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Importance of prioritization and strategy in achieving business goals

6 min read

From: alexhormozi

Achieving significant business growth and financial success hinges on effective strategy and rigorous prioritization, rather than simply working harder or pursuing every new opportunity [04:06:00]. The ultimate goal is to generate as much profit as possible, transforming a 300 million one by identifying and focusing on key drivers [00:00:05], [07:58:00].

Defining the Gap and the Problem

Businesses often face a gap between their current state and their desired financial goals [00:47:00]. This gap manifests in two primary scenarios:

  1. Anxiety from Too Many Options: Feeling overwhelmed and stressed about which path to take when there are many potential ways to reach a goal [01:13:00], [01:30:00]. This indicates a lack of clear strategy [02:27:00], [03:12:00].
  2. Hopelessness from Lack of Options: Feeling lost or sad because there’s no clear path forward or knowledge of where to begin [01:41:00], [02:04:00]. This means a lack of choices or ignorance about the topic, which is solvable by seeking information [02:08:00], [03:55:00].

What is Strategy?

Strategy is fundamentally about prioritizing [02:53:00]. It means figuring out what will yield “the most bang for the buck” [03:03:00]. A formal definition is choosing how to allocate limited resources against unlimited options [03:08:00]. Strategic thinking allows one to get more from each step, by allocating time, money, and energy into the fewest moves that generate the highest return [04:06:00], [04:12:00].

Identifying the Business Constraint (Theory of Constraint)

Every business has a single constraint limiting its growth [08:30:00]. If a business is not growing as fast as desired, despite working long hours, it indicates that effort is being spent on the wrong activities [08:48:00]. This happens when the constraint is not properly identified [09:05:00].

  • Example: Media Company: A media company with 40 million subscribers wanted to make more money [09:14:00], but focused on improving its already excellent media production (97/100) [09:56:00]. The actual constraint was their lack of a product to sell (0/100) [09:59:00]. Creating even a modest product (0 to 20) would yield significantly more revenue than marginal improvements to their media output [10:06:00].

A useful question to identify constraints is: “Why can’t we 10x this business?” [10:42:00].

Strategic Planning Frameworks

1. Three Core Objectives

Every action or objective should map to one of these three goals to ensure it contributes to business growth and value [11:29:00]:

  1. Acquire More Customers: How will this activity get more customers? [11:33:00]
  2. Increase Lifetime Gross Profit (LTP/LTV): How will this activity make existing customers worth more? [11:43:00]
  3. Decrease Risk / Increase Enterprise Value: How will this activity reduce the risk of future business failure or increase the overall value of the business as an asset? [11:52:00], [11:57:00].

Wealth is built from owning assets, not just generating income [13:30:00], [13:43:00]. A business with a strong team that runs itself is far more valuable than one entirely dependent on the owner [12:49:00], [13:03:00].

2. What, Who, How (Leveraging Talent)

Once objectives are clear (the “What”), the next crucial step is determining “Who” will execute them and “How” [20:33:00]. Big business owners prioritize getting their team to execute tasks rather than doing everything themselves [20:53:00]. This requires developing the skill of hiring, recruiting, training, onboarding, and managing talent [14:04:00].

  • Hiring A-Players: The difference between small and big businesses is the number of “A-players” they have [14:25:00]. Big business owners maintain a low tolerance for mediocrity and continuously seek out high-performing individuals [14:48:00], [14:53:00].
  • Confronting Discomfort: A significant lever for growth lies in having difficult conversations, especially with underperforming team members [15:40:00], [15:54:00]. Mediocre employees can consume a significant amount of bandwidth (e.g., 25% of time) [15:30:00], [15:33:00]. Being unwilling to address poor performance (e.g., implementing a performance improvement plan) can keep a business owner “poor” [17:02:00], [17:19:00].

3. More, Better, New (Avoiding “Shiny Object Syndrome”)

After identifying the highest strategic leverage activity, the sequence of action should be [23:40:00]:

  1. More: Can we simply do more of what is already working? [23:54:00]
  2. Better: Can we improve the efficiency or quality of existing processes without investing new resources? [24:04:00]
  3. New: Only after exhausting “More” and “Better” should new initiatives be considered [24:15:00].

Most small business owners mistakenly prioritize “new” things [24:17:00]. This “shiny object syndrome” often leads to 10x goals in 90 days, followed by abandoning them for another new idea when quick results don’t materialize [26:28:00]. Sustainable growth, like Jim Launch’s 40% growth post-exit, comes from consistently doing more of what works and continuously making it better [25:11:00], [26:45:00].

4. Impact vs. Ease Matrix (Prioritization)

To prioritize tasks, list all potential activities and rank them by:

  • Impact: How much effect will it have?
  • Ease: How easy is it to implement? [29:05:00]

Tasks with high impact and high ease should be done first [29:22:00]. This prevents distraction by less impactful or harder tasks like rebranding a logo when the business is not yet well-known [29:52:00].

The Importance of Product and Compounding

True success comes from having an “exceptional” product or service that generates word-of-mouth referrals [31:01:00], [31:11:00]. This creates a “compounding vehicle” within the business, meaning customers market it for you [32:10:00], [32:38:00].

  • Delaying Gratification: Investing more work upfront to build an incredible product leads to less work long-term [32:42:00]. This willingness to delay satisfaction is a critical skill for wealth building [32:45:00], [32:50:00].
  • Fixing the “Sandwich”: Many businesses struggle because their core product or service is mediocre [33:23:00]. Focusing on improving the product, customer experience, and operations is crucial before investing heavily in marketing [34:04:00]. A hole in the “bucket” (e.g., high customer churn) will negate any marketing efforts [34:26:00].
  • LTV Enables Marketing Spend: Businesses that can spend the most on marketing are those with the highest Lifetime Value (LTV) of their customers [34:49:00]. If a business generates significant profit per customer, it can afford to spend more to acquire them [35:04:00].

Pathways to Getting More Customers

There are fundamentally eight ways to acquire customers, categorized into two groups [42:36:00]:

  1. Direct Methods:

    A good starting point is the “rule of 100”: spend $100/day on ads, do 100 cold outreaches, 100 warm outreaches, or 100 minutes of content daily [43:44:00]. Doing more of these activities not only generates more leads but also improves skill [43:57:00].

  2. Leveraging Other People (OP): These individuals or entities can perform the direct methods on your behalf [44:24:00].

    To get these “other people” to work for you, you must first employ the direct methods on them (e.g., warm/cold outreach to potential affiliates) [45:20:00].

Conclusion

True business growth and wealth come from strategically setting priorities, identifying and addressing core constraints, optimizing existing successful activities before pursuing new ones, and building an exceptional product that fuels its own growth [04:06:00], [08:30:00], [24:15:00], [32:10:00]. This requires discipline and the willingness to confront discomfort, particularly in managing talent and improving the core offering [15:54:00], [32:45:00]. The most effective way to grow is to consistently improve many small things (“100 golden BB’s”) rather than seeking a single “silver bullet” [26:37:00].

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