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Life in the Fast Lane

Inc. magazine's editor-in-chief offers some highlights from the annual Inc. 500 conference.
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Highlights from our annual Inc. 500 conference

Southern California has more Inc. 500 companies than anywhere else on earth, and so it was no doubt high time we held our annual Inc. 500 conference in Los Angeles. This year's event drew more than 1,000 people, making it one of the largest gatherings of successful company builders in history. It was also one of the most glittery. Keynote speakers included actor-producer Henry ("The Fonz") Winkler and superstar restaurateur Wolfgang Puck. The real Sugar Ray Leonard put in an appearance, as did people who looked and sounded an awful lot like Marilyn Monroe, Groucho Marx, and Bill Clinton. Mayor Richard J. Riordan hosted a reception at Universal Studios, where attendees had a chance to preview the new Jurassic Park ride. "If you want the same experience without coming to L.A.," said one soggy CEO, "just have someone pour a bucket of ice water on your head and push you down an elevator shaft."

Then there was the conference opener, an ersatz rendition of "Soul Man" performed by a group of Inc. staff members in Hawaiian shirts, which somehow wound up on CNN. The television commentator referred to it as "questionable soul." Maybe so, but we're still getting requests to appear at company outings, weddings, and bar mitzvahs. Go figure.

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The most memorable anecdote of this year's Inc. 500 conference came from Martha Rogers, coauthor of The One to One Future.

The story was about a distinguished-looking gentleman in blue jeans who walked into a bank and asked a teller to complete a transaction. The teller said she was sorry, but the person responsible was out for the day. The man would have to come back. He then asked to have his parking receipt validated. Again, she said she was sorry, but under bank policy she could not validate a parking receipt unless the customer completed a transaction. The man pressed her. She did not waver. "That's our policy," she said.

So the man completed a transaction. He withdrew all $1.5 million from his account. It turned out he was John Akers, then chairman of IBM.

The moral: Give employees information about the value of customers, not mindless policies.

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Management accountability was a hot topic, at least among the most successful Inc. 500 veterans. Alan Hald and Jeffrey McKeever, cofounders of MicroAge (#233 in 1986), said they conduct a complete management review every three years, in the course of which some managers are kept in place, some promoted, some demoted, some moved laterally, and some fired. Patrick Kelly of Physician Sales & Service talked about his company's practice of encouraging employees to identify bosses who aren't performing. "We just had a case in which a manager was demoted by the people who reported to him," he said. Down the hall, attendees heard from Eric Kriss, founder of MediVision (#35 in 1989) and the current CEO of MediQual (#285 in 1990), who explained his company's proprietary system of peer review, in which all managers are evaluated by employees.

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"We make it up as we go along. Which is what you all do every day."

-- Laughing Stock, an improvisational group that entertained the Inc. 500 audience at lunch one day

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The education crisis has been an issue at Inc. 500 conferences for the past several years, and this one was no different. In numerous conversations we heard that the best jobs companies have to offer are the most difficult to fill because the secondary-school system is simply not providing students with the right skills.

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"It used to be that you'd get a good loan officer, establish a relationship, and then he'd disappear. Nowadays you get a good bank, establish a relationship, and the bank disappears."

-- Jeffrey McKeever of MicroAge

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"Just ask" is the advice Douglas Mellinger gives to aspiring entrepreneurs. He himself was looking for advice when he graduated from college, in 1989, and so he called about 35 top executives and chief information officers of Fortune 500 companies. Fifteen agreed to meet with him. Today he has three former Fortune 500 executives on the board of his $21-million software-development company, PRT Group Inc. (#42 in 1995). Nine others are part of his informal advisory board. And 75% of his big-company advisers are also his customers.

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"So, you must be one of the 500 richest people in America."

-- A Los Angeles cab driver talking to an Inc. staff member he had just picked up at the hotel

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The case against reading business books was made by Jerry Brenholz of Advanced Technical Resources (#38 in 1995). "I used to play competitive chess," he said, "and I was rated by the American Chess Federation. I never read a single book about chess until I noticed that my competitors always brought books with them. So I started reading, and my game went down. I think it's because my best asset is my own mind. So now I might read something about business here or there, but mainly I rely on my own mind."

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"We are the 10th-largest brewer in the United States. Do you know what that means? We have one two-hundredth of the beer market. That's minuscule. Twelve years of busting my ass, and we've gone from nothing to infinitesimal. If I'm lucky, I'll go another 12 years and get to be small. That's my life's work."

-- From the keynote address of Jim Koch, founder and CEO of Boston Beer Co., brewer of Samuel Adams beer

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But among readers of business books, the hot one was Built to Last: Successful Habits of Visionary Companies, by Jim Collins and Jerry Porras. "This book helped me identify core values in my own company," said Rhoda Makoff of R&D Laboratories (#304 in 1994). "It's also enabled employees to recognize my company's core values and buy into them."

"I learned more from the one restaurant that didn't work than from all the ones that were successes."

-- Restaurateur Wolfgang Puck

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Norm "Dr. Gloom" Brodsky and Sunny Jack Stack went at it again in the third round of their face-off on the economy. Readers had given round one, in our January issue, to Brodsky, agreeing with his pessimistic forecast by a 13% margin. In February the two restaged the debate for a radio station in the Midwest, but no one could understand a word they said, since they insisted on talking at the same time. Call it a draw. And round three? This time Stack got the nod from the people in the room, who at the end of the session voted three to one in favor of his optimistic economic outlook. On to round four . . .

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"If you haven't restructured your company in the past three years, you're in trouble. A company is not a Catholic marriage -- forever. It's California style -- one year at a time. . . . "

". . . What should you do with bad employees? People say, 'Fire them.' Wrong. Recommend them to the competition. . . ."

". . . What we have to learn is not how to slow down change but how to speed up solutions."

-- From the keynote address by author and management theorist Ichak Adizes

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Best Performance by a Stand-Up CEO
This year's award goes to Patrick Kelly of Physician Sales & Service (#302 in 1988), who talked to a packed room about the experience of creating the first national medical-supply company, one with sales of $600 million and more than 1,800 employees -- including more than 150 who have become millionaires by owning PSS stock. Among the highlights:

? "I didn't choose to become an entrepreneur. I got fired and started a company in order to earn a living. I had to learn to be a CEO. I'll tell you right now, I stole every idea I have. There is not an original thought in my head. I stole everything, and you should, too."

? "We like people to ask questions -- even dumb questions. To show them how much we like it, we hand a two-dollar bill to anyone who asks a question in a meeting, and we're going to do that here." (And he did -- and he got lots of very good questions.)

? "Avoid bureaucracy. We have a rule at PSS. You only have to read the first memo you get from a corporate officer in the course of a month. If you get any others after the first one, you can throw them all out."

George Gendron can be reached at george.gendron@inc.com

Last updated: Sep 1, 1996




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