Why Your Business Lacks Real Tracking Systems to Grow
Audio only · watch on YouTube
A friend of David Wood’s kept the books for his internet business by hand, and those books were routinely off by five or six figures in a single month. David uses that story to make a point he says he learned the hard way himself: you cannot make data-driven decisions without accurate data, and pretending otherwise is exactly as reckless as spending 10,000 dollars on traffic with no idea how it converts.
He read chapter 9 of Orrin Woodward’s Resolve and pulled out a leadership pattern
David opens by quoting former presidential speechwriter James Humes: “every time you speak, you’re auditioning for leadership.” He asks the audience to sit with that, then explains where the rest of the talk comes from. He had just spent a study session, 21 pages worth, on chapter 9 of Orrin Woodward’s book Resolve, 13 Resolutions for Life, titled “Leadership Resolved.” His conclusion after years of hearing leadership defined different ways is that it “can only be demonstrated, not adequately described.” He quotes Ronald Reagan’s line that the greatest leader isn’t the one who does the greatest things but the one who gets others to do them, and he cites Woodward’s observation that sports coaches and business leaders win the same way, through the plan-do-check-adjust cycle, PDCA, a concept David says he already covered in a blog post a few days earlier.
Tracking numbers matters, and he admits he once refunded customers he’d never billed
David connects PDCA to something he first grasped marketing online in 2009: without tracking the numbers, a business can look like it’s working while it’s actually declining from market saturation, competition, or changing technology. He says one of the hardest things for any leader to build is a scoreboard for every part of the business, and that he has met plenty of online marketers with excellent conversion tracking and terrible bookkeeping, because “free-spirited entrepreneurs” like himself never studied accounting and never worked with accountants.
He then describes his own failure in Amway in 2005. People came to his Phoenix apartment every week with paper order forms and checks, while he ordered product from his sponsor by phone days earlier. The system broke down constantly. When a team member showed up and he didn’t have their product, he lost track of what was owed, so he started refunding people without ever getting his own money back, telling himself, “yeah, it’s fine, I’m going to solve this problem when I’m rich.” He says plainly that isn’t how it works, and that data systems and accounting controls exist to stop small disasters from becoming, in his words, nuclear explosions down the road.
Vision is contextual, and pride shuts down the ability to create it
David turns to Proverbs 29:18, “where there is no vision, the people perish,” and argues the reverse also holds: where there is vision, people prosper, but vision can exist in one part of a life while being absent from another. He recalls the first time he made more than 100,000 dollars in a month, in 2011, and how it made him feel briefly invulnerable, “like Wolverine or Spiderman.” Pride, he says, creates a “personal destruction cycle” that shuts off the ability to generate new vision, while humility does the opposite, opening what he calls “a floodgate of inspiration that flows like a current of living water.”
From there he moves to culture, quoting Woodward directly: “leaders create culture, culture creates results.” Drawing on having done business in 216 countries and worked with hundreds of thousands of customers, employees, affiliates and vendors, David says small cultural problems scale with group size, a pattern that seems harmless with ten people can quietly wreck a team of thousands years later. He credits a trainer named Danny Johnson, met at a seminar in California, with the line “to change the fruit, you got to go to the root.” He also recalls being 21 years old in the network marketing industry in 2002 and assuming half the cultural rules only existed because the leaders were old. He later realized each rule had “someone’s name on it and a pattern of distraction” behind it, a lesson built to protect people from repeating past mistakes.
The six-step business game pattern he took from the book
David lays out what he calls the six step business game execution pattern from Woodward’s chapter.
Find the game, meaning define your outcome, your target customer, your systems, and your game plan. Track parameter, because you can’t improve what you can’t track. Educate team parameters, so your team understands how results will be tracked within the culture. Play and score the game, taking massive action and keeping score of what’s working and what isn’t. Study the score, paying close attention to the numbers the way a real entrepreneur must, treating the business like it could be a billion dollar empire, because that’s the only way it can become one. And make adjustments through plan, do, check, adjust, doing more of what works and changing what doesn’t until you get trackable results you can keep improving.
He closes by asking viewers not just to watch or read but to comment, take notes, and say specifically how they will apply what they learned and what their biggest realization was. He mentions his own method for this project: rather than reading for an hour a day as he normally does, he now reads with a timer and with the intention of writing and teaching afterward, so his brain pays attention differently, and he plans to report back on the results as he applies them in his business, his life, and his relationships.
Written up from the original recording. The full transcript is below.
Read the full transcript (13 min talk, 2,536 words)
Former presidential speech writer and author James Humes is known to have said, every time you speak, you're auditioning for leadership. I want you to think about that for a moment as you're realizing that Humes isn't just writing about being a professional speaker. What was the last thing you said? Did it uplift, encourage, and edify? Did it speak inspiration and vision? Did it speak belief into the person that you're communicating with?
What impact did your words have? See, over the next few minutes, I'm going to share my learnings from today's reading session as I continued in my careful study of Orrin Woodward's book here. It's called Resolve, 13 Resolutions for Life. I devoured 21 pages of this today on Leadership, chapter 9, it's titled Leadership Resolved, to develop the art and the science of leadership. Over the years, I've heard leadership defined in different ways, and what I've come to believe is that leadership can only be demonstrated, not adequately described. See, it creates certain things by manifesting influence and results, leaving behind a trail of change.
I quote Ronald Reagan, where he said, the greatest leader is not necessarily the one who does the greatest things. He's the one that gets the people to do the greatest things. Orrin Woodward points out in his book that the way sports coaches and business leaders win is actually the same. See, using the plan, do, check, adjust process, it's called PDCA, I did a blog post on it a couple days ago, you want to create, execute game plans, and keep score, and you want to adjust to get better results. The idea of keeping score and tracking results reminds me of a concept I first began to understand when I started marketing online in 2009. You want to make data-driven decisions if you want to prosper and continue to prosper.
See, if you don't pay attention to the numbers that you have in your business, and changes in the market conditions and results, you might think that what you're doing is working while actually what's going on is your business is in a state of decline from market saturation, from competition, or from changes in technology. One of the most complex tasks for any leader to learn and implement is to create a scoreboard for every aspect of their business and life. On the internet, for example, I've met a lot of marketers that they have great systems in place to monitor conversions data, but they have the most awful financial control systems that exist in any kind of business because we get a lot of free-spirited entrepreneurs like myself. They've never studied accounting systems in school, they've never worked with accountants, and so they really don't even know how to keep books. See, conversion tracking is one kind of financial system. Accounting controls are another kind of data-driven system.
The other day I heard a story about a friend of mine who has such poor accounting data that his books that are written by hand for an internet business are always off by five figures and they're routinely off by six figures in a single month. I want you to ask yourself a question. How could you possibly make data-driven decisions without accurate financial data? You can't. That's just as ignorant of us to do as it is for an internet marketer who spends $10,000 on traffic without having any sort of conversion skill, expecting to create a return on their investment by hoping and waiting for the best. When I was trying to build a business in Amway in 2005, I did the same exact thing there.
I had people coming over to my apartment in Phoenix, Arizona every single week with paper order forms and checks to pick up products. Physically, I was ordering from my sponsor over the phone a few days earlier. It was a disaster. My team members would come and they'd deliver a check and if I didn't have a product they ordered, I would just lose track of things because the tracking system was so bad and my brain is built more like an artist than it is like an accountant. So what I started to do because I was so desperate to solve a disaster of people wanting to get their products is I just started to literally refund them if they didn't get their products, but I wasn't getting a refund back and I ignorantly justified it saying to myself, yeah, it's fine. I'm going to solve this problem when I'm rich.
Well, my friend, that's not how it works. You got to solve your problems right now and be honest about them. See, data systems and accounting controls prevent little disasters from turning into nuclear explosions down the road. One of the most important leadership principles I ever discovered, I wish I would have read in a book, but instead, like most of the knowledge that I've gained deep in my soul, burned into my soul, excuse the wind there, I learned it through pain from acting in the absence of a mentor who's done in the past what I was doing right then. I can best describe the lessons with these words, wherever you're not prospering in your life, you're immediately going to begin to perish and the inverse is also true. Where there's no vision, the people perish is a common saying in the Bible in Proverbs 29-18.
It's easy to toss around the word vision without understanding the meaning or really even having one or meeting anyone that really has a real vision in their life. While the saying is true in Proverbs, the reverse is also true and it applies in context, meaning two things. Number one, where there's vision, the people actually prosper and number two, vision is actually contextual and it can exist in one area of your life but not in another area because of pride, ignorance, or maybe even arrogance. Sometimes contextual prosperity from creating vision in one area of our lives, it inflates our pride in areas not even related to the context in which we actually are prospering. I remember when I started making more than $100,000 in a month back in 2011. It was the first time in my life and how I started to think I was invulnerable like Wolverine or Spiderman.
What pride actually does is it creates a personal destruction cycle that immediately begins to dismantle prosperity at its root and shut off the divine gateway inside that gives us revelation and wisdom to create new worlds with our words. Pride destroys the ability to create inspired vision and simultaneously the inverse is true. Humility creates new worlds that unifies people, is honest with data, and opens up a floodgate of inspiration that flows like a current of living water running through time, giving life to the world around you as you step into the inspiration that you, my friend, are created to be. See if you're humble, if you're open, if you're willing, if you're desiring, if you're working, if you're adjusting towards your vision, you will prosper and become a leader that will create change in the world. And that, my friend, is reality-based prosperity. Leaders with a vision align a culture to create a current of change.
The concept that Orin went over, he talks about the concept of a cultural current that's formed from the lessons of leadership within an organization that nurture the new people as they're coming into a team. The painful lessons, the painful lessons, I hope you hear that, the painful lessons and life learnings of the leaders align with new members coming in to create a flow of positive change that leads people in the right direction and creates prosperity. He says, and I quote, leaders create culture, culture creates results. Because I've been blessed enough to do business in 216 countries and work with hundreds of thousands of customers, employees, affiliates, and vendors, I've seen social patterns play out in a way that very few people in the world have. I've done things right on one hand and I've done things wrong and I've made mistakes on the other hand, right? What I've learned is that culture can be likened to the metaphor that I gave in yesterday's blog post about financial patterns.
Tiny cultural issues magnify in relation to the size of the group of people. Something that seems okay with maybe 10 people will result in a team with hundreds or thousands of people falling apart years later for no apparent reason. One time I went to a seminar with a woman named Danny Johnson in California. She's a trainer in the home business space and what she said is this, she said, to change the fruit, you got to go to the root. See, good cultures have strict social rules and systems for a reason and that reason isn't always apparent for those coming into the culture and they're easy to write off as unimportant or just religious or they're there for no reason. I remember when I was first in the network marketing industry in 2002 as a young gun, 21 years old, and I remember I thought a good half of the cultural rules were only there because the leaders were so old, literally.
It was useful ignorance. I didn't know. I didn't know what I didn't know, right? I now know from direct personal and painful experience why they had every single one of those rules. Each one had someone's name on it and a pattern of distraction. They put a system in place to prevent, to protect the people.
But see, a culture isn't just there to create rules and prevent destruction, it's also there to create abundance and prosperity through properly executing on a vision. Let me share something that I learned from the book. The six step business game execution pattern. Again, the six step business game execution pattern. Number one is to find the game. You got to define the game.
See, business isn't quite the same as participating in a sport because in business, you define the rules and structure outside of what you're required to have, which is society's legal and economic framework, right? Some rules are important to keep and other rules, they can be broken. Getting clear on your outcome, getting clear on your target customer, your systems and your game plan, those are the essential things to create anything great in your life. Number two, track perimeter. You can't improve what you can't track. Every part of your business and life need to evolve into a system that you can use to track progress if you want to continue to prosper and if you want to build with the way that things actually work.
There's a fine line with creating reality distortion and changing your environment, like Steve Jobs talks about, and creating a fantasy that's ignoring real data. Step number three, you want to educate team parameters. If your team doesn't know how to track results within the parameters you're creating in your culture, they won't be able to change their behavior from feedback as they're getting or not getting the results within your culture. Educate people in the system and how the system will be tracked and managed to help them get the results that they want. Number four, play and score the game. Now it's time to take massive action and make things happen.
Treat your business like a game and be willing to play. When you get results and you keep score, and when you don't get results and don't keep score to adjust, you want to keep score of whether things are going good or whether they're not going good. Remember, there's no failure in life. There's only feedback from the action that you're taking that can help you adjust from the feedback and get more of the results that you want. If you're actually tracking the results, if you're actually tracking your actions. Number five, study the score.
You want to pay attention carefully to the tracking and numbers in every area of your business if you want to be a real entrepreneur. I've made mistakes in the past of not paying attention to certain patterns of data or not creating systems that give clarity on reality that's in front of me. I've made the change and so should you. You want to treat your business like it can be a billion dollar empire because that is the only way that it can. Number six, you want to make adjustments in plan, do, check, and adjust PDCA. When you get feedback that something's working, you want to do more of it and make tests against it to see if you can make it even better.
When you get feedback that something isn't working right, you want to change it and try doing it in a different way until you're producing trackable results you can then improve through your testing. I hope you've been enjoying this content, the videos, the articles, the blog posts. I don't want you to just read this information. I don't want you to just watch this video. I want you to comment. I want you to take notes and apply it in your life.
If you take these things and you apply them, it's going to create change if you just continue to pay attention. I'd like to know specifically how you're going to implement what you've learned and what your major aha was today and I want to see if I can help you have a little aha every day so we can create worlds together over the next year. We make a little change every day. It'll be a dramatic change in the year. One of the reasons I'm writing these things is actually for myself. It's a way of testing a better system of learning for myself and seeing if I could advance and grow faster because all leaders love to grow.
Rather than just reading for an hour a day like I normally do, I actually set a timer, get a book, and I read for an hour. It's not just this book. I just do this every day. I'm reading with the intention of writing and teaching so my brain is paying attention differently. I'll report the results that I'm experiencing in my life as I get them and as I'm implementing things that I learn into my business, into my life, into my relationships. I want you to share this with your teams and Facebook, share it on YouTube, share it with the people you know that run business and let's you and I, together, let's create better leadership in the world.
Go ahead and follow me on Facebook, go ahead and follow me on YouTube. You'll find those links below or above the video and I'm looking forward to interacting with you and more importantly helping you create change in the world by being a better you. My name is Dave Wood. I appreciate you.