Genius Network Verne Harnish Interview

Genius Network Interview

Joe Polish, President of Piranha Marketing, Interviews:

VVeerrnnee HHaarrnniisshhAuthor and Business Success Expert

Mastering The Rockefeller Habits

GeniusNetwork.comInterview Series

Mastering the Rockefeller Habits

Joe Polish Interviews Author and Business Success ExpertVerne Harnish

[email protected] Phone: (480) 858-0008 Fax: (480) 858-00042

Joe Polishs Tempe, Arizona office headquarters for Piranha Marketing is

often referred to by marketing insiders as action central for much of the

entrepreneurial world. Though he made his fortune in an almost invisible niche

by telling carpet cleaners how to crush the competition and turn their small local

businesses into money-churning machines, he is now among the most

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Consulting clients from many different countries each happily pay up to $20,000

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The business world is moving faster than ever before. Staying close to the action

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Joe Polish



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Hello, this is Joe Polish, president of Piranha Marketing and founder of the

Genius Network Interview Series. Youre about to hear one of my Genius

Network interviews. I just want to thank you for taking the time to listen

to this and I hope you find it very useful.

If you want to find out more information about some of the

interviews and resources that can help you in your business, you can go to

www.Joepolish.com and we have a Joe Polish Recommends section, with

all kinds of resources and vendors and services and products that we

recommend that could help you in your business. Also, for more useful

interviews and a whole list of other people that Ive interviewed, you can

go to www.GeniusNetwork.com.

Thanks, and enjoy the interview.

----------------------

Hello, this is Joe Polish and I want to welcome you to another Genius

Network interview. I have got a very, very smart guy named Verne

Harnish that is on the line. Verne, you are in Virginia somewhere, right?

We are, right next to Dulles Airport.

Awesome, awesome! I am going to read, real quickly, a short bio on you.

This is the only portion of the interview that I will actually read, so that

people know whom I am speaking with. Then we will get right into it. So

here we go.

If you do not know who Verne Harnish is, here is who he is. He is

married to Julie and he is a father of four children named Cameron, Cole,

Jade, and Quinn. Verne is the founder of two world-renowned

entrepreneurship organizations, the Young Entrepreneurs Organization

(YEO), and the Association of Collegiate Entrepreneurs, which is ACE.

Verne is presently founder and CEO of Gazelles, Inc., which you

can visit at www.Gazelles.com. Gazelles serves as an outsource corporate

university for mid-size firms and hosts a faculty of well-known business

experts including Jim Collins, Geoff Smart, Jack Stack, Neil Rackham,

Seth Godin, and Pat Lencioni.

These are some very smart people. You know Jim from Good ToGreat; Geoff Smart from Topgrading; Jack Stack from The Great Game;and Neil Rackham, who wrote the awesome book Spin Selling; and SethGodin, who is one of the worlds leading marketers. Obviously, Verne is

associating with some amazing people.

His company also sponsors best practice trips to GE, Southwest

Airlines, Microsoft and Dell. He is referred to as the Growth Guy. He is

a columnist for several publications and a contributing editor for FortuneSmall Business magazine.

Verne is the author of a really awesome book and I have insert-

ed awesome, that is not in the bio here called Mastering TheRockefeller Habits: What You Must Do To Increase The Value Of YourFast-Growth Firm, which has been translated into Spanish, Chinese,Japanese, and Korean. Named one of the Top 10 minds in Small Business

by Fortune Small Business magazine. He has appeared on the cover of theDecember and January 2002 issue of the magazine.

Verne also chaired the renowned Birthing of Giants

Entrepreneurship Leadership Program at MIT for 15 years, and the

MIT/WEO/YEO Advanced Business Program.

He has also chaired, for many years, the leadership program for

Canadas prestigious Top 40/Under 40 program, and is going into his

seventh year leading an executive program in Malaysia entitled Taipan:

The Making of Asian Giants. He has also launching similar programs in

Australia, India, and Ireland next year.

Verne has a BS in mechanical engineering and an MBA. His

hobbies include piano, tennis, and magic as a member of the International

Brotherhood of Magicians.

Hopefully, I got everything right there, Verne. Is there anything

that I left out that should be mentioned so that people know who you are?

I just received my Serbian version of the book.





Verne:

You are kidding!

We are now big in Serbia.

Wow! That is awesome! Well, you are all over the place.

Also, I must say that you also have launched programs in Australia,

India, and Ireland this year. I said next year or last year, but it is this year.

A lot of people may or may not know what YEO is, Young

Entrepreneurs Organization, I actually was a member of YEO many years

ago. I went to Birthing of Giants this last year, with our good friend Rick

Sapio.

I had no idea you actually founded these organizations until I saw

you speak at one of the YEO events on Mastering the Rockefeller Habits.

I thought you were incredible, not only as a presenter, but just a great

thinker, which is why, after all these years, I am so happy to be doing an

interview with you.

Joe, I appreciate it. By the way, they have taken the Y off of YEO now.

We are just EO because we all got old. Now we are just the Entrepreneurs

Organization.

How much did you have to do with that decision, if any?

None whatsoever.

Okay.

I turned over the reins formally back in 91. I launched the MIT program,

which, as you mentioned, I chaired for 15 years. I really was heavily

involved, obviously, beginning from 87 to 91 and still do things with it

today.



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Awesome! First off, I am going to recommend, right now, that everyone

get a copy of the book. We are going to talk about the book and I will ask

you some questions about it in just a moment here.

I highly encourage people to go to www.Gazelles.com. There are

a ton of really, really valuable articles that Verne has written there. I have

been spending the last week reading them all and they are filled with

enormous insights. I would encourage people to check out the site. There

is great information there.

I just want to ask you some questions about entrepreneurism and

what it is you do. There is one thing that I remember from your speech,

when I first saw you speak for the first time. I have never forgotten this

and I have actually quoted it several times, and I wanted to ask you about

it.

You made this comment that a lot of entrepreneurs say that they

work well under pressure or work well under deadlines. You said, It is

not that they work well under pressure or under deadlines. They simply

just work.

We have always kidded that entrepreneurs work half-days; just pick the 12

hours of the day that you want to work. Entrepreneurs could often work a

lot less hours for someone else, but it is just not in their DNA. Your

audience knows that because they are entrepreneurs themselves.

Absolutely. I will also mention that this Saturday, you are leaving for a

nine-month trip with your family to different parts of the world, literally

taking a vacation for nine months. I am happy that you have scheduled

some time in for us to do this interview before you head out, because you

are basically going to be unreachable during this period of time.

The reason I bring that up is, for one, I would like you to maybe

talk a little bit about why you are doing that, and I think it is also

something that many entrepreneurs would aspire to be able to structure a

business so it allows them to have the life, the freedom, and the

capabilities to do something like that. Tell us a little bit about your





Itquotes not that entrepreneurswork wellunder deadlines...they justwork, period.

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business and what it looks like and why are you going on this trip, how

would you set it up sort of thing, and then I am going to ask you some

questions about the Rockefeller Habits.

First of all, my staff and team are very excited that I will be gone. One of

the things I saw over the many years running the MIT program was that

often the four days up there were the first four days that any of the

entrepreneurs had really left their companies. Because, as you know,

particularly that first four or five years, it is 24/7/365.

The fear that was in their eyes of leaving the business behind, yet

when they got back from the program they realized that, for the first time,

the team had to step up, make decisions on their own. I know Richard

spoke about this when you did the interview with him. Being gone is

really useful for the staff stepping up and making decisions on their own.

This has been kind of a two-year planning process to prepare the

company for the move. I hired a president, Patrick Tien, who is now

running it. We had kind of our final planning session yesterday to turn

over the keys to running the organization.

The genesis of it was my wife and I, years ago, when we first got

married, had discussed the importance of taking a year and immersing our

children in other cultures. Joe, as you know our children are going to be

facing a considerably different world than we have been doing business in

now that this extra billion people, particularly from India and China, are

coming onboard into the middle class. This is the biggest single business

opportunity the world has ever seen!

We wanted our children exposed to that side of the planet. So two

years ago, we started the plan to make the move. Our oldest is 12. We

knew if we did not make the move now, we were not going to be able to

really convince him to come with us as he gets more locked in with his

friends and his school and the whole bit.

You can guess the conversation nine months ago, I hate you; you

are ruining my life, kind of thing. He has come around and the other

children are anxious to tag along. So we are going to do it.



Beinggone isreally useful forthe staffsteppingup andmakingdecisionson theirown.

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I will be doing business along the way. There is a business

motivation here, too. I will be working a day a week, which is my

commitment to the family, to further open up India and China and Dubai

and other parts of the world to our message.

I have been on tour, but I really want to go over and support our

marketing partners that we have in place in those parts. That is the

secondary reason for making this trip.

First off, I think it is awesome and I think more people should really look

at how they could arrange their lives in order to have these sorts of

experiences. You can read books about it, you can watch videos about it,

but experiencing it is where all of the real true learning and insight comes

from. That is awesome!

Let us get into your book. I am going to probably mention it a few

times, The Rockefeller Habits, throughout the interview, so let us just startthere and talk about this incredible book you wrote, the title, and how it

came about.

I have been doing this for 26 years, the doing being educating executives

of growing companies. Joe, I wish I had done it years before. In fact, we

have been pushing CEOs of companies to write a book.

It is unbelievable what a difference it makes just from a marketing

perspective. The minute you have a book, everybody thinks you are just

smarter the next day, which is crazy.

In terms of a business card to hand out, to get attention in your

industry, to use as a recruiting tool for employees and potential

employees, as a guide in order to share the culture, it is probably one of

the least-expensive marketing things that you could do as a CEO. That is

one of the articles that is actually up on Gazelle.com is kind of a case to

be made and an example of kind of an inexpensive way to do the book, a

medium cost, kind of the $10,000 solution, a $30,000 solution, and the

$50,000 to $70,0000 solution.

I just recognized that it was time to kind of codify the things that I





Theminuteyou writea book,the nextdayeverybodythinksyouquoteresmarter.

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have been doing over all of these years in helping these growth companies.

So, I wrote it in 2002. The inspiration for the name came when I was

visiting one of our first marketing partners in Detroit, John Anderson.

John actually launched the YEO Chapter in Michigan.

His wife had been reading Titan, which was a definitive biographyon John D. Rockefeller. Cindy goes, Verne, you have got to read this

book.

So she handed it to me. I read it over the next few weeks. I had

some of the same robber/baron misconceptions of John D. Rockefeller that

a lot of folks have had just through the media and history.

Instead, what I found was an unbelievably young entrepreneur.

Here is a guy that started at age 20 with his brother and some friends. He

fit the profile of the Young Entrepreneurs Organization.

You had a gentleman here who was unbelievably disciplined and

had launched very much at the same time that we have been experiencing

right now. There was this new technology called oil that had been

discovered up in Titusville, Pennsylvania. Overnight, just like kind of the

dot-com era, 1,000 refineries popped up and then died just as quickly as a

lot of the dot-coms did here at the beginning of our century.

Out of the dust came this young man, during what I kind of call the

second wave of a new technology, and ended up dominating that industry.

He went on to become the wealthiest businessperson ever in history. He

makes Bill Gates and Mukesh Ambani and Slim, out of Mexico look poor

by a factor of three.

As I read through what the things were that he did in order to

dominate that industry and to win competitively, the things he did were

universal. They were just basic disciplines and habits that any one of us

today could emulate.

That became really the inspiration for the title and this word

mastery that Michael Gerber is using so much here today. We are

seeing, emulated here with the Olympics, are, I think, what it is all about.

So I called the book Mastering these Rockefeller Habits. They served himwell and, again, I thought they were very simple and practical for



Basic disciplinesandhabitsthat anyone of ustodaycouldemulate.

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entrepreneurs here today.

There is lot of great insight that every entrepreneur could derive

tremendous value and how-to from. Can you talk about the habits -

priorities, data, and rhythm?

Those three are key, if you are then going to be able to make great

decisions. Really, obviously, our success is just equal to one thing: the

sum total of all the decisions we make personally in our lives and we

influence to be made in our business by our employees, our customers, our

suppliers.

First is that basic of setting priorities. As the famous story goes,

John D. Rockefellers coach was the famous Ivy Lee. Ivy was back then,

the Bill Campbell we see today Bill being the big coach to Steve Jobs

and Eric Schmidt and all those of Apple and Google and this stuff.

But the guy, back then, was Ivy Lee. The one thing Ivy taught the

great industrialists, including John D., is a very simple thing. Before you

go to bed at night, take a piece of paper out and just get very clear what

are the handful of things you have got to do the next day, and be clear what

number one is. The reality is, the best we can do is get one thing really

accomplished each day, that is going to drive us towards our long-term

goals. John D. was very disciplined in setting these priorities and making

sure that those priorities cascaded down throughout his organization.

The second was the importance of data. He was so proud of the

leading edge telegraph system that he had. Just imagine, Joe, what it was

like to get data in from the Russian oil fields back 100 years ago. We are

lucky we have got the Internet!

He was a guy that also understood the importance of thinking and

getting away from the office. He even had a special telegraph line

installed between his home and Standard Oils headquarters, so that he

could stay in touch yet be away, so that he could think.

Then thirdly, this importance of having a meeting rhythm so that

you could deal with the number one challenge everyone has in business





Beforeyou go tobed atnight,clearly listwhat youhave to dothe nextday...

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the minute you get your first employee, which is communication.

The thing that particularly enamored me with John D. was when he

first launched the company in Cleveland, because of the way that society

was structured, he and his co-founders would walk to work each day and

they would walk home each day. What he came to realize, and I think

others might have experienced it but he recognized it, that almost all the

important decisions got kind of figured out and decided on these walks,

not in the intervening 8, 10, 12, 18-hour workdays that we were kind of

kidding about earlier.

To his credit, when he moved the company from Cleveland to New

York City, even though that inner circle changed and that is another

tough thing that entrepreneurs have to deal with as they grow the

companies but even though his inner circle changed, he made sure that

they lived near enough to each other, close enough to Standard Oils

headquarters, that they could continue to walk to work together and walk

home together. Then he actually institutionalized, formalized, the daily

luncheon with his top directors.

There you are talking about the brain trust of his company having

lunch together every single day. You have got to know they were busy as

anyone is today, yet they made the time.

What I find is interesting spinning forward here 100 plus years is

the importance of us having talk time, Joe. This is only research that I

have uncovered recently, way after I first wrote the book back in 2002.

This email culture we have has literally driven us to silence. I do not know

how many of your listeners have literally seen, in their companies, people

trying to solve pretty significant issues through email, where you get these

kind of 24 stringed emails together.

I think it is ludicrous in so many ways.

Yeah. If we would just get on the phone and talk for a few minutes, we

could get it done in 15 minutes instead of 15 days. We now understand the

mechanism. That is what is exciting.



The number oneproblem that everyone has in business: Communication.

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The research comes out of the grieving, research around grieving.

What they found specifically is this: whenever you are kind of concerned

or worried or anxious or facing an opportunity, those kind of things that

turn your stomach as an entrepreneur, it physically sits in your medulla,

this kind of reptilian brain that we have. It is a thing that, again, gives you

the cold sweats.

You can sit in your office and try to think your way through the

issue by yourself, and it physically stays in your medulla. What is

amazing is the moment you verbalize it, you speak it, it shifts from the

medulla right to your prefrontal lobe, which is that part of your brain that

literally says, Let us stop worrying and let us get going and get the

problem solved.

I am convinced, 100 plus years ago, that John D. may not have

understood the physical mechanism but he sure recognized the importance

of having his top team there in conversation every single day. That has

been the importance of driving that business.

First off, that is fascinating to even hear things like that. I love hearing

stuff like that because I am a big believer. I have done a lot of work with

a guy named Dr. Edward Hallowell. He is the leading psychiatrist in the

world for ADD, ADHD.

He recently wrote a book called CrazyBusy: Overworked,Overstressed, and About to Snap! Strategies For Coping In A World GoneADD. He calls what a lot of people perceive or think is ADD, he calls itAttention Deficit Trade. He wrote a whole article about it for HarvardBusiness Review.

He is trained from Harvard. He taught at Harvard. He is a very

bright guy.

He talks about how today we are the most connected we have ever

been electronically, but the most disconnected we have ever been in

human moments. There have been studies and research proven that

staring at a computer literally changes the neural pathways in your brain.





quoteLetquotes stopworryingand letquotesget goingand get theproblemsolved.quote

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I reinforce this to my team all the time. Pick up the phone and call

people, just talk to them whenever there is an issue, whenever there is a

bottleneck. You will always accomplish more through a simple phone call

than ever trying to send emails back and forth and just being able to

connect with people.

What you were saying about the walks has given me a lot of ideas.

I recently went down to YouTube, which is owned by Google, and saw the

way that they do lunches there. Everyone would just get together and they

can talk and they can eat lunch together. I have no idea if it had anything

to do with this sort of thinking, but I think there is a lot to be said there.

That is a huge lesson for all of our listeners to really think about.

Just on what level is your brain trust, as you call it, Verne, able to get

together and talk and to have those sorts of discussions?

If there is only one thing your listeners get off of this call, it is to find this

brain trust and have breakfast with them once a week. Let me tell you a

couple of stories.

One, we just did a recent piece in Fortune on Bill Campbell, thegreat coach of Silicon Valley. In that article, we highlighted the fact that

Steve Jobs regularly goes on Sunday walks with Bill it said in the

article so he can just kind of talk through some things that he really could

not talk to anybody else about; which has been the power of YEO and our

forums, as you probably experienced. It is just having a group of six or

seven other CEOs where you can open up and get that talk time.

I remember back when I was 15 and we had moved from Colorado

to Kansas. I was in a small town called Kinsley, 35 miles literally this side

of Dodge City.

My dad woke me up one morning, early, and he said, I want to

teach you something, son. He took me down to the local diner about 6:00

in the morning.

He pointed me over in the corner and he said, That is the Lewis

boys, and they have breakfast in that corner every single morning. The

Lewis boys were the ones that kind of own Kinsley. They are the



My dadwoke meup earlyone morningand said,quoteI want to teachyou something,son.quote

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kingpins. He said, That is where they plot the domination of Kinsley

every single morning, discussing has anyones farmland come up for sale

that we can grab before it goes on the market? Anybody have any kind of

used farm equipment? Who would we like to be, mayor or sheriff?

That always stuck with me.

Let us speed forward here today. I went out on a limb last year, in

one of my articles in one of my Growth Guide columns, and declared what

I feel are the three most important pages ever written in business. Those

happen to be in the book Jim Collins Good To Great, pages 114 to 116,where he outlines the CEO counsel.

It was a piece that I found a lot of people missed in reading Jims

amazing book, Good to Great. When we pinpointed him and said, hey,Jim, what is just one thing us growing companies could do out of your

book, he said, That!

He outlines, on those three pages, 11 rules for who ought to be in

this brain trust, kind of what the agenda ought to be. It is really about,

once a week, getting kind of an hour of more informal time.

This is not the same as your weekly executive team meeting or

operating meeting that a lot of even small business owners have, like we

do. This is something different.

Ever since I read that book and we started doing it, I have got kind

of a brain trust that gets on a conference call every Monday morning for

an hour. I credit it for being able to get my business to a point where I

could get it turned over to a president and take nine months and go travel

with the family. It would not have happened otherwise, Joe.

Right, right. There are so many things that I would like to ask you, that

you even alluded to here with just talking about the three habits of

priorities, data, and rhythm. You wrote an article at Gazelles, which is

posted on www.Gazelles.com, Stop Doing Email.

Part of getting the first thing done in the morning goes back to one

of the Rockefeller Habits from Ivy Lee, which is to be clear on the one

thing that you need to get done. You actually make the case that jumping





He outlines,on thosethreepages, 11 rulesfor whoought tobe in yourbraintrust.

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up in the morning and immediately going to email as being so damaging.

I very much believe that because it sets your whole day off on someone

elses agenda, not necessarily your own.

Can you talk a little bit about that? Because I think many

entrepreneurs hear this but they do not really put it into a habit and they do

not do it. The ones that do, myself included, it makes such a positive

impact on your ability to get done what needs to get done and what you

want to get done. Talk a little bit about the dangers of how you check

email.

A couple of things. Let us go back to what we now know about the brain.

You had mentioned some things, as well. We are, on average, interrupted

every 11 minutes. The big culprit of that is email and these Blackberries

and other devices that we have.

Yet, the brain takes at least 25 minutes to get up to speed. It is just

like your automobile. You get better gas mileage when you get going and

get out on the highway.

So right there is the rub. The most important thing you can do is

get that uninterrupted 30 minutes to an hour.

Everybodys biorhythms are different, so find your best hour.

Then that is when you have to kind of shut off the world and get the brain

turned on and get it focuses. If you get the one good hour in, everything

else kind of takes care of itself.

I went to go hear Tim Ferriss speak recently, the four-hour work-

week guy.

He is a good friend of mine. I do not know if you knew that or not, but I

have interviewed Tim and I know him pretty well.

I had to admit; I had not read the book. I kind of thought it was a

frivolous title, though great titling; one of the best titles of a book in a long

time. He told the story why he had picked that name, which was smart.

I went, expecting that I was going to get some kind of frivolous



If you getone goodhour in,everythingelse kind of takescare ofitself.

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talk. What I realized, first off, the guy is amazing, as you know. He is

brilliant and his four-hour workweek is about thatfinding one good hour

every day for four or five days, you can get a lot accomplished.

One of the things that struck me in his talk, because he is big about

not doing email, is just the fact that if I think about my own business,

Joann, my assistant, opens up my physical mail. I cannot remember the

last time I opened up mail. She will put the two or three pieces on my desk

that I really need to look at and she deals with everything else.

It is the same with email. The reality is there are only three or four

emails you really need to deal with.

One of the reasons I am heading over to India is to further instruct.

After hearing Tim speak, I went and got an Indian assistant, Mohad. I

want to now, over the next few months, have him understand what emails

I need to see and what emails I do not. He can be crunching them over the

nighttime, and the next morning I have got them in my in-basket for me to

deal with. I think we have just got to think about email the same as we

treat regular mail in the old days.

I agree. I agree. The funny thing about the modern day, if you do not set

up a process of managing modern life, it will manage you. This really

comes a lot from my discussions with Ned Hallowell, who has now

become a very good friend of mine. We see that with a lot of

entrepreneurs.

Another thing that you mentioned about Rockefeller was about

setting up the special telegraph line to get data, so that he can be away so

he can think. I wanted to actually have you talk about that idea of being

away so that you can think. It is a whole process of setting up an

environment or a way that you can actually do the critical thinking.

What do you mean by that? In your experience, you have coached,

organized, and helped thousands of entrepreneurs and some very, very

successful ones at that, some of the top in the world. What have you

discovered or learned about being in an office, being out of an office, how

to set up the time to really think about your business, your life, and your





The reality isthere areonly threeor fouremailsyou reallyneed todealwith...

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actions? Anything you can talk to that would be strategies that the

listeners could take and use?

Way back there was a sausage company up in Wisconsin. When the son

took over from the father, I think one of the most impressive things he did

that made that company huge is he purposefully rented an office down the

street and disciplined himself to go down there for half a day a week with

just a yellow notepad, and would sit there and think about the business.

We hosted Paul Orfalea, the great inspirational founder of Kinkos

who, right now is just dying because FedEx wants to get rid of that name

or maybe have gotten rid of it already. Paul said something very

important to our audience last fall. Look, the primary job of an

entrepreneur, the most important thing that we do is to provide our

company with ideas.

He described one idea he had that put $30-million to the bottom

line at Kinkos. He said to us strongly, Close your door, get out of the

office, and find that think time.

Eric Schmidt keynoted at Michael Milkens recent global

conference I was out there speaking at. Here is a guy running Google and

Michael is up on the stage saying, Okay, Eric, what is really key to you

maintaining your relevance as a company and as a leader of probably the

most important visible company on the planet right now?

He could have said a lot of stuff, Joe. He said, You know what it

is? It is having the discipline every weekend to shut off email and read a

book, so that I have got more ideas and I have got some time to think.

The new head of Citibank, we did a piece on him in Fortune. He

emphasized the fact that one of the key things that he is focused on is

making sure he has time to think. If ideas are the main thing that we

provide our companies, we need both the learning and then the think time

in order to make that happen.

Then obviously, the best example of which we actually modeled

our two summits around is Bill Gates think weeks. Bill here, having just

made the transition into his foundation, has been speaking deeply about



Close yourdoor, getout of theoffice andfind thatthinktime!

17

Verne:



what habits he wanted to carry over.

One of the ideas he brought with him is this Think Week, where he

takes seven days, 100 to 120 books, manuscripts, PhD theses, and white

papers. I call it that tower of guilt that we all have in our office of piled

up magazines and books we have not got to. Bill Gates hides out up in the

Northwest and for18 hours a day for seven days straight, he plows through

those materials. Plus he has time to then to think about what he is learned.

He has been clear about the significant ideas that have kept

Microsoft, a technology company, relevant. Microsoft is one of those rare

firms that is still actually doing well 30-some years later.

The heart of it is been those think weeks. Example after example

after example have really driven home at least this message to me, and we

have shared that obviously with our audiences.

That is good. That is some fabulous advice.

Let me ask you about something you wrote about in the book. You

wrote that there were 28-million firms in the US, 96 percent of these with

fewer than ten employees.

If you could talk a bit about barriers that keep small companies

from getting larger. What are the obstacles that get in their way, because

a lot of the people listening have small companies? They want to grow

them, they want to make more profits, but they have all these obstacles

that get in the way and they do not know how to overcome them.

I think I mentioned in there that 70 percent of them are home-based. It is

really just them and maybe a bookkeeper. That is the bulk of business in

the United States.

I say this kind of tongue-in-cheek but I think there is some truth

there. The main barrier is people, from the standpoint that I have always

kidded. Most entrepreneurs I know, really down deep inside, do not like

other people. Again, I say that tongue-in-cheek.

In fact, their view is, I would love business if I just did not have

to have employees or even customers to deal with. What they are in love





Most entrepreneursI know, deep downinside, do not likeother people.

18

Joe:

Verne:

with is their idea. I will come back to that word. They are such idea

people. It is the idea of their business that they are in love with.

For them all those relationships just get in the way. In fact, you

know, a lot of entrepreneurs were kind of a little different in school.

I think you are absolutely right. I remember reading this book Profiles ofLeader and Success that profiled people that had made amazing impact inthe world but also had crazy traits.

This guy profiled everyone from Walt Disney to Frank Lloyd

Wright to Hitler to Maria Montessori, and all kinds of amazing

entrepreneurs on some levels, and then leaders, some majorly destructive,

others well accomplished.

One thing that was mentioned in that book that you made think of

was that they sought out a lot of advice but rarely took anything but their

own counsel.

Most entrepreneurs are loners, Joe, as you know. That is one of the

reasons why I launched YEO was to deal with that issue and for folks to

be able to find some people like themselves that they could hang out with.

That is the overall issue. In the book, I outline three specific

barriers. The first one, related to what I just mentioned, is leadership.

Again, in most home-based businesses, it is the person and maybe

a couple of helpers. They can never get over the hump of trusting that

anybody else could do what they do as well or better. That is the issue.

Now, those that finally do hire their first few employees are

usually able to kind of get over the hump and get up to about ten

employees. One person can lead pretty comfortably, five, six, seven other

people. It is a decent span of control.

Then what happens is as you go from about 10 employees up to 50;

you pass through one of the things they call Vernes Valleys up at the MIT

program. That is about when there are 25 employees. You are big enough

but not big enough. As such, you have to start bringing in some other

people to start leading some of the folks that you have hired.



Theyusuallysoughtout a lotof advicebut rarelytook anythingbut theirown counsel.

19

Joe:

Verne:



Roughly 50 is one of those kind of natural points where companies

settle in, in terms of number of employees. Now if you take 7 times 50

you get 350 employees and that is another one of those plateaus.

Somewhere between 50 and 350 employees, you then have to add

yet another layer of management. It is this inability for the entrepreneur

to get their DNA passed down first to their initial leadership team, then to

these middle managers that you have to bring in as the company grows,

and then to this next level of management is what gets the organization

stuck. We talk about certain activities and habits and processes that can

help you get that DNA passed down, so that the rest of your team is

making as good, if not better, decisions and there is that word again,

decisions than you are.

The first barrier is your own leadership and your ability to get

others to do what you need them to do and be happy about it, and then

figure out how to grow other leaders within the organization. That is

barrier number one.

Barrier number two is really a systems and process issue. We kid

about when you make the move from home-based business literally to

your first office, the first system that gives you a headache and it is going

to be a headache the rest of your life, is your phone system. We all

remember those initial challenges.

We just got done changing out our CRM system here this summer,

and it looks like it is going to kill you when you have to upgrade any one

of these kinds of systems. With zero to 10 employees, you have got to deal

with the phone systems and the computer systems, to kind of keep us

connected.

From 10 to 50 employees, the system that kind of gives up the

ghost is the accounting system. It was sufficient for a while to have your

monthly statement that you looked at and just hoped the bottom line was

black instead of red.

Between 10 and 50 employees, now you start needing more

granular information. I need to know if I am making money by customer,

by location, by skew, by salesperson. Without that kind of detailed





The firstbarrier isyour ownleadership.

20

information that can only be had if you upgrade your accounting system,

you start making some bad decisions.

Again, you are going to have challenges with the accounting

system the rest of your life, like you are phone system. These things are

just additive.

Above 50 employees, you then run into a systems integration

problem. You have been running the business basically on three pieces of

software.

You have got some accounting package that you have started out

with, initially Quicken and then QuickBooks. You have had your CRM

system kind of an ACT or Goldmine or something, as a lot of us grew up

on.

They always had this third operating system that usually was

named after the person who created it in the industry. You would have like

ACT, QuickBooks, and then Dave.

You could kind of piece everything together through email, like if

somebody changed his or her address. At some point, just an address

change - because you have got the customers listed in all three different

databases is enough to bring the place to a screeching halt.

It is literally entrepreneurs being able to get their systems in order

so that they can then handle the complexity that is growing as the

company grows. You have got just kind of a systems and structure

problem.

First is leadership; second are your systems, processes, and

structures. The third barrier then is just some pure market dynamics.

There are a couple of them.

One is an internal versus external challenge. Most of the time, the

world, if you can get your leadership and system problems fixed, will let

you get to about $10-million in revenue. But something happens when

you add that extra zero. All of a sudden now, if you have launched a new

kind of business, you have just proved to the world that it is viable, and

now you have got a lot of competition that is entered.

Or, in order to piece together $10-million in revenue, you are



The thirdbarrierinvolvessome puremarketdynamics.

21



making some big companies mad, and now they start to pound on you.

Then you get calls every day about folks wanting to buy you.

What happens is up to $10-million all of a sudden at that size you

start getting sucked into all the operational issues. This is primarily

because you did not get the leadership in place, you did not get the

systems and processes in place you needed to.

Now, right when you need to be out doing battle in the market, you

have now been sucked in to all the internal issues and it is enough just to

crush you. Guys wake up and say, Man, I want to go back when I just

working out of my house, making a lot more money than I am today with-

out all these employees and customers to have to deal with. Those are

the three basic barriers: leadership, systems and structures, and being

able to deal with some of these market dynamics.

Great! Let me ask you, do you think the best approach to overcoming

these obstacles is if you were to put any attention on personal

development, hiring people, and systems? I know this may be a difficult

question to answer because it is different for different businesses, different

people, and situations. If you were to maybe to offer some advice on

where to actually start looking if you are in the middle of these barriers. If

you are an entrepreneur listening to us both talk right now and having to

overcome this, where would you say put your attention?

Well, very self-serving, Joe. It is why I wrote the book. I saw this

happening so many times over the previous two decades I have been doing

this. I would encourage them really to take a look at the book. I deal with

each of these issues and then how to overcome them.

It is why we launched this two-day workshop that is still going

strong a decade later. We have moved 20,000 executives through it. It is

two intense days of helping entrepreneurs figure this stuff out.

I would also point people to and I am excited he is got a new

book coming out Geoff Smarts new book called Who. It is an update tothe famous Topgrading methodology that his father Brad made popular





quoteMan, Iwant togo back towhen Iwas justworkingout of myhouse...quote

22

Joe:

Verne:

three decades ago.

It is a method of interviewing and making sure you pick the right

person, that GE and other great companies still use today. We have now

adapted their process so that us mere mortal small businesses can utilize

it. The heart of it is we are really bad at interviewing, Joe.

I know! I have interviewed Brad Smart, and so most of my listeners have

already heard my interview. I went to one of his sessions and I could not

believe how inept I actually was with so many things after having learned

and gone through Topgrading.

We have to recognize the fundamental issue. The fundamental issue is that

we are optimists. We would quit early in the process of launching our

businesses if we were not unbelievably, crazily stupid optimists. That is

our downfall, because all we want to do is see the good and not uncover

what are going to be the issues down the road.

The discipline of how to pick the right people to be on your team

will either save you so much time or be at the heart of the headaches and

sleepless nights that entrepreneurs face. It might make you want to go

back and fire everybody and just go back into the house.

You have a quote in the book where you say that one great person can

replace three good people. Let us talk about that. Can you create a great

person or is it a matter of seeking them out? I think I know the answer to

this, but I wanted to ask you.

It is seeking them out and it is realizing it is not about an individual being

great or not. It is about that individuals fit with your culture and your

approach.

The same person who would be just good for you might be great

for somebody else. That is why it is real critical that in doing your

Topgrading interview and your evaluation, that you really look for the fit

around culture. It is much easier to train the skills than it is the attitude.



We wouldquit earlyin theprocess oflaunchingour businesses if we were notunbelievably,crazily stupid optimists.

23

Joe:

Verne:

Joe:

Verne:



You hear it all the time, but you can get enamored by somebodys

resume. They accomplish all this in some other company, and you think

automatically they are going to be able to do it in your firm. But they do

not fit.

Entrepreneurs, I think, understand kind of intuitively what fit

means, but you have got to make sure you interview for it and look for it.

It is not that an individual employee is either good or great. It is that you

have got to find the ones that fit you. That is going to help them be even

greater because there is that alignment.

You are absolutely right. I recently went through a very high-level

position in my company where I though, in the right environment, this

person would be fantastic. In mine, it was not. It was a huge lesson to be

learned.

Jim Collins very much speaks to this in Good To Great. If you findyourself having to manage people, you have probably made a miss hire. I

believe you share the same sort of philosophy.

A subject that I think most listeners just would want to run and

crawl under a rock when they are faced with is firing someone. Or you are

thinking, Do I have the right person, and you are always second

guessing yourself. What are your thoughts on, as you say, letting people

go be who they are somewhere else? If you are in a situation where you

just know deep down inside you do not have the right people or something

is missing, how do you recommend actions to take for people in that

situation?

Let me get to that question, but let me go back and finish answering your

other questions, which was the specifically three good equals one great.

That specifically came from the cofounders of The Container Store. I

hosted them for several years up at the MIT program.

The Container Store is this retailer, sells garage organizers, closet

organizers; often called the Home Depot for women. These guys just beat

it out in the trenches. By the way, they sold a piece of it to a private





Entrepreneursunderstandintuitivelywhat quotefitquotemeans...

24

Joe:

Verne:

equity firm this last year and took some chips off the table. So,

congratulations to them. They constantly kept being named the best place

to work in the United States. They beat Microsoft and all the biggies.

I finally said, Lets look under the covers there. They were the

ones who said, Our philosophy is that we can find one great employee to

replace three good.

Then, they pay them literally twice as much. You can do that more

with a retail pay$20 an hour versus $10. But if you are getting three

times the output, your labor costs are actually considerably less. Then

they give them lots of training that helps keep them great.

One of the quotes which drives what we do is one we got from

Michael Dell, You have got to start with great people, but then you got to

keep them great. Container Store provides their people 160 hours of

training a year.

I think Kip and Garrett summarized it much more plainly. They

said when they launched the business, do we want to have a whole bunch

of low-paid stupid folks that we have to manage or would we rather have

first a whole lot less, yeah, better paid, but lower total payroll of smart

people? I think any one of us would rather have the latter.

Absolutely!

They went about day one, store one in Dallas, by putting in place that

philosophy and sticking to it. I think it paid them dividends over the 30

years.

That is great. That is great!

Then your question, which is Ah, so I did not Topgrade. I threw a dart at

the list. I would probably have been better off throwing a dart at the list

than the person I would have picked, and now I got to do something about

it.

If anyone ever says it is easy from an entrepreneurs standpoint



quoteYou havegot to startwith great people, butthen youquotevegot to keepthemgreat.quote- Michael Dell

25

Joe:

Verne:

Joe:

Verne:



maybe in big companies it is easy because the folks are faceless and

namelessthey do not know what they are talking about. Man, when

these people become your neighbors or friends it is the most single painful

thing you have to do.

All you can do is just realize is that normally they are as miserable

as you are. We kid with the phrase I am going to free up your future. It

is not doing anybody any good when it is not working. They often sense

it before you do, and definitely the rest of your employees do.

There is that age-old rule that I wish we could follow most of us

do not which is, hire slow, fire fast. But you just try to do your best.

You kind of said something, too. They sense it before even you do. I have

really thought about this a lot, especially with conversations with my

buddy Richard Rossi, and your friend too, that if you even start

questioning it, you are probably already in the area where you know

something is wrong.

I speak this from my own experience. There are times where I

have belabored doing the inevitable, which is getting rid of someone or

giving them the opportunity to move on, and I just did not do it when I first

thought about it, when I knew it should have been done.

There are situations where people are really superb up to a certain

point. One of the lines from Dan Sullivan is the skills that get you out of

Egypt are not the same skills you need to get to you to the promised land.

Certain people are good to a certain point, but they are only going to take

you to a certain point.

If your bigger future is beyond their capabilities, something has got

to change. Sometimes that means having them not be in your organization

anymore. How do you recommend people going about that obstacle?

First, I do think we fall back on that bromide a little too much, in that,

Hey, our company, our market, our opportunity has outgrown our

people, when I think a big part of the blame is on us. It is what caused

me to launch Gazelles, Joe.





There isthat age-oldrule that I wish wecould allfollow:quoteHire slow,fire fast.quote

26

Joe:

Verne:

Here I have launched YEO, I knew a lot of the guys in YPO and

Vistage and all these other CEO groups. It was a standing joke up at the

MIT program, where literally the CEOs teams would run scared knowing

that their CEO had just been at this learning program and they are likely

going to come back and be crazed for the next couple of weeks.

Here we are educating ourselves, spending tens of thousands of

dollars on ourselves, and doing nothing for the rest of our executive team.

We wonder, then, why they are not keeping up with us.

I have been doing some work at Motorola University. I knew

Steve Kerr up at Crotenville, when he was running that for Jack Welch at

GE. I realized that we had to get out of this mindset of a genius with 1,000

helpers, as Jim Collins calls it, and begin to provide some high-level

executive education for our CLO and CFO and BP sales and marketing.

We had to get them some education, as well.

That is why we launched these summits and I launched Gazelles.

It was to be this outsourced corporate university so that we could bring this

kind of Fortune 50 quality education of the faculty that you mentioned in

the beginning and bring that down to us mere mortals. I have seen many

executives underneath the CEO that the CEO did not think were going to

make it. When they got a little bit of education they just blossomed and

were able to grow into the position much more than I think the

entrepreneur expected.

I would not want to first just fall back on that kind of Hey, they

are just not going to get it to the next level, without us doing our job to

provide them some education and development.

I have been talking a lot about Goldman Sachs. I have just read

their history, which was a phenomenal read. They have come out of this

entire kind of sub-prime thing unscathed. They doubled their

profitability last year when everybody else was sucking wind, and they are

on record pace in 2008.

The New York Times came out and said, You know, we really see

two things. The Goldman Sachs executives, one, get lots of personal

coaching and go through lots of education.



Here weare, educatingourselves.and doingnothingfor therest of ourexecutiveteam.

27



I have some firsthand insight there. When Steve Kerr left

Crotenville, when Jack Welch stepped aside at GE and was going to retire,

who recruited him? Goldman Sachs in the year 2000.

Steve spent the next six years building one of the most leading-

edge executive development centers in the world for the Goldman Sachs

executives. Here you are talking about some of the smartest, highest paid

executives on the planet and they are continuing their education. I think

that is what we owe our people.

Just like everyone listening is actually educating themselves by the mere

fact that they are listening to us talk and me interview you, I very much

believe in the same thing for everyone.

Even in my marketing, one of the main methods of selling and

teaching clients how to sell is education-based marketing. It is easier to

make decisions when someone has information, and then they can make

an informed, intelligent decision. I think it is no different when you are

trying to learn and educate yourself.

I am a huge believer in personal development for my own team. I

spend a very good portion of revenue on training my people to be the best.

If there is one thing I think I do right, it is definitely in that area.

Hence, a lot of the deepening of the methodologies and processes

on what to do and how to do it, can be started with your book. Or they can

go to Gazelles. That is one thing that I definitely want to encourage

people to do and hope they do because if any of this is resonating with you,

you can certainly get tremendous amounts of training through what you

have already set up, Verne.

I want to ask you about a couple of other things, though. I will

keep driving people back to the fact to absolutely read the book if you

think it is cool. Go out and buy the book as soon as you are done

listening to us. Buy the book, if you have not done so already. There is

so much to learn here.

I want to ask you about meetings, because I am curious to what you

will say. You mentioned all throughout your methodology the importance





Here youare talkingabout someof thesmartest,highest-paid executiveson theplanet, andthey arecontinuingtheir education.

28

Joe:

of meetings. You even talk about having daily meetings, and just the idea

causes anxiety in my mind because I do not like meetings. How do you

structure the meetings so they are not so painful to get through? Or maybe

correct my perception of what a meeting or an effective meeting actually

is, because I think a lot of people might share that sort of thinking.

You bet! I think it is because we are in a lot of really bad meetings. You

go to enough bad meetings, and you do not want to ever do that again.

If you think about itjust take a moment philosophicallythe

most important thing about people is we are basically social beings.

Maybe the entrepreneur is not as much, from what I said, and that is why

they often have the biggest aversion to it.

But almost everybody else in the company is a social being. The

most important things that actually happen, happen in meetings. Think

about the meetings with the customer, meetings with suppliers, meeting

with your team to come up with the new product design, and that most

important meeting, that meeting with yourself that is uninterrupted, that is

on agenda, on task, where out of it comes a real detailed list of what we

are going to do next.

Meetings are critical. In fact, all of civilization has been about

getting rid of the mundane work and turning that over to machines. All of

these new dark factories that we have today where the humans that are left

are basically sitting around coming up with process improvement ideas to

make it even better.

As people we were intended to be in meetings. They are just a lot

more fun at the bar than they are in our own companies.

Right!

That is why we hate them. Now, I also know when the meetings are done

right, you actually need a whole lot less of them. That is a big part of what

we teach.

We actually say, If you do it correct, you only need about 10



Whenmeetingsare doneright, youactuallyneed awhole lotless ofthem.

29

Verne:

Joe:

Verne:



percent of a standard 40-, 50-, 60-hour workweek in order to manage the

business. You may be in, again, other meetings with customers and the

kind of things you ought to do that are market-facing activities.

To run the business, we have a little video clip on our Rockefeller

Habits DVD from Alan Rudy, from Express Med. He took the company

from $8-million to $60-million. When we first met him, he was literally

spending 80 hours a week just trying to keep the wheels from falling off

the place.

Once he got our habits in place, including the 15-minute daily, he

said he was able to reduce it from about 80 hours to a more manageable 8

to 10 hours for him to run his company. He had the other 20, 30, 40 hours

to go out and find the major relationships and partnerships and customers

and ultimately the company to buy his firm.

If you do it right, you can reduce, dramatically, the number of

meetings that you need. The thing we are most controversial about is this

daily huddle thing that you mentioned. Especially when it is small teams,

teams of three, four, five. People are thinking, Hey, we see each other all

day. Why do we need to have this structured 15 minute?

Anybody who is married knows that you can be sleeping with the

person, but that does not mean anything approaching communication is

happening. That is the difference here.

Let me share just a quick story that drove this home. One of the

other guys that keynoted at the Milken conference and is huge in the news

right now is T. Boone Pickens. This 80-year-old, who is now turning 81,

put forth this amazing energy plan.

The other thing he is known for is just the last few years he took

$4.6-million and turned it into $5-billion. That is a pretty huge

accomplishment at his age.

There are 3,000 of us in the audience saying, Okay, T. Boone,

how would you do this? He could have waxed on philosophically about

markets and stuff. No, he said, One thing: it is our meeting rhythm. I

am practically cheering out in the crowd.

He said, It is very simple. A la John D. Rockefeller at 5:30 every





The thingwe are mostcontroversialabout is thequotedaily huddle.quote

30

morning. Do you want me to go through this?

Yeah, absolutely! Please do! I think it is really valuable.

Here is what he does. At 5:30, he has these two analysts who come in and

they start scouring the world for just information on what is going on in

the oil industry. Some pipes bust a leak in Uzbekistan or something.

There is a daily gathering of information.

Then at 6:15 sharp, he calls in from home and has a 15-minute

huddle where they brief him on what they have learned around the globe.

We know that in order for you to see a pattern, you need at least six

data points. If you are seeing them daily, you are going to see the trend

sooner than those folks that are having just the weekly or the monthly

management meeting.

Then at 6:30, he works out. He has got a trainer.

Notice what is happening. By getting this data every day and

having this 15 minutes of talk time, back to what we discussed earlier in

this conversation, his brain then has a chance to go to work on this data

and information while he is working out.

At 7:30 sharp, he then meets formally face-to-face with his team

for 20 minutes, while he has these two egg white omelets. That is where

they then get the final talk time to decide what their trading strategy is

going to be for the rest of the day.

They then go to work, just like we would go to work. Then at the

end of the day, at 4:30, they meet back together, huddle back together and

discuss what worked, what did not work, what they learned, and the rest is

history. It is that kind of rhythm.

It is the same thing I saw at Goldman Sachs. Where Morgan

Stanley and Merrill Lynch have the monthly management meetings and

therefore got caught off guard. Goldman Sachs exec teams meet twice

daily, 6:00 am and 6:00 pm for a few minutes, and as a result, they just saw

it sooner than everybody else. That is the power.

I have one last example. I am a huge fan of Linksys. Janie and



Then theygo towork, just likewe wouldgo towork.

31

Joe:

Verne:



Victor Tsao are the couple that built that huge company that ultimately

sold to Cisco for $500-million. Good ending to their entrepreneurial run.

We hosted Victor up at MIT, and our question was, What was

key? How did you beat Microsoft? How did you beat Cisco?

He basically said one thing: The day Janie and I started the

company, husband and wife, we set up a daily meeting at 5:00 every day

for a few minutes. It was a formal meeting. We would sit down and

basically discuss, what did we learn today from a customer, or a move a

competitor made?

By gathering that information and talking about it every day, they

saw micro movements in the marketplace way before any of the big guys

did. Then they said, If we decided there was something we needed to do,

change a word in a document or add an entire feature set to a product, our

rule, well get it done in four weeks.

Let us speed forward a decade or so later. He described how when

John Chamber, CEO of Ciscos doing due diligence on the company,

basically John said, Victor, Janie, you know why we are buying your

company? Fundamentally, you guys have made almost every tactical and

strategic decision about a month ahead of us. You have been a month

ahead of us for a decade, and we have not been able to catch you.

Let us go back one more. Sam Walton. We looked at the fortune

and we said, What is really behind the success of Wal-Mart? Largest

company now, again, on the planet. They surpassed Exxon Mobile this

year.

What we found was a very simple thing that Sam Walton started

the day he launched his first store. That is what I want to keep

emphasizing. These are things that John D. Rockefeller did the day he

started his company; what Janie and Victor did the day they started, when

it was just two of them.

What Sam did every Saturday morning before the store opened, is

he would gather together his handful of employees in his one store. His

question was, What did we learn this week from our customers, what

things did you learn by shopping our competitors? They would have the





They sawmicromovementsin themarket-place waybefore anyof the bigguyquotes did.

32

talk time in this meeting, and then they would decide things that they

would want to do to make the place better. Then they would implement it

by noon.

Speed forward several decades later. It is exactly the same habit

today.

Our calculations are, because of this meeting rhythm and data

gathering process, that they are about nine days ahead of their competition.

They have been nine days ahead for 40 years.

Wow!

That is the practical power and importance of these habits. Gathering the

data, meeting about it, and then using that to set your priorities and then

acting on it.

You know, I would almost encourage everyone listening to us. You have

completely changed a lot of my perspective, not necessarily changing but

just added to my perspective. I think getting perspective is important,

which came out of a meeting between you and me in this discussion. I

always take it back to discussions. I would encourage people that are

listening to whoever is a key person in your organization, to listen to this

interview, have them listen to it, and then literally have a meeting of what

did you learn from this interview. Use that as a starting point to put into

practice what it is you are talking about here, as elementary as that may

seem for some people that are already very successful entrepreneurs. I

think it will just elevate you to a whole other level in your thinking on this.

One of the things that you were describing made me think of

something. Verne, I have known Dan Sullivan for over a decade. I have

been in his program, Strategic Coach, for over a decade. He has hired me

several times to help with the marketing and promotions of Strategic

Coach.

One of the conversations I had with him a couple years back that

really got me thinking, was when I asked, Dan, what do you sell at



Gatherthe data,meetabout it,use thatto setyour priorities,then actupon it.

33

Joe:

Verne:

Joe:



Strategic Coach? What are you selling?

He said, You know, in a lot of ways, we offer discussions. We

facilitate higher levels of thinking with very successful entrepreneurs. But

it doesnt sound really sexy to say You are going to have a discussion.

I thought about that for a long time and I still do. I have come to

the conclusion that all the insight that is worthy of growth and things that

I have discovered in life all came out of a discussion. It was either a

discussion that I had with another person or a discussion that I have had

with myself. If I can improve the quality of my discussions or the quality

of my own internal discussions, I just tend to get much better results.

The way that you just described meetings, it just made me think of,

well, maybe it is just the attitude of Ive got to go do a meeting versus

Hey, I am going to go have a discussion about what we learned today.

It is all about communicating with other bright people, a brain

trust, and pulling out the insights, the strategies, the methods, and the

things that will take you to reach a bigger future.

I thank you for that answer because it really helps me think through

the whole purpose of being effective versus being ineffective. Is there

anything else you want to say on that before I ask you another question?

In the book we have specific agendas for the daily, we have specific

agendas for the weekly, we outline the power of the monthly, then

obviously we are well known for this one-page strategic plan tool that then

helps you kind of get everything on a page. We outline how you handle

that quarterly meeting.

It is a day, week, month, quarter, year rhythm that facilitates I am

going to use your term discussions, conversations, knowledge sharing,

think time, and talk time that we now understand metaphysically why it is

important. It is the most competitive weapon we have; which is our

brains. I encourage people to take a look at those details.

By the way, Joe, it is why we launched our Growth Summit. We

sit people at a roundtable. We want the teams to stop the craziness for six

months and come for two days and learn together, have conversations for





It is themost competitiveweapon wehave: ourbrains.

34

Verne:

48 hours, and really take your thinking to the next level. Then you have

got six months to go back and execute all that. Then we are going to come

stimulate you again for a couple of days.

We answered the questions of our team this last week. Our signups

for that summit are twice what they were last year. We are talking about

what is supposed to be a tough economy.

I am convinced people have figured out that anyone can do well

when things are going well, but it is the smart folks that have the winning

ideas when things get tough. I think they have found that out in two days.

I think it is why our signups are running twice what they have ever been.

This is for the listeners, because I was going to ask you about Genius

Network anyway, but you are talking about it right now. Let me kind of

give my reaction to Genius Network in a roundabout way.

There is reason I call it Genius Network when I do my interviews.

I now have a very high level-coaching group called Genius Network

Mastermind where I have discussions with people that are in the

information publishing business. That is one of the niches that I help

people with, book authors and speakers along those lines.

Genius is sort of the marketing term, but it is really is wisdom that

works. It is connecting people with what I consider great thinking, great

insights, and enormous wisdom. My interviewing you is simply

uncovering what I consider what Verne Harnish has to offer. What a lot of

people would call genius, I look at it as wisdom. You have an enormous

amount of wisdom as it relates to entrepreneurs, and by talking to you

about it and having this discussion, I am able to capture this, record it, and

then share it with other entrepreneurs so that they can learn and grow.

Part of this process is planting a seed. I hope this plants a lot of

seeds in a lot of our listeners minds, so that they can grow those seeds and

grow those ideas and become better entrepreneurs. I am very much a

believer that capitalism is an amazing, wonderful thing and entrepreneurs

are the ones that make the world go around.

You have fabulous training that has helped thousands of these



Anyonecan dowell whenthings aregoingwell...

35

Joe:



entrepreneurs. For all the listeners, how do they access, where do they go,

what would you recommend? I know a lot of the people listening would

probably want to attend some of your summits.

Just go to www.Gazelles.com. Joe, We have also got www.Gazelles.tv

back on the daily. Down our right-hand column, we have got, for instance,

a link to the YouTube piece that shows the famous 1-800-Got-Junk

company and Brian Scudamore, the charismatic leader running their daily

huddles.

I know Brian. If you were to get in a fight with him, you think you could

physically take him?

No way!

Actually, I think you could.

I am 110-pound weakling myself. I got a trainer this year. I am almost 50

and we have a one-year-old, so I am trying to get back into shape for this

trip. Since you know Brian, I would suggest taking a look at his

information. Right there is a bunch of just complementary resources that

I encourage your listeners to go take a look at.

You mentioned something important, and that is coaching. I would

be remiss if we did not touch on that.

One of my favorite phrases is, No ones ever achieved peak

performance without a coach. When you think about the great masters,

the Tiger Woods of the world, these are guys that have coaches. If you

think about it, it is the best that have a coach, not the worst.

I think people think that coaches are for folks that need remedial

help. In fact, we all saw Tiger Woods go through a period where he

actually fired his coach. He then went 19 months, almost to the day, with-

out winning a Major. He lost his money title for the first time in 2004. He

himself was wise enough to go back and get another coach, Hank Haney.





No onequotesever achievedpeak performancewithout acoach.

36

Verne:

Joe:

Verne:

Joe:

Verne:

The moment that happened, we have seen some of the greatest golf the

world has ever seen up to the point of his latest injury.

We really think it is critical not only to get the learning, but also to

get some coaching. We think coaching without the learning gets stale; but

the learning without the coaching does not get the traction.

We have got a bunch of coaches ourselves that can help out, but

just go out and get somebody that can hold your feet to the fire and hold

you accountable and have that talk time. I have had the same coach,

Arthur Lipper, who owned Venture magazine for many years. He is beenmy coach since 83 and he is been invaluable.

Why did you name your company Gazelles?

It is the term that David Burch at MIT labeled the growth companies in the

economies. He is misunderstood when he said, It is not small business

that generates all the jobs; it is the gazelles, a sliver of small business that

is grown at least 20 percent a year for four years in a row. It tends to be

memorable as well.

There is so much more that I could ask you, but I am only going to ask you

one last question. What I will say before I do that, though, is that I

encourage people to go to www.Gazelles.com to check it out. There are

many articles that you can read there.

Some of my favorites are Raise Prices, Less is More, Stop

Doing This, Nows the Time to Sell Your Business. There are a lot of

really good articles that you have posted there, and I would encourage

people to check you out and read your book. You talk about critical

numbers and smart numbers and a situation room and all kinds of other

very, very, valuable things that all entrepreneurs could benefit from.

Check out our web greeters, another place where we are able to, as a small

business, utilize resources on the other side of the planet. 24/7/365

somebody will pop up on. If you cannot find one of the articles you just



Get somebodythat canhold yourfeet to thefire...

37

Joe:

Verne:

Joe:

Verne:



reference, just ask them and theyll point it to you.

Awesome! There you go. There you go!

I believe in entrepreneurs. The reason I like helping entrepreneurs

and would do it even if I did not get paid for it is because I believe that all

of the inventions, the ability for us to talk on the telephone right now and

record this and have the internet and have shoes and luxuries, they all stem

from the mind of some entrepreneur. Going back to the original definition

of an entrepreneur from John Baptiste Say in the 1800s, it says, An

individual that takes resources from a lower level of productivity to a

higher level of productivity.

For a

Documents

Genius Network Verne Harnish Interview