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Predictable Success (Unplugged)

A conversation between Les McKeown & Moe Abdou
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Predictable Success (Unplugged) !Les McKeown with Moe Abdou
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About Les McKeown & Moe Abdou

Les McKeown

Les McKeown is an accomplished entrepreneur, strategic advisor,

bestselling author and highly regarded business speaker. His latest book -
Predictable Success - is a rare blueprint to help businesses of all sizes
develop the skills, tools and business strategies to increase profits and
create sustainable growth. As a native Irishman, Les first distinguished
himself as that country’s youngest-ever accounting partner.

Moe Abdou

Moe Abdou is the creator of 33voices — a global conversation about things

that matter in business and in life. moe@33voices.com

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This is Moe Abdou. I’m delighted today to be joined by Les McKeown,

author of, in my opinion, the best business book that have been written in
the last few years - Predictable Success. Les, I’m more excited to have this
conversation with you today than I have been in a long time. I really
appreciate you joining us.

I’m absolutely delighted to be with you Moe. Thank you for having me.

First of all, as I have mentioned briefly, I was wondering when I first

picked up this book about three months ago, where it was 20 years ago.
Hundreds of books are written every year on the topic of business success
and evolution of business.

I think it might be important Les to share your perspective early on. What
makes Predictable Success, for those who haven’t read it, a little bit more
unique than a lot of these other business books that are written out there
all year?

My own view of course is going to be coming from a slightly biased perception. I

think that what has made the book—certainly in terms of the feedback that I
get from people who have read it. What has really given it the impact that it
has is that — first of all, I have been able to encapsulate literally a lifetime’s
work in watching and participating in what makes organizations succeed and
fail into something as very readable.

I combine I think an anecdotal way of telling the story of the life cycle of a
successful business together with really hard edged stuff that I have learned
having suffered bruises out in the marketplace. I started 42 businesses myself
before I was 35 years of age. Since then I have helped literally hundreds more.

Even a dumb Irishman like me, you got to see some patterns as you go along. I
think I put those into a very readable format that is also instantly actionable.
You know, you read the book, you put it down, and you go do the stuff that I
share in there. You don’t sit and mull about it for a long time.

About a week and a half ago, I had a small mastermind group of

entrepreneurs here in San Diego that I visited with and I brought them each
a copy of your book. As I was handing the book to a very young, very
ambitious and successful entrepreneur, he looked at the title and looked at
me and said, “Moe, if success were really easy and predictable, why isn’t
every entrepreneur wildly successful because nobody gets into these
businesses to fail?” I felt that was a great lead in to our discussion that
day. I’m curious how you would respond to that.

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The first thing I would say is that I don’t think you’ll find the word easy
anywhere in the book. I don’t say it anywhere. I don’t claim that predictable
success is easy. In fact, one of the things that I show is that at two critical
times in any organization’s development — stages I call Whitewater or
Treadmill — getting through those stages and getting to the stage that I call
Predictable Success is in fact incredibly painful. I mean, it really is tough
particularly for founders or owners. That would be the first thing. I’m not
saying that it’s easy. I’m saying it’s achievable and it’s much more achievable
once you know the vocabulary and the methodology that I laid out.

The second thing is that many of us have got different varieties of business
training if you want to call it that. I’m from the school of Hard Knox. I learned
basically everything that I put in the book from the reality of building, running,
growing businesses. There are a lot of wonderful business leaders out there
who have got a huge academic background supporting all of their knowledge
about business leadership.

It doesn’t matter where you come from. Nobody ever sits down and tells
business leaders that success can be predictable. It’s like we’re given the
expectation for success. After all, that’s why we do it. Then we give it a whole
set of tools to achieve it but nobody ever really links the two and says, how do
you use the tools and what sequence to get success in your business which are
left to rummage around the toolkit to see what’s appropriate at what point.

Really, all I have done with predictable success in one sense is to show what
the sequencing of the use of the most common tools that we all meet everyday
in building a world class business like building an orchard for example. Where
does that come in, when do you use it and how do you use it.

I think that’s the main thing that I have heard people said to me over and over
again. You know Les, I’m not reading anything here that I have never known
before but what you have done for the first time is you really showed me to
how sequence all of this.

And make a sense of a lot of this as well. There is a beautiful model that’s
illustrated in your book. Again, I want to really focus on the steps in the
model but talk to me a little bit about the early stages of a business from
your experience?

What I show in the book and, I should mention that I didn’t invent any of this
stuff as I say in the introduction. I just spent a long time chipping away until I
discovered what was underneath — what are the fundamental dynamics of

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business success that every organization goes through whether it’s for profit or
not for profit.

I did spend a lot of time by getting vocabulary right. I wanted to be able to

convey these lifecycle stages as intuitive a way as possible. As I said, I don’t
make them up. It’s just a reflection of what anybody who has been in business
will already recognize.

What I have noticed is that there are three growth stages if you will that lead
up to the apex of maturity for an organization; the stage that I call Predictable
Success. Those three growth stages real quickly are, first of all, Early Struggle
which is pretty obvious to anyone. Typically, though I’m generalizing hugely
here, around about three years for most businesses.

It’s all about finding a sustainable profitable market. That’s all it is. The race is
to get to that sustainable profitable market before your external funding runs
out. About 80% of all businesses don’t even make it through that stage; a high
death rate in Early Struggle.

For the not lucky but hardworking 1 in 5 that get through their businesses get
to the second stage which I have given a highly technical name. I call it fun
because that’s what it is — it’s fun. It’s the first stage rocket ship growth that
most businesses go through starting from really low market share.

We’ve got our profitable, sustainable marketplace. We’re very enthusiastic,

loyal. We sell like crazy. The business grows like crazy. We build the myths and
legends of the business. We snatch victory from the jaws of defeat on a weekly
basis. And then with that success and fun, comes an avoidable complexity as
the business is growing through Fun it gets more complex.

At some point, every organization hits the third stage which I call Whitewater.
That’s really the point at which the growth of the business has brought a
degree of complexity that takes the ability away from the founder/owners to
manage the business viscerally. The business and fun quite rightly is typically
managed by the gut.

You worked very close to decision making. We can make things happen. We can
turn in a dime. We say things they get done. But at some point, we hit the
stage of Whitewater where we’ve got to put some systems and processes in
place. Really, it’s the point at which management needs to be professionalized.

You talked about the Early Struggle phase. The focus of that particular
phase in the business cycle is to identify the market. Is it correct to

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assume that the majority of people who fail in that stage — there are tons
— is it because of a lack of focus on identifying that particular niche?

More or less. There are a number of sort of sub-versions of that. Essentially,

they fail either because there is just an outright lack of a sustainable market
for their product or service. Sometimes people launch businesses and painfully
discover that just not enough people are interested in what they have to offer.
But more often than not, they just miss the mark.

One of the things, for example, we’re seeing at the moment just as we talk is
we’re beginning to see over investment in tech startups. There is sort of a
slight bubble sense to all of that. One of the things that I have noticed over the
years is that when startups get over invested, it numbs them to the importance
of finding their sustainable profitable market very quickly. They think there is a
lot of cash rolling around that they can just buy another 9:35 share, spend
another three weeks in R&D.

Really, what you’ve got to do whether you’re a tech or not, you got to have a
buzzer or a bell or something on your desk and be able to ring it once everyday
to indicate that you’ve gotten closer to finding exactly who is your target
market and how do we sell to them. That sort of ruthless focus on who is our
target market and how do we get to them. That’s what gets you out of early
struggle.

Can you share with us your personal experience with your first startup?

One of them that I talk about in the book — I’m a CPA by training or a
chartered accountant as we called ourselves back in the UK. A colleague of
mine, another chartered accountant, bought the master license for Pizza Hut
for Ireland. That might sound pretty routine but in Ireland, we had no history
at all of destination restaurants such Pizza Hut. We had Mom and Pop
restaurants. There were no McDonalds in those days. There was no Burger King.
We were the first people into the market. Believe me teaching Irish people to
eat flat and hard bread was no mean feat.

I can imagine.

Here we were, two bright, as we thought, certainly financially literate

accountants of all things but very entrepreneurial people, the pair of us. We
thought we couldn’t fail with this. Pizza Hut gave us all of the manuals and the
details and the spreadsheets. It looked like a no-brainer.

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Well, nine months into this thing, we were deep in debt. I talked about it in
the first chapter. I remember clearly staring out the window of our conference
room one really wet November day in Belfast and thinking, how did two bright
chartered accountants get themselves so deeply in debt here?

We had just done exactly what we just talked about. We haven’t really thought
through who our target market was. We had to work out how do we get people
to come in and eat in these restaurants when they’re not used to.

As it turned out for us the secret was to discover that really our target market
were young families with young children because the restaurant was very, very
appealing to young people. Once we got that and we re-tooled what we were
doing and focused towards it then it all began to come right but it took us a
year to get it right.

How about the mindset? Tell us a little bit about the mindset that you had
through that process?

Of working through what we were looking for in Pizza Hut?

Yeah, absolutely.

Of course, in those days, I have been brainwashed by my accounting training to

believe that it was all about the numbers. What we really changed in me, not
just in the Pizza Hut startup but in all of the startups that I did was it became
abundantly clear to me very early on that the numbers are only one part of the
story.

Sure it’s good to be well-financed and it’s good to be well-structured. You can
throw as much as money as you want at the wrong people and you’ll never get
a good business. If you picked the wrong team you can over fund them until
your blue in the face. They’re not going to deliver. Conversely, if you get the
right people — we have all seen really good people deliver successful
businesses that are grossly under funded. We call it bootstrapping these days.

Part of the learning process that I was going through at that point was to move
away from — I’m not thrashing the training that I got as an accountant. You do
get a narrow focus there that has been, to my great credit ever since then, of
looking at the PNL, the balance sheet, and cash flow. I learned, at a great
expense, that that’s only one dimension of at least a four dimensional part of
success. The second part is getting the team right.

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The third thing that really made the Predictable Success methodology begin to
come together was I then learned many years later through work that I was
doing with incubation units helping other people launch businesses that even
the people and the money together wouldn’t deliver success through the whole
life cycle.

What I discovered was it’s the people, it’s their financing but it’s also the
structure within which they operate. To cut a very long story short, what I
discovered in short order was that you could launch businesses that were well
financed with the right team but once they hit that second stage that I called
Fun, and then moved into Whitewater, the whole structure of the business
needed to shift in order for it to succeed in the third stage.

You talk a lot about good decision-making and success in any business
large or small is a process of repeatedly making good decisions. I’m curious,
who are some of the best decision makers that you have worked with?

Probably the best people that I have seen are folks that just nobody would
know their name. I have been very impressed with the founder or owners of
large businesses and I’m talking here, in many cases, of businesses that are half
a billion to a billion dollars in revenue. You really got to be a world class
decision maker to take a family business to that size.

There a number of folks that wouldn’t thank me for talking about them but
privately hold businesses in the heartland here in the U.S. where you maybe
got a second or a third generation family member who has typically had it easy,
maybe even had a soft ride because dad or grandpa built the business. If they
had wanted to, they could have just rested on its laurels but instead have
really taken hold of the business and pushed it forward and delivered
substantial growth to what could have been a very old slowly declining business.

As in generic terms, that sort of group of people continues to impress me. They
are the heart of who I work with and it’s why I work with them. I’m just
fascinated and full of admiration for founder or owners who take the business
to the third level, in terms of what we’re seeing out there at the moment, the
same people that are mentioned frequently.

I think Steve Jobs does a wonderful job of, almost in a sense, pretending to be
this PR crazed, upfront, and charismatic guy. He is all of those things. I think
one of the things we’re going to discover in the next couple of years — as he
presumably will move away a little bit because of his health from the
management of the business — is that he’s a superb leader and that there is a
real depth to how the business is being done there.

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I love to listen to Warren Buffet talk about how he makes decisions. I listen to
that man read the telephone book but when he starts talking about how and
why he thinks about what he does, he’s got a superb brain.

Is there a particular pattern that you see in these great decision makers? I
think one of the things that handicaps especially — I’m going to say
emerging businesses, that 10 to 20 million dollar businesses — the ability
to make those decisions. Are there patterns that people can gain from
great decision makers that are out there?

It’s interesting I was having a discussion just last week with a group of investors
asking me the same thing as we debated around the table. The way in which it
coalesces for me is that I see a lot of people who would be capable of being
really world class business leaders and world class decision makers, if you want
to put it that way.

If they weren’t so convinced about the uniqueness of their own business and
sometimes themselves — we have a phrase back in Northern Ireland where I
come from. We talk about somebody having a wire by themselves.

Sometimes I see people who are in organizations where they are really
believing their own PR too much. When you look at people like Buffet and the
latter Bill Gates — not so much the early Bill Gates, he definitely didn’t have a
wire about himself. What you see is a person who is able to think systemically.
In other words, their business, they see it as part of the universe or the solar
system in which it operates and they talk from that perspective. So it’s almost
as if they are above what’s going on and seeing the broader patterns.

Sometimes I see a CEO and he or she is sitting — I was watching one just in
Charlie Rose the other night. It’s almost like they wear their own businesses
like an accessory and everything about the uniqueness of what they have got.

Well, no business is that unique believe me. I have been inside literally
hundreds, probably by now, thousands of businesses. While there is a degree of
uniqueness to every business, 80% of what they do is absolutely the same. You
better understand where you fit in the wider scheme of things or you’re going
to get bitten. So that systemic thinking, that ability to get up above and see
the patterns is really what for me marks a great leader.

It’s interesting that you bring that up because one of the real eye opening
concepts for me in the book personally was this whole concept of
Whitewater. As an entrepreneur, as somebody who for the past 25 years
has worked and coached with entrepreneurs specifically in the wealth

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management business, I know that this whole issue of Whitewater is

unavoidable. How does an entrepreneur make sense of that?

The great thing about my job is this, for most entrepreneurs, founders or
owners, many professional CEOs, general managers or whatever who are in the
driving seat when the business hits Whitewater, they are not sitting with my
graph or any other understanding of life cycle. Imagine where they’re at.
Typically the business will have six to seven, maybe eight or nine years of fun
and then it will hit this Whitewater stage. It can happen at any time but
typically that’s the sort of model.

But when you’re going through that Fun you’re not thinking, this is early stage
growth; this is the second of seven stages. You’re just thinking this is what I
was made for. This is how business is supposed to be. I can do no wrong.
Everything I touch is turning to gold. This is wonderful and then bang, the
business hits Whitewater. And although it takes between three to six months
for it to really take hold; it really is like driving in the molasses. Everything
grinds to a halt.

So for that CEO, founder or owner or manager, they’re not thinking here is a
natural stage in growth. They are thinking, holy cow, my child, my baby, my
business, this thing that’s everything to me is dying. They think they are on the
last stage of the lifecycle which I call Death Rattle and they’re not. They’re
going through adolescent growing pains.

When I get to show people the lifecycle; literally, they’re just a physical image
that I have there. This is why I worked so hard and long of getting the
vocabulary right. I try to get to the point and I got there. I can have somebody
see exactly where they are and the fact that this is a natural stage and
development and that if they do the right things, they’ll not only survive.
They’re going to come through to the best stage which is Predictable Success. I
can get people to see that within literally seven minutes. That’s a wonderful
thing for me to be able to do.

It was a complete eye opener for me too. One of the things that I was going
to say here is this is unfortunately, where I personally have experienced
and seen a lot of people give up.

Yes, exactly right because it’s devastating. You feel a combination of things.
First of all, you think, oh my goodness, all of the people who told me I was an
idiot when I started the business up in Early Struggle; all the folks who said,
you’re crazy just to stay where you are. They’re going to be proved right. I’m
going to be made to look like an idiot here.

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Secondly, typically these people have cut skin in the game, a substantial
amount. They are thinking, what am I going to do for a living here? Thirdly,
they’re typically again very strongly bound by ties of loyalty and sweat, equity
and blood to the people that they have employed. They are just dreading the
thought that this thing is shaking so much that it’s going to die.

Very many people will back up a little bit. They would burst course, take their
business back down a tad or two to the stage that I would call Fun, in order to
just stop the shaking and then they sell out. They just say, I don’t see what I
can do to run this business because when it scales, it’s as if I lose my touch.

It’s wonderful to be able to show people that there is a few simple things that
if they’ll do them, they can get their hands back on the wheel again and they
can take control once more. That’s a huge part of my job. It’s just a delight in
being able to show people that.

It’s one of those things — this whole sense of ownership and accountability.
I know that when you go into a company, one of the ways you get that
pulse is to start to see that level of ownership. As people get to that,
beyond the Fun and get to that Whitewater stage, I get the sense that that
level of ownership maybe dies down a little bit?

It can die down a lot. By this point, there is usually a management team. It
may only be two, three, or four. It could be 50 people but typically it’s a small
management team. At this point, the management team loses that ability to
drive the ship. It’s being buffeted around in Whitewater and we’re making
mistakes and we’re dropping things.

The whole vision of the business, the idea of where we’re going and that
alignment around that begins to fragment. The employees, they would do
anything for these founder/owners; the management team that have brought it
to where it is. Everything has been very highly attuned and aligned.

People literally would just do anything to make the business work. Then they
begin to see not only are we beginning to drop the ball here but the guys—
whichever gender we faced, the men and women who are running the business,
they seem to be panicking up here. At the very least, they are frozen in action.
Of course, everybody gets concerned at that point. The sense of accountability,
a sense of ownership, a sense of being aligned around a common vision it drops
dramatically.

The biggest mistake that I see happen over and over again is that what
management tries to do is to whip everybody, I don’t mean in a bad way, but

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to bring everybody back to alignment by redoing the mission statement and

having some rah-rah events and trying to pull everybody together and giving
really good speeches. All of which is understandable but it won’t do anything
until management have got their hands back on the tower and they can really
steer the ship again.

Because if you’re an employee in the organization and you hear the rah-rah
stuff but you don’t see that the guys that you’re looking for to run the business
are really able to run it, able to move it, then you don’t believe it. You just go
back into your cubicle. The degree of strength and commitment is weakened
rather than strengthened by that. They can tell that there is an incongruity
here.

What I get people to do is work at getting their hands back in control of what’s
happening by fixing their own chart, by getting their organizational chart back
to being a machine for decision making. So they can actually control what’s
happening each day. Then once they have got control back, then we can look
back at the mission statement and get people realigned.

Les, I have been a big believer, you know, I have always believed if I had
the right people that I can almost accomplish anything. But it’s very tough
to find the right people especially in a kind of entrepreneurial world that
we’re living in. Tell me how you personally know when you have the right
person?

I would have to answer that within the context of the Predictable Success life
cycle. I think that’s one of the things that I see shift in a way that’s very, very
hard for highly entrepreneurial business people to accept. What I mean by that
is this, in the early day of a business, in Early Struggle and Fun, most
entrepreneurs hire viscerally, they hire by their gut and quite rightly so. It’s
really the only way to run the early growth of the business.

So you bring somebody in, you interview them, you interview them by and large
for attitude because you know that if they’re missing a skill that you will be
able to mentor and coach them so long as they got the right attitude. So we
bring people in and they get a lot of exposure to what’s going on. They’re very
close to the seat of power. We, as the owners and the managers, we can touch
the tower a lot. We can encourage people. We can manage them and we can
coach them.

What happens as the business gets more complex is we would love to — we kid
ourselves that that’s what we can continue to do but the reality is we can’t.
There is too much else that needs to be done. So we start bringing people in

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for attitude as a way we did before. But they don’t get the touches on the
tower. They don’t get the coaching and mentoring and so they fail to get the
skills adjustments that are necessary to run the business. What we need to do
at that point is begin to put some process in place.

At that stage, hiring begins to shift. If you’re going to scale your business
indefinitely — I mean, you can keep the business as a Mom and Pop operation
and continue what you were doing. There is nothing wrong with that.

But if you want to scale your business indefinitely, there comes a point at
which you got to a piece of hiring for skills and attitude and trust the system
that will put the right person in place and stop kidding yourself that you, as the
founder/owner, are going to be able to make those touches on the tower
because that’s not the way it works.

And then definitely by the time you get to 1000, 2000, 3000 person business,
you better have a world class way of finding, hiring, training, and developing
the right people because you sure as straight aren’t going to be doing it, and
your divisional managers aren’t going to be doing, and your team supervisors
aren’t going to be doing it. So you got to institutionalize that.

I think it changes over time. I’m not saying that we’re not always looking for
people with the right attitude. Of course we are but over time, you got to shift
what is a personalized coaching and mentoring skill into something that’s
institutionalized and is done by the organization throughout all of its ranks.
Even by the time you are at maybe 50-75 people, it becomes necessary to do
that.

You mentioned earlier, Steve Jobs and really more so, not only is he a
creative genius but also a tremendous leader. You’re around leaders all
the time, you’re working with them, you’re coaching them, is there
patterns in the 21st century traits of a leader in the world that we’re living
in today where we’re bombarded by innovation opportunities, the world is
not in a great state but there is still a lot of opportunities out there. What
do you see in terms of leadership?

You know, it’s a fascinating time. Two weeks ago I was in Santa Monica at an
incubation event where I was talking to about 70 young people in their early
20s, some are younger than that, who were right in the throes of launching
their own business. We were discussing exactly the same thing. What are the
traits of someone who will succeed now compared maybe what those traits
were like 20 years ago.

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Probably the greatest thing that I see that is almost unavoidable — unavoidable
is not quite the right word, but it’s close to mandatory. It’s transparency. I
think the old leadership model of you only need to know what you need to
know which is sort of command and control based is being supplanted by a
much more collegial peer type of a relationship. I’m not advocating and I don’t
believe a democratic management style succeeds in the corporate world.

I do think that leadership can be more transparent, that people can share much
more not only of their vision for where they’re going but also their
uncertainties. The reason for that is this, that the bright people coming into
the workforce these days are used to what we would now call crowd sourcing
opportunities, in other words, pooling the knowledge and strengths of everyone
to make the best of what they’ve got.

A lot of the great businesses that are being launched that we’re seeing at the
moment are a direct result of crowd sourcing, of people getting together in a
room and working out where we’re taking something. As opposed to just the
model of the single great leader which will never go away. So transparency
would be one thing.

The other thing that I would add which is universal which I think has always
been around and it harks back a little bit to something that I was talking about
earlier, is the ability to be dispassionate. I don’t mean callous or ruthless. I
mean the literal interpretation of dispassionate which is to know when to step
away from your passion and to view things objectively and make decisions in an
objective basis.

Sadly, I see many entrepreneurs who are blinded by their passion. It’s
wonderful to have a clear vision of where you want to go but when that leads
you to kid yourself about your financials or be far too generous about your
market estimates and things like that then that’s a road to nowhere.
Transparency and the ability to be dispassionate when necessary are two things
that I certainly would be looking in people.

That’s a tough one. This transparency I really see that we’re in a world
where that’s almost a requirement nowadays is this issue of dispassionate
that you talk about. It’s really unique that you address this issue. At the
same time, it’s probably very difficult for entrepreneurs as well as leaders
in general to see that they probably need a Les to come in who is an
outsider who can see that much clearer than they do.

It’s an unfortunate side effect I think of just the availability of media and
journalism around business in general. You know, 40 years ago we just about

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would have had — I think Fortune was maybe in its early days or something like
that. These days you can go to the magazine racks or fire up your internet
browser and go to a million sites that talk about sexy passion; the CEOs that
have got sexy business stories.

What I tell people all the time is you can buy Architectural Digest and look at
really big houses costing millions upon millions but you shouldn’t presume that
that’s necessary to get a roof over your head. You can go and buy celebrity
magazines and you can see rich pretty people. It’s fine to want to be like that
and it’s fine to look at those magazines but you shouldn’t imagine for a
moment you need to be those things in order to be a valid human being.

In the old days, at magazines like Inc and Entrepreneur and so forth, if you will
Business Porn, the way in which we are educating people these days that
entrepreneurship and success in business has always got to be ridden with
passion and it’s got to be a really adventure story. That everybody’s business
could be a front page story on Entrepreneur, you know, it isn’t like that.
Sometimes it isn’t as great when it is.

Really, most of the times, the hard decisions are made in the very cold light of
dawn. We’ve all been there. We all sat a kitchen table at 3 a.m. counting stuff
up in the back of an envelop and saying, what do I do in Monday morning to
meet payroll. The ability to be able to handle that stuff objectively. You need
your vision in order to get yourself up in the morning but then to do something
about it, you need to be able to be objective.

One of the things I have been trying to do with Predictable Success is bring
people the tools that enable them at the times when they need to be objective.

You’ve done a brilliant job of that. In fact, one of the success factors that
I have picked up for the last four months personally in following your work
is this whole concept of managing laterally. I have never heard that before.

It wasn’t something that when I began to work on Predictable Success, I would

have thought would have appeared in there. Nowhere could I get away from it.
Every business that I was involved in or that I helped other people with to grow
through the Whitewater stage at Predictable Success we had this issue every
single time. It’s pretty simple. As you’re growing your business through Fun,
people become managers originally because they are doing a really good job of
just that. They’re managing other people.

So then if you view that as vertical management where you’re managing your
own team, whether you’re on sales or legal or admin or officer at warehouse

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whatever it is; that’s where managers start. We may not even give people that
name at the outset. They are just doing it and then eventually they get called
managers.

So because that’s the beginning, that’s what we think management is. It’s that
vertical up and down management. But the reality is when you hit Whitewater,
what’s happening there is this, that every business has to pass the battle as it
were like a relay race through the various departments in the business. You
might start with R&D, you get to marketing, you get to sales, you get to
delivery, you get to service, you get to customer acquisition. You got to hand
the battle all the way through there.

What’s happening in Whitewater is we’re starting to drop the battle. It falls

somewhere. We get an order and then we screw it up or we get an order and
we deliver it but we deliver it in the wrong ways. So we’re dropping the battle.
What of course became obvious to me eventually was that this was down to the
ability of managers not just to manage vertically but to manage horizontally,
laterally as well. That people had to lift their heads up.

Instead of protecting their own team, their own group in those silos is to look
either side, left and right and say, — it’s the concept of internal customer if
you will — who is it that’s handing the battle to me? If I’m sales, I maybe taking
the battle from the marketing department. Who am I passing it on to if I’m
sales, I’m taking it from marketing and maybe passing it on to delivery or to
the service team?

That ability to work laterally is a mindset change. Often, we literally, I mean,

literally have to put people in a room and just talk to them through the
concept and get them to realize there are no more briny points for managing
your team. We’re not saying that you don’t do that anymore but you’re only
running this table because you do that. There are no more briny points.

The briny points are for, how do you work with each other? So instead of
getting into the them and us thing and stuff falling in between stools and
dropping the battle, what you’ve got to do is to learn to work one with each
other and hand that battle smoothly again. Once you make that flip, that’s
really what pushes the organization out of Whitewater and into Predictable
Success.

What do we do to stay sharp?

As owners? As business managers?

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No, you personally. Because you are definitely not only an A-list author but
your material and the way you present information is superb. How do you
keep that edge for yourself?

I don’t know is the truthful answer. I could make something up that would
sound really good but I would be making it up. If I was to guess, it’s that I don’t
read that much in my own sphere. I don’t read other business books much. I
don’t read business magazines.

I really try to do most of my own information gathering and pattern recognition

— which is really the business that I believe I’m in — outside of business
because I think it helps me see things fresh. I’ll spend a lot of time in and
around science and architecture because there are a lot of patterns in there.
My strong belief is that any strong pattern is a truth that’s applicable in any
area and equally applicable into business.

I see myself much more often spotting something else where I’m thinking, what
is that application to business? And then I’ll see something very much with a
fresh pair of eyes which is what I believe I have been able to do with
Predictable Success as opposed to spending my time in business conference and
workshops and so forth.

When I’m not with clients, I’m not thinking about business. I’m always thinking
about patterns that are applicable to business but not patterns of business
itself. So probably that would be my nearest guess.

Anything unique that has evolved recently between the time that the book
was released? I know the next one is coming out this year.

What I had to do with Predictable Success is leave out one enormous and very,
very powerful diagnostic tool which we don’t have time to go into today but
essentially this all came—for me, developed all at the same time. I had to
break them into two or the book would have been 700 pages and utterly
unreadable and probably too dense for anybody to be expected to plow through.

Essentially, when we look at the seven stages in a lifecycle, the stage that any
organization is in is actually dictated by the underlying management styles that
are most predominant. I have discovered that there are four key management
styles and it’s the way in which they mix almost like taking vitamin B and D.
It’s the mixture of those four management styles that locks an organization
into one another of the stages.

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As I say, I had to leave all of that out but that’s what the second book is
entirely about. I’m right on the throes of getting the manuscript ready for the
publisher now. Our intention is to have that out in early 2012.

This book is an absolute blueprint for an entrepreneur or a senior

executive who is a reader. Is there one thing that you didn’t want people
to not forget as they listen to this conversation?

What I’m saying in Predictable Success is that getting there, getting to that
apex, getting to Predictable Success and staying there is a constant battle
really, as I said earlier, I wouldn’t suggest that it’s in any way easy. But it’s a
constant battle between systems and processes on the one hand which are
necessary to scale the business and keeping creativity, entrepreneurship, and
risk taking inherent in what the business does.

If I was to pass anything on to any business person, it’s that ability to be able
to know when to emphasize one then the other that really keeps a business in
Predictable Success and to be all out just for one or the other. It’s all about
systems and processes or it’s all about entrepreneurial risk taking. It’s
eventually what drives businesses under and getting that balance right is really
the key.

The website is called www.PredictableSuccess.com. I know you do a lot of

coaching and a lot of workshops, can you talk a little bit about the
opportunity that people have to get more of this information beyond the
book.

A really good starting point is the book itself then there is my blog which is free.
You can sign up for that on the website. I write every weekday. I have a piece
up there. It’s a very useful way to keep up with where my current thoughts are.

I do one quarterly workshop every three months obviously. It’s very small, just
10 to 12 people. We go very deep into the methodology. I help the participants
establish exactly where they are. We work with the management styles as well
so that they can know what they need to do in that front. We give them an
action plan that they take away with them on their second day. It’s a day and
half workshop. And then obviously, I do one-on-one coaching and counseling
into organizations. All of that is pretty easily found on the website
www.PredictableSuccess.com

People can sign up for the workshops right on the website? I know the next
one is coming up this quarter in March.

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Yeah. We got a great group in Seattle, March 10th and 11th. We’ve got two seats
still available there if anybody is interested. They are great fun. They are what
I enjoy doing more than anything I could say. It’s just me and 10 or 12 people
around a conference table. It’s hard work but we have a lot of fun and we help
people move the needle. When you go back from that workshop, you’ve got
your own Predictable Success action plan tucked under your arm.

We don’t do binders. We don’t do those big workshop manuals you go to and

then you can come back from the workshop and they go to binder heaven. We
send people back with one sheet of paper with two to three very specific
action points. They are really good fun so I highly recommend it.

I appreciate your time enormously. I know that anybody who has an

opportunity to read the book or to visit the website, you can’t help but get
advance knowledge on how to grow your business. Les, I’m very grateful
for your time.

Thank you Moe, it’s my pleasure.

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