The Agile Scaleup

#1 Millennial Firm; Lessons Top Turnaround; Unlocking Cash; Satisfactorily Underperforming?

"...insights for scaleups"

HEADLINES:

Who needs a turnaround? Companies in serious trouble and companies seemingly doing just fine, even though they should be doing far better. We call these "satisfactorily underperforming" businesses.
	Greg Brenneman, Turnworks

Elite SEM #1 Best Place to Work for Millennials -- more below, but first...

Right Now and All at Once -- this is the mantra of the top turnaround biz leader in the world, Greg Brenneman, who turned around Continental Airlines, PwC (turned around in 3 weeks and sold for $4 billion), Home Depot, and dozens of other firms as part of his $8 billion private equity firm. It's also the title of what will clearly be one of the best business books of 2016. Subtitled 5 Steps to Transform Your Business and Enrich Your Life, GPro and book club members will receive a copy next week. Greg is also the opening keynote for our fall Growth Summit Oct 25 - 26, Dallas.

Simple Turnaround Test -- Notes Brenneman:

In my CEO days, I had a very simple test I used to determine whether I should take any job offered me. I asked myself, "Can I sit down and, on one piece of paper, write a plan to turn around this company and grow it? I divided a single piece of paper into four columns. At the top, I wrote "Market," "Financial," "Product," and "People." Then under each of those headings, I wrote down the key actions I thought the company had to take.

His book outlines his simple one-page analysis and process (though nothing simple about figuring out the value drivers).

Driving Revenues -- I really like his emphasis on identifying how to drive sales. He goes on to note:

Empirical evidence shows that you get at least four times the market value for a dollar of profit that comes from revenue growth versus a dollar of profit that comes from cost reduction.

He discusses how to drive revenues in the chapter titled "Think Money In, Not Money Out." Might be worth going right to that chapter. However, it's one of the rare biz books I've read cover-to-cover twice (and will read again). There's a reason we're opening with Greg in the fall - see you and your team at the Growth Summit. This is the one of the savviest biz leaders in the world.

Elite SEM Named #1... Best Place to Work for Millennials of the Top 100 chosen by Fortune (91% of their 140 employees are millennials). An active Scaling Up (Rockefeller Habits 2.0) practitioner, I just wrote about their communication rhythm in Huffington Post. Part of the key to their success, notes Fortune:

Morrison meets with every employee a month or two after they start and asks the same questions: what they liked or hated about their old company, what Elite is doing right and how management can improve. Kirshner and Morrison also do this periodically for long-tenured employees, allowing them to blend feedback from new and old workers.

Take 2 minutes to read the Fortune article on how they've become a great place to work for millennials. Congrats to Ben Kirshner (CEO), Zach Morrison (COO), and the rest of their team.

Prime Data Unlocks Cash to Scale 10x (Gazelles Case Study) -- my latest Huffington Post piece features how five years ago marketing tech firm Prime Data had five employees, with growth constrained by cash flow. Today, it has 50. Using several strategies, the company reduced invoices stretched out to 90 days by 92%, freeing the substantial cash needed to scale up. Asking for advance payments was one way. Notes Steve Falk, CEO:

I was old school. If someone wants to do business with you, the last thing you want to bring up is to ask them to pay you advance.

However, he did ask and several, including a non-profit, agreed to pay a $100,000 retainer upfront. Read how and why - plus other strategies Falk's team used to speed up cash flow.

Satisfactorily Underperforming? -- it doesn't have to be that way, let us help.

COACHING:

Have you ever wondered if your company would be a good candidate to work with an executive growth coach? Click here to watch Gazelles International President Keith Cupp describes the four most important attributes of successful clients.

And if you're interested in becoming a world-class certified Gazelles International coach, please contact Jean Carpenter at [email protected] / (360) 798.9471.

TECHNOLOGY:

Align Software puts everyone on the Same Page - Literally! See, in real time every person in your organization and how they are progressing on their priorities - alongside how they Align to the Company Priorities! Scale Up your Rockefeller Habits implementation with www.alignwithgazelles.com - on your computer and on your phone.

Better Book Club -- What's your team reading? Increase your books read per team member. Easy, Proven, and in the Cloud at http://www.BetterBookClub.com.

How Does your Profit Compare?; Fortune 500 Stats; CEO advice; Hooked

"...insights for scaleups"

HEADLINES:

Focus your energy on a few things and delegate the rest.
	Fortune 500 CEO advice

7 Minute Mastery -- Scaling Up Club -- Create habit-forming products/services with this week's selected video clip from Nir Eyal, author of Hooked but first...

How Do You Compare -- the 2016 Fortune 500 list is out and I find it useful each year to pick a few firms in my related industry and see how Gazelles stacks up in terms of revenue and profit per employee. As a whole, the 500 generated $12 trillion in revenues representing two-thirds of the U.S. economy, $840 billion in profits, and employ 27.9 million people. Revenues were actually down 4.2% and profits down 11% from a year ago -- mainly dragged down by oil prices.

$430k Revenue/Employee -- given these numbers, the Fortune 500 averaged $430,000 revenue/employee. For all their perceived bloated-ness and bureaucracy, the big firms generate over 4x the revenue/employee than most mid-market firms. The challenge: mid-market firms tend to throw people at problems rather than focus on improving productivity through process re-design.

$30k Profit/Employee -- in turn, the Fortune 500 averaged $30,107 profit/employee last year. Apple, which moved up from #5 to #3 on the list, generated $53 billion in profit on $234 billion in revenue with 110,000 employees - giving it a whopping $485,000 profit/employee - greater than the average revenue/employee of the Fortune 500!! Insane.

7% Profit -- overall the Fortune 500 generated an average 7% profitability (the Global 500 was lower at 5.4%). If you're hyper-specialized on a profitable niche, mid-market firms should be generating 15% to 30% net profit, giving them something close to the same $30k profit/employee of the Fortune 500 even though their revenue/employee is much lower. Revenue is vanity; profit is sanity. How do you compare?

CEO Advice -- Fortune also surveyed the CEOs of the 500 list, asking them for the best management advice (they had ever received. Hiring the best people; listening and asking questions; relentless focus; and pacing were the main categories of insights. The pacing comments spoke most loudly to me - here's a couple of my favorite:

"It's a marathon, not a sprint." "Nothing wrong with getting rich slowly." "Don't get too low with the lows or too high with the highs." "Start small, fail fast, scale quickly."

In essence, the best advice mirrored the Rockefeller Habits - ageless principles that serve "elephants" and "gazelles" equally. Take 1 minute to scan the 300 words of sage advice - simple yet difficult to follow.

Keep Scaling Rev/ and Profit/Employee -- no matter where you stand right now, the key is continuing to improve these two key performance indicators. Let's say you're at $100k/employee. With the help of your team, drive it to $125k/employee; then hire down to $115k/employee; then drive to $135k/employee; then hire down to $125k/employee; etc. Keep scaling!

Just 7 Minutes Per Week -- stay one step ahead. Psychology plays a key role in influencing people's behaviors. In this week's 7-minute clip, understand the 4-step process of the Hook Model by Nir Eyal and create products people can't put down and habits that stick.

To access the clip, go here!

COACHING:

Have you ever wondered if your company would be a good candidate to work with an executive growth coach? Click here to watch Gazelles International President Keith Cupp describes the four most important attributes of successful clients.

And if you're interested in becoming a world-class certified Gazelles International coach, please contact Jean Carpenter at [email protected] / (360) 798.9471.

TECHNOLOGY:

Align Software puts everyone on the Same Page - Literally! See, in real time every person in your organization and how they are progressing on their priorities - alongside how they Align to the Company Priorities! Scale Up your Rockefeller Habits implementation with www.alignwithgazelles.com - on your computer and on your phone.

Better Book Club -- What's your team reading? Increase your books read per team member. Easy, Proven, and in the Cloud at http://www.BetterBookClub.com.

Kimbal Musk; Shark’s Paintbrush; Venture Column; Geoversity Launch

"...insights for scaleups"

HEADLINES:

How can the colors of a butterfly's wing reduce the world's lighting energy bill by 80 percent?
	Jay Harmon, How Nature is Inspiring Innovation

7 Minutes to Mastery -- Scaling Up Club - out-learn the competition in how to have automatic recurring revenue with this week's selected 7-minute video clip from John Warrillow's The Automatic Customer but first...

Geoversity Launches -- where carbon and silicon come together to drive innovation - for those leaders that have benefited from Singularity U learnings, a complimentary program called Geoversity, with support from Harvard's TECH, is launching next February in the jungles of Panama - apply for one of 40 spots. More below, but second...

Kimbal Musk's $5 Trillion Industry -- wow, didn't realize how many of you are leading significant companies in the food space. My latest Venture column in Fortune highlights "5 Ways to Profit from the Exciting Future of Food." According to Kimbal Mush (Elon's brother), it's an industry 10x the size of the internet biz world. 7 billion people need to eat and there's lots going on to make this healthier and more accessible. Please take 1 minute to scan the five ideas. Thanks to Kimbal Musk, Helene Godin, Brad McNamara, Mike McMenamin, and Jared Auerbach for contributing to the column.

Biomimicry ("to imitate life") -- serial entrepreneur Jay Harman, CEO of Pax Scientific, has spent the last 30 years starting and growing multi-million-dollar research and manufacturing companies using biomimicry, the process of taking clues from nature to solve real world problems. Notes Harman in his breakthrough book The Shark's Paintbrush: Biomimicry and How Nature is Inspiring Innovation:

From sharks, whales, and dolphins to lizards and leeches to bees and butterflies to trees and seashells, there are thousands of species already teaching us about engineering, chemistry, materials science, fluid dynamics, nanotechnology, medical devices, and on and on.

Think Velcro. Think paint that mimics shark skin to reduce drag on planes and boats. Think hippo sweat that provides a better sunscreen. Harman's book shares 100 case studies of what your company can learn from nature that will inform how you organize, structure, and deliver innovative products/services to your market. At a minimum, look at Harman's Pax Scientific website to see new designs in fan blades, etc.

The Nature of Business -- further notes Harman:

$1.3 trillion of global GDP will be generated in the next ten years from biomimicry. By adapting nature's strategies to solve human challenges, biomimicry represents the foundation of all future innovation.

Harman is keynoting our fall Growth Summit in Dallas Oct 25 - 26. He's also headlining the first Geoversity program I've co-founded in the jungles of Panama. GPro and book club members are receiving a copy of Harman's book. Read the "Introduction" for an excellent overview of what we can learn from nature to fuel our organizations.

Geoversity -- Directed by the co-chair of Fortune's powerful Brainstorm-E conference and Editor-at-Large, Brian Dumaine, Geoversity is partnered with the Technology and Entrepreneurship Center at Harvard (TECH) to give 40 leaders hands-on experience (and a helicopter tour/transfers) in Panama City and the jungles nearby on the following topics:

• Bio-Inspired Products
• What Nature Teaches Us About Organizational Structure & Strategy
• The Circular Economy
• Workplace Design
• Nature: The Next Great App
• Innovating with Nature
• Marketing with Nature
• A Plunge in the Rainforest
• What Business Can Learn from Nature's Diversity

More importantly, these leaders will bond and support each other over three annual sessions, like the Harvard and MIT programs in which many of you have participated, to transform your businesses and organizations to take advantage of what we can all learn from nature. For an introductory video and a list of the faculty and to apply for one of the first 40 positions, visit the Geoversity website.

7-Minutes to Mastery -- Automatic revenue is a dream for any company. Just because your primary business isn't a subscription model, doesn't mean you can't leverage automatic recurring revenue. There are many models out there, but here's a great one from John Warrillow. To access the clip, go here!

EDUCATION:

Learn the Scaling Up Methodology on a new level with our Online Master Class. For more information and to find out if this is a good fit for you and or your team, contact Juan Gonzalez at [email protected] or call him at (512) 773 5465

Want to 10X your Team? Click here to master the dynamics of business growth or contact Juan Gonzalez at [email protected] or call him at (512) 773 5465.

TECHNOLOGY:

Align Software puts everyone on the Same Page - Literally! See, in real time every person in your organization and how they are progressing on their priorities - alongside how they Align to the Company Priorities! Scale Up your Rockefeller Habits implementation with www.alignwithgazelles.com - on your computer and on your phone.

Better Book Club -- What's your team reading? Increase your books read per team member. Easy, Proven, and in the Cloud at http://www.BetterBookClub.com.

COACHING:

Have you ever wondered if your company would be a good candidate to work with an executive growth coach? Click here to watch Gazelles International President Keith Cupp describes the four most important attributes of successful clients.

And if you're interested in becoming a world-class certified Gazelles International coach, please contact Jean Carpenter at [email protected] / (360) 798.9471.

Best Summer Read; Scooter Store Innocent; Don’t Be Authentic; June 13 Deadline Harvard Exit Strategies

"...insights for scaleups"

HEADLINES:

The cowards never started and the weak died along the way. That leaves us, ladies and gentlemen. Us.
	Phil Knight's (Nike co-founder) favorite quote

7-Minutes to Mastery - Influence -- learn Steve Martin's 3 main motivations to get anyone to do anything. More below, but first...

Scooter Store Did Nothing Wrong -- after spending five years and $10 million investigating Doug Harrison's company (and destroying 2500+ jobs in the process), the FBI ultimately found the Scooter Store did nothing wrong, more below, but second...

June 13 Application Deadline -- Harvard's Summit on Exit Strategies, more below, but third...

Don't Be Authentic! -- notes Adam Grant in this insightful NY Times article titled "Unless Your Oprah, 'Be Yourself' Is Terrible Advice":

Nobody wants to see your true self. We all have thoughts and feelings that we believe are fundamental to our lives, but that are better left unspoken.

This was a particularly painful article for me. I pride myself on being transparent and "speaking my mind." This article suggests a much better way - in essence:

Instead of searching for our inner selves and then making a concerted effort to express them, Trilling urged us to start with our outer selves. Pay attention to how we present ourselves to others, and then strive to be the people we claim to be.

Take 2 minutes to read this powerful article - then work on being sincere vs. authentic (you'll understand after reading the article).

Brené Brown Responds to Adam's Article -- so begins the debate as Brown immediately challenges Grant's authenticity vs. sincerity distinction - then Grant responds to her. It's been a while since I've seen a couple of the top professors/thought leaders go at each other. It's an important topic and worth reading the two additional pieces (4 minutes). BTW, Brown's response seemed authentic (crude and blunt); Grant's sincere (polite and measured).

Nike -- Great Summer Read -- best biz bio I've read in a while - Phil Knight's (co-founder of Nike) biography titled Shoe Dog. Knight's book, once again, proves that scaling a company is never easy - from the challenges with his initial Japanese partner going around his distribution agreement to ongoing challenges with his bankers. Ultimately, Knight and his team "just kept moving" like those that navigated the Oregon Trail (the source of the opening quote above).

Knight's Terrible Time with Managers -- notes Knight, sitting in a hot tub with the former CEO of the trading company that saved Nike:

"We have so much opportunity, but we're having a terrible time getting managers who can seize those opportunities. We try people from the outside, but they fail, because our culture is so different." His friend nods and says, "See those bamboo trees up there? Next year...when you come...they will be one foot higher."

Knight understood the message:

When I returned to Oregon I tried hard to cultivate and grow the management team we had, slowly, with more patience, with an eye toward more training and more long-term planning. I took the wider, longer view. It worked.

Yes, it seems to have worked. Nike's revenue last year was over $30 billion and the market cap today is just shy of $90 billion. Knight's book is a real page turner, quick read - enjoy this summer.

Knight's Run-In with the US Government -- thanks to what Knight called a "bureau-kraken" customs official on a power trip, Nike was almost destroyed. This lone official claimed Nike owed customs $25 million, even though his own colleagues in the Treasury Department sided with Nike and said it didn't owe any money. This was at a time when Nike's revenues were only $25 million! Anyway, Nike, like so many of my entrepreneurial friends, have found that it's not just in other countries, but also in the US that unhappy bureaucrats decide they need to act important and end up crushing growth firms which are less able to fight their own government than the large Fortune 500.

The Scooter Store Short Story -- Knight's battle with the US Government pales in comparison to what happened to Doug Harrison's baby. Notes Harrison in a note to me a couple weeks ago (lots of authenticity and sincerity):

After over a decade of being aggressively pursued and abused by the Department of 'in'Justice, examined and re-examined harder than any company I know, they have finally come to the conclusion that we didn't do anything wrong. The DOJ "officially" said that they can't prove anything "beyond a reasonable doubt" (the legal definition of innocent). While the press made all kinds of wild assumptions, it is worth noting that the FBI (F'ing Bunch of Idiots) and the Dept. of in-Justice never made any allegations, no charges, and no indictments. I can and will pursue complete vindication for my reputation, my business, my employees, and my family.

Again, Harrison's story isn't an isolated situation. Dozens of entrepreneurs have shared similar stories with me - one today - and all ended up being innocent but prosecuted by the media in the meantime.

Bill Gates' Top Five Books for the Summer -- and here is Gate's annual summer reading list which includes a two-minute animation he created to explain his picks. Neither the list nor the video are that inspiring, but he did convince me to read The Vital Question.

Reading Makes You Happier -- this New Yorker article is tough to read, but makes one great point - something biz guru Peter Drucker understood - that reading good fiction books gives you great insight into people. More specifically:

...people who read a lot of fiction tend to be better at empathizing with others (even after the researchers had accounted for the potential bias that people with greater empathetic tendencies may prefer to read novels). And, in 2013, an influential study published in Science found that reading literary fiction (rather than popular fiction or literary nonfiction) improved participants' results on tests that measured social perception and empathy, which are crucial to "theory of mind": the ability to guess with accuracy what another human being might be thinking or feeling, a skill humans only start to develop around the age of four.

As organizations move to more self-directed work teams - and you wrestle with authenticity, these skills will become more and more critical - more than technical skills.

7-Minutes to Master -- Scaling Up Club -- rather watch/listen than read, Steve Martin, considered one of the top three influence experts in the world, is co-author of The small BIG: small changes that spark big influence. Go to slides 3 to 6 (7:14-14:43) and see how small changes can have a surprisingly positive impact on your business. Steve will also focus on the 3 main motivations to achieve successful influence.

Only have one minute? Watch slides 13 and 14 (43:47-45:08) to understand the importance of affiliating and gaining the approval of others in the science of persuasion. To access the clip: Scaling Up Club Members go here. Non-members can join here to enjoy!

Harvard Summit on Exit Strategies: Application Deadline -- Monday, June 13 application deadline to attend the Harvard Summit on Exit Strategies is fast approaching. Are you planning to sell your company in the next 36 months for $25 million to $500 million or more? Maximize your Exit by applying to attend (at no charge) this two-day symposium hosted at Harvard on August 23 and 24. I'll be one of the speakers discussing the strategies PE firms and larger companies use to "rob" owners of their firms. A first-class faculty will help you make the most of this big (and final) decision - and teach you how to handle the challenges you face after exiting. The response has been fantastic, but there is still time to apply.

COACHING:

Have you ever wondered if your company would be a good candidate to work with an executive growth coach? Click here to watch Gazelles International President Keith Cupp describes the four most important attributes of successful clients.

And if you're interested in becoming a world-class certified Gazelles International coach, please contact Jean Carpenter at [email protected] / (360) 798.9471.

TECHNOLOGY:

Align Software puts everyone on the Same Page - Literally! See, in real time every person in your organization and how they are progressing on their priorities - alongside how they Align to the Company Priorities! Scale Up your Rockefeller Habits implementation with www.alignwithgazelles.com - on your computer and on your phone.

Better Book Club -- What's your team reading? Increase your books read per team member. Easy, Proven, and in the Cloud at http://www.BetterBookClub.com.

Pricing Strategies; Hyper-Specialization; Summer Poverty Camps; Harvard Exit Strategies

"...insights for scaleups"

HEADLINES:

7 Minutes to Mastery (Scaling Up Club) -- Better understand social trends with this week's selected video clip from Michael Drew's Pendulum, but first...

June 13 Deadline -- apply to attend, free of charge, Harvard's Exit Strategies Summit August 23 - 24. More info below, but second...

When Low Prices Work...and when they don't! In this latest HBR article by pricing guru Hermann Simon, he outlines how a company can make huge profits being the low price competitor (think IKEA with 5.5x industry average profitability) so long as they follow these key strategies (all or nothing):

• They have a low-price position from day one.
• They have a high-growth, high-revenue focus.
• They are extremely efficient.
• They guarantee adequate and consistent quality.
• They focus on core products.
• Their ads focus on price.
• They never mix their messages.

Take 3 minutes to get the details for each strategy. Then more importantly, read Simon's book Confessions of a Pricing Man - the best book on pricing ever written (what do you know about pricing?). Simon will also keynote our fall Growth Summit in Dallas Oct 25 - 26.

Hyper-Specialization (Gazelles Case Study) -- Denes Purnhauser, based on our "Hyper-Specialization" advise, has created a "Cloud Office Suite for Small Record Label Companies." Read more about how he's taken a general set of commoditized IT services and bundled them to create a 100% solution for a narrow niche - and then productized it. When you do this, marketing costs fall and margins skyrocket.

Bringing Out the Best in People -- the Third Edition of this business classic was released yesterday. I consider it one of the top five business books of all time. Written by the top human behaviorist in the world (for business), Aubrey Daniels has debunked most of the popular management techniques like Employee of the Month programs, quarterly reviews, etc. And his approaches are as applicable to the family (years ago his team helped Julie and me get our 2-year-old to stop screaming at meals) as they are the work setting. GPro and book club members will receive his book next week.

Two Critical Programs -- besides our Scaling Up workshops, I recommend all leaders attend two 2-day workshops as part of their executive development - Jack Stack's "Great Game of Business" workshop; and Aubrey Daniel's "Bringing Out the Best in People" workshop. Learn how to gamify your business and then get the most from your people in a positive way.

Summer Poverty Simulation Camp? -- Looking for a different kind of learning event? For those that want to experience what it's like to live in a refugee camp or live homeless on the streets, there are several options to gain empathy into the plight of the less fortunate. Without its critics, this Fortune article highlights the controversies surrounding these ventures while providing a list of camps. I participated in something similar when I was in college and it was one of the most impactful experiences of my life. For me, I finally understood the roots of terrorism (I became one very quickly in the simulation - no surprise to my closest colleagues and friends!). Anyway, I highly recommend you try it.

Harvard Summit on Exit Strategies -- are you planning to sell your company in the next 36 months for $25 million to $500 million or more? Maximize your exit by applying to attend (no charge) this 2-day symposium hosted at Harvard Aug 23 - 24. I'll be one of the speakers discussing the strategies PE firms and larger companies use to "rob" owners of their firms. It's a first class faculty aimed at helping you make the most of this big (and final) decision - and how to handle the challenges you face after exiting. Application deadline June 13.

June Scaling Up Workshops -- Montreal June 7; Portland June 9; Los Angeles June 14. For more info.

7 Minute to Mastery -- Scaling Up Club -- Understand the newest social trends in business such as collective mentality and how we can better adapt our businesses in a society leaning towards a "we" focus. This 7-minute clip looks at on how in a "we" society, businesses need to have real conversations and better understand their clients. To access the clip or signup: go here!

COACHING:

Have you ever wondered if your company would be a good candidate to work with an executive growth coach? Click here to watch Gazelles International President Keith Cupp describes the four most important attributes of successful clients.

And if you're interested in becoming a world-class certified Gazelles International coach, please contact Jean Carpenter at [email protected] / (360) 798.9471.

TECHNOLOGY:

Align Software puts everyone on the Same Page - Literally! See, in real time every person in your organization and how they are progressing on their priorities - alongside how they Align to the Company Priorities! Scale Up your Rockefeller Habits implementation with www.alignwithgazelles.com - on your computer and on your phone.

Better Book Club -- What's your team reading? Increase your books read per team member. Easy, Proven, and in the Cloud at http://www.BetterBookClub.com.