Managing a Profitable High-Growth Business: Lessons From 25 Years in the Trenches at TransPerfect

Managing a Profitable High-Growth Business: Lessons From 25 Years in the Trenches at TransPerfect
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Something about TransPerfect that makes me especially proud is that there has not been a year since we began a quarter-century ago in which we have not earned a profit, or in which we have not grown. When I look back and examine all of the things our teams have done correctly—how we work together as a company—I want to make sure that our future is brighter than our past. And we’ve had a pretty bright past.

An organization’s success is interdependent.

The success of any company—whatever industry they are in—depends upon the relationship between its employees, its clients, and the organization itself. At first, it would seem like these people have competing goals and competing interests. In reality, their success is very much intertwined.

As a business owner and CEO, what I want for TransPerfect is steady profitable growth. Of course, it is what any company wants. You want to be selling, you want to control your own destiny, and you want to be profitable.

In an article I wrote last year for the Huffington Post, I touched on some of the issues that employees want. What I want for our employees is to continue the growth that creates interesting career paths and leadership opportunities. Without that growth, everyone stagnates.

Growth is not just a nice-to-have; it is not a want-to-have: it is a must-have. If you want to build interesting career paths, if you want to give raises, if you want to have opportunities for managerial advancement—and most organizations want all of these things for their employees—you must grow.

For our clients, we want to be stable partners. We want to bring new, cutting-edge technology to help our clients run their businesses better. Because we are a valuable service for them—and because adding a lot of value is not cheap—we also want to be charging them appropriately.

Companies, especially services companies, can’t compete on price (someone will always be cheaper).

When it comes to pricing, the game is really won or lost on price optimization—in making sure that you’re charging for what you can. Whether it’s for revisions in the translation world, or something else in the staffing world, your company needs to be charging for its work and the value your organization provides to its clients. You cannot build the world's greatest service organization that has great people with great career paths by competing on price—someone will always beat you. Someone will always do it cheaper. They may be operating from a low cost location, or price irrationally. You can’t win by cutting your price point to where engagements are not supporting your business and creating profits. If you want to be at the forefront of your industry, you must proactively bring more innovative and high-value solutions to your client. You need to be the best, and charge for it.

The best way to grow is to not lose what you have.

Maintaining your existing clients by doing quality work—because there are only so many times you can do non-quality work and keep a client—is the number one source of growth for a business. The key to growth, and the hidden truth about growth, is that you grow if you churn your existing clients at a lower rate than your competition.

Sales, new business development, and getting new clients is great! You need to be on the phone, mailing, going to trade shows, networking and presenting, as if you do not have any clients (no matter how many you have). You need to be doing all those business development activities, but key to growth is taking care your clients—such good care of them, that losing one is rarity. You can have a great sales organization, but if you are not executing for your existing client, you will be forever running on a hamster wheel. There is no growth possible without keeping your customers—it is the single most important factor in creating a high-growth company.

What you want to have, obviously, is the best production and the best client relationship possible. If you have the best of both worlds in these things; meaning you're delivering great work and you're also delivering great service, then your client is truly your partner and your advocate—they want to see you do better. They’re going to be referring you to other departments internally and throughout their network externally. They don't want you to go out of business. They want you around, because you are helping their business, and you are a valuable partner.

The quality/service matrix.

What I think is interesting is if you have a couple delivery hiccups, but you have a great sales/customer-facing relationship, that's going to get you past it, and you're going to maintain the customer. Conversely, if you somehow temporarily drop down on the client service level, but your quality is still top notch, you’re also likely going to maintain the customer. You can be great in either one of these categories and keep the customer. What you want, obviously, is to be great in both—or at minimum, be striving for continuous improvement in both.

Production (or Operations) and Sales each own responsibility for creating a successful client relationship and moving as far up the matrix on each axis as possible. Sales or Production/Operations can each maintain the average customer themselves by being the best—even in the wake troubles in the other department. You may be in jeopardy of losing the client, but you still have the opportunity to take corrective measures and save the relationship.

When you provide neither outstanding client service, nor an outstanding product/service, only bad things happen. You will lose customers, your reputation, and your business will inevitably suffer.

Everybody contributes.

In one of my favorite stories about John F. Kennedy, the President is walking the floors at NASA during the space race between the United States and the Soviet Union to see who could get to the moon first.

President Kennedy runs into the janitor and asks, “What are you doing?”

The janitor replies, “I’m mopping the floors, Sir.”

Kennedy then puts his arm on the janitor's shoulder and says, “you’re not mopping the floors, son—you’re helping to put a man on the moon.”

To be a great manager, you must convey to your team that they are part of a vision—something larger than themselves. Show employees they are more than just cogs in the machine—and that their contributions have meaning. The best part is that it is always true. It take's a village, and everyone's job is important to the overall success of your team. Similarly, the success of each team/department is vital to building and maintaining a successful organization. When you are a leader, it is your job to help people connect the dots.

"Our success is intertwined."

You’ve probably heard the phrase, "it takes a village," in other contexts. Another way to think about this concept is by understanding that in an organization, everyone's success is much more intertwined than they might realize or than it may appear. The people behind the scenes—that work in IT, Facilities, Admin, HR, or Accounting—it takes all these people to make a successful company. Do not underestimate them. And do not take them for granted.

What professional high-level salesperson wants to do their own invoicing? How many people who are not in Sales want to make cold calls? The point is: no person, and no department, achieves business success on their own.

There’s a sports analogy I sometimes use when I speak about the back office folks who don’t always hear their names called or get all the glory. In American football, if you’re playing offensive line, you have one of the most important positions in the game. If you can’t protect the quarterback, you can't throw; if you can't create holes in the defense, you can’t run. Without the offensive line, you can’t move the ball.

So these guys are playing one of the most important positions on field, and when do they get their name called? They get their name called when there’s a flag—they screwed up and committed a penalty of some kind. In other words, they only hear their name when they do something wrong. Back office operations is a little bit like these guys. Sometimes with Technology, you get to be on the front line and be the hero by making everyone more efficient. But for most others in the back office world, the only time they get singled out is when they've screwed up or made a mistake.

It’s important for everyone to recognize this fact—and take extra time necessary to appreciate and recognize those people that are in the back office. I like to say they are the tracks that our train runs on. Don’t ever forget how important those team members are to the overall success of the organization; they are critical—go the extra mile to find creative ways to recognize their contributions and their achievements.

What is the toughest thing about Sales?

The toughest thing about Sales is that you need to be self-motivated. Time is your only asset, and you must take personal accountability for using that time effectively or not. If you do your job slowly, or half-halfheartedly—what happens? Perhaps your manager will admonish you, but basically nothing happens—and that is the kiss of death in Sales.

The world won’t end if you don't do your job, or get lost in non-productive tasks. If you don’t do your outreach, if you do not work a trade show and make as many contacts as possible, if you do not do your colds, warm calls, or follow up calls. Sales is a self-motivated animal—the whip will, most times, not be cracked.

Again, the toughest thing about sales is that there are no immediate negative repercussions for not doing your job. However, your career can slip away simply by not making the most of your day. I tell younger salespeople people: Why not be a hero today? If you’re not at the beach on vacation—if you’re not on a day off—why not work the hell out of the time you spend at work? This is especially true in those critical first few years of the job—when you establish a reputation and have the opportunity to pull ahead of the pack. With effort, diligent time management, and no fear of ejection, you're 80% of the way to where you need to be as a salesperson. The other 20% are the fine points. But it starts with personal accountability—you don't blame failure—or success—on any external factor, it's just you—and you should show up every day with your game face on.

Can you imagine a Production/Operations person saying, “sorry, I'm just having a bad day,” and does not deliver your product? Instant failure; bells go off; the customer yells at the salesperson or the executives. It is not acceptable to fail to execute on a customer requirement. So if Production cannot fail to execute—if they cannot have a bad day—then you shouldn’t have a bad day either in Sales.

What is the tough thing about Production/Operations?

There are many things that salespeople or other executives will promise, and you are bound to keep those promises (within reason) to your customers, even though you didn't make them yourself.

There are exceptions to every rule, but generally salespeople are not out there promising ridiculous things simply because they want to make the lives of those who bear the brunt of delivering the product or service more difficult. They’re out there in a competitive marketplace trying to win. Sometimes they do over-promise. Maybe sometimes they don't understand the complications of what they're selling, or what the customer is asking. There may be occasions when salespeople don't know how push back on their client—even when its in the client’s best interest to do so. Sometimes expectations are mismanaged, and it still falls on Production/Operations to come through.

Salespeople are often on the spot by client’s that require almost impossible turn-around times—and because the salesperson wants to win the business, they say what the client wants to hear. That could ruin somebody's weekend, or even mismanage the client’s expectations to the point where the project seems doomed based on the parameters promised by Sales. That’s where you have bite the bullet and either come through—or get the salesperson or a senior manager to let the client know that you've over-promised and re-adjust their expectations.

The key with bad news is delivering it fast, and fixing it. Try as well as all might to run perfect businesses, mistakes will happen. That's okay once in a great while, as long as it remains an anomaly. In fact, you can even end up with a stronger relationship by showing the client how you dealt with adversity in that moment. However, do not expect many passes from today's buyer; competition abounds in most industries. So if you are in Production/Operations, you are likely going to have work yourself to the max, because someone (who was not you) promised something more aggressive than they should have.

Whenever you have different internal division meeting and interacting with each other—there is tension. If you picture departments visually as circles, they will cross over with other departments (like Venn diagrams). Expect potential conflict, cross-divisional stress, blaming, other enemies of teamwork, and be proactive about minimizing them. There is always a natural tension and a natural instinct to point fingers and say, “those guys did something wrong.”

Whether you’re approaching a project or problem as an employee or as a manager, it is important to understand and respect the fact that you are a team and your success is intertwined. When there is a touch point between different departments, you just recognize that there are going to be issues—it's going to happen—and coach everyone to deal with it respectfully.

Conflict and internal competition, to a healthy extent, can be good.

Wrigley, the chewing gum magnate, had a phrase that embodied this: “when two people in business always agree, one of them is unnecessary.”

Basically, the point is: all conflict is not bad. In fact, conflict can be good. It can lead to better solutions and better technology. It's okay to disagree with someone, because if you agree with them all the time, you might as well not have them there.

It’s okay to have conflict, as long as you deal with it respectfully. You should never be out there hurting someone’s feelings with personal attacks, but better solutions and more efficient processes often arise from dissenting opinions and alternative approaches that challenge your team, department, or organization’s existing approach.

If you have a differing opinion of how you should do things as a team, encourage healthy debate about it.

I manage 4000 people, and if someone tells me I could be doing something better, I listen. I do not want "yes" people on the team that will tell me what I want to hear. I want people that challenge things: me, their teammates, the status quo.

Become a “we” person.

How are you going to make someone feel if you sell a job and say, “Hey, I sold this huge project and I’m going to make a big commission on it…you now need to stay late and work on it, for weeks. Are you cool with that?”

Don't be an "I" person—become a “we” person. It may sounds like it’s a small thing, but it is actually a huge thing.

In your emails, calls, and in most everything you do, become a “we” person. If you sell or do something that causes folks to have to pull extra hours, consider staying late night with them and helping them out. It’ll do more than you can possibly imagine. People like to think about what you would do if the roles were reversed, so don't be afraid to show them.

Make bad news travel fast.

Of all the most underused phrases, I think the most important are: “I don’t know,” "I need help," and “I’m sorry.”

When you fail, it is okay. You are going to do that if you are to succeed. As a matter of fact, the amount you succeed can probably be measured by the amount of times that you fail. When you screw something up, fess up fast. Apologize and fix the situation. Do the postmortem later. The client doesn’t care about why or whose fault it is. Get the problem solved and then later you postmortem and figure out how the problem can be prevented in the future. Again, at the end of the day it doesn’t matter to the client. So, foul up, fine. Fess up fast.

The best way you can judge an organization is not by how fast good news moves; good news travels fast on its own. How you judge your organization—whether your organization is a 4,000-person company, or your organization is just you and one person who reports to you—is by how fast bad news travels. Bad news needs to come faster than good, so you can manage it before it gets out of control. This requires the trust and respect of your staff or teammates.

Cultivate an environment that will not tolerate bad news being swept under the rug for even an instant—encourage people to get help. You may be mad at them in the moment, but the most important thing is that the problem gets solved. Measure your organization by how fast bad news travels—the more effective your team, the faster bad gets escalated.

Never turn away from a problem.

In 2007, we had the honor of having Charlotte Beers speak at an event we held in San Francisco. Ms. Beers is credited with breaking the glass ceiling for women in the field of business and advertising.

One of the things she said that stuck with me: “what I always did, whenever there was a problem, I turned towards it.”

People tend to turn away from the problem or conflict. Problems expand when they aren’t dealt with.

This is true of small issues as well as large ones. If you have a disagreement with a colleague, take 10-15 minutes and take them out for coffee. Deal with the problem with the person, and deal with them as a person. If you do that, and you do that as soon as possible, you will make your life much easier. If you don’t do it, the problem will snowball, your relationship will worsen, and it will only continue to get worse. So turn towards the problem and do something about it.

Bad behavior tends to expand—it will not fix itself naturally. You must turn into issues, meet them head on, and address them—and the faster, the better. Deal with all problems immediately, while they are small. This won't eliminate all big problems, but it will help you greatly throughout your career.

Nobody quits a company, they quit a boss.

I tell our managers: whenever anyone quits, they don’t quit TransPerfect, they quit you. It is a jagged pill to swallow, but it’s important to come to this perspective quickly in management.

Again, nobody quits a company—they quit their boss. They may think that they’re quitting the company, but they are quitting because somebody (perhaps you as the manager) gave up on them or was not as invested in their career success as they should have been.

Likewise, if you’re having problems with your boss, don't put it all on the boss. Nine times out of ten there's something you can do about it—and there’s nothing in the rulebook that prevents you from helping your supervisor be a better boss.

Focus on your customers and what they need to compete in the marketplace.

People often ask me how big the translation market is. I’ve heard pundits claim it's as low as $6 billion and as high as $45 billion. I honestly don’t concern myself with that, because I just don't care.

What I do know is that we have customers, and I know that our customers are buying other products or services, and I want to be selling whatever they’re buying.

Whatever it is our customers are doing, if we can be the best at providing the product or service to them…that’s what we want to be doing.

In the legal business, we got into the eDiscovery and litigation support businesses because our customers—impressed with how we handled their translations—asked us to. It's eat or be eaten in the business world. If you don't provide something your customers are buying, someone else will—and they will eventually come after your business. You always want to execute better than your competition—to be the hunter, rather than the hunted.

Share of customer—that’s what I care about versus market share—and that’s what I encourage our sales and client-facing professional to care about, gain information on, and report up the chain of command.

Think Big and Believe.

The greatest athletic achievement of all time is the breaking of the four-minute mile. People had been trying since the dawn of time—or whenever the mile was invented as a unit of measurement—to achieve that feat.

Roger Bannister broke the 4-minute mile in 1954. In the year or two following that, something like a dozen other people broke the 4-minute mark. What do we really think? Do we just think human beings got really fast in 1954? Do we really believe people just got faster?

No, they didn’t just get faster, their frame of reference as to what was possible changed. People figured, “If this guy can do it, I can do it.” The way they approached it changed. I challenge you to change your frame of reference, and think big and believe—because it leads to big things. It lead TransPerfect from 2 people in a dorm to a 4,000 person industry leader. There's no telling where thinking big can take you.

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