Episode 402: How LEE IACOCCA turned ONE DOLLAR in to BILLIONS!
In Lee Iacocca’s business playbook, assembling the perfect team proved to be the ultimate game-changer, catapulting Chrysler from the brink of collapse to a formidable billion-dollar powerhouse.
In this episode, Adam Stott unveils the legendary leadership strategies of Lee Iacocca, one of the automotive industry’s most successful CEOs, illustrating how he transformed one dollar into billions with Chrysler.
Adam walks through the eight business principles that Lee Iacocca employed, offering listeners actionable strategies they can implement to expand their own ventures.
Show Highlights:
- Successful businesses are built by hiring the best talent and continuously investing in team capacity.
- Keep business priorities straightforward and ensure everyone understands and aligns with them.
- Clear, concise communication can lead to better decision-making and operational efficiency.
- Align resources to activities that drive revenue, ensuring core operations are well supported.
- Navigate changes without halting revenue-generating operations by adhering to business fundamentals.
Links Mentioned:
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Copyright: This video and thumbnail contain imagery from Fiat-Chrysler, The New York Times, CBS Evening News, Ford Motor Company, Chrysler, Getty Images, Senate TV, CNN, Tony Spina – Detroit Free Press, and John Collier – Detroit Free Press. The content is used under fair dealing for the purposes of commentary, criticism, and review, with no copyright infringement intended. This video is not endorsed by or affiliated with Fiat-Chrysler, The New York Times, CBS Evening News, Ford Motor Company, Chrysler, Getty Images, Senate TV, CNN, Tony Spina – Detroit Free Press, and John Collier – Detroit Free Press.
Transcript:
Please note this is a verbatim transcription from the original audio and therefore may include some minor grammatical errors.
[00:00:00] Adam Stott: How one of the best CEOs in history turned a 1 into billions. We’re talking about Lee Iacocca and his eight success strategies. Let’s dive right in so you can start using these strategies to make more money in your business.
[00:00:22] Just five years ago, one of the biggest legends as a business CEO ever passed away, and he left behind some wisdom that you can use to help your business grow. And that’s what we’re going to be discussing in this video. In this video, eight success strategies from Lee Iacocca. If you don’t know who Lee Iacocca is, he was behind the iconic Ford Mustang, masses of growth for Ford Motor Company.
[00:00:51] And he actually joined Chrysler at a point when it was going out of business. It was worthless. Hence the one dollar. Into billions, which is exactly what he did. He took a company that was going out of business on the verge of bankruptcy, absolutely finished and turned it around with his legendary CEO management strategies to turn the business into one of the automotive industry’s biggest ever success stories.
[00:01:18] Now, I remember. Reading Lee Iacocca’s autobiography and just being wowed, finding the principles he had to create success, the unbelievable self belief he had to go out and get things done is very inspiring. And I’m really looking forward to sharing these strategies with you now. Let’s dive right into these eight strategies and principles that you can use to start turning dollars into billions of dollars.
[00:01:45] Let’s jump right in.
[00:01:50] So the first principle from Lee Iacocca is hire the best. Hey everyone. Hope you’re enjoying the podcast. We’ve got a free training that I’m doing right now online from the comfort of your own home called stand out brand. What this does is it shows business owners how to get noticed on social media, stand out.
[00:02:12] Get more leads and get more sales. So if you want to make more money in your business, head over to adamstop. com forward slash SOB. That’s adamstop. com forward slash SOB and join us on the free three day workshop, stand out brand. Now, the cool thing about this. is that all the leaders in history that have created a billions and have billion dollar lessons that have had massive success agree on this one thing.
[00:02:43] There’s no ambiguity. Everybody agrees that if you want to be massively successful, business is a team sport. You can’t do it on your own. Now I meet Hundreds and thousands of entrepreneurs and business owners that we train and we move them towards success. And initially their mindset is they’ve got to do everything themselves.
[00:03:03] Everything comes down to them. They’ve got to put it in place. Well, actually the opposite is true. You constantly got to be building your team, top grading your team and hiring the best people around you. And Lee Iacocca’s lesson was when Chrysler was absolutely finished going out of business and he literally bought it for pennies to turn it into a billion dollar company.
[00:03:25] His strategy was simple. I want the best people. I want the best minds. And he was in a place where he couldn’t invest. He couldn’t go and get the best people’s never money, but he paid the money anyway, to bring the best talent into the company to drive it forward. And this is a mindset. A mindset of a winner where many business owners just don’t do that.
[00:03:45] I go, I can’t get the best. I can’t afford the best. I can’t bring the best people in. And if you have that mindset, you end up doing all the work or you get people that are not right quality, you end up stuck. If you have that mentality of let’s find a way, let’s find the best people. You can build an elite team that can take your business all the way to the top.
[00:04:04] Don’t just take it from me. Lee Iacocca’s number one lesson to billions is hire. The best people, your business is a recruitment business. Okay. So lesson number two, this is so easy, so practical and so usable for anybody watching this. And it’s something that we promote within our businesses as well is that get your priorities straight.
[00:04:27] IACOCA believed in simplifying business priorities and your business priorities should follow. on a simple page, like one page. These are the priorities. He was amazed at how many businesses fail to streamline their goals, prioritize effectively and avoid complexity. I absolutely love this principle. I think so important.
[00:04:51] A lot of people make business really complicated, but if you literally had your one page business plan, this is something I teach my inner circle clients that I coach directly. You’ve got one page business model, that one page business model, the functions of your business, and we monitor. And we increase those functions, productivity and efficiency with most people just make it too complex.
[00:05:12] They’ve got hundreds of pages. And what happens is they end up getting lost in the sea of the day to day. If you want more success in the words of Lee Iacocca, just get your priority straight, get them down on one piece of paper. You know what you’re watching a video or listening to me on the podcast, wherever it is, you could take a pen and a notepad out right now and write down what your three biggest priorities are.
[00:05:35] for this year or what your three biggest priorities are for this month. And if you were to do that, everything that you write down has much, much more chance of coming into your life because you wrote it down. So his second rule, which I love is get your priority straight, get them down on one page. So now number three, which is Say it in English.
[00:06:00] Keep it simple. Amazing. Effective communication is essential in business. IACOCA warred against long winded documents filled with jargon. Clear, concise communication can save time and lead to better decisions. I love this principle because what happens to a lot of business owners, a lot of business people, is they go on this journey when they start out in the business, they’re right at the beginning and they don’t know a lot and everything’s very simple and everything’s very fluid.
[00:06:31] Fast and they go and they get the results and they get stuff done. And then as each month goes by and six months goes by and a year goes by two years, five years, 10 years, people end up in a different place. And what’s happened across the course of that 10 years is they’ve accumulated masses of knowledge.
[00:06:47] Got all this knowledge and all this stuff they know and they forget that the people they’re communicating with are actually coming in on the beginning of that journey. You’re 10 years ahead of these different people and they’ve just showed up. So you’re thinking in a certain way and they’re just not thinking in that way.
[00:07:04] And it is your job to say things clearly. Candidly and in English to bring them along to where you’re at now The good news is remembering that success leaves clues It doesn’t take the new person coming in Ten years to get up to speed with you if you say it plainly and clearly and you keep it simple So this principle is something that Lee Iacocca understood and made sure that his team really prioritized having that clear, concise communication, and that can help you improve your business too.
[00:07:37] So number four, the line makes the money, and I’m going to give you a wicked interpretation of this for your business in a moment, which I believe will be really helpful for you, but let’s explain it. In Iacocca’s words first, Iacocca understood that is the operational side of a business, the line that generates revenue.
[00:07:57] Management’s job is to support the line, not to interfere. It is a lesson in staying focused on what drives the profit. Beautiful. Now I want to interpret this for for you and for your business because having run multiple eight figure businesses myself, built teams of hundreds of people that worked with me and worked with thousands of business owners.
[00:08:20] As a business gets bigger, you see it all the time. Departments pull against each other and they go in different directions. And often the core focus of what the business does can be compromised with other people’s priorities coming in from different angles. So the one thing that you really want to get clear on is what are the key drivers of income in your business?
[00:08:45] What are the things that make the money? The core operational activities and the reason I interpret this one a bit longer is obviously in the automotive industry for Iacocca, the line was. Building the cars, the more cars we build, the more cars we sell, the more cars we sell, the more money the business makes.
[00:09:04] So that’s the line, and he’s running the resources around making sure that the line runs smoothly. Now in your business, More than likely you don’t build cars. You do something else. Maybe your recruitment business perhaps you’re in dance schools or salons or coaching, consulting services, whatever you do, what is the core revenue generator?
[00:09:28] What’s the line in your business that creates the income? Deploy your resources around the line in your business and you will see your income and your profitability increase. But what I want to do is when I’m working for a business owner and I say, what’s the one thing that drives revenue in your business?
[00:09:47] I want to say bang and know the answer to that immediately. I’ll give you an example. I have a business that coaches and trains thousands of entrepreneurs. If you said, what’s the line in my business, the line in that business is the events. The more events that we run, the more happy clients we have, the more clients we acquire the more business owners grow, everything runs on the events.
[00:10:11] And the event is the core element of the business, much as in Leah Iacocca’s version, The line is the building of the cars. What’s yours? And you can put yours in the comments for me, or let us know because I’m super interested for you to establish this. Now, before we move on, why do you want to establish this?
[00:10:29] Because if you don’t establish this, it’s very easy to move towards what we call low income generating tasks. which are things away from the line, things that don’t make the money where the line is the high income generating task for your business. And that’s where you should pull your resources, your people to create more revenue for your business.
[00:10:50] Hopefully you’ve enjoyed that one. And I look forward to hearing about what your line is in the comments. Number five is a rule that we can certainly all learn from. from managing businesses. Lay out the size of the playing field. Iacocca was a fan of delegating within limits. He called this defining the envelope.
[00:11:11] Teams were given room to operate freely but within established boundaries that aligned to company goals. So let’s interpret this and I want to actually give you an example as well which will really help you to see this. So Iacocca says, right, this is what We want to achieve, go and achieve it, tells his management team, gives them the boundaries, gives them the budget, but doesn’t tell them or micromanage how to think and act.
[00:11:38] A good example of this is when he took a superstar employee out of Ford Motor Company that had wanted to build a vehicle within Ford Motor Company, which later on would essentially become the minivan. Iacocca really believed in this person’s talent and when he brought them into the team, he essentially said, yes, you’ve got the scope to build this vehicle.
[00:12:02] We’re defining the envelope. This is how much money can be spent. This is our deadline and our timeframes. And this is your resources. The team that you can have go and make it happen. He didn’t micromanage every last detail. He believed in this person’s talent. He showed the playing field. This is the boundaries.
[00:12:24] This is the amount of money. This is the team, the resources. And then it was up to. that executive to go and make it happen. Well, that in itself was one of the moves that saved Chrysler because the minivan became a huge success. It was absolutely a monstrous success for Chrysler that took them from bankruptcy to billions.
[00:12:47] So just believing in others, following the ideas, but setting the playing field out, setting the deadlines and putting talented people to task often could be one of the best uses of time in your business. This leads perfectly into Iacocca’s next rule number six, which is you must keep some mavericks around.
[00:13:09] To avoid a narrow perspective, Iacocca believed in keeping contrarians or mavericks around. Differing opinions lead to better decisions, and avoiding groupthink is key to a company’s success. Survival. Now, this principle is something that I’ve used in my own businesses. I’ll give you an example of that.
[00:13:29] We have a management meeting every single week. We will look at three things within the differing departments. We will look at what are the breakthroughs that department has had, what have they gone and done that’s really amazing. And like they’ve had a brilliant breakthrough in the last week, in the last month.
[00:13:48] What are their current barriers? Something that they’re stuck with? Something that they’re struggling with? Something that they’re really holding them back? And what are they proposing to do in execution to make this happen? Now, we call this the BBE process. My business is called BBE, Big Business Events, and we have A free community called Big Business Entrepreneurs, again, BBE, that you can join.
[00:14:11] We’ll put that in the description. And when you look at this process, what we do is we let the management team communicate those breakthroughs, those barriers, those executions. Then we bring them together and we say, right, These are the barriers that everyone has. We’re going to pick two of these barriers or three of these barriers, and we’re going to workshop them out.
[00:14:33] We want all of you to come up with your solutions. These differing opinions can sometimes create some conflict, but conflict is good. Because that does lead to you making better decisions. And that’s exactly what IACOCA is saying. Now the Mavericks part is you will have people that come into your business that sometimes have a different way of doing things.
[00:14:55] They may not conform to everything that you do within your business. They step out of process or systems occasionally, but that’s okay. If they have a different way of thinking, if they can add tons of value as long as they’re of course respectful and not disruptive in that process. So how would this work?
[00:15:13] What’s an example of this? Well, think Eric Cantona going to Manchester United for the first time, complete maverick. Puts the the collar up, you know, goes out there, makes things happen, and he was a complete maverick. Alex Ferguson knew having two mavericks around also helped. So what I would say to you is there’s always room for a maverick or two in your business and your organization, and be understanding that conflict is okay.
[00:15:40] As long as you resolve that conflict and agree on the execution, which are the next moves, you can get some great decisions made in your company from bringing people together. and creating great decisions. Okay. So lesson number seven is a really great one. I’m sure there are some business owners that are watching the early stages or getting into business.
[00:16:03] Maybe they’re starting out there in planning phase. And if you are, I love this rule for you. And if you’re more of an established business, this is also a great rule for you to avoid. making this mistake. So this rule is stay in business during alterations. Change is inevitable in business but Iacocca emphasized the importance of continuing to generate a profit even during strategic alterations.
[00:16:32] A business should never be distracted from its core revenue generating activities. I love this. Now let me context this for your startup business or your big old business. So that way you’ve got. Two perspectives. If you’re a startup business, the most important thing that you can do in your planning phase, when you’re planning things out, you’re becoming strategic, you’re looking at all the details, is to go and make sales.
[00:16:58] In order to be in business, you’ve got to make money, and you’ve got to go and have conversations and make offers to get feedback. And if you don’t go and have conversations, and you don’t go and If you don’t go and have conversations and you don’t make offers and you don’t market what you are preparing, what you are creating, you can’t generate any money and way too many startups in their business just stay in the planning phase for far too long.
[00:17:24] Yes, you want a great plan, but it doesn’t matter how good your plan is if it’s untested. So you need to get out there and start having the conversations and making the offers. And this is incredibly important, as Iacocca says. Now, looking at this as a bigger business. If you imagine you’re going to move offices or move premises or move shops, whatever it is, you’ve got a bigger business, you’re moving your opposite, you’re moving your operation, maybe even going to another country, whatever it is, you don’t want to stop trading during that time.
[00:17:56] That’s a huge mistake. You want to find ways to continue generating revenue while you are going through changes or alterations. And I think that’s a really good lesson there from Iacocca and hopefully the interpretation really sits with you in the mindset and you get it. So you can start applying that to your business.
[00:18:16] So our final lesson in the eight lessons of taking one dollar into billions by Lee Iacocca, who did exactly that with Chrysler following these rules, is remember the fundamentals. Iacocca was inspired by football coach Vince Lombardi and the importance of getting the basics right. Without this foundation, he knew that even the most advanced strategies Can fail.
[00:18:44] So let’s unpack this Lombardi sports coach. What’s a sports coach got to do with a billion dollar car empire. And that’s why I love the fact that you’re actually watching this video or listening to this podcast because you can do what we call cross pollinate. You can take ideas. If you can imagine a little bee flying up to a flower, taking some of that pollen and in flying off to another flower And spreading the pollen around.
[00:19:12] This is what we call cross pollination. And this is a great strategy for you building your business. You can take ideas from successful people in history because success leaves clues from sports because athletes have a winning mindset. to empower you and your business. And Iacocca knew this, and many people don’t do this, but if you do this, you can create so much more success.
[00:19:37] And the lesson he said that he got from Lombardi was following the basics. Now the purpose of the basics in this example is to is a repetition and doing the same things over and over again and doing them right. Making sure you practice on them, making sure you train on the basics in order to get things right in your business.
[00:19:59] Let’s give you an example for your business. Let’s imagine that you’ve been doing sales calls your whole life, right? Maybe you’re good at that or you’ve been doing some sales calls in your business. Your business is two years old. You spent two years on the phone. Now, when you first started making those phone calls, you probably weren’t that great.
[00:20:17] The first one was a bit awkward. You felt a bit nervy. The first 10 were horrible. Eventually you got to the point a year later where you felt quite comfortable. Then you got to the point where you actually became pretty good at it. And then you were doing it consistently and you’re doing it again and again and again, to the point where you had a pattern, you had a script and that pattern was stored up here for you.
[00:20:40] And you were doing the same things over and over again, you started framing the call, for example, is a good strategy for salespeople to do is frame the call at the start, tell people what to expect, how that calls going to go. Now, you’ve got all of that in your head, and then you hire some new people to take over those calls for you.
[00:20:59] Do you want them to have a two year learning curve or do you want to drill them on the basics and the strategies and train them so they can save two years and get up to your level very quickly? Well, hopefully you can take that example on there’ll be much smarter. To work on the basics for your team, get them performing the way you want them to perform as early as possible so you can develop and grow your business having trained thousands of businesses and took multiple businesses to eight figures myself and train thousands of clients to do the same.
[00:21:34] I see it all the time where business owners neglect the basics. They neglect training. They don’t put the time and effort into the small details where you win is in the mini detail. Ayakoka knew that he took that from Lombardi, applied it to his business to get amazing results. Well, hopefully you’ve enjoyed those eight principles of how you can take 1 and buy a business like Chrysler and turn it into billions.
[00:22:05] I think these lessons from Iacocca are amazing. I read his autobiography. I got a lot of value out of that as well and really enjoyed finding his top tips and bringing them to you. What I’d love To hear from you, if you are watching, would you like a breakdown of Lombardi’s principles? Perhaps you’d want to learn from those.
[00:22:25] Is there another figure in history or a business that you would like an interpretation on? Tell us in the comments, we’ll be more than happy to consider all of those and we want to keep bringing you the best. The best lessons in business and the biggest business growth secrets can make the impact on your business.
[00:22:44] And I look forward to seeing you on the next video. Don’t miss out and make sure you subscribe and we’ll see you on the next one. Hi everybody, Adam here and I hope you loved today’s episode. Hope you thought it was fabulous. And if you did, I’d like to ask you a small favor. Could you jump over and go and give the podcast a review?
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