Now, we’re going to bring Part 2 to a close by sharing the single most important insight I’ve discovered in my 42+ years of starting and running businesses both offline and on.
Before I do that, however, I want to reinforce what I’ve laid before you over the last four chapters.
First: If we strip away everything else, why we started our businesses was because we want to control how we lead our lives and earn money.
That requires control over how our businesses get results.
Then we can control how we live, where we live, with whom we live and what we do on a daily basis whatever life throws our way.
It allows us to predict the results we get with some certainty and develop a stable system that grows our wealth. (That includes anything else that’s meaningful to you).
Second: a long term business is built to withstand ‘Black Swan’ events beyond our sphere of influence so we can live in a stable environment.
Third: a long term business includes three components that work together to produce those results…
- Connection: A process of deepening the relationship we have with new prospects in our orbit.
- Community: A place where we deepen that relationship even further and transform prospects into leads by moving them from resistance, to receptive to ready to buy…
- Conversion: A process of transforming a lead into a long term customer who will buy from us over and over again.
So far, so good.
But this is where we break with conventional wisdom, and why we believe you should too.
Conventional wisdom is based on flawed logic:
FL#1: Every buyer follows the same linear path.
FL#2: Optimizing the parts of the system separately improves overall performance. More traffic = more leads = more customers = more money.
Sadly this is not the case as we learn in ’The ‘Goal’ which unpacks the theory of constraints.
The single most powerful insight from this book is that if we optimise one part of our system, another constraint will appear in another seemingly unrelated place.
Businesses are systems in which the parts interact to produce results only when taken as a whole.
You cannot buy the best engine available, put it in the best chassis available then add the best wheels available and expect to have a winning car.
They are just a collection of parts that were not built to fit together.
Your business is a collection of subsystems that work together to produce something that no part can create without the others.
Connection without Community or Conversion is vanity.
Connection and Conversion are subsystems, just like an engine or a drivetrain, that were not built to work together without Community.
Conversion and Community without Connection do not produce results.
Each subsystem is required but on it’s own is not enough to produce a result. All three must be present before the results we seek are possible.
Optimising Connection will mean we will have to re-optimise Community and Conversion. The system is circular, not linear.
Once you understand this, everything changes.
Instead of looking for the ‘best’ way to create Connection, Community, and Conversion individually, we need to think about how each subsystem works with the others to produce the best overall results.
Example: We could optimize our business system to produce the most money but that might also produce unhappy customers and lead to low team morale so it would be a self-defeating short term goal.
Far better to optimize to produce happy customers and make all of our subsystems (Connection, Community, and Conversion) serve this goal.
Never optimize an individual subsystem without looking at the impact that has on all the others and how that will improve the single KPI that matters most… Happy customers.
How do we do this?
By focusing on my core values:
- Treat everyone like a valued customer, regardless of whether money has changed hands.
- Focus on delivering the result that our customer yearns for.
- Going back to first principles like telling memorable stories that attract people I want in my Community and repel the rest.
- Being Transparent. Show up as I really am. Warts and all. Don’t create artificial barriers or force everyone into a one-size-fits-all process.
- Play the long game. I realise that 85% of my new customers will convert in the next 18 months, not in the next 90 days so I plan accordingly.
The Story Inception Method is a powerful growth engine in which the subsystems are optimised to deliver these core values to our customers and for our customers.
Its impact is profound. It changes how you do business. You become a story driven company rather than a competition driven company.