Three Practices to Help You Become the Best in the World
(Excerpted from my speech at Alpine Investors’ 2022 Growth Summit)
In 2008, Alpine was struggling. We invested the last dollars from our third fund just 10 days before Lehman Brothers declared bankruptcy, and the subsequent fallout meant we wouldn’t be able to raise another fund for several years.
Around this time, I hired an executive coach, and Alpine brought on a consulting and coaching firm for our employees. With the help of these coaches, we unlocked three critical elements — our psychology, our timeframe and our imagination.
Shifting our mindset in these three areas allowed us to achieve results beyond anything we imagined. What follows is a summary of that process.
You can watch the full speech and read the full transcript here.
Change Your Psychology
I have talked to an executive coach nearly every week for the past 14 years. The first question coaches help you answer is, “What do you want?” It sounds elementary, but I have found that most people (and organizations) don’t know the answer — and few take the time to find it.
Investing the time to answer this question is the first step to building a world-class company, as well as creating the life you want. While there are many ways to answer this question, I think the most powerful follow-up question is: “What would you dare to do, have or be if you knew you would not fail?”
We came up with three answers to this question at Alpine. We would dare to:
Be the best-performing private equity firm in the world;
Be the place where the best people want to work and spend their careers; and
Be a force for social good.
It took months for us to crystalize these three points. When we began writing potential answers, our minds immediately flooded with thoughts such as:
“Who are we to think we can achieve such lofty goals?”
“Look at all the ways we’ve failed before.”
“We have no idea ‘how’ to achieve any of these goals.”
But with the help of our coaches, we started to identify those thoughts as limiting beliefs, and we slowly began working through them. Once we aligned on our goals, we wrote them down and communicated them internally. Then we started telling people outside of the organization what we were planning. And in doing so, an interesting thing happened: Our team started to behave as though we were capable of achieving those goals.
If you want to be the best in the world, start by clearly defining what that means to you and your organization. Then, communicate that goal simply, clearly and frequently.
Lengthen Your Timeframe
“The best time to plant a tree is 20 years ago. The second-best time is now.” – Chinese proverb
Most of us suffer from the tyranny of the urgent. A typical day might include a morning commute while fighting traffic, a series of in-person meetings sprinkled with a few Zoom meetings, lunch, returning emails, checking social media, a few more meetings, another gnarly commute home, returning more emails, and binge-watching Netflix while scrolling the internet to “decompress.” That is an exhausting day filled with lots of stimuli.
Following that pattern — day after day, year after year — will ensure that we do today what we did yesterday and do tomorrow what we did today. Living in the tyranny of the urgent, most executives spend their energy fighting what feel like pressing problems – a churning customer, a difficult employee, or some other crisis.
Becoming the best in the world requires rethinking how we spend our time. The simplest way to do this is to start allocating at least 10 percent of our time to working “on our business.” In Alpine’s case, working “on” the business meant engaging in activities to improve our company over the long run, while working “in” our business meant evaluating investments, closing deals and serving on boards.
Starting in 2010, our leadership team spent an entire day per week outside the office, thinking about Alpine’s future and designing programs that would make us successful three, five and 10 years in the future. This process was not easy. Some days felt messy, some felt like we were going backward and others felt like we were wasting time. Moreover, spending this much time out of the office during the Great Recession — when everyone around us was even more keenly focused on urgent tasks — required enormous patience, discipline and conviction.
During these sessions, we asked questions like:
What assumptions are we making about “the way business must be done” that are holding us back?
What would need to be true if we wanted to review every software firm that is for sale?
If we could double the EBITDA of an add-on acquisition consistently, how would we go about that process?
If we were to attract the best undergraduates or MBA candidates to work at Alpine, what would that experience need to look like?
Importantly, we did not know the answers to any of these questions. Finding them required dedicating time to thinking about the answers — and even more time and resources to bring the answers to life. We formed hypotheses and tested them using the formula Jim Collins outlined in his book, “How the Mighty Fall”: First fire bullets, then cannonballs. Try many things on a small scale. And once you prove they work? Back up the truck.
If you want to be the best in the world, you need to spend time planting trees today that will provide shade in the future.
“If you want to be the best in the world, you need to spend time planting trees today that will provide shade in the future.”
Unleash Your Imagination
Bertrand Russell once said, “Most people would rather die than think. Many do.”
Perhaps the single most underutilized asset in our businesses is the imagination of our people. When we stop to “think,” it is often reactive, responding to crises and problems (playing defense) rather than proactively carving out time for activities that will help us win in the future (playing offense). Once we have lengthened our timeframe and devoted at least 10 percent of our time to working on the business, we need to unleash the collective imagination of our team.
If a company is to become the best in the world at something, it doesn’t need to be the best in the world at everything. Instead, leaders need to get out a Sharpie and mark one or two critical elements in the company’s core practices with a giant X. Then they need to focus on that X, becoming one or two standard deviations better than the competition in that single area. Answering “What is your X?” is a great way to start harnessing your team’s imagination.
Southwest’s “X”
In 1972 — after finally winning several lawsuits brought on by its competitors — Southwest Airlines was down to its last few dollars in the bank. The company sold one of its four planes to create cash and keep the company alive. At the time, Southwest operated routes between Dallas, Houston and San Antonio.
Southwest’s then-VP of Terminal Operations, Bill Franklin, decided the company would run the same schedule with three planes as it had previously with four. To do this, Franklin declared that the company would hit 10-minute gate turnaround times — at a time when most airlines’ gate turnaround times were an hour or more, Southwest offered no assigned seating and little catering, operated a single uniform aircraft (Boeing 737), and offered no hub-and-spoke routes to speed up baggage turnaround.
By hitting its 10-minute gate turnaround times, Southwest was able to turn a profit while offering $15 fares on its Texas routes. And as the company expanded, no airline could match its efficiency or prices. As a result, Southwest was the top performing stock on the NASDAQ from 1972 to 2002 with average annual returns of 26%, and generated higher profits than all other airlines combined over those 30 years.
Southwest put its “X” on gate turnaround times and won big on that single metric.
At Alpine, our two “X”’s were attracting the world’s best talent and being the best in the world at closing and integrating add-on acquisitions.
If you want to become the best in the world, unleash your team’s imagination, find your “X” and map out a plan to become the best in the world at “X.”
Why Not You?
Like everyone else, Alpine’s partners and I suffer from the tyranny of the urgent. To this day, we struggle to carve out space and energy to consistently work on priorities that will yield progress in the future. There are funds to raise, investments to evaluate, people to hire and meetings to attend. We have created the discipline to work “on the business” by intensely managing our calendars — we schedule the on-the-business times a year in advance — and use executive coaches to hold ourselves accountable.
You spend nearly 50% of your waking hours working, and you work for many of the best years of your life. Someone is going to be the best in the world in your field. Why not you? Why not now?
“Someone is going to be the best in the world in your field. Why not you? Why not now?”
Sources
A turning point: The birth of the 10-minute turn. Southwest Airlines: https://southwest50.com/our-stories/a-turning-point-the-birth-of-the-10-minute-turn/
30-year super stocks. CNN Money: https://money.cnn.com/2002/10/01/pf/investing/30stocks/