The Agile Scaleup

India Mimics Germany; Driving Sales in August; AirBNB Success; Doubling EBITDA

"...keeping you great" HEADLINES:   To sustain high performance, organizations must build the capacity to learn and keep changing over time.   Scott Keller and Colin Price, McKinsey August is Best Month for Selling -- more below, but first... India Mimics Germany -- one more reason I'm bullish on India and think every growth firm should find a way to do business with this Asian giant. Take 3 minutes and scan this Tuesday NY Times article on the surge in Indian exports - not of cheap trinkets and trash (the approach China took), but of high-value industrial goods that require highly skilled labor - the kind of quality jobs that drive a healthy economy. If only the US could wise up. Renew Faster than Competitors -- Patrick Lencioni, the famous author of Five Dysfunctions of a Team (read it once a year), was the first to clearly delineate the importance of a leadership team being both smart and healthy - healthy being the ability to work well together, trust each other, debate vigorously, and hold each other accountable. McKinsey's research builds on Lencioni's ideas, showing strong organization health literally doubles EBITDA margin and increases profit by 1.5 times. How Great Organizations Build Ultimate Competitive Advantage -- this is the subtitle of McKinsey's new book entitled Beyond Performance. Authors Scott Keller and Colin Price note "our central message is that focusing on organizational health--the ability of your organization to align, execute, and renew itself faster than your competitors can--is just as important as focusing on the traditional drivers of business performance." I couldn't agree more. Here's a quick overview of the book (just have to register on the McKinsey website), though Lencioni's Five Dysfunctions framework is more useful in improving organizational health. Thank you to Dave Davis, President/CEO of OpenRDA, for pointing me to this research. Latest Mesh Business -- AirBNB just received $112 million in financing this week. What I love is the simply stated strategy -- Airbnb is to spaces what eBay is to products. Read Ben Horowitz's blog on why his firm led this new round of investment. In turn, figure out ways you can let others use assets not needed fulltime by their owners -- what are called mesh businesses, a name coined by Lisa Gansky, author of The Mesh: Why the Future of Business Is Sharing, a book I recommended last fall when it came out - and still recommend. August is the Best Month for Sales -- precisely because business seems to slow down in August in the northern hemisphere is exactly why I find it's the easiest to reach decision makers. Most aren't on vacation the entire month, and those that are on vacation are often bored to tears looking for anyone to talk to about business (sorry family, but you can only take some much beach and pool time). 7 Tips To Boost Sales in August -- this is a great time to review Caryn Kopp's article by the same title - it takes one minute to scan her 7 tips then make August your best lead generation month ever!!

Inside Skype; Delivering Software Faster; VanBelle Nursery Theme; Australia Tour

"...keeping you great"

HEADLINES:

Inside the Skype Deal -- Fortune magazine just wrapped up yesterday its hugely popular Brainstorm Tech conference in Aspen. The highlight was an inside and detailed look at the $8.5 billion Skype deal featuring CEO Tony Bates and the two private equity guys that made the deal happen, Egon Durbin, managing director of Silver Lake; and Ben Horowitz, co-founder of Andreessen Horowitz Venture Capital Firm. What interested me most were the details around the culture and product changes that have led to Skype's huge growth (100 million users averaging 100 minutes/month of engagement). Here's a link to the 30 minute session and transcript (listen while you do your email or exercise).

Delivering Software Four Months Faster -- if I had a nickel for every tech client held hostage by their software development team, I would be a billionaire already. This is precisely why Tony Bates was recruited from Cisco to be the CEO of Skype. Go to 14:13 of the video to hear Tony discuss how they delivered their hottest app four months ahead of schedule and why that has been a critical milestone in the company's turnaround. HINT: to quote Tony it's about "rhythm, cadence, and culture." You can scroll down the transcript and read his four keys - it's about halfway down the script (look at your scroll bar to the right to gauge).

Tony and Wife Set Long Term Goals -- every year Tony Bates, Skype's new CEO, and his wife set future goals. In 2007, when he was a 40 year old exec at Cisco, he stated he wanted to be a CEO of a major company by age 45 - and it happened! No surprise. Are your 3 - 5 year personal and professional goals clearly stated in writing - this is something the most successful people do? The month of July provides the perfect time for a mid-year review of your goals - take time on your vacation to think, talk, and decide. Here's a side bar article on Fortune.com that discusses his goal to be CEO.

VanBelle Nursery Nails Theme -- speaking of goals, do you have your latest quarterly theme announced? British Columbia-based VanBelle Throness Nursery just successfully wrapped up their first quarterly theme entitled "Around the World in 90 Days." Go to this link to see the graphic, photos, and metrics they used to drive the theme.

Best Shipping Season in History -- VanBelle's 110 employee company does 80% of their business in one quarter, so it's critical everything goes perfect. Quoting their coach Trevor Throness, "we developed the theme focusing on every shipment being sent out on time for the quarter. They had a balloon going across a huge world map (1 on-time pallet equals 4 miles), touching at different countries as they went. When they hit India, the whole company had samosas, Italy, spaghetti and so on, highlighting the ethnic diversity of their company and focusing on pallets shipped on time. They were extremely enthusiastic about the process, and said that they had their best shipping season by far in the company's history, with only 2 (out of about 300) semis delayed throughout the quarter. They were extremely happy and impressed with the alignment that the theme brought. They even brought in a hot air balloon and gave rides to employees. It was cool". Again, see photos of these events. Congrats to CEO Dave Van Belle, coach Trevor, and the entire VanBelle Nursery team.

Sept. Australia Tour -- due to the high number of requests in Adelaide for a one-day Rockefeller Habits workshop I'm heading back to Adelaide 21 September this year, in addition to Sydney 20 September and Brisbane 22 September. Here's the brochure. There's a discount rate for Weekly Insight subscribers. Use promo code Gazelles and register at www.thegrowthfaculty.com.au

Top 3 Motivators; Quiznos and Burger King One-Page Plans; Nine Lessons for Children

"...out-learning the competition" HEADLINES:   My father taught me if you can walk away from any teacher, book, seminar and/or coach having learned one new thing or you were reminded of something you knew but had forgotten, then you received an invaluable gift. Knowledge once gained may be used again and again.   Michael Palumbos, author of upcoming book Your Family Legacy Quiznos' and Burger King's One-Page Plans -- more below, but first... #1 Business Speaker in the World -- right now, according to Speaker Mix, its Dan Pink, author of Drive: The Surprising Truth About What Motivates Us. You must read the first three pages of Chapter 4 - a model for most of our growth firms -- and then go back and read Chapter 3. He also has one of the most watched TED presentations. Book club members are receiving his book this week and he'll be the main headliner for our Fortune Growth Summit, Oct 25 - 26, Phoenix. I think he's the #1 business speaker as well in 2011! Autonomy, Mastery, and Purpose -- these are the three pillars of Pink's framework for unlocking people's intrinsic motivation. So long as pay is sufficient, your people will produce more and be happier if these three nutrients - autonomy, mastery, and purpose - exist in their work environment. Notes Pink "Type I behavior ("I" stands for Intrinsic) is self-directed. It is devoted to becoming better and better at something that matters. And it connects that quest for excellence to a larger purpose." Pink goes into great detail, with lots of examples, on how to create this kind of environment. Grew Four Times Faster -- to back up his assertions, Pink quotes a Cornell University study of 320 small businesses, "half of which granted workers autonomy, the other half relying on top-down direction. The businesses that offered autonomy grew at four times the rate of the control-oriented firms and had one-third the (employee) turnover." Nine Ideas for Helping our Children (Parents and Teachers) -- Pink also applies his findings to raising and educating children including thoughts on homework, DIY (Do It Yourself) Report Cards, how to offer praise, and a list of five schools in the US that develop intrinsic motivation. The one idea that hit home immediately was the importance of NOT linking allowance to chores. My wife and I have been doing this and we now see our mistake - something we plan to discuss with our four children when we finish our summer vacation. Go to the Table of Contents and locate this short chapter in the book (he also has a short chapter summarizing the entire book called Drive: The Recap). Quiznos' and Burger King's One-Page Plans -- Greg Brenneman, the former CEO of PwC, Burger King, Quiznos, and President of Continental Airlines, engaged our audience at the Fortune Leadership Summit, discussing the simple tools and techniques he's used to lead or invest in over 50 companies. One of those tools is a simple one-page plan he creates for each company. Just this week he sent us copies of the one-page plans he used to turnaround Quiznos and Burger King, which we've included as a download in his online presentation. Greg Brenneman's Online Seminar -- Greg also gave us permission to turn his 60 minute presentation into an online seminar you can share with your entire team (or review if you attended the Summit) - chunked into bite-sized pieces so you can consume a few minutes at a time while doing email if you prefer to learn that way. Again, the one-page plans are included as part of getting the online seminar. Learn from one of the top business leaders for a small fee (covers production and deployment costs). Here's a link to purchase an individual license or company license. Knowledge once gained may be used again and again.

Branson's Life Lesson; Global Huddle Drive Results; Dead Goes Flamenco; Microsoft on Fire

"...keeping you great"

HEADLINES:

Richard Branson's Most Important Life Lesson -- this and other pearls of Sir Richard wisdom below, but first...

Grateful Dead Goes Flamenco -- for you Flamenco guitar fans and/or Deadheads, David Meerman Scott (New Rules of Marketing and PR) teamed up with Juanito Pascual, the famous flamenco guitarist who has been entertaining us at the Fortune Summits, and produced a show featuring Juanito's quintet playing Grateful Dead music - they are calling it DeadMenco -- it's worth a quick listen while reading the rest of this insight.

Global Huddle Drives Record Quarter -- Mark Hamill, Global Managing Director of SpenglerFox, huddles on the phone 60 minutes every week with 12 GMs globally from Moscow to Dubai and from London to Istanbul. They rotate among three topics: one week they focus on 90 day priorities; the next week on Client Insights; and the third week on Competitor Insights (novel approach). Notes Hamill, "Our Q1 this year, April-June, since we kicked off the Huddles has elevated our Q1 performance vs. budget @ +25% on revenue and +100% on profit, and that is coming off a very strong Q4."

So Much Juice -- continues Hamill, "I have to say the hour with the whole team on a global conference call is the highlight of my week and we get so much juice out of the calls, it's energising and inspiring...and critical for me to get the rhythm and discipline I need to keep us on a gazelle-like trajectory. Thanks for all the guidance so far!" Mark, congrats on a record quarter!

When to Schedule the Daily Huddle -- speaking of huddles, I received this note from Liz Wiseman (author of Multipliers), "While at the RELC meeting in Fiji (Liz and I both keynoted their event last week), I heard someone say that they changed the time of their daily huddle from 8am to 10am to raving support from the women. They found that many of the female agents were stressed trying to negotiate children's school drops offs and get into the office. People were skeptical at first, thinking the daily huddles had to be first thing, but they found that they got such overwhelming appreciation from the women that it was a huge win." If I ever implied the daily huddle had to be first thing in the morning, I apologize. Schedule it for whenever it is best for the team!

Microsoft On Fire -- speaking again at Microsoft's Worldwide Partner Conference (WPC) this week, I had the opportunity to see under the tent all that's new with Microsoft. Last year I was concerned about the direction of the company and could understand why critics were questioning Steve Ballmer's leadership. This year was totally different. Their "all in" strategy with cloud computing is paying off resulting in double digit growth - a "gazelle" once again.

What's Working at Microsoft -- Office 365 is hot; Dynamic CRM is pounding SalesForce.com; Windows 7 is experiencing record growth; Xbox is #1 with Kinect and will offer online TV this Christmas; Bing has an improved approached to search vs. Google; they are #1 in databases, putting huge pressure on Oracle (just announced a layoff of 10,000); their ERP product is the best I've seen; and the Windows phone with Nokia is impressive. $9.5 billion in R&D this past year, the most of any company in the world (according to Microsoft - I know that's equivalent to GE's), has not been wasted. One additional advantage -- many of their best Partners are becoming Rockefeller Habits practitioners - and why we're at the WPC Conference again this year.

Richard Branson -- Sir Richard was Microsoft's brilliant guest keynote speaker (another smart decision by Microsoft). Branson's advice included (and stories I had not heard or read before):

1.        Approach to life -- "Screw it, let's do it." But you also have to be quite strict about cutting your losses and saving your money for the next venture.

2.        Most important life lesson -- "Forgive your enemies, the world is too small." After beating British Air in a nasty court case, he invited the head of British Air out to lunch and made him a friend.

3.        On taking risk -- "Never bet the farm; always protect your downside." When he launched Virgin Air, Boeing agreed to take back the airplane he purchased after one year if the business didn't work. This limited his liability to half of Virgin Records' profits, something he could live with.

4.        Women in the workplace -- "Be more accommodating - job sharing, part-time positions, unpaid leave...and job sharing creates more jobs and is good for people and the company." An important message for Microsoft to hear!

5.        Small is beautiful -- "When we have 100 people in the company...we'll split the company into two. When we had our record company division, we actually had 20 separate record companies in 20 separate buildings with 20 separate brands...then those people could feel their success directly."

6.        Next 15 years -- "Africa is a huge opportunity." He was heading back down there right after his keynote.

7.   His hobbies -- "Stop eating shark fin soup." Branson is always trying to make a difference - this comment from his efforts to protect endangered species, one of his latest hobbies

 

Clever KPI; Not China's Century; BAG Meeting; FatWallet Forced to Move

"...keeping you great"

HEADLINES:

This is Not China's Century -- more below, but first...

Illinois Drives FatWallet Out -- consistently named one of the best places to work in the US, FatWallet, an online provider of discount coupons, garnered major news coverage for moving their entire company from Illinois to Wisconsin as a result of a new Illinois Internet Tax law. The law would have caused FatWallet, whom many of you have met at our Summits, to lose about 30% of its revenues. Fox Business News provided live coverage of the move across the state border as employees paraded 5 miles north. FatWallet also created a video documentary which captures that day, the people that were affected and the success of a great workplace culture coming together in crisis. Link to documentary.

BAG (Better at Growth) Meeting -- this is what Thomas Douglas, CEO and President of Springfield, MO-based JMARK calls their 9:33am daily huddle. Notes Douglas, "In that meeting we've solved tons of company issues and it has truly made a huge difference in our company. We follow it up with a JNews Report each day that sends the same information to everyone in the company." BTW, JMARK had a record June.

BAG Board Helps Sales Cycle -- here's a link to photos of JMARK's BAG Board (big whiteboard). Continues Douglas "When we tell our clients and prospects about it (BAG Meeting) and show them our BAG Board and how much info we go through in 10 minutes to make sure we're not missing things, it actually helps in the sales cycle when you have a potential client who appreciates KPI's." I often suggest companies invite potential clients to witness their daily huddles - clients like to deal with disciplined and fast communicating firms.

Clever KPI: Time Spent Touching each System -- Explains Douglas, "we identified a new KPI at the end of last year (we're a technology company that manages computers and servers for other companies) where if we took our average time spent touching each system from .66 hours per month to .5 or less that it increased the profitability of the company by 30k per month because we could support more devices with fewer people (allowing us to scale). We just closed this month with an average of .44 hours per device for the month of June. It does make a big difference."

Insightful KPI -- Total Number of Dependents that JMARK Supports -- further notes Douglas, "One of the other things that we added to the BAG Board is the total number of dependents that JMARK supports. That means the wives, husbands and kids that we're supporting in our organization. We update it each month. We pay 100% of the employees insurance and 70% of all dependents insurance as well." This is a powerful KPI for highlighting the direct human impact a company is having - and for emphasizing the importance of growth firms to the economy. Brilliant and simple KPI - congrats Douglas and JMARK.

Clients that Need Love and Why -- this is also listed on JMARK's BAG Board. Describes Douglas, "This non-KPI is one of my favorites. In the computer & server management business, it's easy for people to become frustrated when they don't understand something, if we don't respond as fast as they'd like, or whatever the case may be." By informing his team that a client is on the Love List it alerts the first person that takes the call from this client to immediately discuss who the owner of their issue is and escalate the call to them right away.

Breaking the Molds -- Concludes Douglas in his note to me "Our company is breaking the molds and is growing almost as fast as we can handle. There are many reasons and people responsible for this, but your insight and outlines have played an important part." Douglas -- thank you and your team for being great students of business.

This is Not China's Century -- Fareed Zakaria, CNN's thoughtful international commentator, weighs in on the topic of China's dominance in the 21st Century. Though China will be important, it has four things going against it, including a demographic collapse as it faces the loss of 400 million people over the next 25 years (while the US population is growing at the same rate as India!). And I found this an interesting data point: "In terms of foreign direct investment, China attracts every month what India takes in every year. Still China only grows two percentage points faster than India," notes Zakaria. His analysis is worth 4 minutes of your time so you have a balanced perspective on China and the global economy - and why I remain bullish on India.