How Free and Inexpensive Technology Put One Company’s Scale-Up on the Fast Track
March 2, 2016
Balmer’s Big Lesson; Zappos Out; Demand Pricing Key; Vyral Marketing Doubles
March 10, 2016

Buffett’s 3 Leadership Lessons; His Prosperity Blueprint; Lean HQ; Amsterdam, Berlin, Barcelona

“…insights for scale-ups”

HEADLINES:

The role of a leader is to define reality and give hope.
              Ken Chenault, CEO American Express (Geoff Colvin’s article)

Amsterdam May 10, Berlin May 11, Barcelona May 12 — join us for our European Growth Summits hosting several top biz thought leaders and their latest books.

Real Leadership — pre-order by March 8 former co-CEO of $2 billion market cap Primerica John Addison’s new book Real Leadership and get a one-year digital subscription to SUCCESS magazine and John’s online course – all for $25. More below.

Buffett’s Three Leadership Lessons — Geoff Colvin has extracted three leadership lessons from Warren Buffett’s latest shareholder letter (released this past weekend) in this short FORTUNE article:

  1. He’s optimistic
  2. He explains what he’s doing so that anyone can understand it.
  3. He admits mistakes and makes no attempt to sugarcoat them.

It’s worth one minute to read – three important leadership reminders.

Profits are Sanity, Cash is King (fun facts) — Buffett (age 85) reports that profits are up 21% and Berkshire ended the year with $71.73 billion in cash – again proof that it pays to hold cash – you age slower, sleep better, and can jump on opportunities more quickly. Here’s a link to Buffett’s annual letter with my highlights below.

Productivity (Rev/Emp) — Buffett highlights on p21 how his various companies focus on productivity – and he goes on to list the huge gains many have made. This is a weakness for most small to mid-market firms which have a tendency to just throw people at a problem. The best measures are Revenue and Profit per employee. For Berkshire, it’s $584,000 and $48,163 respectively for its 361,270 employees ($814,675 Rev/Emp for Primerica!). Take a moment to calculate yours and then for a large company in your similar space. In general, I find the FORTUNE 500 generate 3x the revenue per employee of their smaller counterparts. This is a SIGNIFICANT issue. A focus on process improvement is key (in the spirit of Paul Aker’s “5-Second Lean” initiatives – 1000s of YouTube videos).

Prosperity – Buffett also puts our current economic situation in perspective. On p7 he notes:

American GDP per capita is now about $56,000. As I mentioned last year that – in real terms – is a staggering six times the amount in 1930, the year I was born, a leap far beyond the wildest dreams of my parents or their contemporaries. U.S. citizens are not intrinsically more intelligent today, nor do they work harder than did Americans in 1930. Rather, they work far more efficiently and thereby produce far more. This all-powerful trend is certain to continue: America’s economic magic remains alive and well.

He acknowledges that how this expanding pie is divided will remain a fierce battle; but that even those on the “losing side” will continue to enjoy the benefit of more goods and services at a lower price. He notes that most people live better than John D. Rockefeller could have ever imagined when it comes to transportation, communications, entertainment, and medical access – something that shouldn’t be overlooked.

Simple Blueprint for Continued Prosperity — I found particularly insightful Buffett’s 5+1 keys to taking advantage of the American economic engine. Notes Buffett on p8:

Considering this favorable tailwind (American economy), Berkshire (and, to be sure, a great many other businesses) will almost certainly prosper. The managers who succeed Charlie and me will build Berkshire’s per-share intrinsic value by following our simple blueprint of: (1) constantly improving the basic earning power of our many subsidiaries; (2) further increasing their earnings through bolt-on acquisitions; (3) benefiting from the growth of our investees; (4) repurchasing Berkshire shares when they are available at a meaningful discount from intrinsic value; and (5) making an occasional large acquisition. Management will also try to maximize results for you by rarely, if ever, issuing Berkshire shares.

Lean HQ and one of Buffett’s final thoughts:

In 2015, Berkshire’s revenues increased by $16 billion. Look carefully, however, at the two pictures on the facing page. The top one is from last year’s report and shows the entire Berkshire home-office crew (25) at our Christmas lunch. Below that photo is this year’s Christmas photo portraying the same 25 people identically positioned. In 2015, no one joined us, no one left. And the odds are good that you will see a photo of the same 25 next year.

Concludes Buffett “no one is hired unless he or she is truly needed.” That’s keeping it lean and productive!

Buffett — First Time to Stream — Gazelles isn’t the only one making a LIVE online stream of our FORTUNE Summit available to those who want to share the learning more broadly with all their employees, Berkshire has decided to do the same for the first time in history. Notes Buffett:

Charlie and I have finally decided to enter the 21st Century. To view the meeting, simply go to https://finance.yahoo.com/brklivestream at 9 a.m. Central Daylight Time on Saturday, April 30th. The Yahoo! webcast will begin with a half hour of interviews with managers, directors and shareholders. Then, at 9:30, Charlie and I will commence answering questions.

March Scaling Up Workshops – Mar 15 Chicago; Mar 17 Grand Rapids; Mar 24 LA Join us as we dive deeper into game-changing and productivity driving strategies that have propelled over 40,000 companies around the globe. For more cities and dates – and to Register Now.

Real Leadership: 9 Simple Practices for Leading and Living with Purpose — John Addison shares his straightforward practices for successful leadership through his own personal and professional journey, helping leaders at any level understand and emulate the nine principles that fostered enduring results on his path to success. John’s experiences – from small-town southern boy to influential CEO of Primerica which he took public- will help you make an impact and lead better in every aspect of their lives. With the pre-order of Real Leadership, you will receive free, instant access to the Real Leadership Roadmap digital course ($149 value). The Real Leadership Roadmap also comes with a workbook designed to help participants create their own personal roadmap. In addition to the digital course, each copy of Real Leadership also includes bonus codes for a 1-year digital subscription to SUCCESS (owned by my friend Stuart Johnson) as well as 20% off a purchase from store.SUCCESS.com. This special pre-order offer is available now for $25, including tax and shipping. The book will be shipped after its March 8, 2016 release date but the digital course will be available immediately. This exclusive offer is only available until March 8.

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.

Verne Harnish
Verne Harnish
Verne Harnish is founder of the world-renowned Entrepreneurs’ Organization (EO) and chaired for fifteen years EO’s premiere CEO program, the “Birthing of Giants” and WEO’s “Advanced Business” executive program both held at MIT. Founder and CEO of Gazelles, a global executive education and coaching company with over 150 coaching partners on six continents, Verne has spent the past three decades helping companies scale-up. The “Growth Guy” syndicated columnist, he’s also the Venture columnist for FORTUNE magazine. He’s the author of Scaling Up (Rockefeller Habits 2.0); Mastering the Rockefeller Habits; and along with the editors of Fortune, authored The Greatest Business Decisions of All Times," for which Jim Collins wrote the foreword. Verne also chairs FORTUNE Magazine’s annual Leadership and Growth Summits and serves on several boards including chairman of The Riordan Clinic and the newly launched Geoversity. He is an investor in many scale-ups. A father of four, he enjoys piano, tennis, and magic as a card-carrying member of the International Brotherhood of Magicians.

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