Which One’s Will You Choose?
Let’s talk about mindset! What is mindset? Your mindset is a set of beliefs that shape how you make sense of the world and yourself. It influences how you think, how you feel, and how you behave in any given situation. Your mindset is made up from lots of experiences over a lifetime and, although your mindset can evolve with time and new experiences, for many their mindset on particular things gets set at some point and can be difficult to change. This is exactly why we’re talking about it in this episode.
Typically, any discussion about mindset comes with an explanation about their being two primary types of mindset: fixed and growth. Quite simply, a fixed mindset is a black and white, either-or mindset. You either have it or you don’t, you either can or you can’t, you will or you won’t. A growth mindset, on the other end of the spectrum is one that says, if I don’t have it, I can acquire it. If I can’t do it now, I can learn how to do it in the future. It’s a more nuanced spectrum that allows for growing and evolving into whatever we want to be, do, and have. Obviously, you know that I am going to encourage every one of you listening to adopt a growth mindset over a fixed mindset. But, to help you do that, I’m going to talk about 8 mindsets that I have come into experience with over the past 20 or so years coaching people in business and life. We’ll talk about the fixed version of the mindset, and then the opposite, or growth version of that mindset so that you have some contrast for perspective.
Full disclosure, I learned about many of these from one of my coaches many years ago. The man’s name is Dan Sullivan, and he is renowned as the Strategic Coach. He had a list that he showed us at one of the weekend growth coaching seminars and it wasn’t referred to as mindsets, but as the reasons small businesses stay small. The way it was presented didn’t necessarily resonate with me at the time because I don’t believe every business wants to grow and scale, and many small businesses choose to remain small, and not all because of these 8 mindsets. Many of the small businesses I deal with have very positive growth mindsets and it’s what differentiates them from other businesses. However, I realized there was still lots of value in these mindsets, so I adopted them as just that, mindsets to coach on to give perspective. It has become a great coaching tool for me over the years because, by knowing these, I am now on alert to listen for them and, when I hear one that sits in the fixed category, I know how to coach them into the growth category.
Let’s jump right in with the first one, which is one of the most common and it’s the scarcity over abundance mindset. With all of these, imagine a spectrum with the fixed mindset or attitude on the left of the spectrum and the growth mindset on the right of the spectrum. I run into this on an almost daily basis. I don’t know if it’s better to say that I run into a lot because appraisers tend toward the negative more as a subset of the population, or that most people in general tend to believe in scarcity over abundance. Either way, scarcity is the belief that there is only so much of something to go around, where an abundance mentality says that there is enough of something for everyone.
Let me tell you where I think this comes from, at least in the appraiser profession, and how to change from a scarcity mindset to an abundance mindset. Appraisers, Realtors, and lenders all deal with real estate in some way. Real estate is scarce, in some respects, and anything that is considered to be scarce increases in value. We’ve experienced over the last 10 years or so a scarcity in homes for sale, which has caused them to increase in value as the demand for that scarce resource has been very strong. If you just use that as an example, it’s easy to say, ‘see Blaine! Not enough to go around!’, and you wouldn’t be wrong.
The great thing about our mindset is that we get to choose what we focus on and give our attention to. We get to define what we’re seeing in the world, and how we define something is how we’ll experience that thing. If you pull back and look at things from a broader perspective, you see Realtors having banner years for the past 10 years despite the scarce resource. We have seen appraisers having their best years ever despite the scarcity of real estate. How can this possibly be when there is a scarcity of homes for sale in the market? Well, precisely because you and I were in positions to take advantage of the abundance of appraisal orders available to the market, which greatly exceeded two primary things: the number of appraisers available to reasonably handle the volume in a reasonable amount of time, and the level of efficiency most small appraisers and appraisal shops have built into their business model. That’s a very nice way of saying that most appraisers are horribly inefficient with their processes and, therefore, got capped fairly quickly with the amount of volume available to them on any given day.
All of the evidence for the past 10 years or so have pointed to an overabundance despite the constant messaging around scarcity. Even during those amazing times where everyone’s cup was overflowing, you still saw people saying things like, ‘better make hay while the sun is shining!’, and ‘it’s feast or famine in this business!’ The scarcity mindset is a poison that infects everything. I know what some of you will say if you’re listening to this episode in September of 2022. You’ll say look at the market now, we’re dead! I see appraisers in some of the forums crying about how dead their businesses are, which is to be expected given the fact that the lending business is down 50% or more from where it was this time last year. Most appraisers, just based on the law of averages and doing basic math, have had to do almost nothing to run a thriving appraisal business over the last 10 years. You fill out an app, get on a panel, and you’re in business. You don’t have be different, you don’t have to be special, and you don’t have to be good at anything in particular.
If I was going to teach a class on how to turn any product of service into a commodity, I’d simply deconstruct the appraisal industry and list out all of the missteps appraisers and appraisals companies have made over the last 30 years or so. It would essentially sound like this: step one, remove any semblance of differentiation. Step two, remove all aspects of customer service. Step three, use technology to democratize the process (Zillow, Trulia, apps, public access to more info). Step 4, eliminate customer and client loyalty. Step 5, remove any perception of enhanced value. There you have it, a product, a service, and an industry that, for the most part, is only differentiated by price. And, by the way, when the vast majority of its players have a lack mindset based in scarcity, it becomes much easier to turn that thing into a commodity because the lowest hanging fruit for appraiser is to simply lower their price to stay in business. It’s too difficult to deliver great client service. It’s too difficult to plan out more than a day or a week. It’s too difficult to build relationships over being transaction focused (number 3 on the list), and so on.
What I can tell you is that, when you have an abundance mentality, you recognize that markets rise and fall, but you’re always building the strongest kind of business that can be built, which is one based on relationships over transactions. What the abundance minded also experience is greater market share, which means they tend to get more from less. This means that, when markets inevitably change, like the mortgage market dropping 50%, the abundance minded don’t focus on the 50% drop, they focus on business that is still being done in that remaining 50%. They are the top 20% doing 80% of the business. The business is not spread evenly over the same number of appraisers when things dissipate. If there were 500 orders available last month, and they were spread over 100 appraisers, they weren’t spread evenly at 5 orders for each. The top 20% got 400 of those orders, and the remaining 100 orders were spread over the remaining 400 appraisers, which means only 25% of those likely received any business.
The same metrics get tested in all markets. The top 20% get the bulk of the business. When things slow down for the bottom 80%, they might be slightly slower at the top, but not proportionally to the overall market. If there are only 250 orders now, instead of 500, the top 20% of the top 20% are getting the lion’s share of that business, while the bottom 95% are affected the most. If you’re one of the slowest right now, I hate to say it, but you’re in the bottom 90% or 95%, likely because you haven’t done anything to push into the top 5-10%. There may not be enough to feed everybody at all times, but with an abundance mindset over a scarcity mindset, you’re likely doing the things that the lack thinkers aren’t doing.
The next mindset is a past versus future mindset. I won’t spend a whole lot of time on this one since it’s closely tied to the last one, but basically, it’s always focusing on what didn’t happen in the past, instead of the possibilities for a better future. When you’re always driving by looking in the rearview mirror for information, you’ll crash 100% of the time.
The third mindset is transaction over relationship. This is a big one, friends! When you’re always focused on the next transaction over the long-term relationship, you’re forcing everything in the direction of commoditization. If you’ve listened to this podcast for any period of time, you know that I’m a relationship guy. I always go for building the relationship over just doing a transaction. It’s why I am such a huge proponent of becoming the trusted advisor in your market by answering questions, educating your market, holding classes, and being the voice in the market. Those who are transaction based over being relationship based are valued only for what they can bring to a transaction, and only when a transaction is available. By the way, the transaction-based folks are competing in the biggest arena of competition possible! Those who’ve built businesses based on relationship over transaction have something that transcends the transaction and results in a busier and more profitable business.
The fourth mindset pairing is security versus opportunity. Human beings tend to seek security, comfort, and familiarity over the unknown. It’s a normal and expected survival tactic. However, when you’re heavily security focused, you tend to miss huge opportunities because you’re more focused on the known than the unknown. The famous quote from author, Joseph Campbell, ‘the cave you fear to enter holds the treasure you seek’, speaks to this security over opportunity mindset. Campbell is referring primarily to self-actualization and he uses the cave motif because caves are dark, scary, confining, and hold the unknown. The cave you fear to enter points to your desire for security over the opportunity to grow and create new opportunities by facing your innate desire for security, comfort, and familiarity. The irony is that, quite often the desire to start and own your own business, which is an attempt at controlling some of the unknowns and having security, ends up giving you neither control nor security. The plight of the small business-person is that they’ve essentially built for themselves a job that gives them neither security nor a safety net. Choose opportunity over security and, in many situations, you’ll end up with more of both.
The fifth mindset pairing is that of competition over collaboration. Competition over collaboration is just another form of scarcity over abundance. When you’re unnecessarily focused on what you perceive to be competition, instead of looking for opportunities to collaborate, you end up with the worst of all worlds: heavy competition and no opportunity form strategic partnerships that could lead to bigger opportunities.
The sixth mindset pairing is that of work ethic over wealth ethic. This is one of my favorites from this list because I have been watching and learning for 51 years about work ethic and how those two words tend to permeate the business world. Work ethic is a standard and a metric by which we judge and categorize people. Somebody who works hard and does so over long hours is said to have a strong work ethic. I was raised in a home with a strong Dutch work ethic. What that means is that you’re valued primarily by how hard you’ve worked, not necessarily on what value or opportunities you’ve created. We see work ethic being one of things so many appraisers pat themselves on the back for when they’re working 80-hour weeks and not enjoying life. So many of you seem to want to win some kind of unwinnable contest of who can work longer and harder. Actually, it is winnable, but you have to die to be crowned the victor.
Wealth ethic, on the other hand, is not a focus on how hard or how long you can work, it’s about how much value, how much leverage, what kinds of results, and what kind of impact one can have in the least amount of time. Remember, time is one of our most valuable non-renewable resources, so why not try to get the most done and have the most impact while using the least amount of resources? This one goes back to the security over opportunity one as well. When you value your security and safety over opportunity, you are likely not being a good steward of your time resources because being a good steward of time means leveraging time for all it’s worth. And what it’s worth is typically thousands of times more than people tend to value it. Having a wealth ethic is about looking for undervalued opportunities, making vital connections, and creating profit possibilities for you and your partners, which includes your clients and customers.
The next mindset pairing is that of the hero versus the trusted advisor. If you’re familiar with the Hero’s Journey story arc made famous by Joseph Campbell in the Hero with a Thousand Faces, you’ll have an idea of what I’m referring to. If not, the Hero’s Journey is a story framework you can see show up in many stories and movies. You take an ordinary guy or girl from the village, call them into action to go on an adventure, you have them fight some kind of evil, they overcome that evil, they come back home and try to integrate back into society, but now as something of a hero.
If you’ve ever heard of the Storybrand process, a marketing and business branding process, you’ll know that it’s somewhat built around this hero’s journey story arc. Donald Miller, the guy who created the Storybrand process, talks about how you should become the hero in the story between you and your customers problem. The premise is that every business is based on solving some kind of problem for their customers. If you can clearly articulate what that problem is, and then how you solve it, you become the hero of the story. And, by the way, I love the Storybrand process. I believe in almost every aspect of it, except the part about being the hero in the story. Where Donald Miller and I part ways on that whole process is that I believe you should do everything in your power to make your customers the hero in the story, and you become the trusted guide, which is also a central character archetype in the hero’s journey.
So, are you being the hero and seeking all the glory and status? Or, can you deal with being a very helpful trusted advisor and guide leading them towards their hero’s welcome? I say to choose the latter over the former and you end up winning every time.
The last pairing in these mindsets is that between cost and investment. I always put this one at the end because it bookends these different mindsets nicely. Cost versus investment is really just another way to refer to the scarcity versus abundance mindset. The cost mindset looks at everything as just that, a cost, where the investment mindset looks at things more as a question. The question is, what kind of return can I achieve from this investment of time, money, or other resources. If you always look at everything as just a cost, you’re simply reaffirming your belief that everything is a zero sum game and that there is not enough to go around. Every dollar out for you is just that, a dollar gone, never to be seen again. The one who looks at things as an investment will look at the dollars out, calculate a potential return, and see all the hidden benefits of that investment.
It’s almost guaranteed that, if you’re a cost person rather than an investment person, you likely are a one person business and are capped at whatever your own personal capacity is each day, week, and month. You see hiring people as just an outflow of funds instead of what it really is, an increase in your time and talent. This speaks to the who, not how mindset, as well. If everything is just an expense to you, you likely have no ‘who’s’ in your business, so all the ‘how’s’ are left up to you. If you remember back to our discussion about how our abilities decline over time, you will hopefully realize that you can only be the ‘how’ person for so long before you just can’t do it anymore.
Listen to this one over and over friends. Really give some thought to which side of the spectrum you live on with some of these and then ask what it would take to move to the other side.
Until next week, I’m out…