22
Too Smart for Your Own Good
THE WEIRD THING is that sometimes, the more successful you are and the more talents you have, the harder it is to run a business. This may seem counterintuitive. If you are super smart, motivated, and talented, then you would logically be the best possible candidate for entrepreneurship, right? Unfortunately, this is often not the case because you are always going to be better at doing every job than your employees.
The “smart people” problem starts back in school—definitely in college, sometimes in high school and depending on your school system, even as far back as junior high, when teachers first assign the dreaded “group projects.” Knowing the 80/20 rule (80 percent of all work is done by 20 percent of the people), what do you think happens in every group project? The smartest and most talented people in each group do the lion’s share of the work. They don’t want to risk their grade in the class by dividing the work equally, and just hoping that Timmy (the guy who is absent from class two days a week on average and sleeps through class on the other three days) does his part well, if he remembers to do it at all. In school, there isn’t any benefit in trying to get Timmy up to speed quickly. Forget that. No, the smart people just take over and do the whole project themselves.
And thus begins the smart people work cycle. The smartest people do just about everything better than most everyone else. They write better, plan better, reason better, and sometimes, even look better. They are better, until it comes to running a business. Then they are not better—they are screwed. There are only twenty-four hours in each day, and a person does need to sleep, eat, shower, and do certain other things. So, each day this smart person tries to do everything himself, because he can’t stand someone else doing a job badly. Then, he is stuck with the one-man-band “job-business” with no way to grow.
It is interesting to note that some of the slackers—some of the people who knew best to surround themselves with smart people who would do the work—are better-suited for entrepreneurship than the smart people themselves. They know how to delegate and sometimes, how to manipulate other people into doing things that they don’t want to do.
Ideally, the smart people would just be able to convey their talents. But since the smart people are so used to doing everything themselves, they don’t learn the key skills to make their businesses successful, including automating and delegating as many tasks as possible. As a smart person, you need to use your smarts and talents to boil down their essence in an easy-to-follow format that even a monkey can replicate. (See “Recommendation” at the end of the chapter for a book on this.)
Also, smart and talented people often have a flair for the unusual, complicated, or different. They don’t like to follow the KISS principle (Keep It Simple, Stupid), which is required to make a business succeed. If you think of the assembly line in a fantastic manufacturing plant, or the global presence of McDonald’s, they both seem complex, but in reality, they are a series of incredibly simple functions. Every single task is broken down into easy-to-follow steps. The assembly line worker repeatedly performs a few tasks that are specifically defined. So does the McDonald’s cook, cashier, and drive-through order taker. There is little input from these individuals, as everything has been standardized for them.
In fact, some of the largest, most successful businesses in the world are staffed not by the smart people but, in large part, by regular, average, and sometimes, stupid people. These successful entities have just a few people who are smart enough to standardize, automate, and delegate the majority of the tasks in a way that can’t be screwed up by their average employees.
So, being smart or talented isn’t going to help you unless you can use those smarts to figure out a way to simplify those tasks that will make a business successful. This isn’t easy, because it goes against everything you have ever done and is counter to how you were taught to think. However, it is necessary for a business to succeed, and it is why smarts and talent alone don’t predict entrepreneurial success.
The Smarter You Are, the Bigger the Opportunity Cost
The other issue with the smart people starting businesses is that smart people have the most to lose. The smarter you are, unless you have the social graces of a wild ape, the more options you have available to you. You have the ability to make a lot of money in a variety of fields and have room in your career for promotions and raises. This means that when you start a business, you have a lot more to risk than someone who makes less money and has fewer career options. This is often referred to as the “golden handcuffs” dilemma. Because you have more to risk, this means that you need to have a business opportunity that is going to provide an even bigger reward for it to be worth it to you.
If you currently make $250,000 a year (or have an opportunity to do so), your business is going to have to be five times more successful than the business of someone making $50,000 a year to get the same return. Additionally, it is a lot harder to establish a business that will double your yearly profit when you make $250,000 a year than if you make $50,000 a year.
So, with the most to lose, a wide range of other options available, and the penchant for more intricate, complex endeavors, don’t be surprised when the valedictorian of your high school keeps his day job and it is one of the more average students that finds success (or at least tries to find success) in his own business.
EXERCISE 14
TARGET FOCUS—OPPORTUNITY:
Is Your Business Scalable?
Write down your answers to the following questions:
- Does your business model require you to be doing the bulk of the work because of your “own special flair”?
- Can you simplify the business to teach others to do what you do and still provide outstanding value to your customers?
- Can you automate your business process?
- If you delegate work, can you still manage and stay aware of what others are doing (i.e., not abdicate when you delegate, not out-of-sight, out-of-mind)?
If you answered yes to question one and no to any of the other questions, your business is not scalable and will fall into a jobbie or job-business category (as discussed in section 2A). At this point, you may want to retool your current business model. If you are set on evaluating this particular business model as it stands, use your awareness of the additional risks associated with jobbies and job-businesses as part of your evaluation of the overall risks and rewards of the business.
RECOMMENDATION
To gain some different perspectives on and insights into automating and delegating in your business, you may want to reference Tim Ferriss’s The 4-Hour Workweek and again, Michael E. Gerber’s The E-Myth Revisited.