Doctor Death; Unstoppable Teams; High Stakes Negotiations; Best $995
March 28, 2019
Atlassian’s Core Values; Bezos’s Letter; CKO; ScaleUpX
April 12, 2019

Loss Leader Fallacy; Ken Allen Turnaround; Henry McGovern; London Nov 11 – 12

Hello ScaleUps, 

Hope it’s been a productive and purposeful week. Here are some insights/opportunities to help you outlearn/outthink the competition.

(It) was like having a loss leader as the majority of our business.
  Ken Allen

Come Meet Henry McGovern —
Scaling AmRest to over 38,000 employees across 16 countries from his first Pizza Hut in Poland, Henry McGovern is flying over to keynote our ScaleUp Summit in Atlanta May 21 – 22. Outperforming the entire restaurant industry by a factor of 2:1 the past dozen years, Henry will share in detail how he’s accomplished this in a tough industry. Thank you Henry for giving back to our community.

Ken Allen’s $5 billion Turnaround (Lessons for All of Us) —
This HBR article details the steps Ken Allen took to go from a $3 billion loss in 2008 to a $2 billion profit in 2018 at DHL Express. There are important and applicable lessons for all of us “mere mortal” company leaders. It starts with grabbing the attention of our team with emotion, images, and music!! Just read the opening paragraph – how Allen used the image of a beating heart that slowed and then stopped to convey it was time to act or go extinct!

The Fallacy of “Loss Leaders” —
DHL was competing in a commoditized business where they didn’t have any distinct advantage (hope that’s not you) – domestic deliveries in the US. Noted Allen, “70% of our shipping volume was domestic, which was like having a loss leader as the majority of our business!” He further notes, “Behind the domestic expansion was the (ill-advised) belief that high volumes in domestic shipping would reduce our unit costs for international as well” How many loss leaders do you have in your business? Has your sales team convinced you these loss leaders are needed to get the profitable part of the business? Question this, NOW!!!

The Power of Simplicity —
Continues Allen: “For executives, the question of “what to do” is often better thought of as “what not to do.” Every day half a dozen opportunities land on my desk that promise to be the next big thing, but successful managers know how to turn down opportunities that could distract from the sector where they can deliver the most value.” The “what not to do” was domestic shipping – so Allen made the tough decision to exit this 70% of the business. What business do you need to exit? 

It Always Comes Down to Focus – the “Words you own” —
“I knew we were putting ourselves on the right course by concentrating on what we did best,” exclaims Allen. “Our turnaround strategy was based on one central tenet: focus. DHL Express would have the single focus of being the world’s premier international express shipping company.” No one could own “shipping” – but DHL would own “international express shipping” by being the easiest and best at this one thing. What is the one thing you’re best at?

Then Execution, $100 Million in Training…and Music —
It was Allen’s next decision, when the company was losing massive amounts of money, to invest in employee training. Notes Allen, “Our employees define the customer experience. Recognizing this, our focus strategy positioned our people as the key part of a four-link chain of success: Motivated (and well trained) employees (1) would provide great service (2), leading to loyal customers (3) and, ultimately, a profitable network (4).” The rest of the article details how he did this, including his use of music/song to get his messages across. If it isn’t obvious, I love this article. Please take 4 minutes to read/absorb – and then take action. Thank you to Scaling Up Certified coach Corwin Smith for pointing me to this insightful read.

Meet Me in NYC and London – Bloomberg CEO Summits
Bloomberg just confirmed: in addition to keynoting their CEO Summit in NYC June 17 – 18 I’ll be keynoting their fall CEO Summit in London Nov 11 – 12. These are Bloomberg member-only events, but global membership is just $5k per year (18 annual events) and it’s an impressive and growing group of CEOs. Speakers in NYC include The Carlyle Group co-founder David Rubenstein; General Stanley McChrystal (Team of Teams); Gary Loveman (Harvard prof/former CEO Harrah’s); and Kathryn Minshew, CEO & Founder of The Muse. For the complete program, go to this link 

CEO-BOOTCAMP: spend 3.5 days with Verne, serial entrepreneur John Ratliff, and 6 other CEOs in a beautiful retreat setting, addressing the constraints holding back you, your business, and your industry. Jun 4 – 7 (Sold Out); Aug 20 – 23, 2019; Jan 14 – 17; Jan 21 – 24, 2020.

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]


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? The Scaling Up team is prepared to support you. We have helped 40,000 other organizations over the past 30+ years, in scaling up their organizations through coaching, workshops, online training and more. 

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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.