Mid-Year Review; #1 Mistake of Growth Firms; Brain Fitness; Seattle and Denver
May 31, 2011
Y-Size Your Business; What Millennials Love; How Great Entrepreneurs Think
June 7, 2011

Malcolm Gladwell Seminar; Demand Wins; Peacetime CEO vs. Wartime CEO; Can You Scale

"…keeping you great"


Tom HAGEN Mike, why am I out?
MICHAEL CORLEONE You're not a wartime consigliere. Things may get tough with the move we're trying.
                                                  Scene from The Godfather

Malcolm Gladwell Seminar — "Why People are Successful" is the title of our June online seminar featuring Malcolm Gladwell. Unarguably the most famous non-fiction writer of our time, his books Outliers; Tipping Point; and Blink have changed the language and thinking of leaders around the world. Our latest Gazelles Growth Institute online seminar focuses on Gladwell's discoveries about successful people as featured in Outliers. It's a program I've also shared with my older children. Anyway, I'm so excited to bring this guru to your desktop. NOTE: because of the deal we structured with Linkage, who is representing Gladwell, we can only offer the companywide license, but you'll want to share this seminar with ALL your employees and family members.

It' All About Demand, Not Supply — over the past few weeks I've been warning my audiences that a key shift has occurred that is changing entire industries. From World War II until 2007, demand has outstripped supply – therefore, business has been about maximizing and streamlining the supply chain (better, faster, cheaper). However, the situation has reversed. Now supply is outstripping demand in many industries, given that the 1.4 billion people moving into the middle class must first produce before they can consume (it's a timing issue). The only exceptions are the basics – food, water, power, and low cost housing. Therefore, you MUST shift your focus to understanding and managing the DEMAND side of the business.

Google, Facebook, eBay, Amazon — and mid-market firms like BuildDirect – what these companies do is understand and generate DEMAND. They don't make anything! They help an oversupply of vendors reach interested customers at the right moment. They have the databases, they have the customer relationships, and they have the data. And most importantly, they know where the most profitable niches are. So where do you get ideas for making the switch from a supply to demand focus? Keep reading.

How Companies Win — this is the book that rocked my world the last few weeks. Subtitled Profiting from Demand-Driven Business Models No Matter What Business You're In Rick Kash and David Calhoun are a couple savvy guys that outline how a business makes the transition to a demand-focused organization. The key is slicing and dicing potential markets in ways that help you find the best "profit pools" – those specific types of customers within your niche that will make you the most money i.e. it's critical you give sales people specific lists of potential customers to pursue. Just skim the first four chapters – that's all you'll need (about a third of the book) – skip the rest. And I'm aiming to get one of the authors to a future Summit – hopefully next spring.

Peace Time CEO vs. War Time CEO — the other reading that rocked my world (and made me question some of what we've been teaching) is this blog by Ben Horowitz, Marc Andreessen's co-founder in their venture firm. BTW, they purchased Skype for $2 billion, which everyone thought was stupid, until it was sold to Microsoft for $8.5 billion (another great Ben blog post). Anyway, Horowitz suggests that Google has moved from peace time to war time, which is why Eric Schmidt stepped aside as CEO to let Larry Page run the show. And Horowitz suggests that how you lead in war is much different than in peace. His list of differences makes you think i.e. the "Peacetime CEO always has a contingency plan. Wartime CEO knows that sometimes you gotta roll a hard six!!" Take 2 minutes to look over the list. Thanks to Dilendra Wimalasekere, with game-changing 24/7 Techies which provides unlimited tech support for a nominal fee each year, for recommending this blog. Horowitz is one of the key bloggers I'm now following – another really smart business leader.

How to Know if Your Business Can Scale — and take 3 more minutes to scan this excellent Fortune feature by Alex Taussig, a Principal with Highland Capital Partners. He suggests the question "how scalable is your business" is misunderstood and so he provides a concrete definition, illustrated through some simple graphs. In essence, will the business ever reach a point where gross margins improve with increased revenues?

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.