Fix This Next: The Business Hierarchy of Needs
Many of you have heard Maslow’s Hierarchy of Needs. It is a triangle with 5 levels to it: Physiological, Safety, Belongingness, Esteem and finally Self Actualization. I used to think that you had to achieve one at a time – climbing the different levels. I now know that you are really at stages at each level; however, you can not truly realize the higher levels if you have not mastered the lower levels.
Mike Michalowicz has brilliantly created a Business Hierarchy of needs. Again with 5 levels: Sales, Profit, Order, Impact and Legacy. Within each level there are 5 core needs. Being truthful where you are with these needs will help determine what we need to “Fix” next.
I love that Mike takes a moment to clarify that although he has a book called Profit First (in which we have already gone through together), he was not referring to the fact that it should always come first in the order of how we manage the business. Rather he is referring to setting aside our profit prior to paying any expenses out of the business.
Instead of Income – expense = profit, he contents that it should be Sales – profit = expenses. If the concept is brand new to you, reach out to me and we can talk about it.
Level 1 – Sales – Core needs are: Lifestyle Congruence, Prospect Attraction, Client Conversion, Delivering on Commitment and Collection on Commitments.
Level 2 – Profit – Core needs are: Debt Eradication, Healthy Margin, Transaction Frequency, Profit Leverage and Cash reserves.
Level 3 – Order – Core needs are: Minimize Wasted Effort, Role Alignment, Outcome Delegation, Linchpin redundancy and Master Reputation.
Level 4 – Impact – Core needs are: Transformation Orientation, Mission Motivation, Dream Alignment, Feedback Integrity, Complementary Network.
Level 5 – Legacy – Core Needs are: Community Continuance, Intentional Leadership Turn, Heart-based Promoters, Quarterly Dynamics, and Ongoing Adaptation.
I hope that you are intrigued as much as I am, and you will go with me for the ride of learning about this Business Hierarchy of needs.
I look forward to your thoughts and comments.
Stay healthy, be safe and know that we are thinking about each of you.