A “focusing illusion” is a psychological concept that refers to the tendency of people to place too much importance on one aspect of an event, leading to an overestimation of its impact on their lives.
When it comes to exiting a business, I see the focusing illusion in play with business owners way too often. “It’ll work out great, I just know it,” they say.
Unfortunately, chances are, it won’t. At least not without some deep thinking and planning to level up the illusion.
It’s funny, no one believes that a professional athlete can skip training, practice, team meetings and even the game and still end up with the championship ring, just because they’d like that to happen. And yet, successful business owners and entrepreneurs do this all the time when they decide to sell their business, without having done any of the training.
They put on their focusing-illusion glasses and put their faith blindly into the belief that they can wing it, figure it out on the fly, talk their way into it or otherwise imagine it into existence.
On the other hand, forward-thinking entrepreneurs and business owners focus on reality, not illusion, when it comes to their exit-planning strategy. They don’t subscribe to the illusion of chasing the “happily-ever-after” rainbow dream.
Instead, they spend the time and resources developing a plan that has the dream chasing them.
How do they do it?
Red, Gold, Green
One way is to do a simple thinking exercise I call “Red, Gold, Green” that you can accomplish alone or with someone who cares about you in less than 30 minutes.
Red = The Reality Check. This is what I call a + 1 exercise.
Step 1 is a quick, gut-check 1-5 rating – where 1 is floundering and 5 is phenomenal – of the seven key value-creation components in your business: Leadership, Operations, Administration, Sales, Marketing, Technology and Management.
Step 2 is the + 1. What is the first thing you can do to improve every rating that is less than 5 and maintain every rating that is at 5?
Gold = The Future Check. It makes you answer a simple question that too few business owners ever ask themselves, “What do I want by (specific future date)?” Its power comes from taking you out of the present, today, and into a specific date in the future that you’ve chosen as your ‘I-want-to-be-ready-for-a-transition’ date and helps you get clear about where you want your business value and your personal meaning to be on the day you sell or transition away from your business (which, keep in mind, is inevitable).
Green = The Action Check. It starts with another simple question. “What is the first action I need to take to bridge the gap between my Red and Gold?” Is it the +1 you identified with your Red – Reality Check – or has the time you’ve spent in the Gold of your future, getting clear about what you want by a future specific date, caused you to re-think your +1?
What I find most valuable about the Red, Gold, Green exercise is not its simplicity and speed, although those are important. What’s most valuable, though, is the powerful focusing and action insights. It transforms your thinking process around the complex topic of exits, transitions and preparation into the start of a simple and clear playbook for identifying and mining your future value and meaning.
By making the complex simple, Red, Gold, Green does two additional things. First, it makes getting started easy. What business owner doesn’t have 30 minutes to invest in focusing on the most valuable personal and professional event of their life? Second, it disrupts focusing illusion. While others continue to ‘kick that thinking-can down the road,’ business owners using the Red, Gold, Green thinking pick up that can and deal with it. They abandon focusing illusions and instead just focus. They know that few things in life just happen and that the best results aren’t achieved by wishing and hoping, but by knowing and doing.
There is nothing more rewarding than watching business owners take the Red, Gold, Green thinking journey. While their peers are mistakenly fixated on the illusion of what chasing their dream will be like, these savvy owners are on the road to creating a playbook that has their dream chasing them
