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This talk covered a subset of Patrick's usual course, filtered down to <2 hours

 

Bettina Intro: Patrick is serial entrepreneur. Currently President of Gazelles.com. Verne Harnish is CEO. Today covers a methodology taught by Verne & Patrick. Has similarities to the agile methodology (daily huddles, weekly checkins, etc). She uses it.

 

ref book: Mastering the Rockefeller Habits by Verne Harnish. Patrick & Gazelles.com graciously gave out a free copy of the book to all attendees.

 

Uses wall street term: Gazelles (high performance traders). Wall Street Aphorism: Gazelles usually die from overeating not getting taken down by a lion

 

Patrick's company is Gazelle Systems. 6 people. gazelles.com

 

Sweet spot for Patrick's client sweet spot is companies between 10 & 150 emps.

 

Example: Hostopia

Focus on one thing.

Each quarter CEO would add one big thing. Lots of things, but one BHAG (Big Hairy Audacious Goal) per quarter. Successful sale

 

think 13 week race. 2 days planning, 90 days execution each quarter.

 

4 decisions: 

 People (happiness)

 Strategy (rev/growth)

 Execution (profit/time)

 Cash (oxygen/options)

 

The first 3 are the standard for large co's apply good to great strategy. The fourth is added for small co's by Patrick & Verne.

 

aphorism: sales cover 50% of your sins & vc covers the other 50.

 

(no sure I heard this right) Amazon went from inventory turns of 2 to 26

 

Provided a planning booklet: Gazelles Growth Tools. About 10 pages.

  first page: Accountability for roles. Layout your major hires/roles. key goals (leading indicators) and P/L & balance sheet impact (lagging indicators). 

 

second page: 1 page strategic plan. captures relationships, values, mission, 1 & 3-5 yr goals, competencies, BHAGS, KPIs (key performance indicators), essential people & processes.

 

third page: quarterly planning

 

fourth: rockefeller habits checklist

 

fifth: execution list (who, what, when). Essentially the action items.

 

sixth: cash planning

 

seventh: marketing quotes

 

eigth & ninth: note pages

 

Cash planning guidelines:

shows a graph labeled cash runway. vertical is balance sheet, horizontal is time in months. One line is Backlog: if you sell no more starting tomorrow, what happens cash (essentially burn rate). Second is pinkie report: Sales that will absolutely close (within a certain timeframe?); name comes from telling the salesperson they will have their pinkie cut off if any account on the list doesn't close. Third is sales plan: if you hit your sales numbers, what happens to the cash.

 

The actual sales plan often shows the company going bankrupt in the middle.  Replan your

 

Cash Conversion Cycle (CCC)

 

A: Sales Cycle

B: Make/Production & Iventory Cycle

C: Delivery Cycle

D: Billing & Payment Cycle

 

A--->C--->D

->B->

 

Payment not happening timely in D, may be a problem in A, B or C. Need to investigate and look for system problems.

 

Long delivery cycle delays cash while you are out money for inventory, labor, etc.

 

In small business this is a major issue. Cash is King and understanding Cash Flow is absolutely essential.

 

BHAGs

These are great [ed]

Patrick likes them too: Everyone *Needs* a BHAG

 

conversation with dad:

Patrick: want to beat oracle. 

Dad: you have no software, you are a consultant.

true, but patrick had software he wasn't selling yet. 

7 years, built the company to acquisition @ 20M

anecdote:

lost out to another competitor in a deal with Oracle.

sent 4 mailings to every manager in the consumer products/packaging div, all the way to ellison

ended up getting business sent to him, because people started to think he was part of the program.

 

Profit/X

At Gazelles: Profit/Recurring Rev Customer

At his software company: goal was owning source code they developed. Profit/code base owned, I suppose.

Most people focus on the Profit part, without really defining the X part. Define X really well so it aligns with your goals & bhags.

 

Exercise

10 mins to draft your BHAG

 

How did you do?

Test #1: Is your BHAG a poster?

  Do your people really know the goal

  A Dash of Strategy? Start each meeting with Purpose & BHAG. Ask often during planning, meetings & decisions: how does this help move us towards X?

Test #2: Are you different?

   (this is a half day exercise normally). How do you differentiate? What is your core? How does that define your ideal customer? Are you pursuing customers not in the core?

Also don't confuse this with how you are better than the competition (we deliver on time more frequently than our competitors). It's something where your competition doesn't even register.  (your fridge will make your dinner when you are hungry, not just keep it cold)

E.g. Apple

  Patrick keys on Design, Emotion, Future & Imagination. Operate differently: total secrecy, apple stores, etc…

 

e.g. Rackspace

Fanatical support: itemize the way they do this differently: support is answered by humans (no ACD), answer w/in 3 rings, resolve w/in 1 transfer

 

What are you Doing that is Different? 

Repel the wrong customers. Attract the right ones

 

Being selective. Apple has a small product line, but each product does great, because they avoiding making weaker products.

 

Is your cheshire cat smart? - What is your Profit/X?

 

note: must define & refine your BHAG when you have enough of the business defined. Formation of business & idea is too early (spaghetti on the wall), as the business & market becomes better understood you can define and refine your BHAG(s).

 

Must also establish discipline to execute: meetings happen regularly, etc…

 

People should know what the quarter is about (page 3 of Gazelle Growth Tools- GGT)

 

Test #1 do people know what the main thing is?

test #2 do you have three goals?

test #3: did you red yellow green it (similar to S.M.A.R.T. - Specific, Measurable, Attainable, Realistic, Time-bound)

E.g. close 4 $100k deals: green = 4 sales; yellow between R&G, Red = 2, SuperGreen = 5+

 

Execution Buddy: 

HTG Peer Group

  5 companies

  meet & plan quarterly

  monthly accountability

Results

  Build Execution Rhythm

  Saved time

  Execution (couldn't read the rest)

 

Rediness checklist

ready if

got main thing

top 3 priorities

red yellow green

 

Execute plan with 100% confidence

make every week count. Every monday has a meeting, he reviews all important projects & MAKES DECISIONS. Status is provided, agains the red yellow green success criteria, before the meeting. Meeting is about decisions.

 

Action Triggers

couldn't capture the screenshot of the rhythm metrology software screen, but basically a spread sheet, vertical access is person & line for each project in their accountability; horizontal axis is week #. Each cell is red, yellow, green based on the criteria.

 

zoomed through a few last slides, that I cannot type fast enough, but basically reiterate the above: 2 day plan, 90 days execute; 

 

Personal experience: family daily huddle- 3 best things meeting

  - started with one daughter (6 yrs) who was having nightmares, other daughter (3 yrs) wanted to be included; the daughters later asked why mom wasn't included. Mom got added ("Honey, it's for the children"). Does this every day with the only exception being on a flight without phone. 3 minutes total time, but makes a huge difference.

This talk covered a subset of Patrick's usual course, filtered down to <2 hours

 

Bettina: Methodology taught by Verne Harnish & Patrick. Has similarities to the agile methodology (daily huddles, weekly checkins, etc)

 

ref book: mastering the rockefeller habits by Verne Harnish

 

Uses wall street term: Gazelles (high performance traders). Wall Street Aphorism: Gazelles usually die from overeating not getting taken down by a lion

 

Patrick's company is Gazelle Systems. 6 people. gazelles.com

 

Sweet spot for Patrick's focus is companies between 10 & 150 emps.

 

Example: Hostopia

Focus on one thing.

Each quarter CEO would add one big thing. Lots of things, but one BHAG (Big Hairy Audacious Goal) per quarter. Successful sale

 

think 13 week race. 2 days planning, 90 days execution each quarter.

 

4 decisions: 

 People (happiness)

 Strategy (rev/growth)

 Execution (profit/time)

 Cash (oxygen/options)

 

The first 3 are the standard for large co's apply good to great strategy. The fourth is added for small co's by Patrick & Verne.

 

aphorism: sales cover 50% of your sins & vc covers the other 50.

 

(no sure I heard this right) Amazon went from inventory turns of 2 to 26

 

Provided a planning booklet: Gazelles Growth Tools. About 10 pages.

  first page: Accountability for roles. Layout your major hires/roles. key goals (leading indicators) and P/L & balance sheet impact (lagging indicators). 

 

second page: 1 page strategic plan. captures relationships, values, mission, 1 & 3-5 yr goals, competencies, BHAGS, KPIs (key performance indicators), essential people & processes.

 

third page: quarterly planning

 

fourth: rockefeller habits checklist

 

fifth: execution list (who, what, when). Essentially the action items.

 

sixth: cash planning

 

seventh: marketing quotes

 

eigth & ninth: note pages

 

Cash planning guidelines:

shows a graph labeled cash runway. vertical is balance sheet, horizontal is time in months. One line is Backlog: if you sell no more starting tomorrow, what happens cash (essentially burn rate). Second is pinkie report: Sales that will absolutely close (within a certain timeframe?); name comes from telling the salesperson they will have their pinkie cut off if any account on the list doesn't close. Third is sales plan: if you hit your sales numbers, what happens to the cash.

 

The actual sales plan often shows the company going bankrupt in the middle.  Replan your

 

Cash Conversion Cycle (CCC)

 

A: Sales Cycle

B: Make/Production & Iventory Cycle

C: Delivery Cycle

D: Billing & Payment Cycle

 

A--->C--->D

->B->

 

Payment not happening timely in D, may be a problem in A, B or C. Need to investigate and look for system problems.

 

Long delivery cycle delays cash while you are out money for inventory, labor, etc.

 

In small business this is a major issue. Cash is King and understanding Cash Flow is absolutely essential.

 

BHAGs

These are great [ed]

Patrick likes them too: Everyone *Needs* a BHAG

 

conversation with dad:

Patrick: want to beat oracle. 

Dad: you have no software, you are a consultant.

true, but patrick had software he wasn't selling yet. 

7 years, built the company to acquisition @ 20M

anecdote:

lost out to another competitor in a deal with Oracle.

sent 4 mailings to every manager in the consumer products/packaging div, all the way to ellison

ended up getting business sent to him, because people started to think he was part of the program.

 

Profit/X

At Gazelles: Profit/Recurring Rev Customer

At his software company: goal was owning source code they developed. Profit/code base owned, I suppose.

Most people focus on the Profit part, without really defining the X part. Define X really well so it aligns with your goals & bhags.

 

Exercise

10 mins to draft your BHAG

 

How did you do?

Test #1: Is your BHAG a poster?

  Do your people really know the goal

  A Dash of Strategy? Start each meeting with Purpose & BHAG. Ask often during planning, meetings & decisions: how does this help move us towards X?

Test #2: Are you different?

   (this is a half day exercise normally). How do you differentiate? What is your core? How does that define your ideal customer? Are you pursuing customers not in the core?

Also don't confuse this with how you are better than the competition (we deliver on time more frequently than our competitors). It's something where your competition doesn't even register.  (your fridge will make your dinner when you are hungry, not just keep it cold)

E.g. Apple

  Patrick keys on Design, Emotion, Future & Imagination. Operate differently: total secrecy, apple stores, etc…

 

e.g. Rackspace

Fanatical support: itemize the way they do this differently: support is answered by humans (no ACD), answer w/in 3 rings, resolve w/in 1 transfer

 

What are you Doing that is Different? 

Repel the wrong customers. Attract the right ones

 

Being selective. Apple has a small product line, but each product does great, because they avoiding making weaker products.

 

Is your cheshire cat smart? - What is your Profit/X?

 

note: must define & refine your BHAG when you have enough of the business defined. Formation of business & idea is too early (spaghetti on the wall), as the business & market becomes better understood you can define and refine your BHAG(s).

 

Must also establish discipline to execute: meetings happen regularly, etc…

 

People should know what the quarter is about (page 3 of Gazelle Growth Tools- GGT)

 

Test #1 do people know what the main thing is?

test #2 do you have three goals?

test #3: did you red yellow green it (similar to S.M.A.R.T. - Specific, Measurable, Attainable, Realistic, Time-bound)

E.g. close 4 $100k deals: green = 4 sales; yellow between R&G, Red = 2, SuperGreen = 5+

 

Execution Buddy: 

HTG Peer Group

  5 companies

  meet & plan quarterly

  monthly accountability

Results

  Build Execution Rhythm

  Saved time

  Execution (couldn't read the rest)

 

Rediness checklist

ready if

got main thing

top 3 priorities

red yellow green

 

Execute plan with 100% confidence

make every week count. Every monday has a meeting, he reviews all important projects & MAKES DECISIONS. Status is provided, agains the red yellow green success criteria, before the meeting. Meeting is about decisions.

 

Action Triggers

couldn't capture the screenshot of the rhythm metrology software screen, but basically a spread sheet, vertical access is person & line for each project in their accountability; horizontal axis is week #. Each cell is red, yellow, green based on the criteria.

 

zoomed through a few last slides, that I cannot type fast enough, but basically reiterate the above: 2 day plan, 90 days execute; 

 

Personal experience: family daily huddle- 3 best things meeting

  - started with one daughter (6 yrs) who was having nightmares, other daughter (3 yrs) wanted to be included; the daughters later asked why mom wasn't included. Mom got added ("Honey, it's for the children"). Does this every day with the only exception being on a flight without phone. 3 minutes total time, but makes a huge difference.

 

This talk covered a subset of Patrick's usual course, filtered down to <2 hours

 

Bettina: Methodology taught by Verne Harnish & Patrick. Has similarities to the agile methodology (daily huddles, weekly checkins, etc)

 

ref book: mastering the rockefeller habits by Verne Harnish

 

Uses wall street term: Gazelles (high performance traders). Wall Street Aphorism: Gazelles usually die from overeating not getting taken down by a lion

 

Patrick's company is Gazelle Systems. 6 people. gazelles.com

 

Sweet spot for Patrick's focus is companies between 10 & 150 emps.

 

Example: Hostopia

Focus on one thing.

Each quarter CEO would add one big thing. Lots of things, but one BHAG (Big Hairy Audacious Goal) per quarter. Successful sale

 

think 13 week race. 2 days planning, 90 days execution each quarter.

 

4 decisions: 

 People (happiness)

 Strategy (rev/growth)

 Execution (profit/time)

 Cash (oxygen/options)

 

The first 3 are the standard for large co's apply good to great strategy. The fourth is added for small co's by Patrick & Verne.

 

aphorism: sales cover 50% of your sins & vc covers the other 50.

 

(no sure I heard this right) Amazon went from inventory turns of 2 to 26

 

Provided a planning booklet: Gazelles Growth Tools. About 10 pages.

  first page: Accountability for roles. Layout your major hires/roles. key goals (leading indicators) and P/L & balance sheet impact (lagging indicators). 

 

second page: 1 page strategic plan. captures relationships, values, mission, 1 & 3-5 yr goals, competencies, BHAGS, KPIs (key performance indicators), essential people & processes.

 

third page: quarterly planning

 

fourth: rockefeller habits checklist

 

fifth: execution list (who, what, when). Essentially the action items.

 

sixth: cash planning

 

seventh: marketing quotes

 

eigth & ninth: note pages

 

Cash planning guidelines:

shows a graph labeled cash runway. vertical is balance sheet, horizontal is time in months. One line is Backlog: if you sell no more starting tomorrow, what happens cash (essentially burn rate). Second is pinkie report: Sales that will absolutely close (within a certain timeframe?); name comes from telling the salesperson they will have their pinkie cut off if any account on the list doesn't close. Third is sales plan: if you hit your sales numbers, what happens to the cash.

 

The actual sales plan often shows the company going bankrupt in the middle.  Replan your

 

Cash Conversion Cycle (CCC)

 

A: Sales Cycle

B: Make/Production & Iventory Cycle

C: Delivery Cycle

D: Billing & Payment Cycle

 

A--->C--->D

->B->

 

Payment not happening timely in D, may be a problem in A, B or C. Need to investigate and look for system problems.

 

Long delivery cycle delays cash while you are out money for inventory, labor, etc.

 

In small business this is a major issue. Cash is King and understanding Cash Flow is absolutely essential.

 

BHAGs

These are great [ed]

Patrick likes them too: Everyone *Needs* a BHAG

 

conversation with dad:

Patrick: want to beat oracle. 

Dad: you have no software, you are a consultant.

true, but patrick had software he wasn't selling yet. 

7 years, built the company to acquisition @ 20M

anecdote:

lost out to another competitor in a deal with Oracle.

sent 4 mailings to every manager in the consumer products/packaging div, all the way to ellison

ended up getting business sent to him, because people started to think he was part of the program.

 

Profit/X

At Gazelles: Profit/Recurring Rev Customer

At his software company: goal was owning source code they developed. Profit/code base owned, I suppose.

Most people focus on the Profit part, without really defining the X part. Define X really well so it aligns with your goals & bhags.

 

Exercise

10 mins to draft your BHAG

 

How did you do?

Test #1: Is your BHAG a poster?

  Do your people really know the goal

  A Dash of Strategy? Start each meeting with Purpose & BHAG. Ask often during planning, meetings & decisions: how does this help move us towards X?

Test #2: Are you different?

   (this is a half day exercise normally). How do you differentiate? What is your core? How does that define your ideal customer? Are you pursuing customers not in the core?

Also don't confuse this with how you are better than the competition (we deliver on time more frequently than our competitors). It's something where your competition doesn't even register.  (your fridge will make your dinner when you are hungry, not just keep it cold)

E.g. Apple

  Patrick keys on Design, Emotion, Future & Imagination. Operate differently: total secrecy, apple stores, etc…

 

e.g. Rackspace

Fanatical support: itemize the way they do this differently: support is answered by humans (no ACD), answer w/in 3 rings, resolve w/in 1 transfer

 

What are you Doing that is Different? 

Repel the wrong customers. Attract the right ones

 

Being selective. Apple has a small product line, but each product does great, because they avoiding making weaker products.

 

Is your cheshire cat smart? - What is your Profit/X?

 

note: must define & refine your BHAG when you have enough of the business defined. Formation of business & idea is too early (spaghetti on the wall), as the business & market becomes better understood you can define and refine your BHAG(s).

 

Must also establish discipline to execute: meetings happen regularly, etc…

 

People should know what the quarter is about (page 3 of Gazelle Growth Tools- GGT)

 

Test #1 do people know what the main thing is?

test #2 do you have three goals?

test #3: did you red yellow green it (similar to S.M.A.R.T. - Specific, Measurable, Attainable, Realistic, Time-bound)

E.g. close 4 $100k deals: green = 4 sales; yellow between R&G, Red = 2, SuperGreen = 5+

 

Execution Buddy: 

HTG Peer Group

  5 companies

  meet & plan quarterly

  monthly accountability

Results

  Build Execution Rhythm

  Saved time

  Execution (couldn't read the rest)

 

Rediness checklist

ready if

got main thing

top 3 priorities

red yellow green

 

Execute plan with 100% confidence

make every week count. Every monday has a meeting, he reviews all important projects & MAKES DECISIONS. Status is provided, agains the red yellow green success criteria, before the meeting. Meeting is about decisions.

 

Action Triggers

couldn't capture the screenshot of the rhythm metrology software screen, but basically a spread sheet, vertical access is person & line for each project in their accountability; horizontal axis is week #. Each cell is red, yellow, green based on the criteria.

 

zoomed through a few last slides, that I cannot type fast enough, but basically reiterate the above: 2 day plan, 90 days execute; 

 

Personal experience: family daily huddle- 3 best things meeting

  - started with one daughter (6 yrs) who was having nightmares, other daughter (3 yrs) wanted to be included; the daughters later asked why mom wasn't included. Mom got added ("Honey, it's for the children"). Does this every day with the only exception being on a flight without phone. 3 minutes total time, but makes a huge difference.