FYI: The Talk of the Inc. 500

There's always a lot of music at our annual Inc. 500 conference, but this year's event in Nashvillerocked the house. The festivities got under way with country-music star Jo Dee Messina and wrapped upwith the Pink Flamingos, the official band of the Inc. 500.

Overall, the 17th Inc. 500 conference proved to be one of our liveliest, most upbeat ever,thanks in no small part to the hospitality shown by Governor Don Sundquist and his fellow Tennesseans. Funaside, the conference gave us a chance to find out what's on the minds of some of the country's mostdynamic company builders.

This year, like last year, the number one topic of discussion was the continuing shortage of goodpeople--indeed, of any people--available to be hired. The labor squeeze just keeps getting tighter, with theresult that companies are going to extraordinary lengths to attract and retain employees, as you can seefrom the accompanying conference notes.

Meanwhile, a new challenge has arisen: the burgeoning world of E-commerce. Bear in mind that acompany has to have been in business for at least five years to qualify for the Inc. 500, so thecompanies at the conference typically were started seven or eight years ago--that is, before the Internetboom. As a result, talk focused on the efforts of successful, established growth companies to adapt to thedigital economy. Appropriately enough, the conference was kicked off by a presentation on that subject byTed Leonsis, group president of AOL Interactive Properties.

Life in the fast lane

Highlights from our annual Inc. 500 conference

"When Microsoft came at AOL, people asked me if I was afraid of Bill Gates. I said I was more afraid ofJerry Seinfeld. We could actually see how the number of people on-line would plummet between 9 and 9:30on Thursday nights. Fortunately, the numbers always picked up about 9:40 or so, when people went backon-line to talk about what Kramer had said, or whatever."

--Keynote speaker Ted Leonsis, group president of AOL Interactive Properties, former president ofAOL Services Co.

OH, LORD, WON'T YOU LEASE ME A BMW
Jim Bernard, CEO of U.S. Energy Corp., inAlpharetta, Ga., named his number one problem: finding people. He's turning business away for lack of staff.His number two problem? Deciding how fast to grow, and what it will cost--but that really gets back toproblem number one, he said.

So he's considering every available option, including equity participation. The competition, he says, isbrutal. There's a software company down the street from him that gives every employee, even thereceptionist, a BMW. The company leases the cars, but the employees have them for their own personaluse. You go by the company, and you see 45 brand-new BMWs in the lot. And this is in Georgia....

SILK PURSES FROM SOWS' EARS
Like many companies, Research Triangle Consultants setup a recruiting team in response to the labor shortage. The team worked so well that president and CEO JeffLeRose turned it into a profit center: the three recruiters now help the company's clients with their hiring.

"When you get yourself in shape for a climb, you spend several hours a day working out on aninclined treadmill with a heavy pack strapped to your back. You look goofy. You smell. It's an ugly scene. That's always true. The road to success is not pretty. When you get to thetop of the mountain, you look beautiful, but it's all the other stuff that gets you there, and it's realugly."

--Keynote speaker Jamie Clarke, adventurer, author, and entrepreneur, on the preparation for hissuccessful ascent of Mount Everest in 1997

"Revenues are just a distraction."

--Keynote speaker Ted Leonsis quoting the founder of an Internet company with no revenues thatAmerica Online recently bought for $400 million

SEEING THE LIGHT
Don Dennis, president and CEO of AVT Inc., in Littleton, Colo., said hewas a "total non-believer" in E-commerce until recently. The General Electric veteran first sat up and tooknotice when he saw an article in an industry publication about GE's plans to move all procurement to theInternet, amounting to about $1 billion in on-line sales.

Dennis decided to see how good the Internet was at lead generating. He was already advertising in the Thomas Register. Why not try a listing on the Thomas Register Web site? He didn't have timeto do anything fancy, so he just took his published material and put it on-line.

In 45 days, he was getting more leads from the Web site than he'd gotten from the print version afterone and a half years. In fact, of the 10 or 11 lead generators he has, the Web is now his foremost source ofleads.

"Real creativity has nothing at all to do with casual days. The absence of discipline and standardsdoesn't drive creativity. In fact, it's almost the opposite."

--Keynote speaker Robert Lutz, CEO of Exide and former vice-chairman and president of Chrysler

THE VIRTUAL FOCUS GROUP
Casey Sweet of Quesst Qualitative Research, in Brooklyn,N.Y., talked about hosting real-time on-line chats that work as focus groups. Not only are they lessexpensive (owing to low travel costs) and more convenient than conventional focus groups, she said, butthey often work better because of the anonymity of an Internet chat room: people are more likely to saywhat they really think about a product.

"You are never completely worthless. You can always set a bad example."

--Keynote speaker Dr. Robert Payne, statistician and trend tracker (a.k.a. Durwood Fincher,professional double-talk artist), on the subject of leadership

THE KING OF PERKS
One technique for keeping people is offering great perks, and GaryQuick, president and CEO of Quick Solutions Inc., in Columbus, Ohio, was the Perk King by acclamation. Hisstrategy: "When you affect the family, you get more mileage out of your perks. A television set from thecompany, for example, will sit in front of the family for the next five to seven years."

So every four weeks he sends house cleaners to the homes of employees who've been with him for 36months or more. He pays $1,200 toward their vacations. When new employees sign on, he sends a bigbasket of food to their homes. All managers, as well as recipients of the company's outstanding-achieverawards, get a week per year in the company condo on Sanibel Island, Fla. Employees who refer six otherpotential recruits get the use of a Camry for two years. All the employees have their own business cards.And every Tuesday morning there's a ceremony at which administrative people are given $10 for everynew hire and $3 for every new deal the company has made--a total of between $2,000 and $3,000 eachyear. Next February, if key managers meet their goals, Quick will take them and their spouses to Maui. He'salso in the process of starting up an in-house concierge service for his employees. "We're really into thiswarm-and-fuzzy thing," says Quick.