Building a Small Firm: The Key to Success and Growth

1. “I am often asked by would-be entrepreneurs seeking escape from life within huge corporate structures, ‘How do I build a small firm for myself?’ The answer seems obvious …Source: Paul Ormerod, Why Most Things Fail: Evolution, Extinction and Economics

2. LONG Excellence. Always. Gartner Group/PPM & IT Governance Summit Tom Peters/San Diego/22 June 2011

3. NOTE:To appreciate this presentation [and ensure that it is not a mess], you need Microsoft fonts:“Showcard Gothic,”“Ravie,”“Chiller”and“Verdana”

4. What Works.What Doesn’t.

5. “I am often asked by would-be entrepreneurs seeking escape from life within huge corporate structures, ‘How do I build a small firm for myself?’ The answer seems obvious …Source: Paul Ormerod, Why Most Things Fail: Evolution, Extinction and Economics

6. “I am often asked by would-be entrepreneurs seeking escape from life within huge corporate structures, ‘How do I build a small firm for myself?’ The answer seems obvious:Buy a very large one and just wait.”—Paul Ormerod, Why Most Things Fail: Evolution, Extinction and Economics

7. “Mr. Foster and his McKinsey colleagues collected detailed performance data stretching back 40 years for 1,000 U.S. companies.They found thatnoneof the long-term survivors managed to outperform the market. Worse, the longer companies had been in the database, the worse they did.”—Financial Times

8. Dick Kovacevich:You don’t get better by being bigger. You get worse.”

9. “Data drawn from the real world attest to a fact that is beyond our control:Everything in existence tends to deteriorate.”—Norberto Odebrecht, Education Through Work

10. “Not a single company that qualified as having made a sustained transformation ignited its leap with a big acquisition or merger.Moreover, comparison companies—those that failed to make a leap or, if they did, failed to sustain it—often tried to make themselves great with a big acquisition or merger. They failed to grasp the simple truth that while you can buy your way to growth, you cannot buy your way to greatness.”—Jim Collins/Time

11. “When asked to name just one big merger that had lived up to expectations, Leon Cooperman, former cochairman of Goldman Sachs’ Investment Policy Committee, answered:I’m sure there are success stories out there, but at this moment I draw a blank.”—Mark Sirower, The Synergy Trap

12. M & A success rate as measured by adding value to the acquirer:15% Source: Mark Sirower, The Synergy Trap

13. Spinoffs …systematically perform better than IPOs … track record, profits … “freed from the confines of the parent … more entrepreneurial, more nimble.”—Jerry Knight/ Washington Post/

14. #4 Japan#3 USA#2 China#1 Germany

15. MittELstand*

16. *“agile creatures darting between the legs of the multinational monsters" Source: Bloomberg BusinessWeek on the German MITTELSTAND

17. Seymour CTFairfield OHFrankenmuth MI

18. Basement Systems Inc.

19. Jungle Jim’s International Market, Fairfield, Ohio: “An adventure in ‘shoppertainment,’as Jungle Jim’s call it, begins in the parking lot and goes on to 1,600 cheeses and, yes, 1,400 varieties of hot sauce —not to mention 12,000 wines priced from $8 to $8,000 a bottle; all this is brought to you by 4,000 vendors. Customers come from every corner of the globe.” Bronner’s Christmas Wonderland, Frankenmuth, Michigan, pop 5,000:98,000-square-foot “shop” features the likes of 6,000 Christmas ornaments, 50,000 trims, and anything else you can name if it pertains to Christmas. Source: George Whalin, Retail Superstars

20. “Be the best. It’s the only market that’s not crowded.” From: Retail Superstars: Inside the 25 Best Independent Stores in America, George Whalin

21. What Works.What Doesn’t.

22. No.“Optimization” “We’ve got to get this right.” “Perfectly compatible”“Synergy”“Big”

23. Dick Kovacevich:You don’t get better by being bigger. You get worse.”

24. “It is generally much easier to kill an organization than change it substantially.”—Kevin Kelly, Out of Control

25. “The secret of fast progress is inefficiency, fast and furious and numerous failures.”—Kevin Kelly

26. Regis McKenna*: “A lot of companies in the Valley fail.”Robert Noyce**:“Maybe not enough fail.”RM: “What do you mean by that?”RN:“Whenever you fail, it means you’re trying new things.”*McKenna was the original Silicon Valley “marketing guru”**Robert Noyce was an Intel co-founder and one of the fathers of the modern information industry.Source: Fast Company

27. “Once a system grows sufficiently complex and centralized, it doesn’t matter how badly our best and brightest foul things up. Every crisis increases their authority, because they seem to be the only ones who understand the system well enough to fix it. But their fixes tend to make the system even more complex and centralized, and more vulnerable to the next national-security surprise, the next natural disaster, the next economic crisis.” —Ross Douthat/NYTimes on the financial crisis

28. “Don’t ever use that word ‘synergy.’ It’s a hideousword. The only thing that works is natural law. Given enough time, natural relationships will develop between our businesses.”—Barry Diller, responding to a student question, address at the Harvard Business School (from Marshall Goldsmith, What Got You Here Won’t Get You There

29. Yes. “Satisfice”“Requisite variety”“Radical decentralization”“Resilience”“Focus”/“Niche”/“Mittelstand”

30. “Rose gardeners face a choice every spring. The long-term fate of a rose garden depends on this decision. If you want to have the largest and most glorious roses of the neighborhood, you will prune hard. This represents a policy of low tolerance and tight control. You force the plant to make the maximum use of its available resources, by putting them into the the rose’s ‘core business.’ Pruning hard is a dangerous policy in an unpredictable environment. Thus, if you are in a spot where you know nature may play tricks on you, you may opt for a policy of high tolerance. You will never have the biggest roses, but you have a much-enhanced chance of having roses every year. You will achieve a gradual renewal of the plant. In short, tolerant pruning achieves two ends: (1) It makes it easier to cope with unexpected environmental changes. (2) It leads to a continuous restructuring of the plant. The policy of tolerance admittedly wastes resources—the extra buds drain away nutrients from the main stem. But in an unpredictable environment, this policy of tolerance makes the rose healthier in the long run.”—Arie De Geus, The Living Company

31. What Matters.What Doesn’t.

32. “At a party given by a billionaire on Shelter Island, Kurt Vonnegut informs his pal, Joseph Heller, that their host, a hedge fund manager, had made more money in a single day than Heller had earned from his wildly popular novel Catch-22 over its whole history. Heller responds …

33. “At a party given by a billionaire on Shelter Island, Kurt Vonnegut informs his pal, Joseph Heller … that their host, a hedge fund manager, had made more money in a single day than Heller had earned from his wildly popular novel Catch-22 over its whole history. Heller responds …‘Yes, but I have something he will never have … Source: John Bogle, Enough. The Measures of Money, Business, and Life (Bogle is founder of the Vanguard Mutual Fund Group)

34. At a party given by a billionaire on Shelter Island, Kurt Vonnegut informs his pal, Joseph Heller … that their host, a hedge fund manager, had made more money in a single day than Heller had earned from his wildly popular novel Catch-22 over its whole history. Heller responds … Yes, but I have something he will never have … enough. Source: John Bogle, Enough. The Measures of Money, Business, and Life (Bogle is founder of the Vanguard Mutual Fund Group)

35. Joe J. Jones 1942 – 2010 Net Worth$21,543,672.48

36. “Managers have lost dignity over the past decade in the face of wide spread institutional breakdown of trust and self-policing in business. To regain society’s trust, we believe that business leaders must embrace a way of looking at their role that goes beyond their responsibility to the shareholders to include a civic and personal commitment to their duty as institutional custodians. In other words, it is time that management became a profession.”—Rakesh Khurana & Nitin Nohria, “It’s Time To Make Management a True Profession,” HBR/10.08

37. “It is not enough for an agency to be respected for its professional competence. Indeed, there isn’t much to choose between the competence of big agencies. “What so often makes the difference is the character of the men and women who represent the agency at the top level, with clients and the business community. “If they are respectedasadmirable people, the agency gets business—whether from present clients or prospective ones.” —David Ogilvy

38. Organizations exist to serve. Period. Leaders live to serve. Period.

39. Excellence1982: The Bedrock “Eight Basics” 1. A Bias for Action 2. Close to the Customer 3. Autonomy and Entrepreneurship 4. Productivity Through People 5. Hands On, Value-Driven 6. Stick to the Knitting 7. Simple Form, Lean Staff 8. Simultaneous Loose-Tight Properties”

40. “Breakthrough” 82* People! Customers! Action! Values! *In Search of Excellence

41. Hard Is SoftSoft Is Hard

42. “On the face of it, shareholder value is the dumbest idea in the world. Shareholder value is a result, not a strategy. … Your main constituencies are your employees, your customers and your products.”—Jack Welch, FT, 0313.09, page 1

43. Hard Is Soft (Plans, #s)Soft Is Hard (people, customers, values, relationships)

44. “[This year’s] graduates are told [by commencement speakers] to pursue happiness and joy. But, of course, when you read a biography of someone you admire, it’s rarely the things that made them happy that compel our admiration. It’s the things they did to court unhappiness—the things they did that were arduous and miserable, which sometimes cost them friends and aroused hatred.It’s excellence, not happiness, that we admire most.”—David Brooks, “It’s Not About You,” oped, New York Times, 30 May 2011

45. “In a way, the world is a great liar. It shows you it worships and admires money, but at the end of the day it doesn’t. It says it adores fame and celebrity, but it doesn’t, not really. The world admires, and wants to hold on to, and not lose, goodness. It admires virtue. At the end it gives its greatest tributes to generosity, honesty, courage, mercy, talents well used, talents that, brought into the world, make it better. That’s what it really admires. That’s what we talk about in eulogies, because that’s what’s important. We don’t say, ‘The thing about Joe was he was rich!’ We say, if we can …

46. “ … We say, if we can … ‘The thing about Joe was he took good care of people.’” —Peggy Noonan, “A Life’s Lesson,” on the astounding response to the passing of Tim Russert, The Wall Street Journal, June 21-22, 2008

47. The Memories That Matter The people you developed who went on to stellar accomplishments inside or outside the company. The (no more than) two or three people you developed who went on to create stellar institutions of their own. The longshots (people with “a certain something”) you bet on who surprised themselves—and your peers. The people of all stripes who 2/5/10/20 years later say “You made a difference in my life,” “Your belief in me changed everything.” The sort of/character of people you hired in general. (And the bad apples you chucked out despite some stellar traits.) A handful of projects (a half dozen at most) you doggedly pursued that still make you smile and which fundamentally changed the way things are done inside or outside the company/industry. The supercharged camaraderie of a handful of Great Teams aiming to “change the world.”

48. #1: “Design Is Everything.”

49. “Design is everything. Everything is design.” “We are all designers.” The Power of Design: A Force for Transforming Everything, Richard Farson

50. Charles Handy: “One bank is currently claiming to … ‘leverage its global footprint to provide effective financial solutions for its customers by providing a gateway to diverse markets.’”