6 Factors to Spotting Potential

A few weeks back when we were visiting our office in India, we took a few days and flew on over to Bangalore to attend the EO India regional event called RIE.  The India EO events are always a great time, as they’re known for bringing in fascinating speakers and holding dinner events in extraordinary places such as castles, old forts or roof top venues.  This year, staying true to their reputation, they brought in Praful Patel, the Minister of State for Civil Aviation, Vijay Mallya, the Chairman of Kingfisher Airlines and Rasmus Ankersen, a self proclaimed high performance anthropologist.

The latter, Mr. Ankersen, was especially intriguing to me.  He has done some very unorthodox research around the world to back up his hypothesis of determining how to spot potential in someone when it may not be presently visible.  Ankersen is a native of Denmark, has written 3 bestselling books and has been in training camps in Moscow, Jamaica, Africa and Brazil (to name a few) to train with and help produce some of the most successful athletes worldwide.

Ankersen traveled to Moscow to study the training of the top tennis players in the world.  He went to Jamaica to study the best sprinters in the world, to Kenya for the best long distance athletes, and Korea for the best female golfers in the world.

Checkout this video of Ankersen discussing his theory.

His research thus far has resulted in some key factors in spotting potential:

1) Always look behind a performance.

To determine what caused a performance, you have to see what was behind the performance itself.  Was it raw talent that can be coached, or was it pure technique and heart without much raw talent?

2) Magnify what you can see.

Look at what you have and don’t let it be static. A vision of what is possible with someone is important to see where the future is with them.

3) Know Yourself.

Know your capabilities, and know the difference between what you can improve and what you can’t change.  If you are gifted at growing managers of people on a business team and have a candidate with amazing analytical skills, but low people skills, you could develop their people skills, but couldn’t contribute much to the growth of their analytical skills.

4) Give hunger greater priority than ability.

Hunger is something that you can’t teach, and is much harder to pull out of someone than the skills necessary to be the best.  If two people have the same basic skills, the one that demonstrates the hunger is the one you should be watching.

5) Stay Open Minded.

In order to do this, it requires that you not judge a candidate that may take more time to mature.  Keep people curious about their potential and don’t feed them negatives that can hold them back.

6)  Have the courage to believe in potential.

It requires courage to believe that you can take someone that is not yet there and ripen them to reach their potential, even if it will take time.  In our India office, we seek the candidates that are hungry to grow and learn, even if they possess less experience in software skills, and bring them along to blossom into their full potential.

Listening to Ankersen’s talk made me see the similarities between being a coach and being a manager.  If you have a camp that consistantly leads with medals, then it says something about the opportunity to grow the talent that is around you.  What are you doing to pull out the best in the people around you? 

Here’s another video of one of Ankersen’s interviews.




Will Your Foundation Support Your Growth?

Some really great things have been happening on our visit to our India office.  In addition to hiring 2 new developers, 1 tester and a designer, we shared a lot on improving our projects and engaged our R&D team in some awesome discussion on new products. Outside of the office, we broke off into 2 teams and Chris and I enjoyed our first game of Cricket.

A few days ago we had the pleasure of visiting a very unique community called AurovilleAuroville came to be in February of 1968 when some 5,000 people representing 124 nations came to India and participated in a ceremony.   They each contributed soil from their homeland as a symbol of unity, that Auroville would be a place where people “of all countries are able to live in peace and progressive harmony above all creeds, all politics and all nationalities.”  The place where they joined to perform this ceremony is in the picture below…and it is one of the most amazing things I’ve seen yet.

india matrimandir tree big resized 600

What do you see?  It looks like a bunch of trees…beautifully and carefully placed to grow together, but looks can be deceiving.  This is a Banyan Tree…and it’s all ONE TREE. How it works is that the tree’s branches grow out, but as they continue to grow out laterally, along the way new roots grow out from the branches and down to the earth to support additional growth.  The new roots can be so thick that they appear to be separate trees.  It’s simply a beautiful sight to behold, and a perfect location for the unity ceremony.

The growth of the Banyan Tree occurred to me as a great analogy to business.  Building anything, whether it’s a business or a house, requires a foundation.  What many companies experience, however, is that their foundation cannot support their growth, causing them to fall.  The reason the Banyan Tree doesn’t fall is because it continues to add to its foundation as it grows. 

Good businesses are built with several layers of support that push information up and down the hierarchy.  Without a good foundation to support those layers, the flow is disrupted and bad information can be shared, usually resulting in bad decisions.  If you’re in the business world, you have probably experience this in some form or fashion.  Small issues can usually be corrected, but bigger issues can easily lead to business failure.  For this reason, having the right people and the right processes in place is vital to creating a strong foundation.  As your business grows, so do your people and your processes. 

After writing the first part of this blog I decided to do a little more research on the Banyan Tree, and what I discovered was pretty interesting.  I found that in the ancient language Gujarati, the word “Banya” translates to “Grocer or Merchant”.  This stems from when long ago, Hindu merchants would conduct business under Banyan Trees because of the shade they provided.

Can your business grow outward and upward like the Banyan Tree?  Does your foundation have layers of support…people and processes…to handle your growth?




Lunch is free, afterall…

Have you thought about the idea of “free” as a business model before? You know…give it away for free and then get paid in some other format. It’s nothing new. The concept has been around for years, but was not accepted until the Google world of today.

Everyone knows what Jell-O is, and most likely have tried it, but what most people don’t know is that when Jell-O was created back in late 1800’s, it sat in a warehouse for a few years because no one knew exactly what to do with it. I read about this in Chris Anderson’s book Free, The Future of a Radical Price.

It wasn’t until 1902 in LeRoy, NY (the next town over from where I went to high school) that Frank Woodward had an idea for how to create demand for the product. His idea was to give away “free” cookbooks with Jell-O recipes, delivered directly to people’s doorstep. Within 2 years they hit a million in sales. This concept built steam throughout the century with others like Gillette razors, and then free radio and TV.

Now we live in a world made of bits rather than atoms, and economics tells us that cost lies in the R&D. With increasing sales to cover the R&D expense, cost goes to zero for each incremental sale. When the concept of “free” is applied, it provides an opportunity to be creative with where the revenue comes from, and a chance to build a marketplace where most wouldn’t suspect.

Can you imagine flying for free? In Europe it’s common to fly for as little as $20. Ryanair’s CEO Michael O’Leary believes that they’re on their way to free airfare, with operations being totally supported by in-flight gambling. Look around at what else is free: talking internationally in Skype, Stock Trades, Craigslist, and a multitude of products by the king of free, Google.

My company is joining the world of “free” by creating an online software tool that helps you to achieve your goals, free to use, of course. It is called AchieveStreet. By using the accountability found within a forum, business team, board, charity group, or even group members for a school project, getting things done comes more easily. The tool is free, but as with other free online tools (I.e. Facebook), the more users you have, the more revenue you can expect to gain from advertising.

How can you utilize this “free” world to grow your business, or possibly venture into something new?




Ship Strategy…in business?

In the early 1800’s, a new kind of ship was manufactured. It was a leaner, more slender ship, built for speed rather than capacity. Its sharp long prow was made out of expensive oak, and its sails spread 160 feet across. These ships were called clipper ships. They ran wide open, day and night, virtually ignorant of weather conditions, arriving beaten and battered at their destination, but on time no less.

In the 1840’s, still recovering from a 5 year economic depression, the US built 160 of these low capacity, more expensive ships. The reason was that the gold rush was booming out west, and supplies were in high demand. The need for basic materials was so great that supplies could sell for as much as 1000% more than on the depression stricken east coast. These clipper ships were resilient and fast, and could travel the east coast, move down around the tip of South America, and be back up to the San Francisco Bay in a record 89 days.
When the gold dust ran out on the west coast, it was shortly after discovered in Australia. The clipper ships quickly turned their sails and headed towards the next opportunity.

In business, we should strive to be like the clipper ships, constantly looking for new opportunities and having the ability to benefit from situations that fall out of balance. How quickly could you mobilize resources to take advantage of these situations?
The Clipper Ship Strategy stands for seeing where value creation can happen by understanding the flow of money and recognizing the variances in pricing and resources, then being agile enough to take advantage of the situation. To read more on this, check out the book The Clipper Ship Strategy by Richard Maybury.

At Efficience, our Clipper Ship Strategy is having a team in India with the high intelligence and low cost, allowing our clients to create software tools that make them more competitive at prices they can afford. Have you considered what your Clipper Ship Strategy is?




Welcome to Extremistan, Land of the Black Swan…

After the last blog post one of our project managers, Taryn, asked me “If you can’t predict a Black Swan, then how do you stay away from the negative ones, and vice versa, how do you put yourself in the path of positive ones?”

To answer this question, you have to understand the two types of environments that exist in the world of the Black Swan. Taleb calls them Mediocristan and Extremistan, and they are defined as:

Mediocristan …”When your sample is large, no single instance will significantly change the aggregate or the total. The largest observation will remain impressive, but eventually insignificant, to the sum.” (p.32, The Black Swan)

Another way to look at this is non-scalable types of events. Examples are those such as a person’s weight and height, or the non scalable income of a baker, beautician, or a massage therapist. You don’t grow 6 inches or gain 100 pounds in a day…and careers where a standard amount of money is exchanged per transaction are Mediocristan, and don’t subject you to a Black Swan event.

Extremistan…”Inequalities are such that one single observation can disproportionately impact the aggregate or the total.”(p.33, The Black Swan) This is a scalable event like wealth, book sales, planet size, and financial markets. Also in this environment, a few can take all the winnings, or a negative might totally wipe you out. The banking losses from the 1982 banking crisis wiped out all the collective profits made by banks in the past 200 years. In Extremistan you are subject to a Black Swan.

What all this means is that, when you know the environment that you are living in and if it is subject to a non-scalable or scalable event, you will know the potential of the risk. If your work is like an orthodontist (non-scalable), you can make a nice living over a long period of time, but no single day will dramatically change your income total. If you are an author (scalable), the masses end up working 2nd jobs while a few will experience Black Swan events like J.K. Rowling.

Our software company makes most of its money from building custom software products for clients, a non-scalable income. About 20% of our efforts, however, are spent building products that we put out in the market place. This is scalable and subjects us to a positive Black Swan if they were to go viral. This is a controlled way to manage for a positive Black Swan.

Now you know what a Black Swan is…it’s time to figure out if you’re living in Mediocristan or Extremistan. If you’re living in Extremistan…what can you do to move away from the negative Black Swans and put yourself in the path of a positive one?




How do you prevent a bad hire?

What is the most important duty of a CEO?  Bob Prosen, author of Kiss Theory Good Bye, says “Hiring people smarter than I am and putting them in the right positions!!!!” I have to agree, but creating roles and filling them with people who can play to their strengths in those positions isn’t an easy task.

Last week I did a presentation to my EO chapter on my company’s hiring process, which is built around the Topgrading methodology. It’s hard to express how important this is to us, because we put so much time and effort into taking what we’ve learned from books, speakers, and even bad hires to create something that really works for us. Our process is 13 steps, and has shown us a high success rate of getting the right people in the right places, in turn saving us money. For example, research shows that if you hire someone at 6 figures, and they turn out to be a bad hire (within what amount of time? A year? 6 months?) it can cost you as much as 1.5M in lost productivity and opportunity cost. This is reason enough alone to work harder to get it right the first time, and not just relying on your gut and a resume to make a decision on hiring someone.

In short, this is our process:

This isn’t something that happens in a day, or even a week. I and a few others on the team spend an extensive amount of time with each candidate throughout the screening process, getting to know their background, their work experience and their personality. We hone in on their natural strengths, and match them up to the needs of the company and the position. From another perspective, this also ensures that things they are not good at are not key aspects of the position.

Having a defined process and checklist in place for our hiring process is essential, but it is also extremely beneficial to other areas of business. Think of it this way, thousands of planes take off and land successfully every day. They manage this because they have a checklist to make sure they aren’t missing anything. We don’t want to miss one thing on our checklist, because that one thing could lead to making the wrong hire.




Do You Have Rhythm?



FlockGPS).

Death by Meeting by Patrick Lencioni and Mastering the Rockefeller Habits by Verne Harnish.

Can we be candid here?

In my business, I have found that at the top of the list of problem areas resides communication. Working in a global market adds in a variety of cultures making communication something that should not be taken lightly. With the world getting flatter, many of us now have customers, suppliers, partners, or team mates in other countries. For more than 5 years now my company has been working to grow our team in India and working diligently to make our processes better, as we have learned that the majority of our issues arose from communication, or lack thereof.

My US team has worked hard with our India team to create an environment of candor and better communication with every team member. In their culture, it is not easy to create a space where people feel comfortable to communicate in a way that is open, forthright and just plain candid!

We have made lots of progress, but I feel we can be even better. We did this by making candor the key thing brought up in our conversations and team meetings. I would obnoxiously ask over and over “what is our biggest issue….being Candid right? So are we being Candid?”

About 5 years ago I read a book called Winning by Jack Welch. To this day, one thing still stands out about that book…Chapter 2 entitled “Candor:” He spent an entire chapter on being Candid. He said, “When you’ve got candor – and you’ll never completely get it, mind you – everything just operates faster and better.” He was very adamant about the benefits of it, but also discussed why it is so difficult to accomplish.

So how do you get Candor? Even though we are fighting human nature, it can be done. Jack says, “There is nothing scientific about the process. To get candor, you reward it, praise it, and talk about it. You make public heroes out of people who demonstrate it. Most of all, you yourself demonstrate it in an exuberant and even exaggerated way – even when you’re not the boss.”

Keith Ferrazzi also talks about candor in his latest book who’s got your back? He says it is up to us to make it happen and to create an environment of candor. He points out that studies conducted since the 1970s make it clear that those who avoid conflict undermine their relationships and their success. He also says “Candor, or caring criticism, always ends up being greater than the sum of its parts. In other words, when candid exchanges between people collide, the fusion generates entirely new insights, new ideas, and new approaches what we collectively call innovation.”

We at Efficience think this is a very important issue and we continue to work hard to stimulate an environment of Candor. Is Candor alive in your company and in your life?




So Why Read My Blog?

I was born an entrepreneurial spirit, an inherent desire to create opportunities and realize them. My journey has led me around the world, given me the opportunity to learn from some remarkable people, and experience leadership on a whole new level.

In my life I have gone from pumping gas, delivering newspapers, and making clown shoes to creating a mutual fund from scratch that helped carry my firm to $1Billion in assets. I then created the first mutual fund in the world run solely by its shareholders. I have seen my ideas and investments flounder, and I have also seen them thrive. I have felt stupid and genius at the same time, and discovered the world of Dyslexia. I have identified the difference between my strengths and my weaknesses, and learned to use them to my advantage. I have found a world of people who share my entrepreneurial spirit within the Entrepreneurs Organization (EO), and with them I have been everywhere from the Pentagon to the Playboy Mansion.

Today I run a custom software development company called Efficience, with offices in both the United States and India (Effindi). My team and I have realized success and failure, and from that have developed an effective form of execution that we call FlockGPS.

I know that I did not get here alone, and I feel that my path to success is ongoing. My point is this: I got here from what I learned from other people, and it’s only fair that I pass along my awareness and experiences. Our economy suffers right now. We are the only ones who can fix it. I want to succeed, and I want to see Entrepreneurs around the world succeed, as well. We are the ones providing the innovation and job growth in our economies.

I was told a long time ago that if you really want to know something, you teach it. So if sharing this blog exposes you to ideas that will help you grow your business and inspire the entrepreneur inside of you, then I think they refer to that as a win-win.




Freedom to Create, Share and Grow

More and more we hear the term Entrepreneur in the media and from politicians these days. They are saying that Entrepreneurs are the primary creators of jobs in the economy, and I agree completely. But what is it that these Entrepreneurs are doing different? What is an entrepreneur made of and what really describes one?

Growing up I was always looking for opportunities, and I thought it was just because I wanted to be successful and make money. I didn’t realize until later in life that what I was really seeking was more than just money and success. I was fulfilling an inner desire to take an idea, mold it, push on it, worry about it, get excited to tell others about it, and jump up and down at each sign that it was slowly manifesting into existence. Creation seems to be the key here, just like an artist or musician.

How do I know this? Ask anyone who has sold a company for big money, and then ask them what they did after that (I have asked plenty). They may have traveled the world or enjoyed the beach for a while, but they usually revert back to that inner desire to create and manifest. Money was not the answer. Now, especially with the freedom of money, comes a desire to manifest at an even higher level.

This is what Steve Wynn called the Dark Side of Entrepreneurism and spoke to us about at the EO 20 yr celebration in Vegas. You risk it all so that you can continue to create and manifest at the expense of the fortune you have already created. Steve did this when he opened and created Wynn Properties.

The one word that encompasses being an Entrepreneur is the magical word “Freedom!” When you run a business you are free to be who you want to be, to go the direction you see fit and to manage people the way you think best. From that the market place is your gauge for success.

So when you have freedom to create, share and grow (one of our core values) in the areas that you are most passionate about… out of you comes the highest expression of who you are. When you stir this soup, what you get are people running high growth companies that create jobs. These jobs also allow for self expression and living a purpose, which in turn attracts high caliber people generating a positive feedback loop, which leads to more growth and jobs.

Entrepreneurs of the world: We thank you all for your desire to create and manifest, making the world a better place!