Stop Switching Strategies and Start Scaling | Ep 863

In this episode, Alex (@AlexHormozi) unpacks the real reason most entrepreneurs don’t succeed. Not because they lack strategy, but because they fail to execute the one they already have. Welcome to The Game w/Alex Hormozi, hosted by entrepreneur, founder, investor, author, public speaker, and content creator Alex Hormozi. On this podcast, you’ll hear how to get more customers, make more profit per customer, how to keep them longer, and the many failures and lessons Alex has learned and will learn on his path from $100M to $1B in net worth. Wanna scale your business? Click here. Follow Alex Hormozi’s Socials: LinkedIn | Instagram | Facebook | YouTube | Twitter | Acquisition Mentioned in this episode: Get access to the free $100M Scaling Roadmap at www.acquisition.com/roadmap

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Alex Hormozi?

  If you feel like you're not making progress, this might be why. In my earlier part of my career, I read a ton of self-help books, everything I could get my hands on. But I realized that my life didn't change. And so the moment I stopped obsessing over finding the perfect plan, I started making progress. And I eventually hit lots and lots of money by the time I was in my 30s. And so this video is about why that might be the case, and more importantly, what you can do about it.

• 0:27Alex Hormozi?

  Hey, guys. Welcome back to the game. I had a couple of conversations last week with different business owners. And there was something that probably will affect you, which is many people want to change their plan rather than improve the execution of the plan they're currently on. And I want to break this down tactically for how to improve execution. So I met with a business owner last week who's doing about $5 million a year. I believe the source to be reliable. I'm not guaranteeing that's what he was making. But he said he was making about $5 million a year. And he had this issue that he wanted to talk about his strategy in the business. He's like, hey, you know, I think we should recombine these things. I think we should change our sales process up. And one of the issues that he was having was that he was struggling to get conversions to be consistent. Meaning his sales team wasn't converting at a consistent percentage. Now, that might be ahead of where you're at. It might be behind where you're at.

• 1:12Alex Hormozi?

  If you're one person, then it might be you, right? If you have a much bigger team, then it might be bigger than that. But the main point was that he wanted to change these things up. And after listening to him talk about this for a while, I was like, I don't think you have a strategy problem. And even if you did have a strategy problem, I don't think that we can work on that until we solve the execution issue. Because if we're seeing volatility or variability in the results with an existing plan, then it means the plan isn't being executed all the way. Because when you have your cool good weeks, you're fine with those results. When you have your bad weeks, you're not good with the results. Then it means that we're doing something different during the good weeks versus the ones that are bad. And so this is the analogy that I have for this. And so if you think about climbing a mountain, right? A lot of people think that there's like, what is the perfect path up the mountain?

• 1:56Alex Hormozi?

  But in my experience, there's usually multiple paths up the mountain that you can take. But none of the paths will work if you're constantly trying to jump from path to path. Because in the real world, one path might be direct and might be Steeper, another path might have more loops. Now, you might see the other path and think, man, that one's not as steep. But what we don't see about the path until you get on it is that, oh, man, this one's actually going to take me way longer to get up the mountain. And so, most of the time, we need perfect conviction about our plan more than we need a perfect plan. And so, think of the paths up the mountain as your strategy. Like, the mission is getting to the top. That's what we want to do. But the strategy is how we're going to prioritize our resources to getting there.

• 2:39Alex Hormozi?

  Right? And so, your ability to execute on the path, walk the path, stick to the path, is ultimately the thing that's going to predicate your success far more than the path itself, provided it's sensible. And what I've found, um, in my experience is that most people actually have a pretty decent idea what to do. I'll give you a different analogy. So, if I said, hey, you need to get in shape. If you know nothing about getting in shape, you still probably have an idea that you should probably stop eating crap, and you should start moving more. And if you're trying to gain muscle, you should probably like lift weights. And if you want to get bigger, you should probably make those weights or those reps go up. These are probably things that you'd be like, I kind of already knew that. The thing is, is that people don't do that. And so, the issue usually is like, I want to have this perfect plan. But like, if you just did only that for the next three years,

• 3:23Alex Hormozi?

  you'd probably be way better off than the vast majority of people. And so, this was a big realization that I had, which had this, this over-analysis of like, what is the perfect plan? And I call it the fallacy of the perfect pick, which is that we wait and we wait to try and find the perfect path. And the thing is, is that this is a $5 million a year business owner. So, this is, has nothing to do with where you're at. This happens at all levels, right? The mountain just gets bigger, but it's the same concept. And so, for me, there was a period in my life before I started making, you know, a lot more money, where I had nine different businesses, alright? And I had nine businesses that I was CEO of, and I wasn't making any money. Now, we were making revenue, but because I was so spread thing, I couldn't focus on any of them enough. And so, all I could do is just barely keep my head above water. I had, you know, a dental agency, I had a chiropractic agency,

• 4:07Alex Hormozi?

  I had my launch business where I was flying out. So, I was in different cities every week doing these launches. And then, I also had six locations of gyms that were running too. So, I was so spread thing, I was stressed out of my mind.

• 4:20Alex Hormozi?

  Most people can't execute. And so what I would think at that moment in time, like now, looking back, it's obvious. And maybe you hearing it's obvious, but for some reason, it's kind of like the Yiddish saying, where your nose is an inch above your mouth, but needs somebody else to tell you your breath smells bad. I think it's the same thing with this, which is that at the time, if you, if I had asked younger me, what do you think the problem is? I'd be like, I think I need to change my strategy up. I think I need to change all these things up. When around is that most times you don't need to change that much at all. You need to actually just do the one thing really well. And so it's not about coming up with the plan or doing the plan. It's sticking with the plan, right? You can beat most people at anything if you just stick with it for a year. If you're willing to suck at something for a hundred days in a row, then you could beat most people at most things. The bar for excellence has never been so low.

• 5:05Alex Hormozi?

  And so most of your competition quits after the first sign of difficulty, the first impasse on the mountain where they don't immediately get it. Because they've never known what hard feels like. And so you having to figure something out, the unknown is the hard part. The figuring it out is the hard part. And so people think that, oh, I should switch paths because I understand the path of getting to here. So you might get this far up the mountain and you might be on this path and think, oh, I could do this path or this path or this path. The thing is, is usually you have to go back down and then you gotta go over and then you gotta go up again. Right? So it's actually a lot longer to keep switching paths. But we don't think that because this path we can see. We already walked down here. We already see the bottom of the mountain. We can see the path to here, but then from here we get stuck again.

• 5:48Alex Hormozi?

  And so we keep, you know, re-leveling up and going from, you know, level one to level two, level three, really quickly because we've beaten those bosses before. But then you get to level four again and you're stuck. And so you have to grit through that period where you don't know what you're doing. And this took me so long to understand, like the not knowing part is the part that's hard. And that is where people give up. It's not usually the, the like, oh, I just need to work harder. Sure, there's some people who are weak and they just lose there. But most of the times when I talk to business owners, that's not actually where they lose. It's because they don't know what to do. And so they think, oh, I'll change my strategy rather than figuring out what to do is the strategy. Most strategies do work. So I want to hit on this a little harder. One of the misconceptions about business is that there's this one secret thing, right? There's usually Lots of ways to win. There's a few ways to skin a cat, right?

• 6:34Alex Hormozi?

  If you have a dull knife, on the other hand, you're never going to be able to skin the cat. And the the sharpness of your knife is your ability to execute whatever path you have. Real quick, guys, thank you, thank you, thank you. You guys are awesome. This podcast continues to grow. We had our highest month ever last month, which is huge. And we don't run ads to grow the show. It's just you guys. It's just you guys. And so if this podcast has provided you value, if you could text it to a friend, or you could send it on Slack, or share it on your Instagram, that is how this podcast grows, and that is why I continue to make them, it's because of you guys. So thank you, guys, first and foremost. And if you have it in your heart, there's somebody who could use this, then please send it. Lots of love. Enjoy the rest of the pod. And so when I was talking back to the business owner, I said, okay, so if execution is the issue, what's the, that's the, okay, that's the surface level problem.

• 7:19Alex Hormozi?

  You're not doing what you know you should do. The underneath of that is why is this not happening? And so I see this as a combination of two different things, all right? And so one is culture, and the other is talent. So I'm going to explain both in a more operationalized manner, so it's not just these buzzwords, all right? So what is culture? So culture is the rules of reinforcement in a business, okay? So what are the things that govern what gets rewarded and what gets punished? And so if you think about culture, there's probably a hundred or a thousand behaviors that exist within any business or any environment, right? When we learn a culture as a society, there are things that we do. You hold a door. That's one thing that you do, and it gets rewarded. And if you don't do it, it gets punished, right? If you cut somebody off in traffic, it gets punished, right? And so each of these things are things that get rewarded or punished, and that's what creates culture.

• 8:03Alex Hormozi?

  But within every business, there's kind of a subculture within the larger culture, where you have more and more nuance of things that are your preferences as a business owner. But if people are not working to your preferences, then it means the culture you have, the rules that govern reinforcement are not being adequately exercised. And the way that you reinforce culture is, one, who you hire and who you fire. So who you allow to exist in the business tells more to your team about what you think is acceptable. Number two is the behavior that you do not allow to change. So if someone does something good and you don't reward it, then they learn that they don't get rewarded for doing that thing. On the flip side, if someone shows up Minutes late to a meeting and no one says anything, then you teach everyone it's okay to be late.

• 8:44Alex Hormozi?

  And so the first issue with his business was that there's probably a culture of non-performance. And we have to get very specific with what makes somebody not perform. And sometimes it's only two or three behaviors. Oftentimes it's like 20 or 30. And you have to be able to observe what are the things that makes me not like my team? And what would I rather them do instead? And so I use the format of start, stop, keep. So what I want you to start doing that you're not doing, what I want you to stop doing that you are doing. And what do you need to keep doing that I'm going to keep reinforcing? It's a very simple way to give feedback that I really like. Now, what about talent? Cause that's the second half of this. One is the cult is the rules, right? The talent is the people who are actually doing the behaviors, doing the stuff. And so from a talent perspective, a lot of businesses can't expand anymore.

• 9:29Alex Hormozi?

  Not because they don't have the model to do it, but they don't have the ability to execute on the plan. And the ability to execute on the plan comes down to the quality of the people that you have in the business. And I can tell you this firsthand, you probably don't have high enough bar for who should be working for you. And I say this for myself too. The moment I increase the quality of the people who work with me, the more money I make. Right? And so what's really interesting is that I think that this is one of the greatest arbitrage opportunities that exist in business to this day still. Which is that, let's say that the 50% mark for a role is $75,000 a year. All right. Now for you to pay 90th percentile, it might be $115,000 per year. All right. Now you might be like, wow, that's a big difference.

• 10:12Alex Hormozi?

  But here's the thing is that this person is probably like five times more effective than this one. But they only cost 30% more. That's a great deal. That's a good investment. And so at this point, all I really try and do is just find rainmakers. I want people who are exceptional, who are obsessed with this task. Real quick, guys, I have a special, special gift for you for being loyal listeners of the podcast. Leila and I spent probably an entire quarter putting together our scaling roadmap. It's breaking scaling into 10 stages and across all eight functions of the business. So you've got marketing, you've got sales, you've got product. Customer success, you've got IT, you've got recruiting, you've got HR, you've got finance.

• 10:54Alex Hormozi?

  And we show the problems that emerge at every level of scale and how to graduate to the next level. It's all free and you can get it personalized to you. So it's about 30-ish pages for each of the stages. Once you enter the questions, it will tell you exactly where you're at and what you need to do to grow. It's about 14 hours of stuff, but it's narrowed down so that you only have to watch the part that's relevant to you, which will probably be about 90 minutes. And so if that's at all interesting, you can go to acquisition.com/roadmap. R-O-A-D map, roadmap.

• 11:25Alex Hormozi?

  Now, how do you differentiate the people who are good versus not? I'll give you a tactic around this. So when you're interviewing, I like to know what someone's doing in their off time. And if what they do in their off time is not what I want them to do in their full time, then they're not going to be full time, right? They're going to be always moonlighting to their other thing. And so I'd rather say like, what are you obsessed with? And I like asking that question. What are your extracurricular activities? Now, if they're like, honestly, all I do, let's say I'm hiring a videographer. They're like, all I do is video stuff. Like this is what I'm really passionate about. This is what I spend my time watching on YouTube is like, how do I improve the lighting? How do I improve the audio? How do I improve the sets? Like this is the stuff that I like really am obsessed about. I probably know that that person's going to do a pretty good job because also if I tell them, hey, you need to improve this stuff, they're like, great, I love this feedback. I want to get better.

• 12:07Alex Hormozi?

  Now, if somebody's like, oh, I love pickleball and using and working out. There's nothing wrong with that. It's just that is that the thing that you're obsessed with? And so asking that question in a couple of ways in an interview will tease out whether someone's spending their discretionary effort and time on the talent or the skill that they need to win in their role in the business. And so that's on the pick side, right? The third element of this, uh-uh, here we go, is training, right? So if you have rules that govern reinforcement in the business, okay, this is what we like, this is what we don't like. And then you get really good people in. You still can have people who have potential versus actual. And so obviously the higher up in the business, the more you're hiring for actual, the less you're hiring for potential. The lower someone is in the business, the more you're hiring for potential and less for actual.

• 12:51Alex Hormozi?

  And so when we're picking somebody, it's like, I'll pick somebody who's just generally intelligent and has work ethic over somebody who might be more experienced in the Career, but doesn't demonstrate the same level of intelligence. Cause I think the smart person will be able to catch up to that dumber person really quickly and then pass them. And so what does training look like? And so training in the business in order to execute, I'll be really clear here. The reason that your plan isn't working is because no one's doing the plan. So why aren't they doing the plan? These are the reasons, right? And so from a training perspective, it typically comes down to observing the details. I'm gonna give you a story about this. So I was meeting with a different business, which is a solar sales company. That was doing, you know, multiply figures, which is great, good sized business.

• 13:32Alex Hormozi?

  And the founder was telling me that they were struggling to develop a sales leadership within the business. And he said they did an offsite and they came up with like their six pillars of sales leadership. And it was like accountability, time management, blah, blah, blah, blah, right? They had like six things. I don't remember what they were. And he said after the two day, you know, two day event where everyone came together and agreed on those principles. They went back and no one changed their behavior. And I said, okay, well, what does accountability mean in terms of behavior? What is like, show me what someone who's holding someone accountable does. How would I know that accountability had occurred, right? And so what happens there is he was like, wait, so I need to be like, oh, you need to text your team every morning. And you have to do end of week reports with every person review.

• 14:16Alex Hormozi?

  And you need to, at the end of the day, give kudos to the people who did well. And then ask the people who didn't do well, what they were struggling with, and then drill them on how to improve that skill. He's like, oh, I was like, right, say that. Don't say accountability. No one knows what it means. We have to translate these big words into smaller actions that we want someone to make. And then it's very easy to say, hey, you didn't do these four things, rather than you didn't hold someone accountable. Cause they're like, I don't know. I thought I was holding him accountable. Because we both have different definitions for the same thing. If this sounds more nuanced, guess what? Welcome to business, right? These are skills that you just need to develop at some point. Because changing strategy forever, over and over again, is never going to get you up the mountain.

• 14:59Alex Hormozi?

  All you're gonna do is keep going down from this one over to this one. And then maybe you get to here and then you change over and then you go over to here. And so each time you're wasting all of the extra effort, keeping, switching paths. Rather than saying, oh, the issue I have is talent, which means I need to recruit better. Oh, the issue is culture, which means that I have to show my leaders how to punish and reward behavior in the business. Oh, we're getting people in, but they're not being productive. So we need to improve our training rather than just say, oh, everyone sucks, right? And so a lot of success comes to sticking with something long enough to make the number of mistakes required to actually figure it out. Otherwise, you just keep starting from zero every single month. And you can beat 99% of people without being smarter or luckier, but by being willing to endure pain and uncertainty for longer.

• 15:43Alex Hormozi?

  That's the path up the mountain.