WEBVTT
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The topics and opinions expressed in the following show are
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solely those of the hosts and their guests and not
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those of W FOURCY Radio. It's employees are affiliates. We
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make no recommendations or endorsements for radio show programs, services,
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or products mentioned on air or on our web. No
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liability explicitor implies shall be extended to W four CY
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Radio or it's employees are affiliates. Any questions or comments
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should be directed to those show hosts. Thank you for
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choosing W FOURCY Radio.
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Welcome to Powerful Business Strategies, where you will find out
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that everything you have ever learned about growing your business
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is wrong. Finally, a show where you'll learn the right
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way to grow your business by learning business and financial
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strategies that your competition isn't doing. And now here's your host.
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President of NeXTSTEP CFO Michael Barbarita and joining Michael for
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today's show as an executive moderator is chooky obia.
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Yes, yes, yes, this is schukin. I believe that gratitude
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is undefeated and growth is about the next step. It
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is an honor for me to collaborate with my good
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friend Michael. Michael, how are.
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You fantastic, chekey, so at Chicky said, My name is
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Michael baberta president of Next Step CFO, and next Step
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CFO is a fractional CFO and strategic im limitation firm.
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Business owners hire us to double and triple their profit
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using business and financial strategies that their competition isn't doing,
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and our vision is to ensure overwhelmed business owners achieve
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consistent profits that lead to time, freedom to build a legacy,
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and live the life they design. Our mission is dedicated
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to guiding small business owners to leveraging their time, exploding
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their profits, and building a meaningful legacy. You know, this
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show powerful business Strategies in our book of the same name,
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is a step toward accomplishing that vision and mission. So
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with that'd like to hand it back to my co
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author and moderator for the showy Obia, Michael.
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It's funny. So look, I'm feeling very energized by today's
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episode because we are discussing a topic that I would
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say it's near and dear to a lot of business
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owners and the psychology behind that. So the title for
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today's episode is the confidence Crisis. Why smart business owners
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make poor decisions and how to fix it. So really
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enthralled by the insights that Michael's prepared. So look, folks,
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quick disclaimer, Michael and I are both affiliated with a
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number of different organizations, and I currently serve as a
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managing director of business development for Better Price, a global
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business focused law firm. In addition to that, it's truly
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an honor to collaborate with Michael to moderate these business
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roundtables that we do really coast to coast, and we
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document the insights from these roundtables as part of our
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book called Powerful Business Strategies. Please note that the views
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expressed on this show are personal views based on those
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successful experience is with the roundtables and beyond and look,
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my mission as the fearless moderators to ask the right
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questions to help you the listener, learn the best strategies
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that the competition isn't doing. With that, back over to Michael.
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Thank you, Jicky. So, I want to point out that
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we decided to expand on last week's show about decision making,
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so a's kind of a public service warning. There is
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similar content, but there's also an expansion of that content
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in this show. So I wanted to point that out.
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But I want to stop. I have a question for you. So,
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what's the difference between a business owner who confidently makes
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million dollar decisions and one who agonizes over a five
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hundred dollar purchase for weeks. Well, it's not intelligence, it's
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not experience, and it's not even how much money they
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have in the bank. It's something more fundamental, and it's
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costing most business owners hundreds of thousands of dollars in
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missed opportunity every single year. So today we're going to
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expose the confidence crisis that's secretly sabotaging even the smartest entrepreneurs.
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And I'm going to give you the exact framework that
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transforms hesitant decision makers into confident business leaders who consistently
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make profitable choices. And if you've ever fouled yourself paralyzed
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by a business decision, questioning your instincts or watching competitives
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seese opportunities while you deliberate, this episode will change everything
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for you. So let's dive in. So I want to
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start with a story that might sound familiar. David owns
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a successful construction company. He's been in business fifteen years.
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He's got twenty employees, generates about three million in annual sales,
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and by any measure, David is successful. But here's what's
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happening behind the scenes. David spent three weeks agonizing over
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whether to invest fifteen thousand dollars in a piece of
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equipment that would save his company in a year. So
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three weeks so while he was deliberating, his main competitor
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bought similar equipment and started underbidding him on projects.
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That is fascinating, Michael, I mean, oh wow, So look,
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what do you think was really holding David back from
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taking that leap of faith.
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Well, it certainly wasn't the money. David had the cash,
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it wasn't the math, the ROI was pretty clear. But
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what David was experiencing is what I call confidence crisis,
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and it's an it's an epidemic among many business owners.
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So here's what most people don't understand confidence in business.
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It isn't about feeling good or being positive. Business confidence
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is the ability to make decisions quickly and decisively based
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on sound information, even when you don't have all the answers.
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And the problem is that most business owners have been
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conditioned to overthink every decision and taught that good business
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people are cautious that they analyze everything to death and
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that they never take risks. And this is just not
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the right way in today's fast moving economy. The biggest
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risk is not taking risks. The biggest danger is not
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making decisions quickly enough. While you're analyzing your competitors, I'm sorry,
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While you're analyzing your decision making, your competitors are acting,
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while you're researching, opportunities are disappearing. And I see this
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Christ's confidence crisis manifesting essentially in three what I call
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devastating ways. First that analysis paralysis. You know, business owners
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get so caught up and gathering more information that they
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never actually make decisions. They research and research and research,
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but they just never pull the trigger. And second is perfection,
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and perfection is some procrastination where they wait for the
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perfect solution, that perfect timing, the perfect circumstance, But the
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truth is perfect never comes. Good enough implemented immediately beats
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perfect implemented too late every single time. And third comparison confusion.
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They look at what other businesses are doing and second
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guess their own instincts. They see competitives trying something new
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and panic thinking that they would that they should do
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the same thing. Even if it doesn't fit their business model.
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I think a lot of our listeners are curious about this.
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So what's the cost of this confidence crisis for the
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typical business owner?
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Yeah, it can be staggering, chiki. So let me give
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you a quick example. The average business owner that we
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work with is probably missing out on at least two
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hundred grand and annual revenue because of poor decision making.
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Not bad decisions either you know, or you know, slow
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decisions or no decisions at all. And if you think
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about it, while David was debating about the fifteen thousand
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dollars equipment purchase, he lost three projects to his competitor.
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And these three projects where there were seventy five grand that
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would turn into twenty two thousand in profits. So his
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three weeks of indecision caused him nearly five times the
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price of the equipment that he was worried about buying.
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And here's the real kicker. After implementing the confident decision framework,
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David not only bought the equipment, but he also invested
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in two additional pieces and expanded into a new service area,
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and his revenue increased by about two hundred grand in
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the following year.
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That's an incredible transformation. Michael Wile, can you give us
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a little preview on what this Confident Decision Framework looks like.
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Sure, So, the framework has four core components, and I'll
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break those down in detail throughout the show today. But
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first is what I call the seventy two hour rule.
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Second is the eighty percent information principle, Third is the
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cost of inaction analysis, and fourth is the minimum viable
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decision process. Now, these four elements, they actually work in
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concept to eliminate the confidence crisis and transform any business
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owner into a decisive leader who can consistently make profitable choices.
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And so we're going to dive deep into each one
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of these today and I'll guarantee you that by the
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end of the show, you'll have a completely different approach
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to business decision making. So let's dive into that first
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component that I talked about in the Confident Decision Framework,
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and that first component is the set what I call
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the seventy two hour rule. And this is really something
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if you could commit to, will change the game in
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your decisions. And it directly contradicts what most business experts
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will tell you because traditional business advice says to take
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your time, gather all the information, sleep on it. And
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this approach might have worked in nineteen eighty five when
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business was a lot slower, but it's literally business suicide.
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In twenty twenty five. Markets move too fast, opportunities disappear
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too quickly, and opportunity and competitives are just too aggressive
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for slow decision making. The seventy two hour Rules states
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that any business decision that takes longer than seventy two
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hours to implement should should be made. It should be
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made within seventy two hours. So notice I didn't say
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implement it, I said decided. So here's here's why this works.
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So most business decisions are reversible. You can try something,
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measure the results, and adjust. The few decisions that are
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truly irreversible, like selling your company, are certain employee decisions.
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Those deserve more time. But ninety five percent of business
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decisions can be tested, modified, or completely reversed if they
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don't work out. That's a beautiful thing.
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You know.
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We talked about testing a lot, and it's one of
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the best pieces of ammunition a business owner has. They
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can test everything. So let me give you a real example.
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A restaurant spent two months debating whether they add delivery service.
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So two months, that's an annoyed period of time. During
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those two months, by the way, three competitives launch delivery
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and watch, they watched potential customers ordering from them instead.
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And so when he implemented the seventy two hour rule,
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he decided within seventy two hours to test delivery with
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just dinner service just Thursday through Sunday, just within a
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three mile radius. And it was it was a minimum
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viable decision that he could implement quickly and adjust based
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on the results. Well, the test happened to be successful,
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so he expanded to lunch, excuse to lunch, increased the
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delivery radius. But here's the key. Even if the test
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had failed, he would have only lost a small amount
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of money and gained valuable market intelligence. So instead of
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two months of analysis paralysis, he had two weeks of
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real market.
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Dare Mike was interesting, right? You know, I can already
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hear some listeners thinking, wow, I mean, but what if
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I make the wrong decision quickly? I mean, how do
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you address that concern?
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Well, that's exactly the right question so to me, and
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it reveals the fundamental misunderstanding about business decision making. Most
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business owners are trying to make the right decision, but
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that's the wrong goal entirely. The goal is not to
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make the right decision. The goal is to make decisions right.
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And there's a huge difference. Making the right decision applies
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there's one perfect choice and if you just analyze long enough,
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you'll find it. Well, that's a myth. In most businesses situations,
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there are potential, multiply multiple potentially successful paths, and the
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key is picking one and executing it brilliantly. So making
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decisions right means having a systematic process for making choices quickly,
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implementing them effectively, measuring the results, and adjusting course based
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on what you learn. And he's a perfect example that
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I mentioned last week Netflix when they decided to shift
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from DVD by mail to streaming. Was that the right decision? Well,
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we know now that it was, but at the time
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it was highly controversial. Many investors thought it was a mistake,
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and some customers were actually furious. But Netflix didn't wait
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until they were one hundred percent certain that this raming
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would work. They made the decision based on the information
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they had, and they implemented it decisively. They measured customer response,
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and they adjusted their approach on what they learned. That's
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making decisions right, not making the right decisions. So now
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let me share the second component, the eighty percent information principle.
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This principal state that you should make decisions when you
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have eighty percent of the information you think you need.
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Got one hundred Why eighty because the last twenty percent
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of information usually takes eighty percent of the time to gather,
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and by that time, you know it's a lost opportunity.
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And so I worked with a client who wanted to
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expand into new market. He spent four months researching demographics, competition,
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local regulations, customer preferences, just about everything you can think of,
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and by you know, that was admirable. But by the
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time he finished his research and felt he was ready
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to move, two competitors had already entered that same market
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and captured most of the early adopters. And here's what
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we should have done. We should have gathered the essential
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eighty percent of information in two weeks, made the decision
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to test the market with a small pilot and learned
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that we're amanding twenty percent through actual market experience through
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the testing. So the information you get from real customers
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spending real money is infinitely more valuable than theoretical research.
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I could not agree more with that. Now, Michael, look,
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this is really challenging conventional wisdom, and that's part of
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what we do here in the show. Right, Can you
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give us a practical framework for determining when we have
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that crucial eighty percent of information?