Extreme Ownership: Why Personal Responsibility Breeds Better Outcomes | Ep. 32

Episode Summary

In this episode, host Brian Spear explores the transformative framework of extreme ownership and its practical application across capital allocation, business leadership, and wealth management. Originally popularized by former Navy SEAL commander Jocko Willink, extreme ownership distinguishes between backward-looking blame and forward-looking responsibility. Rather than shifting fault onto operators, markets, or external circumstances, business owners and investors must recognize that while execution and management can be delegated, governance and ultimate accountability can never be outsourced.

Spear outlines a three-step framework: owning the decision, owning the system, and owning the mission. Through personal reflections on early real estate investments—including a mobile home park acquisition 15 years ago that initially underperformed on near-term cash flow—he demonstrates how taking personal agency turns operational failures into scalable systems that built Sunrise Capital into a firm with over $500M in assets under management. The discussion breaks down six distinct failure layers—decision, execution, selection, system, thesis, and outcome—to help leaders run accurate post-mortems using tools like the Experience Transformer. Furthermore, Spear addresses the danger of becoming an operational bottleneck, advocating for a decentralized leadership model that transforms a company from indispensable to self-managing and self-multiplying. By applying these principles and running diagnostic frameworks like the six-month test, business owners and high-net-worth investors can eliminate victim mindsets, mitigate downside risks, protect family capital, and convert painful tuition paid to experience into durable legacy wealth.

Key Takeaways

• You can delegate execution, management, and research, but you can never delegate governance, accountability, or the ultimate responsibility for your capital.
• Blame focuses backward on who caused a problem, whereas true ownership looks forward to analyze personal influence and fix the underlying system.
• Systemic failure must be diagnosed across six distinct layers—decision, execution, selection, system, thesis, or outcome—to avoid solving the wrong problem.
• True extreme ownership requires building a decentralized leadership model that prevents the founder from becoming an operational bottleneck.
• Operational mistakes only build wealth when formal post-mortems convert hard data into permanent process and structural updates.

Key Topics Covered

• Extreme Ownership Framework in Business and Investing
• Accountability versus Blame in Portfolio Governance
• The 20-Slot Investment Punch Card Model
• Cash Flow versus Speculative Valuation in Asset Allocation
• Mobile Home Park Turnarounds and Syndication Lessons
• The Six Failure Layers Diagnostic System
• Eliminating the Founder Bottleneck to Build Self-Managing Companies
• The Experience Transformer Post-Mortem Tool
• The Six-Month Test for Business Continuity and Freedom
• Family Office Governance and Intergenerational Wealth Stewardship

Episode Chapters

00:00 The “Extreme Ownership” Shift Brian Spear introduces the concept of extreme ownership, illustrating how shifting from external blame to personal agency expands control over investment and business outcomes.

02:52 1. Own the Decision Spear emphasizes that investors can never outsource capital allocation accountability, highlighting the need for absolute clarity regarding accepted assumptions and structural portfolio risks.

04:48 Excuses Ruin Outcomes Reflecting on an Alabama mobile home park acquisition from 15 years ago, Spear shares how taking responsibility for a flawed plan prevented a partnership breakup and laid the foundation for managing $500M in assets.

11:48 Bet on Good, Don’t Speculate on Great Using Warren Buffett’s 20-slot punch card framework, Spear explains why high-net-worth investors should prioritize durable cash flows over speculative upside.

15:46 2. Own the System Spear breaks down the six distinct failure layers—decision, execution, selection, system, thesis, and outcome—that leaders must evaluate to isolate root causes.

20:16 Where Did YOU Fail? CEOs and executives must stop blaming department underperformance or market conditions and instead examine where leadership failed to provide clarity, alignment, or systems.

24:51 The Outcome Belongs to You The episode addresses the danger of taking ownership too far by becoming an operational bottleneck, outlining how to build a culture where team members take personal responsibility.

28:32 Are You the Bottleneck? Spear recounts his transition from handling every operational task as a perfectionist to empowering specialized talent across the organization.

31:35 Become “Irrelevant” in Your Business Spear explains why a founder must transition from indispensable to irrelevant, sharing how taking a three-week sabbatical tested Sunrise Capital’s self-managing capabilities.

33:32 3. Own the Mission (The Test) Leadership standards are set by behavior rather than wall posters, requiring leaders to govern their business and family office with clear principles.

38:56 Ask After Every Failure Spear walks through Jocko Willink’s four-step debrief process to ensure that every mistake results in a stronger, more resilient operational system.

Full Transcript

[Transcript begins]

Brian Spear: When something goes wrong in your business, or your investments, your career, or your family’s financial life, who do you hold responsible? One of the most expensive habits an investor can have is believing someone else is responsible for their results. They say, the market let me down, or my operator underperformed, my employee dropped the ball, the economy shifted. Sometimes all these things can be true, but here’s the question that successful investors ask instead.

Brian Spear: What could I have done? What could I have done differently to change the outcome? Because every answer to that question increases your control, and every excuse gives that control away. Today I’m talking about one of the most transformative ideas that I’ve ever adopted, and that is of extreme ownership.

Brian Spear: Not as a philosophy of blaming yourself for everything that goes awry, but as a framework for reclaiming personal agency. In this episode, we’re going to explore what extreme ownership looks like in investing, business, leadership, and your family’s financial life. And how you can claim full agency in every aspect of your life with this approach.

Brian Spear: I’m Brian Spear, and this is the Sage Investor Podcast, where my mission is to help you generate cash flow and build legacy wealth in a tax-efficient manner, because that’s what I’m trying to do for my family, and I’m sharing all the secrets that I learn along the way. The phrase extreme ownership was popularized by Jocko Wilnick. He’s a former Navy SEAL commander. In his book, he tells a sobering story about a tragic friendly fire incident during combat in Iraq.

Brian Spear: There was chaos on the battlefield. Communication broke down. And friendly forces mistakenly engaged one another. During the debrief, there was just plenty of blame to go around. Somebody on his team failed to confirm a location. Another individual that was on his team interpreted an order incorrectly. But when Jocko, the boss, stood up before his commanding officers,

Brian Spear: He didn’t go ahead and point fingers at his direct reports. He simply said, I am responsible. I am the commander. And that didn’t mean that his team did everything right, most assuredly, or that they weren’t held accountable along the way. They most assuredly were.

Brian Spear: but it meant that he, as the leader, owned the ultimate outcome. And that’s the massive divide between blame and ownership. Blame is backward looking. It asks, who caused this so I don’t have to carry the weight of it? I don’t wanna have to carry the burden myself.

Brian Spear: But ownership is forward-looking. It asks, what part of this did I personally influence and what system allowed this to happen? Blame just explains the past. But ownership is ultimately going to determine your future. It’s an easy concept.

Brian Spear: to admire in a combat story. But the truth is it gets incredibly uncomfortable when we apply that same sort of logic to our own money, to our own business, and ultimately to the people that we trust along the way. Let’s dive into step one here, which is owning the decision, right? Look, the truth is nobody is going to ever care about your family’s financial future more than you do.

Brian Spear: You know, you might have a world-class CPA, an ethical financial advisor, a highly experienced operators that are in your corner. They can be incredibly talented, but they will never carry the ultimate consequences of your capital allocation the way that you and your family do. You can delegate some research. You could delegate execution. You could delegate the day-to-day management, but you can never outsource the

Brian Spear: the responsibility, the accountability. You are the one who’s ultimately responsible. So the first layer of extreme ownership is to own the decision. When we write a check, right, it’s easy to let a dangerous psychological distance creep in away from that investment, right? We start calling it the operator’s deal or the advisor’s strategy. And we act as if passive investing means passive responsibility. It’s not my fault.

Brian Spear: But passive investing does not eliminate governance. You still own the decision process. Before you allocate capital, right, you’ve got to answer a couple of core questions. What assumptions am I accepting here? And how much structural damage can my portfolio absorb if I’m just flat out wrong?

Brian Spear: And I don’t care if we’re talking about investing through a financial advisor in traditional stocks and bonds, or if you’re taking personal agency and managing your own individual stock portfolio on TD Ameritrade, right? Or if you ventured into alternative investments and you’re actually buying real estate yourself personally, actively, or if you’re passively investing in syndications, any of those things, it doesn’t matter. The truth is all of those still at the end of the day roll back to you.

Brian Spear: you are ultimately personally accountable for the results of all of that capital allocation. And you don’t need absolute certainty when you’re making an investment, but you do need absolute clarity about exactly what and exactly who you are trusting. Let me give you a little example from my own experience in allocating capital and taking personal agency when making investments, right? Right.

Brian Spear: So early in my real estate investment career, this is about 15 years ago, I went ahead and bought a mobile home park in Alabama. So a modest-sized mobile home park did so with one partner along the way. And that partner had an additional 15 years of experience in real estate in advance of mine, right? So I had a lot of business experience and had been successful everywhere I’d been, but I had not had as much real estate experience up to that point. So when this deal was underwritten,

Brian Spear: I was largely relying on his underwriting acumen and some of those assumptions along the way to ensure that that deal was going to pan out the way that I otherwise was anticipating. The truth is I was early in my real estate investment career and I was taking a healthy amount of personal capital and allocating it to this mobile home park.

Brian Spear: And I’m walking away from a significant six-figure salary in the W2 crazy employee universe and going out into the real world, looking to replace that income along the way. And the cash-on-cash returns from underwriting look good. Look good, right? 10% over the course of the first five years or so rough shot. There were so many things that we could fix along the way. And today, while we’ve been running the same business plan for 15 years, the rinse-and-repeat business model, we’re going to be a little bit more.

Brian Spear: I had had significantly less experience running mobile home parks at that time. The unique thing about this individual transaction was I had had a massive amount of park owned homes along the way. And there’s a huge difference between a tenant owned home community and a park owned home community.

Brian Spear: And again, the experience was not there at the time to really truly understand how massive that gap is and that divide is. A tenant-owned home community is obviously where the residents own all of the homes themselves. And what occurs in that environment is that the residents are unbelievably sticky. They virtually never leave. Where could you live for just a few hundred dollars a month in a first world civilized society? That said, in a

Brian Spear: park owned home community, you have renters of the individual homes, right? They pay not only the lot rent, but they also pay a home rent. And in doing so, it’s just a much, much different mentality. The part of this business model, when we acquired this asset was to convert the community from a park owned home community to a tenant owned home community.

Brian Spear: And golly, what an unbelievable deal it was. We were basically looking to transition these renters to homeowners by virtue of keeping their payments roughly the same. Let’s say they were paying about $500 on a monthly basis as a renter. We’re going to turn them into homeowners for right around $500. It was like $495, even a little bit better than their all-in payment for just $500.

Brian Spear: For the rental. And the logic from the business owner’s perspective is that once we got the homes off the balance sheet and were on the plate of the of the of the residents, then we get the business becomes more durably wonderful.

Brian Spear: the income becomes much more safe, predictable, durable income over exceedingly long periods of time. Sometimes you might forego a tiny bit of income in the near term. You could probably charge a little bit more if you’re renting out both the lot and the home. However, you’re going to experience more turnover and you’re going to reinvest into those park owned homes significantly more. It’s a more difficult operating business model. So we’d much prefer to have the residents own their own homes and ultimately operate our mobile home parks like a parking lot.

Brian Spear: And so that was the business plan. We’re going to turn all these renters into homeowners. And golly, we thought we were going to do it in six months. Who’s not going to take this deal, right? It’s the same exact price. You get to own the home in just a couple of months. Life is good. Ultimately, that fell flat on its face. And virtually no, none, or very negligible percentage of the community ultimately chose to take the deal of moving away from rentership into homeownership.

Brian Spear: That was a stark surprise for me and for my partner as well. And ultimately what it led to was significantly lower cash on cash returns in the near term, in the first few years of ownership of that business. And that was difficult for me, especially as I was leaving the corporate world and looking to replace my personal income. Now, I had a couple of different ways I could have taken this, right? I could have blamed my partner.

Brian Spear: for incorrectly assuming the cash flow numbers in the pro forma. And in doing so, could have ruffled some feathers along the way and ended up breaking up the partnership and moving on. Or I could have taken personal accountability and agency and extreme ownership and saying, I’m the individual that’s ultimately accountable for this. I’m the individual that ultimately allocated the capital. And I’m the individual that can ultimately go in and try to change this investment a little bit and create the best outcome possible.

Brian Spear: as opposed to taking the path of blame, ultimately took the path of extreme ownership and rolled up the sleeves, spent a lot of time in Alabama turning around the property, and it ended up being a wonderful result. Long story short, ended up selling the deal after a handful of years of ownership, sold it for more than twice that we bought it. Everybody did very well along the way. It was a good result. But the cash-on-cash return in the near term was painful, was painful. What is the end result of this? Had I chosen…

Brian Spear: to take the path of blame. 15 years later, I still have that exact part. We now own $500 million of real estate. We have 1,000 different investors. We’ve raised a quarter of a billion dollars and have impacted tens of thousands of families’ lives across 20 states in this country. And I don’t think any of that would have ever happened had we ultimately taken a different decision to blame that partner for incorrectly underwriting the cash flow in the first couple of years of ownership of that asset.

Brian Spear: All that is to say, at the end of the day, taking extreme ownership pays dividends over the long term. And that really is a hard lesson, right? It is a hard lesson. De minimis cash flow in the first few years. And if I would have taken that position of victim mentality, I would have been letting a passive structure.

Brian Spear: excuse passive thinking. And that’s not something that is tolerable in my household. I refuse to take that victim mentality and must maintain that personal agency along the way. It’s a bit of a hard lesson, but ultimately it worked out in the end. You know, if a deal goes sideways, it’s highly likely that external factors played a role. Maybe the lender pulled back, right? Or maybe the operator dropped the ball along the way. Those can be facts.

Brian Spear: and they should be assessed. But if your analysis ends with the operator failed, you learned absolutely nothing along the way. To own the decision, you’ve gotta turn the mirror back to yourself, right? If you’re pointing the finger at somebody else, how many fingers are pointing back at you? Did you ultimately choose the operator based on deep discipline, or were you just quietly reacting to fear, or greed, or comfort, or social proof?

Brian Spear: That shift can be painful, right, of taking accountability, but it’s the only way to restore your personal agency. You know, that’s really why Warren Buffett enacted this wonderful framework associated with a punch card, this concept of a 20-slot investment punch card. Imagine you only get 20 major investment decisions in your entire life. Once you punch all 20 slots, you’re done. Can’t make another investment.

Brian Spear: And that kind of forced scarcity completely changes your behavior. If you only got 10 or 20 slots, you stop chasing every decent looking deal. You study the people in those assets more carefully. You interrogate the downside much more thoroughly. And you pay obsessive attention to incentives. You become incredibly selective because you got to live with the results and the weight of every single one of those punches.

Brian Spear: Scarcity doesn’t completely eliminate mistakes, but it drastically increases your responsibility before you deploy capital. And personally, that’s why there’s certain asset classes that I’m just unwilling to invest in. I just won’t touch stuff. It’s not that they can’t make money. It’s that I don’t deeply understand the underlying cash flows or the exit valuations thoroughly enough to justify making that investment. I would rather make an investment that is certain to be good.

Brian Spear: than hopeful to be great. That is actually investing. I’m going to invest in something that is certain to be good, as opposed to speculate on something that is hopeful to be great. The truth is, Bitcoin might go to the moon. And a lot of these AI stocks, hey, they’ve done an unbelievable job running exceptionally high over long periods of time. But Jamie Dimon just said something last week, I saw it in the Wall Street Journal, where he was conveying that, are all these AI stocks gonna pan out over time? Because the valuations are just insane right now. The multiples are just huge.

Brian Spear: And the question was, you know, Jamie Dimon stated something to the effect of, is it possible that these AI companies are going to throw off enough cash, enough cash flow to justify these valuations? And he said, probably. And then he conveyed, is it likely that.

Brian Spear: that these AI companies are going to throw off enough cash flow in a reasonable amount of time to justify their current valuations? And he said, definitely not. At the end of the day, it’s just about cash flow. How much cash flow are these businesses throwing off? Valuations based on hypothetical multiples or revenue on the top line, it’s irrelevant. How much actual cash flow at the end of the day after expenses, et cetera, et cetera.

Brian Spear: is the business going to throw off? And who knows which one of these individual businesses on the AI that are shooting at the moon are ultimately going to be successful. If you run this back to the year 2000…

Brian Spear: You know, Google, obviously, it would have been great to invest in Google in the year 2001 or 2002, whenever. And it’s obviously shot to the moon. But the truth is, at that time, you did not know who was ultimately going to win the Internet wars. You did not know. You could have invested in AOL or Yahoo or MSN or you name any of these other AI companies or any of these other massive Internet companies that were at the top of the heap at that time.

Brian Spear: with massive multiples in 1998, 99, et cetera, et cetera. Google ultimately won. And right now there’s a lot of AI companies that are fighting to get to the top of the mountain and all of them are losing cash. They’re losing money. None of them are currently profitable or very negligible, right? You don’t know who’s gonna win.

Brian Spear: and they keep leapfrogging each other in terms of the large language models. So the truth is, I don’t know. I’m not smart enough to know in 10 years which one of those is ultimately gonna be the victor. So I would rather invest in something that is certain to be a good investment, a la mobile home parks, compared to something that is hopeful to be a great investment when it could actually go to zero. That’s just my personal contention. Ownership means knowing the boundaries of your own understanding and refusing to cross them just because the crowd’s getting excited about something, right?

Brian Spear: Remember, you don’t own every market outcome, but you absolutely own the process that exposed your family’s capital.

Brian Spear: to the outcome in the first place. Now we’re gonna move on to step two here, which is owning the system. The second layer of extreme ownership is to own the system. Every failure has a highly visible final moment, right? It’s the default, it’s the missed deadline, it’s the project that blew past its budget. But that final moment, it gets all the attention, but the truth is, it’s rarely where the failure actually began. The root cause usually occurs months back, way further upstream.

Brian Spear: It lives in these unclear expectations and misaligned incentives, or a culture that’s just quietly tolerating subpar standards along the way. If you just replace that person who made that final mistake, you’re likely solving the wrong problem and not the underlying root issue.

Brian Spear: Before you just react as the owner of a business, right? If somebody’s running a company or an organization, you got to run a diagnostic across a lot of different distinct layers. We’ll call it six different distinct failure layers here. The first one is the decision failure. You know, the underwriting process. Let’s say the underwriting process was weak or the choice should never have been made in the first place.

Brian Spear: Second one is the execution failure. Maybe the plan was solid, but follow through and basic communication fell apart. So the third one is the selection failure. The system was fine, but you put the wrong person or the wrong operator in charge.

Brian Spear: The fourth one is the system failure. The incentives, the data flows, the safeguards were so poorly designed that failure was structurally predictable. It was inevitable that it was going to fail. Five is the thesis failure. You executed a bad strategy perfectly. There is nothing worse than perfecting something that should not be perfected to begin with, that you shouldn’t be doing to begin with.

Brian Spear: The fundamental premise, right, of this investment was just flawed, right? That’s the thesis. The sixth and final is the outcome failure. You might have a great decision process, but it’s simply run over by a completely unpredictable macroeconomic event. And really, that’s why in our capital strategy, we have the outcome.

Brian Spear: principle that is planning for black swans. You never know when the next inevitable black swan is going to occur, but you know it’s going to happen. So you’ve got to put enough cash in the balance sheet. You’ve got to find a way to have enough cash flow to write out the next inevitable recession. And if you don’t do that, that’s when this occurs, right? Well, you’ve got a great decision, but you get a huge unpredictable macroeconomic event that could ultimately lead you astray. All these distinctions, they’re critical because they dictate your response and how you respond to that failure. If execution failed, then you need better accountability.

Brian Spear: If selection failed, you need to change the operator. But if the outcome failed under pure uncertainty, you need to accept it. You need to accept it and avoid overcorrecting a perfectly good process. I’ll give you an example here. Sam Zell has talked about this on several occasions. He’s the type of individual that will try to drive the best risk-adjusted returns in real estate. And he said on numerous occasions where he’s made an investment,

Brian Spear: knowing all of the risks, knowing the potential rewards, that investment didn’t pan out. It ultimately lost money or went to zero. And he’s asked after the fact, would you do that investment again? And he says, yes.

Brian Spear: Yes, I would do that investment again. If I could go back in time, knowing all the things that were available to me, I had all the data at my fingertips. I was placing a bet in the marketplace, and I believed that it would be a legitimate bet from a risk-adjusted return perspective. Ultimately, it didn’t pan out, but he’s comfortable with that result. I personally am never comfortable losing money. So I am just, I’m going to avoid that like the plague.

Brian Spear: I’m going to mitigate the downside risk to the nth degree. But you can see the logic. And if he’s comfortable going to zero, it’s much more like venture capital, right? Some of those guys are making 100 bets knowing 90 of them, 95 of them are going to go to zero and trying to strike it big and hit Uber on just a couple of them. That is one philosophy. I’m unwilling to take that. But if you’re comfortable doing it, at least you are logically making the decision in advance.

Brian Spear: So everyone has to choose their investment philosophy. And that’s what Sam Zell was comfortable with in that example, right? If the outcome failed under pure uncertainty, you just need to accept it at the end of the day. Remember, look, luck is gonna be able to hide terrible decisions sometimes.

Brian Spear: And uncertainty sometimes is going to punish brilliant decisions that you made along the way. Ownership means looking past that emotional sting of a bad result to really diagnose the underlying root cause and exactly what went wrong, what broke along the way.

Brian Spear: Now I want to pivot into just leading an organization, right? Leading a business. We’re talking a little bit about, you know, from an investment perspective, ultimately, you know, leading your family office. But I want to talk about it from a business perspective a little bit. Extreme ownership starts with no excuses. As a CEO, I can’t say the IR team did not communicate well. I can’t say the acquisitions team missed the deal. I can’t say…

Brian Spear: operations fail to execute. I can’t say the market just got so hard and interest rates went to the moon. I can’t say investors, they just didn’t understand the strategy. I can’t say the team, they just didn’t follow through. Because at the end of the day, with extreme ownership, you have to ask yourself better questions. The better CEO question is, where did I fail? Where did I fail to create clarity?

Brian Spear: alignment, training, accountability, or systems along the way when something goes wrong. That shift is the entire game. It’s a mindset shift. If an investor is confused, that is a communication issue.

Brian Spear: If a department is underperforming, that can be a leadership issue. If a process is breaking, it’s a system issue. We need to go back to the drawn board, fix the value engines, process, procedure, documentation, fix it. Iterate and improve. If the wrong person owns the wrong seat, that’s a people issue.

Brian Spear: The job is to get the right guys on the bus and the wrong guys off the bus. If the organization is misaligned, at the end of the day, that’s a CEO issue. Get back to the drawing board. Figure out the explicit clarity of the mission, vision, values of the business. What’s the big, hairy, audacious goal? And provide that level of clarity to everyone inside of the organization. Extreme ownership forces the CEO to move from blame to ultimately figuring out the root cause and taking ownership.

Brian Spear: As a CEO, right, extreme ownership, it means I am responsible. I am responsible for building a company where the mission is clear, the standards are high, the downside is protected, the team is accountable, and the investors can trust that we will tell the truth. We will make disciplined decisions, and we will improve every time we face adversity. My team will…

Brian Spear: tell you that, I say this over and over until I’m blue in the face, that we will iterate and improve. It’s one of these phrases I use all the time, iterate and improve. Because every single day when we come in, we’re going to have some sort of form of adversity. Something will go wrong. Iterate and improve. The same concept associated with fail forward. It is that win or learn, we never lose. We will fail forward over and over and over again.

Brian Spear: And I know when something goes awry in the business, right, we’ve got 75 different people here. Not every single individual mistake that happens tactically on a day-to-day basis is ultimately a mistake that I personally made. But it doesn’t change the fact that I am ultimately accountable for the results of the business in its entirety.

Brian Spear: It comes down to accepting that you aren’t doing the work yourself. You are owning the ecosystem where the work actually happens. And it ties directly into kind of one of our core philosophies over here at Sunrise that I mentioned, and it is failing forward. Let’s be honest, right? Failure is painful. It ain’t fun. It’s expensive. And sometimes it’s very embarrassing. There’s nothing automatically good about failure. Right?

Brian Spear: Pain, it is not automatically wisdom. And time, it’s not automatically improvement. A mistake only actually becomes valuable to you and the organization when there’s a lesson that you take that becomes operational. And in order to do that, you’ve got to have a system. You’ve got to confront the brutal facts, what went wrong, without softening the blow to protect everybody’s ego along the way. So at Sunrise, what we do is we use a tool called the Experience Transformer.

Brian Spear: It is a formal post-mortem designed to extract all the hard data from a mistake and ultimately convert it into a concrete process change. So maybe you have a new checklist or a revised underwriting rule or a different delegation standard or tactic.

Brian Spear: If a failure that you have in the business does not result in some sort of structural update, then you’ve essentially paid a massive tuition fee to the old school of hard knocks and you threw all the educational materials and the books and the syllabus and the degree directly into the garbage, right? So, you know, as you step into the system ownership,

Brian Spear: You also can hit this dangerous, I would say highly predictable wall. It is ultimately about becoming a bottleneck and ultimately becoming a perfectionist. One of the mistakes when you take extreme ownership is ultimately believing that everything should run through you. When you take extreme ownership and you’re ultimately feeling that you’re accountable, as the leader of the business, myself personally, I like to use the phrase that I am a recovering perfectionist.

Brian Spear: And so yesteryear, when we were much, much, much smaller, a lot of things would ultimately filter through me. And everything would get passed along my desk and I’d have to sign off on XYZ along the way before things would progress. And as you can imagine, that might work when it’s just you as a solo entrepreneur, solopreneur. It might work when there’s two, three, four, five guys inside of the organization. But the truth is, you know, at a size and scale of our size, we have 75 people here.

Brian Spear: It would be literally impossible for me. 75 people over the course of 20 different states. We literally have people that are employed throughout the world in like five different countries. It’s pretty crazy. It would be impossible for me to request that every single decision, every single piece of work get passed across my desk before ultimately stuff gets done. So I have to accept that.

Brian Spear: The individuals that are inside of the organization are going to need agency themselves. They need to take that ownership mentality. And the beautiful thing about extreme ownership is that if you embody that perspective and that philosophy and you –

Brian Spear: Share with your direct reports that you are ultimately accountable and you as the leader of the organization will take responsibility when any of the individual direct reports make mistakes. And then you will try to iterate and improve the organization by providing them with better training and better resources, systems and processes and all the things necessary for them to fix that riddle, to solve that problem moving forward. What happens is this wonderful, this wonderful process

Brian Spear: upward cycle occurs where the next level of leadership, let’s call it the C-suite in this example, begins to have that same level of personal agency and they begin to take extreme ownership in their roles.

Brian Spear: And when their subsidiary department ultimately sees them as the leader of the finance department or the leader of the asset management department or the leader of the acquisition team or operations, and all the leaders are taking accountability for their department, if it is to be, it is up to me. And they will run through a brick wall for everybody inside of their department.

Brian Spear: then every single individual within that department begins to embody the same exact principles and philosophy of their direct manager. And it’s this wonderful effect that occurs. But it only starts if you, as the leader of the organization, are willing to take extreme ownership and act as if it is necessary to…

Brian Spear: Have everyone in the organization take personal agency for the results of the business. This concept of breeding and ownership mentality, that’s what everyone wants. I should say that’s what the vast majority of successful businesses ultimately have along the way. Businesses that are going to endure the test of time, the ups and downs, the inevitable ebbs and flows, end up having associates throughout the entirety of the organization who are going to be a business.

Brian Spear: that own the outcome. It is quite literally one of the pieces of the puzzle, the building blocks of our execution system. We call it the ROWS execution system. It’s an acronym, ROWS, like getting everybody to row in the same direction. The O inside of that acronym stands for own the outcome.

Brian Spear: If it is to be, it is up to me. You are personally accountable. Everyone in the organization is relying on you to ultimately do your job. And we will succeed if everybody in the organization takes accountability, owns the outcome, and does their job exceptionally well. And if not, then ultimately we’ll have issues along the way. You know, when I first started going with this extreme ownership philosophy, I think one of the failures that people take or one of the flaws that they have is they want to

Brian Spear: really do everything themselves. And I had a little bit too much of that early on in my tenure where I was a perfectionist. I still am a perfectionist, but I’m a recovering perfectionist. I understand that it’s impossible for me to do all this work myself. The business, I now understand, after being on the other side of this and delegating to exceedingly talented individuals, that they do this much better than I could ever do it anyway.

Brian Spear: But at the time, you want to make sure that everything is perfect along the way. And you end up becoming a bottleneck. This is the fatal flaw, is that if you take personal agency too seriously from an extreme ownership perspective and you try to do all the work yourself, you become the bottleneck. I’ll give the example of, you know, I was ultimately at one point the butcher, the baker, and the candlestick maker. I was doing every aspect associated with investor relations. I was doing every aspect associated with the legal docs inside of the organization. At one point, I also paid every single bill and ultimately did all the marketing and sales inside of all the mobile home parks we had in the portfolio. It was.

Brian Spear: was impossible for me to be able to serve, I’ll use the example, serve our investors to the degree to which they deserve to be served. And it was okay when we had five, 10, 15, 20 investors. I was able to manage and handle those relationships well. You get to 50, still handling them pretty well. All of a sudden you get to 75, 100. While I’m juggling these other tasks, I was not serving them to the degree to which they should have been served. And it was incumbent upon me to bring on

Brian Spear: that had additional bandwidth, time, energy, effort, and skills superior to mine that allow us as an organization to serve our partners better than I could serve the investors solely myself. It doesn’t mean that I still don’t take personal accountability and extreme ownership when something goes awry or a mistake is made from an investor relations perspective. It is still on my plate at the end of the day. If it is to be, it is up to me.

Brian Spear: It ultimately provides all the team members that are on that side of the house with freedom, personal agency, owning the outcome, ability to work in a wonderful culture where everybody takes personal accountability for the results. And the partners along the way receive a much, much better experience than they would otherwise if it were just me, myself, and I trying to figure this out on my lonesome.

Brian Spear: I would say that’s a distinction that needs to be understood. True ownership, right, extreme ownership, it’s the exact opposite of micromanagement. True ownership is building a decentralized leadership model where your team deeply understands the mission, the standards, the guardrails, and they can execute brilliantly on

Brian Spear: without waiting for your permission. And paradoxically, right, the strongest evidence that you actually own your system is that it no longer requires your presence to run efficiently. And I’ll give you a perfect example, right? I just walked away from the business for three weeks. I took a little personal sabbatical with my family. We went to five different countries on a wonderful cruise and spent a little bit of extra time in Paris. Oh, life is tough.

Brian Spear: But this served multiple purposes. One, it allowed my family to re-energize, rejuvenate, which is beautiful. Selfishly, that’s wonderful. But it also tests the business. It pressure tests the business to ensure that you’re building something wonderful.

Brian Spear: You’re building a self-managing company along the way. The fact of the matter is, the more valuable that I am to the business, the less valuable the business is to me. So you have to try to make yourself, you have to try to make this transition

Brian Spear: from becoming indispensable to becoming irrelevant. And it’s not something that happens overnight, but it’s consistently working on, ultimately delegating prudently, bringing on leaders, letting them continue to grow, giving them more responsibility, more personal agency, and ultimately looking to create a self-managing company

Brian Spear: Because at the end of the day, you don’t want to work in a dancing bear business where you’re owning it and you’ve got to be up on stage doing everything. And I’ve had many vacations earlier on in my duration of owning this business where I was on vacation, where I was in another state or on a cruise ship somewhere. But in my mind, I was still back home at work. I wasn’t present with my family. This three-week sabbatical that I talked about, I literally popped open my computer one hour.

Brian Spear: for an email session with my strategic assistant to ensure that nothing was blowing up along the way. That was it. It was absolutely wonderful. And it was beautiful to see when I came back that the business was humming along the way that we would have otherwise anticipated. It’s a beautiful example of building a self-managing company. So let’s go ahead and move on to layer three here, which is owning the mission. Step three is owning the mission. The standards that you set for your business, they don’t cascade from posters on your wall.

Brian Spear: They cascade from your behavior, actually living out the principles. More is caught than taught. A company doesn’t become accountable because the word integrity is ultimately slapped onto the refrigerator in the office. It’s not something that’s just plopped onto the mission statement and actually you think it’s going to magically appear. An investment portfolio, it doesn’t become conservative just because you claim to care about capital preservation.

Brian Spear: Standards, they become real through what you tolerate, what you correct, and ultimately what you model when the pressure is on, what you actually do on a day-to-day basis. It’s just as true in your home as it is inside of your office.

Brian Spear: Even if you don’t call it one, the truth is you are operating a family office. Anybody that is managing money on behalf of their family is running a family office. You’re managing taxes. You’re managing your estate planning. You’re managing debt. You’re managing cash flow. That financial system is actually teaching your kids something.

Brian Spear: When I was up at Harvard doing some executive education, the woman who ultimately runs all of the courses associated with family offices over at Harvard Business School conveyed that

Brian Spear: Everyone has a family office. I don’t care if you’re running a portfolio that’s $500,000 or $500 million. It’s completely irrelevant. A million bucks, 50 million bucks, 100 million bucks. It’s why the definition of family office is a little bit amorphous because everyone has a family office irrespective of the cumulative size of your respective estate. Your kids are learning something from you along the way regardless. Somebody’s gonna teach them about the financial system. It’s either teaching,

Brian Spear: discipline, patience, and stewardship, or where they’re learning these items is quietly demonstrating secrecy, consumerism, anxiety from the traditional school system. And ultimately you own that lesson, whether you like it or not, whether you’re teaching it intentionally, or if it’s something that’s just happening by default. And that brings us to this third layer, this third step, which is owning the mission.

Brian Spear: The system must always serve the mission. But a lot of times we get wrapped up in optimization that we forget why we even built the machine along the way. You’re just oftentimes caught in the weeds doing the work on a day-to-day basis where you can’t zoom out and ultimately see the big picture.

Brian Spear: We chase the higher yield without realizing that we’ve accepted dangerous concentration risk. Sometimes we scale a business to maximize enterprise value only to destroy the personal freedom that we ultimately set out to build in the first place. A highly efficient system serving the wrong mission is just a massive, massive quiet tragedy.

Brian Spear: So to test if your system that you’re building is actually serving your mission, you got to run what I like to call the six-month test. And the six-month test is this. Imagine that you woke up tomorrow and unfortunately you were stricken with a debilitating health disease, something that would not allow you to ultimately go to work mentally.

Brian Spear: Go to invest. You could literally not go back and do your deed for the next six months. What decisions would keep moving smoothly because your team or your family, they understand all the core principles in the organization? What standards do you have would collapse because they actually only existed in your mind, not actually in reality?

Brian Spear: What have you actually called delegation, but it’s actually just abdication, just completely abdicating responsibility. I talked about that personal venture that I just took, right, three weeks away from the business. And it was wonderful to now genuinely understand that we have a self-managing company here at Sunrise where I can walk away for multiple weeks and,

Brian Spear: And I walked back, exorbitant amounts of work was done in my absence. Problems inevitably popped up, but problems were resolved without my having to actually be there.

Brian Spear: And it’s wonderful to see. If you extend that out a little bit further, right, running the six-month test, it would be beautiful if everyone had the luxury of ultimately creating a self-managing company. But the pinnacle, but the pinnacle and the logic associated with the six-month test is this, is if you were to walk away for six months and at the end of that six-month duration, not only is it self-managing,

Brian Spear: But it is self-multiplying where you walk away where the business is at XYZ size and you come back six months later and the business has grown in value, enterprise value, size, scope, more cash flow, etc., etc. That is a self-multiplying company and very few businesses ultimately get there. But that is the goal. And always trying to think through the six-month test. Where do you stand?

Brian Spear: in your journey. Can you walk away for an extended period of time, have freedom of time, freedom of money, freedom of relationship, freedom of purpose, and allow your portfolio to continue to grow without you having to be there on a day-to-day basis? Because if your system falls apart without you actually being there to constantly rescue it, you haven’t really built a system. You’ve built a dependency. Now let’s talk about the ownership debrief here, right?

Brian Spear: We gotta establish a clear boundary line. Extreme ownership, it can easily become warped into a toxic cycle of self-blame, of perfectionism, and ultimately, hindsight bias. And that’s not the goal, that’s not what we’re trying to achieve with extreme ownership. So let’s look at three real-world realities. First, some of these outcomes are genuinely somebody else’s fault. That occasionally happens, right? If a partner commits fraud or an operator violates trust, they are actually accountable for those ridiculous actions.

Brian Spear: We have some legal consequences when that pops up, right? But taking ownership means asking, why was my family’s capital exposed to that person in the first place? Second, hindsight bias is a liar. You can’t judge a decision solely by the result.

Brian Spear: You know, it’s like focusing on the scoreboard all day. We’ve talked about this over and over. It’s about focusing on the process. We focus on the field, the playing field. And at the end of the day, the score takes care of itself. You got to judge the result by the information you had at the time. Sometimes a solid decision yields a bad outcome. Like we talked about with Sam’s, all it happens sometime. That’s just the price of dealing with this crazy complex world that we have. Third and lastly here, passive investing does require delegation.

Brian Spear: You cannot operate every asset that you own. It’s impossible. Remember, look, you can delegate execution, but you can never delegate governance and accountability. Ownership is not about trying to control every outcome, right? It’s simply about accepting disciplined responsibility for everything within your sphere of influence.

Brian Spear: So to help you put this kind of into process, Jocko Willink’s got a four-step process that I will lay out here. It’s called the debrief. It’s actually really, really quality. He’s used it for an exorbitant amount of time. They teach a lot of this stuff in the military. So walk through these questions whenever a project, a deal, or a strategy disappoints you. The first question is what went well? What worked, right? What went well? What worked? And what should be repeated over and over there? The second question is what went wrong?

Brian Spear: What failed? What needs to be eliminated? The third one is what did we learn? What are those key insights, those golden nuggets that we can extract? And the fourth one is how will we adjust? As Brian Tracy says, knowledge is not power.

Brian Spear: The application of knowledge is power. Iterate and improve. You have to fix the problem, not just understand what went wrong. You have to actually do something about it. The purpose of the debrief is not to chastise yourself, right? It’s not about self-flagellation, right? It’s about ensuring that whatever tuition you just paid, right, to the old school of hard knocks, actually buys you a better, more resilient system moving forward. So at the end of the day,

Brian Spear: Wealth, it’s not something that you just possess, right? A business is not just a company that you own. Your career, your portfolio, your family, your legacy, they are all systems that you are responsible for governing. You can delegate nearly every task on your plate, but you can never outsource responsibility, personal accountability, agency for what those systems protect, what they teach, what they teach.

Brian Spear: what they tolerate, and ultimately what they produce. Not every bad outcome is going to be your fault, but what you extract from it, what you change, what happens next?

Brian Spear: is always going to be your responsibility. So own the decision, own the system, own the mission, and that’s how experience ultimately becomes wisdom. And that’s how ownership really becomes true stewardship over time. Thank you very much, guys. If you like this, please do hit the subscribe button. Share it with a friend. It would be very much appreciated. But until next time, you’d be great.

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