You’d better be running...

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The Making of Indian Giants - A management program by Verne Harnish


verne-harnish-75" Every morning in Africa, a gazelle wakes up. It knows it must run faster than the fastest lion or it will be killed. ...every morning a lion wakes up. It knows it must outrun the slowest gazelle or it will starve to death. It doesn't matter whether you are a lion or a gazelle....when the sun comes up, you'd better be running."


Verne Harnish calls himself the ‘Growth Guy'. He has been named one of the Top 10 minds in small Business by Fortune small business in 2002. He has a long influential track record with entrepreneurial and emerging businesses. He founded the internationally recognized Young Entrepreneurs Organization (YEO) and Gazelles Inc. He is the creator of the Master of Businesses Dynamics Program.


Verne's mission is to help entrepreneurs of emerging , fast growth companies increase the value of their firms. He has a gift for turning complex problems into simple solutions. He is the founder of the YEO ‘Birthing of Giants' executive program in which Verne works with CEOs and executive teams where he gives them practical tips and tools to solve the challenges that come with building a company.


Verne Harnish was in Bangalore for a special day long management program  aptly called ‘The Making of Indian Giants'.


Verne's methods are simple and easy to use. It is also taught by him in a clear and concise manner with lots of data, everyday examples and a pinch of humor.


Here are a few good takeaways from the program:


An entrepreneur is an event driven person and is usually not a good disciplinarian. So every entrepreneur needs a person who has the same passion but is process driven. This key position has to be someone the entrepreneur can totally rely on. Traditionally, it has usually been a family member or a close friend. A good example is what Steve Ballamer was to Bill Gates. As Aristotle says "You are what you repeatedly do. Excellence is not a event - it is a habit."


Another key person every entrepreneur needs is someone who has the ability to hold other people  accountable for their actions. Or else it will be a case of everybody doing nothing.


Also there comes a point in every organization as it grows when the entrepreneur fails to recognize a person who actually works for him. At this point the dynamics of the organization changes. This is when the he needs the rest of his core team to be able to pass on his vision to all the employees. Verne calls this ‘Being on the same page'. This is made possible by what he calls a daily/weekly huddle that the entrepreneur has with his core team. They in turn have a huddle with their respective teams and so the whole organization is on the same page, so to say.

  No one has achieved peak performance without a coach. Education + Coaching = Growth.

Every entrepreneur needs to know and have a plan of action for the next 90 days and 10 years hence. But the crunch is that only an entrepreneur can think that far, the rest of the planet ( those who work for him ) needs to know what is to be done immediately and so the 90 days plan. This is  an extension of the daily/weekly huddle.


A further benefit to this idea is that the single thing our brain is best designed to do is pattern recognition. It was Demming who said "You cannot make patterns without data points."The rhythm of the daily/weekly huddle gives the entrepreneur and his core team a steady stream of relevant data to help in their business decisions.  It is during these huddles and receiving of all the data that suddenly some ideas crystallize. 


Another method to keep in touch is to take one employee to lunch every week. Henry Ford did this and he always picked people closer to the front line and during the 45 min lunch, the first 40 minutes he spent on small talk. By then the employee is comfortable enough to share his innermost fears and thoughts. So to "move faster you've got to pause faster" That is take the time to talk through issues.


If you cannot measure your success it does not count. There have to be kept promises indicators. Here again you need data to be able to measure what you are doing.


Everybody in the organization needs to know where it is headed and if the entrepreneur cannot state the strategy in one sentence then he has a problem.


Verne says the single most important thing that one can do is to make a list of 6 things that need to be done. Then pick the one that you will most definitely do and this will take care of your priorities for you.


Janie and Victor Tsao of Linksys have a simple answer for their success. They listened to what their customers had to say and implemented it within four weeks. When Cisco acquired Linksys, John Chambers said that the reason for the acquisition was that Linksys always were ahead of Cisco, by about 5 weeks.


Whoever learns faster wins.


Another simple advise is to note down the one thing that will make the company or your service better every week. When you act on it you are 1% better every week and this has a compounding effect.  For example if you even save just Rs.40 a day, over a period of 30 years it becomes Rs.4,38,000. This is huge because of the compounding effect. It shows only later because in the initial years the needle does not move as much. Steve Jobs has said "I am always amazed at how overnight successes take a hell of a long time."


What do you do when your company is in trouble? Verne says the best thing you can do is to go out and talk to your customers. 


Talking to your customer on a regular basis is the key. Also what you ask determines your growth. One of the common mistakes and a bad question to start with is ‘Are you satisfied?' . A better way is to know your customer and focus first on is "how he is doing". What are his goals, what kind of problems he is facing on the way, what's new in his industry, etc. Then comes the questions about your competitors because it is always smart to know what you are up against. The last question can be about how the customer feels about you, your product/service.

Dreams with a plan = Vision


The job of a coach is to ask the right questions and guide the entrepreneur in the right direction. His role is only to verbalize the problems and possible areas of improvement. The answer will come to the entrepreneur. So advisers are ‘influencers of the indusry'. For example even a champion like Tiger Woods failed to do well when he tried to play the game without a coach!.


Cash is King. So here are three ways to shorten the Cash Conversion Cycle:


1.  Shorten the cycle times.


2.  Reduce mistakes


3.  Improve your businesses model.


Keep asking yourself and your people these questions: What are the things that you can 1) Start doing,  2) Stop doing and 3) Keep doing?


It is a good strategy for the entrepreneur to ask himself these two questions every 90 days.


1.  If I were competing with us how would I kill us?


2.  If we were a brand new start up today what will I do?


What does it take to motivate your people is a million dollar question? First hire motivated people. But What happens over time is that the company itself starts demotivating the individual with mundane tasks or things that he is not interested in doing. So the entrepreneur's task is to get rid of things that demotivate. But interestingly Bill gates had a bigger problem ; How do you motivate millionares? The answer is in the fact that when people quit stretching they get bored. Because life is like a rubber band; if you do not stretch it, it does not reach its full potential.


Another simple method to motivate is to get all the employees to write down in two columns what they love doing and what they loathe doing. These will be different for different individuals. This Love/Loathe document can be used to juggle tasks around accordingly.


Did you know that ‘The Best Place to Work In' award has been consistently won by a company called ‘The Container store'. Their 3 simple rules are:


1. Great employee = 3 good people Hire the Best instead of making do with many mediocre employees.


2.  Pay twice as much Be ready to pay for quality


3.  160 hours of training It is not fair to judge an employee unless you have educated them at least for a year


Whoever controls the ink owns the industry. So own a word that best describes what you stand for and do. That should be the core purpose - The WHY of your business. Your whole strategy for growth should revolve around this core value. For example 3M- Inovation, Nike - Competation, Disney - Happiness, Starbucks - Escape, MicroSoft - Ubiquity


According to Jack Welch - "Strategy is not a lengthy action plan. It is the evolution of a central idea through continually changing circumstances."


One problem with entrepreneurs is they do not like to look back. Greatest lesson in history is that we do not learn from history.


You have to be able to pick a sand box, make a promise and Keep it. Also Keep your business simple. This in a nutshell is verne's simple formula for success and growth. 


The event was organised by CII and Knowledge Capital


Arathi P. Balaji 


Issue BG75 June07


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