How to Run a Mastermind Group

This morning I was having a conversation with an aspiring speaker. He asked my thoughts on the best ways to further his career.

My response was, “Join a mastermind group.” What is a mastermind group? It is a group of people who get together and work on each other’s business (or personal lives). The concept was developed by Napoleon Hill in his book, “Think and Grow Rich.” The purpose is to “multiply an individual’s brain power and continually motivate positive emotions.”

I am in a few mastermind groups and have been in many others in the past.

Let me give you some interesting ways in which you can run your mastermind sessions. Unless noted otherwise, assume your mastermind group is four to six people who meet on a somewhat regular basis (once a month or once a quarter).

Accountability Model – I am in one group that is organized like this. Each person has 45 to 60 minutes to present their status report to the group, focusing on progress and obstacles. It is more of a conversation, with others jumping in with thoughts and ideas. At the end of the day, each individual declares what they want to achieve before the group meets again. This format is good for holding others accountable for results. Unfortunately, there is less time for creativity and problem solving. To speed things up, status reports can be sent via email in advance of the meeting.

Problem Solving Model – This is my favorite model. When it is your turn, you have 60 to 90 minutes to present a problem you are facing and get feedback/creative solutions from the others. For example, the latest version of my website is a result of such a mastermind group. I printed off copies of my home page and asked for feedback. One person said, “I like the unconventional thinking concept, but there is nothing unconventional about your homepage text. What are some provocative thoughts?” As a result I fleshed out my 10 unconventional thoughts and turned them into a flash header. My most recent session was feedback on a new product I am developing. The feedback you get is incredible. The key is to solve an issue that is of importance to you. And if you can’t think of a problem/opportunity, the group can help you find one. This is a highly creative and focused mastermind model.

Book Club Model – Prior to getting together, every member in the group reads/listens to the same article, book, CD/MP3 that descriptions a useful tool that can be applied to your business. For example, one time when we met, we all read the same article on copywriting for websites. We then applied the article’s concepts to our respective businesses. Because everyone is working on the same problem (e.g., creating an elevator pitch), you learn a lot about your business even when you are helping others.

Theme Model – This model works better with a larger group (e.g., a dozen people). You choose a theme for the meeting (e.g., technology or sales). Each person comes prepared to give a 15 minute presentation on their best practices for the selected theme. Each person is encouraged to bring a handout. A dozen people can present in approximate 3 hours. When you leave, you have 11 handouts with great ideas. And as you are not working on each other’s businesses, different people can attend each time. This model is a fantastic way to get lots of tips in a short period of time. I learned more about technology during a 3 hour mastermind than I had in the previous year. And it didn’t cost me a penny.

Micro-Model – This is a variation of the “Problem Solving Model,” where each person brings a problem/opportunity they want to work on. But this time there are only two people who participate. The dynamic is very different when it is one-on-one. It is more focused. If you are paired with the right person, you can get even more done in a shorter period of time. Plus, you are working on your business half of the meeting. You can work also with different people each time. I really like this model and use it on an ad hoc basis as often as possible.

There are many other models too. Colleagues I know have mastermind groups comprised of four people from different geographic areas. Once a quarter they meet in a “neutral” location for a weekend. Friday night is socializing and catching up. Then on Saturday they work on two businesses, and another two on Sunday. This is a very intense model.

You can meet via phone. You can discuss via email or online bulletin board. You can meet weekly or monthly, quarterly, or on an ad hoc basis. There are no rules. I prefer face-to-face meetings once every 6 to 8 weeks with email exchanges in between.

Who should you have in your mastermind group? That’s up to you. I have two groups where everyone is a professional speaker. This has the advantage of our sharing specific ideas that work for our industry. I have another mastermind group where no one else is a professional speaker; the others are a trainer, a consultant, and a marketing guru. The advantage here is getting ideas from other industries.

One critical point is that each person must be at the same “level” relatively speaking. You don’t want anyone who is a drain on the group because they can only ask for advice but can never give it. You also don’t want a situation where someone does not receive personal value because they are constantly giving. Regardless, you want a commitment from everyone to go to all (or at least most) of the meetings. Slackers should be ditched as they will bring down the energy of the entire group.

Play around with it. Find what works for you. But just do it. The value you will gain is immeasurable. It may even save you thousands of dollars that you might otherwise spend on coaches or mentors. For me, my mastermind groups augment, not replace, the experts I hire.

Do you have a mastermind group? What have you found that works?

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Surveys Uncovers Surprising Results

Back in the 1980’s, executives used to joke that you would never get fired for buying “Big Blue” (IBM) computers. It’s not that IBM was the best, but you knew they would not screw up.

When I worked for Accenture (then Andersen Consulting), the Economist once called us “The McDonalds of the consulting industry. You know what you will get and it’s not fillet mignon.” People hired us not to get highly creative solutions, but rather to be assured of a successfully implemented solution.

There is a reason why consulting firms are so successful.

People choose safe, tried and true solutions over those which may be better yet have a risk of failure.

This is human nature. People take risks to minimize losses, yet play it safe when it comes to increasing gains.

But how much of a gain must be dangled in front of us before we will risk giving up the sure thing? I’ve been conducting a survey to find the answer.

Here’s the first question posed to respondents:

Which would you choose?

• Option 1: A guaranteed gain of $75K or
• Option 2: An 80% chance of getting $100K and a 20% chance of getting nothing

Our survey found that 75% of the people go for the sure thing, option 1. People play it safe when it comes to increasing gains. But how safe?

What if the upside is increased to an 80% chance of getting $150K? Now, 57% take option 2. Still, 43% play it safe, even though there is an 80% chance of doubling their money.

What if the upside is increased to $225K? 76% choose option 2. This means that, 1 in 4 people still play it safe even when the potential upside is 3 times the original amount. When we increase the upside to $450K - 6 times the original amount - we still have 20% of the people who go for the sure thing.

It appears that people believe the expression, “A bird in the hand is worth two in the bush.” Interestingly, the original Old English expression was, “”Better one byrde in hande than ten in the wood.” That seems even more accurate.

Ok, let’s look at the loss side of things.

Here’s the first question posed to respondents:

Which would you choose?

• Option 3: A guaranteed loss of $75K or
• Option 4: An 80% chance of losing $100K and a 20% chance of losing nothing

This time, when presented with a loss rather than a gain, 71% go for the riskier option 4. People take risks to minimize their losses. [As an aside, when I ask audiences this question, the percentage of risk takers is closer to 90%]

Increase the potential loss to $125K and 44% still go for the riskier option 4. When the potential loss is increased to $250K, 22% of the respondents still opt for option 4.

If you plot these responses (risk-taking probabilities against expected gains), they make a nice “S” curve as depicted in the graphic left.

What does this graph tell us?

It clearly supports the premise that people take risks to minimize losses, yet play it safe when it comes to increasing their gains. The loss of $1,000 hurts more than a gain of $1,000 feels good.

This means that you can sell someone more easily when you focus on losses rather than the gains. This might explain why Al Gore has been so successful with his “Inconvenient Truth.” Instead of focusing on the benefits of a cleaner environment, he focused on the “meltdown” associated with the status quo. Can anyone say Nobel Prize?

The shape of the curve also gives us a bit more insight. First, the gain of $2,000 does not feel twice as good as the gain of $1,000. Equally, the loss of $2,000 does not hurt twice as much as the loss of $1,000. There is a point where we become numb to the increased gain or loss.

Another potentially useful take-away is what I call the “risk/reward tipping point.” This is the point where the “S” curve flattens out on both the loss and gain side. This occurs at the point when 80% of the people take the desired action. And based on my research, this ratio is a little under 3.

What does this mean?

The hoped for win (the upside) must be three times the guaranteed amount in order for most people to risk the sure thing.

There is a reason why the status quo wins out in business, politics, and life. Rarely are we given options where the benefit is three times the sure thing/current situation.

On a final note, there was some interesting research on this topic…but with a twist. Researchers at Duke University, in a paper entitled “Sleep Deprivation Elevates Expectations of Gains and Attenuates Response to Losses Following Risky Decision” (Venkatraman, Chuah, Huettel, Chee), wrote that this risk-taking profile changes when someone does not get enough sleep.

When kept awake for 24 hours, the study (supported by brain scans) showed a double whammy: people became more optimistic about potential gains and they were also numbed to the negative feelings associated with losses. They would act riskier and have less regret (distinct from disappointment) about bad decisions. Their decisions were often bad decisions. If you go to Las Vegas, be sure to get plenty of sleep!

Our ancestors lived in a world of scarcity. Therefore it is not surprising that we do everything in our power to horde what we have. Unfortunately, our desire to play it safe can cause us to miss out on big opportunities. Risk taking is fundamental to innovation. And innovation is critical to long-term success.

If you want to see some of this stuff action, be sure to read my entry on 10½ Ways to Improve Your Life – By Losing. This may give you some tools to enable you to take healthy risks to improve your life and business.

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Quote of the Day

“I worry a lot of people fall into the trap of believing that they need to make big life decisions before they can start doing anything….Your life doesn’t need to go through a predictable story arc. It doesn’t have to start with a dream, follow through hard work and end up in a nice home with four bedrooms. Instead it can twist and travel. You don’t have to know the final answer, you just need to act on the next step.”

Scott H Young: What Do You Want to Do With Your Life?

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Goal-Free Fun

In a previous blog entry, I describe how games can turn work into play.  The key is to choose a game that resonates with you. Here’s a bit from the Simpsons that shows that not all games are fun.

Bart forgot his permission slip, so he was unable to visit the chocolate factory.  Instead, he was stuck with Principal Skinner who had other plans for him.

Principal: Here’s a whole box of unsealed envelopes for the PTA!
Bart: You’re making me lick envelopes?
Principal: Oh, licking envelopes can be fun! All you have to do is make a game of it.
Bart: What kind of game?
Principal: Well, for example, you could see how many you could lick in an hour, then try to break that record.
Bart: Sounds like a pretty crappy game to me.
Principal: Yes, well, get started.

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Cool Book of the Day

Goal-Free Living was featured as today’s “Cool Book of the Day.” What I like about this website is that it is not your standard book review. Instead, Dan Janal, the site’s creator, posts a bit of “backstory” about the books he features.  Check it out.

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