Transcription
Sergey, Dim, please come out here because I will ask you personally to introduce our next guest. I know how much time and effort you spent to get him to come to us, and the content that will be presented now is expensive, so listen carefully. Sergey, the floor is yours, please. Yes, I would like to tell a little backstory. We had a moment when we were really starting to grow very strongly and rapidly, from two million to 15, then to 30, then to 50. And when you grow fast, you swim in such a river of blood when you constantly have problems here, problems there, it's difficult here, there's complexity. And at some stage of development, it simply became clear that if you don't start systematizing and don't start delegating properly, making processes systemic, then you might not survive the next few months. I don't know if anyone else is in the same situation, who is just drowning in their business, not sleeping at night, and so on. And from different corners, Vysotsky, Vysotsky, Vysotsky. Who is Vysotsky? Vysotsky, Vysotsky, Vysotsky. We heard about these technologies, it turned out that they are not taught in business schools, and there is nowhere specific to learn them. So, it's hard to learn somewhere. And we started hiring one consultant, he wasn't particularly capable, and another content creator, Anton, it was unclear, he couldn't implement anything. And then fate brought us together with the help of Zhenya Nazarov with Alexander Vysotsky, who is probably the strongest consultant in the world, both in terms of the number of implementations and the quality of implementations, specifically of systemic technologies, so that the owner can actually exit the business. And despite the fact that we do online schools, an online school turns out to be automated without the owner's participation, it makes 3-5 million. When it makes much more, you need people, you need a team, you need systemic processes, you need statistics, you need numbers. You need, well, it's a completely different level. And Alexander works here with manufacturing companies, with IT companies, with very different industries. And he is truly, perhaps, the best in the world at repackaging companies from chaos into systems. Who has heard of him before? Interesting. Let's welcome Alexander Vysotsky, the maestro of systemic business. If you are interested in the online school industry, to sell your knowledge and the knowledge of your expert, and you want to know how to do it, get a step-by-step plan and a list of relevant niches this year, sign up for a free masterclass on how to create your online school, produce yourself or your expert. The link is in the description below this video. Click, go, and register. Thank you. Thank you for such an introduction. Now I will check if I have slides. They will appear now. So, well, this is a terrible, terrible, boring topic related to management and people. You know, I have quite a long entrepreneurial history. In 1994, I opened my first company, it was MacCenter, an Apple computer dealer. And just today, the speaker mentioned that there are certain specifics of working in such a business. When I started dealing with Apple computers, I was fascinated by this technology. But you can imagine, or maybe you can't, that 25 years ago, ordinary Windows computers were such terrible roaring coffins that usually stood next to the desk. They couldn't be placed on the desk because they were very heavy, they hummed loudly. And when I saw an Apple computer at that time, it was an amazingly elegant, very beautiful computer with a graphical interface, a color screen, a manipulator, a mouse, and so on. But this was 25 years ago, it was a miracle. And I can tell you, when I saw this, I was simply fascinated by it, and with enthusiasm, with my partners, I started this business. And at that moment, the standard profit margin for an Apple computer dealer was 32 percent. I know that those who deal with electronics now will shudder. That is, the standard margin set by the manufacturer for a dealer was 32 percent. But I can tell you that happiness didn't last long. Approximately five years later, when I finished with this business, the margin was already a standard eight percent. And at that moment, I said, that's it, I need to stop this because for that money, it's impossible to provide any service or anything like that. In general, over these years, over these 25 years, I've done various businesses, and not all of them were successful. Moreover, this first company, you know, from this company, I had to leave with my head held high, with an Apple computer under my arm, and practically without money a few years after starting the business. But I mean, without any capital, and with the words "damn it," someday I will have owners, never again will I deal with partners, I will always work alone. Who, by the way, had a negative experience working with partners? And Chursin? And who has partners now? Well, well, understood. Good. I, you know, at one point, I did a study. I simply asked people, raise your hand if you have partners. And then I know some other questions. So, those of you who are now, we will check this. This is a question for those who raised their hand about having partners. And now I ask you this question: if you and your partner were asked who is the boss in your company, could you name the same name without any long deliberation? Who in your company is it like this? About 30 percent raised their hands now, among those who raised their hand about having a partner. So, my friends, to those who raised their hands now, I can tell you, well done, you have a chance. This is not a guarantee, it's a chance. And for those who didn't raise their hands now, you have no chance, no kidding, it's true. Because, unfortunately, there are colossal fundamental mistakes. You have no chance, unless, of course, you fix this situation. But I hope you will fix it. I will give you some practical data that might allow you to fix it. Because having partners is great happiness, it helps a lot, it can strengthen the company, it's simply amazing when you combine talents, when these talents understand each other, create some extraordinary chemistry, an extraordinary cocktail, amazing products. But it can also kill you, as it killed most companies where people worked as co-owners. You've probably noticed that up to a certain stage, it's always great for some reason. But after a certain stage, a turning point suddenly comes, and it's not so great anymore. Who has noticed this? I will tell you the reason, the philosophy, and the laws why what happened in this case is inevitable, and under what other conditions you will understand under what conditions it is inevitable. You need to understand the reason why this is happening. It is directly related to the responsibilities of business owners. One more point I want to draw your attention to: this world is very much captivated by the idea that you must do something valuable for people, you must work hard. To whom among you did your mother say in childhood, or those who raised you, say that you must be persistent, son, you must, or daughter, you must work a lot, be hardworking? If you are interested in online schools, but there are many questions and doubts, the accelerator has a free 30-minute consultation with an expert who is ready to answer all your questions, analyze your niche, help you find an expert, and tell you how to negotiate with him. He will tell you about the steps you need to take to have your own online school. Register via the link below this video. Who among you, raise your hand, was told that if you are hardworking and work hard, success will come to you? That's nonsense, actually. That's not true. We've been lied to. It's true, we've been lied to, because there are a huge number of people around who work hard from morning till evening, and success will never come to them. If you sweep the streets, you can wear down the handle of, I don't know, this broom, just on the asphalt until it turns blue. Sweep these streets from morning till evening, and you will never have a decent car, or a house, or a yacht, or the opportunity to travel. I think this is clear to you and you agree with it. I am saying something completely trivial now. What is the mistake here? What is wrong with the direction of the goal? But do you agree that a janitor who sweeps the yard from morning till evening will never earn as much as, I don't know, Bill Gates, no matter how hard he tries? Do you agree that Bill Gates doesn't actually work harder than this janitor? If we're honest, he doesn't work harder, guys. Let's not deceive ourselves. Bill Gates doesn't work 12 million 144 thousand hours a day. No, he works a certain amount of time. His work is not much harder than that of a janitor. Have you ever tried to go out in winter at four in the morning with a crowbar, you know, to break ice on some Moscow streets? It's hard work. It's no easier than the work of a highly qualified engineer. It's no easier than the work of a banker, believe me. But do you agree with the idea that this is hard work? Yes, but it's not paid, and this guy has no chance. What's wrong here? Look, the most important thing is wrong. People think that the most important thing is to work hard, to put in effort. No, the most important thing is to choose the right role, and then work hard and put in effort. Do you get it? So, first, we, I, by the way, didn't come up with this idea myself, but unfortunately, he has already passed away, a Russian billionaire. When I asked him what the most important thing for success is, he said, you know, people think you need to work a lot and hard. In reality, that's not the most important thing. The most important thing is to choose the right role in which you need to work hard. By the way, I am very happy to be at this forum, to be at this conference, because, you know, my hair stands on end from what I hear, what incredible businesses are being created. I sit here and think, it can't be, it's just amazing. I would like to go through this school, you know, in organizing space. I myself would like to go through that school, you know. I sit here. We live in amazing times, how many opportunities we have today thanks to the internet, new technologies, and so on. Yes, returning to the role, I can tell you that most people, unfortunately, do not really understand what the role of a business owner is. What do you think, if a person does not understand what the role is, what it actually consists of, can he be successful in this activity? Never, friends. In reality, there is no such phenomenon as unconscious success. It doesn't exist. Success can only be conscious. You can't just work hard because labor, by definition in the Russian language, labor means purposeful activity, conscious activity. That is, labor is conscious activity in some role. So, you can only work hard when you understand that role. So, my observation over these years, and I have been professionally working with business owners for ten years, and my first book on this came out about five or six years ago, and I can tell you, when you take entrepreneurs, amazing people, brave people, people who shape everything. Pay attention, everything good. You know, I also like how sometimes you say, well, this is business, and this is some social sphere. Well, now let's talk about business. Don't belittle your role, please, because everything you see around, all of this, has been created by entrepreneurs. Practically all these roads, these bridges, these art galleries, these works of art are financed by entrepreneurs, you understand? Everything that happens in our lives, these delicious cakes, this coffee, these cars, all of this was created by you, you are creating all of this. Everything around you, you have a very special role, especially you, people attending this conference, because you are not just in the wake, you are the forwards of this business world. What you do, most of you do, it wouldn't even occur to ordinary people. It's something beyond good and evil, you understand? It's something cosmic. As of today, for most people, you are not just creating what people consume today, you are creating what they will consume in decades. You are creating the future. Therefore, for me, by the way, there is no boundary between business and some social life. From my point of view, any business you do is a colossal social project. And therefore, it is colossal, colossal not only important for you to be successful, but it is also important for society as a whole that you are successful. Because on this depends whether we will eat healthy things, tasty things, whether we will have comfort and all that. You have a very important role. So, your profit, survival, prosperity, the future of this world depends on it, not just yours or your family's. But returning, in general, to the responsibilities of owners, I very often ask entrepreneurs about what, well, you are an entrepreneur, a business owner, what are your responsibilities? He says, well, my responsibilities are to do business, to do it so that it prospers. I want to draw your attention to this fact. Unfortunately, this is a technical fact, as we have already discovered, that if you do not understand your responsibilities professionally, you have no chance to work in this field, and therefore your chances for a personal result are not very great. Because there is no such phenomenon as unconscious success. It is always success, it always happens only to the extent that you are capable of acting consciously. Therefore, it is very important to understand what your responsibilities are. I am going to tell you about this. First, I want to show you how your understanding of responsibilities is related to the development of your business, or in other words, what usually happens to an entrepreneur, a businessman who creates his business, and it doesn't matter what kind of business it is, it's an offline business, an online business, a combined one, and so on. Conventionally, on this diagram, I have depicted some stages of business development from the perspective of human relationships, interaction, or management, let's say. In general, the word "management" is a rather funny word. Management will soon become a swear word in our society. This is natural. I, for example, recently spoke at a conference for, it was a closed conference for consultants and top executives of companies. I came out to them, I was thinking how to get their attention. I came out to them and said, "Hello, bureaucrats!" And they were all, you know, with such incomprehension. You know, Americans are like children. I explained to them, I said, "You understand that exactly 100 years ago, you, who are you, what are you doing now?" They say, "Well, management. We are managing. We are managers. We are doing management." I say, "And do you understand that exactly 100 years ago, what you are doing was called bureaucracy, and a person who did the same job 100 years ago as you are doing now, if I asked him, 'Who are you?' he would say, 'I am a professional bureaucrat.'" And it wouldn't sound like a swear word, you understand? Because that's what the field of management was called. And 50 years ago, he would have said, "I am an administrator." Today, both bureaucrat and administrator are almost swear words. It's something, you know, smelling of mothballs, having no relation to real business, to managing people. Today, we call it management. Therefore, I can easily predict that very soon the word "management" will become the same swear word as the word "bureaucracy" became, and we will come up with some other word just not to upset people, to find, well, it's like, you know, how sellers are not called sellers anymore, right? They are consultants. How are sellers called now? Sales managers, consultants, or something else? You understand, this word has become a swear word. So, look, now I'll explain a little why it became a swear word. When you start a business, it's very... many of you started businesses from scratch. Usually, you work alone. You have a couple of assistants to whom you don't even give specific responsibilities. You just give them tasks: do this, do that, and so on. At this stage, do we have problems with management? No, no. We have completely different problems: how to push our product to the market, to the consumer, how to deliver it, and so on. Further, if we are successful at this level, we move to the next level, when, as the creator of the business, we have people directly subordinate to us who already have a specialization. We have a salesperson, someone who handles promotion, someone who bakes pies, someone who delivers them, and there is manual control. And we easily manage these people because we have an understanding of the business process, how to do it, how to bake pies, and we have common sense and some kind attitude towards people. Do you agree with this? At this stage, do we have any problems with management? Practically none. Well, practically none. Of course, you have to hire someone, fire someone, but this is not the stage where we say, "I need to figure out the management system of my business." No, everything is going fine. This is also a stage. Let's sell more. Let's produce even more. And for most businesses, this is probably the last stage of their development, I think so, at least my observations say that 80 percent of businesses never go further. They get stuck at this stage. Then this person decides to retire, he says, "Son, would you like to manage our store?" He says, "Dad, are you crazy? I've watched you all my life, how you've been rushing between the counter and the warehouse, and no, I won't take this karma upon myself, sorry, I'll go work for some corporation or something like that." This business cannot be capitalized, it cannot be sold, and in reality, it's too, it's too complicated. The next level, unfortunately, in such a mode, we have a natural limitation in growth. How many employees do you think we can grow to here? How many? Seven. Five. Guys, I can tell you, I've met phenomenal guys who managed five employees, sixty. But these are unique individuals. Usually, it's really 10-15, and then that's it, stress. I can't anymore. I myself broke down, it seems, at 60. When there were already 60, I told my partner, "That's it, Tolik, we need to stop this. We need to build some management system, otherwise, I'll just go crazy." The next stage is when you have a manager. By the way, most companies reach this natural level. That is, you've grown to a certain number of employees. The natural desire is: I have two salespeople, so we need a sales manager. He will manage the salespeople. Or we need... And you start hiring managers. This is where managers appear. What happens then? Everything goes to hell. It turns out that these amazing managers whom you hired, for some reason, and you were not a professional manager, you managed based on common sense, and it worked out. You hire a professional manager, and everything goes to hell. Fantastic! Who has encountered this? Look, now I'll explain why this is a natural and inevitable result. Look at this. Everything starts to break down here. And therefore, where do we jump back to? Level 2. And most companies, those who don't understand the nature of this phenomenon, don't understand why this is happening, as soon as they accumulate a little strength, money, they try to jump to level 3, get problems, and fall back to level 2. And so they go back and forth for years, back and forth. Hired managers, fired managers, and then half the team ran away, you understand? This is what happens. Now, look, why does this happen? Let me explain. Here, at stage number 2, at level number 2, you are successful because, first, you know how your subordinates should do their work. You know how to bake pies, and you have common sense, and you are successful. Here, what knowledge are you lacking when you move to this level? Exactly. Because you are hiring guys who should manage. That is, they should manage. And to manage guys who should manage, you must know how they bake their pies. You must know the technology of management. You must perfectly understand how a manager should be. Only in this case can you manage a leader. If you know the tools of a leader. But what's the focus? I hired a large number of leaders, and talented guys come who have worked for years in leadership positions. You ask them, by the way, if you hired an internet promotion specialist, and you wanted to find out during the interview how alive he is as a promotion specialist, what questions would you ask him? Cases he told you. Well, I worked in companies A, B, C, D, and we got a case. Would you ask him, "How do you do this?" or "How do you achieve this result? What do you use?" Yes, you would ask him specific questions. "Here's our situation, tell us what tools you will use." Or "You told us about this case, now tell us how you specifically did it." And of course, even if he tells you, it doesn't mean he can do it, but at least it gives hope. So, when I hire leaders, I ask them questions: "List the management tools you will use as a leader." And you know what I usually get? "Well, incentives, punishments, we have instructions, and we hold meetings." "Well done. Good. You hold meetings. Here's a piece of paper. Please write down the standard protocol for a meeting. What, why, during the meeting do you consider?" And if he thinks for more than three minutes, what does it mean? He hasn't conducted one. He might have read about it somewhere, someone explained to him that it's important, and so on. Well, by the way, he named four management tools. Generally, a low-level leader uses at least twenty. Generally, that is, he didn't name many things. For him, for example, it's not unrealistic that the company structure itself is a management tool. Quantitative measurement of results is a crucial management tool. But many, many others. So, this guy, he's not even theoretically a real leader. He's more likely a talented person who has a tendency to perform the duties of a leader. But he doesn't know how to do it. And for this reason, we understand them, we put them in place, and they don't cope. But this is not an ideal situation. The ideal situation is when you give them some framework, when you give them some structure, a system, give them management tools. Because, just like when you open a business, what do you dream about? About how your amazing clients will receive amazing pleasure from what they received from your product, right? Well, did any of you dream about how your happy clients... Yes, yes, yes. Raise your hand, who dreams about it? Well done. Who thought about opening a business, thought about how I will advertise this service and how I will sell it? Who thought about that? Even more well done. Who among you thought, "How will we manage to brilliantly provide this product so that it is the best?" Okay. And who among you dreamed, "How will I resolve all sorts of issues with my employees, and how will I hold daily planning meetings with them?" I think fewer people, actually. Yes, people don't dream about this. Look, this is some kind of quirk. We want to create a business, we dream about business, but for some reason, we dream about everything except what we will have to manage people, build a management system. And therefore, when we encounter this need, this necessity, we don't want to deal with it, you understand? We don't want to deal with something that we didn't intend to deal with at all. And it sounds absolutely flat, but it is so. Thank you. And you can only cope with this in one way: you consciously adopt the point of view that this is my job, and I have to cope with it, and start dreaming about these terrible, dull management things. Yes, and then you can rise over time, build a management system, and then your managers, whom you hire, will cope, and then you will reach this fourth level, when you already have the opportunity to do the real work of an owner. What is the real work of an owner? Lying on the beach with a margarita, here are palm trees, girls, or vice versa, muscular lifeguards, I don't know, it depends on gender preferences. But the idea is exactly this. And society believes that the work of a business owner is to do nothing. This is foolishness, of course. You are right, the questions.
Strategies are development questions, some others about which I will now tell you. Here is a brief list of owner functions. The first function is creating ideology. Someone must create the business ideology. Someone must go out in front of people and say, "The meaning of our activity is this." The meaning of our activity is this. The next function is strategic marketing. Strategic marketing is when we decide our brand will be like this: it will be bold, bright, beautiful, and modern, or our brand will be classic, as if it was carved from a piece of marble from ancient Greece, you understand, something like that. And we will promote our product or service in this way, and we will interact with this target audience. This is strategic marketing, meaning how, to whom, in general, we will promote and provide our product. The next owner function, I will go into a little more detail on all these functions, is creating the technology for product production. That is, how we actually bake pies. So, social networks. Why do you go to an accelerator, an online school? Because you need, if you are going to, for example, create an online school, you need the technology for creating an online school, and you go to get this technology. Technology can be bought, acquired, but one way or another, someone must take care that it is bought, acquired, or invented. Because very often in many businesses, we have to invent technologies for producing services or products. I can tell you, I spent years of my life describing consulting methodologies, materials for consultants, writing books, and so on. This is all related to the creation of the technology of my business, my consulting business. By the way, do you know why most consulting companies do not expand? Have you noticed that most consulting companies are small groups where there is a guru, he has devoted assistants, there are 5 of them, and they work for years. And very often, many clients come to consultants and ask, "Well, if you are so smart, why isn't your company growing?" Something like that. Have you encountered this? Yes. Well, I can tell you that yes, it's true, most consulting companies do not grow. Why? Because a person cannot transfer technology, he cannot describe technology, it is in his head, he is the carrier of technology, he cannot describe or transfer it to his successors. And this, by the way, is why I invested years in describing the technology of what I do, and that's why my company is growing, and that's why I consider myself largely a technologist, a creator of consulting products. The next is building an organization. Building an organization is when you develop the company structure, rules of operation, manager responsibilities, all these, you know, boring, boring managerial things. But nevertheless, it is also the owner's responsibility to set all these standards. By the way, this is the reason why many businessmen curse MBA. They go to MBA, go through it, and say, "Well, I got something from this, my consciousness expanded, but I can't apply anything in my business. What's wrong with me?" And they start thinking, "Something is wrong with me, or something is wrong with MBA." Guys, MBA was developed over a hundred years ago. MBA as a standard, you know that MBA is a standard. And MBA has a goal, and the goal is very simple: large corporations needed corporate officers, trained leaders. And universities always, at all times, and including a hundred years ago, prepared engineers, doctors, teachers, scientists. They did not prepare leaders. So big business, but this was more than a hundred years ago, to be honest, about 125 years ago, it was already in America when large corporations approached leading universities with a request: "Make us a program for training top executives." And the MBA standard was developed. And now, look at what the MBA standard is. The MBA standard is needed to train a smart, capable person. By the way, classic MBA only takes people with leadership experience, you understand. This has meaning, only with fundamental education they take to MBA, and this is the classic. Why? Because now we need to teach him to use the management tools and approaches that exist in the corporation, you understand, so that he knows how to conduct business. Notice that this task differs in something from the task of an architect, a business creator, of course. Because it's one thing to drive a car, and another thing to design a car. It's one thing to operate a company that someone built, which already has all these principles laid down. This is what MBA teaches wonderfully, and these are wonderful, magnificent programs. And it's a completely different thing, and a completely different skill, to build like an architect, to lay down all these principles, you understand. And therefore, you just need to apply it correctly. This thing works. The next function is financial assets. The business owner must set certain templates, certain standards for how the company should handle money, and then monitor that these standards are applied. And the last, penultimate, security. Who among you, being an owner, cares about the company's security? Yes, but there are different levels to this. We are not talking now about guarding our warehouse. We are talking about security when we correctly register, think through financial and economic schemes, think through some contract forms, offer texts, and so on, and so on. And the last, rather amusing function, is when you have several co-owners, and you need to manage them. I don't know how natural this idea is for you, because there are people who believe that if we have fifty-fifty, then no one should manage anyone, because we are equal partners. Guys, that doesn't happen. There is no such phenomenon as equal partners, because this situation always leads to collapse. A little later, I will explain why in a bit more detail. Creating ideology. You set goals, vision, mission. You set the main meaning of the company, and ultimately, the company's code. Why is ideology so important? Because, you see, we have to make decisions every day in business, different decisions, difficult and complex. Should we give a refund to this client, but our money will suffer, and our financial security will suffer, or not do it? Then, perhaps, our reputation will suffer. And many of these decisions are on the edge, where you cannot definitively say yes or no. What should guide us? We must have some criterion of good or evil, you understand. This ideology, our goals, are the main criteria of good and evil. It's like, they always ask me at Vysotsky Consulting, for example, "Well, what about us?" I say, "Everything is very simple. We have a main principle. We have a main criterion. We either helped a businessman build a management system, and it works, or we didn't help. And it doesn't matter for what reason: he didn't cope, we didn't cope, our approaches are imperfect, and so on. But I know exactly why we work. We work to build management systems." Why is it important to help a businessman build a management system? Yes, it's very simple. It helps to unlock the true potential of the business, the true potential of the product. Because he can provide it in some small place with five assistants, or he can create a national company. I have plenty of cases among my clients who are creating national and international companies. Why? Because he has 100 more business ideas, people want this product or service, but he simply had problems with scaling. By the way, they ask me, "How much will the business grow if it doesn't have a management system?" I say, "It depends on the potential of that product." There are businesses that grow hundreds of times, there are businesses that may not grow if he has some local restaurant and he doesn't intend to turn this restaurant into a chain of restaurants or a franchise or something else. Yes, his indicators will improve, I don't know, by 30 percent over several years, maybe they will grow twice. That's all. If he doesn't have this ideology, if he doesn't want to go further, then he will simply have a magnificent, amazing, well-established local restaurant, but it won't turn into McDonald's by itself, you understand. And so, ideology is very important. Why else is ideology important? Because we deal with people, and people, wait, something slipped. People have different motives, and I mean people who work with us. You've probably seen that there are guys whose eyes are burning, they like what they do. And actually, even if you didn't pay them a salary, they would still try to do something in their free time. Who has such people? Enthusiasts? Absolutely. And usually, these guys, if they are capable and competent, usually bring great benefit to the company. And once, in one of his articles, Ron Hubbard wrote many good articles on management. He formulated that these four, four main levels of motives, and the highest is a sense of duty. A sense of duty. I can say, who among you, for example, truly believes that the success of his business is a matter of honor for him? No, it's not just money, you understand. It's our promise to the consumer. It's a promise we made to partners. It's a promise we made to the team. And most importantly, what is the most important promise? Of course, to ourselves. We made a promise that we will do this, and we feel a sense of duty. And who among you, from time to time, feels that, in general, money is actually not the most important thing? I completely agree with this. And by the way, when you have such a point of view, you usually have a lot of money in the end. It sounds very strange, but it's true. Money is not the most important thing. But if money is not the most important thing for you, why do people gladly bring you money? They feel it directly. They somehow want to convince you of this. So, this sense of duty, these guys. And who in your company has 100% of people with a sense of duty? Hands up. No. Yes, that happens rarely. Congratulations. That happens, but it happens rarely. The next level is personal beliefs. It's a lower level. It's when a person does the job because it's, you know, it suits his beliefs. What is this? For example, a guy who does internet promotion, and in general, it doesn't matter to him which company he works for: a training company, a consulting company, an online school, or somewhere else. But if he does internet promotion, he tries to get the most out of it. Well, in general, it doesn't matter to him what the company does. Who has met such guys? They work well, right? Quite well. This is a fairly high level, it's the second level after a sense of duty, but a little worse than those who truly have a sense of duty. If we had such promotion, but with a sense of duty, it would be even better, wouldn't you agree? The next level is personal gain. This is when a person does some work simply because he wants to get something. He came to you for a job and says, "Please hire me, I have no experience, I want to gain experience." Sometimes this works well, sometimes it doesn't work very well. But these people are harder to manage. And the last level of motivation is when a person works only for money. He came, he is only interested in money, and in general, it doesn't matter to him what to do. By the way, this is very rarely encountered in real life. Now, look, many people believe that motivation is some kind of internal audit, a level of motivation is some kind of internal, initial quality of a person. And who among you believes that motivation can change, become higher? Absolutely. You came to a conference, your eyes lit up, you were inspired, motivation increased. You returned home, talked to some depressed friend, and you don't want to do anything anymore. Recently in New York, one of my partners, because I am also a board member of Life Mission, this is augmented reality. We recently took a contract with Disney, exclusive for all of the United States. And thank you very much, it's a big step for us. We've been working for several years, but I, in particular, am responsible for the strategy of this company. So, for me, it was also a major shareholder of the company. So, he met with a partner there, and he's somehow a bit sad, not very optimistic. And I start asking questions, and I realize that it's related to the fact that he talked to some depressed guy, you understand. Wow. Well, this is a small drop in the level of motivation, but nevertheless, it can greatly affect the entire company, it can greatly affect the entire business. So, the question for you: how to increase motivation? What needs to be done to increase people's motivation? Give them more money. It doesn't work, guys. Of course, you are absolutely right. Convey goals, convey the mission, inspire people. Well, we can convey goals and mission, inspire people when, first, we know that this is our responsibility. It is the function of the business owner to formulate this. It is the function of the business owner to convey this all the time. You can't just do it because it came to your head, by mood. Yes, it happens, but if you don't understand that this is a professional duty, you won't do it always. And motivation needs to be constantly supported, and it needs to be constantly raised. And for this, a very conscious decision and understanding of how to do it is needed. You must formulate these ideologies, and you must constantly convey them, convey them, convey them, and so on. And then your team's motivation will rise. And if you stop conveying it, it will start to fall. Why will it start to fall? Depressed friends, and there's TV, don't forget. Maybe you've never watched TV. I know such people, they only have YouTube, Facebook, and so on. And that's okay. But many people watch TV, you won't believe it, it still broadcasts something. And usually, when you turn it on, you learn a lot of new and terrible things about our future, about our present. Therefore, this must be done constantly. Motivation must be constantly raised. This ideology is not some damn beautiful bow on the wall, you understand. It is one of the most powerful tools that directly affects efficiency, teamwork, people's desire to cooperate, how they feel in your company, how long they want to work in your company, whether they will bring their friends to work in your company, whether they will promote your company's products to their friends, and many, many other things. Therefore, this is the first tool, this is the first, I would say, sacred duty of a business owner. The next duty is strategic marketing. I can tell you, I had funny incidents when I didn't quite understand the owner's functions yet. This was about 16 years ago. I hired a marketer, well, because I already knew that I needed a marketer. Well, there were no social networks then, you know, Facebook hadn't arrived yet, and nothing like that. I hired a marketer, gave him a salary, and said, "Well, let's do marketing." And after a month, he was a great guy, by the way, he is very talented, now he is a well-known person in the country. But then it was his first job after university. And after a month, he presented me with a report. The company I'm talking about was engaged in the production of orders, medals, awards, souvenir products, similar badges, and all sorts of things like that. And he made this report, and in this report, there was everything. In this report, for example, one of his key messages based on the results of this report was: "Alexander Ivanovich, most of our clients also need branded office supplies, flags, and branded tableware." And I looked at him, and I realized that I had lost a month, I had lost his salary, and in general, I had to somehow survive what I was about to tell him, and possibly lose a potentially talented marketer. I told him, I said, "You know, our company will not produce tableware, nor office supplies, nor flags, because we produce awards. Our vision, our ideology is to produce awards and make these awards such that just the sight of these souvenirs, awards, evokes admiration. And when someone sees a person with our award on their chest, just by the sight of this award, it should create the impression that this person possesses special merits, special achievements, and special qualities. And this is our ideology. We will never do anything else." But in reality, this was my mistake, of course. Because this guy was trying to do the job of strategic marketing for me. He was trying to determine for me what products we should promote to the market, you understand. Because I, as a business owner, did not fulfill my job. And unfortunately, that's how life is. If we, as business owners, do not do our job, if we do not define all these main ideas for our business, sooner or later someone will start defining them. And by the way, have you noticed that there is such a curve when a company starts, it is mega-effective, including in terms of marketing, and it is understandable, you look at it, it is clear what it is doing, and so on. But when many companies, when they grow, become rich, they have marketers and all that, you look at the company after some time, there are many such examples, you cannot understand what it generally does, who they are, what their style is, you understand, what is happening. That is, you, as the owner, as the creator of the business, must perform this function. And what should marketers, specialists in promotion, advertising do? Yes, they should implement these ideas in practice within this marketing strategy. They should implement the ideas. But if you don't do it, they will become your strategists, you understand, strategists in marketing, and you will get horns and legs in the end. The next function, a gear fell out here, imagine that there is a gear here, or two gears. Creating technology. As I already told you, you can buy it, you can borrow it, you can buy a franchise, or you will have to develop it. But you cannot grow a company if there is no formalized technology. Formalized technology means technology that has a form. It doesn't mean it's detached from life. No, it means it is somehow described, drawn, it could be transferred to other people. I can tell you, when I was building a manufacturing company for the first time, I encountered a big problem in the area of technology. I couldn't buy it anywhere. We had to recreate it. I specifically hired people who described technological processes, technological maps, and so on, and so on. Why? Because I couldn't expand, I couldn't hire people, I couldn't plan activities, my managers couldn't cope with planning, with anything. Why, by the way, does this function belong to the functions of a company owner? I can tell you. But if you think that the one who does the work is the creator of technology, then you are deeply mistaken. This will never happen. I've done it, and I've tried. I tried to involve my best technical specialists in creating technology. It doesn't work. These are different things: creating technology and performing work are two different things. And then, those who are in operations simply don't have time for it. They need to grab more, throw further, rest while it flies. They don't have time to look at it. Very often, people who are ideal at doing work cannot connect two words. They cannot describe it, they cannot transfer it. But you watch them, and you understand: he does this first, then this, and it's successful. That's why someone must be engaged in describing the technology. By the way, for Vysotsky Consulting, for our main offline product, I spent three years describing the technology, three years full-time, can you imagine? Well, it is precisely because of this that I am now opening branches in China and the United States, because I have a described technology. It is practically a huge value in itself. I'm not saying it should be so monstrously difficult in all types of business. It's just that consulting is an extremely complex business from a technological point of view. In most businesses, it's a little easier. I can tell you, I very often envy my clients, very often. Because he builds houses and says, "I can't find the necessary number of foremen." That is, we have plenty of orders, we have amazing quality, people are queuing, there are many workers, but I can't find foremen who will manage construction sites on site. I understand what he lacks: the technology of working as a foreman. It's not about hiring, because there are no foremen on the market. They don't know how to manage such facilities. There are simply no such people. He doesn't have the technology on how to train these foremen. I understand that, of course, compared to what I do, I would write this technology for foremen's work in about three months, I think. It's not three years, but I would write it. And by the way, this is a real case. This guy described the technology of working as a foreman on a site, and in the last year, he increased the number of sites threefold because he learned to train foremen, control how they work, and he is growing very rapidly in an area where competitors are not growing like that. Sometimes this makes breakthroughs. So, technology, our beloved, our everything. Building an organization. Setting management rules: how your managers will manage, how they will receive reports, how they will hold meetings. I can tell you, I made a breakthrough in my time with my company Gerold Master when it started in the market, it was around the year 2000. A manufacturing company at that time was the same company as 5-6 other competitors. Within three years, it was many times larger than all the others. And it's not because they didn't know how to make awards, not because they didn't know how to work with metal, not because we had the best specialists. It's not true. I didn't understand anything about working with metal, and our specialists were not the best. But we made this breakthrough simply because in this business, when you deal with different, imagine, you have 60 people working in production, and simultaneously in production, there are at the moment, our number of people is like this, but at least 40-50 orders. Each order is 30-40 different operations. So, you have at the moment for these 60 people, there are hundreds of different operations. And if you miss something in one of the operations, you naturally have problems with the order. This is an organizational problem. That is, from the technological area, it moves into the organizational area. How to control all this? So, the breakthrough I made in this area with this company is mainly organizational. It's not technological. We haven't invented a single new way of processing metal. All of them were invented. And in many businesses, by the way, development stops due to technological problems. The next area is finance and assets. I can tell you, there is a revolutionary idea here, for example, when, when I tell you, imagine that your financial activity is organized ideally. What tangible result of such a circumstance comes to your mind? And I mean the desired result: transparency. That is, I look, and I understand everything that is happening. Positive return on investment, right? That is, we get more money than we invested, and apparently, these indicators are constantly growing. So, there are actually money. So the owner doesn't worry about where to get money for his needs. And this, by the way, is a very important point: when the owner doesn't worry. There is a certain balance between cash and non-cash. I understand that you are talking about having enough cash to continue and develop the business, and the owner's income is growing ideally. Understanding how much it can be sold for is very good. I can tell you, you are naming absolutely wonderful, amazing things. But from my point of view, you are not naming one most important thing. Perhaps it is obvious to you, perhaps not. Sometimes obvious things are not named. But for me, the most important thing in financial management is that my managers fight for all of this. For me, this is the most important part of the financial management system. For me, the financial management system is not just order, not just a certain transparency, not just indicators. For me, the most important thing in financial management is that all my leaders and managers do this. And I can tell you, since 2004, in all my companies, my leaders have been doing this. I only control that this system works. And this is the most important thing. Why do you think this is important? The answer is absolutely because it is related to responsibility. Because if it is on my shoulders, even if I have transparency, I have all the indicators, I have a good return on investment, I have normal cash, but I am pushing this. What is happening here? Have you encountered such a situation when you say to your managers, "Guys, we need to increase revenue threefold"? They say, "Yes." But you understand that deep down, they don't care, right? Yes, of course, they say, "Of course, boss, we need to increase it threefold," but in reality, "we don't know how," and "I don't understand." I will tell you such a story. This is a real life story. At a certain point, before I fully transferred the responsibility for financial management to my managers, before that, my production volume was 60,000 per week, it doesn't matter what, but 60,000 per week. And my manager kept explaining to the head of production, Nikolai Ivanovich, "We need to increase production volume. We need to raise it to at least 80% with our staff. We need to spend more money on advertising, and so on." What do you think he told me all the time? "It's impossible. We have outdated equipment. We have not very skilled employees. Our premises, our materials, blah, blah, blah, blah, blah, blah, blah. And we don't even have enough electricity." After I took and completely rebuilt the financial system, I fully transferred finance to the management of managers, meaning they were responsible for paying all bills, finding money for salaries, finding money for rent, for new equipment, for development, and so on. I can tell you, they didn't want to, of course, they resisted. I had to show some persistence. But after I changed this game completely, two weeks later, Nikolai Ivanovich said, "We will easily do 80,000, just give us a little bit of tools here and hire these people." After four weeks, he came with a plan to increase to 120,000, humbly lowering his gaze. He came to the managers' meeting and said, "You know, we are missing one piece of equipment here, here we can do two shifts, here I found a way to involve subcontractors, we will increase production volume to 120,000, double the production volume." Why did this happen, do you think? His point of view completely changed. Exactly. Before, I said, "We need to increase." He did not understand. Effort, counter-effort. Subscribe to the channel, like this video, and comment on what else you would like to know. When we completely transfer financial management to managers, what happens? They now need money, not me. I receive my percentage of revenue as an owner regularly, every week, since 2004, by the way. What's pleasant is that, as you know perfectly well, the further we work, the more needs grow. And it's great when your managers' needs grow, when your managers' needs grow, because the more their needs, the more they earn, and the more we earn as owners. I think this sounds quite strange, what I'm saying, a slightly unusual point of view. So, in reality, this is the only correct state of affairs with finances: when we set such rules of the game, when managers start to care about financial well-being, and they start to fight for revenue. And when this happens, guys, believe me, I thought I was very inventive regarding money, I thought I knew how to handle money very rationally. But guys, what they can do, I cannot. They find ways to reduce costs and increase revenue that would never have occurred to me. Why? Because they are directly closer to the activity, they know better, of course, I understand the strategy better, but they know the specifics better, what can be squeezed out where. And when they start to fight for increasing revenue in earnest, when they join this game, bam, this whole game changes.