PRINCIPLE 16

Secrets, Techniques, and Strategies of the Successful Entrepreneurs I Have Worked With

I have been teaching entrepreneurship to CEOs and college students for over twenty-five years, and I have been paid by companies to teach their executives how to be more effective and help their companies become more profitable. Not surprisingly, both the students and executives always ask me for “tips on how to become more successful or to be a better CEO.”

I remember reading that when Larry Page returned to Google as CEO, one of the first things he did was to ask Steve Jobs for advice on becoming a “good CEO.” Jobs had a rather simple but exact formula that worked for him:

1. Surround yourself with “A players” who are smart.

2. Deliberately have a goal to build a great team.

3. Motivate the team to be better than they think they are.

4. Focus on five products, not a hundred, and produce five great products.

5. Remember the basics—to win, you have to “block and tackle” better than your opposition.

6. Don’t get too big or too flabby.

7. Never get too complacent—always be innovative.

8. Never stop learning.

I like Steve’s list. Let me add a few ideas of my own, based on what I have learned both throughout my career and by observing other people.

HOW TO CREATE A GREAT TEAM

Developing an effective team is one of the most difficult tasks in business, but it may be one of the most important things any entrepreneur can do. Having a company with good products and good sales is usually not sustainable unless you build an effective team.

New employees usually have ideas for growth and would like to try new things, while the people who’ve been there for a while think things are just fine the way they are. They are resistant to new ideas and creating new roles. Sounds dysfunctional, doesn’t it? It certainly sounds like the employees are pulling in different directions, and it’s hard to move forward if that’s the case.

One of the most important lessons an entrepreneur needs to learn early on is that he needs to create an effective team if he is ever going to accomplish anything significant. Sure, you could decide to do everything yourself and simply run a micro business. However, as the name implies, it’s probably going to be small. To do anything that’s going to have significant impact, you’ll need to grow, and that means adding employees. In turn, that means getting those employees to work together as a team.

Here’s how I do it:

1. To be on my team, you have to be smarter than me. (Many would say this isn’t so difficult.)

2. I surround myself with people who are self-motivated.

3. My job is to keep them focused, inspired and to empower them to perform at their best.

4. I try to remove obstacles so they can get their job done without fear of failure.

5. I also try to keep things light with a sense of humor and laughter.

EMPOWERMENT AND LEADING TEAMS

Why go through all this trouble? Because a leader does not have a monopoly on great ideas. You may come up with more than most people, but, most is not all. You want to have as many good ideas as possible, and your teammates can provide you with them.

That’s why empowerment of employees is an entrepreneur’s secret weapon for success. Your employees may not know how to implement the ideas, and they probably won’t have the resources required, but you can help them with all that. What you need are the best ideas and a team of people to carry them out.

Here are the seven steps I try to follow in forming effective teams.

1. End dysfunction. It’s difficult to build high-performing teams in a dysfunctional environment. People need to feel they’re working in a place where they are valued; they know what their role is, and they feel comfortable offering suggestions that will specifically improve their team and the organization in general.

2. Have great leaders. I put an “s” on “leader” for a reason. Yes, of course, there is ultimately one person in charge of the organization, but that doesn’t need to be the person running every team. Leaders at all levels need to have knowledge, establish clear goals, and have a passion for the task at hand. They must be the driving force and should lead by example.

3. Each of the leaders must have a defined goal. A true leader knows where they want to go, as opposed to just saying, “Follow me.” It sounds obvious, right? Think about the work teams you have been on. Was that always the case?

4. Leaders must enjoy seeing people work to their full potential. They take pride in the fact that members of the team are accomplishing more than they ever thought possible.

5. Treat people the way you would like to be treated. That should go without saying, but if you’ve ever worked within a bad organization, you know this is not common.

6. Communicate. First, you’ll have to deliver your key messages over and over again. You’ll be bored hearing yourself long before the message ever sinks in organization-wide. Second, communicate face-to-face whenever possible; it’s simply the best way.

7. The importance of monitoring. You’ll need regular sessions where you check in on the team’s progress and change direction if needed.

PROOF THIS WORKS

Bob Burton, CEO and chairman of Cenveo, a world leader in commercial printing, custom packaging, envelopes, labels, warehousing fulfillment, and related services, is a great example of someone who does this well. Bob is charismatic and extremely motivated and has an outstanding record of financial success. Before the year begins, company goals are established, and then he holds periodic meetings with all the key executives to monitor their progress. Bob reminds me of many famous football coaches. That’s not surprising, since he was an All-American at Murray State and was drafted by the San Francisco 49ers.

HOW TO CREATE A GREAT TEAM (PART II)

We mentioned this earlier, but because it is so important, I want to return to the Maslow hierarchy here.

The graphic above is a representation of the work of Abraham Harold Maslow, a psychologist who noticed early on in his career that certain needs take precedence over others. For example, if you’re both hungry and thirsty, the need for something to drink will take precedence over eating. This isn’t surprising; you can go without food for weeks, but you’ll die within days if you don’t have something to drink. If you’re thirsty and someone is choking you, the desire for air will top your desire for water.

Maslow ranked all needs into five categories; the lower the position in the triangle, the more fundamental the need. For example, as you can see, security is more important than friendship.

Why am I talking about this? It is simple. You can rank the characteristics needed to create effective teams using Maslow’s hierarchy. Just like with his triangle, you work from the bottom up.

Physiological. This level is the starting point. What do you look for in team members (something that we’ll discuss in a second), and what do you pay them? You can’t say people should work for nothing. Even with commissioned salesmen, you need to give them a draw.

Safety. In this context, people want to know where they stand at work, and we tell them.

Love/Belonging. Most people want to do more than trade their time for a paycheck. This is certainly true for people who work at our companies. They like socializing with their coworkers. They look forward to coming to work.

Esteem. People want to do a good job and want to be recognized for doing so. They want to move up the ranks according to their ability, and they don’t want to hear there’s a rule that says you can’t make partner unless you’ve been here ten years. We don’t have these rules and do everything we can to help our people get ahead. We’ll pay for professional education classes and give time off to attend training sessions.

Self-actualization. The next logical step. People want to be the best they possibly can be; we want to help them get there.

Conclusion: Money is a motivator—but, as you can see, there’re other factors that you can use that will produce positive results.

THE ROLE OF REWARDS

I’m a big believer in rewarding people. Are there cash rewards? Some. We pay out bonuses periodically to deserving people. But, as we saw, at a certain point cash is not a huge motivator. Other rewards might include parking closest to the door, a day trip to the spa, a free lunch, or me bringing in a cup of coffee for you.

I don’t think you can do this sort of thing enough. You’re giving people recognition and bolstering their self-esteem. Sure, you can say, “I pay them; that’s enough,” but it isn’t enough. Take another look at Maslow’s triangle to see why.

CASE STUDY: TEAMWORK IN REEL LIFE

Teamwork is a staple in Hollywood movies. It is a constant in war movies and others such as Aliens, Ocean’s Eleven, and X-Men. Consider the movie Twelve O’Clock High, which was nominated for four Oscars and won two. In 1998, it was selected for preservation by the Library of Congress because it was “culturally, historically, and aesthetically significant.”

As that designation would lead you to believe, the film about the U.S. Eighth Air Force’s involvement early in World War II is based on a true story. The film stars Gregory Peck as Brigadier General Frank Savage, who takes over the 918th Bomber Group that had been suffering from high losses and a lack of morale and leadership.

Not surprisingly, Savage encounters resistance at first as he tries to improve the unit. Through intensive skill training—and improved discipline—Savage begins to turn around the unit. As the pilots achieve increased success—destroying more enemy targets and suffering fewer losses—they embrace Savage’s methods; they become a cohesive, high-performing unit where the pilots and officers feel comfortable offering suggestions that enable the squadron to become even better.

SAY THANK YOU

I’m embarrassed to admit that I came to this idea relatively late. I remember on the first day of the Owners/Presidents/Management (OPM) program at Harvard, Marty Marshall, a world-famous marketing professor, got up in front of us and said, “If you don’t remember anything else from your time here, remember this: Say thank you to people who do a good job.”

I hadn’t been doing it enough, so the moment I got back to the office I tried it, and I couldn’t believe the results. My employees’ faces literally lit up when I said thank you, and their self-esteem soared.

Because this idea of saying thank you is so important, I will return to it later.

FINDING GOOD TEAMMATES

Clearly, the better the members of the team, the greater the potential for the team to perform well. So you want to absolutely hire the best people you can. But finding good people takes time. You’re busy, and after you’ve interviewed the seventh person for a position, there can be the tendency to say, “I’ve got a million things to do. They’re good enough. Maybe they’ll work out; let’s go with them.” But if you start to settle for less than the best, your organization will suffer.

Worse, you’re giving up a huge potential advantage. There are always going to be people who are smarter than you leading your competition; and there are always going to be companies that offer a better product or service than you do. The only way you can narrow those gaps is by having better people than they do. If you settle during the hiring process, that’s never going to happen.

Here is the approach I use to shorten the process of finding great people. Before you interview with our company, someone has gone through your background to see if:

1. You have the potential to be a leader. They’ve looked to see if you held a leadership position in a previous job or played sports in school. I look for people who know what it’s like to be part of a team, and who have the potential to be in charge of one.

2. You’ve demonstrated drive. Maybe you put yourself through college, persuaded your municipality to put in bike lanes, or got your former employer to expand its child-care program. Teams invariably encounter obstacles, and you need to have people who know how to overcome them.

3. You are good with people. This is the hardest one to instantly see from someone’s resume, so during an interview I’ll ask, “How would you fire someone?”; “A client has called and is complaining about his bill. What would you do?”; or “Let’s pretend for a minute that you’re interviewing me. What questions would you ask?”

This is only half the battle. You want to hire the best people you can, but you also need to ensure that they’re comfortable within your company. If there isn’t a good fit, you’re not going to get the best out of them.

That’s why I’m always extremely candid during the interview process about our company culture. I tell candidates the positives about working for us: how they can move up as fast as their talents allow, the smart and enjoyable people they’ll be working with, and that we regularly schedule games and company events to foster friendships and teamwork.

I also tell them what some people consider to be the negatives, such as firing the bottom-performing 10% of our employees every year (after unsuccessful hard work helping to improve their skills). That way, they know that if they are not hard, competent, efficient workers, they probably will want to look somewhere else for a job.

LEARNING FROM OTHERS

I’ve been fortunate in being able to work with a large number of successful entrepreneurs. Here are some of their ideas and philosophies that have contributed to their successes. You may want to incorporate some of them into your management style. I know I have.

Jay Fitzgerald

Jay is the former president of Golf Digest magazine. During his presidency, Golf Digest became the number one publication in the golf industry. When I asked Jay if he had any “secrets,” he gave me the following ten ideas:

1. Lead by example and set clearly defined goals.

2. Treat everyone—from the maintenance person to the vice president—as equals.

3. Be the voice of the company and set the tone.

4. Keep your “door open,” but also walk around the office.

5. Ask for good ideas and stress creativity in all phases of the business.

6. If you find that employees are more interested in vacations, taking all their allocated sick days, asking a lot of questions about their pensions, and constantly late coming in and leaving promptly at 5:00, they are not employees you want to retain. You want employees who pull the wagon, not ride on it.

7. Reward extraordinary performance and establish a winning culture. Do not talk the talk, but back it up by delivering (walk the walk).

8. Pete Carroll, head coach of the Super Bowl–winning Seattle Seahawks, said it very well:

Arrive early to meetings.

Be prepared.

Want to win more than your opponents.

9. Vince Lombardi, famed coach of the Green Bay Packers, said, “Winning isn’t everything; it is the only thing.”

10. Enjoy what you do and everyone around you will get the message.

Jim Lillie

When Jim arrived to become president of Jarden Industries, a world-class consumer products company with a diverse portfolio of 120 powerful brands like Mr. Coffee, Sunbeam, and Oster, the sales were $300 million. When we did this interview, in 2015 (less than ten years later), sales had risen to $9 billion. So what are Jim’s secrets that have contributed to Jarden’s incredible growth?

1. Care about your reputation.

2. Conduct your business matters, including the making of acquisitions, in an honest way. Do not be concerned about making the last nickel. Remember that some day you may be involved with the other party again, and you want to have dealt honestly with them the first time.

3. When you make an acquisition, include “earn-outs” as an incentive to the sellers. Also provide a mechanism and tools for the sellers to grow in leadership with the new company.

4. Hire better people than you and develop future leaders.

5. Develop in your management group a “sense that they are owners of the company,” not renters. They will care more about the company, just like the owners of homes care more about their houses than renters do.

6. Wear multiple hats and do not be afraid to get your hands dirty.

7. Understand that each new venture starts with a “clean sheet of paper.” How you did things before may not work now, because the conditions and facts are different.

8. Know leaders are people who are:

Demanding but fair

Bold—not afraid to fail

Decision makers

Good communicators

Leaders by example

9. Cultivate leaders, culture:

Hire for values.

Share information.

Encourages a lot of new thinking.

Do your job.

10. Hold meetings when needed. The CEO sets the time and is not a traffic cop, but more a facilitator.

Nick Trigony

Nick was president of Cox Broadcasting, an executive at ABC and Blair Radio, and excelled at all three companies. His thoughts about being successful:

1. Do not be afraid to fail.

2. Set an example for everyone else.

3. Give credit for success to others, but take responsibility for failures.

4. Surround yourself with the best people you can. Find smart, honest, hardworking people—no jerks or “yes” people.

5. Empower people by giving them leeway, flexibility, and the ability to make decisions.

6. Have people bring you their problems, but ask them to also bring recommended solutions.

7. Build up trust. Be a person of your word.

8. Have your team’s input when setting goals, but also challenge them to grow the company and exceed expectations.

9. You know you’ve established the right culture if people want to come to work.

10. Understand that not everyone can lead or want to lead.

11. Manage up and down the chain of command.

12. Be sure your spouse and family support you. I changed jobs and moved several times in my career.

13. When the economy goes bad, stay the course and be more innovative.

14. Work in an honest way with competitors and people you report to. You never know when they can help you in the future.

Tom Quinlan

Tom is president and CEO of the NASDAQ-listed company RR Donnelley. It is the largest provider of printing and print-related business in the world and has over 65,000 employees and revenue of approximately $12 billion. I asked him about his management style and the secrets of his success. Here’s what he told me:

1. Reward performance. The reward does not always have to be monetary.

2. Do not ask people to do things you are not willing to do.

3. Make decisions. Make the tough decisions as soon as possible.

4. Communicate, communicate, and communicate. Keep e-mails to twenty-five words or less. Any e-mails greater than twenty-five words, pick up the phone and call the person.

5. Do not get complacent. Continue to evolve both yourself and your business.

6. Realize that great progress is made when you check your ego at the door.

7. Be polite and courteous; say, “Thank you.”

Bob McLynn

Bob is co-founder and owner of Crush Music. He is the business manager for some of the most popular musical acts in the United States, with clients such as Train and Fall Out Boy. You will see in his answers to “What made you successful?” that it is all about expertise, hard work, passion, teamwork, and being a calculated risk-taker.

His answers:

1. I set a time limit (age thirty) to either make it as an artist or go into something else.

2. I understand the business I am in. My partner Jonathan Daniel and I started as musicians and toured the country. Managing bands was a natural extension and, with our background, gave us a competitive advantage. We felt we were artists working with other artists.

3. When we recognized a talented band, we gave them the benefit of our expertise and even in some cases provided them with financial support.

4. We really enjoy our profession. It is essential because there are times we work eighty-hour weeks.

FOUR TAKEAWAYS FROM THIS CHAPTER

1. If you want to grow and succeed, build an effective team. There is no other way.

2. Give credit for success to others, but take responsibility for failures. People need to trust that you’re not going to ridicule their ideas. They should know that if their idea doesn’t work, it isn’t their fault, it’s yours.

3. Remember, the most effective way to build a team is through face-to-face communication.

4. Reread the list of comments at the end of the chapter from the CEOs interviewed, and adapt the advice and techniques to your style.