Use the Business Hierarchy of Needs to Move Your Business Forward
MAY 4, 2020 | CJ Ezell
Use the Business Hierarchy of Needs to Move Your Business Forward
Discover the critical issue you need to fix next!
What is the next problem you must address or the opportunity you must meet to grow your business? Do you know the answer… the one that will truly move your business forward?
In the past, I repeatedly fell into the trap of fixing whatever problem was in front of me. Whether I was saving the day or trying to get my company to the next level, I rushed to the apparent problems…you know, the one with the squeaky wheels. At any given time, there are a mountain of issues that need your attention. So, trusting my instincts, I would just pick the one that felt most urgent and focus on it. In addressing the apparent issues, I often disregarded the one that would have the most impact. I was always problem-solving, yet my business remained stuck.
One of the biggest problem business owners have is that we don’t know what our biggest problem is. We can’t be sure that we are focusing on the area of our business that, when addressed, will yield the best results.
In his new book, Fix This Next, bestselling author Mike Michalowicz has developed a business model based on Maslow’s hierarchy of needs, which states that there are 5 categories of human needs, from the most basic need for survival to the highest need for happiness and fulfillment. For us to attend to something higher on the list, we first need to make sure that our needs are met in the categories below it. For example, before you can focus on meeting your needs for belonging, you first need the basics like air to breathe and a safe place to sleep. It’s tough to deal with your self-actualization when you’re hangry and tired! Looking at Maslow’s hierarchy of needs, Mike realized that it has a direct correlation to entrepreneurial progress: what drives your business, what keeps your company trapped, and how you fix the roadblocks along the way to achieve the highest levels of success as you, the entrepreneur, define it.
The key to climbing the hierarchy is simple: fully satisfy your business’s current level of needs, not by rushing to the apparent daily demands, not by addressing advanced needs before basic needs, and not by trying to fix everything at once. To do this, we will use what Mike calls the Business Hierarchy of Needs. The Business Hierarchy of Needs breaks down like this:
Sales: At this foundational level, the focus is on the creation of cash. Just as humans can’t survive without oxygen, if you don’t have sales, your company will not be able to survive. Heck, without sales, you won’t have a business at all.
The five core needs at the sales level are:
• Lifestyle congruence
• Prospect attraction,
• Client conversion,
• Delivering on commitments
• Collecting on commitments
Profit: Here, the focus is on the creation of stability as our business needs line up closely with our human needs for health, financial stability, and a safe environment. Massive revenue doesn’t mean much when you have no profit, no cash reserves, and are drowning in debt.
The five core needs at the profit level are:
• Debt eradication
• Margin health
• Transaction frequency
• Profitable leverage
• Cash reserves
Order: At this level, the focus is on the creation of efficiency ensuring that everything runs like clockwork. With all its organizational efficiency needs met, your business can run and even grow, no matter who is on your team. It can also grow without you, the entrepreneur.
The five core needs at the order level are:
• Minimized wasted effort
• Role alignment
• Outcome delegation
• Linchpin redundancy
• Mastery reputation
Impact: Now the focus is on the creation of transformation. Many businesses never correctly address the needs at this level, because they don’t know this level exists or misunderstands what it is all about. The needs that must be addressed at this level are related to client transformation, and how your company aligns with your staff, vendors, and your community.
The five core needs at the impact level are:
• Transformation orientation
• Mission motivation
• Dream alignment
• Feedback integrity
• Complementary network
Legacy: At this highest level, the focus is on the creation of permanence. If you want your business to continue to thrive for generations to come, you’ll have to consider the big questions, such as your long-term vision for your company and how your business will adapt to changes.
Here are the five core needs at the legacy level:
• Community continuance
• Intentional leadership turn
• Heart-based promoters
• Quarterly dynamics
• Ongoing adaptation
To be clear, the Business Hierarchy of Needs levels do not represent stages in business growth. They are levels of needs. Your business will not linearly climb the hierarchy but move up and down it progresses. Like building a structure, you don’t just go up…you go back down to the foundation, shore it up, so you can build higher. For example, while you may be dealing with a need at the SALES level, that does not mean your company is still in the SALES stage. You are merely strengthening the foundation.
The Business Hierarchy of Needs gets you out of guessing mode and into fast, impactful, deliberate action. It took Mike the better part of three years to perfect it, testing it out in his own business and with other entrepreneurs. Once he figured out how to pinpoint what to focus on next, his businesses grew faster and healthier. Since learning about the tool, I’ve stopped relying on my instinct alone and have started using this system to listen and respond to my company’s actual needs.
Now, when you get stuck, all you must do is start at the bottom of the pyramid and address the core needs you have not yet met. It’s back to basics, baby. Basic needs that is. The tool never stops working. You can always return to it to pinpoint your biggest challenge, fix it next, and then pinpoint the next one after that as you build your beautiful business.
Want to find out what you need to fix next? Take this free assessment online to find out: cjezell.fixthisnext.com
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