The Agile Scaleup

#1 Book Canada; $170 Million Tograding Story; CEO of Zappos

"...keeping you great"


HEADLINES:

"He has a home" -- living in no place for more than 8 months, T.J. Peeler was taken in by a family when he was 14. Four years later, he'll be the first in his original family to graduate from high school and he'll have a full ride football scholarship to University of Pittsburgh, as one of Virginia's top high school running backs. It's a modern-day "Blind Side" story in our own backyard. And his goal? "I just want a family and kids, that's it. I just want to be a man and take care of my kids."

Joanne and John Costello -- The community in this story is Ashburn, VA. The family is our own Joanne Costello and her husband John. Joanne runs operations for Gazelles; John is the local high school (championship) basketball coach. Please take five minutes to read this heart-warming cover story in the Washington Post last Friday (and click on the photos -- there is definitely some resemblance between Joanne and Sandra Bullock). Joanne and John are truly "A+" people -- at work, in the community, and at home -- and this is a perfect holiday story worth sharing with your children. We are so proud of them!!! BTW, TJ's team did win a second state championship last Saturday.

#1 Book in Canada, #5 in China -- speaking of "A" players, it was announced this week that Geoff Smart's book entitled Who: The "A" Method of Hiring, was named the #1 best business and management book for 2009 in Canada by The Globe and Mail newspaper. A month ago, it was named a "Top 5 Business Book for 2009 in China" by the Shanghai Daily (the Chinese get it). And a year ago, it hit every major bestseller list in the U.S. after being ranked #1 out of 2.4 million titles on Amazon the two weeks following its release.

$170 million Topgrading Story -- and yesterday, Brad Smart, Geoff's father and the father of Topgrading, shared the story of 28-year old genius Aaron Patzer, who earlier this month sold Mint.com to Intuit (Quick Books-fame) for $170 million. Patzer is staying on as the head of a new personal finance division for Intuit. Patzer credits Topgrading as critical to his success, helping him achieve a 90% successful hiring rate (no time for amateur-hour hiring practices). Patzer's amazing story is below. And take a look at Mint.com's Dec. 4 amusing video questioning the U.S. government's unemployment statistics.

Geoff Smart Jan 21 Webcast -- Gazelles is hiring (new person in January) and I hear that many of you are as well. As such, Gazelles' top 250 customers will receive a holiday gift of Geoff's book next week. And on January 21 we kick off a new Growth Series of LIVE video webcasts starting with Geoff Smart January 21, noon -- 1:30pm ET walking you through the details of hiring "A" players. This webcast will be highly instructional, not just an overview of the book. $199/individual; $495/company license (unlimited browsers) and it will be archived for a year. And the three month series will be $995/company license. The other three webcasts:
 

	Geoff Smart (People) January 21 noon -- 1:30pm ET -- author of bestseller Who: The "A" Method of Hiring
	Jeff Jarvi (Strategy) February 18, noon -- 1:30pm ET -- author of bestseller What Would Google Do?
	Chip Heath (Execution) March 25, noon -- 1:30pm ET -- Stanford Prof and co-author of bestsellers Made to Stick and Switch: How to Change Things When Change is Hard which will be released Feb 16, 2010

Monthly Web-Based Education -- schedule it now for 2010 and "...keep your management team great."

MOVED TO VEGAS -- Sales and Marketing Summit, April 20 -- 22, we landed Tony Hsieh, CEO of Zappos, as a keynoter. And the Gazelles 22 participating executives will have a private tour of Zappos Headquarters, which is in Henderson, NV, so we moved the event to Vegas. The rest of the faculty is set as well -- here's a link for a sneak peak. On Thursday, April 22 (since there are limited flights out Wed night) there will again be three half-day workshops including one led by Eric Keiles and Mike Lieberman, authors of my favorite "how to" marketing book Reality Marketing Revolution.

Aaron Patzer Story -- from Brad Smart's "Topgrading Tip" (to listen to this Topgrading Tip, click here)

This short case study is amazing, the title is not hyped, and the case study has some great lessons for all managers.

Meet Aaron Patzer, founder of Mint.com, and a 28-year old who just sold his company to Intuit for a cool $170 million. I read that he attributed some of his success to using Topgrading methods. So I called Aaron, and here's a brief version of his story ...

Aaron grew up in Indiana, got into computers at age six, paid for school by designing websites starting at age 16, graduated Duke in computer sciences and electrical engineering, dropped out of a Ph.D. program at Princeton, and received a MSEE instead.

He joined IBM, got three patents on Play Station and quit because IBM seemed to promote people on the basis of seniority and Aaron guessed he would not have a fun job for more than a decade. He joined a start up, wrote code and soon he was interviewing candidates on the phone.

With about a 600 IQ, Aaron wasn't satisfied with his interviewing skills, and he picked up my big, fat book, Topgrading: How Companies Win by Hiring, Coaching, and Keeping the Best People. I suspect he memorized the book and particularly the Topgrading Interview Guide. He asked the questions about education years and then investigated a person's career by asking about - for EVERY job - successes, failures, bosses ("I figured if a candidate's last 3 bosses were jerks, I'd be one to hire him."), boss appraisals, and reasons for leaving. Aaron "got it," the power of gleaning patterns and the importance of asking "why?" 1,000 times. He used the TORC (Threat of Reference Check) Technique and asked finalists to arrange reference calls with past bosses.

Aaron says Topgrading is the best business book he's read, although he says the first part included name dropping with famous Topgraders, and too much "selling" of Topgrading. He instructs his managers to go to Chapter 11 for the practical advice (which today is available in a much more exciting tool, the Topgrading Workbook - click here). And I suggested that his managers read Chapter 12, the legalities of hiring, written by the largest employment law firm in the US and written to keep managers out of a minimum security prison.

Back to his success story - at age 25, Aaron was working 75 hours per week and frustrated with the additional hours necessary to manage his personal finances using Money or Quicken. The bolt of lightning struck - he'd create the best personal finance software.

So he did it, he launched Mint.com, with occasional self doubts. After all, he was attacking Microsoft and Intuit with no business experience, no leadership experience, no knowledge of Java web services, and by the way - no money. Ahh, but he already knew how to hire A players.

Google Mint.com to see details of his business, videos of how someone can enter a few super secure credit card and bank accounts in 6 minutes and immediately begin saving money and time. And it's free.

So, at 26 years of age Aaron started hiring people for Mint.com and now he has 40 employees. When he sold Mint.com to Intuit, the company made him head of their personal finance division, so there will be a lot more opportunities to Topgrade.

How did he Topgrade Mint.com? He used the Topgrading hiring methods, with a few tweaks to really, really zero in to be sure he wouldn't make a mistake. For example, he asks engineers general questions about their methods to determine if they are so customer service oriented that they sit with users and note any frustration.

And what is his track record? Four mis-hires out of 40. Not bad! A couple of others quit for good reasons - a dad died and another one of Aaron's employees returned to Asia to take over the family business. Looks like a 90% success record, with successful hires not just "okay," but true high performers.

Aaron Patzer makes assembling a team of outstanding performers look easy. He didn't happen to mention one small factor that actually does make Topgrading "easy" - he's clearly an A player!

Recommended Resource: The "Cliff Notes" for Topgrading is the 176-page Topgrading Workbook, a bit shorter than my 650-page tome! The Topgrading Workbook explains each of the crucial Topgrading steps, and then presents the fun, illuminating exercises that teach how to do it. Those are the same exercises we use in our Topgrading workshops. For more information or to purchase, click here.

Michael Dell Video; India's Biggest Challenge; 3I Program; Ted Turner

"...keeping you great"

HEADLINES:

Nurse Next Door #1 Best Place to Work in BC -- congrats to this Vancouver powerhouse, their third consecutive year to make the top 10 and the first time they were #1. Noted Ken Sim, co-founder, in a recent note to me "(Gazelles) has been a big part of this achievement. Before we were part of the Rock Habits cult :), we ranked #72."

Video with Michael Dell -- and Mark Graham, head of RIGHTSLEEVE, an online promotional products company, sent along this video of his recent meeting with Michael Dell. RIGHTSLEEVE won the Dell SMB Excellence Award and got to spend time with several senior leaders of Dell at HQ along with Michael. Mark noted that Michael was very down to earth and approachable -- here's the link to his conversation with Michael

India's 7.9% GDP Growth -- this for the quarter ending in September, was not surprising given the changes I've seen in India just the past few months -- the new airports, roads, and building construction -- it was actually a pleasure travelling through India last week. And our workshops in India were all oversold (we actually had to turn people away). Universally, the firms participating are bullish on the future and simply trying to find enough talent to keep up with demand (Infosys, alone, is offering 13,000 jobs) -- all good problems. And my guess is that this GDP growth is understated given the size of the informal economy in India. Here's the Economic Time's reaction to the GDP growth, where several India economists suggest that the growth will drop because of a poor crop season

Mid-Management Monthly Meeting -- the main rhythm I focused on with the firms in India last week (both my public and private workshops) was the importance of the monthly management meeting that involved ALL the managers in the company (you're hosting one, correct?). The key weakness in India firms is the lack of mid-management development -- to the point where as the company grows, it puts more and more pressure on the senior management team because their mid-managers are unable to take over the day-to-day running of the business. The monthly management meeting, where the focus is on collectively solving a couple big challenges in the business together, is the most effective way for the senior team to get it's DNA passed down to the middle managers. It's in the process of working on the business together that you see who gets it and who doesn't so you can direct appropriate education and coaching -- and where the senior team can share their industry knowledge, thought processes, and model the core values.

Farewell to A.G. Lafley, P&G -- two large company CEOs I've admired/followed for years are Ratan Tata in India (think nano-car) and A.G. Lafley, former CEO and Chairman of Proctor & Gamble. Like Ratan Tata (who lives in what's described as a "book-crammed" bachelor pad), Lafley has focused on the executive development of P&G's leadership (i.e. he put all of P&G management through the Power of Full Engagement training) and on getting extremely close to customers, making sure that customer ideas and needs drive decisions in P&G vs. the "plant guys." Here's a quick Fortune magazine tribute to A.G. Lafley who is stepping down completely in January and an important Noel Tichy  Harvard Business Publishing article on how Lafley mishandled and then corrected the promotion of a top executive against the wishes of his team. It's a lesson in the importance of involving the broader management team even if they aren't going to like the decision.

Jimmy Calano's 3I Program -- in my book I highlight CareerTrack's 3I program. Jimmy Calano, a founding board member of EO and long-time advisor/mentor to me, felt a main job of anyone in management was to constantly contribute ideas to making their company grow revenue, reduce costs, and/or better serve the customers. As such, he required the managers at CareerTrack to submit three ideas each month that would help in these three areas. He would then review these in detail, providing constructive feedback where he thought it was necessary, and then brought all his managers together each month where they focused on implementing the best ideas he had identified from those submitted. This process of working on the company together and focusing the collective intelligence of his managers on the business not only contributed real results to the bottom line (he figured a million dollars each year), but more importantly, it was both a powerful executive development tool and a way to get his managers closer to the customer and their teams, since they needed their ideas to submit each month.

Ted Turner Revisted -- and Jimmy Calano, still an avid reader (usually 100+ books per year), sent over a copy of a mini op-ed piece he wrote for his local newspaper, recalling the time 25 of us spent an afternoon with Ted Turner (and Jane Fonda) back in 1990. Jimmy recently read Ted's new 2009 autobiography entitled Call Me Ted which I just downloaded to my Kindle for some holiday reading. BTW, I didn't realize Ted is the largest private land owner in the U.S. with 2 million acres -- a nice trivia question for the holidays. Anyway, here is his short op-ed.

This week's Boulder Daily Camera question: Many of us spent Thursday with friends and/or family, gathered around the feast of the year. If you could assemble your dream dinner party, inviting famous or distinguished people from history, whom would you invite and why?

I would choose Ted Turner (still living!) as my sole guest of honor. Although I missed his recent address at CU, I had the privilege of spending time with him in 1990 as part of a Young Entrepreneur's Organization gathering. For two hours, Ted regaled 25 of us with outrageous stories about his business successes and failures. I recently read his autobiography, Call Me Ted, and learned more about his personal life. And what a life it's been.

In addition to taking control of his family billboard business after his father committed suicide, Ted founded and built the Turner Broadcasting System (TBS) and changed the face of broadcast media. Nicknamed "the mouth of the south," outspoken Ted has been a pioneering business titan (CNN was his brainchild), an internationally renowned sailor (winning the America's Cup), a good father (of five), a three-time husband (but with no lasting marriages), the largest U.S. landowner (two million acres), a World Series winner (as the Atlanta Braves owner), a restaurant mogul (Ted's Montana Grill chain), and a towering philanthropist (he pledged $1 billion--a third of his fortune--to the UN Foundation).

I'd be thrilled to have Ted Turner share his passion and wisdom on the three issues that now most concern him: world population growth, climate change, and nuclear annihilation. An inspiration to all of us, he is devoting the balance of his life to these global causes. Turner, though not perfect, is an accomplished person with noble, grand ambitions--even in his twilight years.

-- Jimmy Calano

Highest Paid Position; Tim Storm Almost Blindsided; 300 Pounds of Force

"...keeping you great"


HEADLINES:

The Blind Side -- every one of us needs someone or something to watch our blind side -- and it was great to see the success of Michael Lewis's book, The Blind Side, as a movie this past weekend -- it appears to be on the way to $200 million. I'll leave the human side of the story for you to pick-up in the book or movie. It's the x-ray like statistics underpinning football that caught my attention when I first read the book two years ago; surprising stats that were as revealing as Lewis's treatise on baseball in his classic book Moneyball.

Highest Paid Position in Football -- what was so surprising was learning that the highest paid position in football was not the quarterback, running back, wide receiver, or line backer -- players that garner 99% of the attention -- but the rarely noticed offensive left tackle whose job it is to protect the blind side of the quarterback (for right handed passers). It's a position that requires a 300 pound human with "the body control of a ballerina" to borrow a phrase from the book -- and there are only a handful of humans on the planet that qualify! And if the left tackle doesn't do his job game in and game out, one blindsided sack (when most quarterbacks get hurt) can end the career of a quarterback and the season for a team. This is why the position is so critical.

Fat Wallet's Blind Side -- take 31 seconds and watch Tim Storm, CEO of Fat Wallet, one of the top bargain hunting websites (coupons and cash back deals perfect for the holidays!), discuss how he was almost blindsided in his business from not tracking some underlying metrics that had been in decline and were not made visible until he implemented Rhythm -- underlying metrics that if not corrected would have destroyed his company.

Avoid Being Blindsided -- this has been the tagline for our online dashboarding system called Rhythm since it was launched in 2008. For the fraction of the cost of a left tackle, the system is explicitly designed to watch your back -- and to keep the CEO and management team from being blindsided by declining metrics and missed priorities -- situations that can go unnoticed if you don't take proactive action to make them highly visible, which the system does. We're learning it's best for companies with over 50 employees, where keeping track of cascading priorities and metrics can become a spreadsheet and paperwork nightmare -- the kind of thing that can make critical metrics invisible quickly.

Dramatically Shorter Meetings -- and I also talked to Alex Mackay, CEO of DMTI, a leading location content provider, about his experience with Rhythm (part of my weekly customer calls). Besides concurring with Tim that it keeps all his performance data more "in sight, in mind," he was amazed at how the system dramatically shortens his weekly meetings since everything he needs to know about the status of priorities and the KPIs driving the company are at the team's fingertips. Equally important, the system is now the objective "bad guy" instead of Alex!

WARNING -- 300 Pound Gorilla -- the system is not for leaders queasy about holding people accountable or teams unwilling to face the brutal facts -- it will expose weaknesses fairly quickly and this can be very uncomfortable -- it's why I've seen management teams push back, but the results far outweigh this resistance. Rhythm is your 300 pound gorilla in the room, though you have control of its ballerina-like movements.

Patrick Thean, My Left Tackle -- ex-Oracle (enough said) who's built and sold three technology companies, is the force behind Rhythm -- a tool he uses to run Gazelles Systems as well. Patrick, thanks for all you've done for me and our company. And send him an email if interested in a demo [email protected] or catch him at his last half-day "Four Decisions SuperGreen™ Execution" workshop of the year, December 8 in McLean, VA (suburb of Washington, DC).