Robert Kiyosaki: Think Big, Think Expansion
I grew up with two dads, and two very different perspectives on money and investing. My poor dad, my real father, was a well-educated, hard-working man who served as the superintendent of education for the state of Hawaii. He was a well-paid employee who ultimately died broke. My rich dad, the father of my best friend Mike, quit school in grade school but used his street smarts and entrepreneurial spirit to become one of the wealthiest men in Hawaii.
My rich dad taught me about “thinking big,” even though he did not talk about it. Instead, the words he often used were leverage and expansion. When he taught his son and me to think about the differences between leverage and expansion, he used the McDonald’s franchise as an example. He would say, “When Ray Kroc bought McDonald’s from the McDonald brothers, he leveraged himself. When he franchised McDonald’s, he expanded his leverage.”
This idea brings me to the concept of the Cashflow Quadrant (see the image above). The letters in each of the quadrants represent:
B Business owner
Each of us resides in at least one of the four sections of the Cashflow Quadrant. Where we are is determined by where our cash comes from – pay cheques or passive income.
Though financial freedom can be found in all the quadrants, the skills of a business owner and investor will help you reach your financial goals more quickly.
When Kroc purchased the hamburger stand, he leveraged himself because the burger business could make money with or without him. And this is where most S-quadrant business owners stop: they keep their businesses small. When Kroc developed a franchise system for the small business, he expanded the hamburger business into the B quadrant.
You may notice I used the words franchise system, the key word being system. In my book Before You Quit Your Job, written for entrepreneurs, I write extensively about the B-I Triangle. The B-I Triangle is the diagram my rich dad used to focus my thinking and to teach me about the eight parts that make up a business.
Many entrepreneurs fail simply because one or more of the eight pieces of the B-I Triangle is weak or nonexistent. Whenever I look at a struggling business, I use the B-I Triangle as an analytical reference.
Notice that the word product is used to label the smallest section, and the word mission is one of the largest sections – as well as the foundation for the Triangle. This is because the product is the least important item in the B-I Triangle, and the mission is the most important. The mission is the spirit of the business; it is the heart of the business. Without spirit and heart, most entrepreneurs will not make it, simply because the road ahead is a hard one.
The world is filled with great products that fail. The products fail simply because they do not have the power of the B-I Triangle behind them.When you study most successful businesses, you will most likely find a complete and vibrant B-I Triangle in action. A great business will have a strong mission, great leadership, a competent team of managers who work well together, excellent cash flow and financing, clear and effective sales and marketing communications, systems that work efficiently, clear and tight legal documents and agreements, and of course, a great product.
Most of us can cook a better hamburger than McDonald’s. But few of us can build a better business system than McDonald’s – which brings us to the word system again. One of the biggest differences between an S-quadrant business owner and a B-quadrant business owner is systems. Typically, the S-quadrant business owner is the system, which is why he or she cannot expand.
Far too many businesses are people-dependent. McDonald’s, on the other hand, is system-dependent. And it has well-designed systems. Regardless of where you go in the world, the McDonald’s business is pretty uniform. Most important, the company’s business systems are often run primarily by people with just a high school education. That is how good and how sound the systems are.
I have looked at so many businesses that are top-heavy, staffed by highly educated and highly paid people who are working hard and accomplishing little. In most cases, these types of businesses focus primarily on people and not on developing great systems. A great team of highly paid people will fail without great systems.
What is the difference between an entrepreneur and a CEO? Making it as simple as possible, an entrepreneur is like a person who builds great race cars. A CEO is like the driver of the race car. If you have a great race-car driver but a poorly built race car, the great CEO will lose every race. Rarely will you find entrepreneurs who are great CEOs. Donald Trump is one of those people. So are Bill Gates, Michael Dell and Steve Jobs. These men can build great race cars and drive them.
In The Rich Dad Company – a Scotts-dale, Arizona, education business that teaches personal finance and business to people worldwide through books, seminars and educational products – we have three people who are both CEOs and race-car builders: Kim Kiyosaki, my wife and co-founder of the business; Sharon Lechter; and myself. Sharon, also a co-founder, is excellent at both building and driving the race car. Kim and I are better at driving, but we do build parts of the car. I often say that I am the horn of The Rich Dad Company, and Sharon is the engine. I would definitely say Rich Dad is a team enterprise.
I have met many people who have become very rich in the S quadrant. Many are small-business owners who are excellent builders and drivers of small businesses. There are also people in the E and S quadrants who become very rich attaching themselves to B-quadrant businesses. For example, Tiger Woods is an S (and, in his case, S stands for superstar as well as self-employed or specialist), but much of his wealth comes from his endorsements of B-quadrant businesses. The same is true with some movie stars. They are S-quadrant individuals but associate themselves with B-quadrant businesses, such as Sony or Warner Bros.
Donald Trump says “think big,” and he builds giant buildings and megahit television shows. My rich dad said to expand, and he meant expanding the way McDonald’s did. Both are forms of thinking big.
Donald Trump: Think Expansively
Robert’s explanation of “Think Big, Think Expansion” is great and totally on point. But let’s take it one step further. Let’s not just think big, let’s think expansively. To entrepreneurs, thinking expansively includes seeing what is possible and making it happen. Entrepreneurs see the vision and call it good sense and inevitable. The rest of the world calls it innovation.
Recently, I read with interest about an innovation that was attributed to me. I was surprised because I had never thought of it as an innovation; I considered it just a way to combine two elements that might work well together. Years ago, when I was doing the first Trump International Hotel & Tower at 1 Central Park West in New York City, I decided it might be a good idea to build a condominium and a hotel together. It turned out to be an amazing success and has been duplicated by me and many others since.
So many times, innovation really results from common sense put together with uncommon thinking. It’s creative, but it’s about innovative assembly more than anything else.
Thinking expansively is just another way to innovate. Sometimes I ask myself, “What else can I include in my thought process to make it more comprehensive? Is there anything I can add that might enhance the project or idea I’ve got spinning around in my head?” Many times, I will tell myself that something isn’t quite right yet, because that automatically opens the door for more ideas to enter. I ask myself, “What am I not seeing? What else is possible?” Sometimes the answers wind up being innovative ideas. It’s not necessarily some secret process, but it is a process, and it requires concentration.
Robert, Kim and Sharon recently visited me at my golf course in California. I shared this story with them: my club has a beautiful ballroom overlooking the Pacific Ocean and the number-one golf course in California, but the room held less than 300 people. We were unable to accommodate many events (such as weddings) because our capacity was too small, so my management team’s answer was to enlarge the building. They came to me with plans to remodel and expand the ballroom, which would cost millions of dollars and lots of time. We would have had to go through the permitting process and close for many months during construction, thus losing millions of dollars in business revenue – on top of spending millions of dollars to remodel!
As we were standing together looking around the ballroom, I noticed a woman having trouble getting out of her chair. The chair was very large, and she had difficulty moving it away from the table so she could stand up. In fact, the room was filled with these huge chairs. I had an immediate vision: we needed new chairs – smaller chairs!
This one idea not only saved me millions of dollars, it even made me money. We earned more money selling the old chairs than it cost us to buy the new gold Chiavari chairs. We are now able to comfortably seat more than 440 people in the ballroom and have increased the number of large events we host as well as the revenue we receive. No expansion of the building was necessary, and we had no downtime. So, I turned a project that could have cost me millions into a profit!
That’s the first step to visionary status – seeing something and knowing it could be different or better.
As I’ve said before, learn your lessons from as many sources as you can. Think and learn expansively. It won’t be expensive, but it can give you some big returns.
Become Your Best In Business
How can you streamline the actions you take in your business?
A few of the primary keys to becoming successful in business include having a clear intent or purpose, a truly inspiring vision, a grand message to share, a genuine social calling and a targeted niche to serve. From these initial basics arise the primary strategic objectives you would love to accomplish or achieve and a plan for their implementation. But before these objectives can be met, the mastery of the mind is to be initiated.
True business leaders are those who are congruent and integrated and who can organise and lead their inner parts purposefully. Once leaders govern themselves, they can govern others.
Time Is Life
When you loaf about, your mind starts thinking about all kinds of doubts, insecurities, fears, other people’s beliefs and worries about what’s happening and what isn’t happening. Such dead time can zap your energy and confidence levels and distract your mind from your purpose. Any time or space that’s not filled with high priorities often automatically becomes filled with low priorities.
Have you noticed that when you’re busy, you often accomplish and create much more? The more intensely you’re focused and active and the longer you maintain such a focus, the faster your accomplishments (time x intensity = results). Time spent on doubt, fear, or low-priority actions slows down your accomplishment process.
When you take your mind off your focus, all you see are obstacles. When your mind is focused on your dreams, you don’t have time for the many self-doubts that block them.
Raise Your Standard
Anything you do consumes time. To maximise the value of your time, prioritise your interactions. People who seem less busy and want to consume your time may think you’re being rude when you say no to their invitations, but busy people understand immediately that you’re just choosing to prioritise and wisely manage your time.
People who don’t value their own time want to take up yours with small talk, and if you keep associating with people who talk small, you could end up with a small life. You’ll find out what kind of people they are by putting a fee on your time and raising that fee regularly. If people really value your skills and time, they’ll pay for it.
“A man’s growth is seen in the successive choirs of his friends.” – Ralph Waldo Emerson
Efficiency and Effectiveness
Often when you perform a service for less than you feel you deserve, you lower your worth and enthusiasm and slow down your business. Even though you may be working like a ‘dog’, it’s neither efficient nor effective.
Any aspect of your work that pays less than you truly feel you deserve can become the weak link of your business. In addition to undermining your motivation, inefficiency and ineffectiveness can also reduce profit margins. When you or your employees perform effective actions in an inefficient way, ineffective actions in an efficient way or ineffective actions in an inefficient way, your business becomes undermined. Your worth can be determined by how efficient and effective you are at performing high-priority actions. Business masters are those who love what they do, do what they love, and work efficiently and effectively. They delegate everything else to those who desire to do the same.
How can you streamline the actions you take in your business? Ask yourself, “What can I delegate?” You’ll be far more productive, energised, and inspired at the end of the day when you can stick to actions you deem to be high-priority. Unless you value your time, neither will the world.
For more information on Dr Demartini’s teachings, visit www.drdemartini.com
How To Be A Leader
Lead by example and you’ll win the respect and loyalty of your staff.
Being a successful entrepreneur is not about locking yourself away in your workshop and bringing a great innovation to life. Certainly, you need a must-have product that will have customers beating a path to your door. But you also need the business skills to ensure you can scale up production – and the leadership skills to motivate the staff you have employed to help you make this happen.
It is rare to find these three key skills balanced equally in an entrepreneur. Most have more of one quality than another – but there is one of these qualities that we tend to fool ourselves about.
Most of us know whether we have creative skills that can produce great innovations or whether we need to improve our business skills. Almost all of us assume we can be leaders if circumstances mean we have to step up to the plate. However, almost all of us are wrong about that.
Leadership skills are something that you develop and hone as your career progresses. You might think that being head girl at school, rugby captain or president of your Toastmasters’ branch means that you have got leadership nailed.
You would be right that you have some leadership experience. But you are wrong because so much about leadership depends on context. Just as what works on the rugby field and what works in the debating chamber are not the same, so what works in business is different.
In part, it can depend on the size and sector of your business. That in turn is partly because your understanding of the context – your business savvy as opposed to your business skills – is as important as your credibility as a leader.
But there are some common traits in leaders that work in all business contexts. Once you have these nailed, you will find that you can reuse them in different businesses as you expand your entrepreneurial interests.
Here are three starter principles to put into practice today:
1. Be first
Get to work first and leave last. As an entrepreneur, one of the prime qualities you need is energy. You need to put mental and physical energy into knowing the detail of what is going on in your business. Listen to the insights of your staff as to how your systems are taking strain or could be streamlined. If you are serious about growing your business, you cannot expect to achieve this as a sleeping partner who drops by the business premises at best once a week.
2. Be a team player
Make it clear that you are not giving yourself privileges just because you are the boss. If your business involves any kind of production line, whether actual or virtual, you should be able to pitch in and help out if there is a rush of demand or an unusual number of staff hit by the virus that is going round. This is also an opportunity to check personally on the effectiveness of the systems you have set up and make tweaks where you see bottlenecks or downtime occurring.
3. Be last
As well as leaving work last, you should also pay yourself last. Consider this part of your investment in your business – and also an investment that will pay dividends in consolidating staff loyalty.
Peak Performance – How To Become A Strong And Legendary Business Leader
The starting point is to consistently and constantly build and mould an unshakeable character and add a clear strategy for your personal life and your business.
‘Leadership is a potent combination of Character and strategy’
– General Norman Schwarzkopf
Leadership has long fallen into the category of the enigmatic. It is no longer the case considering the ‘deep dive’ neuroscientists, psychologists and industrial psychologists have taken into understanding the brain and human behaviour in general.
For those that have a deep and driving desire to understand themselves better volumes of highly beneficial research are available to you. How willing you are to seek for and apply the infinite amount of knowledge out there is dependent upon your priorities, your ‘grit’ and your level of desire to personally transform and be impactful in this world.
Most of all a strong belief in your own abilities to become a legendary business leader is a basic requirement for the alchemy from follower to leader to take place.
The human nature guru Robert Greene describes a strong character as follows:
“Strong character has a tensile quality like a good piece of metal – it can give and bend but still retains its overall shape and never breaks”
Character is who you really are, not what you want others to think of you. Who you truly are is especially revealed under the most challenging circumstances. How your investors, co-founders, employees and clients view you is highly dependent upon your actions during times of business crisis, failure or when you as an entrepreneur are faced with turbulent personal circumstances.
The ability to authentically and empathetically (towards yourself and others) take a stand for your beliefs, admit (to yourself most of all) to your mistakes, rectify them (the highest and truest form of an apology) within times of strife and difficulty leads to a strong and un-breakable character.
Through this writing you are strongly urged to reflect on the fact that a strong character will not fall from the sky and simply be bestowed upon you, instead a strong character, akin to steel, is moulded and shaped by fire meaning that your character is mostly shaped by challenging times.
As the late master poet Leonard Cohen said –
‘There is a crack in everything that is where the light seeps in’
Nothing is perfect and when you truly learn from failures and mistakes your wounds can become blessings, your tests can become testimonies and you can lead others to achieve the same.
Those that have a slight and very determined smile on their face and maintain belief and even dramatically increase their levels of performance the moment they recognise that they have arrived within a highly challenging space are the ones that have trained for that exact moment.
The Navy Seals say:
“You do not rise to the challenge you fall to your level of training”
All external information gathered within each moment enters the brain and is processed through the Amygdala first – that part of the brain that provides housing for the ‘fight or flight’ response. Information is first filtered through your very own doubts, fears and insecurities.
If you have not worked on your own fears diligently and instilled habitual mechanisms of effective action triggered by fear your re-actions of lack of action (procrastination) will not be optimal at all. ‘Grit’ is born at the intersection of passion and perseverance and can be trained. Bravery can be trained. Leadership can be trained. Character although influenced by genetics can be trained.
All tools to succeed at the aforementioned subjects are within us all, in a lot of cases lying dormant and anxiously awaiting your increased levels of awareness which will empower you to use the tools required effectively.
As a practical example I coach my ‘Peak Performance’ clients to train for Grit in the following way – Choose a day of the week when you are especially tired and not in the greatest of moods force yourself to the gym and train the toughest muscle group for you (usually legs) and where you normally do three sets of squats do seven and make those sets harder than before in every way.
Or again choose a day of the week again where you are very tired and instead of taking a plunge onto the couch to watch ‘Game of Thrones’ or whatever it is, go and hike, a long tough hike that will really test you.
It does sound harsh but you will thank yourself when the tough times occur and they will, that you have willingly trained yourself for grit.
On to the subject of Strategy which forms a potent combination with character and results in Leadership.
Dictionary.com defines strategy as:
A plan, method, or series of manoeuvres or stratagems for obtaining a specific goal or result.
For a strategy to be effective a basic requirement of many requirements is that a clear and highly specific end vision and/or goal, and/or result must be defined. Visions, goals or desired results are often vaguely defined because the often subconscious fear of clearly defining our failures by setting clear and measurable goals plagues us.
The mind struggles with finding solutions, answers and strategies when vague goals are set. It is also very hard to retain focus on anything that is very vague. As the importance of an effective plan to achieve your well defined Vision and goals cannot be overstated I strongly recommend getting expert help to facilitate a future session.
Once the desired end result, goals and vision is crystal clear we can ‘reverse engineer’ an effective plan that can actualise our dreams. We need to create a metric system that constantly, consistently and visibly measures our progress and success of our plan. The metrics will notify us of challenges and will signal a need for adjustments within our strategy.
The very good news emanating from this article is that anyone can be a legendary leader should they not only sincerely wish to be a leader but also take effective action on becoming one. The starting point is to consistently and constantly build and mould an unshakeable character and add a clear strategy for your personal life and your business.