MI Rewind: Invest Better Using Focus and Essentialism w/ Greg McKeown

0:00You're listening to TIP. Hey guys, on today's show, we're resharing some of my favorite episodes from the past for a few reasons. First, we get a lot of new listeners each week, so new listeners may never have heard this episode before. Two, even if you've been listening for a while, you may have missed it when it first came out. And three, even if you've heard it before, it can be a great episode to reinforce your learning. If you're not interested in this episode, no worries, you can pick back up with us next week with a brand new episode. Everything going forward is from the original episode, and I hope you guys enjoy this one.

0:31On today's show, I talk with Greg McKeown about the unpopular and often misunderstood concepts that have made Warren Buffett and Bill Gates ultra successful, and how you can implement those same concepts in your life to achieve success in investing, business, or even your career. Greg is a New York Times and Wall Street Journal bestselling author, an accomplished keynote speaker, and he consults for major companies like Adobe, Apple, Google, Facebook, Pixar, Salesforce, and Twitter. If you're looking to get more content than just a one weekly free podcast, make sure to follow me on Instagram. I post there almost every single day with different ideas about business, investing, the stock market, real estate, and I have new content coming out almost every single day.

1:20You can follow me on Instagram with my username, Robert at T-I-P. That's spelled out Robert, A-T-T-I-P. Now let's dive into the show. You're listening to Millennial Investing by the Investors Podcast Network, where your host, Robert Leonard, interviews successful entrepreneurs, business leaders, and investors to help educate and inspire the millennial generation.

1:53Welcome to today's show. As always, I'm your host, Robert Leonard, and I'm very excited to have Greg McKeown here with me today. Welcome to the show, Greg. It's great to be with you, Robert. Let's start today's show by talking a bit about your background and how you got to where you are today. I spent 20 years on an adventure and it all started when I was staring at a piece of paper in my hands with all these scribbles and answers on it. I'd been brainstorming this question, what would you do if you could do anything? And I noticed when I looked at the piece of paper that law school wasn't on the list, which was, as it turns out, inconvenient, because I was at the time at law school.

2:29And so that was the turning point. I quit law school and did what I really wanted to do, which was, well, to teach and write. That's what I wanted to do, but in an entrepreneurial way. I wanted to work with businesses. I wanted to understand how they worked. I wanted to understand the leadership dynamics and the team dynamics, organizational behavior, and just what is it? I mean, on that piece of paper, we're a series basically of questions. And one of those questions I think has such relevance for everybody listening today, and it's this. Why is it that otherwise successful people and companies don't continue to be successful?

3:05They should. But what we find, what I've found as I looked at the data and studied this question, is it what should happen doesn't happen? And so that's like a driver. That question has been driving me for those 20 years. And that's sort of the background. I worked in Silicon Valley companies through that for many years and noticed some predictable patterns and so on. But that was really the question that kept me up at night. If anyone knows that what's supposed to happen doesn't actually happen is stock investors. So I think the audience is definitely going to know what you're talking about there.

3:35What really got you interested in this question though? What happened? Was there an aha moment that you were just like, this is what I want to study. This is what really drives me and I'm passionate about. In the midst of working with Silicon Valley companies and noticing a pattern there called now the paradox of success. Let me tell you that pattern and then something happened personally and they connected together. So in the professional observation, I noticed that when a company was small, they got focused and they were able to drive success. Clarity led to success. And success breeded so many options and opportunities, which all sounds like the right problem to have, but it does, in fact, turn out to be a problem.

4:15It leads to what Jim Collins has called the undisciplined pursuit of more. And the undisciplined pursuit of more will plateau whole organizations. And so instead of being able to go forward to what ought to be their next level of contribution to success, they just can't get there because they're using all of their resources to do too many things at their current level. And right in the midst of all of this, I got an email from my colleague at the time. And it said, Friday between 1 to 2pm would be a very bad time for your wife to have a baby. I mean, my wife was expecting, otherwise, that's an even stranger email to get.

4:50But to my shame, I went to the meeting. And afterwards, what I learned from that lesson was simple, which is if you don't prioritize your life, someone else will. And that's kind of in hindsight where the idea is connected because on the one hand, I was observing the undisciplined pursuit of more in these organizations. And then all of a sudden, I'm having experience on the personal level where I'm trying to do everything and certainly keep everybody happy and violate something more important for something less important. And what I found is I sort of turned my attention to that particular theme.

5:21I found that many people, especially the Millennium Group, feel these challenges. People listening can test this right now. Have they ever found themselves like I was feeling stretched too thin at work or at home? Have they ever found themselves feeling busy, but not necessarily productive? Have they ever found themselves where their day is being hijacked by other people's agenda for them? And the answer to that question is yes, especially if that has become a regular answer. It means that you're falling into the undisciplined pursuit of more. And the antidote, the way out, and this is what, of course, I'm advocating in essentialism, is the disciplined pursuit of less but better.

6:00That's the way out of this conundrum. So what exactly is essentialism, if you had to define it, and what does it mean to be an essentialist? Essentialism is the antidote to the problem that we've just been discussing. Problem is the undisciplined pursuit of more. The solution is the disciplined pursuit of less but better. The name for that process is essentialism. Essentialism is a way of thinking. It is to see the world through the lens of what is essential. There's three parts to it. You really create the space to think big, to think great, to think bolder than you've ever thought before, to explore more broadly and more boldly than you ever have in search of those few things that are so valuable, they will change your stance.

6:50And then step two is that you start to eliminate all the other stuff. You might find when you find the key things you ought to be investing in, they might be so valuable that 90 % of the work that you've been doing or assumed you would be doing just needs to be eradicated. You shouldn't be doing any of it. Far less of that than you were doing before. So that's step two is to eliminate the non-essentials. Actually, to remove that investment, you're no longer playing around with investments. And then step three is to build a system, to execute, to build a system to make it as easy as possible to keep investing in those things that you've identified as being extraordinarily valuable.

7:29And that's it. That's the process. And it's an ongoing process, a disciplined pursuit of what is essential, rather than an undisciplined pursuit of what is not essential. But the process is explore, eliminate, and execute. That's what essentialism is. As we have this conversation, it's just, I think, about three weeks or so after the New Year. And so that's obviously one of the biggest times that people are setting new goals. So how does this idea of essentialism impact how people should set goals? Well, I see there being a paradox. And actually, it's one that even for people that read essentialism or get into it, they sometimes miss.

8:05And it's this, you've got to create space to have a far greater vision than you normally have. Now, that doesn't sound like the discipline in pursuit of less. But it is so critical. You suddenly discover my family. Over the break, we spent a couple of weeks coming back again and again to these vision boards that we were creating. So I have four children and my wife, all of us. We just kept coming back, kept asking the questions, what do we really want to achieve? What has 2020 got to be about? And not just rushing into the year, rushing into email, looking bigger so that you can start to make more deliberate trade-offs This is the core idea.

8:47Let me share the core idea and then one illustration of it. The core idea is the driving mindset of essentialism is that almost everything is meaningless noise. Almost everything is of low value, but a few things are superbly, incredibly, life-changingly valuable. That's the mindset. Now, if you believe that, let's say as an investor, for example, and of course, there's lots of different kinds of investors, but how might you approach it? If you think everything's approximately equal value, you might just kind of try and go with everything. You might try and do what everyone else is investing in, kind of rush in, rush out.

9:28If you're an essentialist investor, what you would be saying is, I'm going to pay the price to explore broadly until I find the thing that is so valuable. I'm going to go big and keep it for a long time. That would be my strategy. That would be the approximate strategy. And as it turns out, there is an investor that did that. And they had that perspective upfront before they became famous. They did go on to be famous. That was their precise... In fact, this investor had a message where they said they knew they couldn't be right hundreds of times in their investment career. They likened it to having a 20-punch card that they could only be right 10 or 20 times in a whole lifetime.

10:08They had the understanding that that was enough if you find the right investments. But it also, that perspective says, you don't just go and mess around with every investment that comes along. Just because other people are doing it doesn't mean you do it. And so that's like the heart of it. We're talking about Warren Buffett, of course. And I mean, it is now, as you look back on a lifetime of the most successful investor in history, you find that 90 % of his wealth can be traced to 10 investment decisions. What's fabulous about that is that he knew it up front. It was a deliberate understanding.

10:36It was an understanding of how the world actually works. It's not wishful thinking. It's just how it works. And so our job is not to shovel coal from one point to the other as much as possible. It is to find the diamonds, and that makes it worth the effort in order to find them because they're so valuable once you do. Warren Buffett says that his investment strategy, isn't it, borders on lethargy. I mean, that's amazing. The most successful investor in history, his investment strategy borders on lethargy. He wants the right things, then he invests big, and he keeps it forever. That's his whole strategy.

11:13That's so different than the average investor, whether we're talking about in stock or whether we're talking about entrepreneurs, that they do the opposite. They think the opposite is the way to do it. Just do everything you can, hustle on everything all of the time, and then you're going to somehow get to the top. That's just not what you actually find produces those kinds of results.

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14:23And for a limited time, you can use code stocks15 for a 15 % discount at checkout. All right, back to the show. Why do you think so many people have trouble with this? Why do you think more people aren't able to replicate what Warren Buffett has done. Like you said, this isn't a secret. This is very common knowledge and a lot of people know it. So why aren't more people able to replicate it? Robert Leonard They don't replicate it because they're living in success. Even if they don't feel successful. If you're listening to this and you think, well, I don't feel that successful, so much I haven't done, so much I want to do, that's fine, of course.

15:01But you are incredibly successful by virtue of the fact that you are able to listen to this, comprehend it, means that you're literate, it means that you're well, almost certainly live in a free society, or largely free society, that it's also largely stable. I mean, these conditions are the rarest, the rarest kind, if you take the broad picture of the history of humanity. And so, of course, people are blind to this, especially as a millennial. So we were born into stability. Now I know it doesn't feel like that with a variety of chaotic things that go on, and social media and news gives us the impression of sort of chaos all the time.

15:42But it's still the most prosperous, the most successful, the most democratic, the most safe, the least likely scenario that you will die at war than in almost any other time in human history. That means that everybody around you has more options and opportunities than they know what to do with as well. Born into the internet. not quite, but almost. Reaching adulthood, sure, the internet is now a phenomenon. A massive opportunity, every direction. And so all you have to do is be born in that environment and just do what everyone else around you is doing, and you're going to miss the strategy. You're going to miss this other alternative part because the number of shiny objects is immense.

16:23I mean, it's not a few more than it was before we were born. You go back a couple of hundred years. The number of... You don't understand how hard it was to even get a book. To just own a book was significantly challenging. The amount of opportunity and options have exponentially increased, just absolutely massively so. We've just all been born into it as if it's all normal, and we are totally unprepared for it. As a result, the path of least resistance is just to do way too many things. Start doing it, start doing it, follow this thing and that thing, and own it in every direction, without realizing it's even a strategy, even a choice.

16:56What Warren Buffett demonstrates and helps us to remember is that there is an alternative strategy, and it is for the taking. It's just not one that's being modeled very often. Now let's talk about that idea in the context of a career or even a side hustle. I mean, it makes complete sense from an investor perspective, but I think a lot of people listening to the show today work a corporate job where the amount of time that they're putting into their work is often used as an indicator of their success. If their boss sees them putting a lot of time into something or that they're really busy, that makes them look successful.

17:26But that doesn't necessarily equal success or importance. Why is that? Well, organizations can often get into this. Organizations are breathing the same air as the people that breathe air who work in the business. That's true for the actual air, but it's also true for cultural air. If you're a non-essentialist environment outside of the workplace, you're going to walk into that place and you're going to keep thinking like that. And so the key, what I see people do that break with this is they wake up to the fact that this is a choice. This way of making decisions is a very particular strategy.

18:08And they either wake up to it because they get worn out, exhausted, burned out, or they wake up to it because they're thoughtful and selective and Warren Buffett style. Well, for some people, that really is a very different way of thinking. They have never thought that way. In fact, I would say the book is more countercultural than I realized it was. And so then what I see is this pattern, is that they start reading it and they start going, oh my goodness, I've been seeing it all wrong. I can see it in a new way. The opportunity is enormous if I can figure this out because instead of just doing more stuff, I'll do more of the right things.

18:41There's few things that matter. I can go to the next level personally and professionally, and they get other people on board. And so, I've learned not to try to be an essentialist on your own. You want to do it collectively or not at all. So I've seen the most successful essentialists. They don't just, hey, I'm going to be the only essentialist in my workplace. They get other people. They say, okay, let's read this book together. Let's talk about this together. Let's introduce the language of essentialism into our conversation. So then they're able to talk in a way they couldn't talk before. They can ask each other.

19:11They can say, well, look, is this essential? Is this really what we want to be doing? Is this the right trade-off? What trade-off should we be making? You can ask, well, look, if we could only do one thing this year, what's that breakthrough thing? What really is it? We've got to do one thing, one really important thing. What's the priority? And all of this is a new way of speaking and talking, and they grow this. I mean, I normally get involved in these organizations as a result of one of these people that grows the influence, and they'll say to me, okay, we'll come and we'd like you to speak at this event or something like that.

19:40I'm sort of, in a way, the story's already been written. the first few chapters, it's already been written by the time I'm there because somebody woke up, saw the non-essentialist costs, saw that they could become an essentialist, and they grew an essentialist culture around them. And that's what to do. Don't do it on your own. Don't try to be the only essentialist in your world. It won't work. People will think you're a bit crazy. But if you get them on board, it's amazing what people can do. It's just amazing. I just talked to a group. Let me just share this one illustration, exactly what I'm describing here, is that somebody came across Essentialism, they introduced it into their company.

20:16That company produces big tours, big, massive, I mean, like music tours for artists that everybody listening to this would have heard of. And normally the game, the name of that game is do as many tours as you can with as many people as you can, and that's how you're going to be successful. But after Essentialism, he said, okay, that's not it. What we need to do is do the right tours for the right people. The idea is that they'll be more successful. So within one year, they reduced their number of tours by 40%. 40 % less tours, but their revenue increased by 4x. Robert Leonard That's what it looks like in play.

20:51He couldn't have done that on his own. He got the whole team around this to think about what really was valuable and what was just noise. So how do we do that? How do we determine what is important and what's just noise? Robert Leonard You know, it's not actually that hard. I would say it's kind of easy, but it's not what is normally done. That doesn't make a thing hard. It just means you have to be aware that other people aren't already doing it. So you have to sort of take apart less travel. It looks like creating space to really figure out just to think about it. You didn't ask the question, what's the most valuable work I can do this year?

21:30Your brain and spirit is like a Google search engine. It will provide you answers depending on the questions that you type in. If you type in the question, hey, what's in my inbox today? What emails do I respond to? How can I respond fast? How can I get to zero inbox? Well, then it will help you to do that. If you ask instead, what are the biggest, greatest mission that I could imagine for my life. Okay, well, then it will process that. So I'm suggesting to ask essentialist questions first to explore that. Step one, to explore what is really valuable and to pause for a moment to live in the uncomfortable pause.

22:11I'll give you an illustration of this. Again, this will sound counterintuitive even to people that are familiar with essentialism. Steve Harvey invited me to speak at his annual camp. These are for single moms and they're basically at-risk sons, at risk of crime and getting infected with negative energy and patterns. And one of the things he said, it was really interesting because we know Steve Harvey as the entertainer, as the comedian, the talk show host even, but this was really different. I mean, this was him raw and passionate and visionary. One of the things he said to this whole group once they were all together, he said, listen here.

22:53He said, the problem, the problem for all of you here is that you are asking for too little from your life. I mean, actually, he put it this way. He said, you're asking God for too little. That's what he said. He said, you're praying, please help me to get the rent check. He says, and you always do. One way or another, that happens, that works out. He says, stop asking for that. You've got to dream so much bigger than that and ask for something way better. And he suggested something that I started after his suggestion. He said, you go home. He said, here's the challenge. You go home and you write.

23:27I think he said 400 things. But then he adapted to the group. He said, that's too many. Just go do 100. Of the biggest vision that you can come up with for your life, the biggest things you want, you really want. He said, now predict what happens. He said, what's going to happen is that you're going to get to item 23. And that's it, You're out. That's it. You don't know anything else. Those things are already bigger than you can believe, bigger than you can imagine. He says, keep pushing, keep thinking, keep allowing yourself the space. I started that. And every item on the list that I have now is significant and way beyond what I believe is possible.

24:04And that's exactly what's so great about it. And maybe this all sounds very high in the sky, but it's like, that's the idea of creating space to explore. What you're looking for is the stuff that's 90 % or above important, valuable, significant, game-changing. You're looking for that. And most of the time, people are just so reacting to the latest text, news update, social media post, news update about someone's social media posts, and so on. Their mind is consumed with this total trivia. And instead, you could be envisioning, turning that off, pausing, and really thinking what could be. And out of that, now, I'm not suggesting people go and do those 400 things.