Scaling Up Magazine Scaling Up Magazine April 2018 - Page 23
differentiates you from your competition.
Are all processes running without drama
and driving industry-leading profitability?
In the largest investment in an
e-commerce company in Canadian history,
Coastal.com, a Vancouver-based eyewear
company, was purchased by Essilor, one
of the world’s largest lens manufacturers,
for CAD$430 million in 2014. Roger
Hardy, founder and CEO, credits the
disciplined execution of the Rockefeller
Habits with these stellar results.
Case in point: Some German industrialists
sat in on Coastal.com’s daily executive
team huddle while the company’s leaders
stood up and reported on their critical
numbers. The executives discussed quickly
their key opportunities, issues, highlights,
problems, and threats. “They were blown
away with our operational efficiencies and
knowledge of the business,” Hardy noted.
Hardy’s team also introduced the Net
Promoter System (NPS) to the company
to measure how likely customers were to
recommend it to others and to single out
a few, from over 2 million, who indicated
they were not raving fans, so the senior
team could call them. These weekly
conversations with customers, debriefed
at the weekly huddle, gave Hardy and his
leadership team a “gut feel” for the market
that drives ongoing improvements. One
change caused revenues to jump 60%
in one market. More recently, Coastal.
com tapped into the innovative ideas
of its employees in its own Shark Tank
type of competition. Implementing
those ideas generated another 15% lift
on Coastal.com’s revenues in 2013.
Coastal.com excels at execution
precisely because it listens to customers
and employees; has a meeting rhythm
to discuss and implement quickly
what’s being learned; and a process
for setting priorities from all this
input. This excellence in execution
continues to wow customers, engage
employees, and deliver stunning
financial results for the shareholders.
In Scaling Up, you can find the Rockefeller
Habits Checklist. Take a few minutes to go
through it. Don’t worry if you don’t have
many items checked. Neither did Hardy’s
executives when they attended their first
Rockefeller Habits workshop. “It gave
me a blueprint on how to run a team in a
successful way and is a key part of why we
have achieved $200 million in sales while
keeping everyone aligned and heading
in the same direction,” says Hardy.
Hardy advises CEOs to review the
Checklist every three months. “You’re
not going to get it perfect every quarter,”
he says. “It’s a work in progress. It
forces you, though, to be objective and
to realize there are blind spots. Like a
pilot taking off, you don’t want to forget
to lift the landing gear. It may be the
things you take for granted that can hurt
you the most. A Checklist is a good way
of reminding you what’s missing.”
Jim Collins and Morten T. Hansen, in
their book Great by Choice: Uncertainty,
Chaos and Luck – Why Some Thrive
Despite Them All, note: “Greatness
is not a function of circumstance.
Greatness, it turns out, is largely a matter
of conscious choice, and discipline.”
We couldn’t agree more and hope
you’ll consciously choose to implement
the 10 Rockefeller Habits detailed in
Scaling Up to guide you in Execution.
Tip: In driving Execution, implement
three key habits: Set a handful of
Priorities (the fewer the better); gather
qualitative and quantitative Data daily
and review weekly to guide decisions
and establish an effective daily, weekly,
monthly, quarterly and annual meeting
Rhythm to keep everyone in the loop.
Those who pulse faster, grow faster.
Do you have consistent sources of
cash, ideally generated internally, to
fuel the growth of your business?
You can get by with decent People,
Strategy and Execution, but not a day
without Cash. Cash becomes even
more critical as the business scales
up since “growth sucks cash.” The
key is innovating ways to generate
sufficient profit and cash flow internally
so you don’t have to turn to banks
(or sharks!) to fuel your growth.
Costco, the fast-growing warehouse
retailer, is a prime example. Co-founder
Jim Sinegal made a bold move in charging
a membership fee for people to shop at
his stores. Today, those fees account
for 75% of Costco’s profit ($2.3 billion
of $3 billion in pre-tax earnings in
2013) and, as a group, bring in enough
money to finance all new stores.
Great companies, by choice, keep three
to 10 times the cash reserves of their
competitors, Collins and Hansen revealed
in Great by Choice: Uncertainty, Chaos,
and Luck –Why Some Thrive Despite
Them All. That allows growth firms to
weather the storms, and that is why Bill
the very A
that Microsoft always keep a year’s worth
in the bank. This
is a lesson Gazelles has heeded since
YET out TO
in the aftermath
of 9/11. If you’ve ever experienced the
reality of SO
able to make
payroll, you’ll never want to face it again.
Tip: In managing Cash, don’t run out of it!
This means paying as much attention to
how every decision affects your cash flow
as you would to revenue and profitability.
With the right fundamentals in mind,
you’re ready to start climbing. And
there's no better time to refocus on
them than at the ScaleUp Summit.