Dave (0:08)

Hi and welcome back to Locally Owned, the podcast for local business owners by a local business owner, designed to give you insight, ideas and inspiration that you can implement immediately. In today's mini episode, I'm going to be diving into James Clear's book Atomic Habits and applying it as sort of a best practices for small business owners. I'm your host, Dave, and as the owner of Street Smart Entrepreneurship, your goals are my goals. In this review, I'm going to give you five of my takeaways from the book Atomic Habits. Let's get to it. Too often we convince ourselves that massive success requires massive action. James makes the case for establishing small habits that that lead to massive results. He calls this the 1% rule. He says that by improving by 1%, it's not particularly notable and sometimes it's not even noticeable, but it can be far more meaningful, especially in the long run. He says that success is the product of daily habits, not once in a lifetime transformations. And he makes a strong case for this when he compares a 1% improvement in our skill versus a 1% decline in our skill. He says that goals are good for setting a direction, but systems are best for making progress. We think we need to change our results, but the results are not the problem. What we really need to change are the systems that are getting us those results. So in other words, habits are the building blocks of our systems, right? They're the behaviors that are repeated eventually, without thought that get the results we're looking to achieve. So if you start with the right habit and you repeat it and improve it over time, your results will improve over time. So think of it like this. If I go to the gym and work out from that one workout, I'm not going to instantly have the body or the strength or whatever my goals are after just one workout. But if I create a habit of going to the gym and consistently go, I'm going to be 1% fitter after each workout and that's the trajectory I want to be on. Habits are the compound interest of self improvement. I love that. We all know that compound interest over time builds a fortune for the wealthy. And so if we improve our habits by just this tiny percent, our lifestyle is going to improve dramatically year after year. So after one year, if I improve my fitness by just 1% each time I work out, and I work out every day, I will be 37 times fitter after one year. So how does this apply to business? Well, let's just say you want to improve your sales skills and you get in the habit of working on your sales skills every day, and your goal is to improve by that imperceptible 1% each time. Well, at the end of one year, you will be 37 times better at selling than you were the previous year. That's the 1% rule. Takeaway number two. Habits shape your identity and vice versa. So that's a good thing and a bad thing. So let me tell you the bad. James says that behavior that is incongruent with the self will not last. It's hard to change your habits if you never change your underlying beliefs that lead to those habits. So if you have a new goal and a new plan, but you haven't changed who you are, it won't last. He also says your behaviors are usually a reflection of your identity. Research has shown that once a person believes in a particular aspect of their identity, they're more likely to act in alignment with that belief. And if you know much about what I teach with goal setting, the foundation of my system for goal setting is that you set your goals based on who you want to become, not on what you want to achieve. So I think he's spot on here with this. Now, it also aligns with something that Zig Ziglar says. Zig says it's impossible to consistently behave in a manner inconsistent with how we see ourselves. We can do very few things in a positive way if we feel negative about ourselves. So the unfortunate truth is that it takes a lot of work to change a negative self image. We can't just change it by deciding to change it, but deciding to change it is the first step on the road to changing it. So once we have an awareness of seeing the areas where we have a negative self image, Then we can create a plan to change it. So James says that the more you repeat a behavior, the more you reinforce the identity that's associated with that behavior. So here's the way it seems to me is our habits, they shape our identity, but in return, our identity shapes our habits. So what we want to do is establish a habit based on who we see ourselves becoming, Based on this positive image of who we want to become. Because the more we practice that habit, in other words, what James says, the more we repeat a behavior, the more we practice that habit, the more we're going to reinforce the identity, our self image that's associated with doing that. So every time we do that, we are creating evidence that that's who we really are. And the more evidence you have for a belief, the more strongly you're going to Believe it. So in business, there's areas that we know we're not handling well, right? And so we can take the 1% rule that we just talked about and establish a new habit, working on and practicing and improving areas that need improvement. And we can do that every day. So let's say, for instance, communication between you and your staff is an issue. You're doing that poorly. So you can establish a new habit. Let's say you establish a 15 minute morning meeting where you work on communicating with everyone and all the important ideas that need to get communicated, get communicated. And every day you have that meeting and you work on improving that meeting so that communication improves. Now, According to the 1% rule, if you do that every day, after a year, your communication is going to improve by 37 times. Takeaway number three. Implementation intention and habit stacking. Okay, it sounds fancy, right? So implementation intention is basically the idea of scheduling your habits. That sounds so simple and it almost sounds a little anal. But stick with it, it works. So the simple way to apply this strategy to your habits is to fill out this sentence, I will whatever habit you want to start at, and then you pick the time that you're going to do it in whatever location you're going to do it. Right? So, and this also is why planning your day out is so important, because you are now planning this habit at a particular time in a particular location. So I'll give you an example. At the beginning of the year, I have a goal that by the end of the year I want to learn 12 songs in this style called Fingerstyle on the guitar. It's a very difficult style where you're playing the bass, the melody and the chords all at the same time. So the habit that I set up was to practice every day. So here's how an implementation intention would sound with that. So every day I will practice fingerstyle guitar for one hour at 7 o'clock in my studio. That's how it would be set up. Now the thing that goes along with that, that James says, is to do habit stacking with that. So you have a bunch of habits that you do that with and you stack them one on top of each other, right? So let's say I want to establish the habit of doing the dishes and cleaning up the kitchen as soon as I'm done eating dinner. And I also have another goal to make it a habit to meditate every day. So this is how it would look if we were going to stack all that. I would say, after dinner I will do the dishes and Clean the kitchen at 5:30, obviously in the kitchen. And then I will practice finger style guitar at 6 o'clock for one hour in my studio. And then I will meditate for 20 minutes at 7:00 in my studio. So one of the things is, James says that most habits are triggered by cues which when you think about it, it's true. Think about someone who smokes, they often have a cigarette after a meal or a cigarette with their coffee. So they're naturally having a cue that causes that habit. So with habit stacking, you make a habit the cue for the next habit. So how you can apply this to business is you can create a morning routine that allows you to stack one habit or one task or one part of your process on top of another. So for instance, after your morning meeting, you can immediately make all your return phone calls in your office at 8:00 and then you can make 10 outbound sales calls at 8:30 in your office and then you can check the reports with your accountant at 9 o'clock in the conference room and so on. And this eventually becomes a routine where you don't have to think about anything, it's just what you do every day. And that makes the habit the cue for the next habit. Takeaway number four, environment. Your environment plays a crucial role in the success you'll have in sticking to your habits. Think about it. If you have a goal to lose 20 pounds and you get rid of all sweets and all junk food and anything that is not on the diet, you get rid of it. Take it out of your house, you're way more likely to have success than if you only had sweets and junk food and everything on your diet. You had to go to the store and buy every day, right? Your physical environment plays an important part of your success. Now there's a great book by Ben Hardy that talks all about this. It's called Willpower is Not Enough. I'll leave a link to that in the show notes. It is a great addition to read if you're really interested in this. James Clear says that every habit is initiated by a cue. And we are more likely to notice cues that stand out. Right? So it's sort of the out of sight, out of mind rule. Think about it. If you're walking around your house and you're trying to stick to your diet and there's a bag of potato chips on the counter, you're suddenly going to find yourself craving potato chips. So make sure your environment gets rid of cues for bad habits and is queued up to help you establish your good habits. So let's go back to my goal for learning this fingerstyle guitar. So I can make this real easy by having my guitar on a stand in my office while I'm working all day. I'm seeing that thing and I am knowing that I am going to practice for one hour later that evening. Now I can make this even easier because imagine if my guitar was in its case under the bed in the bedroom, and every time I wanted to practice, I had to go to the bedroom, get the guitar out of the case, bring it into the office, go get the music somewhere, go get the music stand, get all that set up, and then practice. I'm much more likely to practice if all I have to do is show up to the office or to my office or studio and the guitar is already there, the music is already on the stand. It's so much easier. That's the beauty of making your environment a place where it's easy to do the habit that you're trying to get in the practice of doing. So James Clear says, if you want to make a habit a big part of your life, make the cue a big part of your environment. So let me give you an example from my company. So I owned a service company for 28 years, and every morning the guys would get their three or four jobs for the day and they would load up their vans and they would go out and do the work. So every once in a while, a technician would leave the shop and they wouldn't have something that they needed. And so someone would have to stop what they're doing, bring it out to them, or they would have to come all the way back to the shop. You could imagine that was not a pleasant experience for anyone. So what I did was I took a checklist of everything that was supposed to be in that van that they would need for the day, and I laminated it and attached it to the back of the van. And then each technician had to be in the habit of going over that checklist every morning. But I made that checklist a part of their environment. So it was easy enough. When the doors were open, the cue was right there in front of their face. There's this big checklist that they had to go over and that established the habit takeaway number five. Dopamine. This is my favorite one. James says that habits are a dopamine driven feedback loop. Every behavior that is highly habit forming. For instance, taking drugs, eating junk food, playing video games, browsing social media. It's associated with higher levels of dopamine. The same can be said for our same basic behaviors, like eating food, drinking water, having sex, interacting socially. In all of those things, dopamine is released. What's interesting is that it's not only released when you experience pleasure, but also when you anticipate pleasure. So whenever dopamine rises, your motivation to act rises. It's crazy, but it's actually the anticipation of a reward, not the fulfillment, that gets us to take action. So he also says, and I love this, your brain has far more neural circuitry allocated for wanting rewards than for liking them. The fact that the brain allocates so much precious space to the regions responsible for craving and desires provides further evidence of the crucial role these processes play. Desire is the engine that drives behavior. Every action is taken because of the anticipation that predicates it. So it's the craving that actually leads to the response. So we need to make our habits pregnant with expectation of a reward, and that experience motivates us to act. So if I understand them right, the release of dopamine happens when we anticipate a reward much more than when we are actually receiving the reward. So he talks about temptation, bundling, and basically what that is, is that's adding a reward either to the habit itself or right after the habit. So let's say you want to add a habit right after a reward. So you might say something like, I will eat my dessert after I clean the kitchen. So now, while you're cleaning the kitchen, dopamine is released because you're anticipating that reward, so you're actually enjoying cleaning the kitchen more. You can also add a reward to the habit if you want. So you might say something like, I will smoke a cigar when I'm doing yard work. So you look forward to smoking that cigar, but now you're actually looking forward to doing the yard work. So you can do all kinds of things like that. Listen to your favorite podcast while you're running, which I'm sure is locally owned, or buying new workout clothes after you lose a certain amount of weight. There's all kinds of ways that you can do this. So maybe how this might work in your business is you can think of something that you enjoy doing, like taking a lunch break and then saying, I'm going to take my lunch break, and then I'll call three potential clients. Or you can say, after I call three potential clients, I'll take my lunch, or I'll take my lunch, and then I will make my sales calls, and then I'll check ESPN on my phone, you can combine rewards with the habits that you're trying to establish, and that ensures that dopamine gets released and makes you enjoy the habit that much more. Now, there's many other takeaways from the book Atomic Habits, but these are the five that I found to be really insightful and scientifically sound. I'd highly recommend the book, and there's a link in the show notes if you're wanting to read it for yourself. Thanks for listening to another episode of Locally Owned. If you found this to be helpful, then go ahead and hit the follow button so you don't miss another episode. I would love to know your thoughts, so feel free to leave me a review.