and it’s always the right time. You can change your life quickly and “stay ahead” by finding the right mentor.
In closing – you are an average of the five people you surround yourself most with, and you tend to surround yourself with people that provide value to your life. A mentor can often help you think deeply about who those five people should be if you’re not already taking that initiative.
I have enjoyed writing these articles and look forward to sharing more ideas and thoughts in the coming weeks, months, years.
Next Topic: The world will only give you what you refuse to give up doing. We are owed nothing, and despite what you may read in a warm and fuzzy media article, the real world will only reward those deserving of being rewarded. It’s that simple. YOU have the power to influence those around you, but ultimately the market makes the final decision, not you.
-CJPJ
A Book That Changed Our Business
If you’re like me, you’re constantly working on and seeking ways to improve your business. That doesn’t have to mean you own a business, but rather that you treat your team like a business that you are building.
In its most simple form, a business is a series of decisions made daily. How a business reaches those decisions is what separates the good from the great. I believe the best companies are those that are constantly improving the process and timeliness of how they make decisions, which in turn, creates consistency.
Decisions come in all shapes and sizes:
Decisions about your team:
- o How to reward productive work?
- o How is your org chart/communication chart set up?
- o Are people in the right place / right seat? Do they want it, get it, and have the capacity to do it?
- o What do employees career paths look like?
- o What can you do to help strengthen the company culture?
- o How do you encourage creativity and teamwork?
Decisions about customers.
Decisions on how to achieve profitability.
Decisions about vendors, stakeholders, and partners.
Decisions about values.
Decisions about your product.
Decisions about systems and processes within the organization
Decisions on company goals. Not just long-term, but what about 90-day goals, one-year goals, three-year goals, 10-year goals?
Decisions on why the hell your team should want to work for your business?
Decisions about the metrics of your business that matter – and how do you track them?
Decisions on what technology to use and what to get rid of.
Decisions on how to tackle issues that the company is having.
Decisions on how to create a better competitive advantage.
Decisions on when to say NO.
The list goes on…..
Now – for the real challenge – how do you make all these decisions on a daily basis when your firm is in a hyper-growth state, and it never seems like there are enough hours in the day or people on the team? How do you know that the decisions you made a year ago are applicable to today? A year can often change a lot of things – for better or worse. How do you make all these decisions while still staying focused?
It is not easy – in fact, it can get very overwhelming. If you’re like me – you’ve sat at your desk before, looking at the ceiling, saying, “What the hell is going on in this business? I think I know – but where can I turn to so that I can fact check? How do I know my team knows what we are all really doing here and where we are headed in the future? And if even if they kind of do, how do I know they will always be up to speed, year to year? How do I know my people like their job and can do their job?”
If you think you are alone – think again. It’s the beautiful world of entrepreneurship, running a business, or running a team – IF YOU ARE PASSIONATE!
About a year ago, I was introduced to the book Traction, by Gino Wickman. I am an avid reader of business books and material – a lot of it is great, some not so great. There are a lot of books that tell you how someone “made it” (i.e., Step 1. Drop out of college and buy a hoodie, Step 2. Code while all of your friends are at the bar, Step 3. Launch and get a shit load of funding, Step 4. Scale, gain customers and learn from your mistakes, Step 5. Sell).
Traction is not that book. Traction is a set of tools and immediate action items you can learn in order to change the way your business operates, which if successful, will help with Steps 3 -5 above (no guarantees on Steps 1 & 2!). This is what I needed to take Fort Capital to the next level, and it has been an absolute game changer. Unlike a lot of business books, this book provides a very easy to understand, practical approach to business that allows you to begin implementing processes into your business immediately that will help you “get a grip on your business”. Traction teaches “The Entrepreneurial Operating System (EOS)”.
Traction breaks any business down into six key components: Vision, People, Data, Process, Issues, and Traction. It gives you tools on how to manage and think about each component. Traction has helped us see our business with a lot more clarity and has left us more empowered to make more consistent and focused decisions.
I won’t rewrite the book, but I’ll give some context on the six key components:
Vision – If you can clarify your vision, you can make better decisions about people, processes, finances, strategies, and customers. Traction is teaching us how to create a Vision/Traction Organizer (VTO) that helps to clearly show our Core Values, Core Focus, 10-year Target, Marketing Strategy, three-year goals, one year plan, 90 days goals, and all the issues that could hinder us from getting there.
People – We are learning better practices on hiring and making sure that the right people are in the right seat. We are learning how to understand if people get it, want it, and have the ability to do it. Lastly, we are learning how to make sure to spread accountability throughout the company.
Data – We are learning how to formulate and manage data so that we can have a pulse on our business and be proactive rather than reactive. It is teaching us to define which metrics need to be consistently tracked. This had a huge impact on us. It is easy to have a feeling you’re doing well or poorly, but the proof is in the numbers. The numbers will pinpoint exactly how well and how poorly. As the saying goes: “The numbers don’t lie”.
Issues – The book says, “Your ability to succeed is in direct proportion to your ability to solve your problems.” We are not only learning how to make decisions more quickly; more importantly, we are learning how to solve problems more quickly. What drains most people’s energy isn’t having a lot of work to do, it’s having a lot of unresolved issues. We are learning how to quickly Identify, Discuss, and Solve problems (IDS).
Process – This is often the most neglected and overlooked component by entrepreneurs and leaders. Knowing your core processes, writing them down, and effectively communicating them across the company creates consistency. Consistency is a key trait that all great companies share.
Traction – The first five components help create traction. An organization with traction is accountable, communicates well, and is focused and organized. We’ve learned the importance of weekly leadership meetings, also known as Level 10 meetings, which are 90-minute meetings that are organized/structured so that a pulse of the business is measured weekly. In these meetings, I’m learning how to work on the business and not in the business.
I truly believe this book can help businesses of all sizes. I have met companies with four to 400 people that operate off the EOS system. This is not a book that you can read once, put it up, and expect results. This is a BIG commitment. In fact, the book even recommends (but doesn’t require) hiring an EOS professional to consult your business in the early stages of rolling out EOS. We did not hire a consultant. Our company committed in January of 2017, and we are still learning how to consistently implement best practices. Traction sits on my desk, and I refer to it at least once a week. I’ve probably read it cover to cover at least three times. Like everything in life that you want to be great at, it takes practice. I am in no way professing that we have perfected the book, but I do know we are becoming more consistent and focused each quarter.
I am forever grateful for being introduced to this book and encourage anyone seeking more consistency and clarity in their business to join in.
-CJPJ