On today’s podcast “Accurately Assessing Your Capacity” we discuss how you may be overestimating your knowledge or capacity and setting yourself up for failure and burnout.
This is one of the reasons that leaders get trapped in The Leadership Crazy Cycle by being task saturated and over-committed.
Listen now to learn how to accurately assess your capacity as a leader, not to mention that of your team, and avoid falling into the traps that hold businesses back from scaling successfully.
454 Accurately Assessing Your Capacity
Chris LoCurto 0:00
On today's episode, how to accurately assess your capacity as a leader, not to mention that of your team and avoid falling into the traps that hold businesses back from scaling successfully. All of that is coming up next.
Welcome to the Chris LoCurto show where we discuss leadership and life, and discover that business is what you do, not who you are.
Welcome to the show, folks hope you're having a fabulous day, wherever you are. On today's show, we're talking about not exceeding our grasp our our limits our capacity by going after things that are fun and exciting. And I'm probably losing people right now, I want to hear this by going into things that are fun and exciting. But that don't bring the kind of long term success that we ultimately want and that we can sustain. Right? So how many of us have ever been in this situation before we didn't really accurately assess the time invested required? I know I've my wife and I have experienced that recently, as we have been working the business and also growing things up on the ridge and, and having a whole lot of animals show up that we have not accurately assessed our time, on some certain things. How about not accurately assessing the financial investment required? I know, nobody's ever done that you went headstrong into something and didn't realize it was gonna cost considerably more. What's the old saying on building a house, I've built multiple, you know, a couple of houses. And I can tell you, it's absolutely true plan on going 30% over budget and plan on going 30% over on the time, that's definitely a possibility. How about not accurately assessing the resources necessary to complete the project, this is a very biblical thing, who does not first count the cost and you know, so that he doesn't go out and start to build and realize that he can't actually afford to finish them if you've ever been on in a third world country or done missions in third world countries or anything like that. You've probably seen this effect where somebody has started a process or many people have started processing, but didn't have the money to finish. And so things houses, buildings, things just sit there. How about not accurately assessing the capacity of our team to do the job completely? Leaders, we see this all the time, where leaders, business owners get really super excited about something and start moving forward and never really assess, does my team have the capacity to do this, usually what happens is, is the leader goes man, I got a great team, they knock it out of the park, they do all kinds of incredible stuff. Surely, they'll be able to do this as well. And we don't take into account, they're already busy knocking it out of the park, they're already doing the things that you want them to do, right. So quite often, we see leaders that do not accurately assess the capacity of the team to complete the job. Or how about accurately assessing our capacity as a leader as a person to do the things that we're doing with excellence. Now, that is a big thing. For me, that's a big core value of mine. A lot of our core values are not corporate sounding. But there's a couple that are and one of those is excellence. I tell people all the time, if I cannot do it with x, and if it's client facing, and I can't do with excellence, there's a really good chance I'm not going to do it. Oh, but it'll make you tons of money. I don't care. I don't care to make the money and deliver a sub excellent subpar product service, whatever. So there have been over the years people have actually just stopped mentioning things to me because they they come to realize he's really not going to do it if he can do it with excellence where other people will do it. Because it'll make them money. And yeah, there may be problems that maybe, you know, might not be as good as it could be. And that's just not me. Right? I care more about the person the client than making the dollar right? Profit is not our number one motivating factor. It's actually number three. Number one is God number two is helping people. Number three is profit. So there is an actual psychological phenomenon for this and it's called the Dunning Kruger effect. The Dunning Kruger effect is when people mistakenly overestimate their knowledge or ability in a specific area. Now this can occur due to a lack of self awareness which prevents them from accurately assessing their own skills that's from Psychology Today. Here is a question quote, those with only limited knowledge in a domain suffer a dual burden, not only do they reach mistaken conclusions and make regrettable errors, but their incompetence robs them of the ability to realize it. Wow. If that is not a punch in the throat, I don't know what it is, but cash? How true. Right? How true. If we don't understand capacity, if we don't understand how to accurately assess capacity, then not only do we screw up, make mistakes,
feel regret because we've done things the wrong way. But because we don't know how to assess our own incompetence robs us of the ability to realize that that's why it didn't work out in the first place. Think about that. So if you take a look at how many times even recently, that you've not accurately assessed, Amy of the things that we talked about, then guess what, there's a really good chance that when it failed, or if it failed, that instead of recognizing, oh, man, that's totally my bad, I did a terrible job assessing this, that you may be looking at it going, I have no clue. What's not my fault. Well, it's somebody else's fault. It's this other situation or whatever. Unfortunately, regrettable errors and mistakes made can cause you to be robbed of the recognition that that's because you're not accurately assessing capacity. Now, this is one of the reasons that leaders get trapped in what we call the leadership Crazy Cycle. We see it all the time, yours truly has been there. The reason I created killing leadership Crazy Cycle is because a couple decades ago, I found myself stuck. And I was frustrated as all get out. And I started doing things and learning and testing things out to find out oh my gosh, not only am I stuck in this, you know, I didn't call it leadership Crazy Cycle yet. But not only am I stuck in this place, it's my fault. And I've got to do something about it. And we have a whole ton of podcast episodes and lessons dedicated to that topic alone. Because of having realized how painful and how impactful it is, when you don't know how to accurately assess things like capacity, when you do get yourself stuck in the leadership Crazy Cycle when your leaders are stuck in the leadership Crazy Cycle. So not only does this cycle frequently lead to project failure, but it can also have this incredible demoralizing effect on the teams being led by the leaders who are in accurately assessing their capacity. Think about it, you've probably been on one of those teams, you've probably experienced it having had a leader in your early years, your younger years, those of us that are older, those of you that are young, you may be experiencing this right now. Where they don't accurately assess your capacity, the team's capacity, the resources needed, whatever it is, and then that thing begins to fail. And you start going, Hey, let me let me raise a red flag here. Let me point something out. And you're just wrong. Right? We've all been in those situations where we saw something as not gonna work well. And the leader just seems literally either not caring about it, or just oblivious to it. So in this episode, we want to help you avoid this trap. What causes the Dunning Kruger effect? To quote them, or to quote Psychology Today, confidence is so highly prized in the workplace, that many leaders would rather pretend to be smart or skilled than risk looking inadequate, and losing face, folks. In other words, pride can blind leaders from leading themselves and their teams. Well. Think about that for a second. Where are you fooling yourself or those around you? Putting pride aside it can also be the result of not doing one of these things adequately. Cost analysis, market research, accounting and planning. So here's the deal. To quote our own Joel fourtner. You cannot grow or scale your business with resources that you do not have, and you cannot scale beyond your capacity. It's so true, folks. It's absolutely true. This is why our message is so different than so many other people's that message out there that are trying to sell you on the magic pill. If you solve these things, then you can actually scale successfully. So when we talk about scaling, we're talking about your capacity to grow your business and pursue new ventures if you want to, it could be just new new growth in the very thing that you're doing. While circle highlight star, the word while sustaining your health and viability in the marketplace, this is crucial to you. This is crucial to your team. This is crucial to your business's success this year. If you're going to scale and you're going to do it well, you have to make sure that you are actually understanding assessing accurately your team's capacity, your capacity, business capacity resource capacity, so that you can go after scaling in a very healthy way. Now when we come back, we'll turn back the clock a bit and look at some 2000 year old wisdom from a Jewish rabbi. His message is still valid today.
Joel Fortner 11:02
Hey, it's Joel Fortner here. I'm the Vice President of leadership development on Chris's team, and I oversee our Next Level Mastermind business coaching program. Most business owners and leaders lack a clear path to succeed in business. They question whether they're making the right decisions, if they're focusing on the right things to really grow their business. If this is you, you need a coach in your life. Coaches help you make better decisions, navigate uncertainty, lead more effectively, and grow your business without sacrificing your life and your family. In their first year, our clients typically see an average of 67% increase in gross revenue, and an average of 138% increase in net profit. And regained hours of time, our clients stay in the program for three and a half years simply because of the results they get. So if you're ready to run your business at the next level and see the growth you've been wanting, then visit chrislocurto.com/mastermind. Again, chrislocurto.com/mastermind, today.
Chris LoCurto 12:03
So Jesus explains this capacity concept and the Gospel according to Luke. If we look at it through the New Living Translation, don't begin until you count the cost, who would begin the construction of a building without first calculating the cost to see if there's enough money to finish it. Otherwise, you might complete only the foundation before running out of money. And then everyone would laugh at you, they would say there's the person who started that building and couldn't afford to finish it. Lots of people, lots of people get crazy excited about starting a new business about growing their current business about taking on new projects. And I will tell you that this is not uncommon, especially when we find our more higher D personality styles that get a business going successfully. And instead of growing in wisdom and understanding and knowledge of how to make it more successful, they get bored. Listen, I get it, I have led a lot of high D personality styles that have gotten really bored with the business that they have. They're like I want to start something new. There's nothing wrong with that, except you have to understand what that's going to do to your current money making scheme. So if you have a great successful business, and we pull you and your energy and resources away to go make something else happen, because you're bored. What do you think's going to happen to that money making business, it will tank, it will tank it will tank if we don't put the right things in place. If we don't assess accurately the capacity of the team to continue without its leader, if we don't put something in place like a champion, who then takes over with all the energy to make it happen in the understanding and the knowledge and the resources. Then unfortunately, that thing tanks. The other thing is I see this all the time. I see when folks are like Chris, I have got this amazing product. I've got this amazing service. I need to go, you know, $300,000 into debt to make this thing happen. I'll never forget I had a guy reach out to me who I think I think he was in Southern California. He may still be listening to this day. This is a long time ago. But he reached out and he's like, Dude, I make these amazing tacos and everybody loves them. Like everybody raves about them. All my friends, my family, everybody, they love them. And so I'm wanting to go get a restaurant so I can sell these tacos. And you can you can see the excitement. You can see the concept. It makes sense. I've got this incredible product. I must get it out there. Let me go heavily into debt, getting a restaurant. All the equipment all have everything so I can sell my tacos and I'm like, Dude, you're you're asking me because you know that I've done this type of stuff for quite a while. Here's what I'm going to tell you Whenever we get excited that we have a phenomenal product, but we don't have proof that we can sell it on a grand scale, then what tends to happen is we overextend ourselves put ourselves in a situation where we are way behind on money, which causes us to be incredibly emotionally handcuffed to this new idea. Because if it doesn't work, we lose all of that money that we've just gone into debt for. Right or we've poured our own cash into without the proof that it actually works. And then every aspect of our life gets attached to this process, our relationships, our parenting, our friendships, our health, everything gets connected. Because we went out, we did something ridiculous. And unfortunately, it's not working the way that we thought it was, or would work. And now it's, you know, failing. And all the money's, you know, going to be an issue for us. So we're stressed out we're stressed with our marriage, we're stressed with a kid. You can see the whole picture right? You can see the the snowball, right, the snowball effect. So here's what I suggested to him. Here's what I want you to do.
When I lived out in California decades ago, you could go to some of these markets and stuff and they had these pushcarts get a pushcart, set it up, we're not talking about a ton of money. This is so much cheaper than a brick and mortar restaurant, set it up, make your tacos, go to Events, push it around the city, do whatever I think is in San Diego, push it around, show up at events. You know, see if you can sell your tacos from this pushcart. If they are phenomenal, you can get word of mouth, you can start advertising, you can do all kinds of stuff to get people to come down and buy your tacos off your pushcart, right, if it works, spend that money, take the money that you see, you know, save a bunch of the money that you're you're making, put it into a food truck. This is a long time ago before food trucks became incredibly popular like they are right now. Right? I'm like, put it in a food truck. Then you can drive around in the food truck and sell your tacos, if they're that great. If they are that phenomenal, then you can put it into brick and mortar. Well, what have we learned? So my advice would be different now that we've learned that food trucks have gone ballistic, we would actually probably stay in the food truck instead of do the brick and mortar, right. So this was my advice to him. And it hurt. He's like, Man, I just don't think I can do it that way. I don't think I can lose out on the opportunity. I've got to go after this opportunity.
Folks, that very thought process, man, I hope that he was super successful, I hope that he made it, I hope that he's making lots of tacos and lots of money and lots of people are happy. Here's the problem with the thought process. The thought process says, I'm going to miss out on this amazing opportunity that my friends and family have told me about, right? Because he didn't have proof that there's tons of people out there looking to buy his tacos. So it's people that he knows, I have this opportunity that everybody's gonna want. And so I have to go big or go home. And my assumption is, is that he went out and actually went into debt. And you know, but hopefully perfectly he stopped he reassessed. He took a look at the capacity, look at the resources and ask themselves the question, should I go prove this concept first. So we have to be taking a count. Now it's not. It's not a difficult concept to grasp. But it's not as fun as going ballistic, by not counting the gods, right. So new ideas are fun, but they have to be tested. new projects are exciting. But you've got to use wisdom. New products are thrilling to sell. But you've got to make sure they're viable. So remember the words of Jesus don't begin until you count the cost. So learning to assess your capacity and scale means first learning to valuate take account of all your resources, all your resources, your people, your money, your computers, your cars, your desks, your you know, footprint, every resource that you have, including knowledge, what's the knowledge base in your team or your leadership team or you know, you write, evaluate and assess all of your resources? What do you have for vendors? What do you have for people you can trade things I don't know whatever it is, find and evaluate every resource. Assess, count the total costs as far as you can possibly see. We always have budgeted with the process of good, better and best. Right? So take a look at what could this possibly cost? What if it went? Well? What if it went incredibly well? But what if it doesn't go? Well? What if it goes really badly? What if it's devastating, right? So assess it as far as you possibly can and plan plan for the growth you want to see even if it's in the future. So if you don't look out and see where you're going to grow, a lot of folks just go, man, if we do these things, we're going to we're going to create more revenue. Well, as we talked through and strat plan all the time. If we doubled your revenue tomorrow, what would happen to your business? In any, any team member, any leader, you know, worth his weight? goes, Yeah, that would self implode us. We couldn't handle that. But for some reason, on the front side, we convince ourselves if we just added more money, all of our problems would go away. Nope. That's why Chris LoCurto My team, we don't sell the magic pill of, hey, do this, it's going to make a ton of money. We help you discover all the things that are keeping you from getting to that money. We solve all of those things and have you ready so that you can scale? Well, when we come back, getting accurate perspective on your team. And business will help you keep you on a growth cycle that is manageable and bears lasting fruit. That's coming up next.
Hey, folks, a couple years ago, I was visiting with a client and the CEO said to me, Chris, we're not going to hit our goal. I asked him what he meant. And he said, We're gonna miss our three year revenue goal coming out of strat plan by a few months, I didn't realize it at first, that he was having a lot of fun with me by saying they were about to triple their company in less than three years. How freaking awesome is that? Folks, these are the kinds of results that businesses get by coming through our four day strat plan event. On average, we find $2.1 million worth of revenue in the next 12 months that the company was not planning on. And this event is for all sized businesses. If you're small, medium, or large, it works for every single business, because it's not industry specific. It's about gaining all the information about all the things inside of your business that are holding you back from success, and then giving you a plan and a process on how to walk that out and be successful in your business. By discovering the things that are holding you back, it helps you get to all of those goals that you've been planning on for a long time. So if you're ready to get the perspective, you need to solve what's holding you and your business back. So you can grow faster than you need strap land. To learn more, go to Chris locurto.com/strat plan. That's Chris locurto.com/strapline. Folks, there's just no substitute. No shortcut around for accurate information, period. Know yourself, know your team, know your business, know the market and know what you bring to it. If you're unsure of the first one, knowing yourself, get yourself in the next level life. There's so much for you to understand about you how you make decisions, your decision making process is based so much more on stuff that has nothing to do with your business. It has to do with the root system. It has to do with experiences, it has to do with your surface level responses. It has to do with the lies that you tell yourself, there's so much about your decision making process that you've got to come to understand. So get to know yourself if you don't know you get the next level life. For leaders, you've got to understand the capacity of the teams you lead. Now you've got to have good tools, you've got to have good systems, you've got to have good programs in place to help you do this. If you don't have those in place. How in the world are you going to know what you can actually pull off. That's why we do what we do. And we use tools and systems like number one, personality profiles for love.
If you've been following me for any decent amount of time you understand how important it is to know how to communicate with people. Make sure that you're leaning in their direction, help them to lean in your direction, understand how to solve problems and avoid conflict. All those things. Understand how to communicate well with your team. Know who's best suited for the certain roles and tasks, minimize conflict, poor perception and increase accuracy. Why do I say sale that? Well, for decades, I have helped leaders and business owners to understand that the number one problem they have is not a lack of money. It's not a lack of clients, it's not a lack of quality team members. The number one issue is a lack of high levels of quality communication. Until you get a few have not done personality profiles and your business, get it done. Go to go to our store and get it for your team. Make it happen, do the video make people sit down and watch it? And then talk about it? Why? Because it is the number one issue you're having in your business right now. By far, every leader who's been through our stuff will agree with that, because once they see it, they can't unsee it. Number two, care arrays and KPI metrics. So we're considered so key result areas and key performance indicators. Alright, so the the, what we're looking at is what is the ultimate result that we're wanting for this team member to put out there? And how do we measure it? Those are the things that we're looking for, right? We're consistently assessing and adjusting these very things as necessary. I just literally had a conversation with one of my leaders the other day, talking about a team member who's coming up on an anniversary going, Hey, we've got to readjust these because this person has grown, they're growing in areas and we want to see what else needs to be adjusted. We don't want to go into the next year, and have things just the same. Let's help them out. Let's give them some excitement, because we can point out that they've grown. But let's also make the adjustments to make sure that they don't get bored or fall backwards, right? So when we see underperformance, then we gain perspective and adapt by holding people accountable to the K array. If we see or the KPIs, if we see that somebody has not accomplishing it, the first thing we ask is, Is it our fault? Did we do a bad job explaining did we do a bad job writing down what our expectations are? And by the way, K RAs are not job descriptions. You can have parts of that in there, but are looking for the ultimate result that they're supposed to be delivering on? Right? So if they're not getting there, we always start with us the leader first, did
we do something wrong? Did we not explain it? Well? Did we write up a bad care, Ray, whatever it is, to not give them the tools? Whatever it is we assess the living daylights out of it to find out, is it our fault? If it is not our fault, then we turn to the team member and go, where are they lacking? Where are they struggling? Why are they not hitting this, we gain a ton of perspective. And then we make adjustments from there. Right? So if it's our fault, then we dig in and we fix it as quickly as possible. If it's a team members fault, then we put things in place, so that that person can actually make the adjustments, and you know, try to be as successful as possible. Also, when we see over performance, we gain perspective and adapt what if somebody is just doing an incredible job knocking it out of the park, and we have not recognized their capacity or their abilities? We've not recognized that they are a greater champion than we thought, right? Or what if somebody is reaching outside of their their boundaries? What if somebody is doing stuff that they're not supposed to be doing? If we don't have these things? These metrics these ways of, of holding people accountable, then what do we hold them accountable to? Well, I told you to do this thing way. But no, you didn't know I'm pretty sure I did. I don't remember it. I mean, it just becomes silly. Number three thing is is quarterly reviews and yearly strat plans. Now we do this on our own teams. So it helps us to maintain and even increase efficiency, expectations and effectiveness. So we actually do, depending upon the year and what we're doing and how much we're doing. We do one to two strat plans on our own company, every year, depending upon what's going on. Sometimes we might focus heavily on one area of the business. But we're always taking a hard look at our business and asking what's holding us back what needs to be adjusted, what do we need to change? When we do those things, it allows our team to operate in greater success. It allows them to operate with greater freedom, because we get to sit down and reveal all of this information and then people go oh, great. Now I have a vision. Now I have direction. Now I know what to work on. So leaders to lead effectively. You've got to understand six things. There are six things that I want you to effectively do you've got to do these things. Number one is you have to understand your mission now for us. Your mission, whether it's you your team, your business, but you got to understand the business's mission, whatever the mission is, for us by Definition mission is the purpose for existing. So your business mission is the purpose for your business to exist, you've got to understand that you've got to understand why that's in place why your business is in place. Number two, you have to understand your vision. Now mission is your purpose for existence. Vision is the next destination, you're going to, you can have one mission, you can have 700 visions, you should always be getting new destinations, going to a new place. What's the next one? What's the next one? What's the next one, right? But if we're doing things, well, we are operating in a unified, single direction, we are not operating as a shotgun approach where everybody's going in 17 different directions, that doesn't work. Third thing is you have to understand your capacity to lead your team to that destination. If you do not know how to get them there, then don't be surprised if you are operating at a shotgun approach. Don't be surprised if some team members get there and some team members don't. Don't be surprised if you keep working on the same vision, same destination, year after year, and never really getting there. Number four, you have to understand your team's capacity to follow you there. Can they follow you? Do they have the ability? Do they have the knowledge? Do they have the wisdom? Do they have the capacity in time? Do they have the resources to follow you to that destination? Do they even want to right? These are things that you need to understand number five, you need to understand your business's resources to see it through. If you cannot afford if you cannot supply the tools, if you cannot
overcome every obstacle, then you're not going to make it. Number six, you need to understand the costs and the obstacles that are going to be in the way as you try and get to your destination, how much is it going to cost to get us there? And what are all the things holding us back from being successful if you do not plan and count the cost. And if you do not spend quality time, especially get somebody who can show you the things that are holding you back. If you don't spend quality time discovering everything that's going to keep you from that destination, then in my world, it's a waste of time. You're just gonna keep doing the same thing over and over and over again, wondering why you're not getting to that destination. So those are things that every great leader must do. Now once you have a firm understanding of these things, then you're ready to set the right priorities which we will be talking about soon in another episode. Well, folks, that's all the time we've got for today. I hope this has helped you immensely. As always, we want you to take this information. We want you to change your leadership, change your business, change your life. And join us on the next episode.