It's not everyday that most of us get to hear a billionaire's inside story. Even more rare is to hear from two billionaires in the same day. But that's exactly the experience I had last week, and I walked away with some interesting perspectives.
The National Capital chapter of the Association for Corporate Growth held it's annual Strategic Growth Conference at the end of last week. The conference featured exceptionally revealing presentations from David Rubenstein, co-founder and Managing Director of The Carlyle Group (the soon-to-be world's largest private equity group) and Steven Case, co-founder of AOL and CEO of Revolution, which invests in companies such as Zipcar and LivingSocial. (Full disclosure:Revolution is a Hinge client).
The first thing I learned is that self deprecating humor is a charming quality in a billionaire. I believe this applies to your run-of-the-mill multimillionaires and CEOs, as well. I also came away with five strategies that apply to growing a professional services firm:
1. Get involved at the early stages of long-term trends
Both speakers recognized likely long term-trends and got involved early. Carlyle Group positioned itself to benefit from the growing influence of government and the growth of international private equity. AOL was at the forefront of the personal computer revolution. It takes guts.
About three years ago we were talking to a firm who was poised to reposition themselves at the forefront of cloud computing. They hesitated. Now they are also just another follower.
2. Be really different
If you follow number one above you may well be different. But sometimes it goes even further. When Rubenstein started out they were the only private equity firm in DC. In New York they would have been a nobody. In DC they could attract top talent from their market. They stood out with a memorable story — investments that were impacted by government activity — and their location became an advantage.
3. Incentivize top people
By giving strong financial incentives to top talent they made a lot of people very rich. This cadre of multimillionaires made them billionaires. Enough said.
4. Find powerful partners
Our research shows that high growth professional services firms tend to use strategic and marketing partnerships. I was struck by the degree to which Case and Rubenstein used partnerships to build their firms. Admittedly, they tried multiple arrangements before they found the right ones, but eventually they found powerful allies that boosted their firms' fortunes.
5. Incremental progress over time
Each of these two iconic successes is a story of incremental changes. Problems are encountered, solutions tried, refinements made — then it's on to the next barrier. This is the same pattern we observed in our studies of high growth, high value professional services firms. It also seems to be true in the case of these mega successes.
Here is a free resource to learn more about how high growth, high value professional services firms do it. I think you will find many parallels to the billionaires' secrets and a lot of data-driven best practices to immediately apply to your firm.