THIS ONE THING will Destroy Your Business

Summary

• Current success is often the root cause of future failure; avoid complacency to prevent business decline.
• Urgency and energy at the start of business should be maintained to sustain growth rather than settling into comfort.
• In 2019, I noticed Gym Launch plateaued, revealing complacency had set in among the team despite our success.
• Success often leads to a false sense of security; behaviors within the company must shift to counteract this.
• Act like a thermostat, setting the temperature, not a thermometer just reflecting it; drive the business rather than accept the status quo.
• To prevent business destruction, ensure your team has a sense of mission and urgency, focuses on results, and doesn't develop an inflated sense of market position.
• Instill a sense of urgency using the formula of purpose plus opposing force, all within stringent time frames.
• Promote a healthy skepticism; success is temporary without sustained effort and agility in business practices.
• Foster an action-oriented team culture that values aggressive attempts and learning from failures over passivity.
• Develop and maintain a gritty team attitude, encouraging pursuit of discomfort to better weather future challenges.
• Inspire through stories and focusing on the 'why' behind your business; maintain enthusiasm and vision despite setbacks.
• Remember that change is constant in business; never let current success hinder future innovation and drive.

Video

How To Take Action

I would suggest implementing an attitude of continuous learning and growth in your business. Never rest on your laurels because success can lead to complacency, and that's when businesses start to fail. Here's what you can do that's low cost but high value:

First, make sure you and your team stay hungry for success. Maintain the energy and urgency you had at the start of your business. Always be on the lookout for ways to improve, even when things seem to be going well.

Second, set clear, challenging goals with deadlines. This will help keep everyone on track and motivated. And remember, focus on results, not just activities. It's about what you accomplish, not just what you do.

Third, encourage your team to take risks and learn from their failures. Promote action over lengthy discussions. It's better to try and fail than to not try at all.

Fourth, keep your team inspired by reminding them of the "why" behind your business. Tell stories of challenges you've overcome and share the vision vividly.

To wrap up, here are four steps that are easy to start with:

1. Keep the Mission Clear: Remind your team of the company's purpose. It’s not just about the job — it's about the mission we're on together.
2. Challenge with Deadlines: Set deadlines for projects to instill urgency. Small timelines work best.
3. Measure Success by Results: Judge work by the outcomes, not just the effort.
4. Inspire Through Stories: Share stories that connect the team to the business's mission.

Always look ahead. Change is inevitable, so always seek innovation and growth. Don't let a current success stop you from reaching the next level.

Quotes by Leila Hormozi

"Success is temporary if we stop doing the actions that got us success in the first place"

– Leila Hormozi

"Purpose plus opposing force over time creates a sense of urgency"

– Leila Hormozi

"Healthy skepticism is understanding that what worked yesterday won't work tomorrow"

– Leila Hormozi

"Promote making aggressive over passive mistakes"

– Leila Hormozi

"Inspiration comes from focusing on the why not the how or the what"

– Leila Hormozi

Full Transcript

is how to destroy your business and remain complacent this is by far the biggest thing that I see when we're taking on portfolio companies is that people's current day success is exactly what creates their future failure as I want to break that down this video so that you can prevent yourself from destroying your business like so many do so what typically happens in a business is that when you start there's a ton of urgency there's a ton of energy and everyone's attacking it right like they're always acting with speed and then what happens is as your business continues to go up you gain success people start to feel a little more complacent they start to feel more comfortable and they start to kind of settle in and then what happens is what follows success and complacency is Decline and so this is what you typically see uh in the s-curve of a business people start to get comfortable they start to ask for more money more time off not people are attacking the urgency it takes you 10 times longer to get anything done and then eventually you're like why is my Revenue going down why is my profit going down and why do I have so many expenses when things are starting to decline and so that's what I really want to get into is explaining how that happens and how you can prevent it in your business so back in 2019 when I owned gym launch had exploded in early 2017 and for about two years everything was super easy and the reason it was easy is because we had a really good product Market fit and timing in the market and we also had great complementary skill sets between me and Alex and so honestly we got a little lucky and so 2019 I woke up one day and I was like what the hell is going on with this business we've been plateaued at the same revenue for the last like six months and though it was obviously really good and we were making a lot of money I felt like I wasn't making any progress and I looked at the team and I felt like everyone was really complacent people weren't acting quickly people were taking immense time off people weren't even getting a lot of work done even though they had no work on their plates and I was like what the hell is going on and what I didn't realize I started studying it I started studying the s-curves in business is that we weren't attacking the business like we were in the beginning essentially in the beginning of a business people have all this fear and insecurity because the business is not big yet it's not steady and so you're constantly speed attacking everything and what happens over time is that especially leadership it starts to get complacent because you feel like almost exhausted you're like we've just built this thing it's taken all this effort and then what happens is that it starts to see through to the rest of the organization and eventually you see a decline so if right now in your business you're plateaued typically what follows a plateau is a decline so I want to talk about how to not decline in business how to avoid that and how to reverse this cycle what you have to understand is that this is always stemming from the fact that you've gained success you see it all the time it's why people who lose weight gain the weight back it's why people who get a lot of money and get rich then eventually lose all that money it's because a lot of people change their behavior once they attain success and so what you have to understand is that this ultimately doesn't necessarily just stem from your product in the marketplace it stems from the behavior in your company so let's break that down there's a quote that I really like which is you can go through life as either a thermometer or a thermostat don't be a thermometer because if you're a thermometer you're just reflecting what's around you and just showing everybody whereas if you're a thermostat you are setting the temperature and controlling the room and so what happens a lot of the time is at the beginning or the thermostat we're constantly controlling the temperature and then over time we become a thermometer we're just checking the temperature we're not driving like we once were we're just accepting what is and a lot of times people just say ah you're right maybe I'll start another business maybe I'll do a side gig I'll get into real estate people start to get all these different interests from their business Plateau because they can't figure out how to grow it and what they don't realize is often not as simple as if you need a new product we need to do marketing we have to undo all the ingrained behaviors in our team that is now preventing us from scaling and getting any bigger the behaviors are the hardest part of change if you study change management changing the strategy the business the pricing the marketing even the product and the people you sell to is not nearly as hard as changing the ingrained behaviors that you've done for the last one two three four years in your team and have now settled in because changing someone's Behavior one person's alone think about how hard it is to change your own behavior think about changing hundreds of people's behavior that's exactly what you have to do and so the question is if you need to reset the thermostat if you're like Layla I feel like this is exactly what's happened is that we've gotten really successful people have gotten a little bit of an air about themselves a little bit of an ego and they fall into this place of complacency and you have to ask yourself this question if I wanted to destroy this business what would I do one I would make sure that everyone was just doing their job walking and clocking out rather than on admission trying to accomplish something big I would make it very transactional I pay you you do these things and then you leave I wouldn't want any of their ancillary time on the business the second I was I would say zero deadlines or sense of urgency for the team right it would just be like whenever you can get that done I know there's a lot on your plate there's no deadlines for driving tours I wouldn't have big strategic goals that we're going towards actually what I would do is I would say we've already accomplished our big goal and I would not think of a new one to drive a team forward the third is I would measure activity and not so if you look at complacent companies a lot of times what they do is they measure activity that people are doing rather than the results people are getting and so that's why we do I'm focusing all on the activity how many hours are you working I wouldn't focus at all on the results people are driving and then the last I would create a false sense of urgency within my team about how well we're doing in the market I would continue to tell them oh we're the marketplace leader you don't need to worry we're going to do great this business around for Long Haul I would constantly reassure them rather than telling them the truth and so the question really is what's the opposite of that the first thing that's the opposite of that is that I would make sure everyone's on a mission if somebody in your company is not on a mission if they're clocking and clocking out you can be sure that they're not effective in their job and they're certainly not giving it the extra oomph that many other people would that would help you drive towards your goals right so that's the first and foremost is you've got to make sure everybody's on the same Mission the second is you've got to challenge your team with deadlines you got to challenge your team with targets if you don't challenge your team they're always going to remain stagnant this starts with the leader if your team is stagnating which means your business is stagnating you have to challenge them with doing more than they've been doing and you've got to set a new thermostat for them we're no longer remaining complacent we're now challenging ourselves the third is that you would measure success by results so no longer are we just measuring someone's success by are they feeling the seat and talking and clocking out get the hours done we're measuring people purely upon results we're probably going to show that to the whole company and hold everyone accountable to each other and the last thing that we would do is we wouldn't get an ego about ourselves and we would remember that every single competitor is constantly waiting for us to us to slip up so they can take our market share and so what is this really that we're trying to instill your business we're trying to instill a sense of urgency because what happens is that when you become successful urgency goes down and so how do you instill urgency there's really a formula behind this urgency is really purpose plus opposing force over time so I want to break that down piece by piece you can understand what I mean by that purpose is the reason that your company exists it's the mission that you're on so you have to have purpose now in order for there to be any sense of urgency over purpose we need an opposing Force which is looking at maybe it's Trends in the marketplace maybe it's a competitor maybe it's industry Trends maybe it's the economy in general there's some kind of opposing force that you're working against and then that is above time which is the amount of pressure that you're putting on so the way that you measure time in your company whether that's days weeks months is going to be what's going to set the tone for all this because you can have purpose you could have an opposing Force but if every time you say that you need something from someone you say get it to me next week things are going to move slow in your company and so you have to have the increment of time being measured in a smaller way in order to get that sense of urgency so there's really four elements that you can instill in your company to create more of a sense of urgency and ultimately get past a plateau and actually grow your company the first one is a healthy skepticism healthy skepticism is the understanding that success is temporary if we stop doing the actions that got us success in the first place a lot of teams when they reach that first goal because a lot of times you set out as a Founder you have the one big goal and then you crush it and then you don't set another goal and then you can't think you're like oh I don't know what the next goal is like I don't know you basically run out of vision when you do that you give people a sense of Pride that they wouldn't otherwise have but what you need to do is you need to give them healthy skepticism you need them to understand that things aren't always going to be this way that will follow success is usually failure in seasons of tough time you want to understand that success can be temporary but that success will definitely be longer if we still act like we're not successful when we are it's understanding that what worked yesterday won't work tomorrow so what you're doing right now for your marketing that's not going to work in four months five months six months a year from now same with how you sell the way that you sell the people that you're selling to it's going to change in the next six to 12 months and so it's understanding that you always want to be proactive because if you're skeptical that things are remaining this way then you're constantly going to be looking forward trying to figure out what you can do to innovate so you don't misstep when those things occur the second is you want people to be action oriented so here's what happens over time is that you get successful and you gain a certain amount of success and then you tend to talk more than you do as a company it's like everything needs a meeting everything needs to be discussed everything has to be run by 17 different people and that's what tends to happen over time is you actually let operations drag you down rather than Propel you forward and so if you want to get back to being action oriented you've got to prioritize doing over talking and so what you want to promote your company is for people to make aggressive overpassive mistakes aggressive mistakes are telling people that it's okay to fail you expect them to fail because you as a Founder fail and it's okay to do that you would prefer they fail trying something then fail by not trying something so if you see that the people that you're selling to the Avatar is changing the Market's changing then it's saying hey I prefer that you try 12 different tests and say we lose money sure but like at least you're trying than just waiting until eventually sales go from 10 sales a week to five sales a week to two sales a week and then finally you like now we have to do something otherwise we're gonna go out of business you want people that can make aggressive mistakes not passive mistakes and then the last piece of that is we've got to correct quickly and don't dwell on it people who dwell on their mistakes tend to slow down the business because we spend all this time dwelling on the mistake that we made rather than taking that energy in time and putting it into creating a solution for the business to drive us forward and get past that and now the third thing that you can do is you've got to be gritty here's what happens and I can tell you this happened in our company in Bim launch and we had to completely redo the culture is that as soon as we got a certain amount of success like I told you in 2019 everyone got soft and I was like I don't understand what's going on and I thought to myself oh well we're not even there yet there's not enough success but because we were the market leader and it was so obvious like the stark contrast between us and our competitors people got soft they got lazy they got complacent and so you have to instill a sense of grittiness in your team again what you can do with that is essentially pursuing discomfort as a team so you want to constantly be putting your team in a place of discomfort whether that's trying new things whether that's you know giving each other feedback consistently whether that's doing new courses whatever it is put them in a place of discomfort even when that department doesn't specifically need to be we want to condition people to always be in discomfort so that when it's needed we can act upon it and rather than that if they're not able to do that then they just remain complacent and by the time you need people to get uncomfortable to make something move they can't do it now the last piece that can Propel your team forward rather than stagnating over time and eventually declining his inspiration emotion drives action more than logic and so what a lot of people lose over time is the founder in the beginning is so excited about everything they're so driven they're excited about the product they're excited about the market they're kind of in that like uninformed optimism period and then what happens is that they start to see the from the business because here's the thing every business sucks once you've been doing it long enough that's what I like to tell people you finally find out what sucks about that business and so once you're in it long enough you find out what sucks what you can't do is let that degrade your vision and inspiration to the team you have to create different ways to stay inspired so that you can translate that to the team and you can drive people forward so they're excited to work every day and so a lot of the way that you can do this is I always tell people you want to speak in stories when you're talking your team and you're trying to excite them about the future speak in stories rather than using the hard facts and presenting the data and the analytics and the charts like that stuff's good as evidence but people learn through stories and people's beliefs are broken through stories and so a lot of what I would do when I was growing gym launch is go back and pull from Howard Schultz from Jeff Bezos from inspiring stories from other entrepreneurs who are maybe going going through we were going through in our business and I would talk about what they did and how they overcame it and all these things and I would bring that back to us and say aren't we capable of doing the same we're capable of being just as great as they are and so that's how you can Inspire team it's just number one speak through story the last thing I'll say about inspiration is that inspiration comes from focusing on the why not the how or even the what it's focusing on why we're doing what we're doing because we want to be an example of greatness because we want to beat the odds because we want to be an example of what's possible whatever that is for you repeating that over and over again and reminding people of who they are if you're on this team you are this you are an example of greatness you are an extension of us trying to be great and so it's constantly reminding people of that and speaking belief into them when they maybe don't have it for themselves so here's what I'll end with as of right now 460 of 500 Fortune 500 companies are no longer on the list that were 50 years ago the amount that stayed in business for hundreds of years was much higher and so what you see is that the rate of change in business now is so fast we can't afford to remain complacent we also can't afford to let present-day success us great future failure and so I would share this video with my team I would embed it in your mind and I would understand that if you feel good right now if you feel complacent right now if you feel like things are easy right now hit the gas [Music]