Chances are, you’ve heard of Maslow’s Hierarchy of Needs. Made famous from his article titled, “A Theory of Human Motivation,” Maslow famously surmised there are five basic categories of human need … and then concluded it’s impossible to have the needs at the higher levels met until the levels below are met sufficiently.
Starting at the bottom with physiological needs (food, water, shelter), and moving up the pyramid to safety, belongingness, esteem, and self-actualization. One must work his way up the pyramid meeting each lower level need before he can achieve anything at the next level.
Now, Translate This to Business!
In Mike Michalowicz’s latest business book, he’s taken Maslow’s model and reconfigured the pieces of the pyramid to reflect the business (or entrepreneurial) journey. A look at his model quickly reveals the absolute truth in his assertions and can help business owners and leaders better understand how to address issues and challenges in their businesses. In other words, where to start … or what to “fix next.” Presumably, this is ultimately how he derived his title, “Fix This Next.”
At bottom and most basic level is SALES – very simply, it is the creation of cash. Since cash flow is the life blood of any business, this is the rudimentary need that must be met before anything else can be achieved.
Moving up the Michalowicz pyramid, next is PROFIT – which he defines as the “creation of stability.” (Check out his book, “Profit First,” for some life changing strategies in this area)
Next, is ORDER – the creation of stability. You have sales, you have found a way to take profit, so you now must create repeatable systems and processes to build stability in the company. It should be noted that any business owner considering an exit strategy, must have these three levels/needs firmly under control.
Moving up from here, we go to IMPACT. This is the creation of transformation. This includes how you benefit your clients, how well your team aligns around your mission, how well their dreams are aligned with the company vision, the type of feedback you receive, and your level of collaboration with partners and vendors for a mutually beneficial relationship in service of your customers.
Finally, at the top level is LEGACY, which is focus on the creation of permanence. In other words, how the business lives on and serves clients after you move on.
The model is brilliant in its simplicity, yet profound in the power it has to clarify what you need to “fix” in your company … and in what order you should (must) do it. If you buy into the model, the priorities for your business become immediately clear.
In his book, “Fix This Next,” Michalowicz addresses the essential elements in depth, focuses you on how to properly identify your business “Vital Need,” then how to get to work immediately to “fix” it. It’s an excellent read for every business owner and CEO. We highly recommend!
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If you’re ready to take your business and leadership skills to the next level, and if you think your business could benefit from more insights like what’s offered in this article, let’s start a conversation. LXCouncil may be the perfect next step!
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