Why Friction Is The Source Of Expanded Freedom For Entrepreneurs

Shannon Waller: Hi, Shannon Waller here and welcome to Inside Strategic Coach with Dan Sullivan. Dan, I love our conversations. I know lots of other people do too. And you were just talking about something that I find pretty fascinating, which is, you said that friction is the raw material for freedom. So let's talk about that. We often talk about obstacles are the raw material for achieving your goals in our Strategy Circle, but this is a whole other take on achieving freedom.
 
Dan Sullivan: Yeah. Well, first of all, the word "friction," depending on which dictionary you look at, the definition of friction is anything that stops or slows down progress. You want to make forward movement and something holds you back. Your feet are sticking to the ground, there's friction. And it's a fundamental dimension of being an entrepreneur. And the reason is because the basis of entrepreneurism is that you're creating something new. You're creating a new company. You're creating a new product or service in the marketplace. You have certain skills, but to really be successful as an entrepreneur you have to have a company around you. And one of the frictions is that you don't have the right people or...
 
In Strategic Coach, we structure everything from the standpoint that the reason why entrepreneurs do anything that they do is for freedom, of which there's Four Freedoms. You have greater Freedom of Time. And that would be both personal, your work time. You have greater freedom in your work to do what you really want to do and which is most effective. Number two is money. There's a quantity issue, how much quantity of money you're getting, and then there's the other thing is the quality of how you're making your money. So what happens to entrepreneurs if they're successful is they have more and more quantity of time just for them to focus on what they're really good at. And the second thing is the quality of who they're doing the work with improves. And that brings up the third freedom, which is Freedom of Relationship. And that would be internal relationships with your team. And then it would be external relationships with customers, with suppliers, with vendors, with collaborators in the marketplace. And then there's all the Freedom of Relationship outside of work in your personal life. And then the fourth one is Freedom of Purpose, that as you become more and more successful, the other three freedoms—Freedom of Time, Freedom of Money, and Freedom of Relationship—actually start defining where the sweet spot is for you for the future of who you're becoming, what your company is becoming.
 
That's where the meaning of being an entrepreneur really comes from, is that there's a overriding purpose. And this is not a temporary thing. This is something that's long term. I mean, you know, why are you spending your life being an entrepreneur? What's it going to do for your whole life? And in all four of those freedoms, there's always friction that is preventing an expansion of your freedom in all four areas. And so entrepreneurs can get very frustrated. Yeah, I mean, if you have friction that you can't solve, then it's very frustrating. So that's the thing. And everything that I've said, if I say this in a group of entrepreneurs, I've got their full attention.
 
Shannon Waller: 100%. 100%. And Dan, you also make a distinction between friction and obstacles that I found quite enlightening.
 
Dan Sullivan: Yeah, "obstacles" doesn't have the emotional hit that "friction" does. First of all, obstacles are kind of like outside of yourself. Friction is something you experience inside of yourself.
 
Shannon Waller: I never thought of it that way, but you're completely right.
 
Dan Sullivan: Yeah, it's very emotional, friction. Obstacles are, I think of a big boulder or a wall or a closed door. And there's a great distinction between that and friction. And friction really bothers you. Obstacles can just be there and you'll say, OK, well, I'll work around them or anything like that. But friction, you can't work around. It's something outside that's now gotten inside of you. So you experience it, emotion, you know, and frustration is the first word that cues you. You get angry, you get frustrated, you're bothered by it, and everything else. It's like you're in a straitjacket and you don't have full use of your capabilities. You're kind of trapped. You feel kind of trapped by it. And the big thing is that entrepreneurs are always doing new things. And anytime you venture into new territory, there's friction that comes with the new thing. There's excitement that comes with the new thing, but there's also immediately friction.
 
Shannon Waller: To me, that's fascinating, Dan, what you just said about it being internal. It is that way because it's emotional. That's on the inside. That's not necessarily on the outside. So coming to grips with this is really key. And your point about it's where you get stuck. And some people, we see them, they've been stuck there for a while. And until they break through, they can't experience more freedom.
 
Dan Sullivan: Yeah, and they have frictions that they haven't even identified. The skill of transforming a friction is that you have to identify it and you have to face it squarely. You know, you have to say, oh, this has to go. You know, this has to go. And that's energizing for entrepreneurs, even the activity of identifying it. All of a sudden, they get some energy back because they know what they're dealing with. And now their problem-solving capabilities can come into play. And I'm going to show that the way we do it in Coach is, not only is a friction the actual raw material for creating greater freedom, but that freedom only comes if you have teamwork. As almost every friction in the business world, you have some of the abilities to take care of it, but it immediately calls into need other people's abilities.
 
And this is why there's a big distinction in entrepreneurs. And I would say that technically, the way the tax department, let's say the tax department looks at entrepreneurism, it's someone who is essentially self-employed. You know, in other words, you're not getting a paycheck from someone else. The truth of the matter is, if you have all the entrepreneurs, I would say 80 to 90 percent of all the entrepreneurs in the world have only created a job for themselves. They actually haven't created a company. I mean, they may be incorporated legally, but in fact, if you look at how they operate, it's just the entrepreneur with whatever help they can get. But it's not actually a company.
 
Shannon Waller: Yes. And for the few who break through to that higher level, you know, they have to keep getting more and more skilled at dealing with that friction in order to grow. Is that how that works?
 
Dan Sullivan: Yeah, well, two things have to happen. If they're expanding the skills in their organization, the only way you can do that successfully is by the entrepreneurs stop doing the things that they're not good at. And a lot of frustration that entrepreneurs have is they spend a major part of their day doing activities that they shouldn't even be doing, but they have control issues. "Well, I'm the only one who can do that." And that just happens to be a leftover from the fact that usually most entrepreneurs, you do have to start as a lone individual.
 
I basically spent the first 10 years of my coaching career when I was a coach out in the marketplace as a one-on-one coach. I didn't really have any help, you know, and it was a job that I did. I had a particular approach, and I had to do the selling, and I had to do the actual work, and I had to do the follow-up, and I had to do the financial transactions, and I had to do new marketing. But it was all me. And it wasn't until I met Babs Smith, my partner in life and my partner in the business, that I all of a sudden I got a great capability that immediately began freeing me up.
 
Shannon Waller: So that's one of the key sources of friction for all entrepreneurs that we know, which are quite a few, that is when you are not doing what you're unique at. You're not doing your Unique Ability. And you're involved in activities at which you're incompetent, lots of friction, and lots of external pain with that too. And then Competent, again, you're adequate, you're okay, but you're not fabulous and other people can do it better than you can. And then Excellent, which is where a lot of people get trapped. They have superior skill, but no passion. And there's friction there. It's not as acute, but it's still lingering. And they get kind of stuck there. And then finally, if they can break through to Unique, then that makes all the difference.
 
Dan Sullivan: Well, and the other thing is we have a concept that there aren't a lot of activities in individual entrepreneurs' Unique Ability. There's two or three things that you do together constitute your Unique Ability. And in my case, I would say that one is, I have a real ability to articulate context. You know, I can establish context. So, my talking about friction and entrepreneurs' friction, I'm establishing a context that every entrepreneur will immediately understand what I'm doing. And I think I've always had a really good skill to kind of articulate what's going on in other people's minds.
 
Shannon Waller: Mm-hmm, 100%.
 
Dan Sullivan: And I have a really, really good skill of asking questions for people to identify what's going on in their minds. So I can create thinking tools, which is, you know, the building blocks of every workshop in Strategic Coach starts off with questions about a particular area of experience that entrepreneurs are having. And I think that I'm always expanding that skill, you know, and I started very early in life. I've always had the ability to kind of get what's going on in other people's experience and ask them questions about their experience.
 
The other thing is, my questions, I never know the answer to as far as the other person. I'm simply asking them to identify something that seems to be true about all entrepreneurs, and I just ask them some questions about it. And they usually get it right away, like when I talk about friction. Within seconds, the entrepreneur will immediately flash to situations in their life where they're very frustrated. So my questions never, never are about things that they don't already know about. But I don't know what the actual specifics are.
 
Shannon Waller: It's interesting, you ask questions that you don't know the answer to.
 
Dan Sullivan: I ask questions that they do know the answer to.
 
Shannon Waller: And most people have it the other way around.
 
Dan Sullivan: Yeah, well, most teaching is just the opposite of what we're talking about here. You're asking people questions where you know the answer and you want them to get your answer. I want them to get their answer.
 
Shannon Waller: Wow. That's very cool and very accurate. The other thing, and we were chatting about this a little bit before we hit record today, you are so adept, skilled, all the things, about finding the energetic and emotional center to something, which I find fascinating because you deal with things, not just at the level of intellect and brain power, which that's substantial, but it actually is what really matters and what actually impacts people much more than just what they're thinking, it's also what they're feeling.
 
Dan Sullivan: Yeah, and I would say that there's two contexts which I'm always very aware of. What is the general economic situation in which entrepreneurs are operating? And as we're recording this, we're in a potential recession. So there's a lot of friction that happens because people aren't making decisions, people aren't spending. Other people are experiencing friction that they don't realize that they're experiencing, but things are stopping, things are slowing down. And it's very, very important for entrepreneurs to understand what the general conditions. And I would say, and I've noticed this because I follow the impact of politics on entrepreneurs. And anytime you get close to a major election, especially in the United States, because the United States has an impact on the whole world politically. I mean, the world kind of goes on pause. What the result of the election is has a huge impact on what becomes possible for them in their mind.
 
So they're waiting, "Well, we'll see what it looks like the day after the election." So there's a pause that's going on, and It happens every two years. You have the residential year elections, which is a big thing, and then you have the midterm when all the, in the United States, every Congress member is up for election every two years, and a third of the senators are up every two years. They have a six-year term, so it's a third, a third, a third. But the United States consists of 50 states, which are like little countries. Some of them are big countries, and they have the same situation with the governor, with the Senate, with the Congress, and then they have local conditions. I mean, there's municipal elections that can make a big difference, and everything else. But all these are factors which cause things to pause and slow down. And if you're an entrepreneur and you need to get results, all those pauses and indecisiveness on the part of other people are a friction.
 
Shannon Waller: That's such an important context. And I know you pay attention to it. I don't think I knew until today why you paid attention to it, which is really interesting. What's the other major context that you're always thinking about with entrepreneurs?
 
Dan Sullivan: The other thing is that if entrepreneurs are successful, there's two other frustrations, which are frictions. And one of them is that they don't have the Unique Abilities of other people around them. To maximize their Unique Ability, they need other Unique Abilities. So, you know, we have a major framework called Who Not How. It's the job of the entrepreneur to give a vision to their company, but it's the job of their skilled people to actually turn the vision into reality. The really best entrepreneurs are vision makers, and they surrounded themselves with such skilled team members in every area of where they need to progress, that they have this confidence that whatever I set out as a vision, I know that the team will either handle it themselves or the team will go looking for other skills from the outside that will help us.
 
More and more entrepreneurs are freed up from all of that doing, all the "Howing." They're the "Whos" who do the "Hows." And the entrepreneur's role is to give constant vision and to make sure morale is up in the company, to give everybody a sense of momentum, to give everybody a sense of motivation. And the entrepreneur, who started off as the only doer, at a certain point is surrounded by other people skilled in achieving the vision. So that's a [unintelligible]. And then as they really become successful, entrepreneurs start to outgrow their personal environment. And so friends that they might have had, associates that they may have had that are part of their personal life are feeling that the entrepreneur is growing and they're not growing. And some of them are inspired by the entrepreneur's growth and they start growing, but some of them start resisting: "Kind of getting above yourself, aren't you?" I mean, you're kind of, "Well, you don't have to worry about money anymore. You don't have to worry about things." So there's a disconnect that can happen.
 
And so probably the biggest transformations that entrepreneurs need to make, and there's some tough decisions here. It requires courage. There's really intense emotions attached to this is that the people who they've had in their life for many, many years—and that could be right inside their family—they're not growing the way that you're growing, and there's kind of a static that develops. You're not getting a clear signal in any way that everybody understands you, everybody understands what you are. They don't understand why you're so ambitious. They don't understand why you don't have enough. Why aren't you happy with enough?
 
In the entrepreneurial world, the only "enough" that you're really interested in is that you always have bigger opportunities. I want to have enough really bigger opportunities that keeps me growing. Well, that's not how the other people think about enough.
 
Shannon Waller: Very true. Very true. It's a great job putting your finger on two of the big frictions, which is kind of the financial environment that people are in.
 
Dan Sullivan: Well, those are the two world conditions. And entrepreneurs have to be very alert and curious and responsive and resourceful about what's going on just in the general setting. People say, I don't want to know about politics. And I said, well, politics wants to know about you. Economics wants to know about you. So, you know, I don't want to get blindsided by big things that happen out in the world.
 
Shannon Waller: Absolutely. I appreciate this because you are so tapped in to what's happening. And I mean, the number of news sites you check every day, all the things, and then you help to provide great context. And you're also in touch with other great thinkers—Peter Zeihan comes to mind—and make those resources available. But getting back, Dan, say that we've talked about frictions different than obstacles. They're feeling friction. What can they do? How can people take action? And you designed, totally give it all away, but we'll give a hint of how to work through this f1riction. What are some ways where people can actually get their handle on it?
 
Dan Sullivan: Yeah, so the building blocks for the entire Strategic Coach Program, and it's a constant building, are what we call thinking tools. Physically, it's just a sheet of paper, or you can have a PDF on your computer. But it's kind of like a thought process that's got five or six things in it that starts off with me simply asking you questions about a particular topic. In this case, it's friction. And it ultimately becomes about freedom. So what I'll do, they have, you know, workbooks, they have things that they can write their thoughts down and keep notes down. So I'll simply say, "Take a page in your notebook, and on the left-hand side, just write down the words, 'time, money, relationship, and purpose,' top to bottom so it's in a line downwards." And I say, "Now what I want you to do is identify where you've had friction related to time that you transformed. And as a result of transforming it, you got freed up."
 
And immediately they've got examples because they've grown as entrepreneurs. The entrepreneurs who are in Strategic Coach are all successful entrepreneurs. We have a personal income minimum that you have to be making as an entrepreneur to be in the Program, which right now is $200,000. So that tells you stories. If they're making $200,000, first of all, they're in the top 1% of income earners certainly in the world, and in the United States, you'd be in the top 2% of all incomers. So you're well along the success path. But that number that you're getting out of it means that the revenues of the company are quite a bit larger. And if that's true, then you've built a team. You actually have a team. And you've got a reputation in the marketplace. You've been through enough business years that you've got the pattern of how the years go. You've had ups and downs in the outside world, and you've learned how to balance your work with your personal life. Or you haven't, you know, but you have the possibility of making great breakthroughs there when you first come into the Program.
 
So that's the general. So I know they have a lot of experience of identifying frictions and transforming them. And the outcome of transforming friction is always freedom. And the freedom is greater Freedom of Time, Money, Relationship, and Purpose. So I get them to do that, you know, frictions related to time that they've successfully transformed, money successfully transformed. So they have just a string of successes. And my logic for this is, I can't ask them to create a better future if I don't show them they already have a great past. Because they have to have the confidence to face something new. And I'm going to show them that they've really, really mastered the ability that once they identify a friction, that they've learned how to transform it.
 
Shannon Waller: Mm. I love that, Dan, because you're putting people into, as someone just sat down, write down your frictions, how you're going to transform them. That could be incredibly challenging.
 
Dan Sullivan: You immediately depress them. You never, ever ask people to focus on something in the present and plan out a future until you've reinforced that they've already got considerable success in their past.
 
Shannon Waller: Yes. All the things. It's so true.
 
Dan Sullivan: And the other thing is, I don't know what they're writing down. The other thing is, I have a rule: Never ask a question that you have the answer to. I don't have the answer to the questions I'm asking. I'm simply asking them, think about friction related to time, money, relationship, and purpose. And that's a regular framework in Coach. So they're very used to it. Thing is that entrepreneurs become entrepreneurs for the purpose of greater freedom. Money just happens to be one of the freedoms that contributes to the overall freedom.
 
So they do that, and I say, "Okay, now circle three of them." And then I have the thinking tool form, and I have them write it down. I say, "Pick the three now and describe it a little bit more, you know, write down two or three sentences about what that transformed success actually was." Pick three of them, and I say, "Okay, now that we've done that, and you know that you've already done this. And actually, the freedom you're feeling right now is a result of the frictions that you've transformed in the past." And then I say, "What's up next now?" And I say, "Let's name three frictions you have right now. I mean, you've already proven to yourself what you do with a friction in the past. When you really identify it and you engage with it, you transform it and your reward is greater freedom." So they do the three frictions that they're now new frictions that they're now going to engage with and they're going to transform.
 
And then the next column, I say, "What's the freedom that's going to come when you've successfully transformed this friction?" And they write down what the freedom is. And it could be greater Freedom of Time, greater Freedom of Money, greater Freedom of Relationship, or combinations of all four of them. And Freedom of Purpose. Then we cross over into a line and say, "What's the first step that you're now going to take?" And they write that down for all three of them. And then I say, okay, let's go to the "Whos" now that you have available to you inside your company, outside your company who now... And this is for your personal life too, so you have other people, and you utilize the skills of other people to now help you. So immediately you only spend a few minutes being alone with this and then immediately you're starting to build the team.
 
So in Strategic Coach, every exercise starts with you coming to grips with some experience and then it immediately leads to who's the team now that's going to take charge of it, take charge of the project. And we have other tools which facilitate that, other thinking tools that facilitate that. And then when they're finished identifying the new team that's going to form around three projects, the new teamwork, then we go to, what are they proud of? You know, what are they proud of about their past and what they're doing right now? What are they confident about? And what are they really excited about as a result of this? And every piece that they've written down is entirely their experience. Our form, our structure, but their experience. And then they go into breakout groups, either in person, if we're in our physical workshop rooms, or on Zoom. And Zoom just has great breakout groups. That whole aspect of Zoom is just marvelous. And it happened for us just at the right time, too, because I think it was a new thing almost when COVID started.
 
Shannon Waller: Right. Yeah. And we dramatically increased our use of it. Dan, as you're talking through the exercise, first of all, I'm reflecting on freedoms and my fabulous colleague Katrina. I'm thinking about all the friction I used to experience before I had someone putting into play my whole calendar and structure. And we've decided that scheduling is a very creative act—it's going to be one of my podcasts on Team Success—because it takes creativity. But then also that confidence from that, oh yes, I have transformed that. That did give me greater freedom. Now I can think of, okay, what currently is causing me friction? So there's just this sense of getting unstuck, as you mentioned earlier, and that sense of freedom is very exciting that, oh yeah, it's not this big, horrible thing where I can't see how to climb this big mountain. It's like, oh, I've done it before. I can do it again in this area.
 
Dan Sullivan: Yeah. And I mean, you can look at your own history in Strategic Coach because you're in your 32nd year of Strategic Coach. And when you started, you were our sales team. I mean, there were two of you, and you were our sales team. Because I was doing all the selling before that. And there were still certain situations, you know, where I would get a large gathering. And we tried to do it, not one on one, but we tried to do it to roomfuls of people who are just the right people who, if they decided, they would qualify for Strategic Coach. So it was strictly entrepreneurial audiences. I think the last time I actually did that was like 2013, where I had any part in the sales process. I do some Zoom calls now because it doesn't require travel, and it doesn't require the before and after, which is the wasted time traveling to give speeches is the time before and the time after.
 
Shannon Waller: Yep. And we would phone and follow up on those lists of people that you talked to. Exactly. Well, it's also validating. It's fun to hear that I was part of your freedom. I helped transform a friction along with my other colleagues.
 
Dan Sullivan: I mean, that freed up an enormous amount of my time, but it uncluttered my mind, you know, because the more that new people can come into the Program without me involved in the process, the more I have to actually create the Program, the more time and attention, time and attention. And I'm just describing what's true for all entrepreneurs here. I'm one of the pack.
 
Shannon Waller: It's true. The other thing that strikes me as we're talking about this is what all of us do as entrepreneurs. What we do is we transform friction for other people.
 
Dan Sullivan: Yeah. And that's the way you create value. All your clients or customers are experiencing their own form of friction that's frustrating them. And you have a Unique Ability as an entrepreneur to help them transform, and they get freedom out of it. You know, I mean, the number one thing that everybody is selling in the world is greater freedom that allows you to get freed up from friction and frustration.
 
Shannon Waller: So true. And I love how we've described this and identified what it is, why it's so important, and then also how people can take action on it by reflecting how they've done it before. And in fact, it is the source of all value creation. We can create value for ourselves that way using Who Not How, but we also do that for others. And that's really the basis of the businesses, which is really exciting.
 
Dan Sullivan: Right now, we get every one of our tools protected as intellectual property. And I think the last count, we had 550 of them. And that's from 33 years of work. But it's just constant. Every quarter, I'm creating seven or eight new tools. And that's my ability. I mean, that's my Unique Ability. I'm like a songwriter. Really good songwriters are producing lots and lots of songs all the time. My skill at doing this has really been a result of freeing myself up from activities that I'm no good at.
 
Shannon Waller: I love the freedom to admit that we're not good at certain things, and we need to be freed up, and there is zero advantage to hanging on to them. I know I'm certainly invested in freeing you up to create more of those amazing thinking tools because then the Program only gets better and richer and more valuable. So yeah, I like this process, Dan. Thank you so much.
 
Dan Sullivan: Yeah, I don't think I've ever gotten such a instantaneous, powerful, expression of sudden freedom that people felt. And the freedom comes... One is the specific frictions that they transform using the thinking tool. But the other thing was that it tells them that all friction in their future is just raw material. So the big thing is to depersonalize friction and say, "You can't get more freedom as an entrepreneur unless you're willing to identify and transform the frictions that are currently available to you."
 
Shannon Waller: Yeah, that is the source of all expanded freedom.
 
Dan Sullivan: Yeah, yeah. And I think that's almost like a law of physics.
 
Shannon Waller: I can definitely see that. That's an entrepreneurial law.
 
Dan Sullivan: And people want a life of comfort and convenience, but my experience is that if the comfort and experience isn't a result of transforming your frustrations into freedom, the comfort and convenience is going to become a friction.
 
Shannon Waller: Interesting.
 
Dan Sullivan: I mean, comfort and convenience don't really free you up if someone else has given them to you. They're only energizing if you're the one who initiated the transformation of the friction that gave you the comfort and transformed the friction that gave you the convenience.
 
Shannon Waller: And I can see how it could become a frustration or a friction because people can become bored. That friction is really necessary for growth. The transforming of it is how we grow and expand. And that is, as you talked about earlier, something that that's why entrepreneurs are in the game.
 
Dan Sullivan: Yeah, and I think boredom, I'm glad you brought up this topic. Boredom means that you are not looking at the next big friction that you have to transform. You don't want to think about it. And what avoiding the next big step in your growth does for you, it makes everything else boring.
 
Shannon Waller: Right. So that's a little dance that people do with avoiding the next growth stage.
 
Dan Sullivan: Yeah, boredom is just a sign of sheer terror at having to take a next big step.
 
Shannon Waller: Interesting. So, embrace the friction is the bottom line.
 
Dan Sullivan: Well, first of all, it's unavoidable. And secondly, it's valuable.
 
Shannon Waller: I love it. Friction is unavoidable and valuable. Very insightful as always, Dan. Thank you.
 
Dan Sullivan: Thank you, Shannon.