Brian Tracy's interview with Jaroslavs Kaplans about business organization, entrepreneurial mindset, operating in competitive markets, and sustainable development

Brain Tracy 0:00
The most important quality in business success is clarity. You must be very clear about why your product or service is superior. You must be clear about what people you need to help you to achieve it.

Jaroslavs Kaplans 0:17
Hello. My name is Jaroslav Kaplan, and I'm today with the legend, Brian. Tracy, Brian, how are you?

Brain Tracy 0:23
I'm fine. Thank you very much, heroes. Love I'm so happy to see you. You know we're working together to get you into the US so that you can be part of our economy as well. So I'm happy that you're with us, and I'm looking forward to your questions.

Jaroslavs Kaplans 0:37
Thank you, Brian. So I prepared a couple of questions. If you don't mind. I will ask you, thank you. First question, Brian, what do you think are the most common and destructive mistakes in managing strategic changes, and how can entrepreneurs develop their ability to stay flexible and adapt?

Brain Tracy 0:51
Wonderful question. The most important quality in business success is clarity. You must be very clear about why your product or service is superior. You must be clear about what people you need to help you to achieve it. We have a course on how to hire the best people, and one of the most important things is to go slow rather than hurrying. You should interview people at least three times before you think about hiring them, and it's the people that you choose who will determine your success. Whenever there is failure in a company, it's because there's people who are not competent. So you must be willing to hire people, and you must be willing to fire people. The most important thing for success in business is that there is something about your product or service, something special that makes it superior to any other similar product, and that is your focus in your advertising and your sales. The reason you should buy this product is because it is better in this area for you, it will help you more, faster, better, cheaper, things like that. And so the second part of your question is, why are companies more successful than others? Is because they have good leadership. And the most important word for leadership is clarity. Is they are clear about what their goals are, what they're trying to accomplish, and everybody is clear about their job and what they're supposed to do to help achieve the goals. The number one reason given for a great company, a positive company, is people say I always knew what was expected. I always knew it what I needed to do, and the number one reason for unhappiness is I never knew what I was expected to do. It was never clear. So clarity is the most important thing of all. If you're in business for yourself, the most important thing is goals is for you. It's for you to set clear specific goals with numbers attached to them that you and your company want to achieve. When you have a written goal, your chances of achieving it are 10 times greater than if you have no written goals. And we talked about flexibility. Flexibility means that you have only one goal, and that is profitability. Flexibility means that you stop doing anything that is not helping you to be more profitable, and you have you're open to change. The biggest reason why people fail is because of what is called the comfort zone. Is they become comfortable in what they're doing, and then they fight, and they resist change of any kind. Your job is to be open and flexible and single, focused on making sales and making profit. Now one more point is the reason for business success is high sales. The reason for business failure is low sales. 20% of businesses earn 80% of all the money in that industry. Why is because they have high profits, high sales and high profits. 80% of businesses are struggling because they are not selling enough of their product. And so your job as a senior executive is to focus everybody in the company on making more sales and more profit.

Jaroslavs Kaplans 4:26
Well, thank you very much. Brian.

Brain Tracy 4:27
Thank you, Yaroslav.

Jaroslavs Kaplans 4:28
So, I have another question for you.

Brain Tracy 4:29
Thank you.

Jaroslavs Kaplans 4:30
So, what do you think an entrepreneur can do to overcome mental barriers?

Brain Tracy 4:35
Well, that's a really good question. How can you overcome mental barriers? Well, there are many different mental barriers. The two biggest barriers are the fear of failure and the fear of rejection, the fear of making a mistake, the fear of investing money and losing the money, the fear of doing something and not being successful. Fear is the number one obstacle to great success and. How do you overcome fear? Well, the only way that you can do it is by doing the thing that you fear, and you do it over and over, and you develop a new way of thinking, and you're not afraid anymore. This is really important, and you can talk to yourself in a positive way, and a simple statement that you make to yourself is accepted by your subconscious mind, and then your subconscious mind reorganizes all your emotions. So here's the statement, is, I can do it, I can do it, I can do it. And you can say I'm the best, I'm the best, I'm the best. Or you can say, I never give up, I never give up. I never give up. When I started to have children, I began to practice these ideas on my children, and I began to tell them over and over, you are the best you can do it. You never give up. And they grew up believe in it because, because what you say is a parent children believe so if you say positive things and build up your children, they believe you, and they become positive, happy children. Same thing with your employees. Your employees are also your children. And so what you do is you treat your employees like good children, and you tell them how good they are and how much you appreciate them, and you say, thank you all the time. And you point out to others. You say, this person did this wonderful thing for our company. Isn't that great? Sometimes at meetings, you say, let's give applause to this person who did something good. So everybody has this feeling, this happy feeling that they're working for a good company. And remember the word clarity. And people need to be clear about what you want them to do, and then when they do it, you tell them, thank you. That's very good. Congratulations. That's excellent. And so on. So you always build up your people. Remember the average person works at 50% of capability, 50% of capacity. So how do you release that other 50% with positive statements when you say thank you, and that's a good job, and we're really grateful to you, then they use 80% 90% 100% of their potential, and that's all comes from the leader. So the leader selects the right people, and then builds them up all the time.

Jaroslavs Kaplans 7:21
Thank you, Brian. It was really interesting and useful. Thank you.

Brain Tracy 7:27
Now tell me people are thinking about using your services. What services do you offer to people that can help them?

Jaroslavs Kaplans 7:35
Yeah, I offer innovative business models. Yes, because sometimes companies struggle to adapt to the environment, yes, and go into their operations, yes. But internal stability is not enough anymore. You need to adapt to any to the environment. And this is a very important point. How to balance internal stability, yes, adaptation to the external environment, yes. And this is my point. I do the balance how to companies can adapt to the environment. Yes, ever changing markets become crazy and crazy, and entrepreneurs need to react, and they do the same job as they did before. So they build the companies, and they need to do new job. How to adapt these companies to the new environment? Yes, and this is a big, big difference between internal stability and external stability. Yeah. So, this is my job.

Brain Tracy 8:31
So how can a company tell if it needs to adapt? Is it falling sales, falling profitability? How can they tell that we need to use your services to make changes?

Jaroslavs Kaplans 8:45
Yeah, it could be lost by market share. Yes, it could be different problems and in the market, imagine a company that organized a large concert or festivals. Yes. So it's all the process, like logistics, like selling tickets, like booking artists, are running like a well oiled machine, so everything is good. Yes, management relies on try and true strategies and use their past experience to run companies and confidently. Yes, but then out of nowhere pandemic hits. Yes, everything is stopped. So they need to do something the market they rely on for decades suddenly disappear. Yes, yeah. So this is a problem the market companies rely on decades sometimes disappear. Yes, like, you know, Blockbuster, like, codec, a lot of examples. Yes, and you need to find out how to operate in the new conditions when other all of the standard approaches are no longer in work, right, because they are irrelevant to the new condition, a new situation, especially on the very dynamic markets. Yes, and the tool. The main tool here is to do research. Yes, and we start do research, not from the market, not from the market research, but from the entrepreneur research. Because the main problem in business model is a realization, because nobody can see you, is it good business model or bad business model? It's no criteria. You cannot say that, yes, the only, the only thing you can see is, is it possible to for you or not? Yeah, because and for one person is possible for another, it's not, it's not possible. So we need to adapt entrepreneur, market, product and customers. So it's like, like a puzzle, like a synthesis of a lot of things. Yes, yeah. So it's very interesting job.

Brain Tracy 10:43
That's interesting. One of my favorite stories is about Thomas Edison, who was the greatest inventor of all times. When he died, 30% of American workers were working in Thomas Edison companies. Really, really amazing. Wow. Well, at those in those days, at the beginning of the century, all the buildings were built of wood. Wow, not not brick or steel, but wood. And one day, a fire set out in their main research laboratories, their main offices, and burned them all. And Thomas Edison called his phone, phoned his wife and said, Honey, you must come here and see this. You'll never see such a big fire in your whole life. So his wife came and they watched the entire business burn to the ground, and they said, What are you going to do now? He said, this gives us an opportunity to start over again, brand new. We can throw away all the old experiments and everything. It's all burned. Now we can start new with new experiments and new products, and it went on to become one of the biggest and best companies in American history. So that's the same thing. When something like COVID strikes, you have a chance to change everything. Now, one more question. Can you give me an example of one of her clients that you worked with and helped them to become more successful?

Jaroslavs Kaplans 12:10
Yeah, it's very simple and interesting case. One of my clients had a chain of retail stores, and they struggle with cash flow. It was the problem that every store they open brings more financial obligations than they got into the profit, right? And credit line was up, up, up, up. And one day it became dangerous, yes. And then I suggest them the experiment. I took the paper and write five questions they need to ask their clients. And after they did this survey and asked them to do the survey only from the clients that bought already the products, not just going around the surroundings. And then they realized that the main criteria for their business is, looks like expensive, but cost cheap. And after they got this criteria, they realized that they manage the warehouse, wrong marketing, wrong people, hiring, wrong so they did a lot of mistakes, and then they cover all of these issues. Yes, change everything. They decrease the assortment in the stores for 80% but the margin increased in 30% in money, yeah, and it's like a magic how you can decrease the assortment of the product in four times, yes, and increase margins by 30% Yeah, yeah. So it was very interesting and funny story, how we can improve the business. Just find out one key question, what customers will buy from you? Yes, yeah. So it was the story

Brain Tracy 13:47
That's, that is great. You know, people hate to change. They fall in love with what they're doing. And even if they're losing money, they still fall in love with it. And someone has to come from the outside and guide them and show them that you need to stop doing this and start doing this. So Jaroslav, you and I have written a book together. Can we talk about that now? Great. Thank you. This is called cracking the business mastery. CO this is a series of chapters with Yaroslav and myself and several other business experts, and what they do is we tell them how they can run a successful business, and it's full of little ideas that may have taken years to learn that this is almost like a bible of excellent ideas that you can use immediately to get more sales and more prophets, and tell us a little bit about your chapter. What is in your chapter?

Jaroslavs Kaplans 14:46
This chapter called second brain, yes, and this is metaphor. Comes from the myth of some dinosaurs had had not only one brain in the head, but also second larger nervous system. And. And now with the PALS

Brain Tracy 15:02
We're talking about dinosaurs in in prehistoric times, go ahead, yeah.

Jaroslavs Kaplans 15:06
And the scientists decided that it's helped dinosaurs to manage back part of the body, yes. And this metaphor is very useful for business, because we need to have two brains, two control centers for the company. First brain in the company, it's management that controls all the operations, yes, and the second brain, it's a solution for innovation, for strategic thinking, for adapting to new conditions, right, to find new solutions, etc. So. And one brain is for stability, and second brain is for finding new ways and adapting to change

Brain Tracy 15:43
Flexibility and innovation and things like that. Yeah, absolutely. That's excellent. That's great. So the first brain is all along to the history of the company and strategic goals and things like that. And then you need lots of flexibility in the in the other brain. That's a great idea. I like that very much. Thank you. And so tell us how people can reach you if they want to contact you and talk to you about your work.

Jaroslavs Kaplans 16:10
Thank you, Brian, for being here. It's a pleasure. Thanks. And you can find me clicking the link here and Taking the book