Momentum Podcast: 833

Growth Creates Complexity and Success Creates Deficit

by Alex Charfen

Episode Description

As entrepreneurs we have been convinced that the better we do, the easier things will get. That there is this magical time in a business where we won't have any more problems if we do everything right.

Unfortunately, this is just not true. In any business, growth creates complexity, and success creates deficit.

The better we understand this concept, the faster we can grow our company, get stronger where things break and grow a real business.

In this podcast, I share a mindset shift that will help you become a better leader, grow a better team, and accomplish more than you thought possible.

If you're ready to make your company stronger where things break, go to and sign up for a call with my team.

Full Audio Transcript

This is the Momentum podcast. So many entrepreneurs have been sold and marketed this belief system that when we do things right in our business, things will get easier and we won't have problems anymore and we won't have challenges anymore. And I've been working with entrepreneurs for three decades. I've been running businesses for over that period of time. I've had multiple multimillion dollar companies and several that have reached eight figures in revenue in a year. And I've helped tons of entrepreneurs do the same thing. And here's what I can tell you. If you're doing everything right, it will always create issues in the business. This is something that the faster we understand as entrepreneurs, the more prepared we are and the more able we are to grow the business that we really want. I'm Alex Charfen and this is the Momentum podcast made for Empire Builders, game changers, trailblazers, shot takers, record breakers, world makers and creators of all kinds. Those among us who can't turn it off and don't know why anyone would want to. We challenge complacency, destroy apathy, and we are obsessed with creating momentum so we can roll over bureaucracy and make our greatest contribution, should we pay attention to their rules, but only so that we can bend them, break them, then rewrite them around our own will? We don't accept our destiny. We define it. We don't understand defeat because you only lose if you stop and we don't know how. While the rest of the world strives for average and clings desperately to the status quo, we are the minority, the few who are willing to hallucinate. There could be a better future. And instead of just daydreaming of what could be, we endure the vulnerability and exposure it takes to make it real. We are the evolutionary hunters, clearly the most important people in the world, because entrepreneurs are the only source of consistent, positive human evolution. And we always will be. I recently got a boxer message from a friend of mine and he said, Alex, you know, I just want to thank you for always talking about in your courses, in your events, in your podcast, about how as entrepreneurs, when we do everything right, we are going to experience more challenges, not less. And he said, You know, my business has been growing. It's almost tripled in size. My team has grown and I now expect that things are going to happen and challenges are going to come up and they don't trigger me anymore. I immediately go into a problem solving mode and I'm immediately able to see what the solutions are. And I just know that those things are going to happen and the challenges are going to come up and that the better we're doing, the more there will be. Now, this may sound completely counterintuitive to what you've heard in other places, but I want to share a fact of business with you. I have this statement that I share with entrepreneurs. Growth creates complexity and success creates deficit. See, when you're running a successful business, this is something I want you to understand, because here's what happens to most of us when we have a challenge in our business. When and for so many of us, finding challenges becomes like this Manna program that runs in the back of our heads all the time. You know, our business is growing. Things are going in the right direction. We're feeling good about what we're doing, and then we see that there's something wrong or a customer has a complaint or something is missed in delivery and it triggers us and sends us sideways and we're frustrated by it. And we think, like, Oh, I must be doing something wrong. I'm not a good leader. I'm messing something up. You know, you can get 100 positive comments from clients and the one negative one is always the one that's going to stand out. And by the way, I want you to know that happens to me, too. And I remind myself that growth creates complexity and success creates deficit. Let me explain to you what I mean by that statement. Let me break it down for you so that you can take this on as a belief system for yourself. See, as you're growing a company, it will always create complexity. Growth creates complexity. Here's what I mean by this. When you have a single person organization, when it's just you working in a company, you know everything that's going on. You're the only person there. And as soon as you add another person, it creates complexity. There's somebody else who now has stuff going on. You don't see everything that's in the business. You add another person, now you're outnumbered. I'm kidding. Kind of. Now you have two people that have information that know what's going on that see things that you're not seeing everything. And as you add people, you add this level of complexity as you add business. So you go from 100000 to 300000, 300000 to 1000000, 1000000 to 3 million. That growth will create complexity. There's complexity in delivery systems. There's complexity in the number of people that you're serving. There's complexity in the systems that are needed to keep the business going in the bookkeeping and the accounting, the financial systems in the operational systems. Growth will always create complexity and success will always create deficit. Let me explain to you what I mean by “success creates deficit”. I am breaking this down for you so that you're prepared for this, so that you start thinking that deficit in the business is actually a good thing. When complexity is created and something breaks when there's a deficit in the business and something isn't working right. What you need to understand is that this is an opportunity to make your company stronger. This is actually indication that you're outgrowing the business that you were and you're becoming a new company. And so when I say success creates deficit, here's what I mean. And I'll just make this simple. Let's say your company is generating X number of leads on a monthly basis, and you have the lead generation systems that can handle those leads. Your CRM can handle those leads. Then you're nurturing those leads either through email or social media or videos or whatever it is that you do to nurture those leads. And those systems are working. And then you have conversion systems that take those leads once they come into your system and when they're ready to buy, you have a system to convert them and things are going really well and everything's going fantastic. And let's say that's so successful that somebody with a top ten podcast calls you and says, Hey, you know what? We've seen your business is doing extraordinarily well. We've heard about it from multiple people. It's been suggested you come on our podcast, we'd love to have you on this podcast and you say, Absolutely. So you go and overnight you generate ten times as many leads as you've been generating. I've been in this situation when Katie and I and I've been in this situation more than once, but when Katie and I had a product and the real estate industry, we were invited overnight to start working with Remax and our lead generation went up ten times what it was and man, did it create deficit. We didn't have the nurture systems in place. We didn't have the conversion systems in place. We had to scramble like crazy. But our company was exploding. It was growing like crazy. And this could happen to you. You go on that podcast and suddenly the nurture system that you have in place, maybe they're not. There's not enough of them. Maybe the conversion system, you don't have enough salespeople, you don't have the right conversion mechanism. You've been growing methodically and now you're exploding. And that success is going to create deficit. And at any stage of company growth, this can happen. I've worked with so many organizations that have been in a fast growth posture already, and then something happens that triples or quadruples their rate of growth. And what always happens is growth creates complexity and success creates deficit. And the reason I'm sharing this with you and going through these anecdotes with you is because I want you to change your perspective on your business, that when something goes wrong, when there's a challenge, when there's an issue, it's not something that you should be frustrated with. It's not something that should cause you anxiety. It's not something that should feel like the walls are closing in. Because, believe me, before I understood this, that's how I used to feel in my twenties. I ran a successful organization and what many people would consider a very successful organization. We worked with multinational companies. We grew. I grew a team to dozens of people. We had offices in the U.S. and Latin America. We were doing incredible things. We were winning awards. We were making a ton of money. And when something would go wrong, when one of our customers would complain, when we'd have an issue with one of our orders, when we had a challenge with something that we were doing as a company, I would go sideways. I would be frustrated and anxious and I would lose sleep over it. I literally would lose sleep sometimes for multiple nights over this thing that had happened because I didn't understand that as my company grew, there was this inevitability that growth creates complexity and success creates deficit. And once I understood this, once I was able to accept this as a fact of doing business, as a fact of growing a business, it made things so much easier for me when something would come up, when there'd be a challenge, I would think, okay, let's fix the process. Let's figure out what went wrong. When we would have something like ten extra leads come in, I would start thinking, okay, where am I going to feel that deficit? Where is this success going to create deficit? Is it going to create deficit in conversion? Probably. Is it going to create deficit in delivery? Yeah. We're going to be delivering to probably 5 to 10 times as many people as we have been. I need to start looking at those systems and make sure we have the customer service team in place. We have the delivery team in place, our computer systems, our ID systems are ready to take on this much more volume and rather than a protein, any time that there was complexity or success or sorry complexity or deficit in my business, any time there was more things happening, there was challenges in the business where it would send me sideways. It started to create this level of excitement, like, okay, now I know what I need to do next. I need to be looking for “where is the challenge going to come from?” And every time that you take on that attitude, every time I took on that attitude and I started fixing things in advance, I started looking for where the deficit was going to come from. I started anticipating what the company was going to need. It would create a new level of success. It would create a new level of growth. And you know what that would do? It would create even more complexity and more deficit. And so as an entrepreneur. What I want you to know is if your business is not creating complexity or deficit, it probably isn't growing. If your business isn't having challenges, then you're probably not going out and doing more and having a bigger impact and creating a bigger income and creating more revenue. Because any time you do more, any time you create a bigger impact, any time you create more revenue, any time you have big opportunities, it will always create complexity and deficit in the business. So start to embrace these things. I know it's a completely counterintuitive mindset because some of many of us have seen the sales letters or had been in the conferences or have listened to a person on stage that says, once my business got to X number of dollars in revenue, everything got so much easier and I didn't have problems anymore. I didn't have challenges anymore. And there weren't weren't issues anymore. And I can tell you that the opposite is true. I. I think that sometimes when people get on stage, they want to share the highlights, not the challenges, and they're encouraged to do that. And I'm not judging people who do, but I want you to know that for every entrepreneur who's in front of a room saying that my business grew 300, 400, 510 X is an entrepreneur who can share the highlights with you, but that also has a tremendous amount of complexity and deficit that they are solving. And maybe that person on stage has already taken on this mantra and knows that complexity and deficit are just part of the game and so it doesn't affect them. So I'll give them the benefit of the doubt that, you know, sometimes we're hearing from an entrepreneur that doesn't share this part because they're not even thinking about it because they already know that success creates success, creates deficit, and growth creates complexity. And as entrepreneurs, when we shift and we start thinking in this way, it changes everything for us. It moves us in the direction of being able to grow our business, to strengthen the business where things break. You know, there's this, I think it's a Japanese proverb that says the strongest breeze creates the strongest trees. And the natural scientific explanation for this is that when trees grow under the resistance of wind, when a tree is blown backwards and forwards, the wood in that tree creates all these tiny little breaks and the tree becomes stronger by fixing those breaks, by growing into those breaks, by fixing the deficit that's created by that strong breeze. And the same thing happens in companies. The more we grow, the more we make an impact, the more income we make, the more we break things and more we create a strong company that will survive, that will be adaptable, that will continue to grow by fixing where we break. And so if your company is having challenges, if you're seeing things that are wrong, if you're finding mistakes your team made, if you have the occasional customer that complains no, then it's probably because you're doing everything right. And growth creates complexity and success creates a deficit. If you are in a situation where your company is growing fast and you want some help with the right systems and structure so that you can grow your company even faster and you want to simplify your operations so that operations become a strength and not a huge challenge like it is for so many companies. Reach out to us. We love to help you go to simple operations dot com right there on the homepage. You can register for a call with my team. We love to jump on a call with you and show you how we've helped dozens of companies around the world. This one is probably hundreds of companies around the world go from seven figures to multiple seven figures, and so many of them go to eight figures and beyond. We love you to be one of those stories. Simple operations dot com registered for a call with my team. We're looking forward to talking to you. And remember, if your company is having challenges, it's probably because you're doing everything right. Growth creates complexity and success creates deficit.

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