Welcome to The Business Academy.

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The most boring business you've ever heard of...sold for 9-figures (Interview)

My friend Cole Zucker built a business in the most boring industry in the world...LED lights. And he sold it for a massive exit ($100M+). You can listen on Apple​ Podcasts, Spotify and my new YouTube channel. Make sure you subscribe to be notified about future episodes.

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I made a mistake with one of our companies...

I was in a meeting with them last week. The leadership team was discussing whether to take on a new project that came in the pipeline.

The team was having a vibrant debate about the pros and cons of taking on this project. I was listening and halfway through I spoke up to share my suggestion...

I immediately regretted speaking up.

And it's not what you're thinking...

Here's are the two reasons I regretted it:

1. Erosion of Agency - when I give directives in meetings, I take away agency from leaders. That is the opposite of what I want. The leaders of our companies are leaders, and they need to be able to make decisions and mistakes without me getting involved.
2. The Well of Influence - This can be the secret killer of a great organization and I want to spend the rest of this article talking about it

What is the Well of Influence and why is it important?

In any relationship, over time you add water to the Well of Influence. Drop by Drop.

Once you build up trust with a friend over many years, you have a large Well of Influence. As evidenced by this:

You can ask them for a favor, and they will do it without hesitation.

It takes a small amount of water from your Well of Influence to get your friend to do something you want.

Each time you want to exert influence over someone, you draw water from the Well of Influence.

You have limited capacity in this Well. And the less time you've spent with someone, the less water you have in the Well to draw when you need to influence them.

It's the same in companies.

As a leader of a firm, you want to avoid making top-down decisions.

Your employees need clarity and agency. They need to feel like they know what's going on, and that they have control of the outcome of the business. It's better for them. It's better for the business.

If you own a landscaping company, and you tell your employees one day you will start building swimming pools that's ok. But you can't also decide you'll be a roofing company and a plumbing company in the weeks following that. That's too much change. Too fast.

Your employees will start to doubt you. You are drawing too much water from your Well of influence.

The best leaders are actively thinking about their Well of Influence. They think about how to fill the Well. And they think about how to keep it filled until they must draw on it.

How do you fill up the Well?

There are many ways to fill the Well of Influence. At its core, you need to build trust and connection with your team. Some ways to do this:

--> You pick a strategy and you stick with it. You're honest. You apologize when wrong. Your decisions are more often right than wrong. You listen to your employees and you let your managers lead...etc

--> When your team speaks, you don't listen with the intent to speak. You ask clarifying questions. Listen with the intention of understanding what they're trying to say.

How do you drain the Well?

You give top-down directives. You ask for a lot of favors from the team. You change your mind on strategy often. You make many important strategic mistakes.

How do you preserve your Well of Influence once you have it?

The best two ways I've observed are

1. You let your leaders make decisions with little input from you
2. You use Soft Power (I'll explain this below)

How organizations use Soft Power

If you're a CFO of a company with 30,000 people. You don't know most of the employees personally, and they don't know you. Your Well of Influence with your employees is low or empty.

Now say you've decided that you need to close a division of your company and invest the resources in a different division. If you decide to do it, people will be mad at you. Especially if it doesn't work out. Either way, you are likely to lose a lot of support and respect.

So what do you do?

You come up with the strategy (but you don't tell anyone). You hire an expensive consulting firm with a fancy name. You tell them your strategy, and to run a research project that ends up with the same conclusion you had.

Then you let the consulting firm participate in the dirty work of shutting down the department and advising to redirect resources elsewhere. If it goes smoothly, everyone grumbles at the fancy consulting company and things move on. If it goes really badly, then you blame the consulting company, and you hire a different one next time.

But you get to preserve the water inside your Well of Influence.

This is how executives of large companies exert influence using soft power.

As a takeaway, think actively this week. What actions are you taking that are depleting your Well of Influence? What actions are you taking that are preserving your Well of Influence?

I'm curious to hear from you, what are other ways you've seen leaders build or preserve their Well of Influence?

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🔑 One good tweet

I've been thinking a lot about this wonderful quote from Jamie Foxx.

"What is on the other side of FEAR?"

"Nothing...it's all in your head"

Click the Tweet below to see the full quote.

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Have a great week,

Sieva

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Disclaimer: nothing here is investment advice. Please do your own research. The information above is just for information and learning.

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