The COVID 19 pandemic has given rise to the shift in how consumers, employees, and businesses behave. Remote working is currently being encouraged by both tech and non-tech companies worldwide.
In my interview with Lucas Root, he provides his insight on how some of the changes are either gonna leave a direct, short-term or long term and even permanent footprint on businesses. However, these shifts will undeniably continue its disruption and may affect the shape of businesses in the future.
The Speaker: Lucas Root
Lucas Root is an accomplished speaker entrepreneur and business success mentor with over 19 years of success across banking, technology, investments, health and wellness, athletics and interactive media.
Lucas is also one of the widely preferred speakers to entrepreneurs and business owners on getting their strategy on track for success and massive growth.
What Can You Learn from the podcast:
- How to properly scale a business (2:55)
- The shift of corporate management to working from home protocol (7:17)
- The circumstances we face working from home and how to create a functioning structure (8:39)
- How to ensure your business survives COVID 19 (10:53)
- Why you have to meet halfway with your clients to survive (12:37)
- Why it’s time to go back to the business fundamentals (19:30)
It’s Starting To Get Bad
Lucas mentioned how he is living in San Diego, California and they just received reports of the fatalities in their neighborhood. Although it’s still ain’t as bad as the rest of the world, it’s getting worse and it worries him both as an individual and a business owner.
We asked Lucas how he and his team is coping with the pandemic. The accomplished entrepreneur wasn’t putting up a brave front but rather provided an honest statement, “we are mostly just scared and anxious.”
However, they didn’t let the situation affect how they responded to their marketplace. In a sense, the pandemic is affecting a lot of his employees, including his personal life.
The good thing is that his team has always been virtual. He has employees from New York, Tijuana in Mexico and more that are spread out across the country. Lucas was confident in their abilities and working from is nothing alien to them.
What Does Lucas Root Do?
To provide a better perspective for the listeners we asked Lucas to share a little bit about his businesses.
Lucas has several businesses under his name. One is a consulting business where his virtual team handles the consultations of strong brands that are looking to grow their strategic operations. This isn’t limited to an existing market but also those that are still to be established.
Lucas also owns a couple of retail businesses, including a gym that he has completely closed. They are not taking any clients at all while the employees are at home. The entrepreneur also has a flooring store.
It’s also important to include that none of these businesses are local or close to Lucas. They’re all hundreds of miles away.
Lucas Root prides in his capabilities to build out the management structure as such that he can manage a business in less than five hours a week.
“How do you do it?” We threw the question seeking answers considering that Lucas has plenty of things on his plate.
Lucas responded that one of the things that he’s very good at is building structures and systems. He continued that most businesses follow more or less the same structure; they look the same from the bottom up or from the top down.
Although every business is different, the crux of his strategy is how business owners must identify the pieces or parts where he must spend some time and money in order to have his business will no longer require an on-site manager all the time.
What Is A Scalable Business?
A scalable business is basically a company that can grow without additional employees and possibly even without you.
First, a scalable business must satisfy two points.
One, is that the business in which how much you pay to create an income is going down.
To elaborate, any business will reach a size where it can no longer scale (which varies per industry). It will have the right set of manpower, customers or products created to remain functional.
Second, the business must not depend on you or a large group of managers to survive.
Creating a business that runs on its own is rewarding. However, this does not happen overnight. Just take it slow and enjoy the ride.
I’m Excited About The Changes
Going back to the COVID 19 pandemic and its impact on businesses. Lucas mentions that there are plenty of things going on at the moment.
Lucas mentions that we are currently witnessing the changes in corporate management and their opinions of what’s the proper way for an employee to report to work.
He expected this was going to start happening with the strong growth of offshoring in the early 2000s. Entrepreneurs are familiar with the fact that they were moving groups of repeatable process operations to India and the Philippines.
However, nothing happened. But now, because people are no longer required to show up to work and are instead working remotely. We’re now seeing management cope with the challenges that they had then 20 years ago.
They’re forced to cope, and Lucas couldn’t emphasize enough how he is really excited about seeing how this will change the corporate work structure and the level of openness that corporate management has towards working from home.
Circumstances Of Working From Home
We asked Lucas what’re the usual circumstances of his employees that are working at home?
He dived right into the reality that people will get lazy.
Lucas Root believes that many people are lazy in terms of understanding the essential need for forming a structure for themselves to create and deliver high-quality outputs.
Part of the reason that they’re lazy is that when you show up to work. The workplace provides that structure, the feel, the environment, for employees. So they don’t have to learn how to be good at managing their time.
However, being at home, there are lots of distractions. And distractions are ridiculously easy to encounter.
Even if you do get into a deep work groove at home. Your body rejects the habit of not going to the bathroom or staying hydrated.
At home, nobody comes by your desk and interrupts you and asked you to go for coffee.
So you might work for two hours non-stop and forget to drink water so you’re a little bit dehydrated, your body starts to become let’s say dissatisfied with what you’re doing to it.
So like working from home is also a test of endurance. You’re forced to create this structure, and people who are good at creating structure might realize that it can help them be more productive.
However, it’s also one good trial to see realize how people could be good management material.
How To Ensure Your Business Survives COVID 19
Lucas was excited to share his inputs since he is currently going through this predicament over the last three to four weeks.
The accomplished entrepreneur stated that anybody who has been following him on social media can see that he had almost little to no posts published over the last two to three weeks.
“I’ve been so focused on dealing with the problem,” said Lucas.
He mentioned that first, you have to figure out your basic cost for your business to keep it running. That doesn’t mean keep the doors open. He has already closed all of his stores and businesses.
But the cost he meant was about how much your business needs to run when things start to return to normal. The cost for when you open your doors and your employees can go back to work, your customers can could start showing up.
“You need to protect that money or cost no matter what,” said Lucas.
Lucas reminds business owners that when you can no longer open those doors back up, you close the business, and it’s over
Lucas Root shared that he didn’t have fun figuring out how long my businesses have to survive before they’re done. However, now that he’s done it, and he understands what he can work with.
He mentioned that he had more confidence in calling up the landlords of his businesses and negotiating. For example, if this situation continues for longer than two months, the business will be in jeopardy.
He was open that he mentioned that he needs to close the shop indefinitely if it goes beyond this date.
Knowing the costs, you can plan out properly and have a real conversation with your colleagues, employees, vendors, servicers, and creditors.
Second, although this one hurts, you need to decide who the people are in your business that is core to your success.
You may not have to, but it depends on how much money you have. But you do need to go through this exercise and ask yourself who is the core of your success.
You need to understand who those people are, like you need to understand what your basic cost of survival is.
Lastly, if you have to, you may need to let go of people.
While Lucas hasn’t done it yet because he doesn’t know how long this COVID 19 pandemic issue will continue to affect his businesses.
However, he was a hundred percent open with every single of my employees stating “this is how much time we have”. And all of those people the stakeholders in my success, all of those people are well aware of what our situation is.
And are well aware of whether or not they’re going to need to play a role in extending that timeline.
Tearing The Band-Aid Off
How do you open the conversation of partnership or rather meeting halfway with your clients or employees?
“It’s like tearing the band-aid off,” said Lucas.
The entrepreneur mentioned that while it is a hard pill to swallow. Everybody in that conversation will appreciate you being straightforward. And as long as they understand that you are not there to take advantage of them.
For Lucas, it has never been about raking in as much profit as he can and running away with it.
Certainly, business is also about making profit but that’s never been the point. It mainly involves building a strong structure and ensuring that everybody in that structure is appropriately compensated.
Make Valuable Use Of Your Time
Lucas Root mentioned that what he is about to share is actually what he is doing with his businesses.
After calculating the costs you need to survive and you’ve identified who your core team is. It’s time to get them busy.
Busy in terms of having them assist you in building a more complete and more robust picture of what about your business makes you special.
Lucas provided a situation that many businesses started out by just selling a product. Using a flooring business as an example, somebody who was a floor installer 20 years ago started the business.
And he decided to sell floors because that’s what he knows and from his knowledge, he was able to build a successful business.
However, nothing about what he knows is something that his team can execute. What he is doing is something that is unique to that person.
And there is no perfect time to pass down those techniques as when your employees are home.
Your employees want to report, want to keep getting paid, want to make the business strong because, at the end of this, they want to return to work and want to continue being productive.
So now’s the perfect time for your whole team to work together and build a robust strong idea of what makes your business special.
But how to start doing it?
For Lucas, he has a couple of different structures that he uses depending on which business his in.
However, you can start with your first thought that some businesses do really well starting with who their customer is and how they want to be good at serving that customer?
And that it’s a good business model. Businesses do really well by building the product first and figuring out how they want to serve a customer with that product.
Each business leader is going to come to this exercise very differently but at the end of the day you have to go through this exercise of being very clear on:
- what makes you strong,
- what makes you good, and
- how it is that you’re gonna serve the market.
Lucas Root was keen on having business owners very clear grasps on what those points are.
Ending Note: A Post-Coronavirus World
While COVID-19 is causing a terrible shock to the global economy, it is affecting millions of families. However, the pandemic has irrevocably changed the way businesses will compete over the start of the next decade.
Businesses that choose to adapt and capitalize on these underlying changes will undoubtedly succeed, while those that do not choose to adapt will be left behind.