Escaping the Competitive Herd; Key Warning; Bold and Fun TicketCity BowlNovember 11, 2010
5 Strategic Mistakes; Success in India; Grandfather of America; Italian IslandNovember 23, 2010
"…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!