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I don’t get angry. I don’t get anxious.

That’s just how I’m wired; I always thought it was a good thing, an advantage. It certainly helped when I was building a company. It helped, too, when there were problems; I didn’t overreact, didn’t let it keep me up at night. 

Lately, though, I’ve been rethinking whether it’s an advantage – or whether it’s a liability, in ways I hadn’t really considered.

An operating system for life

How many decisions do you make a day?

Little ones, big ones. What do I wear? Does this email require my attention?

How should I react when someone lets me down?

Mental models – like this one – help us build those decisions on a framework. A process. Something that’s repeatable, that lets us take our personal biases out of the question – or our deficiencies. They’re what Charlie Munger calls “an operating system for life.”

Let me tell you a story about decisions, anxiety and anger, and biases.

“I should have thrown him out the window”

There was an employee I had worked with for a long time. He’d been there with me at the beginning. He was the definition of “team player you don’t worry about.” He showed up, he produced. So when I found out he was complicit in fraud, I didn’t feel violated; I didn’t feel angry. I felt like I had failed. I hadn’t helped him “unleash his potential”; I would never do something like this, there must have been a mistake, he must have made a mistake. When he said he regretted it, that he wanted to change, I believed him – even though I had to fire him. 

I should have thrown him out of my office window. I didn’t know he’d go on to attempt the same fraud with someone else. I didn’t know he’d be the reason I’d have to talk to law enforcement.

I had fallen into two common traps: I was overconfident, and I had confirmation bias. I saw what I wanted to see because I was too confident in my ability to spot problems, assess truth. 

These are the potholes that using mental models can help us avoid. Unforced errors, if you will. I went with my gut, and my gut was wrong – because it was weighed down with cognitive biases I hadn’t considered.

Some useful mental models

You probably already have a few mental models in your head. Occam’s razor, for example – we all know that one. (The simplest answer is often the best!) 

But you should never have just one. Relying on one mental model – or the ones you know and grew up with – is like limiting your perspective to a single porthole on a ship. Sure, you can see pretty far on a clear day. But you’re missing the island on the other side. 

For example, did you know about “Hanlon’s razor”? “Never attribute to malice that which can be adequately explained by stupidity.” I like that one.

Think of mental models like cross-training your body in the gym, except you’re training your head. “Once you have a name for something, you can spot it, and you can use it,” Gabriel Weinberg says in this great podcast about mental models

To use mental models, know thyself

You can’t really use these tools until you know your own weaknesses – the biases you’re most prone to. Not long ago, I took an emotional intelligence (“EQ”) test through my mentor. I answered a lot of questions, and it came up with a profile that confirmed what I suspected: while my empathy for others was through the roof, my access to my own feelings – particularly anger and anxiety – was very low. 

(By the way, while the test I took isn’t available publicly, this one is similar. Try it, tell me what you think.)

This leads me back to my story, and the two mental models – or biases – I struggle with most. 

The biggest, for me, is confirmation bias. Sometimes your story is so good, it’s hard not to fall for your own bulls**t. In our business, we need to be right 99% of the time. I’ve done this business for 23 years, so I have been right, 99% of the time, most years. It can make you cocky. It has made me cocky, in the past. If you have a problem situation with the client, it’s easier to tap into my capacity for joy and love. To believe my own story, believe in their potential, believe that they can fix this. But as a friend of mine says, “you can never out give a giver, but you can never give a taker enough.” 

You could also call my overconfidence “optimism bias” – essentially a “mistaken belief that our chances of experiencing negative events are lower and our chances of experiencing positive events are higher than those of our peers.” It’s like being a teenager – you just don’t quite understand that one mistake behind the wheel of a car can, in fact, leave you vulnerable.  

Anger – or anxiety – could help me double-check that impulse. But I don’t have those, so I need to put other safeguards in place. 

My safeguards

There’s this “negative Nelly” on my team. He’s the one that always spots the problems, the red flags. I never want to hear them. I’m not anxious or suspicious; I always think the deal will go through. But I need him to do that, as much as I tease him. And he needs me, to be confident when it’s warranted. That’s one safeguard.

I also have a coach. Two, in fact. (Need one? Drop me a line and I’ll recommend you.) I pay them to help me think through these mental models, to help me understand where I need to watch for potholes. I also have a mentor, and I can’t recommend that enough. 

And I read. I’ve taken to heart Munger’s advice from his famous commencement speech, and I’m trying to understand as many of the “big ideas” – the mental models – as I can. (You can find my “starter reading list” at the bottom of this blog.)

“What I noted since the really big ideas carry 95% of the freight, it wasn’t at all hard for me to pick up all the big ideas from all the big disciplines and make them a standard part of my mental routines. Once you have the ideas, of course, they are no good if you don’t practice — if you don’t practice you lose it.”

Charlie Munger, 2007 commencement speech

What about you? What “big ideas” have helped you process the world, or understand your own foibles better? Drop me a line – I’d love to hear your favorites. (Also, if you subscribe to our newsletter, I often include a link or two about a mental model I’m currently reading up on.)

Reading List:

Robert Greene’s “Laws of Human Nature” (a true classic)

Shane Farnam’s “Great Mental Models: General Thinking Concepts” (also, follow his blog!)

Robert Cialdini’s “Pre-suasion”

The post The Potholes In Your Mind: Using Mental Models appeared first on Far West Capital.

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A disclaimer: I am very biased.

I grew up in Houston, Texas, and came of age during the glory years of Hakeem ‘The Dream’ Olajuwon. When the Houston Rockets won the NBA Championship in 1993, I was a fifth-grader, barely allowed to stay up late enough that summer to watch them take down the Knicks in seven games for their first-ever championship. I loved the Dream, of course, but I really loved the role players. If you made me rank them, I’d tell you my favorite was Vernon “Mad Max” Maxwell, followed by Mario Elie and “Big Shot” Robert Horry, who strongly resembled Will Smith in those “Fresh Prince” days.

I’m always fascinated by role players, especially those specialists who have a role that’s both unique and extremely valuable to their team’s strategy. In the era of LeBron James and Steph Curry, it feels vintage to celebrate teams – but LeBron and Steph would both tell you they couldn’t have done it without Ray Allen and Andre Iguodala, respectively.

So as a Houston fan, as a lover of role players, and as a fan of a good story, I love P.J. Tucker.

You may know two things about P.J. Tucker, other than his role as elite defensive specialist for Houston: He loves pancakes and eats them every morning, and he’s got a legit sneaker collection. But while I definitely envy him the sneaks, what I admire about P.J. Tucker is way beyond pancakes and fashion sense. In a lot of ways, P.J. is a grinder, the kind of player I look to for inspiration in my own career.

Here’s what I’ve learned from P.J. Tucker’s long, strange journey.

Don’t let your ego get in the way of your failure

P.J. didn’t have a great start. In fact, he had one of the worst starts to an eventual elite career I’ve ever seen.

It started with such promise: he was the BigXII’s player of the year in 2006, a second team All-American, picked 35th in the draft to go to Toronto. Then… record scratch. After just 12 months in the league and 83 minutes played for Toronto, he was out of the league.

“I did everything wrong,” P.J. would later say. “That was one of the worst years of my life. I wasn’t playing. I couldn’t get reps. Toronto didn’t need me. And it’s big-boy basketball. Grown men. Guys feeding their families. I didn’t know what it meant to be a pro.”

Even then, after what had to be one of the worst, most reality-check years in his life, P.J. was being honest. His ego might have made him want to make excuses, to say his talent wasn’t being utilized, that he wasn’t in the right place. To fail well, he had to own it. And he did.

Be patient with the long odyssey

Over the next 5 years, P.J. Tucker would put on 7 different team jerseys in 6 countries. It had to be lonely. He was far from home, playing for teams in Israel, in Ukraine, in Germany, in Italy; until 2007, the closest he got to playing in his home country was a stint on Puerto Rico’s team. But he clearly stayed hungry. In his first season in Israel, he led his team to a title, breaking their opponent’s 14-year streak as Israeli champions and snagging the MVP. In 2012, he’d do the same for a team in Germany.

He learned to specialize, to focus less on making the big shots and more on doing whatever his team needed that night to get the W. “It was tough being away from home,” P.J. would say. “Overseas, it ain’t about dropping 30 every night, being the man. They care about winning over there. If you’re a winner, you can play forever over there.”

I think that’s where he became the P.J. Tucker I admire: intense, focused, anticipatory, driven.

All it takes is one opening

He’d gotten content, playing overseas. He didn’t feel like the NBA valued what he could do; he knew most couldn’t see his potential as the right puzzle piece for the right team. He was getting paid. He was happy.

And then the NBA called. Would he try out for the Phoenix Suns, asked general manager Dan Majerle?

If it hadn’t been Dan, P.J. might not have left his comfortable berth abroad. But Dan had a very specific strategic plan in mind for P.J.: Your job is to defend the best man on every team. Shut that man down. That’s your whole job.

“Dan used to sic me on people,” P.J. says. “I knew that defense was my way, but that is where I learned to enjoy it and saw how much of an effect it could have on games. You can really change games that way.”

Other teams noticed. Not long after, P.J. Tucker was pursued by the Houston Rockets and signed a four-year, $32 million contract.

They played the Warriors to open that season; P.J. scored 20 points and made the final two free throws to seal a one-point win. I had found a new favorite player.

Remember how you got there

This last season, 2018-2019, was P.J. Tucker’s coming out. Suddenly, the national media loved him as much as I did. (Exhibit A: This article.) They love his pancake obsession, his sneakers, his physical old-school playing style, his enthusiasm for the game and his teammates. But P.J. is still the same guy who remembers his hard first years playing the game professionally; who knows the emptiness of awards without championships.

“I try to help [players] that are in the brink of getting out [of the league],” he says. “I really take pride in being a good vet and helping guys.”

But now he has fun. The sneakers are wilder than ever. The fashion got weirder, more fun. He clearly takes joy in his game, sounding rapturous about guarding former Texas teammate & superstar Kevin Durant the way some guys sound about scoring 30 points.

“This is my dream. I’m living my dream right now guarding Kevin Durant in the NBA playoffs,” he said, just a few weeks ago.

“I want to win. I don’t care if somebody says I’m the best or the worst defender. I’m going to go out and what I do every single night no matter what.”

He’s a joy to watch. But beyond that, I love his growth mindset. I love his commitment to getting better every day, doing the hard, small things no one sees. The focus, honed on doing what he’s good at and playing Robin to James Harden’s Batman.

You can’t control everything. The NBA likely wasn’t ready for an ‘in between’ position player like  P.J. Tucker when he was drafted, and P.J. Tucker likely wasn’t ready for the dog eat dog realities of the NBA. He had to prove himself in ways he wasn’t expecting, in places he definitely did not expect to be. But he stayed humble, embraced that growth mindset, and kept doing the work, and eventually the NBA and P.J. Tucker were ready for each other.

Thanks for reading. Who are your unexpected professional inspirations? I’d love to hear them.

David Phillips is Vice President at Far West Capital, a company that funds the goals of high-growth entrepreneurs. Know a great company in need of capital to unleash their potential? Send them here and we’ll give them a call.

The post The Growth Journey of P.J. Tucker, Your New Role Model appeared first on Far West Capital.

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Luis has always worked with his hands. First carpentry, then formwork – molds – for concrete pouring.

In 1978, just shy of his 40th birthday, he decided to go out on his own, getting his own license and eventually incorporating his own construction company in 1980.

For the first twenty years, he kept it small; just county projects, manageable stuff. Then he hired a talented CFO in 2000, and since then, they’ve built Luis’s construction company to tackle huge projects – all commercial; most of them big, ambitious, multi-year challenges. Museums. Sporting arenas. A movie studio’s giant parking garage.

There are some advantages when you tackle construction projects that stretch over years; one of them is the ability to have a bit of a recession cushion. The economy might be in the dumps, but people still need roads to drive on. In the 80s, they were busier than everyone else. In 2008 and 2009, they had some of their best years. But downturns in their local economy can disproportionately affect their business, especially their available capital.

“Sometimes our size kills us, but sometimes it helps,” Luis says.

That’s the pros. The cons are just as large: to survive in their business, you don’t just need financing – you can’t survive without it.

Financing: critical in the concrete business

For projects at this scale, contractors like Luis’s company need to have financing before the contract is even signed. Work won’t start without it.

It’s not just that. You need to be able to pay your workers – while your company may not get paid for a year, at best.

“Labor is everything – the biggest percentage of our cost. We are DOA in the water without it.,” Fred, the CFO, says. “You can’t survive without financing.”

Many banks are risk-averse; they might take on a company like Luis’s, but god forbid they have a bad year. One little blip, and that bank is dropping you.

It’s not just the risk factor. A traditional line of credit loan isn’t a great idea for a construction project; you might be able to get the project with that backing, but it’s not based on your actual billing, revenue, and operating cost needs.

“You don’t want to take more money out than you need. With a static line of credit, you might take out more money than you need – but every day you get money in and it goes against the line,” Fred says, with some frustration.

Finally, when they’d exhausted their line of credit, their bank recommended Far West Capital, citing their construction experience and the type of financing they offered.

That’s when things really changed.

Expectations, and exceeding them

Within a few days of that initial recommendation, we’d flown across the country to meet him. He quickly saw the potential, and within days, the paperwork was in order, the red tape was blown through, and Luis’s construction company had the financing it needed.

But what they didn’t know they needed was the relationship they got with Far West Capital.

“I would’ve never believed how responsible and meticulous these folks are,” Luis says. “They’re very cordial, very personable. And they’re responsive – you can get ahold of them very easily.

“Even better, they’re always solving problems. If there’s a little hiccup somewhere, they’re on it. The people they have involved are incredible.”

For Fred, it’s made his job easier and given him peace of mind.

“We know the money is available, but not overextended; I know we’re managing it better.”

Far West Capital is in the business of funding the goals of high-growth entrepreneurs. Know a great company in need of capital to unleash their potential? Send them here and we’ll give them a call.

The post Constructing peace of mind appeared first on Far West Capital.

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Are you keeping your best employees?

It’s a question many of our clients and friends are facing these days. According to the Department of Labor, at the end of March this year, the U.S. economy had 7.5 million unfilled jobs, but only 5.8 million people who looking for work. That makes the 13th straight month the number of job openings was higher than the number of people looking for jobs. So, we’re all paying more to hire and attract the best workers. But just paying higher wages doesn’t cut it anymore.

There’s a classic management essay “One More Time: How Do You Motivate Employees?” written in 1968 by Frederick Hertzberg, an essay which has been quoted and referenced countless times in the 51 years since it has been published. (You should read it, but this 2-minute explainer video is a great summary.)

Hertzberg narrows in on a key reason raising salaries alone don’t work: Job satisfaction is not the opposite of job dissatisfaction. Or, put another way you parents will recognize: there’s a difference between needs and wants. Your employees need a competitive, market-rate salary and good benefits. But it’s when you empower them, enabling them to find job satisfaction, that they not only stay but work even harder.

Empowered employees are opinionated! They have a lot of responsibility and a lot of trust. They can be a pain to manage, or a joy, depending on your mindset. And they’re absolutely critical to your success. I’ll tell you why.

Back years ago, when Far West Capital was growing fast, still figuring out our identity, we had a bad client failure. We were reacting instead of anticipating, and the account manager – who should have been able to handle it – wasn’t empowered to make the decisions that needed to be made. That account manager left – understandably – and we had to confront why. That’s when we reevaluated, and made a brand promise we still live by (“Deliver success. Earn Trust. No Surprises.”) which boils down to just “be proactive.” And then we empowered all of our employees to be proactive, to have the power to anticipate problems and deal with them before they became crises.

Today, we measure employees by their own goals. We want them to own their own experience – if you don’t like it, change it. They set measurable goals in an ongoing conversation; nothing is set in stone.

Finding your kaizen

There’s a word for this in Japanese – kaizenabout the process of improving your business through many small changes, driven by employees.

Kaizen is critical to keeping happy employees, and critical to the success of your business. After all, would you rather hear “here’s some smart people in charge, and they’ll tell you what to do” or “can you help me find the solution?” But it depends on trust, and the elimination of time-sucks, speed bumps, and bad feedback systems. A few questions to ask yourself:

  1. Do my policies and procedures add extra work and time without providing a benefit?  Again, this boils down to trust. Do you need those meetings? Can your account manager make a critical decision when needed? Can your employees take vacation time without too much fuss, and disconnect when needed?
  2. Are there too many layers of management and not enough leadership? Management is a process of communicating about outcomes. When outcomes shift constantly, or aren’t clear, you need more managers to communicate to the employees who aren’t in on the goal. If you can change that, and enable everyone to know what they’re working toward and why, you won’t need those layers of management. (Also, too many managers creates more problems in #1, above.)
  3. Are you being transparent enough? Is there a way to provide honest feedback, especially to the boss? I’ve talked before about Workify, feedback software that we absolutely rely on. But it goes beyond anonymous feedback on surveys. Awhile back, I made a decision one of our VPs – who’d been with us since the beginning – didn’t like. He got all hot and bothered about it, but that’s when we were growing fast; I didn’t have a chance to listen, and I wasn’t making time to do it.  Now we have regular one-on-ones scheduled for each manager, with the goal of listening.

How do you know when someone trusts you?

Bad news: You don’t. But you have to try anyway. If the outcomes are happening, if your employees are clearly motivated, that’s your best indicator.

Lorena, who manages our El Paso office, has only not hit her goal once, in 10 years. I know she’ll tell me when she has a problem – she has before, many times. And since great employees beget more great employees, she has the lowest turnover on her team; 4 of her team members have worked with her all 10 years.

Once, I had an assistant. She was a great assistant, but she always found more ways to use her skills, and her job description expanded regularly. Today, she’s vice president of operations, and I depend on her just as much as I did when she was my assistant – just with a much different portfolio.

Those are the indicators I like seeing, the ones that mean we’re doing it right. Yes, it’s nice to be nominated to Austin’s Best Places to Work. It’s nice to see great feedback on Workify. But ultimately, I hope that those salaries and those accolades aren’t the only reason employees stay here. I want them satisfied, empowered, growing. I want them each to be able to deliver success and earn trust with our clients.

How are you keeping and growing great employees? I’d love this to be a discussion. This is an ongoing process for us, and a struggle for many as the labor market gets ever tighter. Tell me what’s worked for you – tweet me here – I’d love to quote you.

Cole Harmonson is the president of Far West Capital, a company that funds the goals of high-growth entrepreneurs. Know a great company in need of capital to unleash their potential? Send them here and we’ll give them a call.

The post Exiting, or Empowered? How to Keep Your Best Hires appeared first on Far West Capital.

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If you know me, you know I’m from Lubbock, Texas. “Hub City,” they call it. And if you were watching the NCAA Men’s Basketball Tournament, you know something else: Texas Tech, my alma mater, pride of Lubbock, made it all the way to the championship game.

They came so close to bringing the trophy home. As I watched the last few minutes of overtime, watching it all slip away, I thought about failure. I thought about Virginia’s infamous loss to a 16-seed last year, and how that failure fueled them all the way to this win, this championship.

Will my Red Raiders be back? I know they will. I know that from this championship run. This is a team that learned from its stumbles, learned from data, paid attention to the small things, and built a process that will ensure they’re contending for that championship for many seasons to come.

Lately I’ve been writing a lot about failure, and change, and how you come back. At a recent meeting of the International Factoring Association (IFA) we had a whole discussion about it. If you’ll pardon some sports metaphors, I’d like to tell you about my Red Raiders – and how their journey overlaps with the things I was hearing at IFA.

1. Success is risky, it can lull you to sleep and makes you overconfident.

After new coach Chris Beard spent three years rebuilding (more on that later) my Red Raiders spent most of this season in the top 10. Their defense was feared. They dominated the Big 12 conference during the regular season.

But on February 2, they were blown out by Kansas on the road 79-63. It was an embarrassing loss. Everything the team was good at had deserted them: focus, discipline, attention to detail, the killer instinct that made their defense so tough.

They’d forgotten why they were there.

“Unbeknownst to us, we were dumb, fat and happy,” Kwesi Rogers of Federal National Commercial Credit said at the IFA meeting. He had done a deal against his gut, one he knew better than to do.

After that Kansas loss, the players had a talk amongst themselves. They talked about emotion, about purpose, about instinct, and reminded each other to embrace the moment and tune out the noise.

For his part, Coach Beard had players put stickers on their phones that said CONSISTENCY. They made sacrifices, some even giving up their phones (you know I love this). They gave up Pop Tarts. They focused on what they do best.

What do you do best? What does your gut instinct tell you? Stop listening to social media likes and short-term success. That’s how you get soft. That’s how you lose.

2. You need your team, especially when things are busy.

When Beard started rebuilding the Red Raiders for this season, another coach commented that “it felt like the island of misfit toys.” Six of eight scorers from the first Elite Eight team in school history were gone. New players and grad transfers had to fit into a team missing most of its core.

In more than one preseason poll, they were picked to finish at the bottom of the Big 12.

Beard’s solution? Host a retreat, away from cell phone signals. The players completed obstacle courses, did trust falls, sang karaoke. They bonded, and learned to trust each other.

When times are good, it’s easy to take shortcuts, to rely on yourself and your own intuition. When everything falls apart, it’s usually because you were too busy and too isolated to see the problem.

“Don’t do what you don’t know,” Gen Merritt-Parikh of Allied Affiliated Funding commented at the IFA meeting. She was busy, wasn’t looking at all the pieces, and took a flyer on a small deal that spun into a large problem.

3. Test your gut instinct against hard data.

My Red Raiders have a great rallying call: 4:1.

“The mental is to the physical, as four is to one,” Coach Beard is fond of saying. He’s pointing out that it’s not just physical ability and gut instinct. It’s the ability to play over distractions, to focus on the important goal.

Outcomes, however, don’t always tell you the quality of your decisions – even when you’re a basketball team. How did you get to that win? How did you get that deal, and how will you manage it?

I’m a big fan of mental models. If you make your decision-making into a process, you strengthen both the quality of your outcomes and your ability to repeat that positive outcome. This book is a great resource to understand nine common mental models; maybe you, too, can find your version of “4:1”.

After losing the national championship, Red Raiders senior center Norense Odiase reflected on the changes that 4:1 process wrought. “The toughness, the grit that got us here, won’t leave this program,” he said.

“Players change, the program changes, the mindset doesn’t change. We’ll be back.”

Cole Harmonson is the president of Far West Capital, a company that funds the goals of high-growth entrepreneurs. Know a great company in need of capital to unleash their potential? Send them here and we’ll give them a call.

The post My basketball team will recover from failure. So can you. appeared first on Far West Capital.

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“If you can keep your head when all about you   

   Are losing theirs and blaming it on you…”

“If” by Rudyard Kipling

We had an exciting (read: nuts) year.

When we joined Advantage Business Capital last summer, it capped off a crazy, challenging, emotional year. It was the right decision, but an earth-shaking, world-shifting moment all the same.

Change happens to all of us. It will happen to you; it will happen to your business; it will happen to your family and your life. It may not be as dramatic as the changes we’ve gone through lately, but it will happen – and you, too, will have to prepare for it and wrest the metaphorical train back onto the tracks. I learned a lot about that in the last eight months, and I’m here to share three strategies that will keep your momentum going – and your team on board – after your world changes.

THE VALUES: Go back to what is important to you

Do you have core values? Do you have them written down?

Or better, are you, your management, your leadership, actually living by them?

During periods of change, everyone looks to the leaders. The tone they set – and the priorities they communicate – are key for moving your team forward. But it isn’t just about tone – you have to hire, and fire, by those values. Don’t let one bad actor drag everyone else down; don’t wait to make a change.

Values, in fact, are one reason we joined Advantage Business Capital – theirs matched ours incredibly well, and they loved the passion we bring to the table. (“Passion”, in fact, is one of our core values!) I think that consistency is one reason we were able to come through this with our team mostly intact; everyone knew what was important and where we were headed and why. And they knew we still had our heart.

During the transition, one of our employees left and went to Facebook. Sounds sexy, right? Cool, fun, internet company with great snacks (I’ve heard). And then, a couple of months later, they came back. They realized it sounded cool on the outside, but it wasn’t an intimate place. It wasn’t a place where people cared about the customer, or where management cared about their employees’ goals and successes.

THE DATA: Measure with your head

I like to talk about growth mindset a lot, about using failure as a chance to learn. I wouldn’t call last year a failure, exactly, but it certainly gave us opportunities to learn, adjust, and reprioritize. We took another look at our metrics – what were we tracking? How were we tracking it? And most importantly, how were we communicating about it?

Change is a good time to review metrics and KPIs like these. You don’t want to be making emotional decisions or allowing your biases to creep in; this is a time for rational decision making, for logic, for numbers. Ask yourself these questions:

    1. Are my metrics prioritized correctly? Which KPIs are the most critical for reducing risk and promoting optimal customer outcomes? Those should be on top. Your metrics should cut through noise and give you the signals you need most.
    2. Am I communicating our metrics – and their context – often enough? Having a reminder of what we call the NN6 (six non-negotiables) every week makes it a lot easier to keep everyone on the same page and spot problems before they snowball.  We can be proactive with our clients and portfolio because of this.
    3. Do I trust my data? Don’t let critical metrics depend on one person’s manual reporting. We hired an audit / spotchecker to do weekly checks on the integrity of our reporting; we don’t want to let human error – or fraud – add to our risk.
THE CULTURE: Listen, then do something. Publicly.

We’ve always believed in being a giver culture, in treating our team like you would a long-term partner. Just like a relationship, we know we’re interdependent; that we need mutual respect; and that communication can make or break everything. But change can rock that relationship to its core, and there will never be a more critical time to listen – and especially, to actually do something in result.

We’ve used Workify for several years as both a measuring stick for our values – are we really living up to that TEAM value?  – and a way to listen, to channel employee feedback into trackable action. Because of Workify’s surveys, we know our team’s overall satisfaction dipped a bit after the sale – it was still positive, but it definitely dropped. So we listened to the anonymous feedback, much of which pointed out that we simply weren’t communicating enough. We weren’t fostering cross TEAM collaboration; we weren’t being as open and transparent, as we could be.

And then we took action. Now 3 times a week we have a “meeting” in our communal area during lunch. It’s not mandatory, there’s no agenda, but I often just take my lunch and work there, and if someone wants to talk, or work out a problem they’re stuck on, they are welcome to join. It sounds so simple, and yet you can see the collaboration happening –  marketing has had a chance to collaborate with underwriting, project assignments are happening in public, and everyone can see how the sausage is being made.

It’s amazing. It feels like a new level of radical transparency. And not for nothing, but our Workify score is back up – to its highest level ever.

To quote Central Bank chairman Kim Wheless as he quotes design maestro & founder of Herman Miller, Max de Pree: “Momentum in a great company is palpable.” I can testify that it is. I feel it. My team feels it. And our new family at Advantage Business Capital feels it too.

So if you, too, are facing a change, or want to shake off complacency and find your momentum, review those three things above to be prepared for chaos and primed to move forward. I’ll recap:

  1. Go back to your core values. Reinforce them, live them, hire and fire by them.
  2. Review your business intelligence metrics and ensure they are guiding rational decisions. Are your metrics telling you what you most need to know? Are they appropriately, regularly communicated? Do you trust the integrity of the data?
  3. Are you practicing radical transparency? Do you have a way to listen to your team, anonymously, and actually do something about their feedback?

Thanks for listening. If you, too, have survived and thrived after big change in your professional world, I’d love to hear about it – and what you’d add to my “chaos prep” list.

“If you can dream—and not make dreams your master;   

   If you can think—and not make thoughts your aim;   

If you can meet with Triumph and Disaster

   And treat those two impostors just the same…

Yours is the Earth and everything that’s in it,   

   And—which is more—you’ll be a Man, my son!”

“If” by Rudyard Kipling

Cole Harmonson is the president of Far West Capital, a company that funds the goals of high-growth entrepreneurs. Know a great company in need of capital to unleash their potential? Send them here and we’ll give them a call.

The post A shift happens. What next? appeared first on Far West Capital.

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Zach knew he could do a better job.

That’s how the story of his company begins, like many other great companies – I can do this, except better! For Zach, his company grew out of customer service – or rather, the lack of it.

Zach’s story also turns out to be a pretty decent echo of ours – and a key reason why many of our clients stick around for years.

The problem was obvious to Zach, from the beginning. He was working in a diesel dealership’s repair shop then, working his way up from mechanic to service manager.

“We’d sit there and tell a customer and tell them we’d give them a diagnosis in 3 days. Weeks pass. The customer would call, and the dealership would tell them “.. Oh yeah, that’ll be a few days” and the process repeats. Ultimately, it would take 3 or 4 weeks – and it may only have been a fuse, something that could have been fixed in a few days, not a month,” Zach says, his frustration still obvious.

For his customers, time is money. Diesel repair often serves trucking fleets and large diesel vehicles that service oil fields; keeping vehicles on the road is critical for these companies. Yet the dealerships Zach worked for constantly lagged on delivering repairs and communicating about those repairs.

“We like to call it the dealership mentality,” he continues. “They have guaranteed business; they don’t necessarily care or strive for customer service. They’re more about their numbers. If their numbers are good, they don’t care.”

He knew he could do it better. But he needed help, and he knew it was key to work with the right people. When he met Jose and Ariel, two brothers working for their father’s painting and coating business, and started talking to them about his idea, they went for it – and founded a diesel repair shop together 18 months ago.

No surprises

They kept one goal in mind: Have the best customer service. They wanted to be trusted; they wanted to be known for being proactive, rather than reactive, with their customers. Unlike the dealerships they’d all worked for in the past, they’d deliver estimates to ensure no customer got blindsided by high repair costs. Regular, proactive updates happen with every customer. And if it’s a quick fix, it’ll get fixed – quickly. Like us, they wanted no surprises.

Word spread quickly. Zach’s company hasn’t had to do any marketing yet – “no website, no social media” Zach says, proudly – because satisfied customers have done that for them. Steady incoming work quickly proved their strategy right.

“We’re in this to make money – but not to get rich,” Zach says.

Trust issues

It’s hard for Zach to overlook bad customer service, now. Their standards are high. If they can keep a customer informed, fuse by fuse, day by day, about their truck’s engine, what’s stopping everyone else?

“You can trust until you have a reason not to. True for relationships, true for business.”

– Zach, diesel repair shop owner & Far West Capital client

At first, Zach and his business partners worked with another company to factor their invoices. They weren’t impressed, but they also hadn’t worked with a factor before. They weren’t sure what to expect. But even those expectations started to crumble quickly.

“We had to do all the legwork. When it came to resolving issues or needing help, they’d shut it down,” Zach says. “They gave us a deal, but that didn’t really help in the long run.”

Finally, he asked his tax advisor for help, who introduced him to Far West Capital.

“From our first conversation, I knew Zach was our sort of client: honest and hard working and growth oriented,” says SVP David Phillips. “We want to make funding processes as efficient as possible for clients like Zach, so they can focus on servicing their customers and growing their business.”

“It has been significantly better with Far West Capital,” Zach says. “We needed our credit limit raised. David Phillips (VP Central Texas) realized it before we even needed to ask, made the argument, and based on the business we had, our credit limit was raised. Just like that.”

Scaling trust

For Zach, maintaining trust – and great customer service – is all about the people.

“We don’t hire as much for skillset as we hire for personality and trust,” he says. “It gets more and more important as we grow. Resumes are important, but I need to trust that you care as much about the customer’s outcome as I do.”

Trust is hard to measure, but you know when it’s broken. For us, a key part of our mantra over here is “no surprises” – aka trust. To measure that, we really like these questions, which we ask our clients – including Zach – every quarter:

  • How are we doing with our promises? Are we doing what we said we would?
  • Do you have what you need?
  • Anything else we can do?
  • What can we do better? What would get us fired?
  • Who else should we be talking to?

(We borrowed these from Sandler training, which everyone should do  – whether they’re in sales or not.)

Zach has his own version of our mantra.

“Customers need to stay happy, and everything else will fall into place.”

We couldn’t agree more.

The post Trust: the best marketing strategy appeared first on Far West Capital.

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In 2018, I started a new committed relationship.

No, not romantically – I’m happily married (hi, wife!) – but professionally, when Far West Capital merged with Advantage Business Capital, part of Central Bank.

As with any new relationship, there’s complications. We’ve had 10 years to build a close, family-oriented team culture here at Far West Capital. Central Bank has been in business for 60 years, since before I was born, before factoring became a common tool for businesses dependent on invoicing, before wellness plans and ping-pong tables became standard office features.

In business, as in life and relationships, some things are timeless. Central Bank’s values, vision, and emphasis on client relationships ring familiar for us; they, too, believe their employees – their team – are the most important part of their success.

So now you know my mindset, the morning I joined Central Bank’s first strategic planning process of 2019. And then the chairman spoke, and I was surprised.

Central Bank Chairman Kim Wheless is a classic Texas old-timer, a banker’s banker, a guy who instantly commands respect. But I didn’t expect his frankness, his honesty, his modernity.

He spoke, mostly, on complacency. This is someone who’s been doing what he does for 60 years, and doing quite well at it. He could be retiring, resting on his laurels, but instead he’s thinking about momentum, and what it means to be stuck, and what we can do to avoid it. He took questions and answered frankly, reflecting on the past, the future, and the classic question – what would you do if you could do it over again?

I took notes. I had to, it was golden stuff. Here’s a few of my takeaways.

Complacency is always a challenge.

First of all, if you’re meeting your core values, you likely aren’t complacent – because those values keep your momentum going. But complacency – or its opposite, momentum – requires focus and planning. Momentum implies long-term direction; long-term direction implies having the right people doing the right things to achieve the right goals.

You’ll know momentum when you see it. Chairman Wheless quoted Max de Pree, founder of storied design house Herman Miller: “Momentum in a great company is palpable.”

Strong internal management prepares you to face external issues.

“You’re looking for three things in a person,” Warren Buffett said, once. “Intelligence, energy, and integrity. And if they don’t have the last one, don’t even bother with the first two.”

When asked what he’s learned, Chairman Wheless specifically talked about hiring; over his many years in business, recruiting and personnel management have been the #1 key for success. But it’s not enough to hire for the job description. Like Buffett, it helps if you approach hiring by looking at personality traits – and that doesn’t stop once they are hired and sit at a desk. You need to understand the personality traits of the people you work with. Not only will this help you put them in the right job, but knowing where someone is coming from at any particular time is huge – especially in a crisis.  

And when you face that crisis, you’ll have the right butts in the right seats doing right things, and you’ll know what – and who –  you can count on.

Character, honesty, and integrity are the most critical parts of lending – in every part of the business.

For Chairman Wheless, these were the most critical for his career – and for the trust he built up with everyone who worked for him or with him. At Far West Capital, we’ve long said a version of that, our brand promise: “Deliver success. Earn trust. No surprises.”

Every time we’ve failed as a company, it has been because one of those three things failed.

If trust and respect are established, change comes more easily.

The most important part of trust is listening. Whether you’re listening to a client, an employee, or a boss, seeking first to understand – to listen – is the most critical step toward trust.

And with trust, comes respect; with respect, change comes easier; with change, momentum continues.

If he could do it all over again…

I’ll quote the chairman:

“I would want to be less judgmental, less afraid of making mistakes. I would trust more, and micromanage less. I would also employ the Golden Rule more.” 

Kim Wheless, Chairman, Central Bank

What would you do if you could do it all over again? What would you change, or hold onto? What’s proven to be your most enduring value?

For me, it’s always been about the people. Our team, our family here at Far West Capital – and now our expanded family at Central Bank. Our clients, who invite us into their life’s work and share their passion.

It’s easy to stereotype banking as stodgy and complacent, but I’ve been lucky – it’s never felt that way, because the people around me have never been stodgy or complacent. Walking out of that strategic planning meeting, I knew we’d made the right decision in our new relationship. I’ve never felt more ready – or more excited –  for the future.

Cole Harmonson is the president of Far West Capital, a company that funds the goals of high-growth entrepreneurs. Know a great company in need of capital to unleash their potential? Send them here and we’ll give them a call.

The post If you could do it over again appeared first on Far West Capital.

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EcoRise helps teachers activate entrepreneurial skills for a lifetime

Jason Koltz has a unique teaching gig. At Akins High School in Austin, Texas, Jason is responsible for teaching a class of 9th through 12th graders about money – and business. His “Money Matters” and “Principles of Business, Marketing, and Finance” classes are in the fall and spring, respectively, and Jason does his best to equip his students with problem-solving skills and real-world experience, managing their money and launching a business.

In the spring of 2019, Jason will change his lesson plans to incorporate a new angle: sustainability.

“Sustainability, by its very nature has a financial basis,” Jason says. “In order to sustain a cause, you have to be able to pay for it. I think it’s important to take that parallel and look at it both ways – it benefits society, but it’s also key for a successful business plan.”

At Akins, “problem-based learning” is emphasized. In Jason’s class, students put together real business plans, examine the inner workings of a real credit union, and approach entrepreneurship as a mindset, not just a job. “Vocabulary is fine, analysis is fine,” he says, “but creating your own is the most effective part.”

“All our kids understand what an entrepreneur is – someone who works for themselves,” Jason says. But what Jason is trying to teach is more an entrepreneurial mindset –  inspiring students to draw from their passions and motivations to create goods and services that benefit society and the world we live in. Fostering this motivation is not only beneficial to a student’s career, but also to their lives and economic choices.

“You could be the next big thing, or that could just help you in your day to day,” Jason says.

Enabling teachers to incorporate sustainability

Austin based nonprofit EcoRise has been working for the past ten years to supply teachers with resources and lesson plans to teach environmental literacy, sustainable design, and social innovation. With a new curriculum called the Business of Social Good, they will extend those principles to a socially conscious entrepreneurship – helping business teachers like Jason incorporate those principles in a problem-based context. In addition, EcoRise supports student showcases – a fascinating exhibition of innovative projects that address some aspect of conservation or sustainability – and distribute “eco-audit” grants to students tackling sustainability challenges.

For Jason, the Business of Social Good curriculum is perfectly aligned with what he’s already doing. Incorporating an eco-audit in his personal finance class just makes sense – especially with a preset model for what that should look like. For his business students in the second semester, he’s excited to incorporate a sustainability angle into the process of building a business. Many of his students get excited by social good, but less so by the tough work of building a business – doing a SWOT analysis, writing a business plan, identifying competitors.

“It’s important that students see sustainability issues that are connected to their lives,” Jason says. The business projects are student driven, creating a very authentic learning experience. His students will be able to apply for grants through EcoRise to implement their ideas. If they’re chosen, they’ll be able to take their projects out of the classroom and into the real world.

Donate for impact

We’re big fans of what EcoRise is doing. We’ve always believed in investing in impact, funding entrepreneurs to create value and give back in their turn to their families and communities. What EcoRise is doing with teachers not only inspires the next generation of entrepreneurs, it creates a sustainable design mindset these students can incorporate in everything they do.

This holiday season, join us in supporting EcoRise’s #10XBetter campaign – in honor of their tenth anniversary – and help make it possible for more classrooms like Jason’s to benefit from EcoRise’s classroom programs and grants. For $25 a month, you can underwrite one classroom scholarship for green building and social entrepreneurship programs – directly benefiting students like Jason’s.

As Jason points out, “Social entrepreneurship benefits society, but it’s also key for a successful business plan.”

We couldn’t agree more.

Far West Capital is in the business of funding the goals of high-growth entrepreneurs. Know a great company in need of capital to unleash their potential? Send them here and we’ll give them a call.

The post Entrepreneurship Is A Mindset, Not Just A Job appeared first on Far West Capital.

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From failure to gratitude

Early this year, I went on an entrepreneurial rescue mission.

We have this client – let’s call him Tom – who’s been our client for a long time. In this business, and because we are who we are, you get to know entrepreneurs very well. You know their finances, their hopes, their dreams. You know what they can achieve, and where they’re holding back. You know what they want to do for their families, and why they chose this path to begin with.

Tom is a great client, with a long track record of killing it at the helm of his company. But Tom had a big problem, the kind of problem that can derail a business completely, and Tom was freaking out. Hard.

That’s where the rescue mission came in. I know Tom. I knew how bad the problem was – trust me, it was bad – but I also knew he could recover. It would be painful, and difficult, but I know Tom, and I knew he could do it. But Tom wasn’t thinking clearly. He was panicking, emotional, ready to give up and throw everything away.

“Look, Tom,” I said, “You have so much to be grateful for.”

In that moment, Tom couldn’t remember all the things he’d achieved over the time he’d built his company. He couldn’t remember why he was doing this in the first place. And all he could see was the negative.

But again, I knew Tom, and I could see what he couldn’t. It was almost like therapy – I just reminded him about all the good things in his life, all the things he’d accomplished, all the possibilities that lay ahead if he was persistent and embraced his failure as an opportunity.

We’ll come back to Tom in a moment. The key here, as it was for me when I experienced failure, was gratitude.

Rejoice in the good things

Gratitude isn’t just for Thanksgiving, my friends.

If you’re familiar with Stoicism, you know gratitude is one of its highest values. Here’s early Stoic philosopher Epictetus, a Greek man who grew up as a Roman slave (!) and lived with one useless leg for most of his life (!!):

“He is a wise man who does not grieve for the things which he has not, but rejoices for those which he has.”

The essential part of Epictetus’ and the Stoics approach: focus on what you can control, and direct your energy toward what you can actually affect. Turn your energies into a growth mindset, and you can start making constructive progress.

But first, gratitude.

How to practice gratitude when you need it most

If you’re in the mindset Tom was in, if you’re picking yourself up off the floor of a failure or an emotional setback, you may not be agreeing with me yet. It’s tough to feel gratitude when you’re in the dark place.

Even if you’re not in that dark place right now, your productivity will get more consistent if you establish a gratitude routine. For me, gratitude grounds me. It’s the starting point of my morning meditation, the endpoint of my workout at the end of the day. And if you are in that dark place, it helps to have concrete steps you can use to get out.

So, how do you establish a gratitude practice? Shawn Achor has you covered. (If you’re not familiar, his TED Talk on happiness + work  is a good place to start.)

Shawn’s Daily Habits give you a repeatable routine, something you can do quickly that refocuses your mind. Here are my favorite Daily Habits:

Write down your gratitudes. For 21 days in a row, write what you are grateful for and why. The act of writing it down rewires your brain, and uses your reticular activator to help you focus on the positive as a way of life.  This does not ignore the negatives or turn you into a Pollyanna; it helps you reframe what happens in your life from “negatives” to a way to improve. If you pay attention to this information, it will help you overcome some of your unconscious biases.  

I have been utilizing this system for years, and I can tell you from experience: it is a game changer.

Double down on good moments.  For 21 days in a row, think of one positive, meaningful experience each day and for 2 minutes, bullet 3 details of the experience. They don’t have to be big details – just bits that bring your mind back to that moment – like what you were wearing, where you were, or who you encountered. This deepens your scan for meaning.

Write a positive email / text message per day to a friend or colleague, thanking them for something real they have contributed to your life. Don’t take more than a few minutes doing this; it’s more important to reach out than it is to craft a perfect message.

I have been doing this one quite a bit lately. The takeaway for me is “wow, I’m the kind of person now that does this sort of stuff” and the responses have been awesome back to me.  I have turned my email inbox – not my favorite thing, normally – into something super positive and affirming.

Meditate. Yeah, I know, you’re over my hippie meditation crap. Don’t knock it til you try it, though. I’m far from the only one, these days – meditation has become a common theme amongst high performers.

For me, it’s about observing my mind so I can control it.  It actually grows your prefrontal cortex (the part you need for good judgement v. fight or flight). Neuroscience, folks!  Slow down your reaction time, and create space for a rational response to the inevitable curveballs.

Gratitude allows you to move past emotion into logic

Back to Tom, who we last left focusing on gratitude.

Once he was thinking about the positives, on what was going right, we were able to talk about a path forward. It would be painful, and require persistence and time. But if he’d do his part, we promised we’d do everything in our power to help.

In fact, he managed better than even we had expected. He implemented the changes we suggested, did the work, took responsibility, and kept up a positive growth mindset – and went on to make a cool $1.5 million in profit last year and over $2 million this year. From the dark place where Tom had thought his business was lost, his life’s work gone, he was able to use gratitude to climb back to a place of growth.

Not long ago, I got a wonderful note from Tom, thanking us for helping him see the “positives in the negatives” and telling us we saved his company. We didn’t, though – he did. Ultimately, he had to do the work, and find his gratitude – not just that day, but the next day, and the day after that.

One of my favorite quotes is from Ralph Waldo Emerson, a more modern Stoic…

“Cultivate the habit of being grateful for every good thing that comes to you, and to give thanks continuously. And because all things have contributed to your advancement, you should include all things in your gratitude.”

I’m grateful you read this. I’m grateful I was able to write this. And I’d love to hear how you practice gratitude – and what routines help you incorporate it into your work. Drop me a line in the comments or tweet at @FarWestCap – I’ll be ever so grateful.

Cole Harmonson is the president of Far West Capital, a company that funds the goals of high-growth entrepreneurs. Know a great company in need of capital to unleash their potential? Send them here and we’ll give them a call.

The post How to find gratitude when you need it most appeared first on Far West Capital.

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