In a previous article I wrote about How to determine your Potential and discuss how your Personal Vision, Motivational Drivers and Executional Capability are three essential factors of determining your potential. In that article, I mentioned tools and resources for the first two but left the Executional Capability for another article. So here are the ways I’ve worked with other CEO’s (and myself) to determine the best work to focus on how to determine where to execute on your potential.
In many ways this came out of the idea of a Personal Hedgehog. Much like a businesses’ Hedgehog from the book Good to Great by Jim Collins, he (and others) applied these ideas to individuals (you can listen & read to Jim Collins talk about Finding Your Personal Hedgehog). For example here is an article where Jim outlines the Personal Hedgehog concept as the following:
Imagine you were able to get or construct work for yourself that meets three tests: you’re passionate about it and you love to do it; you’re genetically encoded for it, so that when you do it you just feel like you were born to do it; and finally, you’re able to make the economics in your life work—you get well paid for it or perhaps there’s some other way of funding it with an economic engine.
These three form a personal hedgehog according to Jim. I made tweaks to these for leaders such as using the term that ‘you were amongst the world’s best at it’ meaning through natural talents, developed skills and experience you could outperform others instead of ‘genetically encoded for it’. This was because in working with CEO’s there was an expectation that they could identify this (as opposed to someone starting out their career) and often phrasing it this way weeded out things that they were good at but were not necessarily creating a disproportionate value for their company (or competitive advantage) by being in the top % in the world in this work. I wanted them to consider what they could do that would really move the needle for their company.
So here are the tools and thinking I’ve used to determine some of these elements:
1. Understanding Your Passion
First, let’s start with determine what you are passionate about. For this, you need to know yourself. Things I look at to help determine this include understanding your personality. A tool I’ve used is personality profile test (I’ve done many such as Strong Campbell, DISC, Myers-Brigg, etc.) The one I’ve used is the PREP Profile System because of it’s focus on how you show up at work. So for example, in my normal state I test as follows:
- Controlling (vs. Supporting)
- Adaptive but slightly on the Extroverted side (vs. Introverted)
- Relaxed (vs. Urgent)
- Generalizing (vs. Exacting)
This means I like to be in a position where I can make the decisions (Control), work with teams but have time to do projects by myself (Adaptive), focus on Important not Urgent items (Relaxed) and do this looking at the big picture versus in the weeds/details (Generalizing). While I can do the other side of these, it takes more energy which will eventually tax me to the point where I’m drained if it becomes months and months out of my natural flow. Knowing this helps free me to focus on roles that fit my profile.
I also examined what things I’ve done that ‘fill me up‘. These experiences where I can tell I’m passionate and drawn to the work allow me to see patterns of what energizes me and know ‘what would I do even if I didn’t get paid’. Equally important are the things that drain me and eliminating those options. For me my ‘fill me up’ list includes:
- The Entrepreneur to CEO Inflection Point – I am passionate about helping entrepreneurs who are ready to accelerate their vision and achieve more than they thought possible. This often includes a process to take all the things they think and feel and capture it so that everyone understands the ‘secret sauce’ and things like the company’s mission, vision and values. This inflection point usually happens when a company has 20-30 employees (or is growing rapidly). The spirit of the entrepreneur needs the leadership and frameworks channeling that energy as a CEO.
- Rapid Growth Engine – I love growth (versus a turnaround) and companies who have ambitious and a vision for more. These companies often are at an inflection point and know what got them here won’t get them to the next level. They need to become crystal clear on things such as who is their ideal customer, how to improve their ability to close deals more predictably, what their competitive advantage is and build a predictable way to consistently get more business (demand control).
- Use Leverage & Scale – In this effort I love helping work ‘on’ the company not ‘in’ the company to build the necessary systems, operational structures, cultural and leadership components to scale and support the growth. To put in key enablers and levers that allow the company to go to the next level and ensure these are built into the dna of the company.
- Measurable & Valuable Strategic Outcome – In all of the above work I enjoy when there is a clear scoreboard that shows the needle was moved not on small things, but on the things that matter the most. So I love working with company’s who seek a liquidity event in the next 2 or so years. I want to focus on big results such as: Did the valuation of the company increase $10M+ or did we pilot a growth plan that shows how to double the company in two years? I love these challenges and find they bring the best out of me.
These topics I am passionate about and I read, write and discuss these topics voraciously and without needing any external motivation. I light up when I have the opportunity to discuss these with other people. A good night would be sitting around a fireplace with a glass of wine in my hand
And lastly, understanding my motivational from the How to determine your Potential article and focusing on the ‘positive side of that. For example, I love Power particularly through influence. I have found the negative side of that is ‘manipulative’ when it’s for my own benefit but should be ‘motivational’ when I influence others from a place of service to them. In the past I started several companies and was always the CEO who led the company to be in this role. Today I enjoy roles where I am an outside coach or strategic advisor working with the decision-maker.
2. Know what your amongst the World’s Best at
What do you do that you are the strongest at? I look at strengths based on natural talents, developed skills and experience. One of the resource I’ve found valuable is StrengthsFinder 2.0 whose test helps isolate the 5 top strengths out of 34. These 5 become a unique DNA to you and are valuable to know where you shine. For example, here are my top 5:
- Futuristic – See and communicate a clear vision of the future.
- Strategic – Creating, aligning and implementing strategic initiatives.
- Ideation – Rapid ideation to solve problems and or come up with ideas.
- Command – Able to make hard decisions and own the accountability.
- Activator – Initiate from from a blank piece of paper to get things going.
I’ve found the above strengths work incredibly well helping shape a vision, build the key strategies to best achieve that vision, ideate on any challenges or problems that get in the way, make the decisions to pull the trigger on executing and the accountability around achieving the goals and getting things going from 0 to operational so that I can hand-off key initiatives after I’ve made a mess and dialed it in so someone can execute on it.
In particular I’ve found having been both an entrepreneur building company’s in several different industries (winning awards such as the 2015 Entrepreneurs Organization’s CEO of the Year) and also joining a Private Equity-backed team that bought over 40 companies which went on to be the 2017 Private Equity Deal of the Year put my in a very unique position. A lot of entrepreneurs don’t understand the world of PE and most PE’s have no entrepreneurial experience. Looking at many company’s from the buy-side made me realize most entrepreneur’s don’t truly understand value creation and post-acquisition economics (not what their company is worth, but what their company is worth to the group buying them). So I love building an Investment, Acquisition or Exit Thesis (the story) and reverse engineering the necessary high-value elements within the company.
My focus is on the intersection of helping entrepreneurs who want to maximize their value and to further my being the world’s best, so to further my knowledge I am conducting research projects as part of Exits & Acquisitions including Private Equity, Investment Bankers/Business Brokers and hundreds of entrepreneurs have participated who want to learn more about how to exit well. This research allows them to learn from peer-Entrepreneurs, including members of The Entrepreneurs Organization (EO), Young Entrepreneur Council (YEC), Vistage and Young President’s Organization (YPO) because few understand it at the level they should, considering it usually is the most important financial transaction of their life. And this thought leadership allows me to grow in my being the world’s best in this space.
In addition, looking at my work history I know I consistently outperform others in certain areas based on both the data/results and the feedback I work with. I often under-valued these things because I assumed most people could do them as easily as I did. But it became more clear that these were natural to me and that’s why my results were much better. This started happening when I did strategic planning for a few friends and over time word-of-mouth built and I was consistently being asked by CEO’s to come in and do it for them based on other’s recommendation. Conversely it showed me areas I sucked at and that took me 10x the amount of effort to get the same results as the people who had strengths in this area. I quickly learned I needed to stop coding immediately when I started a software company earlier in my career and hire legit developers. Look back at your history and reflect on the patterns of where you performed your best or didn’t perform well.
#3 Figure out your Economic Engine
The last point is to determine your economic engine, how do you get paid for doing what you are passionate and great at? This is different things for different people, if you are passionate about non-profits and serving others it may be how to ensure you can cover your living costs through fundraising or determining to adjust your lifestyle to fit the pay. When I work with Entrepreneurs/CEO’s the assumption is that they want to maximize the value of their company.
As I mentioned, I am passionate about the Entrepreneur to CEO inflection point (for example, here is an article about how to best use the entrepreneur visionary spirit when you are in this transition). So in this regard, I try to figure out what they can do that they are passionate, amongst the world’s best and it creates the biggest value impact to their company. All other things, in as much as possible, they need to delegate to others to focus on this. Certainly there are things they always have to do regardless of their abilities such as owning the vision, culture and responsibility ultimately for the health of the company. So what do you do that makes the biggest and greatest financial impact?
The economic engine can be different based on your needs. If you are growing a more lifestyle business where valuation is less important the engine is probably your profit/income. If you want to build a company and sell it, the engine could be valuation impact even if it means running at break-even to put every dollar back into growth or this valuation impact.
My economic engine has changed over the years. Today, income isn’t my goal because my wife and I decided to do things like buy apartment buildings in San Diego to more than cover what we spend each month. This frees me from needing to work for an income and so I can choose what projects and work I do. So I became very clear on what types of projects I want to take on. The first question I examine when I work with a company is:
Can I help create at least $10M of value for the owners?
My economic engine is tied to this. I built my engine to take some sort of consulting fee and an equity position but focus most of my outcome to creating $10M+ valuation for the owner.
This is how I have determined how to execute on potential and the tools I use for myself and others. Several people I’ve worked with have found this process helpful, so I thought I’d share it with the hopes that it is valuable as you reflect on what’s possible for you.
Certainly there are other factors this doesn’t address in executing on your potential such as habits, discipline and getting results. My main focus was the thinking about where to focus when it comes to executing on your potential vs. best practices on executing at a work-level. This is a huge topic so I know there is a lot more that could be covered, so:
Is this helpful? What am I missing? How else can you determine where to execute on your potential?