The Agile Scaleup

Jim Collins Top Ten Books; Jim Collins Key Disciplines; Jim Collins Interview; Power of PICS

"...keeping you great"

HEADLINES: (Growth Summit Highlights Day 1, 2 minute interviews)

Best News from Jim Collins -- THE question that got the attention of a lot of entrepreneurs and their teams in the room last week was when Jim was asked whether founders were able to actually build a company beyond start-up i.e. would they be able to go from telling time to being clock-builders. And the answer is yes!! In the great companies it was NOT the case that the entrepreneur had to be replaced with professional management. Whew! This was reinforced with Hermann Simon's research that the tenure of the founder/CEO in Hidden Champions was over 20 years.

Jim Collins' Top Ten Books -- Jim spoke for over 3.5 hours, so difficult to summarize everything, however, here's a link to a short 2 minute interview I conducted asking him about the specific disciplines necessary to build a great company. There is also a lengthier interview available as well -- both in the right hand column at www.gazelles.tv. And below are listed Jim Collins top ten recommended books and top ten courses.

Aubrey Daniels takes on Dan Pink -- Aubrey carefully corrected Pink's assertion that traditional rewards can't drive creative thinking -- here's the link to a short 2 minute interview where I asked Aubrey to elaborate on his Dan Pink comments (www.gazelles.tv -- in the right hand column). More to Aubrey's point, most reward/compensation schemes are useless in driving performance since they are not reinforcing to the performer, whether it's highly creative problem solving work or routine process activities. What does work all the time are PICs -- Positive, Immediate, and Certain reinforcers. The best example? A scoreboard!! That's why the BHAG video scoreboard, posted where everyone can see it at Australia-based Red Balloon, is such a powerful tool. Go to right hand column of www.gazelles.tv and look for the "BHAG -- Red Balloon" video to see their BHAG scoreboard.

Theme/Celebration for 2009/2010 -- and to add a little spice to the Growth Summit, we featured Gazelles customer Wide Open Baja (Christian Hammarskjold, CEO) and one of their $100k high-performance off-road vehicles. If you're looking for a reward for your team for doing a great job, a place to host your strategic planning session, or a customer appreciation event, it's one of the best I've found. Check out their executive excursions and Horsepower Ranch at www.wideopenbaja.com NOTE: Gazelles isn't receiving any compensation for this -- we're just enthusiastic supporters since we know how hard it is to come up with fun executive activities and rewards.

Do you need expert assistance constructing a winning plan for 2010? -- At the Summit, Jim Collins talked about how the best companies are actively taking advantage of the current market conditions to come out as big winners. Are you playing to win in 2010 or not to lose? Take the time now to block out two days to work with your team to develop a solid plan for 2010. If you need help with your Annual Planning, Gazelles can help you. Contact Cindy Praeger at Gazelles ([email protected] or 704-996-0399). If you sign up before December 31, we will help you jumpstart your plan with 1 free month of Rhythm Execution Coaching and Software.

Feedback from Benetton India -- and India Tour Dec 1 -- 3 -- I'll be leading one day workshops in Mumbai Dec 2 and Bangalore Dec 3. I'll also be leading another private session for Benetton India -- this note from Sanjeev Mohanty, CEO of Benetton India post our first session earlier this year. "During our session we had set up a challenging target of 65% growth for the 3rd quarter. I am happy to share that we have achieved this target! We had launched a very creative campaign across the organization and charged up and motivated everyone with the same and it was a great experience. This is an amazing achievement as most of our competitors are either no growth or even worse, de-growth in business. The most amazing part of the story was that more than the sales guys the supply chain, design, manufacturing and HR guys were chasing the numbers on an hourly basis." The Rockefeller Habits tools are effective across various cultures.

Jim Collins Top Ten Lists:

Ten Books Jim Collins Recommends

1. Churchill, The Second World War
2. Caro, Master of the Senate
3. Goodwin, Team of Rivals
4. Bernstein, Against the Gods: The Remarkable Story of Risk
5. Lewis, Moneyball
6. Homer, The Iliad
7. Drucker, The Effective Executive
8. Gardner, Self-Renewal
9. Lewis, Assault on Lake Casitas
10. Manchester, Goodbye Darkness

Jim Collins Top 10 Great Courses from the Teaching Company

1. How to Listen to and Understand Great Music by Robert Greenberg.
2. Great American Presidents
3. Argumentation -- The Study of Effective Reasoning
4. What are the Chances? Probability Made Clear
5. Economic History of the United States, 1900 - 2000
6. Art Across the Ages
7. Dante's Divine Comedy
8. Emperors of Rome
9. The History of Ancient Egypt
10. History of Modern Russia + From Yao to Mao -- 5000 years of Chinese History

China's Top 10 Companies; Buffett's Investment in China; John DiJulius's Summit Nov 5-6

"...keeping you great"

HEADLINES: (Focus on China for a few minutes this week)

China is Coming with Quality -- Hermann Simon, author of Hidden Champions of the 21st Century, just returned from a visit to China last week before speaking at our Growth Summit yesterday. He brought news that Chinese firms are focused on building competing quality products that will challenge even Germany's lead in many export areas -- and that they are building factories in Germany and the U.S. and other parts of the world. They want to get "in our backyards" before we get in theirs! With over $2 trillion in surplus cash (vs. the U.S. $9 trillion deficit), they have the financial muscle to do it.

China Moving Up the Value Chain -- a recent  Fortune article entitled "It's China's World. (We just live in it)" describes how China is now focused on moving up the value chain, not satisfied with just being the world's factories. In areas of real estate, oil production, banking etc. this article is worth taking a few minutes to scan. My message to you, since most of you are in service businesses: it may be too late for our manufacturing friends, but we need to get our service models and brands into China before they get in our markets. China will continue to move up the value chain rapidly and they have our business models to copy (but difficult to copy our customer service cultures!)

China's Top 10 Companies -- to continue with this mini China lesson, take a few more minutes and scan this list of the top 10 companies in China -- as business owners we should be aware of what's happening around us and be familiar with the rising business landscape.

Buffett Invests in Chinese Auto Manufacturer -- and while we're on the subject of China, just a reminder that Warren Buffett invested $230 million earlier this year for a 10% stake in a Chinese electric car and battery manufacturer called BYD. As this Fortune article notes, this was a real departure for Buffett since he tends to only invest in companies in which he understands the technology. Again, worth a few minutes of reading to see Buffett's take on China.

Keep Your Brand in China -- I've asked one of our best customers, who has been doing substantial business in China since the late 80s (one of the first U.S. firms to do so), to advise Gazelles on setting up operations in China. His first advice is "not to split the brand." And Hermann Simon's research shows that the Hidden Champions set up wholly owned subsidiaries in China (almost all the Hidden Champions are there) with their own people on the ground vs. simple licensing or JV arrangements.

Secret Service Summit Nov 5, 6 -- no, not for the intelligence community but for those of you that know that customer service is how you differentiate your company from your competition (and China). This is John DiJulius's Customer Service Summit in Cleveland. I'll be keynoting along with seven others including the top execs from Zappos, Ritz Carlton, Nordstrom, The Melting Pot, and Hallmark -- companies known for their exceptional customer service practices. Here's a link to more information -- hope to see many of you in Cleveland in a couple weeks.

Obama's Nobel Prize; Book of Failures; Torres Black Book; Seth Godin's Tactics

"...keeping you great"

HEADLINES:

Book of Failures -- Fortune Small Business is looking for stories for their Owner's Manual section in the magazine. This is a story where an entrepreneur describes a business mistake s/he made and then goes on to describe how s/he learned from the mistake and went on to prosper. Email [email protected]

Book of Failures, part 2 -- during my call with Jim Collins, in preparation for his presentation next week at the Growth Summit, he reflected on how rare it is that we study failures vs. successes which is how his latest bestseller, How the Mighty Fall, came to fruition (we hope your team will tune-in to his LIVE webcast if you won't make the Summit). A week later I heard of a concrete process by which a centuries old firm has done just this -- systematically documenting and learning from its past mistakes...

Black Book of Torres -- ...Miguel Torres, 5th generation of Torres Wines (60 million cases, 140 countries, 300 year old vineyards), spoke at the EO University in Barcelona. During his presentation he described their "Black Book of Torres" which formally documents the mistakes they've made going back 50 years! Whenever a mistake is made, the person responsible writes it up in the black book -- then whenever anyone is hired, they are required to read the black book -- obviously, the importance of studying failures. BTW, the last entry had to do with the CFO not listening to the rest of the executive team which strongly advised against a certain currency hedge resulting in a $200k loss. Stuff like that.

Building Books (or anything) That Sell in the Digital Age -- Seth Godin, the marketing guru, has written 10 bestsellers. And he's used some non-traditional tactics to promote his books. In a recent blog post he linked to a video of a presentation he gave eighteen months ago where he details the tactics he used to sell books -- tactics he thinks can help you sell anything in the digital age. For those of you writing books as a promotional tool for your business, this is a must watch -- for the rest of you, there are powerful marketing lessons in this video -- watch at your next weekly marketing meeting.

Book to Attend Seth Godin's Workshop -- Nov 19, NYC -- $880. And I might be too late in announcing, but Seth is offering a rare one-day public marketing workshop -- come learn from the #1 marketing guru of our time.

Would You Call a Book "Book" -- Brad Skelton, CEO of Brisbane-based Skelton Sherborne, has a BHAG to win 95% of their business without quoting. In the meantime, they still have to send out quotations and he wondered, first, if there was something better to call them. They've been using "Rate Confirmation." Second, he wanted to know how to properly position his price in the rate confirmation. So we posed the question to Mark Burton of Holden Advisors, the pricing guru that spoke at the Sales Summit:

"One of the top experts in proposal writing is Tom Sant. Tom is a friend of our firm and one of his key pieces of advice: Never title your proposal "Proposal" which doesn't say anything the client can't figure out themselves. But, oddly enough, that's what most proposals are titled (it's a little like writing a book and titling it "Book", isn't it?). Instead, try writing a substantive title that states a benefit to the client: Increasing Network Reliability and Convenience Through Automated Fax Capabilities. So using Tom's advice, every proposal is a means to further position and confirm your value -- right on down to the title at the top of the page. Brad should consider a series of high-impact titles that reflect the value that his team delivers to customers."

Price is About Trust -- continued Burton "A key driver in presenting price is trust. Shipping can be a complex business and I'm sure that many shipping firms use this complexity to layer in fees. As soon as a customer feels like they have to read the fine print, trust is being eroded. So anything that Brad can do to keep things simple and as obvious as possible will be consistent with the way that he is trying to position the business development and affirmation process."

John Assaraf's Book out in Paperback -- I'm a fan of his book The Answer and his use of vision boards -- a concept anchoring the new EO Injected program (for companies over $15 million in revenue and/or seven years in EO). The Answer is now out in paperback -- pick up plenty for your team.

Obama's Nobel Peace Prize -- and this column brought me to tears -- and I read it to my children. Thomas Friedman remains my favorite Op-Ed columnist of all time. Read (if you're a U.S. citizen) his piece on what President Obama should say when he accepts the Nobel Prize in December.

Embezzled Cash; Killer Cash; Cashing In

"...keeping you great"

HEADLINES:

Cash From Patents -- FORTUNE Small Business Magazine is looking for a U.S. business owner or entrepreneur who has a patent or patents in their name. If so, they want to know whether that patent has been of any value to you and/or your business. Have you ever had to defend your patent in court and were you successful? Have you ever reaped any financial reward from owning a patent? Do you think the cost of filing for your patent(s) was worth it? Whether the answer is yes or no, they would like to hear from you, so if you think you fit the bill, or know of anyone who does, please contact Malika ASAP at [email protected].

Killer Cash Position -- John Ratliff, founder of Appletree, relied on a big line of credit (LOC) to support his growth. Not anymore. They just finished the best quarter in their history (answering phones!) and more importantly their best cash position ever with no need for the LOC. The key? A daily cash report. Noted John in an email this past week "I have been attending your sessions for nearly 4 years now...however hearing you say over and over to get a report of your cash position every single day never really resonated with me."

Daily Cash Report -- continued John "we have a great bank relationship, big line of credit and pretty healthy cash flow so I never really paid too much attention except monthly. We would be in and out of our line of credit 2 or 3 times a month, never for all of it, sometimes half but that is about the most we used. Finally it dawned on me that it was stupid to be doing that, so even though we were not in crisis or even mildly in danger I was majorly annoyed. So, I started getting cash reports daily (only took 15 years!) and wow what an insight that is. Today is September 30th, close of the 3rd quarter (hard to believe) and we just finished the best quarter in our history, and maybe more importantly our best cash position ever! No LOC use this month and a killer cash position. Thanks for finally getting the cash message through my thick head."

Embezzled Cash -- Jay Goltz, owner of Chicago-based Artist Frame Service and dear friend, wrote a scary piece for FSB magazine this week -- the con artist he hired as his accounts payable person who embezzled $75k of cash from him. Take two minutes and read his lessons learned. It's critical that you have two separate people handling your banking -- one person accountable for tracking the money coming into the company (treasurer/receivables); and a second person accountable for tracking the money leaving the company (controller/payables). Receiving a daily cash report also goes a long way to preventing embezzlement -- you can see daily changes tied to specific checks issued and amounts collected that let you see odd patterns of activity.

Free Cash Flow -- are your executives financially literate? A sample of C-Level executives to supervisors was asked to take a basic financial literacy exam and they flunked, scoring on average 38%. Most operations managers, marketing execs, etc. couldn't distinguish between cash and profit or an income statement from a balance sheet. And 70% couldn't pick the correct definition of "free cash flow." Here's a link to the results and some of the questions. As the study notes, it's hard for managers to increase cash when they are unaware of the balance sheet levers they could pull to increase cash flow. Thanks to Gary Moon, Managing Director of Ridgecrest Capital Partners and fellow Barcelonan now, for pointing me to this October 2009 HBR article.

Cashing In -- and this note from Rich Manders, Founder/President of AutomationSolutions, "As you may recall, using the skills gained at the MIT 2005 classes you taught and lots of help from EO and friends I was able to sell my business to a private equity firm. The Rockefeller Habits was a key to our high profitability and high multiple we received." It's our continued experience that companies that implement the Rockefeller Habits achieve superior profitability and valuations. Let us know if we can help.

Putting Cash to Work -- no book has more profound impact on my thoughts about money than Lynne Twist's Soul of Money. As she suggests, money is like water -- it's meant to flow with positive intention. For those that know how to properly put money to work, more money will flow to them; for those that hoard money or use it for bad intent, it will tend to stop flowing. Get the book (or hear her speak at the Growth Summit Oct 21) and be sure to read Chapter 5 first.

Reduced Jim Collins Webcast Price

"...keeping you great"

HEADLINES:

Messed up Jim Collins Webcast Pricing -- OK, I've heard you loud and clear -- you don't like to be muscled into things you don't want! So, I'm unbundling the Jim Collins' LIVE video webcast and offering it alone -- same pricing as our other webcasts -- $495 company license (unlimited viewers from same company); $199 individual license (one computer/viewer). And we're using the honor system -- if you're going to show it to a bunch a people at the company, please pay the company license. Here's the link to sign-up.

Two Segments -- Jim Collins LIVE Webcast October 20, 9am -- 1pm ET -- Jim will actually speak in two segments. There will be a ninety minute segment 9am -- 10:30am ET; thirty minute break; and then a two hour segment 11am -- 1pm ET on Oct 20. And it will be archived for 24 hours so you can watch part of it LIVE and then watch the other part the next day if you like -- and this is also to accommodate our international viewers so they can watch at a convenient time for them.

Available for 24 Hours -- however, let me be clear that Jim's webcast is ONLY archived for 24 hours unlike the other webcasts. This we can't change. If you do sign-up and for some reason miss the webcast LIVE or within the 24 hours, we'll be reasonable and refund your money.

David Allen and Robert Cialdini Webcasts -- two of the other biggest names in business, their webcasts are still available as a bundle with Jim Collins -- all three for $995 company license; $199 each for individual license. These will be archived for 3 months, so you have more leeway when you watch them. David Allen Oct 21, 2pm -- 4pm ET; Robert Cialdini Nov 17, noon -- 1:30pm ET. Here's the link to sign-up.

What Motivates Billionaires; What Motivates Us; What Motivates Them

"...keeping you great"

HEADLINES:

Motivate U.S. Senator John Cornyn -- anyone know him well?

What Motivates Us -- OK, so maybe I'm late, but I'll jump on the bandwagon and encourage you to watch 9 minutes of this 18 minute presentation by Dan Pink at the TED conference in July (the entire 18 minutes is fantastic where you learn about the famous candle experiment, but for those with less time, go to the 9:12 spot). Pink, author of the hugely popular A Whole New Mind: Why Right-Brainers Will Rule the Future and Drive: The Surprising Truth About What Motivates Us (Dec 2009) attacks some of the incentive-based approaches companies use (excellent for non-thinking work) and suggests that Autonomy, Mastery, and Purpose (vs. Carrots and Sticks) are the intrinsic motivators needed for those that have to create, design, and think for a living. Thanks to Richard Lethin, CEO/Owner of NYC-based Reservoir, an outsourced R&D firm, for pointing me to this powerful presentation.

Atlassian Motivates Programmers -- and at the 13:45 point in the presentation Pink highlights Atlassian, an Australian software firm (and fan of the Rockefeller Habits) that created a clever variation on Google's 20% rule for programmers. They call it their FedEx Days (because you have to deliver something overnight) where several times a year they take 1.5 days (lunch Thursday to 4pm Friday) and let programmers jam on any project they desire -- then results are shown and winners chosen. Here's a short description of this crazy irregular event that has created important features/updates to their software. Pink highlights this as an example of Autonomy.

What Motivates Billionaires -- Rick Sapio, founder of Mutuals.com and now head of Mutual Capital Alliance, spent last year with thirteen billionaires, interviewing them, hanging with them, and partying with them (Richard Branson) -- and he's distilled what he calls the Billionaire Mindset. Rick reviewed his results with me and they are truly insightful. Rick is going to present his findings at the Growth Summit in Dallas -- thanks Rick!

If Muhammed Ali Motivates You -- Ken Sim, co-founder of Nurse Next Door (who is also sharing his lessons from implementing Lean at the Growth Summit), sent me this note from his friend "We are showing clips of a new Ali documentary film at Lumiere at 6 pm on Oct 8. My friend David Sidoo is putting up dinner and wine at Vancouver's #1 restaurant and Ali will come for a couple of hours for photos etc. His faculties are muted but....Only come if you are a fanatic like me. It is $5,000 a person (20 people) and the money goes to Ali foundation and Imagine One Day." Reply to this insight if interested.

Motivate you to Register -- Oct 2 Conference Program Deadline -- you can register for the Growth Summit up to the last minute. However, if you would like your company and team listed in the conference program, please register by tomorrow, Friday, Oct 2. See you in Dallas in a few weeks. We have the largest crowd we've ever had -- it's the place to be for 48 hours.

Motivate you to Tune-In -- and if you can't make the Growth Summit, at least tune-in. We're video webcasting Jim Collins and David Allen LIVE from the Growth Summit -- and Jim and his team (I had my call with Jim Monday night -- I'm super excited about what he's presenting especially for us) have allowed us to archive for 24 hours so those in different time zones around the world can view at a reasonable time. Here's a link to sign-up.