The Agile Scaleup

Whole Foods Fail?; Employees First?; Ego is the Enemy?; Uber’s Mess?

"...insights for scaleups"

HEADLINES:

Interacting with Customers? -- does your website give clients an opportunity to interact with a person? If not, see below, but first...

Ego is the Enemy? -- Ryan Holiday is the new Tim Ferriss. And at age 30, he already has several runaway best sellers including Ego is the Enemy, The Obstacle is the Way, and The Daily Stoic. I'm stoked that Holiday is keynoting our fall ScaleUp Summit Oct 17 - 18, St. Louis. More below, but second...

Where Whole Foods Messed Up? -- Amazon's (brilliant) purchase of Whole Foods has wreaked havoc with many companies and industries. And though the price Amazon paid is less than one times Whole Food's revenue, less than what most private companies are worth, who can say that John Mackey, the founder and CEO, failed when he built and sold a firm for almost $14 billion! And he gets to stay on and lead his baby! Overall, it's been an impressive run so far.

Employees First? -- Yet Mackey's "forced" sale of the company has made several people question the validity of the conscious capitalism movement since he was the movement's co-founder. My take? The "employee first idea" is a flaw. Notes this Fast Company article:

...Bill George, who wrote the foreword to Conscious Capitalism, thinks Mackey forgot about two key stakeholders: customers and shareholders. Whole Foods' performance on Wall Street was sluggish, prices remained too high, and Mackey was too preachy about his food choices: he didn't give people what they wanted when they wanted it.

George, a veteran Harvard prof and author, goes on to explain precisely what Mackey missed. Please take two minutes to scan down through this important article.

All Stakeholders Must Be Happy? -- it was Harvard Professor John Kotter's breakthrough research, as reported in his book Corporate Culture and Performance, that answered the question for me. Tracking over 200 firms for more than a decade he found that companies which equally focused on the employees, customers, and shareholders crushed, by a factor of 3 to 1, those firms which took a position that placed one ahead of the rest. This research became the basis for today's "balanced scorecard" where firms like Marriott hold their general managers to three key metrics - employee happiness, customer delight, and financial performance. Thus, Bill George, a dear friend of John Mackey's, is right. Whole Foods forgot about two key stakeholders in putting employees first and that has been a fundamental flaw in its strategy. I think it's a critical lesson for all businesses, especially those in the conscious capitalism camp.

Uber's Similar Mess? -- Bain's top strategist, Chris Zook (who recently keynoted our ScaleUp Summit), co-authored an HBR piece this week which further examines why Uber and many of the "unicorns" have stumbled. In a study of 28 since 2011, nearly two in three died or stumbled. Notes Zook and James Allen, his co-author:

The skills that help founders get their company to take off also are the opposite of those needed to sustain new growth. Founders focus on speed, ignore good process, and relish breaking the rules of the industry they are trying to disrupt. They cut corners, ignore detractors, and avoid naysayers. Their Herculean efforts are responsible for the firm's creation, but also its chaos. Once the company reaches cruising altitude, its leaders need to listen more to competing voices and invest more time in emerging stakeholders.

In short, "what got you here won't get you there" to borrow the title of Marshall Goldsmith's book. Making the transition from entrepreneur to CEO is critical - and the same for the rest of the senior leadership team.

Unscalable Founder? -- Chris Zook and James Allen, in their book The Founder's Dilemma, details four barriers to scaling. In the HBR article, they note:

One of these is what we called the unscalable founder. We believe the founder's mentality is a strategic asset. Nurtured correctly, it can help a company achieve scale insurgency - a company with the benefits of both size and agility. But many individual founders aren't scalable. Individual founders can become a barrier to growth if they are unable to let go of the details and micromanage, or fail to build a cohesive team around them, or allow hubris to get in their way. We found 37% of executives at growing companies described the unscalable founder as a major barrier to their success.

Again, in my experience this is not just an issue for the founder but for the entire extended leadership team. Anytime a leader, anywhere in the organization, fails to let go, build an A-player and healthy team, and/or becomes hubris, the results are going to be less than optimal. Please take 3 minutes to read Zook and Allen's HBR article -- or in 10 seconds go to the end of the article and review the five questions they suggest will determine the health and scalability of the organization. Ego is the enemy and the obstacle is the way!

The Daily Stoic -- which brings me back to Ryan Holiday. Marcus Aurelius, wealthiest Roman and ruler of the empire, didn't have time for 10-day retreats to meditate on the meaning of life (not that I'm not a fan of these) - he had a kingdom and a family to serve 24/7. Thus was born stoicism. Most of the ideas come from Aurelius' private diary - his daily reflections on leading and living. Holiday has compiled these ideas, with short and brilliant commentary, into a book called The Daily Stoic: 366 Meditations on Wisdom, Perseverance, and the Art of Living. I've enjoyed reading each daily meditation since the book was released last October. SPro (ScaleUpPro) and book club members should receive the book this week. Then come hear Holiday share wisdom from his various books at the fall ScaleUp Summit in St. Louis Oct 17 - 18. He's not to be missed!

Are Your Online Customers Walking Away? -- Your website is like a shop. If there are no sales people to help your online customers, they will walk away to a competitor. LiveAdmins, which Gazelles has used for over a decade, helps businesses proactively greet online customers and engage them in conversation. The multilingual chat services offered by LiveAdmins are provided round the clock, ensuring needs of all visitors are taken care of. LiveAdmins has helped companies across all industries significantly increase sales and enhance visitor experience for over a decade.

EXITING: Thinking about selling the business for $40 million or more? Want to get 25% to 200% more than you thought? Request the whitepaper from the Exit Strategies Summit at Harvard from Denise Richmond at (610) 299-6466 or email at [email protected]

TECHNOLOGY:

Create Accountability – Drive Execution
Click Here to Watch a video example.

Align is your cloud based business operating system designed to keep you on your path to executing your goals. 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, tablet or phone. $5.00 per month gets you started.

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 working with a coach might accelerate your company's growth, exponentially? Do you have what it takes to move the dial from good to great? Click here to watch Gazelles International President Keith Cupp describes the four most important attributes of successful clients. Contact us at [email protected] for more information.

And if you're interested in becoming a world-class certified Gazelles International coach, please go to gicoaches.com/becomeacoach for more information. If you determine that we're a fit and wish to join our premier organization, we invite you to contact our Dir. of Coach Engagement at [email protected] or 877.217.2253 ext.700.

Crazy Backstory; No Try, Only Do; Brand/Culture Assessment; Be Incredible!

"...insights for scaleups"

HEADLINES:

Free Brand/Culture Assessment -- 2016 ScaleUp Summit speaker Denise Lee Yohn, author of What Great Brands Do, is working on a new book and is gathering research through a free brand/culture assessment, more below, but first...

My Apology, But Great Story -- I took some time off last week, so there was no insight (and there will be other gaps this summer). Otherwise, the next piece would have been more timely. I still find this a perfect example of why it's always a "WHO" question when you want to win and win big!! And it's an amazing and insightful story of constraint analysis, quick decision making, and making the ONE move that all but guaranteed a championship title a year in advance. Please read!

'I'm Ready': The Text That Started the Warriors' Dynasty -- for non-NBA fans, the Golden State Warriors basketball team continued to set records in winning their 2nd Championship in three years, crushing Lebron James' Cleveland Cavaliers. But there is a back story that all but guaranteed this outcome a year in advance, which this brilliantly written Sports Illustrated (SI) article article details. In short, just 30 minutes after the Warriors lost Game 7 of the finals last year to the Cavaliers, after having the winningest season in history, Warriors player Draymond Green kicks into action. Rather than sitting around all depressed, thinking about how no team had ever lost a championship being up 3-1, Green is making a move to guarantee this never happens again.

Only One Option -- to quote SI, Green asks himself:

"What will get us over this hump and make us incredible? Not just incredible for a year. What will make us incredible for a long, long time?" Rather than what, the question was who. Green believed the Warriors needed a player to take stress off Curry, so he wouldn't always have to hit the 35-footer, and apply it to James, so he would never again be able to hide on Harrison Barnes, freelancing for blocks and steals. Only one such person who walks the earth was available.

Green had analyzed the devastating loss, identified the key constraints, and realized the only solution was a "who."

Kevin Durant -- the SI article continues:

And so, at that locker, in that uniform, less than an hour after the most excruciating loss of his life, Green punched up Kevin Durant's number. "See what we're missing," Green says, recounting the text message he sent Durant. "We need you. Make it happen." Green had been courting Durant for months, but this was his strongest pitch yet, delivered at the most dramatic juncture. "Right after you lose Game 7," Green says, "shows you're serious." Of course, the Warriors did not need Durant, not really. They had gone 73-9 without him. But Green would leave nothing to chance. Neither, it turned out, would Durant.

The rest is history. Durant joins the Warriors, they set an NBA playoff record in winning 15 straight games, and this move all but assures the Warriors of several more, if not a record number of, championships. It's a lengthy, but riveting article - please take 6 minutes to read the rest of this story and pick up more negotiation and human behavior tricks.

What Will Make Your Company Incredible for a Long, Long Time? -- bring this question to your next weekly meeting or quarterly planning session. Take some time this weekend to think about what is truly constraining your business (or personal) success. It's likely a "who" issue. Who's missing? Who could take a significant load off you and the team? Who do you need to text?

No Try, Only Do -- the previous story couldn't have set me up any better to promote a book titled No Try, Only Do (exactly what Draymond Green did!). Serial entrepreneur Andy Bailey launched and scaled an Inc. 500 company, which he successfully exited in 2011. Now founder of Petra Coach, a significant coaching partner with Gazelles (and creator of Align, the SaaS dashboarding system we recommend), Andy has logged more than 10,000 hours coaching firms in using the Rockefeller Habits. His new book No Try, Only Do provides numerous case studies that detail how to put these habits in action. Go right to Chapter 6 and see how NationLink Wireless, Andy's earlier company, 4x'd the industry average gross margin/employee - moving from $75k/employee to a whopping $275k/employee. Then read the rest of the book! Thank you, Andy, for the perfect "how to" supplement to Scaling Up (Rockefeller Habits 2.0).

Who You Sit Next to Matters -- there's been a long-standing idea that your success is the sum of the people you associate with. Along these same lines, this HBR article titled "Want to be more productive, sit next to someone who is" highlights research proving this link. For me, the best solution is hiring all A-Players, then you don't have to worry about who sits (or plays) next to whom!

Free Brand/Culture Assessment -- Denise Lee Yohn is working on a new book about the mutually-reinforcing and interdependent relationship between company culture (what you do on the inside) and brand identity (how you're perceived on the outside.) She has developed an assessment to help you determine how well-integrated your brand and your culture are and where the biggest gaps exist. Please take the assessment - it's free and only takes about 15 minutes. Not only will you help Denise collect the data she needs for her new book, but also you'll get a personalized report that will help you identify the brand type and corresponding core values that will enable your organization to achieve its greatest impact.

TECHNOLOGY:

Create Accountability – Drive Execution
Click Here to Watch a video example.

Align is your cloud based business operating system designed to keep you on your path to executing your goals. 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, tablet or phone. $5.00 per month gets you started.

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 working with a coach might accelerate your company's growth, exponentially? Do you have what it takes to move the dial from good to great? Click here to watch Gazelles International President Keith Cupp describes the four most important attributes of successful clients. Contact us at [email protected] for more information.

And if you're interested in becoming a world-class certified Gazelles International coach, please go to gicoaches.com/becomeacoach for more information. If you determine that we're a fit and wish to join our premier organization, we invite you to contact our Dir. of Coach Engagement at [email protected] or 877.217.2253 ext.700.

EXITING: Thinking about selling the business for $40 million or more? Want to get 25% to 200% more than you thought? Request the whitepaper from the Exit Strategies Summit at Harvard from Denise Richmond at (610) 299-6466 or email at [email protected]

Atlassian Doubles; Leprino Dominates; Wal-Mart Leads; Elite SEM on Today Show

"...insights for scaleups"

HEADLINES:

Atlassian's Value Doubled -- in just under 18 months since it's Dec 10, 2015 IPO, Atlassian's market cap has doubled from $4.2 billion to $8.4 billion. I'm just saying! Congrats to Scott Farquhar and Mike Cannon-Brookes for continuing to lead one of the best run companies in the world. Discipline and focus are key, as Scott notes on the back of Scaling Up.

Fortune 500 List Ratios -- the latest Fortune list is out and Wal-Mart still tops with $486 billion in revenue, more than twice Berkshire Hathaway and Apple, sitting at #2 and #3 respectfully. With a combined revenue of $12 trillion and profits of $890 billion, average profit is 7.4% for the Fortune 500. Mid-market firms, if they dominate a narrow niche, should be 3x this - are you? And with a combined workforce of 28.2 million, average revenue per employee sits at almost $426,000/employee, over four times that of mid-market firms.

Pricing and Process -- Better strategic pricing (branding drives pricing power) and lean processes are two main reasons big firms crush scaleups in revenue/employee. Building brand (owning a word or two, like "pizza cheese" - see below) and annually cleaning up processes, like cleaning out closets, will increase your revenue/employee, a KPI to watch closely.

Chick-fil-A 3x KFC -- the iconic fast food chain Chick-fil-A, famous for not being open on Sundays, generates over 3x the revenue per store as competitor KFC -- $3.1 million vs. $960,000. Reasons:

1. Customer Service - #1 on Consumer Reports for all restaurants
2. Employee Training - "the better we train the longer people stay"
3. Fulfill Dreams - paid to have an employee take photography classes

It's comes down to showing that you care. And when employees feel cared for they care for your customers and company. This Business Insider UK article article provides more details. Thanks to John DiJulius, customer service guru, for sharing this story in his latest blog.

85% Market Share -- Forbes manages to get an interview, but still no photo, of camera shy James Leprino, the 79-year-old billionaire founder of Denver-based Leprino Cheese which owns 85% of the "pizza cheese" market with Pizza Hut, Domino's, and Papa John's as clients. Notes the article:

Leprino takes out his beat-up black leather wallet, removes the rubber band holding it shut and reveals a card featuring the four company watchwords: quality, service, price, ethics. "I've got everybody keeping one in their pocket," Leprino says. "The company was growing so fast they were missing this important message."

Please take 2 minutes to read this case study of how to dominate a niche! What is your niche in which you'll own 85%?

Ben Kirshner on Today Show (Gazelles Case Study) -- congratulations to Elite SEM's CEO for his appearance on the Today Show with Al Roker discussing the misconceptions about millennials and work. Elite SEM was named by Fortune as the #1 place for millennials to work last year (#5 this year) and is coached by Gazelles Certified Coach Matt Kuttler. FYI, Ben is going to give a ScaleUpX talk at the fall Summit and then lead a longer session at the Scaling Up User Conference the following day (Oct 19, St. Louis). This is one of the best run companies in the US.

Strategy Guru Frances Frei Joins Uber -- Harvard prof and author of my favorite strategy book Uncommon Service has made a bold move and is joining Uber, not as COO, which they are still looking for, but as their first SVP in leadership and strategy. This Recode article will fill in the details as she goes in to clean up a real leadership mess. Can't wait to check back a year from now.

"Quality, Service, Price, Ethics" -- James Leprino built a pizza cheese dynasty by consistently innovating and delivering on these four drivers. What are your drivers? Pick a few and then deliver!

COACHING:

Have you ever wondered if working with a coach might accelerate your company's growth, exponentially? Do you have what it takes to move the dial from good to great? Click here to watch Gazelles International President Keith Cupp describes the four most important attributes of successful clients. Contact us at [email protected] for more information.

And if you're interested in becoming a world-class certified Gazelles International coach, please go to gicoaches.com/becomeacoach for more information. If you determine that we're a fit and wish to join our premier organization, we invite you to contact our Dir. of Coach Engagement at [email protected] or 877.217.2253 ext.700.

TECHNOLOGY:

Create Accountability – Drive Execution
Click Here to Watch a video example.

Align is your cloud based business operating system designed to keep you on your path to executing your goals. 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, tablet or phone. $5.00 per month gets you started.

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.

2930% Increase in Sales Leads; President Zuckerberg?; 24/7 Techies; Inside Apples New HQ

"...insights for scaleups"

HEADLINES:

2930% Increase in Sales Leads -- and this was for a motorcycle dealer in NYC. Using an AI tool called Albert, Adgorithm's AI-driven marketing platform, Asaf Jacobi's Harley dealership went from selling one or two motorcycles a week during the winter to 15 the first weekend he turned on the tool! By the third month of using the tool, leads increased 2930% and 50% of those were "lookalikes" - mirroring the customers most likely to purchase. Please take two minutes to read the details in this HBR article. This is powerful stuff!

8 Ways Machine Learning Improves Processes -- a significant weakness in scaleups is a lack of effective processes. This results in costly mistakes and wasted time, plus no fun for employees. Machine learning is stepping in to fill the gap. This HBR article outlines the specific processes companies are using machine learning and AI to drive and improve - worth 1 minute to scan down through the list. We'll be hosting more experts in these fields at our ScaleUp Summits (next one Oct 17 - 18, St. Louis).

(President) Mark Zuckerberg's Commencement Address -- I realize this is old news already, but this Boston Globe Opinion piece written by the guy whose book became the famous movie about Mark, is classic. Ben Mezrich wonders if Mark is running for President already with a goal to visit all 50 states in 2017 (his personal goal this year); is he already a cyborg with AI components; will he purchase Uber, Tesla, etc. and assimilate Elon Musk? It's a fun and insightful article with a real possibility that Mark runs sooner than later (thank Trump for clearing the path for business owners to run and win). And for those that missed the speech, Fortune did a nice job highlighting the top 10 quotes from the speech - worth having for your next meeting or cocktail gathering.

If Zuckerberg Ran America Like Facebook -- and yesterday Inc. magazine weighed in. The most interesting part of the article details his "listening tour" of America. And it details how Mark is the consummate politician given all the challenges he faces in dealing with governments around the globe. It's a piece worth reading as it details the skills of a 21st Century leader.

24/7 Techies (Gazelles case study) -- my latest Huffington Post piece highlights Dilendra Wimalasekere's Sri Lanka-based 24/7 Techies. By identifying its core customers in a detailed buyer persona; figuring out what they really want; making the right brand promises to them; and putting a system in place to make sure it keeps those promises, Dilendra's firm is receiving accolades. The product review site TopTenReviews chose 24/7 Techies as the number one company offering the best support for phones and tablets. And its Net Promoter Score is excellent, with 96% of its customers willing to refer the company to others.

24/7 Techies' Brand Promises -- serving mainly US, UK, Canadian, and Australian customers 50 - 70 years old who are non-tech savvy, they guarantee an "outstanding experience" or you don't pay, defined measurably as:

• Answering a call in less than two minutes
• Never hurrying customers and answering all their questions
• Offering clear pricing via a flat fee for unlimited support

They also offer a free diagnostic that allows the company to explain the problem in detail to the customer. And given the service culture Sri Lanka is known for gives Dilendra a leg up on international competitors when it comes to having a pool of talent from which to hire caring people willing to work with older adults (OK, 50 isn't old!). Please take 2 minutes to read the details. Congratulations Dilendra on defining a clear strategy and executing on it. Have you clearly defined your ideal buyer and 3 brand promises?

An Exclusive Look Inside Apple's Mothership -- and for the curious, this Wired article gives some of the first looks inside Apple's amazing new HQ. The attention to every detail is truly impressive with a main design element to blur the line between indoors and outdoors. Jobs understood the importance of connecting with nature as it impacts the quality of work life and creativity. It's a lengthy article so grab your favorite drink this weekend and soak in the ideas.

COACHING:

Have you ever wondered if working with a coach might accelerate your company's growth, exponentially? Do you have what it takes to move the dial from good to great? Click here to watch Gazelles International President Keith Cupp describes the four most important attributes of successful clients. Contact us at [email protected] for more information.

And if you're interested in becoming a world-class certified Gazelles International coach, please go to gicoaches.com/becomeacoach for more information. If you determine that we're a fit and wish to join our premier organization, we invite you to contact our Dir. of Coach Engagement at [email protected] or 877.217.2253 ext.700.

TECHNOLOGY:

Create Accountability – Drive Execution
Click Here to Watch a video example.

Align is your cloud based business operating system designed to keep you on your path to executing your goals. 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, tablet or phone. $5.00 per month gets you started.

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.

EXITING: Thinking about selling the business for $40 million or more? Want to get 25% to 200% more than you thought? Request the whitepaper from the Exit Strategies Summit at Harvard from Denise Richmond at (610) 299-6466 or email at [email protected]