How to Apply the Principle of Finite Volume to Your Company
Rem Oculee (00:05):
Welcome to the Exit Mindset Podcast. I’m Rem Oculee. 15 years ago, when I was trying to sell one of my companies, I couldn’t get what I thought was the right price for it. I realized I had things set up the wrong way, even though the company was profitable. So, I spent years researching and studying exit strategies to improve my company’s valuation. I discovered that the same process that improves valuation would improve business profitability and give me more free time. I’m here to show you what I have learned. You see, the best way to grow your business is to look at it from the perspective of someone who’s going to buy your company. Once you start thinking that way, magic happens, and you start seeing things you could not see before. But that’s not all, I also discovered the three principles that you must know to command a better price for your company. The three principles are first, the product, second, deck infrastructure, and third, the conversation you have with the consumer. Once you master these three principles, you will be on your way to increasing your profits, your company valuation, and get more work-life balance. So, listen in and learn how you can do that. I will teach you through this podcast, lessons from the trenches, and we will have a dialogue with some of the greatest minds on the planet.
Rem Oculee (01:29):
So, do you ever wonder, when do I get the time to do everything? Of course, you do. Everybody in business does that. You wonder, how am I going to be able to change my product and make it better? How to improve my infrastructure, make it better. How do I get my conversation going in a better way to make sure that I capture every angle in the way I interact with the consumer? The answer to that question is very simple. I call it the principle of finite volume. What does that mean? Well, it means a few things. First thing you got to do, you got to break it down. So, let’s take the product. Once you decide which elements of the product need to modify, change, eliminate do something with. Now is the time to go ahead and decide the top priority, and once you decide on that top priority, you need to understand that this is what I call the principle of finite volume. Where the first thing you gotta do is, know at the beginning, find what the end is and fill everything in between.
Rem Oculee (02:27):
But this is where finite volume comes into play. So, the principle of finite volume says that there’s only so much physical room in any space and that if you exhaust what’s in that physical space, it will be over. It’s the same thing with any part of your operation or any task you have, or any job that you have or any mission that you have. Ultimately, if you figure out the beginning and end that volume has a certain quantity to it. So, what you start doing is chipping at the volume until you get to the end of it, and it’s over. Now the problem with that, why it sounds obvious, but the problem with that is most people don’t think that way. Most of the time overwhelm kicks in, you start thinking about all the other things you gotta do. You start thinking, well, okay, this part of the process needs more engagement and it’s, uh, limited, and how do I do that?
Rem Oculee (03:17):
But if you take that process and break it down into specific parts, and each part is a milestone and you tackle one milestone at a time until it’s over, you’re going to find that most of those things that you want to work on will finish. And lots of times I see people come to me and it’s been six months and they haven’t done anything. And I go, what happened? Well, I just got too busy. And that’s understandable, there’s nothing wrong with that. It is a human trapping, but what you need to do is go above it. Lot of these things are like beasts that you can take down. Why is it a beast? Because it’s easy to fall into them, because it’s easy to continue within the road that you’re on, and it’s hard to get out of it.
Rem Oculee (03:59):
However, that beast can be taken down by persistence, by objective analysis. And I’m going to give you one tool and one solution that’s going to make all the difference for you, which is to break things down. So, the idea behind this is that you got to break the process into about four to five parts that are manageable. Don’t try and take it into 50 parts, don’t do 17, don’t do 23, just four or five. My preference is three. But let’s say I’m giving you a little leeway in here; I say four to five at the most. So, if you take it to four or five elements, then you start taking those and start working with them. Each one of them treated with a finite principle approach as well. So, you take the first part and say, what is the beginning, what’s the end? And then go work at finishing it up.
Rem Oculee (04:49):
If you finish it, then you’re done. Then you have time to go to the next one. But at least you have specific milestones, specific points to complete and eliminate part of that volume. So, to reorient your thinking, don’t think of the job as being a road. Think of it as a box with a volume in it, a volume of something, things that you can take out. But the volume is very linear, very specific. The dimensions are not chaotic, the dimensions are squares or blocks. Think of it, maybe a box within box. So, a box with multiple boxes, and if you take one out, you have one less. You take the second one out, that’s two less. Until you get to five and the box is empty. What happens when the box is empty? You’re done, you’ve finished everything. So, that’s really the process and how it starts.
Rem Oculee (05:40):
So, you must understand that it’s a multidimensional problem, but it’s very simple. Instead of wanting to look at the XYZ plane, one line goes horizontal while the other line goes vertically. And if you’re right on the graph, it’s just simple, you could see what’s there. Here, again, you’re looking at the finite volume which is you think of it as the boxes that you’re taking out of the big box. And if you finish those boxes, then you’re done basically. By the same token, you are running a company, you’re going to have multiple types of boxes. I’m talking about the large boxes. The idea of the box in a box is going to make your life a lot simpler. And if you label each box as part of the project, that’s going to finish, then you’re going to be in good shape. Now let’s go to the reasons why this would not work.
Rem Oculee (06:25):
And there could be a lot of them out there, but they’re all derived from the same motivation. And I’m going to tell what their motivation is, and you’re going to be surprised. It’s called fear. Fear could be anything; fear of failure because you can do what you think it may not work out, fear of executing, and that you’re going to have to spend a lot of time on it, more time than you have to. And many, many other fears that are probably natural, but they don’t make sense when examining them under the microscope. Now, the problem with humans is lots of times that they don’t know that they have that fear. They rationalize it into something else. So, you might think, well, I just, I’m busy. Granted people get busy sometimes; but busy here, busy tomorrow, busy the next day, and busy six months later. It doesn’t make sense.
Rem Oculee (07:10):
If you’re committed to making things complete and to creating an Exit Mindset, a mindset, that’s going to create a company for you that is going to be profitable. Create more time for you, create a better asset for you. Then you must start shifting your thinking and the way you look at your timelines and the way you look at the finite volume of any projects you take. So, what I’m going to do here is give you as many analogies and examples that can help you visualize what this is about. So, there is this sort of demonstration that I saw a couple of times where people use the concept of rock, stones, sand, and water. And the presenter would actually bring in a jar and it’s a glass jar, large one. And then he looks at the audience and says, “How many rocks can I put in this jar?”
Rem Oculee (08:00):
And most people say two or three, and usually they’re right, two to three. And you put three rocks in there, and they’re done. So, they go, “Can this container hold anymore?” And the audience usually say, “No, they can’t, can’t hold anymore.” So, he takes a jar of stones and pours it in and the stones go between the rocks. Okay, so now there’s more. Then, he says “Is that it?” They said, “Yeah, that’s it, it just full up to the top with stones.” Great, you can’t put anymore? Nope, you can’t put any more, it’s full. Then the presenter takes a jar of sand and starts slowly pouring it in. And next thing you know, all the sand disappeared. He goes, “Is there more?” And the audience says, “No, that’s it, it looks full there’s rocks in there, there are stones. And there’s all that sand filled up to the top.”
Rem Oculee (08:43):
The presenter usually brings in sort of a jug of water that is huge, and he stopped pouring water in. Next thing you know, the entire jug of water has just disappeared. So, the analogy stands that you can put so much in your workdays just so you don’t see it. The volume, the finite volume is in the glass container at the end of the day. The rocks represent the big items they need to complete. The stones, you can think of them as the things in between the milestones. And you can imagine what the sand and the water represent. However, your day, your finite volume should consist of the rocks. What are those rocks? Rocks are the most important thing that creates the most leverage for your company. And if you start thinking that way, you start looking at every project that way and start thinking about the beginning of the project.
Rem Oculee (09:30):
And then to the project, the beginning is just a descriptor. What do you want from it? And the second thing at the end, is it done or not? If the answer is yes, then that’s your end. So, what is that one thing that creates an end for you? And then you start filling what’s in between, in the same way, sand and water start filling the rock and the stones. So, if you think of each one of those boxes as being an entire process, even though it’s a sub process, you’re going to find that by approaching each box with a beginning and an end, you’ve broken the whole thing down in a very simple way. Don’t try to overthink it. Don’t try to look at what’s inside the box for us, by looking at the tasks, try and look at where the beginning of what the end is.
Rem Oculee (10:14):
And the answers to what’s in between is going to come to you naturally. And if you take that process and keep repeating it over and over again, you’re going to find yourself completing a lot more work than you thought you could. So, how can all this help you increase your company profits and valuation? Here’s my thought on this. If you do this only once every two weeks, you take one major process that will have a big impact in your operation from an exit perspective. Meaning that you start thinking, what is that one thing if I do would make my company valuation higher? You break it down into parts, as boxes within the side of the big box. And you do no more than four to five of those. And you start executing. You finish one, you know, when you begin, and you know when you finish. and then you also know when the entire project is done, and you keep reverse engineering it until you get it all done.
Rem Oculee (11:07):
If you do that at once every two weeks, as I said, within six months, your company would be in a completely different place. That’s my assurance to you. Because at that point you have finished at least two major rocks in your domain, and you would be inherently more successful than 90% of the people out there. In fact, if you look at the 10% of the population that wins, that are successful in what they do, regardless of the field, by the way, it’s not about all about monetary things. It’s because they focus on what they want. They have a beginning, and they have an end, and they execute on that and they don’t let any overwhelm overtake them. Because it’s understandable if you’re gonna have overwhelm, that’s normal, don’t worry about it. Don’t feel bad. In fact, the best thing to do is to acknowledge it, acknowledge that you have overwhelm.
Rem Oculee (11:53):
Once you acknowledge it, once you know what it is, you’re going to find ways to go around it. And the biggest thing you could do to remove that overwhelm is to start writing down all the components of the project you’re looking at. All the components of the processes that you have, and then start executing. And you’re going to find great amount of power in taking action. When you start moving, things happen. And that’s my promise to you. Just move. Remember, action is everything. If you don’t use it, you will lose it. And by the way, let us know what you think about this podcast. Feel free to rate us and to give us your feedback. I’m Rem Oculee, and I’ll see you in the next podcast.
Amber Giannone (12:32):
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