The Agile Scaleup

Lessons from the Mexican Tequila Crisis -- Gene Towle

"...keeping you great"

HEADLINES:

"A fool with a plan will beat a genius without a plan every time." T. Boone Pickens' advice from his father

Lessons from the Mexican Tequila Crisis -- Gene Towle, founder and CEO of Mexico-based Softec, sent me this lively note earlier this week "talking to my US friends I realize that they are living through something similar to what I lived through in 1995 with the Mexican Tequila Crisis. Just as I survived, they can as well. I'd be happy to share my experiences: Our companies went from +5M net worth in 1994 to -5M by 1995 and rebounded to just over +500M by 2008." So I took him up on his offer -- always willing to learn from a guy who builds a net worth of a half billion!

Tuesday, March 31, 11:58am -- 12:30pm EST (US) -- Complimentary teleconference with Gene Towle. Join me as I interview Gene for 20 minutes and let you fire questions at him for 10 minutes. Here's a link to register your email address to receive log-in info.

"Bold leaders in tumultuous times always have at least one crash" -- take three minutes and read Thomas Friedman's latest NY Times column -- research from Presidents that have survived crashes compiled by Stan Greenberg. Friedman's final paragraph summarizes the lessons "You can't be too honest in describing big problems, too bold in offering big solutions, too humble in dealing with big missteps, too forward in re-telling your story or too gutsy in speaking the previously unspeakable." Seems like sound advice for leaders of growth firms who regularly face crashes of people, strategy, execution, and cash.

Ezypay Doubles Quarterly Targets Using Themes -- it's time (April 1) for most companies to pick a critical number and drive it home with a quarterly theme. Celeste Kirby-Brown, Sales and Marketing Director for Australia-based Ezypay sent along this note "we attended your training session in February 2007 in Sydney and implemented the Rockefeller Habits into our business. Since then nearly every part of our business (except costs!) have grown dramatically. This is one of the best things that Ezypay has ever done - our staff loves it and it is a great management tool. Ezypay assists businesses to maintain cash flow and we recognise that whilst in part the current economic climate has contributed to our success we still attribute our strong growth to the Rockefeller Habits. For example last quarter alone we grew revenue by 20% for the quarter across Australia and New Zealand. This quarter we set a goal which doubled last quarter's target and we have already achieved this half way through the quarter!"

WARNING: The Following Video Might be A Little Risque -- continues Celeste "I thought that you might get a laugh from our current quarterly theme Revenge of the Nerds. We have used this theme because we are focusing our energy on improving systems and developing technology based products. Here is a link to a video that should make you laugh. The video was part of the quarterly theme launch that involved a bunch of nerds (fictitious Ezypay IT department) discussing life, the business and their involvement. The video is a thought bubble when of one of the Nerds (our CEO - Trent Brown), imagined what it would be like to be cool. The making of the video was done prior to the launch and the staff involved, whilst knowing it was for the launch, did not know the theme or what it represented. This of course added to the intrigue and excitement in the office and assisted with staff buy-in as a result of the process." NOTE: it's often critical to take a quarter and let your systems catch up with your growth -- congrats to Ezypay for picking this theme.

"Our-Habits Fell Apart in 2008" -- this is how Mason Arnold, "Cookie Monster" and founder of Texas-based Greenling started his recent note to me. He continued "we didn't create a one-pager or goals, primarily due to poor accountability management. We have recommitted as a team and created our '09 one-pager (Strategic Plan) that I'm happy to share." And I've posted his latest One-Page Strategic Plan and a couple others on our new wiki http://www.aboutus.org/Gazelles_Best_Practices_%E2%80%93_One-Page_Strategic_Plans. Please send me your latest one-page plans, I'll blank out the numbers, and post for others to see -- we get lots of requests for examples and these are helpful. BTW, Greenling has a neat service, delivering organic food directly to your home. I know he's stoked about the Obama's organic White House garden.

T. Boone Pickens, the rest of the story -- and this note from Vince Virga, President of California-based SGIS a leader in Cyber-Security for Federal government agencies. "I went and saw T. Boone Pickens and the CEO of AutoNation this morning and T. Boone told a great story. T. Boone was taking a while to get through college. His father pulled him aside after his fraternity initiation and indicated that he and T. Boone's mom were worried about him. They felt that T. Boone's timeframe for successful completion of college was different than his. He then told him that he needed to have a plan to figure out what was going to be the quickest route to graduation. He told T. Boone, "A fool with a plan will beat a genius without a plan every time." His parents were afraid in his case that they had the absolute worst case on their hands: A fool with no plan.... Anyway, T. Boone figured the quickest way to graduation involved getting his degree in geology. That was his plan. Turned out to be a good one."

The Most Famed Experts are Wrong the Most -- and this nice summary of research by UC-Berkeley professor Philip Tetlok, noted "expert on experts." Beware of the most vocal black and white experts.

"Save the Date" for the new Growth Series -- 90 minutes of monthly executive education from the top thought leaders of our times -- stay ahead of the competition:

	Tuesday, April 21 -- David Meerman Scott -- New Rules of Marketing & PR -- 1pm -- 3pm EST (US)
	Wednesday, May 20 -- Dr. Victoria Medvec -- Negotiation Strategies in Turbulent Times -- 11:58am -- 1:30pm EST (US)
	Tuesday, June 23 -- Keith Ferrazzi -- Who's Got Your Back: The 3 People That Will Change Your Life -- 11:58am -- 1:30pm EST (US)

3 Lessons from 12 Recessions

"...keeping you great"

HEADLINES:

For Those Loving Chet Holmes Book -- I've upped his time at the Sales and Marketing Summit -- he's now keynoting for four hours instead of two. And I encourage you to listen to his complimentary teleconference and read his book -- I continue to get emails on the huge impact his work is having on driving revenue and market share.

Jim Collins on Navigating The Crisis -- read the Fortune magazine interview where Jim lays out lessons learned from his latest research on surviving turbulent times. When I was in Amsterdam last week I met Thomas Kascha, founder of AQ Services, an international Mystery Shopping service (yes, he's close friends with David Rich, ICC/Decision Services, here in the U.S.). Thomas wrote an excellent summary of the Jim Collins interview which I've reprinted with permission under DETAILS below. Take two minutes and read lessons learned and then review in your next weekly management meeting.

3 Lessons from 12 Recessions Spanning 120 years -- I just got off the phone with Victor Cheng, quantitative econ grad from Stanford and former McKinsey consultant who is just finishing a book based on his proprietary analysis of the past 12 U.S. recessions going back 120 years. His book provides case studies on 12 companies that were started in a recession that later went on to become billion dollar businesses. And he found three simple, yet profound, things all 12 companies had in common that made them more than "recession proof." He's going to print up several hundred copies of his manuscript and bring them to the Sales and Marketing Summit where I've invited him to be a last minute keynote -- we'll be one of the first audiences to hear his findings.

However, Victor Gave Me a Hint -- one of the 3 lessons, while it sounds obvious, is to sell people what they need during recessions i.e. massage parlors selling stress relief vs. pampering. More to the point, did you see the reports about the unexpected jump in housing starts in February? If you look into the data, almost all of it was in low-end multi-family rental housing which is what people like Harry Dent have been saying will be hot during the next decade -- in essence, all those people who had no business buying a home are going back to rentals. This lesson requires firms to look at a great deal of data and often involves entirely new strategies, which is why start-ups often have the edge during times like this. Victor shared with me that several companies he's advising, in some cases, are deciding to shut down completely and go a different direction the next decade. Warning -- this is counter to what Jim Collins is advising, but my conclusion? If you have a strong culture and sound strategy, stay the course, though you might have to alter your messaging. However, if the business never really made sense, times like this expose those weaknesses and you're best to change course.

BTW, Victor Cheng Understands our World -- he ran the $20 million a year eCommerce division of Art Technology Group (Nasdaq: ARTG). ATG is the #1 rated eCommerce software among Fortune 500 retailers. ATG software powers eCommerce sites bestbuy.com, neimamarcus.com, marthastewart.com, and kodak.com. He was also the VP of Product Management and interim Chief Technology Officer of LivePerson (Nasdaq: LPSN). LivePerson's flagship live chat service enables call center salespeople to engage in sales conversations with people who visit a company's website. The company is the market share leader in its industry. Victor was part of the executive team that took the company public in a successful IPO. And he's the author of three books, including one entitled Bookmercial Marketing: Why Books Replace Brochures in the Credibility Age -- sound like a familiar theme we've been promoting for years? WRITE A BOOK! It's a perfect thing to do during a downturn.

Investment in Education Fuels "Gazelles" Growth Companies -- and this latest news from the Private Company Index (PCI) -- there is a correlation between companies investing in education, especially sales and marketing education, and growth performance. Shouldn't be surprising!

Founders Outperformed Hired-Guns or Internally Promoted CEOs -- Sarah Weiss, HR Director for The Audit Group pointed me to this story in Forbes (which I'm not allowed to read as a Contributing Editor at FSB magazine :) ). It compares the performance of technology firms between founder-led, hired-guns, and internally promoted CEOs. I would be careful concluding too much from the article since I question the robustness of the research and the possible bias of the organization doing the research (a recruitment firm!). However, the founder performance does correlate with other studies I've read.

Contrarians Win -- i.e. buy when others are selling (or do the opposite of what guys like me suggest!). For me, I find the same with travel. I've spent more money travelling in the past seven months getting face-to-face with my market than ever before. And I've spent more time on the phone with people than ever before. I hear so many companies cutting back on travel, however, now is the time to get out and see people while everyone else is staying home.

DETAILS:

Thomas Kascha's summary of Jim Collins' interview, which he posted on an interesting website www.stopcrisisnow.com -- I find the first point the most fascinating:

Crisis is Normal -- Get Used to It!

• the past 50 years was an aberration in economic growth spurred by stability & unprecedented prosperity
• in effect, the normal times, as we know it, are actually abnormal based on historical facts

Values Must Endure Time

• what's important is not "what" our values are, but that we have values at all
• the more challenging the times, the more we need values; they keep us in check

It's All About People

• hire the best for each position, train & coach them
• DON'T stop hiring; especially in crises, because during these times, the best people are overlooked
• the best people are responsible; they DO NOT need to be MANAGED

Look to the Future

• plan for the long-term; what is apparently unnecessary now may be vital for the future
• this is especially applicable to People, Systems, and Processes
• be mindful of trends

Crisis is Our Friend

• crisis brings out the best in us
• when we survive, we are more prepared to take on challenges for both good times and bad

Don't Just Stand There... Do Something!

• we cannot afford to be indecisive; we must choose to act on all challenges
• if we choose to become defensive, we live to fight another day
• if we choose to become aggressive, we need to ask: "how can we change the world with our plan of action?"

Balancing Faith and Reality

• we must believe in our capacity to survive and thrive, without becoming oblivious to the brutal facts
• we must use the facts to craft a plan of survival and prosperity
  

Who Will win; Ken Sims Approach-Results; Mike Jaggers Expense Tool; Samantha's CEO Challenge

"...keeping you great"

HEADLINES:

March 17 LIVE Webcast with LEAN expert Guy Parsons -- 11:58am -- 2pm EST (US) -- and available afterwards if you miss it in archived form. Go here to sign-up. The first company in ANY industry that embraces LEAN will dominate their industry -- mark my word.

Doubled Sales, Doubled Call Center Volume, Eliminated Inventory, Made More Money etc -- Nurse Next Door Powers Business using LEAN -- the storm continues to rage in Canada -- another Vancouver-based company, Nurse Next Door engaged Guy Parsons for a set of LEAN initiatives in 2008. Results? Here's the list Ken Sims, co-founder, sent this week:

0. We have grown by 100% over the last year / have done it with 22 head office people vs. 30 last year.
   
   
0. Our payroll and billing accountant's biggest challenge this year -- she is bored/has nothing to do half of her time because her job has become so easy (vs. last year when she had to come in evenings and weekends to get her job done). We are now teaching these LEAN techniques to our franchise partners so they can work on growing the business vs. doing payroll all day.
   
   
0. 2 years ago, it was a challenge to add 1 new franchise partner each quarter. Now we add 2 per month (can add up to 5 per month without breaking a sweat).
   
   
0. Our call centre can handle 2x its current volume without adding a single person (which helps us reduce fees to our franchise partners).
   
   
0. With the elimination of process steps, we are making training of franchise partners / franchise partner's workflow easier (make more money)
   
   
0. Inventory levels have been pretty much eliminated (our franchise partners do not require as much capital to start / run their business).
   
   
0. We have reduced waste from a North American industry average of 95% to approximately 90%. While this doesn't seem like a lot, another way of looking at it is we doubled the size of our company (going from adding 5% value to 10% value = 100% gain) before you consider any top line growth.
   
   
0. Our lean initiatives are a major (but not only) reason why we (and our franchise partners) have been able to thrive in this terrible economic period.

Concludes Sims in his March 9 note "And this is just scratching the surface!" Thanks to Cameron Herold for forwarding this note to me.

BTW, Nurse Next Door Racks up Major Award -- announced on March 3, they were named North America's 6th best midsize franchise system by Franchise Business Review (FBR) on its 2009 Franchisee Satisfaction Awards top 50 list. Congratulations.

Adds Customer Value or it Doesn't -- In a follow-up note from Mike Jagger, founder of Provident Security, who championed bringing Guy Parson up to Vancouver for the EO chapter "The thing we did was divide all of our costs into two columns, things that add value to our clients and things that don't. We have a huge IT investment that we require for our monitoring business, which adds client value. However, our clients don't care who hosts our email... So we cancelled our scheduled server upgrade for our exchange servers and are migrating the entire company to gmail. First year savings on the hardware, software, management and support for that is just under $60k. We've got another great (LEAN) tool now to help us look at the business in a very different way." At your next weekly or monthly meeting make your list.

Chet Holmes On-Demand -- over 1200 executives have dialed into Chet Holmes teleconference on doubling sales in 2009. With his permission, he's allowed us to archive his 30 minute presentation for you to listen to anytime on-demand -- here's the link.

Sales Contest -- and this great idea (of course I loved it) from Samantha Belin with SmartCEO magazine after listening to Chet Holmes teleconference on how to double revenue "I told Craig (our publisher) that he should have a sales contest and the winner can go to the April 21st-22nd Sales and Marketing Summit in New Orleans. :-) We'll see what happens."

FYI, Hotel Room Conference Rate ends Friday, March 20 for our two-day Sales and Marketing Summit in New Orleans. If you're planning to attend, at least make your hotel room reservations before next Friday to get our conference rate. Go to this link and scroll down the right hand column to get the conference rate code and call-in information

Drive Revenue, Eliminate Waste -- Gazelles is doing what it can, during these turbulent times, to bring you the most practical, actionable tools for thriving -- now is the time to pounce on the competition -- out learn, out execute, and out compete them while they are weak. Just keep listening and learning -- and that ONE idea -- that one Black Swan moment -- will arrive. But you have to stay in the game!

Buffett's Four Simple Rules; John's Fault; Most Important Tool for Growth Firms; LEAN Webcast March 17

"...keeping you great"

HEADLINES:

Warren Buffett's Annual Letter is Out -- my favorite excerpt is below, but first...

Most Important Tool to Hit Growth Firms -- March 17 next LIVE video webcast with LEAN guru Guy Parsons 11:58am -- 2pm EST (US) -- and archive available afterwards -- don't miss learning about the most important tool to hit growth firms -- sign-up and also access Pat Lencioni and Seth Godin's webcasts.

Drive Revenue, Eliminate Waste, Save the Team -- I've been pushing hard on tools and techniques for driving revenue. Next I want to push on the waste side (you have much more than you think -- see definition of 'waste' below!). Many of you have heard me say "the first company in any industry that fully embraces the Toyota LEAN methodology will dominate their industry." Toyota, so far, has had no layoffs -- and I'm betting they come out the strongest of all the weakened competitors. It's not by accident. Now is the time to put their practices to work in your mid-market firm -- service or manufacturer.

It's John's Fault -- John Stepleton, who built a 500-person, three-time Inc 500 winning research company, was the first CEO to turn me on to the Toyota Production System called LEAN (I thought it was just for large manufacturing firms) -- and he implemented LEAN inside a non-manufacturing business model. So successful was his implementation, he was recognized by the Northwest Shingo Prize as an innovative implementation of the LEAN principals.

$10/hour Employees Realized 28% Productivity Improvements within a Week -- in a note from John this week, he shared "What better time to take the plunge. With the economy struggling, it is the perfect time to begin integrating LEAN into your business. I began my journey more than four years ago and of all the strategies I've implemented over the years (and I've tried a lot of different things) -- LEAN proved to deliver the biggest bang for the buck. If you're not sure it's right for your business -- I implemented LEAN into my call center business where I had $10/hour employees engaged in continuous improvement programs that realized productivity improvements of 28% in time periods as short as one week."

All of Vancouver Doing LEAN -- 100 Times Easier Than Six Sigma -- OK, not quite all of Vancouver, but it seems many of the CEOs in Vancouver have grabbed onto the LEAN movement, led by Mike Jagger, Provident Security (who has already saved $60k from his LEAN initiatives). And they've been using Guy Parsons, the co-founder of the Lean Institute, to teach them. What's brilliant is the simplicity of Parsons' approach to eliminate waste. In turn, you take the time your people get back from eliminating wasted efforts, steps, activities, etc. and re-purpose people to serve customers, make sales, and grow the business.

Five Minute Video on LEAN -- Jeff Booth, CEO of BuildDirect  is one of those Vancouver CEOs implementing LEAN to dramatically speed up the time it takes to get a new vendor up on his website among many initiatives (BuildDirect provides high quality, low cost building materials via a website www.builddirect.com -- check it out if you're remodeling!), Jeff has produced a five minute video interview of Guy Parsons that explains LEAN to his people and details how they are using it in his web-based distribution company. Here's a link which will help you decide if you want to tune into the LIVE webcast with Guy Parsons on March 17

What We Can Control -- notes Booth in his latest blog "One of the things that a company can control in a market like this is operational excellence, by removing waste in a system. Waste is easily defined as anything that happens in a company that a customer would not want to pay for. Guy Parsons, President of Value Stream solutions and co-founder of the Lean Institute is one of the thought leaders in lean thinking. I hope the video helps. I would love your thoughts."

Warren Buffett's Four Simple Goals -- here's my favorite excerpt from Buffett's letter to his shareholders -- take this list to your next CEO Council or monthly management meeting and discuss:

"In good years and bad, Charlie and I simply focus on four goals:

(1) Maintaining Berkshire's Gibraltar-like financial position, which features huge amounts of excess liquidity, near-term obligations that are modest, and dozens of sources of earnings and cash;

(2) Widening the "moats" around our operating businesses that give them durable competitive advantages;

(3) Acquiring and developing new and varied streams of earnings;

(4) Expanding and nurturing the cadre of outstanding operating managers who, over the years, have delivered Berkshire exceptional results."

Panhandler Secret -- I get Seth Godin's blog everyday (so should you) -- and this one earlier this week was particularly insightful because of Seth's story about a panhandler and his secret to success.

Haute N the Kitchen -- if you're a foodie, check our Heather Antonelli's just released book entitled Haute n the Kitchen: Entertaining Inspired by My Travel and Traditions. Early Rockefeller Habits fan and BOGer, Heather enjoys exotic travel and food. And if you're into food and interior design, check out her blog as well.

#1 Sales Mistake; Five Fastest; Best Use of Twitter; Grade Your Website

"...keeping you great"

HEADLINES:

People who own tomorrow are preparing for it today. African Proverb

I could use your help if you're a fan of my book (see below), but first...

Don't Sell Benefits, Focus on Loss Avoidance -- Dr. Victoria Medvec, the negotiations guru from Northwestern University, flew across the pond to keynote our Sydney Growth Summit. As many times as I've attended her four hour course, I had missed this critical piece of advice. Especially during downturns, STOP pushing the benefits of your product/service. Customers aren't interested, especially when they are highly risk adverse right now. Instead, you MUST emphasize the additional losses they'll experience if they don't consider your product/service. People switch to avoid losses; they don't switch to get gains. Read this paragraph over and over and then sit down, set aside your list of benefits, and make a list of all the losses your customer will garner if they don't urgently buy your product/service.

Five Ways the Fastest Growing Firms are Continuing to Grow -- Ernst & Young sponsored our Summit in Sydney this week. Jon Dobell, who leads their Strategic Growth Markets practice and their Entrepreneur of the Year program, shared research garnered a couple months ago from over 250 interviews of Australia's leading firms who are growing ahead of the market. They found these five strategies:

0. Expand into new geographies -- a way to grow the existing sandbox
0. Target one particular market and dive deep
0. Pursue new acquisitions -- many are very inexpensive right now
0. Drive reoccurring revenue -- helps secure the base
0. Focus on cross-selling

BTW, for those who listened to Michael Praeger's teleconference this week, CEO of AvidXchange, driving reoccurring revenue has been a key to their growth during these turbulent times -- here's a link to listen to an archive of that 30 minute interview of a peer.

Most Interesting Fact -- while all the speakers shared gobs of data, the most interesting statistic came from Ross Dawson, Chairman of Future Exploration Network. He compared the size of the global economy to the physical weight of all products and services (I didn't know this statistic existed!). In essence, if and when the global economy doubles in size, the global weight will stay the same. This means essentially all the growth will come from stuff that weighs nothing i.e. knowledge. Content Rules.

Grade Your Website -- Naomi Simson, founder and CEO of Sydney-based Red Balloon, mentioned a free tool that grades your website for SEO (search engine optimization) construction i.e. how easy is it for Google to find your website. Go to http://website.grader.com and type in your URL.

Manage Remote Contractors/Free Agents -- though this feels a little Big-Brotherish, check out oDesk. One of the challenges of hiring free-lancers/subcontractors from around the world, who charge by the hour, is knowing if they are really putting in the hours for which they are billing you. The oDesk tool captures an actual time-sequence of the work the freelancer is doing on their computer and time stamps it. And if the free-lancer has a remote webcam, it will even show them working (this is optional!). Much easier to understand if you just take 60 seconds and look at the website. And the website also helps you locate subcontractors, who have all agreed to utilize the system to track work.

Best Use of Twitter -- there was a great deal of talk about web 2.0 and enterprise 2.0 solutions for companies. Though this wasn't shared at the Summit, Shannon Blake Gans, head of New Deal Studios, sent me a note this week "I thought you would enjoy this story. Heard about Kogi, a Korean BBQ restaurant, on PRI. They use Twitter to tell people where their BBQ taco truck is going to be here in LA and 200 people show up. Now that is a good use of Twitter!" I couldn't agree more. And I love their tagline: We gives you zey grubbin, thanks for zey lovin!

@thegrowthguy -- so at the urging of Mike Jagger, CEO of Provident Securities, I now have a twitter address @thegrowthguy. However, I've been really struggling with what to use it for. Two of the best ideas I picked up at our Sydney Summit:

0. Let your "followers" know where you are physically i.e. "I'm in Sydney for three days" -- you might connect with someone you didn't know was there as well.
0. Ask a question -- twitter is a great way to garner some wisdom from the crowd i.e. "what is the best tapas bar in Barcelona?" or "which application do you use to...?"

Note from Fred Crosetto, CEO of Seattle- and China-based Ammex -- "One of our 40 SSK (Start/Stop/Keep) goals for the year, which we are diving into in Q1, is to undertake 50 hours of sales training for anyone that interacts with clients. We are starting out with Victoria Medvec's DVD and plan on driving the Synchronous Presentation concept across the company. It's a mystery to me why companies cut back on learning and training in down time. Now is when more focus should be put on training and capturing opportunity." To not teach your sales team Dr. Medvec's process for dramatically reducing sales cycle time is to leave the door open for your competition to beat you to the sale.

Help -- if you feel Mastering the Rockefeller Habits is one of the best management books for entrepreneurial firms I would greatly appreciate you emailing a short note to [email protected] -- they are compiling a list of the top books in various categories and I would like to get on their radar. Thank you immensely.