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What's going on, everyone? Welcome back to the game. Today, I want to talk about strategy,

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which is something that's been top of mind for me over the last few weeks. It's one of these

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really amorphous terms that people misunderstand, and I think that maybe listening to this little

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excerpt or podcast may be one of the most valuable things you can have in order to grow your business.

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I'm sitting here in the office on my own before anyone else has gotten here. I've been noticing

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this requiring thing that I've had recently in terms of talking to business owners and people

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on my team. Strategy has come under different names, so sometimes you hear people talk about

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having high-quality decisions, right? Like, no one's like, oh, I need to make high-quality decisions,

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a little duh, but it's not very sexy, right? But the thing is that it's arguably the most important

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thing, and before you tune out mentally to this, I'm going to try and redefine this for you.

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If we think about strategy as prioritization of resources, which is what I define strategy,

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which is you have limited resources against unlimited potential options. You can

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figuratively do unlimited number of things in order to grow a business, and I think this is

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where a lot of people get stuck. Strategy, or at least the level of strategy that you are

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employing, has a couple of variables. One is what are the resources that you have at your disposal,

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and so everybody in the company, as I define it, is a strategist. It's just that the number of

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resources that they have under their control or authority are different. I'll give you kind

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of three examples across some organizations. So, like, me or you as an entrepreneur, we have

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all resources in the company and within our personal network as the thing, that's what we have

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to allocate. Our time, effort, money, human capital, relationships, that's what we've got, right?

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We need to invest those things or allocate them to the things that give us the best return.

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I'll give you a framework for how I think through that in a second. Let's see, two levels below

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you. You've got a director of marketing, for example. That director of marketing is also a strategist.

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It's just that their resources are going to be limited to the people on their team and maybe

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an advertising budget of some sort, right? So, they've got the time of the people underneath of them,

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and they've got a budget, basically the other people's time, and they've got money. At the lowest

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level of the organization, it'd be clear I don't say that as like a pejorative term or something

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that's negative for somebody who's quote, low as I just mean an individual contributor in the

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company. That person pretty much only has their time, and so they need to allocate their time to

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get the highest return. Strategy being translated from the top down is that all of that individual

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contributors tasks or the time that they commit to doing tasks are aligned with the marketing

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strategists way of getting the most out of everyone, which is aligned with the entrepreneurs

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strategy of looking across all departments and all money to get the most out of everything.

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This is super important because there's a couple elements here, right? And so one is,

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okay, what are we using to determine a good allocation of resources? And so right now,

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every person on Earth has a series of to-do's, right? You've got these tasks that you can do or

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should do in order to do your job, whatever your job is, like I have a job to. There's a framework

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that they use in product for software that I actually think pretty much applies to everything,

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which they call rice. R-I-C-E-R is the reach, which is the number of people that a decision

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can potentially impact. The I is the impact. How much does it impact? How many people? That's the

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first two. The third is the confidence level. See, so how likely is it that whatever this task is

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achieves the desire objective of reaching the most people with the highest impact?

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And then the fourth is expense, right? Well, how much do I need to risk or which will cost me

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an investment time and money in order to get that? What we get down to is something in the investment

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world, which is called risk adjusted return, which is what am I going to get, how likely is it,

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and how much is going to cost, right? And so when we're making these basically bets with our time,

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and I think a lot of people don't think about this, but basically every decision you make

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is a bet. Now, some bets have very high confidence, so they're so high confidence that you don't

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think they're bets, right? When you shoot a text to somebody, you have very high, you know,

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to your spouse, hopefully, you have a high confidence that they're going to respond. Now,

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under what timeline, you don't know, but you're pretty sure that they're going to respond to you.

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You have high confidence, but it is a bet nonetheless. In thinking this way, the people who move

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the fastest through life or their careers or achieve their material goes faster simply get a better

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return on their bets. And I think this is one of the fundamental misconceptions of work.

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And so I define work as volume times leverage, which is how many repetitions you do have something

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and what you get per repetition. And so if you do lots of repetitions and get lots per repetition,

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you will have a lot of output. And so I define work as output, not as input, which is, okay,

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why I tried really hard on this. Yeah, well, you know, at least for me, I don't really care. I

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care about what has occurred, what happens as a result. As I think through this, I was walking this

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a videography through this framework the other day, and it was like, okay, well, we know that some

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platforms yield better results. That's leverage. We also know that for me, now at a director level,

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right, if I was a marketing director, I also know some people yield better results. So it makes

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sense to put the best people in the best platforms, then we'll get more bang for a buck, a higher

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risk adjusted return. Now at the individual level, that person has, let's say, 20 things that they

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do to make a video. The thing is, is that those 20 things should not be and probably are equally

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weighted in terms of their output, meaning, and I keep using this example, but I think it's just

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perfect, which is if I color grade a video, it will yield less throughput in terms of reach and

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impact a number of people who see this thing, then let's say fixing the hook or the big idea,

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or the packaging or the headline, whatever. When we're thinking about all of these things,

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this checklist that we have in order to get an outcome, a lot of times people just start with

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the easier ones, not the ones that are going to get the highest return. And I think that having

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this rice framework, or risk adjusted return framework, before you do anything, or before you

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outline your task for the day, maybe one of the most important things that you can possibly do.

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I can certainly say that for me myself, this has been something that I think has given me

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disproportionate returns for my investments, both time, money, energy, et cetera.

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I just feel like people don't get this, or they just don't think about it very much.

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I just kind of obsessed with this. The, the kind of like the two-one version of strategy,

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and I think this is what makes good strategists overall, is that there's a premise that

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sometimes you can reject, and so let me explain what I make by that. I said earlier, we kind of take

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under an assumption that you have this series of tasks, if you're a video person,

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if you're a marketing director, you've got these series of moves that you think you can do,

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right? But the best strategists typically see moves that are off the board. They see other moves

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that might have a higher risk adjusted return than anything on the list, and then those moves become

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the de facto decisions. The problem with this is that we are not trained to think this way

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in school. And so the difference is the difference between something called divergent and

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convergent thinking. And so I talk about this briefly inside of the offers book with an exercise

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that I call the brick exercise, which is right now, think of as many ways as you possibly can to

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use a brick, right? And so usually people are like, okay, to build stuff as a door stop. You know,

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they think of two of the other ones, and then they kind of, they kind of stop, right? That's

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typically because they don't, one, question the premise of what type of brick is it? Is it made of

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gold? Are there holes in it? Does it interlock? How big is it? Is it a massive brick? Is it a tiny

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brick? Lego size or is it the size of the pyramid bricks? Like there's a lot of other assumptions that

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go into that. Now most people standard immediately think classic red brick, right? The thing is,

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is that this type of thinking is what limits most people in making good decisions. And so a lot of

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people think good decision making is like, okay, I've got, you know, I've got these two paths,

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you know, which one should I choose? But I think not enough people dedicate enough time to thinking

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are there other paths? Other moves that are off the board. And that's usually where the orders of

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magnitude increases in throughput or output in any system kind of come from, which is, can I do

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something? Is there something that I'm not seeing? And I like to ask questions like, okay, what would

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I need to do in order to guarantee I couldn't get an outcome? So that would, that would massively

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decrease the risk associated with it. Different types of questions would be like, okay, if I,

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and this is one of my favorite strategy questions I ever got from someone that I worked with,

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which was a super successful entrepreneur, good friend of mine. And she sat down with me and she

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was like, hey, Alex, I want to make $5 million more profit this year, but I don't want to do

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any more work, which was a wonderful, a wonderful question, right? Because a lot of people will just

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simply ask like, how do I do 10% more? How do I do 20% more? But if you're the one asking the

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question, then it's like, then why not ask like, what would I need to do to make $10 million more

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and do it without working? Because the thing is, it's like, you'll still try and solve that question.

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You'll still try and come up with an answer. But wouldn't the answer to that question be a hell

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of a lot better than just a 10% improvement? Obviously, it depends on the size of your business,

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right? But like, you get where I'm going with this. I think one of the most valuable things that we

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can do in terms of thinking of our own strategy is asking questions that we actually want to know

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the answers to. A lot of times people ask themselves terrible questions and then they give themselves

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terrible choices and feel terrible all the time because both choices suck. And so these are the

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moves off the board. This is the third door. Like, these are where the outsized returns come

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in business and life. And so I've just been really thinking a lot about this strategy as a concept

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that I feel like is one of the biggest missing links in most people's careers as individual

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contributors or as leaders and even as entrepreneurs for us is like, this is one of the biggest

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links that most people miss. It's like, is there a third door? Sure. I have my list of things I can do

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and I absolutely should do the things that get the highest impact, which if you just did that,

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you probably already be in the top one percent. I'm just being honest. I think no one does this.

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Like, no one does it. And it baffles me. But at the same time, it doesn't surprise me at all because

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it takes thought. And most people, if you think people are lazy, you know, lazy to get to the gym,

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people are even lazier with their brains. They don't want to think. They don't want to think.

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They want to know like, if they can't think of an answer in five seconds, they're like,

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oh, I'm going to stop thinking about this because it's tiring. It's exhausting, right? But this

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type of thinking is what gets us the most back for our time. And so it's something that I engage

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in really regularly. And a big part of it is just asking better questions to ourselves,

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asking questions we'd love to know the answers to. Well, like, think about this. So this is my,

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this is my little challenge for you. I'll give one for each kind of level of the work for those

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you who are listening. So if you're an individual contributor, answer three questions. Number one,

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of all the things that I could potentially do, what thing, if I only did this one thing,

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would have the highest impact on the throughput that I have in my job, of all the things that I'm

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regularly tasked to do. Now, if you don't know the answer to that question, ask your director,

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ask the person you're supervising, right? Ask the person who's who you report to. And I would also

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encourage the entrepreneurs who are listening to this to think about this. Do you know how to translate

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what every single role in your organization does into how your company makes more money?

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Can you do that? Also a wonderful interview question. Do you know how we make money?

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Do you know how what you do makes the company more money? Because if someone can't simply

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articulate that back to you, if they can't do it on purpose, they certainly won't do it by accident,

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right? And so we have to ask these types of questions. If we have the individual distributor

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asking them, what do you do that generates the biggest impact period? Obviously, they're going to have

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to know what they do and how it links to the impact of the business in order to answer that question

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to begin with. So that's an assumption there, which most people probably fail anyways. Again,

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if you don't know how this works, like you're like, well, how does that work for HR? Okay. Well,

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HR recruits people. HR comes up with compensation. So compensation is going to be a cost. So there's

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going to be that element that translates to how much a business makes. There's also going to be

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the cost of getting talent, which is going to translate to how much money the business makes.

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There's also going to be the output. This is revenue per headcount. And I think HR,

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this is me personally, should understand on the micro level how each of the other roles in the

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business translates. Well, customers support, what do they do? Will they increase their likelihood

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that people purchase again, rate highly, which would then also translate to getting more customers,

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right? They decrease churn. That's something that increases LTV, which means that again,

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all of them, all of these buckets are always going to circle back to it's going to get us more

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customers. It's going to make customers worth more or it's going to decrease risk, which

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conversely is it's going to increase the likelihood that what we want to have happened happens

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or continues to happen. And so like a business only grows by selling more customers or making

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them worth more period. The risk is the third bucket, which is are the things that we will do,

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like for example, we pay people. If we don't pay people, we decrease the likelihood that these

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functions occur in the future, right? Maybe we go to jail. If you have a compliance department,

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then you have to decrease the likelihood that you get sued by regulators, right? Like that's

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the point of a compliance department, which is a decrease in risk, which is an increase in the

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likelihood that these first two things getting more customers and making them worth more continue

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to occur in the future. You have to be able to translate what people do into how it affects the

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business. And this is might be the first test you can just give that you're an entire team like

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you can have them listen to this and be like, okay, guys, how does what every single person here

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does translate to business outcomes? Great. Thing one, thing two of the tasks that you have every

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day, which of them has the highest impact on that? Okay, great. Should we prioritize those tasks

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in terms of should we put more time to those things and we should do them first prioritizing

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means prior you do them first, right? You prioritize and that doesn't mean you do the easiest thing

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first just because you can get it done quickly doesn't mean it's important. But we have this tendency

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of doing it that way. We organize our own time that way and I think it's silly. That's at the

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individual contributor level, right? The next level up is that's when you have you have to take

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you have to weigh in skill and talent of people. We say, okay, these are all the tasks that must occur

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but there are some people who have more skill at achieving these tasks. So I'm going to allocate

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those people in the places that they get the best returns. And yet no one does it. And then

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finally across the entire organization, if you're the entrepreneur, you have to think, okay,

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what is the constraint of the overall business? So for example, at acquisition.com,

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deal flow is not a not a constraint for us. Are there things that we could do to increase deal flow?

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Yes, absolutely. Could we probably run more conversion rates for tests? For sure. Could we

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probably email more? Probably. Could we run ads better? Probably. Could I make more content?

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Yes. Could I make better content? Probably. But the thing is that at our current level,

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the constraint of our business is none of those things. And so for me as the entrepreneur,

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where am I going to allocate my attention? Probably not there. And so if you think of yourself as

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probably the highest output person in the work, not always, but a lot of times you are, you want to go

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where the constraint is. You want to go where you get the highest bang for buck. And so all we do

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all the way through the org is that you just have more resources that you have to allocate.

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You have more things, more levers to pull. The bigger your authority is. If you want to move up

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in the organization, so this is now me talking to everybody who's not the entrepreneur,

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then you want to be able to think one level above you. So that's the hack. Is you want to be able

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to have a good understanding of everything one level above? So if you're the individual contributor,

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you want to think, okay, how do I fit in this team? If I were doing my boss's job,

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how would I allocate these things? I'm going to assume that I do have that job. I'm going to act

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as though I have that job. And I'm going to start acting as if they had given me these great

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directions. And what will happen is that you will probably overall start increasing the output of

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the team in yourself. And so what happens is people think, man, this guy James is a star. He's a

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stud. He's doing all this work and he's getting more output than anyone else's. And this is fundamentally

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how you move up. Now, people do get afraid that you have an entrepreneur company politics if,

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you know, a star underneath of a not star and then they suppress you and it's a whole thing.

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But this is where culture is important and we're having multiple different communication cycles

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across the world can be really helpful because people who are adjacent to the individual can see

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the star rising and can make other leaders aware of that. So that that person has the potential

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to continue to rise in the company and kind of realize their potential choking all the way back up.

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Every single person is a strategist, you're a strategist, I'm a strategist, all of us are strategists.

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And I think the people who get the most out of life for the ones who make the best bets were the

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ones who allocate the resources the best way to get the most output. That comes from prioritizing

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the tasks we have to the things that get the most throughput. But the 201, the advanced version,

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the thousand IQ version of this is asking questions that we want to know the answers to.

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If I had to get to my goal in one year instead of three, what would I do?

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If I had to 10x this year, if I had to do it, what would I do? If I had to double my profit and

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work less, what would I do? These are all questions that we'd love to know the answers to.

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But yet we don't ask them. We ask really painful questions.

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And then we give ourselves painful choices instead. That's what has been top of mind for me,

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Lately, I thought I'd share it with you. Lots of love, keeping amazing,

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crush goals, and I'll see you guys on Ziffipi. Bye.