4 steps that took me from running a company on the brink of bankruptcy to growing it into a billion-dollar business
- Joseph Deitch is the chairman of Commonwealth Financial Network, which has assets under management of more than $200 billion.
- He is the author of "Elevate: An Essential Guide to Life," and the founder of the Elevate Prize.
- Deitch founded Commonwealth in 1979 and, after nearly going bankrupt, built it into a billion-dollar business.
- Some of his most pivotal choices included investing heavily in his people, persistently asking questions, and learning to listen with depth and compassion, as well as investing in failure and himself.
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Early in the life of my company, we were teetering on the brink of bankruptcy. I felt like my whole world was crumbling around me, and the stress manifested itself in sleepless nights, acute stomach issues, and a lot more. My fantasy at that time was to be free of debt - to be worth zero and anxiety-free. Not very sexy, but it was all I could think about.
I got there eventually. "Nothing" never felt so good! And my failures gave me some extremely valuable gifts: renewed confidence, a refreshed perspective, and an insatiable curiosity about what works, what doesn't, and, most importantly, why? Why don't we always do the smart thing? Why can't we listen to those with more knowledge and experience? Why are we so damn stubborn?
Today, Commonwealth Financial Network has close to $2 billion in revenue and over $200 billion in assets under management.
So how did we get there?
The path wasn't a straight one, that's for sure - and there were far more lessons than I could possibly share here. But there were a handful of things that were absolutely essential to that turnaround, and in ways that I wouldn't have been able to anticipate.
1. Embracing an uncomfortable truth: I was the problem
My company grew successfully for the first six years, but then we ran into problems. Lots of them. Eventually, I understood that to put my company back on track, I had to fix myself - and I knew I needed help to do that.
So, I applied to Harvard Business School's Owner/President Management program, a three-year executive education designed for CEOs like me. By the end, I had gleaned so much valuable information that it was almost overwhelming. I distilled it down to what was then the most important lesson for me: listen.
Sure, I thought I had been listening before. But I wasn't … not really. During a conversation, I wouldn't listen deeply to what the other person was saying; I was often just waiting for them to finish so that I could explain why they were wrong.
The fact is that if you're disagreeing with an intelligent person, there's about a 50% chance you're right (or wrong) in any particular instance. If you're wrong half the time, that actually represents an enormous opportunity.
So I took my newfound love of listening into my conversations with senior managers, employees, and our customers, and it was astounding what insights I garnered. Since that revelation, I have learned so much by listening with respect, humility, and curiosity. As a result, my decisions, in both business and my personal life, are much better vetted. Plus, the overall process is more enjoyable for me - and everybody else.
Simple, right? Asking is the key to achieving virtually anything we aspire to. It's a bit like a superpower.
I can't count the number of times I have posed questions to which I have received game-changing answers, including: "What do we have to do to make this happen?" and "How do you think we can improve this?" Needless to say, there were countless productive answers to these and other questions. In the next section, I get into one particular instance of how, when we continue to ask and let the answers lead us to even more interesting questions, it can spur remarkable things.
The bottom line is that it's essential to ask other people (and even search engines) because they have knowledge, experience, and perspectives that we don't - and they can often see things we can't. Plus, it involves others and allows them to help, ultimately building high-performance teams. Remember to ask your inner self as well: Intuition is invaluable.
3. Realizing 'good enough' wasn't good enough
Some years after stabilizing the business, we were once again thriving. This was in part due to our commitment to customer service.
The bar for most businesses is set so low that customers are ecstatic when the mere basics of customer service are met. Simply listening to customers' needs and concerns, saying "please" and "thank you," and genuinely caring about them made us into stars! But we didn't stop there. We asked ourselves, How could we get to the next level? What would it look like? Feel like? What would we call it?
We spent months pondering this and arrived at one word that would eventually describe our new service level: indispensable. Our service would be so incredible our clients would never even think of leaving us - it would be too painful. This can take innumerable forms, but it comes down to a mindset: Not just answering questions but solving problems, not just meeting needs but anticipating them, not just exceeding our clients' expectations but completely resetting the bar for what service can be.
The absolutely essential part of this was internal - we spent a whole year working with each department in the company, getting their ideas and feedback, which generated even more ideas and excitement. We took the time and effort to get everyone involved, and it infused the idea into the DNA of our organization.
To this day, indispensability permeates everything we do. As a result, Commonwealth has been named best in our industry for independent US financial advisor satisfaction by JD Power every year that title has been bestowed. We've also won over 40 "best places to work" awards since 2008.
4. Making 3 essential investments (over and over again)
As someone who has worked in the financial industry for the last 45 years, I often get asked for investment advice. But the three investments that I recommend most often aren't what people expect.
The first? You. It's the best investment by a mile. Devote time, money, and attention to the person who is the engine of all your success and satisfaction - whether by taking classes, finding mentors, seeing a therapist - whatever makes sense for you.
The second is based on something my tai chi teacher used to say: "Invest in loss." People are generally risk averse. If we try something and fail, it can lead to judgment and feelings of guilt, so we often avoid taking risks altogether. Yet taking some risks is essential in any entrepreneurial venture, so I decided to take a different perspective. Investing in loss is a mindset - it allowed me to see any failures as an inevitable part of the path that leads to success. Without that mentality, I may have let my aversion to risks steer me away from decisions that ultimately led to our growth as a company.
Lastly, invest in great teams. With wonderful people by our side who share our passion and purpose, we can go from the brink of bankruptcy to a billion-dollar business … or whatever your objective might be. And this applies to our personal lives just as much as our professional.
Each of these principles has not only helped shape my career, but my life. I can say with confidence that if you incorporate them in your own life, you can reduce unnecessary mistakes, reach your goals faster, and enjoy the journey a whole lot more.
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