Alpine Investors’ 2022 Growth Summit - Opening Speech

Transcript

I want to do a quick thought experiment before telling you what we're going to do for the rest of the day.

What's your limiting factor for 2023? It's coming up on November and you're going to make your budget for 2023. Everyone's answer could be different. How many of you said something around hiring talent? How about customer acquisition? Getting the right number of customers? Sales? Marketing? How about your TAM? Add-on acquisitions? 

Generally speaking, something is holding you back. Now, imagine that you have 10 years to solve that one problem, and you and your team are going to spend 25% of all your energy solving that one thing.

Let's say your problem was hiring enough trained technicians. Let’s say you have 10 years and an infinite amount of money, and your team is going to spend 20% to 30% of your time solving that one problem.

Could you solve it? Of course you could. You build a school: You get the best instructors in the world, and you have 10 years so students can get all the way through the program. You could build the best program – and that bottleneck is eliminated.

Then what’s your limiting factor 10 years from now? You can solve anything that you set your mind to with your team, your energy and your imagination. 

The answer is, it's your psychology: It’s how you think about your world, your business and yourself. It's your imagination: your ability to imagine a world that doesn't exist. And it's your timeframe: Are you actually going to give yourself 10 years?

Are you going to work on problems today that are going to pay off in 10 years? In the business world, those three things – psychology, imagination, and timeframe – are the limiting factors. Like life, business is an internal game.

In 2001, we started Alpine. The same year, a transformative book, “Good To Great,” was published.

Jim Collins took good companies that were doing well, and then they became great. I think we need a sequel to “Good To Great” because we're already great. The sequel is “Great to the Best in the World.”

“Best in the world” isn't something you put on a website and never talk about again. You're going to define what “best in the world” means to you, and you're going to be two standard deviations better than the second-best person. And you're going to have a way to know if you hit that goal. 

This isn't one of those situations where you're going to hear an exciting speech and then you go back to the office Tuesday, return emails and nothing happens. We're actually going to move your business forward and give you tools to keep that going afterward. 

Psychology, imagination and timeframe are fun buzzwords, but I'm going to make them tangible. 

Psychology

We took Alpine down to the studs, started over and rebuilt it. 

“Blue Ocean Strategy,” by Renee Mauborgne and W. Chan Kim, describes red oceans and blue oceans. Red oceans are: You're doing what everyone else is doing. Blue oceans are: You're in a totally different world. We transformed from a red ocean to a blue ocean because we had to, because of the Great Recession.

We got help through executive coaching. Coaches ask, “What do you want?” 

In 2010, I remember thinking I didn’t want to continue fighting and not get anywhere. I wondered what I was doing with my career.

I remember thinking, “Am I allowed to really say what I want?” All of a sudden, there was a flood of limiting beliefs and doubts. Thankfully, with the help of coaching, we overcame some of these limiting beliefs and answered, “We want to be the best firm ever to exist in private equity.” 

If we’re going to spend half our waking lives doing something, then we’re going to be the best in the world. It took us a year to be able to say that. 

We also decided we want to be a place where the best people come to work; and we want to be a force for social good. We started writing it everywhere. 

Give yourself permission to say what you want without worrying about how you're going to do it. 

It had to do with us believing it, because one of the limiting beliefs was, “We’re condemned to what we did in the past.” But a funny thing happened when we started to believe it. We started to show up to meetings that way. We started to hire people who were going to help us get there. We started to attract people who wanted to be part of the best firm in the world. Our identity started changing and we started to become the best firm in the world. 

So, what does best in the world mean to you? If you don't get there today, put two hours on the calendar with your executive team every week until you have something that you're excited about, because it's going to be very hard to hit a target like that. It's very hard to hit a target, but it's impossible to hit a target if you don't set it. 

Imagination

In 1971, Southwest Airlines was losing money on the two routes they operated between Dallas and San Antonio, and between Dallas and Houston. Other airlines didn't like Southwest because they were offering low fares, and that was scary. They didn't want Southwest to survive. So, on those two routes, these airlines dropped the rates dramatically to $15 a flight. They would make Southwest go out of business because other airlines could make money on the other 49 routes they ran. So, Southwest is getting their ass kicked and they're going to go out of business.

They put an X on one metric. Southwest became the best airline in the world with one and only one metric. Gate turnaround time. There are a thousand things you do as an airline – customer service, catering, bag check – and they said, “We're going to be the best in the world at one thing: gate turnaround time.” At the time, gate turnaround time was 65 to 70 minutes. You had to deboard people, change the catering, load the bags (which were coming from 12 different airlines because you had a hub-and-spoke model). That took a while. Then you have to board people, and everyone had an assigned seat. Herb Kelleher had no idea how to do 10 minutes when he said that. They had no idea how to do it, but the how is the killer of all great dreams. 

They had no catering and no assigned seats. They lined people up to get on the plane. It's not a great boarding experience, but it's a 10-minute turnaround. They didn’t do hub-and-spoke models, so they didn't have to screw around with all the bags.

They started hitting 10 minutes and then they could fly 14 routes with one plane in one day while their competitors were doing four or five. And they started making money at $15 per route.

The competitors started getting out of those routes, and Southwest started expanding. From 1972 to 2002, Southwest was the No. 1 performing stock in the world. They made more money than all the other airlines combined.

There's probably 50 things going on in your business, but to be the best in the world, you actually only need to pick one or two levers to be the best in the world. 

Try to imagine a world where you're going to put an X on two parts and separate yourself two to three standard deviations from the next-best person. That's enough to be the best in the world. 

Timeframe

Psychology, imagination and timeframe are all superpowers. Any one of them by themselves is a superpower. But if you put all three together, you will be the best in the world. 

The opposite of timeframe is: You show up on Monday, you have 250 emails in your inbox and you have a standard list of meetings. During those meetings, you fight fires. You have some more meetings, you return some more emails. You go home, you're exhausted, you have dinner, you turn in for the evening, and then you wake up and do it again. 

That's your default operating system. That's why everyone isn't the best in the world. A calendar notification pops up that says, “Figure out where to put two X’s.” You have two hours blocked with your executive team because I told you to do that. Then that time actually comes two weeks from now and you have 250 emails to return. You’ll do it later, right? 

You think, “I could really use that two hours for my emails or for this meeting or this employee just left and we’ve got to have a meeting.” That's the opposite of timeframe, meaning you're prioritizing the urgent over the important. It’s hard to overcome that. 

You're going to work 50 hours a week, so that's five hours a week, which is a lot of time. If you spend five hours a week working on your business, you will become the best in the world. It's about five hours a week longer than anyone else is spending doing that.

When we started doing this at Alpine, we were spending 20% of our time – a full day out of the office every single week – working on our business. It was during the recession, when we had a lot of urgent stuff.

We still spent one day a week outside the office. That's where all of Alpine’s innovations started.

All of us are sitting in the shade of oak trees we planted 10 years ago, and we need to start planting the trees now that will give us shade for the next 10 years. Timeframe is putting time on your calendar today to do things that are going to make you awesome years from now.

No. 1: Be clear about what “best in the world” means to you. Answer that question and then communicate that to your team.

No. 2: Work on the business and use your imagination. Your imagination is the greatest asset that you and your company have, and it's the most underutilized. If you unlock that, it's magical. Commit to five hours a week to work on your business, and put X's on one or two parts of your business in which you're going to be the best in the world.

No. 3: Pull those priorities into today. Make the important become urgent by using your calendar to do it. 

First, we have to give ourselves permission and realize we're enough. We have to realize that we're deserving of these goals we want to set.

If you're not the best in the world at what you're doing, who is?