How good are you at strategizing for long-term business success? Do you know what your next five moves should be?
What do master chess players and master businesspeople have in common? Both always plan five steps ahead. Your Next Five Moves, a book by Patrick Bet-David, argues that what distinguishes exceptional business leaders from average ones is their ability to anticipate future events and plan effectively for them—ideally by thinking five steps ahead. To turn you into a master business planner, Bet-David presents five strategic steps you must start taking now: learn about yourself, improve your problem-solving skills, create a winning team, expand your business, and position yourself as an industry leader.
Learn more about these five steps that can turn you into a successful business strategist.
Your Next Five Moves
Entrepreneur Patrick Bet-David believes the key to sustained success in business is the ability to plan your next five strategic steps ahead of time. In Your Next Five Moves (book published in 2020), he draws on the approach of chess masters, who always anticipate what their rivals will do and devise their next five moves to block attacks, defend their territory, and achieve victory.
Bet-David recommends approaching every activity in life with a five-steps-ahead mindset but dedicates the book to learning how to think five steps ahead specifically in entrepreneurship and business. Bet-David breaks the process of becoming a better business strategist into five steps: learning about yourself and your desires, learning to solve problems more efficiently, creating a top-notch team, growing your business healthily, and positioning yourself as a leader in your industry. In each step, Bet-David shows you how to enhance your planning and strategic thinking skills, so that, by the end of the five actions, you’ll be able to create your company’s own next five strategic steps.
(Shortform note: Bet-David’s organization of the five strategic business steps is effective because it reflects the way businesses themselves grow. Most companies begin at a small scale and gradually scale up, adding team members, departments, procedures, and so on. Similarly, Bet-David starts his steps at a small scale—personal aspirations—and then scales up to consider problem-solving skills and good leadership. Another reason this organization works is that, in each step, you gain the tools you need to tackle the next step. For instance, you must know how to assemble a team before you think about becoming an industry leader.)
The First Step: Understand Yourself
Bet-David believes that the first step of your strategic plan toward long-term success is to understand yourself. Let’s break this process of self-discovery into three sub-steps:
Sub-Step #1: Understand Who You Are Now
Understand who you are now because this allows you to accept yourself fully, writes Bet-David. Only when you accept yourself can you begin to confidently pursue goals and paths aligned with your truest desires and greatest strengths.
Sub-Step #2: Understand Who You Want to Be in the Future
Once you understand who you are and what matters to you now, figure out who you want to be in the future, writes Bet-David. Your strategic steps depend entirely on what future you want to achieve, so reflecting on this is key. Bet-David adds that it’s fine not to know this clearly right now, as long as you dedicate energy toward thinking about the question.
Sub-Step #3: Understand How to Get There
Finally, pursue business ventures aligned with what your strengths are and who you want to be, writes Bet-David. The best place to do this is in untapped markets where you have unique strengths. For example, if you’re passionate about animals and want to start a pet supplies business, you might focus on the untapped market of pets with disabilities using your personal experience of having a dog with a disability.
The Second Step: Learn to Solve Problems Effectively
Now that you’ve taken the first step to understanding who you are and want to be, it’s time to take the second step, writes Bet-David: learning how to solve problems effectively. Good problem-solving distinguishes a beginner from a master businessperson and is key to success in business and life. Bet-David defines good problem-solving as the ability to think through all options, envision possible consequences of every option, and make beneficial choices based on sound information. The better you become at solving problems, the more success you’ll find because you’ll start thinking of ways to prevent problems.
The Key to Better Problem-Solving: Taking Ownership of the Problem
To solve a problem, see yourself as an active agent in it, stresses Bet-David. Consider how you might have contributed to the problem and take ownership of the solution. This allows you to learn from mistakes and improve as a result of them.
How to Solve Problems Effectively
Let’s now turn to the two parts of effective problem-solving:
Part 1: Identify the Core Problem
First, identify the core problem you’re trying to solve, says Bet-David. Often, the problem you think you need to solve is merely a symptom of a deeper, hidden problem. You need to figure out what the true problem is to effectively solve it.
Part 2: Solve the Problem With Cost-Benefit Analysis
The second part of problem-solving is to devise three possible solutions to the problem you’ve identified and calculate the investment cost, time cost, and benefits each solution offers, writes Bet-David. Then, compare the calculated costs and benefits of each solution and pick the one that offers the most benefits for the lowest cost.
The Third Step: Create a Winning Team
Once you’ve learned how to solve problems well, tackle the third step: assembling a winning team, says Bet-David. To succeed in business, you must work with a team—not alone—and manage it well so they’ll want to stick around.
Build a winning team by completing three tasks:
Task 1: Hire the Right People
Do due diligence on potential hires by asking mutual colleagues about them, recommends Bet-David. Don’t trust your gut but rather rely on hard facts that indicate whether they’re a good fit. Additionally, question your initial impression of the person by asking yourself what appeals to you about them, what skills they lack, if there are red flags on their resume, and if the background check revealed anything negative.
Task 2: Retain the Right People
Next, retain employees through an attractive compensation plan, counsels Bet-David. Compensation plans are attractive when they motivate employees to help the company reach its goals and reward them for doing so. For example, salespeople may earn a commission on every sale they make. Determine what you want your employees to accomplish, and pay them more for doing it successfully.
Task 3: Build the Right Culture
Once you’ve hired the right people and incentivized them to stay, build a company culture, says Bet-David. Culture is critical because for employees to put in their best effort, they must identify with the company and its values.
The Fourth Step: Grow Your Business the Right Way
In the first three steps, you learned about yourself, developed the ability to solve problems, and learned how to create a winning team. With these pieces in place, let’s now move on to growing your company. According to Bet-David, there are seven parts to this growth process:
Part 1: Raise Funds
To grow, first, think about how to raise funds, counsels Bet-David. How you do this depends on the degree of control you want to maintain: The more money you raise from outside investors who then gain a stake in your business, the more control you sacrifice. Conversely, funding yourself means maintaining control but risking running out of money. Bet-David believes outside funding gives your company a huge security boost and recommends this route.
Part 2: Find Ways to Grow Both Steadily and Aggressively
According to Bet-David, use your funds to grow both linearly—through steady progress in areas like supply chains and administrative protocols—and exponentially—by making significant, rapid progress in areas like leadership development and innovative business ideas. Inspect your weaknesses and determine where there’s an opportunity to grow linearly and exponentially.
Part 3: Press Employees to Grow Along with the Company
The third part of growing your business is to press employees to meet the career goals they’ve set for themselves, says Bet-David. This compels them to rise to the challenge and grow along with the company. Additionally, when you pressure employees to improve, they do the same to each other. This elevates the competency level of the entire organization, leading to sustained growth.
Part 4: Build and Maintain Momentum
To grow as a business, you must build and maintain momentum, asserts Bet-David. Here are two methods for doing so without letting the momentum get out of control:
Method #1: Build Internal Trust
Build momentum by fostering trust among employees, writes Bet-David. Trusting employee relationships lead to speedier internal operations, which, in turn, helps sustain momentum.
Method #2: Always Focus on Increasing Speed
According to Bet-David, you can also build momentum by constantly devising new ways to perform faster in every area of your business. To do this, look at different speeds at the company—speed of internal processes and speed of the customer purchase process, for example—and shorten the duration of those processes by removing steps.
Method #3: Plan to Maintain Momentum in the Future
Finally, maintain momentum by planning for eventual future growth, advises Bet-David. Do this by first thinking about what the business might need or want in the future. Then, take calculated risks that increase the chances of achieving that future. For example, in the future, you’ll need to hire more employees to expand the business. You might thus hire an HR specialist now who can onboard future employees.
Part 5: Track Your Growth Using Metrics
To effectively grow your business, learn how to collect and use the metrics that matter to your company, stresses Bet-David. Metrics eliminate ambiguity or personal bias around how the company is performing, giving you a clear view of your status. This clear view then allows you to identify inefficiencies and correct them. For example, if you own a travel agency, you could start tracking how many customer complaints each of your travel agents receive. This objective statistic can help you determine which of your agents are the most and least effective.
Part 6: Put Your Knowledge Down on Paper For Posterity
The sixth part of growing your business is to turn your knowledge and experience into a documented system that successors can use, says Bet-David. This ensures the business can grow after you’ve left.
Part 7: Stay Alert As You Grow
Finally, even when you’re growing steadily, always behave as though a threat could overthrow your business, counsels Bet-David. Stay alert in two ways:
Way #1: Don’t Cede Control to Temptation or Your Ego
Don’t fall prey to temptations like gambling, excessive spending, partying, and so on, warns Bet-David. Stay on the straight and narrow to maintain momentum and growth.
Way #2: Obtain the Input of Experienced Business People
Adversity will inevitably strike when you start growing rapidly, warns Bet-David. When this happens, seek the counsel of numerous people with differing perspectives and experiences. Ideally, find people who’ve studied or personally experienced the type of problem you have. They’ll give you the most valuable advice.
The Fifth Step: Position Yourself as an Industry Leader
We’ve just talked about the fourth strategic step—growing your company. Now, let’s turn to the last step of your strategy for sustained success: making the bold business moves that position you as an industry leader. According to Bet-David, there are two bold steps you can take: taking down behemoth competitors and acquiring negotiation skills to apply in high-stakes deals. Let’s discuss each.
Take Down Behemoth Competitors in Your Industry
Though this is a risky move that’s not for every company, you can try to take on the behemoth competitor in your industry, writes Bet-David. This is possible because behemoths, once they’ve grown powerful and complacent, lose agility and the willingness to work hard and take risks.
Negotiate for Sustained Success
According to Bet-David, to become an industry leader, you’ll need to become comfortable negotiating high-stakes deals with partners, vendors, and competitors. Here are three methods for negotiating in a way that sustains long-term success:
- Prepare extensively for meetings.
- Be firmly convinced of the value of your product and your position.
- Develop negotiating power by seeking many options.
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- What distinguishes exceptional business leaders from average ones
- The five strategic steps you must start taking for long-term success
- How to track your business' growth metrics