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Guest: Rick Sapio, the founder of Mutual Capital Alliance, and its CEO for the last twenty years.
Episode in a Tweet: Here’s how to think and act like a billionaire from someone who’s interviewed more than 40 of them.
Quick Background: When his dad died unexpectedly, 13-year-old Rick’s life was thrown into chaos. That experience instilled in Rick both a DIY entrepreneurial spirit, and a passion for finding order. During the 2008 economic downturn, Rick had the bright idea to bid on private lunches with six Texas billionaires. The investment paid off as Rick enjoyed personal master classes from some of the most successful people in the country…and it led to many more billionaire interviews.
On today’s show, Rick discusses the thought and behavioral patterns common to billionaires, and how he believes CEOs of all sizes can leverage those patterns to create “an entrepreneur in every home.”
Transcript: Download the full transcript here.
Key Insights on Billionaire Behaviors
1. “A billionaire doesn’t do anything …”
“One of the patterns I realized with billionaires is they’re really, really good at finding the people to run their various entities,” says Rick. While a struggling CEO might run himself ragged micromanaging, renowned restauranteur Phil Romano told Rick, “a billionaire doesn’t do anything, they don’t even move a pinky, unless they find the perfect person to run the business.”
Billionaires know their time is valuable. According to Rick, many of them don’t even have an office to tie them down! Instead they cultivate an air of inaccessibility: Richard Branson said he bought an island because “I didn’t want people to get to me.” The Bransons and Romanos of the business world don’t waste their days making up for underperforming employees – they hire grade A-talent who free them to focus on the company’s vision. And when they find those top performers, they do whatever it takes to hire and keep them: bonuses, profit-sharing, good salaries and benefits. “I’ve learned if you can compensate people correctly a lot of the motivation and values alignment issues go away,” says Rick.
2. Be a pointer.
In a 1962 speech, John F. Kennedy pointed to the moon. He didn’t then go off and build a Space Shuttle. He didn’t train the astronauts. He didn’t put himself in charge of Mission Control. Sadly, he didn’t even live to see his dream realized. But he pointed at a BIG goal, and the whole country followed him, even after he was gone.
Billionaires, effective CEOs, and successful companies, think and act with that same sense of vision, and that same can-do bravado. Their targets may not be the Moon, but they’re still clear targets, defined by what Rick calls, “catalyzing statements.” Domino’s famously aimed for pizza delivery in “30 minutes or less.” Volvo set its sights on making the safest cars in the world. Bill Gates envisioned a computer on every desktop.
All BIG successes start with that kind of vision. “What really inspired me most about billionaires is they point to where they want to go and they inspire people,” says Rick. “I watched Phil Romano do this with a brand-new company he’s starting. He got 200 people in a room, and he just pointed to the future and got them excited.”
Early in my career, I rode an elephant into an annual meeting to rally my employees around my vision. How are you inspiring your employees? Do they all know where you’re pointing? Do they know the specific, measurable, actionable steps they have to take to get there?
3. The KISS approach.
Richard Branson is a leader in aviation, media, real estate, and philanthropy. But he keeps everything organized under one simple brand umbrella: Virgin.
“By applying a brand and a holding entity to everything he does, the value of the companies increases,” notes Rick. “They all work together promoting the same brand, and cross-pollination saves on expenses.” When Rick started his first company, he made it a holding company – following firsthand advice from Warren Buffet – and he credits that strategy with making his business dealings a whole lot easier. “A holding company is one of those profound yet simple things that has radically simplified my life, but created value that didn’t exist before,” he says.
Even if your company’s activities aren’t diverse enough to require a holding company, keeping it simple is a lesson for any business. Cut away satellite offices or products that aren’t profitable. Use your sales comp to focus your salespeople on the products that turn the most profit. And if your company is in a jam, don’t throw a bunch of desperate ideas at the wall and hope something sticks: refocus all activities on the vision that animated the company in the first place.
1. Move to CEO Island. Hire top c-suite talent to manage day-to-day activities so you’re free to focus on the company’s vision.
2. Point to a Huge, Outrageous Target. If your company isn’t focused on hitting your HOT, then what is it doing?
3. “Simplicity is the ultimate sophistication.” The less cluttered your desk and company offerings are, the better your probability of hitting BIG growth.