SELF ESTEEM IS THE FOUNDATION OF EXCELLENCE IN BUSINESS AND PERSONAL RELATIONSHIPS. SELF ESTEEM IS THE FOUNDATION TO EVERYTHING THAT’S GOOD AND UNFORTUNATELY MOST PEOPLE DON’T HAVE MUCH.
Dan Pena’s QLA Model gives out 7 steps to super success that you can take to create quantum wealth for yourself. I have summarized all the seven steps with great precision. This is the FOURTH STEP of a series of steps I have shared on CREATEQUANTUMWEALTH.COM [my website]. Subscribe to the newsletter of my website for all the notes of all the 7 steps to super success, and for more wealth creation tips.
STEP FOUR: Creating your dream team in business and life
DREAM TEAM IS TWOFOLD:
- THE PEOPLE THAT ARE DIRECTLY IN YOUR ORGANIZATION
- THE PEOPLE THAT REPRESENT YOU OUTSIDE [LAWYERS/ACCOUNTANTS]
WITHOUT EFFECTIVELY UNDERSTANDING HOW YOU CREATE YOUR DREAM TEAM, YOU CAN’T ACCOMPLISH QLA BECAUSE YOU CANNOT DO IT ALONE. IT IS IMPOSSIBLE TO DO IT ALONE.
INTERNAL DREAM TEAM
MOST GREAT LEADERS BEGIN IN THE CAPACITY OF FOLLOWERS. THEY BECOME GREAT LEADERS BECAUSE THEY WERE INTELLIGENT FOLLOWERS.
ANOTHER REQUISITE TO BE A HIGH-PERFORMANCE PERSON IS TO BE A LEADER OF PERSONS, INDIVIDUALS, MEN, WOMEN, AND CHILDREN. NONE OF THE HIGH-PERFORMANCE PEOPLE LIKE STEVE JOBS, BILL GATES, ROSS PEROT, LEE IACOCCA, JOHN SCULLEY, ANDREW CARNEGIE, RICK SCOTT, AND OTHERS ARE LEADERS. THEY ARE NOT MANAGERS OR SYSTEMS PEOPLE OR ADMINISTRATORS.
YOUR PEOPLE WANT YOU TO LEAD. THEY WANT TO BE LED. THEY WANT TO STAY IN COMFORT, SOFT, WARM, AND CUDDLY, LIKE A BABY KANGAROO. THEY DON’T WANT YOU TO TELL THEM THE DOUBTS YOU HAVE. THEY DON’T WANT TO HEAR THAT CASHFLOW IS SHORT. THEY DON’T WANT TO KNOW THAT THEY CAN’T BUT THAT OTHER HOUSE AT THE LAKE. THEY WANT TO HEAR: “EVERYTHING’S GREAT. WE’RE BUYING ANOTHER COMPANY.” THEY DON’T WANT TO HEAR THE BAD NEWS AND YET YOU KEEP ON HEAPING IT ON THEM. THEY WANT TO BELIEVE IN THE GOOD STUFF. AND IT’S OUR JOB TO HELP THEM SEE THAT THAT’S THEIR REALITY. THAT’S WHY YOU DON’T SHARE DOUBTS.
IT’S LONELY AT THE TOP.
HOW TO BE A LEADER?
TO BE A LEADER, FIRST LEARN TO MANAGE YOURSELF. USE DISCIPLINE AND CREATIVITY TO REALLY GET THE JOB DONE. MOST PEOPLE DON’T KNOW HOW TO MANAGE THEMSELVES, LET ALONE ANYBODY ELSE. YOU GOT TO BE ABLE TO TAKE CARE OF YOURSELF. THAT’S WHY MOST PARENTS ARE SO LOUSY AT BEING PARENTS BECAUSE THEY CAN’T MANAGE THEMSELVES. HOW CAN THEY MANAGE A LITTLE KID’S LIFE?
A HIGH-PERFORMANCE PERSON IS LIKE A RIDER TO A BUNKING BRONCO.
YOU SHOULD ALWAYS HAVE ONE OR TWO PEOPLE TRAINING TO TAKE YOUR JOB. DAN WANTED AT LEAST FOUR TO FIVE SUCH PEOPLE AROUND WHO CAN CUT HIS HEAD OFF OR STAB HIM IN THE BACK. HE ALWAYS HAD FOUR TO FIVE GUYS WORKING WITH HIM WHO WERE SMARTER THAN HIM, HAD BETTER EDUCATION THAN HIM, AND HUNGRIER THAN HIM. IT’S MOTIVATING TO DAN.
YOU HAVE TO GET COMFORTABLE WITH YOURSELF.
THE FIRST METHOD OF ESTIMATING THE INTELLIGENCE OF A RULER IS TO LOOK AT THE MEN HE HAS SURROUNDED HIMSELF WITH.
MOST OF YOU HAVE MORONS WORKING FOR YOU. DAN HAS THE BRIGHTEST, MOST AGGRESSIVE, CUNNING, HIGH-PRICED EMPLOYEES WORKING FOR HIM. FOUR TO FIVE OF HIS GUYS COULD EASILY BE CEOs OF A MAJOR CORPORATION.
WITH BIG MONEY COMES BIG PROBLEMS.
IF YOU TELL THEM, THEY’LL FORGET IT. IF YOU SHOW THEM, THEY’LL FORGET IT. BUT IF YOU INVOLVE THEM, THEY’LL UNDERSTAND. THAT’S WHY DAN ALLOWS PEOPLE TO MAKE MISTAKES.
YOU DO NOT LEAD BY HITTING PEOPLE OVER THE HEAD. THAT’S ASSAULT. THAT’S NOT LEADERSHIP.
YOU LEAD FROM THE FRONT. YOUR PEOPLE WANT YOU TO LEAD FROM THE FRONT. THEY DON’T WANT YOU TO LEAD FROM THE BACK. THE MORE SUCCESSFUL YOU ARE, THE MORE SUCCESSFUL THEY’LL WANT TO BE. YOU HAVE TO LEAD FROM THE FRONT.
IF ANYTHING GOES BAD, SAY “I DID IT”.
IF ANYTHING GOES SEMI-GOOD, SAY “WE DID IT”.
IF ANYTHING GOES REALLY GOOD, SAY “THEY DID IT”.
THERE IS NOT ENOUGH LEADERSHIP IN MANAGEMENT ANYMORE BECAUSE AN ENTREPRENEUR IS BASICALLY A LEADER.
TRANSITION: FROM ENTREPRENEUR TO MANAGER TO LEADER.
LEADERSHIP IS NOT ONLY AT THE CEO POSITION. LEADERSHIP HAS TO BE THROUGHOUT THE POSITIONS, DOWN TO MIDDLE MANAGEMENT. THERE ARE NOT ENOUGH LEADERS IN CORPORATE WORLD ANYMORE. OTHER THAN THE HEAD GUYS, THERE AREN’T ANY CORPORATE LEADERS.
MOST RUN THEIR ORGANIZATIONS USING THE TOP MANAGEMENT SCALE, THAT IS: ONE PERSON IN TEN PEOPLE REPORT TO HIM.
DAN’S JUDGEMENT: YOU CAN HAVE ONLY 2 OR 3 PEOPLE MAX REPORTING TO YOU. NOBODY DOWN THE LINE ALSO HAD MORE THAN TWO PEOPLE REPORTING TO HIM. YOU CAN’T PHYSICALLY KEEP ON TOP WHEN THERE ARE MORE THAN 2 TO 3 PEOPLE REPORTING TO YOU.
BY DEFINITION, WE ALL GROW GEOMETRICALLY WHEN WE START THE BUSINESS. WE FORGET HOW TO DO THAT. WE LOSE PASSION. BECAUSE OF SATIATION AND LOW EXPECTATIONS, IT FLATTENS OUT.
AND WHEN YOU GO FROM ZERO EMPLOYEES TO ONE OR TWO EMPLOYEES, YOU BECOME A MANAGER. YOU LEARN TO MANAGE IN A HALF-ASSED WAY AND YOU’RE MANAGING SOME PEOPLE.
THEN YOU FACE A CROSSROADS: YOU ARE EITHER GOING TO BECOME A LEADER OR YOU STAY THE SAME AS A MANAGER, OR YOU STAY AN ENTREPRENEUR AND YOU DROWN.
SOME OF YOU ARE BETTER BRINGING IN A PROFESSIONAL MANAGER AND WALKING AWAY FROM YOUR COMPANY AND NEVER LOOKING BACK.
THE MORE SELF ESTEEM YOU GIVE OTHERS, THE MORE YOU HAVE. THE MORE SELF ESTEEM YOU HAVE, THE EASIER IT IS TO GIVE.
DAN ALLOWS HIS EMPLOYEES TO MAKE MISTAKES BECAUSE HE KNOWS THAT HE CAN UNDO THOSE MISTAKES. HE IS CONFIDENT ABOUT IT.
SELF ESTEEM IS THE FOUNDATION OF EXCELLENCE IN BUSINESS AND PERSONAL RELATIONSHIPS. SELF ESTEEM IS THE FOUNDATION TO EVERYTHING THAT’S GOOD AND UNFORTUNATELY MOST PEOPLE DON’T HAVE MUCH.
ANDREW CARNEGIE’S FOUR RULES FOR SUPER SUCCESS:
- FINANCIAL MOTIVE MUST PREVAIL
- NEVER REPRIMAND EMPLOYEES, INSTEAD, ASK THEM QUESTIONS REVELING THEIR OWN FAULTS
- ONE OR MORE MEN TRAINING FOR HIS JOB
- NEVER MAKE DECISIONS FOR EMPLOYEES. ALLOW THEM TO MAKE THEIR OWN AND GIVE THEM THE RESPONSIBILITY AND AUTHORITY TO IMPLEMENT THEIR OWN ACTIONS
EXTERNAL DREAM TEAM
IN ORDER TO REALLY SUCCEED IN BUSINESS, YOU NEED OUTSIDE ADVISORS. THESE ADVISORS MUST BE TRUSTED ADVISORS. TO HAVE TRUSTED ADVISORS, YOU NEED TO HAVE A VERY SPECIAL RELATIONSHIP WITH SOMEONE AT THE FIRM. YOU NEED A MOLE. THE PERFECT MOLE IS SOMEONE WHO IS MOTIVATED, AGGRESSIVE, AMBITIOUS, BUT NOT AS BRIGHT AS HE OR SHE THINKS. AND WHEN DEALING WITH THE OPINIONATED OR EGOTISTICAL, ALWAYS GIVE THEM CREDIT WHERE CREDIT IS NOT DUE.
IN YOUR DREAM TEAM, YOU NEED A LAWYER, AN ACCOUNTANT, AND A BANKER TO START WITH.
LAWYERS
YOU CANNOT EFFECTIVELY GROW YOUR BUSINESS WITHOUT A FIRST-CLASS ATTORNEY/LAW FIRM. IMPOSSIBLE. IF YOU’RE A SUPERSTAR, ROCK STAR, BASEBALL PLAYER, YOU CANNOT EFFECTIVELY GROW YOUR CAREER WITHOUT A FIRST CLASS ATTORNEY/ LAW FIRM.
DAN HAS 3 LAW FIRMS THAT REPRESENT HIM. HE HAS ALWAYS HAD BIG TIME LAW FIRMS EVEN WHEN HE COULDN’T AFFORD THEM. WHAT DAN DOES IS HE FINDS ONE OR TWO YOUNG ASSOCIATES THAT WAS NORMALLY ONE OR TWO YEARS FROM PARTNERSHIP [MAN OR WOMAN PARTNER]. HE MAKES SURE TO HELP THEM GET PROMOTED AHEAD OF THE CURVE. HE GIVES THEM ALL THE LEGITIMATE BUSINESS THAT HE HAS. HE DOESN’T SPREAD IT AROUND, AND HE MAKES SURE THEY KNOW HE KNOWS THEY GOT PROMOTED BECAUSE OF HIM AND HE MAKES SURE THAT THE FIRM KNOWS THAT THEY GOT PROMOTED AHEAD OF THE CURVE BECAUSE OF HIM. THEN DAN OWNS THEM. AND IF THEY CHANGE FIRMS, DAN GOES WITH THEM.
DO THE SAME AT A BIG ACCOUNTING FIRM.
ACCOUNTANTS
BANKS LAUGH AT THE NUMBERS YOU SHOW THEM FROM A DOOFUS ACCOUNTANT. IT’S MUCH EASIER TO BORROW MONEY AND HAVE FINANCIAL INSTITUTIONS IN YOUR CAMP WHEN YOU HAVE NUMBERS THAT ARE RESPECTED.
THAT’S WHY YOU NEED TO HIRE A BIG ACCOUNTING FIRM.
ALSO, WHEN YOU SUE THE ACCOUNTING FIRM FOR MALPRACTICE IF THEY SCREW UP, THEY GOT TO HAVE SOME MONEY. SO IT’S A DEFENSIVE MEASURE AS WELL.
DAN HAS NEVER HAD TO SUE HIS LAWYERS OR HIS ACCOUNTANTS. HE HAS THREATENED TO DO SO, BUT HASN’T SUED.
DAN NEVER ARGUED FEES OVER GETTING DEALS. WHEN HE NEEDED OPINIONS TO GET THE DEALS DONE, HE NEVER ARGUED FEES. THEY KNOW HE DOESN’T ARGUE. THEY APPRECIATE HE DOESN’T ARGUE AND HE GOT ALL HIS DEALS DONE AND GOT ALL HIS OPINIONS IN A TIMELY FASHION.
ANY FEE THAT YOU PAY FOR A TRANSACTION THAT DOESN’T GO THROUGH IS TOO MUCH. ALMOST NO FEE IS TOO MUCH IF YOU GET THE DEAL DONE BECAUSE YOU JUST WRAP IT INTO THE DEAL. YOU CAPITALIZE IT.
BANKS
YOU FIND A BANK. IF YOU’RE DOING BUSINESS WITH A BANK THAT CAN’T TAKE YOU TO THE NEXT LEVEL, YOU’RE DESTINED TO NOT HAVING GEOMETRIC GROWTH. YOU SHOULD BE DOING BUSINESS WITH AT LEAST A BANK THAT CAN TAKE YOU TO THE NEXT LEVEL.
DAN ALWAYS ASKED BANKS THREE TO FOUR TIMES MORE MONEY THAN HE NEEDED. ALWAYS.
HERE TOO, IF A SENIOR LENDING OFFICER GOES TO ANOTHER BANK, WHICH IS A MORE UPMARKET BANK, YOU GO WITH HIM. IT DOESN’T MATTER THAT YOU’VE BEEN WITH A BANK FOR 10 YEARS. WHEN YOU GO WITH THAT BANKER, YOUR TRACK RECORD GOES WITH YOU.
WHY DO PEOPLE BORROW MONEY AT THE END OF THE YEAR? WHY DO ALL THESE DEALS GET DONE AT THE END OF THE YEAR? IT’S BECAUSE THAT’S WHEN BONUSES ARE PAID. IT’ A LOT EASIER. WHEN THE BANKER HASN’T DONE ANY TRANSACTIONS FOR THE FIRST 9 MONTHS OF THE YEAR AND YOU BRING THEM A DEAL, THEY’RE NOT AS CAREFUL.
YOU CAN’T GO TO THE NEXT LEVEL WITHOUT A SUPPORTIVE LAW FIRM, A SUPPORTIVE ACCOUNTING FIRM, AND A SUPPORTIVE BANK. IMPOSSIBLE.
LOOK OUT FOR BANKS ADVERTISING FOR BUSINESS LOANS & JUMP AT THEM. EXAMPLE: LOS ANGELES BUSINESS JOURNAL [BANKING & FINANCE SECTION]. EVERY CITY HAS SUCH ADVERTISEMENTS.
DAN WENT TO “WHEREVER IN THE WORLD THEY WERE LENDING MONEY” TO GET THE MONEY HE WANTED TO DO HIS DEALS. THERE IS SOMEONE STUPID ENOUGH TO LOAN YOU MONEY FOR YOUR DEAL SOMEWHERE IN THE WORLD.
IT’S JUST A MATTER OF KNOCKING OUT ENOUGH DOORS. IT’S VERY MUCH LIKE HOW YOU APPLY FOR JOBS. IF YOU SEND YOUR RESUME TO 30 TO 50 ORGANIZATIONS, YOU MIGHT NOT GET ANY RESPONSE. BUT IF YOU SEND YOUR RESUME TO 700 ORGANIZATIONS, YOU WILL GET AT LEAST ONE JOB OFFER. IT’S A NUMBERS GAME. DAN HAD PERSONALLY GIVEN AT LEAST 300 TO 350 PERSONAL ONE-ON-ONE BAN FINANCIAL INSTITUTIONS PRESENTATIONS. HE CALLED BANKS FROM ALL OVER THE WORLD IN 40 TO 50 STATES. HE ALWAYS GOT MONEY. THERE’S SOMEONE MORONIC ENOUGH TO GIVE YOU WHAT YOU NEED. YOU CAN’T GET THE MONEY BECAUSE YOU DON’T WANT IT BAD ENOUGH.
YOU GOT TO MAKE THE CALLS. YOU GOT TO GO SEE PEOPLE.
EVEN BAD DEALS GET FINANCED BECAUSE BANKS HAVE TO GET THE MONEY OUT.
GO TO YOUR BANK YOU’RE ALREADY DOING BUSINESS WITH AND SHOW THEM THE FINANCE DEAL THAT YOU’RE GOING TO TRANSACT TO BUY A NEW COMPANY. AND BECAUSE THEY DON’T WANT TO LOSE THE BANKING RELATIONSHIP, THEY WILL BE WILLING TO GIVE YOU MORE MONEY ON A BAD DEAL JUST SO YOU CAN KEEP THE BANKING RELATIONSHIP.
HOW TO GET THE MONEY WITH ZERO COLLATERAL OR SECURITY?
YOU HAVE TO CALL A LOT OF BANKERS. CALL EVERY BANK THAT IS ADVERTISING FOR LOANS. MAKE 50 TO 100 PRESENTATIONS. TELL THEM ABOUT YOUR IDEA. TELL THEM: “I DON’T HAVE ANY TRACK RECORD. I HAVE NO ASSETS. I AM WILLING TO PUT ALL RECEIVABLES. I AM WILLING TO SIGN THE STOCK OF THE COMPANY. PLUS THE PERSONAL GUARANTEE. I NEED TO BORROW _____ THOUSANDS/ MILLIONS [FILL YOUR AMOUNT]”. YOU WILL FIND SOMEONE THAT WILL DO IT.
SELL THE SHIT OUT OF IT WITH ENTHUSIASM. DON’T EVER GIVE UP.
HOW TO GET RID OF YOUR TEAM?
WHEN YOU GET RID OF SOMEONE, NEVER GIVE THEM A HOOK BACK WITH WHICH TO GET BACK IN. ALWAYS MAKE IT CLEAN AND DEFINABLE. NO WAY FOR THEM TO BE BACK IN THE DEAL. ESCORT THEM OUT.
HOW TO STRUCTURE AN EQUITY POSITION AND NOT PUT THEM IN A POSITION OF CONTROL?
YOU HAVE TO TAKE SOME RISK. IF YOU ARE A MINORITY SHAREHOLDER IN A COMPANY, YOUR RIGHTS ARE ALMOST NOTHING, CLOSE TO ZERO. THE ONLY RIGHTS THEY HAVE ARE UPON LIQUIDATION IF YOU EVER LIQUIDATE. OR YOU CAN EASILY BUY THEIR SHARE BACK.
YOU WILL NEVER GET MORE OUT OF AN EMPLOYEE UNLESS WHEN THEY BECOME THE PARTNERS.
ALWAYS REFER TO YOUR EMPLOYEES AS PARTNERS. IT’S A VERY EFFECTIVE WAY TO BOOST MORALE, NOT JUST FOR THE PEOPLE THAT YOU’VE GIVEN THE EQUITY TO, BUT ALL THE PEOPLE ASPIRING UP THE LINE.
BUT WHEN YOU GET RID OF THEM, MAKE IT FINAL AND DEFINITIVE.
IF YOU WANT TO MAKE A LOT OF MONEY, YOU GOT TO GIVE THEM A LOT OF EQUITY. NEVER ASK FOR MONEY FROM THEM. DAN HAS GIVEN AS MUCH AS 40% EQUITY.
IT IS THE MOST DIFFICULT THING TO DO FOR MOST OF THE CEOs TO GIVE AWAY THEIR EQUITY TO THEIR EMPLOYEES. DAN FINDS IT IS THE EASIEST THING FOR HIM TO DO AS IT BOOSTS GROWTH OF THE COMPANY. WHEN DAN GIVES AWAY HIS EQUITY TO HIS GUYS, THESE GUYS WOULD DIE FOR HIM.
EVEN IF YOU GIVE AWAY 10% EQUITY TO THE WRONG PEOPLE, IT MEANS NOTHING. THEIR RIGHTS ARE NOTHING.
WHEN YOU’RE GOING TO SELL THE COMPANY, IT MEANS A LOT FOR THE SHAREHOLDERS. YOU MAKE IT EASY FOR THEM.
IT’S EASIER TO DO IT WITH:
- NO HANDS ON MANAGEMENT
- NOT LOOKING AT THE PAPERS FOR NUMBERS
ANOTHER EQUIVALENT OF EQUITY TO GIVE AWAY IS SUBSIDIARY COMPANIES OF YOUR PRIVATE COMPANY.
YOU DON’T GET PAID FOR WHAT YOU DO. YOU GET PAID FOR WHAT YOU GET PEOPLE TO DO FOR YOU. AND IT’S A LOT EASIER TO GET PEOPLE TO DO STUFF IF THEY OWN PART OF THE COMPANY, AND THEY OWN PART OF THE DEAL.
DAN HAS AN EQUITY POOL IN WHICH HIS ASSISTANTS HAVE 5% OF EVERYTHING HE OWNS, INCLUDING ALL THE COMPANIES.
YOU CAN’T MAKE A MISTAKE GIVING AWAY EQUITY. IT’S ALWAYS THE RIGHT DECISION. BUT WE’RE TRAINED BY THE PRECONDITIONED THINKING THAT SAYS “WHY AM I GIVING 5% WHEN I DON’T HAVE TO. THE POOR BASTARD WORKS FOR YOU ANYWAY.” YOU DO IT BECAUSE THEN YOU DON’T HAVE TO WORK. THAT ALLOWS YOU THE FREEDOM OF DOING MORE BUSINESS OR NOT. THAT’S YOUR CHOICE. IT ALLOWS FREEDOM IN YOUR LIFESTYLE.
WHAT TO DO WHEN AN EMPLOYEE EXITS THE COMPANY?
THESE ARE THE WAYS TO DEAL WITH THIS SITUATION:
- TELL THEM THAT THEIR MINORITY INTEREST IN THE COMPANY IS NOT WORTH ANYTHING TO YOU.
- MAKE A BUYBACK AT THE BOOK VALUE
- FIRE THEM WITH A DOLLAR
- HAVE A GIANT EQUITY POOL WHERE THERE ARE 10% OF ASSETS & BASED ON SENIORITY, YOU BECOME PART OF IT AFTER 3 YEARS OF SERVICE
DAN NEVER HAD TO BUY BACK ANY STOCK. HIS EMPLOYEES EITHER STAYED WITH HIM OR DIED.
DAN BOUGHT A COMPANY FOR $11 MILLION BY GIVING HIM $4 MILLION IN STOCK AND $7 MILLION IN CASH AND KEPT THE SELLER’S VOTING RIGHTS OF THE STOCK FOR 5 YEARS.
WHEN YOU GIVE AWAY EQUITY TO MANAGERS, YOU DON’T HAVE TO KNOW ANYTHING ABOUT HOW TO RUN THE BUSINESS. THEY WILL TAKE CARE OF IT.
YOU DON’T BUILD A DREAM TEAM. YOU BUY ONE.