Words Heard / Our Take   Title:   Managing Growth - $1M to $500M in Ten Years   Who:   Tom Jenkins, Executive Chairman & Chief Strategic Officer of OpenText Corp.   What:   Ottawa Software Cluster (OCRI) special event   Event Held:   November 8th, 2005 at the Delta Hotel Ottawa   Words Heard:   Tom shared some of the lessons he's learned over the past 14 years at OpenText Corp. The major lesson he shared was that sustainable hyper-growth (70% pa compounded) requires the constant reinvention of a company. Management, staff, corporate infrastructure, customers, competitors, development strategies and marketing must all evolve because as it grows, a company's needs change. By way of illustration, Tom spoke of how hiring practices were changed in two key ways to support the changes brought on by hyper-growth. First, people were hired for their ability to do what needed to be done for the company the day they were hired, not what would be needed a year or two later. Board members, for example, were recruited to help the company with a specific set of issues and their terms ended when those issues had been resolved. Second, OpenText began to actively manage the career expectations of new hires. For example, an individual hired as VP Sales was told up front that if all went well, they would be moved a few years later to VP North American Sales and new people would be brought into the company at higher levels. Tom reported that the strategic changes made in hiring gave OpenText the expertise it needed right when it needed it, and retained the invaluable skills and knowledge of employees at a time when the company needed them the most.   Our Take:   Studies tell us that 97+% of all businesses grow by less than 20% a year and that 4 of every 5 businesses will fail before year ten. To put the scale of OpenText's success into proper focus, by going from $1 to $500M in sales in ten years, they grew by roughly 4 x 20% a year and built the equivalent of a $50M business each and every year for ten years in a row. In his book on building businesses, From Good to Great, Jim Collins emphasizes the need to get the right people on the bus, to get them into the right seats quickly and to get the wrong people off the bus just as quickly. Tom's lessons show us that we need to take this one step further; we must recognize that as a company grows, what makes a person 'right' for a given position will change. In other words, just as a really good salesperson isn't necessarily a really good sales manager, an individual skilled at managing 10 is not necessarily the right person to manage 100. Be ready to make the people on your team, including your founders, switch seats on the bus as the job changes around them*. It would be interesting to see a start-up business plan that incorporated Tom's approach into its strategy for growth. Including a budget for infrastructure would make the business plan more realistic and might provide comfort to outsiders that the business might turn out to be not just the 1 in 5 to survive a decade, but also the 1 in 20 IPO's to perform like OpenText. * For any founders out there struggling with growing their company, remember this story: when Tom realized that developing the infrastructure OpenText needed to sustain its growth plain and simple bored him, he hired a COO to do the work.   708-350 Sparks Street, Ottawa, ON K1R 7S8, t: (613) 563 4588, f: (613) 563 4689, ourtake@acornpartners.com, www.acornpartners.com If you wish to unsubscribe, reply to this email with "unsubscribe" in the subject.