Google’s parent company, Alphabet, contains 12 different businesses, but Google accounts for about 85% of all revenue and it’s the only one that makes money. Elon Musk owns or is active in at least five businesses, including Tesla, but only one (Space X, a private firm) may be turning a profit.
What gives? Why pour time and money into losing efforts when you already have a winner? It could be that Alphabet and Musk are so beyond Maslow’s Hierarchy of Needs that they don’t care about losing millions in various “hobbies.” Lifestyle is their driver.
What is your driver, your focus? Why are you investing time and money in certain areas of your business and not in others? I have deep belief in the human spirit–that we will get what we are driving for, it’s just a matter of when. I don’t mean just casual goals or resolutions here; I mean those goals that you are and will continue to “climb the mountain” to achieve. The things for which you will do whatever it takes.
Just be careful in that effort because, like throwing a rock into a pond, your driving motivation will have consequences—for you, your family, and your team. VW was committed to becoming the highest car seller in the U.S. market. That was its focus, its “why.” Along that journey, cheating on diesel emissions became acceptable because it helped VW get closer to its goal. In our world, marriages have been ruined by those driven by business success, and businesses have been ruined by leaders chasing that next “big thing.”
When you pick the direction for you and your business, start by determining your primary driver. It could be lifestyle (balanced life, family time, doing what you enjoy), equity (a business built for the long term/value), or income (maximized net income each year). We all care about each of these, but pick the one that is most important to you over the next two to four years. This is the biggest challenge I have seen with remodeling practices trying to become businesses.
If you want to maximize annual net income, it is best to stay smaller and avoid the overhead of building a leadership team, paying sales commissions, and developing a business infrastructure. If you want to build a business that has equity or that will allow you a better lifestyle, then you have to invest in team members and sacrifice on annual net income
From there, pick the primary driver/focus for your business. It needs to inspire and motivate you and your team. And it needs to align with your personal goal; if you have prioritized “lifestyle,” expect to compromise business returns because you’ll have to work a little less, invest in a management team, etc.
Then, develop your road map to head in your chosen direction. What efforts/businesses should you continue to invest in versus those which should be terminated? Think through team members, processes, and policies. What are required or acceptable business returns?
Focus. Without it, we are in the dark and success will be elusive. Without focus, our time, money, and resources will not be utilized to their fullest extent. Without focus, our clients won’t feel our depth of commitment; they can smell it. And focus starts by knowing our true driver (lifestyle, equity, or income) and developing our business, our team, and our goals from that foundation.
