The Agile Scaleup

5 Strategic Mistakes; Success in India; Grandfather of America; Italian Island

"...keeping you great" HEADLINES:  Grandfather of America (US) -- Happy Thanksgiving Week for those celebrating this US holiday. Brad Smart, the father of Topgrading (the only hiring method that garners a 90% success rate) suggests in his blog this week that the Pilgrims recruited an "A" player, William Bradford, to lead their Plymouth Colony. Take five minutes and read his e-newsletter to your children, providing them an historical perspective on Thanksgiving not taught in school. Five Strategic Planning Mistakes (need your stories) -- this is the topic of my next Fortune column. Email me at [email protected] if you're guilty of any of the following and then fixed them -- let me know which one(s) and we'll call to do a quick interview for the column: Playing Not to Lose vs. Playing to Win -- were you generally playing defense and have now gone of the offensive? Making Decisions in a Vacuum -- did the executive team set priorities without intimate contact with customers and now you have a process of gathering customer input before making strategic decisions? Doing Everything Customers Ask -- in turn, the quickest way to commoditization is augmenting your products/services until they look the same as everyone else. Do you have a filter through which you put customer suggestions? Keeping Middle Management in the Dark -- did strategic planning primarily involve only the senior team or are you engaging middle management more to create better buy-in? Setting Too Many Priorities -- did your strategic planning session generate a list of 75 "to do's" and now you stick to three to five clear priorities for the coming year? Vacation Planning -- this is the time of the year when families start thinking about their plans for next summer (Northern Hemisphere). One option -- join my family (four children 14, 12, 7, and 3) for a multi-sport (biking, hiking, canoeing) tour of the Italian island paradise of Sardegna the week of July 4. The tour will be led by Gazelles' fan Lauren Hefferon, owner of Italy's top bike touring company Ciclismo Classico. Lauren's family will be along for the journey as well. Our last two trips have been our favorite vacation experiences. Here's a link to more info. India Tour Next Week -- I hope to meet many of you in Mumbai 1st December and Bangalore 2nd December. Our Four Decisions "Growth Tools" are having a huge impact in India: Pangea3 -- One of our major clients, Pangea3 (outsourced legal), was just purchased by Thomson Reuters last Thursday. Noted Sanjay Kamlani, Co-CEO of Pangea3, "your tools have played an integral role in our success over the years. As we move forward to build Pangea3 within the Thomson Reuters portfolio of legal businesses, your continued guidance and coaching will be crucial. We expect what has been 100%+ annual growth to turn into 3X to 5X growth at a minimum and that accelerated growth is going to necessitate even faster and more intense learning and implementation of management and leadership best practices. We are instituting a CEO leadership seminar/book club this month where I will guide a group of about 20 of our senior managers reading through your recommended books and talking through their application to our business and our people. We are starting with Switch." Sanjay's team is committed to learning and will be in our session, again, next week. Benetton India -- again generating tremendous growth and profits this past year, CEO Sanjeev Mohanty continues to be a great student of the Rockefeller Habits. Notes Sanjeev "we are getting a huge response from consumers because of our customer service policy and speed of response. We promise to respond to customers for all queries directed to our corporate e-mail within 24 hours and solve all issues within 48 working hours. This is an initiative we have been driving the last 6 months and our teams are passionately and intensely involved with delighting consumers and winning them back. All the queries come to me directly also. I respond to the most disgruntled customers within 15 minutes of receiving their mail and call them up within 24 hours personally without exception. This works like magic. Just wanted to share this with you." QuEST Global -- ranked World No.1 in Engineering Service Outsourcing by the Black Book of Outsourcing 2009, Ajay Prabhu has implemented what he calls the "Gazelles Movement" within QuEST as they head to $500 million -- referring to his people as "gazelles". Notes Ajay "We have shown immense discipline as Gazelles in meeting once a month, adopting Top 3 priorities each quarter and continuing to work them to closure over a period of time. Gazelles' group has been instrumental in quickly raising organizational maturity." It's the transition from entrepreneurial firm to professionally managed that is the main challenge in fast growth India. Perfetti Van Melle India -- run by a dynamic young CEO, Sameer Suneja, Perfetti is the #1 confectioner in India, beating Hershey, Cadbury's, and all the other global players. With 3000 employees and another 3000 distributors, Sameer's focus is on "growing our people as fast as we're growing their jobs." We'll be assisting Sameer's senior team for the first time next week.

Businessperson of the Year; Power of Poland; Message for the G20

  "...keeping you great"

HEADLINES:  (Note: Fortune Leadership Summit May 10 - 11, Houston)

Businessperson of the Year (US) -- today Fortune announced its winner, Reed Hastings, CEO of growth firm Netflix. The stock is up 200% this year, much more than Apple's. And like RIM (Blackberry), the analysts have predicted Netflix's death every year from the beginning. In the end, it's the culture of Netflix (see below) plus a willingness to cannibalize their own business while tapping into the ideas of everyone i.e. their $1 million reward for anyone that can improve their movie recommendation algorithms. Take four minutes and read Hasting's inspirational and insightful story.

No Vacation Policy -- Like Tony Hsieh at Zappos, Hastings didn't like the culture of his previous company, so he was conscious about culture the second time around when he launched Netflix in 1997. To quote Fortune, "at Netflix there is no vacation policy; employees take what they need as long as they get their job done. There are no strict compensation rules; workers choose their stock-to-cash ratios. There are few formal titles. Netflix employees come to the office, work extraordinarily hard, and they go home. There are no beer bashes. It is a place for adults, now numbering about 600 salaried employees." The key is to create a distinct culture -- not the same as others, but uniquely yours.

Readers Choice -- Ford's CEO -- Fortune had some fun with crowdsourcing, letting the readers choose their Businessperson of the Year. Readers picked Hastings third, Steve Jobs second, and Alan Mulally, CEO of Ford, first (as did I). The only major auto manufacturer in the US not requiring a bailout while tripling their sales in places like India, Mulally did a masterful job of navigating tortuous waters. Noted Fortune "His levelheaded leadership (develop a clear point of view and an operating plan; align culture with plan) soothed a fractious management team"...turning around a 107 year old company. Here's a link to the list.

68% of Exports from Companies Under 2000 Employees -- my mentor, the great German "Hidden Champions" researcher Hermann Simon, had an important article published in The Korean Times just prior to the G20 Leaders meeting in South Korea last week. He highlights that 68% of exports in China and Germany (the two export leaders in the world) come from companies with less than 2000 employees. In turn, the US and Japan with many more Fortune 500 firms, lag behind in exports. He notes that Korea has an ambitious plan to create 300 - 500 Hidden Champions (gazelles) in the next five to ten years. Anyway, the second half of the article summarizes succinctly Hermann's 7 keys to dominating a global niche and making huge profits -- worth a quick three minute review.

Poland On Fire -- speaking of exports...YPO Poland hosted me for a day-long workshop in Warsaw on Tuesday. It's been six years since I was there last and the changes are dramatic. The entrepreneurial spirit is burning huge in this former communist country since Poles have been repatriating back from places like Ireland. Poland's exports per capita equal those of the U.S. while their wages are a fraction of the U.S.'s - and if you correct for wages, Poland is on par with Germany in terms of quantity of exports. One big factor -- the government has worked hard to stay out of the way, including reducing corporate and personal tax rates in 2008 (though they do have a large consumption tax). As such, Poland's economy is growing faster than the EU as a whole and has become a great place for investors (no complaints from the entrepreneurs being able to find money for their ventures). They've also revised pensions and have a cap on the amount of debt the country can accumulate. It's was great to be around such positive, hard charging, and entrepreneurial leaders and their executive teams as they drive growth in Eastern Europe.

Bill Campbell Chooses Apple -- I don't know if it's a preferential vote of confidence, but Bill Campbell, coach to both Steve Jobs and Eric Schmidt (Google's CEO), felt forced to choose between the two last week, given their recent competitive friction. Here's a quick story on the situation. Who is your coach? No one has ever achieved peak performance without one!

Escaping the Competitive Herd; Key Warning; Bold and Fun TicketCity Bowl

  "...keeping you great"

HEADLINES: 

Escaping the Competitive Herd -- this is the subtitle of the book I read this week entitled Different, written by Harvard marketing Prof Youngme Moon. Of all the books my insight readers recommended to me (thank you, immensely), I scanned and read reviews of about two dozen and this is the one that most caught my attention -- and it's proving to be as compelling as was promised (thank you Luis Fernandez with Novamex). It's made me think more deeply about my own strategy, differentiation, and approach to the market than any book has in a long time.

First Third of the Book -- one of the most popular professors in Harvard's MBA program and winner of many teaching awards, her writing and case studies are highly insightful. However, like most professors (which is why I don't normally read their books), she wastes the first bunch of pages making a case why she's so great (OK, that's a little harsh) and the rest of the first third of the book explaining the problem she's wanting to address. It's important for you to get the background info and she does outline an important customer segmentation framework: pragmatics, reluctants, opportunists, etc -- similar to Kevin Daum's segmentation in his outstanding book entitled Roar.

Section 2 is the Winner -- this is where Moon shines with lucid examples of three types of "different" brand strategies (many firms employ a combination):

1)	Reverse Brands -- they stop adding features, benefits, and augmentations that eventually drive all markets to commoditization and instead go in the opposite direction, taking stuff away and in the process become the category killer -- IKEA being a key example.
2)	Breakaway Brands -- these brands actually cause you to switch categorizations in your mind i.e. the Japanese AIBO was deemed a pet vs. a robot and that's what allowed its technological problems to be accepted by customers. SWATCH is seen as a fashion accessory, not just a watch, making it the biggest selling watch.
3)	Hostile Brands -- these brands actually challenge you to not purchase them -- to push hordes of customers away -- to emphasize their weaknesses -- and in the process create entirely new social groups. RedBull and the BWM MINI are just two of many examples.

I'm always looking for new business language that will frame our thinking and Moon has achieved the first new language in marketing/branding in a long time.

Key Warning -- many of you have instinctually resisted my pushing you to talk with customers and employees -- and your resistance is justified if you blindly do everything your customers ask you to do -- this is what drives products and services to "sameness." Moon, in the first section of the book, does a brilliant job of describing the problem of blindly listening to customers. Instead, you must be in close contact with customers, but put what they say through your own brand filter i.e. it would kill the Birkenstock brand if they made nice looking shoes!

Useful to Growth Firms? -- this is always my first question when reading a new book -- and I was initially concerned Moon's book might be best for large retail brands. However, I'm convinced it's applicable to almost all of us and will impact your thinking in a major way -- that makes it worth the investment in time. It's not a how to book, but it's such a better "thinking" book than Blue Ocean Strategy, providing much more useful frameworks to help you navigate away from the herd (red water).

Just Plain Bold and Fun -- speaking of branding/marketing, Randy Cohen is at it again. CEO of TicketCity, Cohen has made the bold move to sponsor the newest college football bowl game -- New Years' Day TicketCity Bowl!! Exclaims Randy, "This is a big step for us and an amazing way to brand TicketCity. Our fearless don't be afraid attitude, diving in to the wide world of sports with the TicketCity Bowl, is also an extremely powerful way to motivate our employees. The value is immense all the way around." Go, man, go!!

Augmented Reality -- at the Fortune Growth Summit we honored G200 founding board member Logical Choice Technologies' role in NBC's new series "School Pride." Last Friday the show highlighted their new breakthrough reading technology called Letters Alive. 67% of 4th graders in the US are reading below grade level (ouch) and this augmented reality technology is aimed at fixing this problem. Here's a link to the info and 2 minute video. Like always, its entrepreneurs that must step up and solve our major problems.

Private vs. Public Sector -- because I care about all things education, this NY Time's Op-Ed caught my attention. In essence, a group of business owners in Pakistan have come together to launch over 600 private schools. Spending 40% less per student than the lousy public schools, these private schools are providing an incomparable education. Again, entrepreneurs must provide the solutions.

Possible Good News; Replacing Owning; #1 on Amazon; Favorite Books

  "...keeping you great"

HEADLINES: "Happy Diwali to all my readers in India.

Favorite Books and Speakers -- I'm in the process of choosing #1 rated business authors and celebrity CEOs for the 2011 Summits and online seminars. Who would you most like to hear from? Favorite new book? Email me at [email protected] -- thanks.

#1 on Amazon Business This Week -- David Meerman Scott, the top rated speaker at the Fortune Growth Summit a couple weeks ago, released his new book this week entitled Real Time Marketing and PR. Download a free eBook sample -- as Tom Peters noted "If you are not hooked (hook, line and sinker) within 10 minutes of starting David Meerman Scott's wonderful new book; well, I fear for you." For my take on the book, re-watch my 2 minute interview of David highlighting the main lessons.

Sharing is Replacing Owning -- this business model is continuing to garner a lot of attention with a second book (the other being The Mesh) entitled What's Mine is Yours: The Rise of Collaborative Consumption by Rachel Botsman. Here's the link to a CNN piece written by Botsman that provides a summary of the book -- and hopefully spurs your teams' thinking on how you might apply this idea to a part of your business -- worth 30 minutes at your next weekly meeting or a topic at your broader monthly management meeting.

Malcolm Baldrige Award Criteria -- have any of you utilized the criteria from the Baldrige award to assess and drive improvements in your business? Please let me know. A friend of mine is interested in connecting with anyone who has -- and I'm curious as well. For those interested, here's a link to the criteria -- go right to page 7 to see the seven main categories.

"Multipliers" Online Seminar Available -- the second highest rated presenter at the Fortune Growth Summit was Liz Wiseman, author of Multipliers: How The Best Leaders Make Everyone Smarter. Her entire presentation, complete with PowerPoint slides and her one-page action plan, is now available as an online video seminar. Considering Multipliers get twice the brain power from their teams as do Diminishers, her techniques have an extremely high ROI. Here's a link to the online seminar -- always with a full money back guarantee.

Extreme Question Challenge -- one of Wiseman's immediate take-home "to do's" is her Extreme Question Challenge which she suggests you test on your children before trying it at work. Do nothing but ask them questions (she shares the horrors or getting her children ready for bed and how this technique worked for her). No less than a dozen executives came up to me later in the Summit and shared how they had already tried the technique with their children. I remember one of them explaining how for the first time, using this technique, his 7 year old engaged in a lengthy conversation with him over the phone. Learn this technique (and others) from her online seminar.

Possible Good News For US Businesses -- I've reported out (and complained) several times that in 2012 businesses will have to issue a 1099 for ALL expenses over $600. Well, President Obama mentioned yesterday that he felt this specific provision of the healthcare bill should be changed -- yea! It was a specific change the Republicans wanted if they won, so it seems both sides might find common ground on at least this one issue -- a real victory for business owners.