encounter! with jay abraham and tom...

Encounter! With Jay Abraham and Tom Phillips

www.abraham.com ©1998, Abraham Publishing Group, Inc. 1


JAY ABRAHAM: You’ve already been introduced to Tom Phillips. He has delightfully and

wondrously agreed to spend a half hour summarizing for you two things: His story - how he got there, not just, “Well, we did this, and you’ve got to do that….” But the mindset, the process, the philosophy he builds it on; the strategy he operates by; what the implications of those actions are to you; and a number of very specific ideas on some critical elements that compose some of the most powerful and leverageable components of the eX! Factor Philosophy. And with that stated, I’m going to get off the stage so I don’t take time from you. Tom?

TOM PHILLIPS: Well, thank you, Jay. JAY: Thank you. TOM: And thank you all (applause) JAY: Thank you. TOM: Yeah, I thank Jay, especially, for asking me to share some more ideas. After talking with a

number of you subsequent to my remarks yesterday, I got all charged up, and thought that there were maybe a few ideas that I could share with you that would be helpful. So as Jay has explained, I’m planning to do three things. Number one: I’ll tell you a little bit about the story of Phillips Publishing, International; Number two: I’ll give you, hopefully, some ideas for building your business through recruiting, motivating, training, and retaining your key business builders.

Then finally, we’re going to have a Q&A period. I think some of the Q’s will be from you; some of them will be from Jay, I feel; and hopefully, we’ll get some answers, not only from me, but perhaps, from some other ideas in the audience.

So what it my goal? My goal is to have you get some take home value – some concrete, specific ideas that are applicable to you.

Now, you know I’m not a motivational speaker. I’m just one of you guys – a fellow entrepreneur, business person, and so I think I know what you’re going through, because I’ve been doing it myself for 23 years. So hopefully, having that bit of experience – I’ve been running my own company for 23 years, and having been in business for about 7 or 8 years before that, hopefully I’ve got some things that I can share. But also, I hope I’m sort of in your head a little bit; having lived some of the emotions and experiences you’ve had, I’ve come up with some solutions, and I’ve made a lot of mistakes. And so, I hope to share some of the best of each with you.

First of all, the Phillips Publishing story. And I will only tell you the framework of it, the outline of it, and especially the parts I think that might be of benefit to you. Not so much, “This is my story,” but what can you get out of it? What can you learn?

As you’ve heard yesterday, I started the company in 1974 in the garage of our home. It was a converted garage; we’d converted it into a den, and we had two kids then. We had toys in the den. Well, they were deprived of their playroom, because the toys went out of the den and into their bedrooms, and we moved the desk and a Selectric typewriter – used Selectric typewriter – in, put in $1,000, and started the company.

Our first year, we had started two newsletters, and we did $300,000 in sales. That was the launch pad for what has been built ever since. And we took five years to get to the first million dollars in sales. But it didn’t bother me, because each year we were making progress. And that’s one of my philosophies: Each year make progress. Each day make progress, for that matter. I don’t mind if there is adversity, but I just want to make progress each and every day, and when you compound that, it’s like compounding interest, or the $150 investment we’ve heard about this morning – you know, you’re company is going to grow.



And so we have been growth oriented since the beginning, but that’s what we’ve looked at. $300,000 was the beginning. (I think the actual figure was $293,000, but I’ve always rounded it up to $300,000.

Took us five years to get to our first million. But how did we do this? We always reinvested in the business. And I had a little saying that said, “If we take good care of the company, the company will take good care of us.” And I think most of you in this room understand that – you reinvest in your business. I did not take money out to invest in the stock market. I did not take money out to go on extravagant vacations. I did not take the money out to live high. In fact, when I started my company, I took a pay cut. And I would suggest that that’s a good first step, because it’s another reality check that, “Hey, you’re serious about this.”

In those days, I was making, oh maybe $40,000, and I cut it to, I believe it was $32,000. Well boy, I tell ya, after doing that, that really motivated me, because I couldn’t live on $32,000 anymore after I’d been living on $40,000, so I took my pay cut, but I got it back up to the 40 built upon the success of the company.

I thought I was a publisher. I thought I was a journalist, and a publisher, and a businessperson. And along the way, after a couple, two-three years, I was talking to an old professor of mine. I had an undergraduate degree in Political Science. Now, how many of you have undergraduate degrees in Political Science? OK. You all know the answer to my question: What does that allow you to do? What orientation to the real world does that give you? None…zero. It just allows you to learn something additional. Actually, it’s a good foundation as far as intellectual curiosity, and a good liberal arts education. But it sure isn’t training, and it doesn’t relate to the real world unless you want to become a government bureaucrat, which had never been my idea of nirvana.

So anyway, I went to grad school for Journalism after I had been in the Army, so I had undergraduate, then Army, and then Journalism school. I was talking to an old professor of mine from Journalism school, and I was saying something about what we were doing, and then we talked about another graduate of this college, and I said, “Well he’s really a great entrepreneur.” And he said, “Well Tom, you’re an entrepreneur yourself.”

That was the first time I’d really thought of myself as an entrepreneur, and that really helped me. And I don’t know when each of you in this room have had this revelation that you were an entrepreneur, but I think it was probably some time before you came into this room, and I just urge you to think of yourself always as an entrepreneur. Not as a doctor. Not as an accountant. Not as a lawyer. Not as a small businessman, small businesswoman, consultant, anything. Don’t define yourself as industry-specific or training-specific. You are an entrepreneur, someone who seizes opportunities in the marketplace, and serves those marketplace needs, or your customers’ needs. And you will be much more flexible.

And so fortunately, I think ever since the Reagan era the title “entrepreneur” and “entrepreneurial business” and “new starts” has come into a much better respect. You all remember the 50’s and 60’s and 70’s, I mean, it was Fortune 500, corporate America, and if you didn’t have a job there, “Oh, I’m in business for myself” or whatever… Well now you’re an entrepreneur, and you’ve been credibility. Even the mass media recognizes entrepreneurs as the job creators.

So, I’d be an entrepreneur proudly, not just because of the name, but what it defines in your own mind. It’s like one of Jay’s principles – define in your own mind what you want to be, and what you want to achieve. And this helps by defining yourself as an entrepreneur. Which I sort of did, and this very anti-business professor that I had helped this revelation. So I don’t know where you got your initial revelation that you’re an entrepreneur, but cherish it, and leverage it.

Also, one of the things I did, was I had learned from all the mistakes of my previous employer. I had seen him take leverage, and over-leverage his company. And every Friday, his creditors would line up outside his door, waiting to get the small amount of money portioned out. I didn’t like living my life that way, so I played the financial game very conservatively, and we always kept more cash in the bank than we needed. We always – we were low on bank debt. In fact, it was easy to be low on bank debt, because banks wouldn’t lend us any money. How many of you have had that experience? Banks not wanting to lend you money? OK, well you know what it’s like. We heard some of the questions yesterday, some of the comments. It’s a very disturbing experience, so if they wouldn’t lend it to us, we had to make it. So we made it, and stashed it in the bank.

One of the things we did was realize that we were in business, and that we wanted to - very early on, I personally wanted to work on my business, not in my business. And I think that is an issue for some of the people in this room. Again, look in the mirror tomorrow morning, and ask, “Are you working on



your business, or are you working in your business?” You need to take that step, working on your business – stepping back, and beginning, as I was mentioning yesterday, to delegate some of those responsibilities so that you can work on your business, and your colleagues can work in your business.

Basically, we continued to grow year after year by reinvesting in the company, by hoarding our cash, always meeting our payroll. As a sidebar on this borrowing, as you all know, the very best time to borrow money is when you don’t need it. That’s when the banks like to give you the money. When you do need it, they don’t like to give you the money. It’s very perverse.

Now, I can say that because I am, coincidentally, a vice-chairman of the bank in Montgomery County, Maryland. And I sit on the other side of the table. It’s very bizarre, but they want to lend you money when you have plenty, and they know that you can pay it back. And when you really need it, and your back is against the wall, and the latest product has just flopped – that’s not the time to go and borrow the money.

So if you want an action – please let me ask you: Raise your hand if you do not need any bank financing now. OK, now, each of you who’ve got your right, or left hand up, put it down, and put “To do: Go borrow some money!”

Now, when I say that, literally what I’m saying is, go take out a line of credit. Go to your bank, show them how much money you’ve got, and say you have wonderful plans for the long-term future to grow, and you may need some additional bank financing, but you’d like to get it lined up now. And indeed, what I did was I actually borrowed money when I didn’t need it, and paid it back early. And it cost a little bit of interest, but the bank said, “Hmm. He took out a 90-day loan, paid it back in 60 days? That’s good.” Do that two or three times, do it one-year note that’s amortized, pay regularly…and we just took the money and put it in a different account and built up interest there, and just had the spread. So I suggest you do that.

Because bankers do not understand entrepreneurs. Bankers do not understand entrepreneurs because they are not entrepreneurs themselves. If they were, they wouldn’t be working for a bank, now would they? They would be making almost as much money as you are. But banks pay very low salaries, and banks attract, frankly, risk-averse individuals, normally.

So, go borrow money from your bank. Make them – some of those bankers are happy to lend it, especially when you don’t need it, and they’re very happy to get the interest. So I really would suggest you go borrow some money. And that, of course, begins to build your rapport with your bank, too.

And so I’m being a little facetious about this, but the more he gets to know you, and about your business, the higher the comfort level of the banking lenders and the whole banking establishment will be, because someday you may really need them. If you have a turn for the worse, or you need some expansion capital, or whatever.

So speaking with my banker hat as well as my entrepreneur hat, please try to borrow some money. Do it within the next 30 days, and do it because you don’t need it. Sort of counter-intuitive, but some of you, I’m sure, who have been through the experience, it will resonate with you.

OK. We heard yesterday, and I think we all know, what Fran Tarkenton said is so true, that you grow through adversity. And we kept growing and reinvesting in the company. As I said, I didn’t take money out of the company; I poured it back in. The people that we attracted knew that’s what we were doing. It was for their benefit, as well as the company’s benefit so there would be further opportunities and job security for them.

But then these darn things come out of the clouds and hit you, or blind-side you. And we’ve had our number of battles and adversities, and a number of them have involved the government. “I’m from the government, and I’m here to help you.” Well, we’ve heard that a couple times, but one time we heard it with, “I’m from the government. I’m from the SEC, and I’m here not to help you, but to inspect you.” And then we had something from the Federal Election Commission, because we had a political newsletter that started attacking Teddy Kennedy, and maybe that wasn’t prudent, but it was what I believed in, and so Teddy Kennedy sicked the Federal Election Commission on us, and so…

You know, when you’re in Washington there are all sorts of strange things that go on, but also when you’re out in the rest of America, the government intrudes too much in your lives and your business, in my opinion. So anyway, I think that what you have to do is be prepared for these adversities, but after defeating the SEC in federal court, and the FEC in federal court in battles that most people would have just cut a deal, we felt a lot stronger internally. And so when we had business problems, we said, “Well, if we can defeat the entire federal government…” We had this SEC case when I was, then, in my basement…! I mean, the SEC inspector came and knocked on our door, like the things you hear about in the middle of the



night, in the Nazi era. Well, it was very similar, from my perspective. But when the organization came through that and defeated the whole SEC, which the Merrill Lynch’s don’t usually do. They’ll cut deals. When you achieve that, you get this great self-confidence and determination, and you have built this stronger defense, and you have a lot more drive inside.

So, do turn those adversities into advantages, and realize from these battles you will become much, much stronger. And that’s what we did. We even had our last legal battle was when one of our editors criticized National Life Insurance Company of Vermont, and they were having a big PR campaign going on at the time, and they didn’t like our criticism. So they thought, “We’ll squash this little publisher company, down in Maryland.” And they sued us for $50 million – actually it was $53 million, excuse me. We were sued for libel, for $53 million. And they wanted us to cut a deal, but we stood by our editor, or our writer, and said, “No, he was right – you’re wrong. Let’s go to court.” So we won in court again then, and they basically had to retract the charges, and so forth.

But that’s pretty scary. Although, you know, it wouldn’t have mattered if it was $53 million, or $5 million – it was too much money. And so $53 million gives me just that much more indignation to fight it, you know. Being sued for $53 million – well, OK. We beat them too.

All these things, we got additional strength from. And I would urge you to get additional strength from your battles, too.

How did we grow? And this is very much take home, I hope. Because there are three ways to go – it’s very simple, it’s very basic, but I am guessing that not everybody in this room is doing all three. But we have always had a three-pronged approach. Number one: Grow what you’ve got. Every year, you should try to grow your present products, or product line, or whatever. We started out – one of the two newsletters, we started with was called “The Retirement Letter.” The Retirement Letter has been growing for 23 years. There have been a couple of years, or several years that we may have had an off year, but we don’t neglect The Retirement Letter. It has been a foundation of our growth. Don’t neglect your stable of present products, because they often have the highest margins. You tire of them sometimes before your customers do. So don’t get tired of your cash cow products.

Secondly, start new products. That takes R&D, it takes capital, it takes risk, it takes insights. And they can be line extensions, or moving into a new marketplace. But start new products, without abandoning your old. Go ahead and jump out.

We always started new products in a very deliberate way. We would do a similar form of product, meaning another newsletter, in the investment area. That was the easiest to do. Or we would make one jump up, but not two jumps. One jump means we do a newsletter in the health area, meaning the common thread is newsletters. We theoretically knew how to do newsletters; we’d go into a different marketplace, meaning health. Or we would do a directory, let’s say, or a book, or a seminar in investments. So we would keep the same marketplace, but we would change the form of products. We never jumped from doing newsletters in investments to doing books in health, let’s say. You should only ripple up a step at a time, because you are much less likely to fall off the cliff, or have a mistake.

Don’t try the two steps, because then, if you try the book in health, you won’t know whether it’s because the marketplace for health is no good, or if it’s the book form is no good. You don’t have a clue.

So that was one of the key principles that we developed, and we still do that. We’ve moved into Business Success. As you know, this group that is working with Jay and Denis Waitley, and maybe with Fran Tarkenton, as you heard, this is one of our newest groups. What are we working? We’re working in the newsletter area, which we know, and seminars/conferences, which we know. We did not start in videos on Business Success, or we did not try to start a broadcast network with a video on the whole business success area.

And the third thing is acquisitions. Let me ask you again to participate. How many individuals in the room have made an acquisition of some significance, or any acquisition in your company’s career? Please raise your hands. I’m going to guess about a third of the room. There seem to be a little more people. Most of the acquisition people seem to be sitting on this side of the room. In any case, I’ll say a third to maybe 40% if there were some shy people that didn’t want to raise their hands, so that mean almost half or more of the room have not made an acquisition. Let me suggest that that’s something you should do, and I’ll give you a little bit better time frame than just 30 days. Let’s say in the next 18 months while you’re working with Jay and his team, and our organization, make an acquisition. Buy somebody else’s product line, business, whatever, however you practice, if you’re a doctor or professional.



Now, why do you do that? Well, because, hopefully, everyone in this room is dedicated to a growth agenda, and you need your three legs of the stool, or three streams of growth. Growing what you’ve got; starting new; and acquiring.

Now, why do you also want to acquire? Because that disciplines you to look at other businesses and compare them with yours. You will learn a lot, even from the acquisitions that fall through, that you don’t make. You will learn what you’re doing right, and what the other guy’s doing right, and what you should be doing that he is doing. And then secondly, it’s another wonderful way to bring aboard other business builders if individuals come with big product lines.

Now we’ve done all sorts of acquisitions. Sometimes they came, and sometimes they didn’t. But you’re building, not only your product line, but your most important resource, as I was mentioning yesterday, which I believe is your team, your people. If you buy Product X, and ten people come aboard, or two people come aboard, or 100 people come aboard, they’re all there with you to help you build your business. So, it’s not just the product line – it’s the people too.

So, we use over 23 years, or 22 ½ years so far, the three-pronged approach. And every one of our leaders is empowered to look for acquisitions, as well as to help with the new starts, and grow the business we had. All of your key leaders should be participants in all three parts of the process. You should not say, “Oh, I’m the only one who does the acquisitions” or “I’m the only one who does the new starts.” The new starts should well up from the bottom of your organization, from the people who are closest to your customers, and your marketplace, because they will know what new starts you should be making, probably better than you do if they’re closer to the individual customer.

And then the acquisitions, they will also know the skinny on the street. I don’t often know who’s doing well, or who’s doing poorly among our smaller competitors, but the individual reporters, editors, writers, marketers who are interacting with the other businesses in our industry know exactly what’s going on. You know, it’s the talk over the beer at night. It’s the talk at the trade show. It’s the talk on the phone, when you’re exchanging marketing ideas. So, get those ideas from your own people, and empower them to be part of the acquisition progress.

OK. I told you I’d give a quick summary, and I’m hoping this is it. I’ve tried not to tell you all the mechanics of how you start a newsletter, a magazine, a directory, online services, seminars, conferences, the whole – trade books, tabloid newspaper. We have all those products. But that’s less important, what products we have, and more important is the process.

But where did this process lead us? Now, in 1996, 22 ½ years later, what started in my garage - with myself, a part time editor, a part time secretary, and my wife working part time on that, and part time as a homemaker and raising our children - has now become over 900 employees with the same $1,000 investment. There has never been any additional capital paid in to Phillips Publishing International.

And not only do we have 900 employees, but more importantly, we have 3,000 family members who draw their sustenance every day from our company. And that is the biggest reward I get: knowing that when these families sit down at dinner, each one of them has had a better life, a little bit better day because of our company; a little bit better opportunity than they might have had at the next company down the street.

I won’t get into some of those things – why I think it’s better, but I think of not only employees at the job, but I think the totality of their 24 hours a day, their 7 days a week, and their family at home. Whether they’re married or not, they’ve got family. They’ve got sisters, brothers, fathers, mothers, aunts, uncles, nephews, nieces, and in many cases, their own children.

But we have 3,000 members of our family. As you heard yesterday, we closed our fiscal year on Friday with over $225 million in sales. That’s up slightly from the $300,000 we had the first year. And I’m really happy about that, but I’m happy about that because at the 225. We’re still small business on our way to being big. And when we hit $300 million, we will still be a small business on our way to being big. And if we ever hit $1 billion, we will still be a small business on our way to being big, because that’s the way that I always want to think – that we are, indeed, the David vs. Goliath.

It’s wonderful to have Rupert Murdoch, Time Warner, McGraw Hill and all out there - not so much as role models, because we don’t want to imitate what they do, but as targets, as opportunities. As I always say, Time Warner, our future subsidiary, did this today… And I say that at the office - and we all laugh, as you did, but then - you know, someday, it may not be Time Warner, but so-and-so, our future subsidiary. And some things have become our subsidiaries, or part of our team that I have just dreamed about in years past.



One of the nicest things happened to me, and to show you that the employees do keep track of things – we hit the $225 million, and there was a little celebration that a couple of my colleagues had arranged for our final management meeting for the day. And they handed me a press release that they were sending out, without my even knowing it that day. And the headline was “Phillips Publishing International Achieves $225 Million Sales Year, And Passes the $1 Billion Mark in Lifetime Sales.” That made me feel really good. $1 billion over 23 years – I hadn’t even been keeping track of it.

Now unfortunately, this was not “Passes the $1 Billion Mark in Annual Profit”. It was just the sales. But I encourage you, when you think you have a relatively small business, to go back and add up all the sales you’ve made from Day One in your business. And boy, if that doesn’t give you a sense of accomplishment…Because each one of those sales dollars has affected your customer. Had you delivering value to individuals. You have made their lives different.

All the employees you have ever had, you have touched. We have 900 now, but I would guess, over time we might have had 1500. I’ll have to go back and add up the number of employees that we affected. And if you believe as I do, that we are placed on this earth to make a difference, and make a positive difference, and leave the world better off than when we came into this world, you’ll get a great sense of accomplishment. And that will refuel your energy cells to go on even farther, and jump out of bed the next day, as excited as you were yesterday.

It’s the process, of course. It’s the journey that’s so much fun. You know, if you’re driving from Washington D.C. to California, you want to enjoy it. And then, when you get to California, what do you do? Well, you can’t drive to Hawaii, but maybe you drive to Alaska. And you just keep setting different goals for yourself. But while you’re on the journey, that’s the fun of it all, and the numbers are just benchmarks. And along the journey, you’re affecting a lot of people, and hopefully, for the good. Hopefully, very positively.

So, how did we do all this? That’s a little bit of the history, and you know, as I said, I’ll take some questions later, and I’m sure Jay’s going to shoot a few at me, but – how did we do it? What was the secret of the success? What was the secret of why we did it and other folks in our industry did not?

And I think it comes to the second topic that I said that I’d talk about, and that is the recruiting, motivating, and training of key business builders. In a word, people. The people that we attract into our organization made all the difference in the world, because that’s what your organization is. It is key individuals tackling a common goal. They are your keys to success, also.

We haven’t talked too much about people. We’ve talked about ourselves in this session, and that’s very important. I think you’re the most key person, if you are the CEO, or one of the key leaders of your company. But also, you have to then spread that. How important are your colleagues? Well, as a team, they’re probably more important than you are.

And I’d like to even suggest that, flipping it around another way, if you got hit by a truck, god forbid, as you leave this seminar, would your business survive? And if the answer is no, then you have some work to do, too, because all of us, someday, will get hit by the truck. It will take different forms. It may be peacefully someday when you’re 99 years old, or it may be that truck, or something in between.

So if you want your business to transcend your lifetime, and if you want to leave something that is still having a good effect on the world, then you need to plan for your own succession. But that’s kind of depressing, to think about planning for your own succession. So if I can suggest, you don’t plan for your own succession; you plan for your own success by attracting the people who can keep you growing while you still are alive, well, and a part of the company.

So, I’d like to repeat what I’ve said. Not only are they your future successes, but as I mentioned yesterday, you really must empower them. It’s an overused word now, but you really need to delegate and motivate. And I think that the excitement that you have for your business is one thing that is very motivating. The agreement upon common goals is very motivating. You’ve heard yesterday about our business building methods of doing a business plan each year, that is a full participatory plan, that is built from the bottom up by your team members. That’s very motivating, when they work out a plan, and then, they make the plan come true.

You also need to be growing yourself. I think one of the things - we’ve been talking about moving out of your comfort zone. One of the most serious responsibilities I feel I have is to personally change in order to meet the changing conditions of the marketplace; the changing needs of our customers, and change and grow to be worthy of leadership of 900 people. They have placed their faith in our team, and in me at the head of the team, and I do not want to disappoint them. I think some of the worst things that are happening in America today are layoffs, downsizings, and firings. What does that mean? That



means that management made mistakes. You know, these people offer themselves for employment. Many of them were doing a fine job, and the management made a mistake. If their management had been growing, and in touch with the marketplace, those waves of layoffs would not have been necessary, in my humble opinion.

That’s different from asking an employee who is not on the program to find employment elsewhere – to find his or her opportunities elsewhere. I hate to use the firing word, but outplacement, or whatever. You should do that; you need to do that, if they’re not on the program after all the attempts for motivation, training, and so forth. But, the mass firings that some of our companies are engaging in - it’s the management failure, not the employee’s failure.

So anyway, I challenge myself to be worthy of leadership, and I’d like to suggest that you need to look, again, in the mirror and say, “Are you worthy of leadership, of your colleagues, and are you doing as good a job as you’d like to in being the leader? The answer should be, as it is with me, a perpetual “No, I’m not doing all I can.” So tomorrow, I try to do even more, and become better. And by constantly challenging myself, hopefully I’m keeping up with the needs of the marketplace, and the needs of our company.

And one of the things I think you’ll find – and I think when you ask yourself about being that leader, is that you need to be the leader, not the doer. And you need to empower your colleagues to take the initiative, and implement. You need to be the best leader, not the best production manager, or the best marketer, or the best sales person, or the best doctor.

I think in the professions, this is the toughest thing to do. Because you’ve been trained, not only undergraduate, but many years of graduate school, or of professional school, whether you’re a doctor, accountant, lawyer, dentist, or whatever. It’s very tough to say, you know, I want to take all those years, and not drill teeth. I want to organize people to drill teeth. I do not want to practice law; I want to organize lawyers who practice law.

Now in that particular case, I’m not sure that that is for the good of society - to get the lawyers even more organized than they are now to prey upon the rest of us. But if you concede that they have a noble profession, then they at least should be organized in doing so.

So I think that that’s one of the things that entrepreneurs have the toughest job doing. Realizing that they are entrepreneurs, they are organizers, and they are leaders. They are not doers. They should not be doers; they should not be micro managing. Now this does not mean abandonment of responsibility. This does not mean hands off. This does not mean abdication. It means somehow that delicate balance in leading, empowering, keeping in touch, giving feedback – it’s much harder than doing it yourself. Let me tell you, it is much harder than doing it yourself. How many – and I will even raise my hand – how many of you have said, even say, within the last year, to yourself or out loud to the employee, “Oh, forget it. I’ll do it myself.” Raise your hand.

OK. Well, we all are humans, and so we fall into “I’ll do it myself.” But you must resist that urge at all costs. It is actually easier to do it yourself than figure out how you’re going to train that individual to do it just perfectly, the way you would want it done. That’s much harder. You’ve got to opt for the harder way, because the second time, and the third time, and the fourth time, they’ll begin to do it better and better, and then they will end up better than you are.

I am not the best marketer, the best writer, the best reporter, and certainly not the best financial expert in our company. Hopefully, by concentrating on the leading - I’m one of the better leaders of our company. And that’s what you all, I believe, need to become. Better leaders.

What key resources – after my remarks yesterday, one of the individuals said, “You told me there were five key resources, and you only gave three.” Well, if you want to write down the five – and I’m trying to give the take-home value – I’ll list all five.

And number one, you all can tell me. What is number one? People – that’s the right answer. Give yourself a star. We sometimes use the word “leadership,” even. People, or leadership. When you’re talking to your management cadre, that is what it is. It’s their leadership. But in totality, it is the people.

Who is one of our most important people in our organization? Our receptionist. Our receptionist has been at our front desk for over ten years. This is not the bottom of the ladder at our organization. This is a very important job, where this individual is empowered to interact with everyone in the outside world, speaking on behalf of our company, and be the first interface, and the first impression that anyone gets of our company. We pay that receptionist very well. She is a wonderful woman. Her name is Millie. I love her. I give her a big hug. She is mature enough to realize the importance of her role. She is celebrated



throughout our company, and I think if Millie should ever leave us, I would be crushed. And it goes on from there. Our people are just so, so vital.

Secondly – and I’ll come back to people, because all of this has been about people – but secondly, our markets. Our marketplaces, or the word we’ve been using here is customers. Our customer base. That is very important. We must have the right people to interface with, serve your customers. So customers are, in a way, number two. But they are the people you are serving with your whole team, and you should love them. And Bob King, who is my partner, as you’ve heard yesterday, has brought us a new level of understanding about our customers, and how to treat them. And I have learned a lot from him. He has been a wonderful teacher, and I was concentrating, you know, probably 90% of my time on our team, and our people, and I even need to be reminded to look out there to the customers. And coming to seminars like this helps me do it, because we’re all hearing about our customers, but also all of you in the room are our customers, and our friends.

And that’s one of the things we want all of our customers to be - our friends, our colleagues, and have a win-win with our customers, where we’re even delivering more value than we promised, and getting in return an adequate amount of cash to continue to reinvest in the company so we can serve our customers tomorrow, and next year, and beyond.

The third is products – one of the things I find is that too many seminars, and too much time within our organization, and every organization, probably is focused on the products before you go through steps one and two with people, and the marketplace. When we don’t want to be in a marketplace, we don’t even look at a potential acquisition, no matter what the product is. I felt that acquisitions are start-ups. People bring us wonderful product opportunities. “We’ve got this great widget you should publish!” “Well, is it in our marketplace?” “No.” “Well, thank you, but there’s somebody else who has better ability to do a good job in that area.” So if you don’t have the knowledge of the marketplace, then you shouldn’t be fooling around with products in areas, or in marketplaces you don’t understand.

Fourth is capital. Now if this were a venture capital conference, all the venture capitalists would think, or say to you that the capital is the most important thing, wouldn’t they? The bankers think that capital is the most important thing. But what is this capital really searching for? The capital is always searching for entrepreneurs to make the capital work. The venture capitalists are looking for people in this room. And so when venture capitalists are out there, or when you’re looking for capital, if you should, unfortunately, need venture capital, which comes at a very high price, remember that they need you more than you need them. Now they will not tell you that, of course. But they need people to work 12 hours a day, 7 days a week, and all they’re giving you is money. Money – very plentiful commodity. The right ideas with the right people and the right marketplace – you know, the money will flow your way. So don’t sell yourself too cheaply to get capital.

And then another form of capital, of course, is, as we said, the bank. Go borrow some money now. Rates are pretty low. Get in on a long-term basis; pay it back.

And then third: remember capital from your customers. Your customers want you to succeed. If they have the ability to pay you up front, ask them to do so. You can then reinvest and serve them better. As we discussed yesterday, unhealthy, unprofitable companies don’t do a helluva lot for their customers over the long term because a bankrupt company can’t serve its customers.

And finally, organizations and systems - infrastructure, if you will. Knowing the people in this audience, I am sure none of them have made the mistake that I have seen others make, though. And that is, you know, you want to start a company. You raise some capital, and you go out and you get the lease on an office. You buy a lot of furniture. You go buy your computer systems. You hire some people. And then you sit down and decide, “What’ll we do? Who will our customers be? What will we produce?”

Now, this is absurd, of course, and I’m exaggerating in the extreme, but think about it. A lot of people fall in love with the organizations and systems. They fall in love with the computers themselves, as an end in themselves. They fall in love with the furniture.

I want you to know that when I started in my basement, I went to the used furniture store, and bought a $250 desk for $65, because it had one drawer broken. And then, I got a carpenter to fix it for $15. That was an $80 desk – an $80 investment for a $250 desk. I still like to do that type of thing. I still like to get extra value, because if I don’t, if I mentally let myself fall into the trap of just paying the standard going rate, as paying retail – we’re not going to profitable anymore. We won’t pass down the right cultural values.



So number one: We still look for a good deal, good value. It was also good value for the store that sold it to me, because a lot of the Fortune 500 companies wouldn’t touch that desk. They had a smaller market for this broken desk.

The most important thing is, though; we still have that desk. We still use that desk. Why? For 21, 22 years now, we use that desk. I personally used that desk for a number of years, and then when we moved to some new space, and realized I’d need a little larger desk, and I thought I wanted, maybe a little better desk, I will admit. I passed this down to the next person in line, and said, “This is a magic desk. There’s great success that comes with this desk, and I want you to have my desk.” And we used it for a few more years, and then that person passed the desk on and said, “Not only did I use this desk – and I’ve had a great career since I’ve been using this - but this was Tom Phillip’s old desk, and you are good enough to receive Tom Phillip’s old desk.” And I think it now is being used by our Telecommunications Manager. I hate to say that I’ve lost track of the desk, but I know we didn’t get rid of it, because we never throw away desks. But, the point was we sort of touched each person’s life. We gave them a little inspiration. We also were very cost effective for the company.

I also do it another way. Any equipment I’ve got, I buy, let’s say, a new desk. How do you buy a new desk, and make 10 people happy? Because it’s the trickle-down effect that the literal economists forget about and deride. But the vice President gets the new desk, and he gives his pretty nice desk to the director of marketing, who gets a new desk, who gives his or her desk to the senior marketing manager, who gives his or her desk on down the line. Everybody gets a new desk. Everybody’s happy, and it only costs one desk, not 10 desks.

Now, this is not apocryphal, this really works. And, you know, I’m assuming that all these desks are still functional, and serve the needs of these individuals. But what I’m trying to also impart to you is that the company has been successful, I think among other reasons, because as we grow large, we try to continue to think small, think entrepreneurially. We want to be the billion-dollar company that thinks like a $10 million company.

Now, getting back to people. This is something that I want to share with you, that I’m not sure I fully understood the first time this guy told me - he was a very wise gentleman – when I was having one of the battles with the government. I met him, and he was the former managing partner of J.K. Lasser, which was a big accounting firm that merged into one of what is now the Big Six, or the Super Six. And he gave me a piece of advice. I was talking about how much it was going to cost to hire someone. All the money I was going to have to lay out for this very capable person. And I was sort of wringing my hands about this expensive hire. And he said one little thing that has never left me. “Hire the best, and cry only once.”

Now think about that, and write it down. “Hire the best, and cry only once.” When you advertise for someone, you should hire the best person, even though that person is not the least expensive. Even if that person blows the whole mental plan you had of the range. If that person can deliver the value, you will wring your hands. You will cry. The accounting department will wail. You will have to think about the other colleagues, and are you being fair to them?

But that person will repay, and build your company far, far more, with much more leverage than being cheap on the front end. And of course, if you look at the flip side of the coin, how many times have you cried over the mistakes that were made by a less competent person? Or a less dedicated person?

I think that by trying to hire the best, motivate them, and so forth, we’ve ended up having a very low turnover, and we have people such as our receptionist, as I said, with us 10-11 years. My personal assistant and secretary, and executive assistant, executive secretary, whatever title she wants, she can have…has been with our firm for 16 years.

Well, I’ll tell you, I wanted to hire the best, and this was after I had had a series of inexpensively hired secretaries. I would never use the word “bimbos”, but you know, they were young and inexperienced, and just didn’t get the picture. But I thought I was saving money until Phyllis came along, and I realized before hiring her that I needed to have someone who was a business builder and would help me.

And she turned down the job the first time. But she took my offer, and went home to talk with her husband, and she called me back the next day, and said, “My husband said that you’re not going to pay me enough, that that’s not enough money, and so I don’t want the job.”

And that terminated the conversation for a few minutes. Now, what is the natural reaction is, “What is a secretary going to do? She has nothing – she’s been hired, she’s dictating our salary schedule? Well, I’ll go on to the next candidate.” And then I said, “No, no, no.” I realized that in the interviews that we had had, we had struck up such a wonderful rapport, and I had such wonderful feelings about what the



relationship could be like, I called her back and said, “OK, it’s a deal. You get the salary you want. I think you’re worth it. And come aboard.” And you know, in that case, I did not let me ego stand in the way. I mean, there have been times I have, and I’ve made some stupid mistakes by doing that. But I really think, 16 years later, “Wow, whatever it was, it was on the order of like, $3,000, or whatever – holy cow, am I glad I spent that extra money, and hired the best.” And I haven’t cried ever since.

And there were a lot of people like that, that we have, with really long term relationships, that we try to get the very best, and cry only once.

OK, how do we motivate these wonderful people, once they’re aboard – motivate and reward them? Well, you heard about the Disney trip yesterday. That was when we had what we called, “Our Double Celebration.” The Double Celebration was 20 years in business, and $100 million in sales, our first $100,000 year. So we took all of our employees, a spouse or significant other of theirs, plus their children to Disneyworld in Florida for a three day weekend. 1300 people went. We chartered six airplanes to leave from Washington. We had lots of space for people coming from our offices in England, California, Houston, Denver, and so forth, and they all – it was like a military campaign. It was so much fun! It was just like a prelude to the Gulf War, and you know, what Schwarzkopf did there – it was very exciting, and it was also great business training at how to tackle a very massive project. Logistics, 1300 people – sort of a prelude to the 500 here. We didn’t have quite as many logistics to get this thing underway, but it was very exciting, and why did we do that?

Well, I felt very appreciative of the people who had worked so hard to build our company, and I wanted to say thank you. I wanted to say thank you to them, but also, knowing the hours a lot of our people put in, to other significant people in their lives, namely, a spouse or whoever they selected, and children, if they had any. And the thing took on a life of its own.

I just went on a nice little weekend, and there have been more benefits that have flowed from that than I could ever have imagined, and I was just attempting to give a gift of thanks to our colleagues. I mean, not only did we get a lot of publicity externally, that now, when we go to recruit, people say, “Oh, aren’t you that great company that took all of its employees to Disneyworld?” But the spouses, in many cases, who have had it up to here with 8 p.m. arrivals of their spouse home, or the weekend work, or whatever - now realize that they were appreciated, and they were included, and hey, maybe this was a little special company that didn’t do things just the ordinary way.

And finally, the kids – the kids had the greatest time, because they went back to their school after the announcement about the upcoming trip, and said, “My mom’s company is taking us to Disneyworld. What’s your mom and dad’s company doing?” And so they got all these bragging rights in school, and it was just phenomenal, because now you had the whole family happy about Phillips Publishing. And this is not the dreaded employer that you hate to go to work to. This is a fun place, and they’re saying thank you. And I hadn’t realized that it would be so profound an effect, and so now, they say, “Well, we’ve got a 25th Anniversary coming up…” I’m not sure what we’re going to do, but I want to make it very special. And I really do.

And I think that the person who had the most fun out of the party was me, because I saw how happy everyone else was, and that’s what turns me on. I’m very happy when I make other people happy. And you know, life, liberty, and the pursuit of happiness are in the founding of this country. I’m not a medical doctor, so I can’t help you with your medical life. I am active politically, and I’m trying to work to help all Americans preserve their liberty, and hopefully, I can help on the happiness scale – both our customers and our team members.

So, I would like to suggest that you think of something, as life goes on in your company, that you can surprise and delight your own team members with something that is unexpected, that shows you how much you care about them; that you really do love them. You wouldn’t take people that you don’t love on a trip with you, would you? You would take your family. Well we took our extended family.

OK. We also have some other things that are very – less dramatic, but very, very effective. We have something called, “Recognition Day.” OK, Recognition Day – write this one down. Now here’s a little participatory thing: How many of you have offices, when someone has a birthday, you have a little cake, or a little celebration, or you make note of it? Raise your hand if you have birthday parties. OK, about half of the firms, at least. That’s the origin of our Recognition Day.

We started having cakes for everyone that had a birthday. And then, we had so many people that it was like – you know, with 50 people, statistically, is one birthday cake a week for the whole company, and it doesn’t work out very well. Because all you’re doing is, every week, it’s another cake. So we decided to group them into once a month, and we’d celebrate everybody’s birthday on the same day for that



month. And it became known as “Cake Day.” And Cake Day – we started recognizing people, singing, “Happy Birthday to You.” “Oh, and Jim, we also want to recognize you because you had your 5th anniversary with the company. Come on up, Jim; let’s give Jim a round of applause. And Jim, say something about your five years.” Hey – and then next month there was another Jim. So then it became two things: birthdays and anniversaries.

Well, we were recognizing an achievement, an achievement of five years, or three years, or whatever number of years at the company. And then, we had some new members of the team attending this Cake Day one time, and it was “Hey, let’s bring Suzy up and introduce her. She’s a new member of the team.” So Suzy comes up. “Hi Suzy, welcome. You are our new Marketing Manager. Say a few words.” Suzy’s petrified. My God, she did not expect to be called in front of the whole company on Cake Day, and told to give her little bio.

Many employees are not as self-confident as everyone in this room coming to the microphones, as you may have noticed in your own company. But Suzy got through it all, and then the next month we offered the same opportunity to Jane, and Jim, who came aboard, or Steve, and Bill, or whatever – so then we had a third thing.

And then finally, one time somebody got promoted to Vice President, and so on Cake Day we said, “Come on up, Dave. We want to give you a round of applause, and we want to recognize you for being elected Vice President of the company.” So we had a fourth thing.

Well, what do you know? We said, “Wait a second – we’re putting the wrong emphasis on this. This gathering is not about cake. This gathering is about recognition of people.” So we actively changed the name of the day to Recognition Day, and sort of banned the use of Cake Day, because we wanted the emphasis to be upon the recognition of our colleagues.

Well this is really a bonding experience, whether it’s someone that’s celebrating a 10th anniversary or not. And during the anniversaries, another thing we do is we recognize with something tangible. On the 3rd anniversary, I don’t know if you’ve seen many of our team members. They are often wearing this little pin that says “PPI.” They’re not required to wear the pin – they want to wear the pin, because they’re proud of being part of our team – at least, that’s what I’d like to think. I will say, you get promotions if you wear your pin.

JAY: Stop, stop – I don’t want to interrupt, but I want to ask an “out-of” sub-comment. Take a

moment of your time. You talk about the incalculable leverage of having people on their own, wanting to work harder, care more, because of the pride, and the connection, because they think that – you’re probably going to say it, but I think it’s so important that people see the exponential leverage in each facet of what you’re talking about. But I don’t want to assume that they’re going to get it subtly. Would you mind?

TOM: Yes, these people take our company as their company, which it is. And I’ll talk about

compensation, and sharing equity, and all that in a few moments. But they are highly motivated, because they want to do well for the company and for themselves, and they are proud of being part of our team. So one of the things we do is recognize that at Cake Day – and I suggest that you develop a lot of symbols that have very important meanings – sort of spiritual meanings. This is a symbol, the PPI Pin. And you get an initial pin, and after three years you get a pin with a little ruby on the dot for the “I”. After five years, you get a sapphire, and after 10 years, an emerald, and at 15 years, a diamond. And it’s just symbolic, but it symbolized, somewhat.

The uniform of the military understands symbols very, very well. And I think we can learn a lot from them. Do not our colleagues in uniform who are defending our nation, risking their lives for our freedom – don’t they have pride? Are they not highly motivated, would they not die for their fellow citizens? Of course. And they are recognized, not through compensation, as we all know. I mean, modest compensation. And not for wonderful opportunities in the civilian world, if they get out. They are recognized for excellence with a number of intangible, spiritual things that are symbolized by ribbons or various ceremonies.

So I would urge you, even as a small organization, not to forget the ceremonial things, the symbolic things that are so important to us, as individuals.

So anyway, so we have Recognition Day. And Recognition Day has taken on a life of its own, and it’s a fun time, and it is a bonding experience. Now everybody sort of slips the word to new employees that they’re going to have to get up and say a few words, so it’s not quite so traumatic, I think. Of course, sometimes when you’re warned about a problem coming up, it’s worse than if you’re called upon.



But it goes very well, and it takes about an hour every month, and it’s a really good experience. It’s a communication experience, also, across the company. So I recommend, if you’ve got a Cake Day going now, that you turn it into a Recognition Day.

OK, compensation play – we started early on paying, as I was saying, hopefully more than the going rate. We’d like to pay a little bit better, because we’d like to get a lot better. But then we’ve put in a very good health plan and all the usual things like that, and then, when we were relatively small, we started a profit-sharing plan, an IRS-qualified profit sharing plan. Now, we define our contribution as a percentage of our profits are put into the plan every year, not a percentage of the person’s salary. And the IRS will allow you to put in up to 15% of a person’s salary into a profit sharing plan.

A personal recommendation of mine – never define the amount of contribution as a percentage of their salary. Always define it as a percentage of the company’s profit. Why? Because that’s where the money comes from, the profits. Not because they have a salary, but because the company was successful enough to make profits. You need to tie your colleagues focus on the health of the company - not, as we were hearing earlier from the stage, not on an entitlement to a job they have, and therefore it’s partially an entitlement.

We also, then, have a bonus plan, where you have an effect on the company; about from the middle ranks of our management team all the way to the top, there’s a bonus system. Or another way of putting it is, from the top all the way down, as far as we can stretch it, when people can have a major swing effect. We have annual bonuses. They’re calculated on results quantified in advance. If you achieve this much more profit or sales than last year, you will get this bonus as focusing.

Finally, we have now a stock option plan. When you become an officer of the company, you are then eligible for our stock option plan. And that is a major step in your career, when you become an officer of the company, and we take it very seriously, and so do they. And then, the stock option plan, which I can’t go into the details, does share the growth of the company with our colleagues who are making it happen. So that seems to be fair to do, rather than hold it all with the President, or the top management of the company.

Finally, we share a lot of the financial details with our people. I recommend one technique. See this? This is called our Green Sheet. This comes out every day showing what the sales for every single product in our company were that day. By the end of the day, the accounting department adds up all the money that came in, makes a Xerox copy of this, and sends it around. And then at the end of the week there’s a cumulative roll-up, and it’s compared not only what we took in this day, this year – but compares it with last year, so you can make progress. And this is sort of a report card on us. How are we doing? Hey, we’re doing well…And indeed, this one that I have in my hand is actually our roll-up for the whole fiscal year, ending last month. We’re 32.2% ahead in sales this year over last year. And I can tell you each and every product.

Well, what does this do? This is a top management information tool, but it is also an empowerment tool, and a communication tool to all of your employees. Why is it on green? Money – I heard it over here first. You want to teach your people that money is good, and that the better the company does, the better they will do.

So this is really – now we’re sharing a lot of information. Most companies don’t show all their employees each and every sales dollar. And then at the end of the month we also share with our entire management team and anyone who is involved in the direction of the company the bottom line, too. The financials go out to about 100 people in our 900-person company. So there are no big secrets about how profitable a product is, or whatever.

What does that do? Well, if you’ve got an unprofitable product that’s highly motivating, you want to fix it so you can be with the rest of the guys, and be doing well, and if you’ve got a wonderful product, you don’t have to brag about how well your product does. You can be very humble, because the Green Sheet is bragging for ya!

Finally, we have an annual report. Why does the company have an annual report? An annual report, because it is a reaching out communications tool. It tells what happened the last year at the company, and it’s very people-oriented. I’ll have one up here afterwards, if anyone wants to see it, but it tells our values. For instance…

JR: You’re a closely held company. TOM: Yes, yes, we’re a closely held company.



JAY: You don’t have to do this. TOM: Yeah, I don’t have to do this, and we’re not a public company. We do not have to do an

annual report. The only thing that this is missing is the bottom line, because for competitive reasons we don’t necessarily want all of our competitors to know exactly what our profit margins are. But there are all sorts of neat things that I would suggest each of you do what would be your equivalent of an annual report. If it’s a corporate brochure that you update annually, fine. If it’s a literal annual report, fine. But we talk about our values in here.

And what this does, is this is great for our bankers. It gives us legitimacy there. It’s a great communication tool internally, and more importantly, it’s a great recruiting tool. When somebody wants to come and learn about your company, you give them the annual report. You tell them what your values are, you show them the bar chart of your growth, and you show them pictures of many of your employees.

The name of each one of our 900 employees as of June 30 of each year is printed in this annual report, because we say thank you for making this possible. And it is something so that each and every employee can go and say, “Hey, my name is in the annual report.” You know, IBM doesn’t put the name of each and every one of their employees in the annual report – they never could do it. But I’m pledged to do that. As long as there is enough paper in the world, we’ll keep expanding this annual report to keep the names going.

It also tells our product line, and groups things. It’s a wonderful…it shows our outside directories, which we have. It’s a wonderful thing. I’ll leave one up here for people to peruse if you like, and indeed, if you are interested I would be happy to send you a copy of our annual report because it’ll do two things. It’ll give you ideas for your company as well as giving you some more specifics about our company, and answering some questions about our company you might have had.

So, I’m going to suggest if you would like a copy of our annual report, which is sort of the story of Phillips Publishing for almost 23 years - please at the end of this session, come on up and give me your business card, and I’ll send it to you within the next 10 days, when I get back to Washington.

So. Those are some of the highlights. I hope those have been practical suggestions. JAY: Wait a minute. Can I wrap things? TOM: Sure, you wrap for me… JAY: Well, I wanted – the first thing, before I wrap – I want to know how much time you’ve got.

Be realistic. TOM: How much time do you want, Jay? JAY: Well, I wish we had four more days, but… Here’s what I want to do. I want to ask you a

few general questions… TOM: OK. JAY: This gentleman stood up, so I want you to – you’ll get to come back, but I want to have

each group, in a minute, discuss the biggest single question as a group you could ask. But I want leverage. I want leverage. I want to get everybody getting the best universal answer that everybody can gain from, so we all get leverage. But I want to ask you a couple things.

TOM: OK JAY: First of all, this is very interesting. Mac was pointing out, if you took my – you know my

three-way business model. Wouldn’t it be incredible if you took my three-way and your three-way… because they’re different; the exponential implications of that are quite profound. Have you got any comments about that?

TOM: Yes.



JAY: Could you share at least one? TOM: Well let me think it through. Um…you share JAY: Let me ask you a different question first. TOM: OK, sure. JAY: You just spoke for an hour – a gracious hour – whatever, 14 hours, whatever you spoke for,

a very profoundly rich period of time. It was wonderful. We appreciate it. You’re getting ready to leave when we’re done with this. You’re in your car going back to Newport, or wherever. There’s one overriding desire in your mind, in your heart right now. It must have been when you made these notes last night – is there an idea that you want to walk out of this room leaving us aware of, and acting on – one, more than anything else you talked about now? What is it, please?

TOM: The vital importance of your key colleagues, meaning people. That’s what drives

everything, and we tend to forget that. JAY: Good. That’s good. One of the things you said, and I want to get you to comment

differently – I’ve always believed that capital was not really hard to get. Most people sell out their everything, including their integrity, to get capital. I always found that money was not hard to get, but if you sold out your integrity, it was almost impossible to get back. Would you like to comment on that for a minute?

TOM: No, I agree 100%. The money will flow from the ideas. JAY: Or the equivalent. TOM: Yeah, the money or the equivalent, right. The capital, the ability, will flow from the ideas

and the values. There was a gentleman who spoke yesterday – I can’t remember who it was - who talked about the fact that he went out…it was the dentist…who went to 21 banks, and finally the 22nd, or whatever, gave him the money based on what they say in banking is the “Four C’s”. One of those C’s is character…

JAY: Yes. TOM: …Believed in him, believed in his integrity, more than anything else. That was a very

smart banker. And that’s – if you go to the right places, the capital will flow, even to integrity. JAY: Well, see, I believe – you’ve known me for a long time. I’ve been divorced a number of

times, and wiped out to the tune of millions, and it’s no great – it’s public knowledge. But I’ve always been able to get anybody to finance, because my ideas…

See, I think ideas and action, those two together, and there’s maybe a better word, are the real commodity of wealth building in today’s society. You may want to…

TOM: And ever more. We are so lucky to be entrepreneurs now, because in the old industrial

age, you needed capital first to build a steel mill, or whatever. You might have a great idea, but you did need the capital.

Now, it’s intellectual capital, if you will, but it’s the most important… JAY: That’s exactly right. TOM: Intellectual capital, to use that phrase – that’s the most important thing. And from

intellectual capital – meaning people, and their ideas – will flow money capital.



JAY: Absolutely good. OK, now you’ve got some great ideas, and you reverse-engineered. You started with the end in mind, and that’s one of the 50 people that I interviewed who were really profound thinkers, and people that I learned from, and my own vision. Most of these people started with a very clear picture of what they were trying to get, and they worked backwards – what had to occur – and broke it down to little steps. And that’s astute, but what do you do if you don’t have this culture - you’ve got 50 or 100 employees? How do you retrofit quickly and effectively and honestly, not just superficially?

TOM: You can’t do it quickly. I’m sorry. JAY: OK, well how can you do it? I’m just asking the question. TOM: OK, you can do it effectively. You need to do it step by step. JAY: What’s the first step? TOM: The first step is: Know where you’re going. Now let me say… JAY: What does that mean? Clarify what that means. TOM: Oh – you know your values, and ultimately where you want to go. Let me give an

example, if I may. We have made a number of acquisitions. We talked about that earlier. Sometimes the acquired

company does not mesh well with your culture. Well, increasingly, we are not making those acquisitions, because it’s very difficult to change the culture.

A recent acquisition was made, not just because we wanted to be in the marketplace, but we were so much in synch with the values of that company – and you know who it is – Doug Fabian, The Fabian Organization. They are a wonderful organization. The shares are values like this. And we’re now going to share each other’s business techniques and ability, but we have common values, common goals.

Now, if you come into a situation where your own company now, or a company you want to acquire – let’s say there are ten employees. What you need to do is gradually make that shift. You just can’t fire all ten – you don’t have a business yet. But what happens is, when Sally quits to take another job, and Sally wasn’t a star performer, and was one of those people who was always whining or complaining, you make sure that Sally’s replaced. So one by one…

What the point is, suppose you even had eight out of ten of your employees who were negative – you know, negative thinkers. So it’s four to one. So one person leaves. Then it’s only seven to three.

JAY: Yes, great analogy. TOM: And then, now you’ve got six to four, and at the time you got even – put it this way. By

the time you’ve got a majority, top management doesn’t have to worry about enforcing standards or whatever…

JAY: I agree, I agree. TOM: Our company – the people who are not fast growth achieving people feel very

uncomfortable. Because they’re hanging around with… JAY: They either rise to the occasion, or they purge themselves. TOM: Exactly. I thought Fran Tarkenton, yesterday – I hope you all listened. The – winners

want to hang around winners. JAY: Yup. TOM: And you should hang around a winner to learn. But also, losers feel very uncomfortable

around winners. They opt out. You don’t have to fire them.



JAY: That’s great, great point. I’m going to add something…I’m going to try to interpret,

embellish, and then ask for validity, or invalidating comments from you. On the concept of acquisition, I would submit – and Tom may argue with me…not argue, like, but

he may take a different perspective…that you have a number of strategic interests in mind. Number one is, it’s a fit for one of a number, or a combination of reasons. Added profitability, the ability to integrate it into your facilities – some profound human capital there that can be used in other things you’re doing…technology, whether it means high tech or low tech, that can be used or expanded on with your nuturement, or your intellectual, human, or financial capital or distribution. You’ve got to question all those things.

Number two: Don’t think you have to have a bucket full of money to acquire something. There are a lot of businesses out there that are struggling to make payroll, and there’s no one else that would buy them. You’re doing them one of the most benevolent services by letting them come into your infrastructure.

Number three: Some people would actually pay you. I paid once to sell one of my businesses to KCI, because there were certain consequences that were more advantageous to me. Give them some thoughts on that. I just want to expand. Do you agree?

TOM: Sure, no, I agree 100%. If you want to acquire something, you don’t have to have a whole

lot of capital. You might say to an individual, “Look, we’ve got a great company here. I want you to join the team, and I want you to bring your company with. And here’s the deal.” (And we’ve made this deal many times.) We’ll buy whatever the terms are, 80% of the company, and you keep 20% of the company. You keep that 20% for five years, and then if you want to leave…

JAY: You get the formula going in? TOM: Exactly – formula going in. And then if you want to leave, we will pay again, and in the

meantime, we will have grown that part of your company, or that product line, or whatever – so big, that you’ll get a double payoff.

JAY: That’s right. TOM: Well that’s great for the selling party, because he or she has a job, an opportunity for five

more years of growth personally, an opportunity to cash out at the end – a double hit. JAY: Compound, tax-deferred… TOM: Exactly, exactly. And it’s also good for this company, because you’re only putting up 80%

of something, but most importantly, you’re getting someone who is highly motivated to keep that company growing.

I’ll be very candid with you. We now are looking at an acquisition in the UK. And the sellers are two entrepreneurs who want to sell, but keep working there, and not have a variable incentive depending upon success, for the next two years when they would work there.

What do you think my answer was to that proposal? NO. Because I want – they sincerely believe, I mean, these are wonderful, honest people. They are Brits, though, so they’re not very risk-oriented, you know, in many cases – and pardon me for any Brits who are in the room…

JAY: I want to interrupt a minute. Explain what security really is. What’s security? Because a

lot of people have this delusionary definition of security, and really, it’s germane. Their assessment of what security is, is…

TOM: Yeah, well they think security is something that is fixed. And they are – I’m not sure if

the word “security” is… JAY: Well, give me a better word.



TOM: All right, let me say this: what they wanted to do, is they wanted something for sure, they wanted it secure, fixed, whatever. But I realized, though they’re honest people – and they really think they will work just as hard in the next two years…

JAY: For no incentive. TOM: For no incentive. Because – they’re wonderful people. But I know that’s not the way the

world works. If I were to sell my company to Time Warner, I don’t know that I would have quite the passion if everything were fixed. Not because I need the money, but just because – you know, the incentive, the excitement, and so forth…a lot of that would be gone for entrepreneurs. Now this is not a corporate – Corporate America, you know...

JAY: No, I understand, I understand. TOM: It probably doesn’t matter one way or the other. There’s not much incentive going there

anyway. But for entrepreneurs to sell out, and not have an ongoing incentive – I wanted it. I wanted them to do extremely well.

JAY: Better, even. Absolutely. TOM: I want them to make tons of money. I learned this from you. If we can help them do well,

the company will do well. Everyone will do well. JAY: I agree. Sounds good. TOM: Anyway, so I had to say no, and one of my negotiating managers couldn’t quite

understand why, because the deal was a pretty good deal, but… And he said, “No, no, these people are going to work hard, they’re proud of their business…” Yeah, but you’ve got to understand human nature. Human nature, especially for entrepreneurs.

JAY: Now, a couple more, and then we’ll go to the audience. Now, this is a tough one, and it’s

not meant to put you on the spot, because I think you have a good answer, but… you’re advocating acquiring fixtures, fixed assets, equipment, etc., at good values. I want you to clarify, because we’re teaching people how to maximize their situation, but a lot of these people here are vendors. So I want you to reconcile that with – there’s some interesting, not disparity, but I want you to deal with it.

TOM: Well, I think you said the key thing: good value. Leverage with every purchase. In other

words, we are now spending… first of all, I wanted to be in a non-capital intensive business. Why did I want to be in a non-capital intensive business? Because I didn’t have any capital. And so I wanted to play to may strength… The ideas, and so forth, was what I had in my head. So I had to make that $1,000 work very well.

Well this year, on a $250 million plus budget, we’re going to spend $5 million on equipment - capital expenditures. Now, I think in some ways, that’s a small percentage of our total volume, but on the other hand, I think, “$5 million – that’s a lot of widgets and computers, and desks, and so forth!”

JAY: A lot of Stick-ems. TOM: Yeah – oh my goodness. This is just too much. But what it is? It’s a whole new call

management system for our 800 number. It’s a whole new system for our accounting. It’s a whole new telephone… I mean, all this stuff, when you’re going, that you just seem to need. Every new employee that comes aboard needs the PC, the set up - $5,000, boom, out the door for every new employee.

JAY: How do you reconcile yourself with that? TOM: Well, I realize it is a means to an end of success, and therefore it is necessary. What I just

don’t want to do is have our people fall in love with it as the end. In other words, the MIS Department



should not run the company. The MIS Department should help the business builders run the company by supporting them. People who fall in love with their capital…

JAY: I understand. I have one more question, and this is a reverse one. What do you think they

should get out of this process, and out of me, more than anything? Because you are my publisher, you and I have had a very interesting relationship, directly and indirectly. You’ve experienced most – and I laud you for participating at the level, and taking notes at the level. What do you think they should get out of this, or they should see this as? And I’m not talking about me, but if they can see me vehicularly as a catalyst, that’s good.

TOM: Well, maybe three things. Number one, the phrase has been used here so often. Think out

of the box, or what I would call, think creatively, non-conventionally, non-linearly, and the reverse – the contrarian thinker.

JAY: Can you tell them why? TOM: Well, because that’s the way to profits, fame, success, happiness – when you’re small, you

can’t do things that the big guys do, just to get big. You’ve got to change the paradigm, change the rules of the game. And that’s so much fun, as well as being successful.

JAY: It is, isn’t it? TOM: It is, it’s just great. I will not become McGraw-Hill by doing the same thing, and imitating

McGraw Hill. I have to out-think, out-smart, and do things almost opposite. It’s like contrary investing – you know, don’t go with the crowd. Listen to your own insight.

Alternative health – I mean traditional health these days… I don’t want to get into too many other subjects, but you know, traditional medicine is intellectually bankrupt now, and good health, as Denis Waitley was talking about – vitamin supplementation, behavioral modification – that’s the way to go. But where is all the money being spent in this country, by the government, and all the institutions? On old, traditional health.

So, you’ll never get well by thinking the old ways, and you’ll never grow your company by thinking the old ways. So that’s the one thing.

Then secondly, I think one of the most important things that you will get from this conference is the feeling that you are not alone. How many of you have thought, during troubled times at your company, or when you are the only one thinking the way that you are thinking, and you just can’t explain it, or get the other people to catch on, that you’re alone. And you think, “Am I crazy? Or is the world screwed up? Is the rest of everybody else screwed up?” You are right. And the nice thing about this thing is, you will remember that there are 500 other people from all across not only this country, but other parts of the world who have gathered together, and share many of the same goals and values and vision that you do, and that you are right. And that this is the right way, and I’m sure you will draw strength from that forevermore.

Attendee: My question - or my table’s question is, How do you identify, and what process do you

use of knowing when you’ve found the best person? TOM: Well, we do very extensive interviewing. I look for certain things on the resumes.

Number one is achievement in his or her career, and number two is education, because education is achievement. If you’ve gone through the routine of getting a very good education, you’ve believed in yourself very early, you’ve got intelligence, and so education is important. And you know, good schools of formal education is one thing, but also the layers of, have you been to the Jay Abraham seminar? Have you been to the direct marketing school of this? Or what have you done to self-improve? And then what have you achieved? Have you been with a winner organization, or have you been with a loser organization? And how often have you changed jobs? We have a long retention of people. If they’re early in their careers, it’s fine, you’re sort of shopping around to learn what you’re good at, or what you’re not good at. But those are some of the key things.



JAY: Any - not trick, but any pivotal questions that you ask that are so revealing that most people wouldn’t think to ask?

TOM: Well one is, if you didn’t have to earn money or work for a living, what would you do?

And then, they really tell you. And the right answer is, “I would still want to work for your company.” But the wrong answer is, you know, you’ve had people come in and say, “Well, I can’t wait till I earn enough money, because then I want to quit, and I want to go to Alaska and live with the Eskimos” or something. There is somewhat of a disconnection between their life goals and the business goals, and they should be in harmony.

JAY: And there’s a point you’ve got to make. It’s not fair to them, as well as you. Part of this is

not self-serving or manipulative – you’re not doing them any service if you don’t put them in a situation conducive to what they want.

TOM: Exactly. They will be unhappy. JAY: Exactly. TOM: And I do not want people to be unhappy. JAY: That’s great, OK, thank you. OK, now, back to… Jerry Sharum: Tom, my name is Jerry Sharum. I’m in the supply business. They asked the

question that I was going to ask, but I want to take it one step further. In addition to doing interviewing, do you do any kind of personality testing?

TOM: No. Maybe we should, but we do – we learn the person’s personality through a series of

interviews. We’ve talked about whether we should do these standardized tests. I don’t know that they’re – it’s not a policy decision, it’s just that we’ve never got around to it. I’m not opposed to them.

JAY: Can I make a suggestion? I think he actually gets a very good feel for their psychological

makeup by the self-induced pressure they put themselves in, because their interview process is not predictable, really, is it?

TOM: Right. JAY: Sometimes they’ll see you every two weeks, sometimes it might be – I think you do that,

perhaps, strategically on purpose to see how the prospect is. You’re evaluating, and contemplating, and formulating what to do with them or the division. You’re also watching how they respond to a more contemplative process.

TOM: Right, exactly. And how much tenacity do they have, how much patience do they have,

determination… JAY: And whether they really walk their talk each time. TOM: Right, exactly. Also, you know, some multiple interviews over multiple days with

multiple people, and then, you know, when you gather all the information back, if somebody’s telling you a line eventually it shows, because they’re all over…

JAY: They breach somewhere. OK. Good. Steve Wyles: Yes, my name is Steve Wyles, and I’m an opthamologist. I would like your

recommendations, please, on how to introduce the concept of sharing the profit and loss with your employees when, for the last 25 years, that hasn’t been done.



TOM: Oh, you take the next time you would do an annual review, however often you do it – every once, or one month, or on their anniversary. But you would say, “My opthamology practice has had a very good year, and I want to give you this bonus, and say thank you for helping make it a good year, and here’s the $1,000, or $10,000, or $200 – whatever it is. I’m going to be setting up a program for the coming year, and I’m going to set aside X% of the profits. I’m going to share it with you and the other employees at the end of the year. And if we have grown our profits from $100,000 to $200,000, or whatever the numbers are, I’m going to share this portion because I value you, and I know you’re making a contribution. I want you to know ahead of time, and I want you to be empowered to help us do that.” And then a year from then, I would guess that if you’ve got the right people aboard, they will have helped you share your practice, and they will share in it. And they will be happier, you will be happier, and everyone is a winner. You’re a winner, they’re a winner, and your clients are winners, because they’ve gotten better treatment, more attention, more customer-friendly, patient-friendly service because the individuals care more.

JAY: Thank you. Attendee: You were talking about how you compensate people with profit sharing, and what I

didn’t understand is how you can do that without it being a reflection, or a percentage of their salary. And we talked at the table there, and people had a few ideas, and a few models of how it’s done. And some of them seemed like…

TOM: All right, I’ll tell you the mechanics are you take a percentage of the company’s profits.

Say, oh, let’s just take an abstract number. Say we had $1 million in profit, whatever company it is, and you say, “I’m going to give the employees 10% of our profits.” And so you take $100,000, and then you divide it up among employees as a ratio to their salary, and it turns out to be a percentage in their minds, perhaps, or it’s two week’s salary, or whatever it turns out to be. So it’s related to their salary, but it comes from a percentage of the profits, plus, you don’t define it as a percentage of their salary. Some of the profit sharing plans say, “We will pay you 10%, or 15%, or 12% of your salary out of the pool of profits. And it always is 12% of your salary, no matter whether the company is terribly profitable, or not so profitable.

Attendee: And does everybody get it? TOM: Everyone in the company gets it, yes. All 900 people, once they have – well, but there’s a

wait – an IRS waiting period, I think that it’s up to a year. So in the second year you get this. And it’s put into the profit sharing plan, which then compounds, tax free, until your retirement, or you leave, or whatever.

JAY: One last question, and it’s an embellishment of this gentleman, but – in people who are

more result-critical, do you have supplemental programs for them too? TOM: Yes, for the people who are more result critical, which is the word that’s being used, we

have other additional plans. There is the bonus plan, and the stock option plan, and promotions, and raises. JAY: Are those in lieu of, or in addition to, or… TOM: In addition to the base salary. Oh also, Bob King came up with an idea. We had such a

wonderful, wonderful year this year within one of our subsidiaries, even more than the oldest subsidiary itself – Phillips Publishing, Inc., subsidiary of Phillips Publishing, International – went over $100 million in sales, highest profits ever. And so Bob had the idea which I approved and endorsed and participated – we gave each of our employees in the Phillips Publishing, Inc. subsidiary five extra vacation days to be taken whenever they wanted over the next 15 months – this summer all the way through ‘til the end of next summer. Because they had been working so hard, they had produced. They had results. And when we tied it to the fact that we had results, and therefore, we could afford to do that. So now, each employee has extra vacation time, and that’s been very wonderfully received.

JAY: Great, OK



Steve Miller: Hi Tom, my name is Steve Miller. I own a small, growing advertising agency. TOM: Oh great. I started my career in advertising agencies, as you may have heard yesterday. Steve Miller: You said yesterday that you, once a year, for one month, completely rewrite your

business plan? TOM: Yes. Steve Miller: We were curious, at our table – how do you do that? What five major steps do you

take to sit down and do something of that size and undertaking? TOM: Well it’s an annual business plan, and it’s a budgeting and business planning of every

product, from the bottom on up, and we just started the first year, saying, “OK, what did we do last year? What do we think we can do next year?” But we now – it’s a lot more sophisticated than that. I don’t have the time now, to go through all the steps, but…

Steve Miller: But the answer is, Tom, you don’t do it. You don’t do it – your people do it. TOM: Yes, that’s right, exactly. I don’t do it. All the individuals do. For instance, the

individual looks at his individual product, and say, the publisher, or the direct marketing manager, or the group publisher will look at a group of products. It’d be like – if I may use an analogy in your case, you’re looking and evaluating each of your client relationships every year. How much did they spend last year? Are we going to get 15%, or 17.5% of this? What did the economy look like? What are their product lines? What’s their competition? What’s their budget going to be, flowing to us? How can we get more of their budget? How can we cut out the competition of other ad agencies, and get, you know, all of their lines of products advertised, and what do we need to do in hiring key people to build this account – the whole thing. The whole budget, but we don’t call it the budget, because it’s a business plan; it’s a rethinking of the business. And then, you just do it, and if you’re living your business all of the time, this is the time to sort of step back, and you get a little bit better perspective than the day-to-day. I mean, I don’t know if that’s helpful enough, but there are a number of –

You can ask – anyone who asks, who wants to delve into our business planning at greater depth, and I hate to do this to my colleagues, but they all know how the plan works. So any Phillips Publishing employee should be able to help at this conference. They will give you a few more insights, but I really can’t in this time frame. Don’t hesitate to question that.

Attendee: Greetings. I think that’s a great idea. My company this last year, I would describe as

sales being flat. They were up, however the profits were down. We don’t currently publish anything like that, however, the grapevine went through the company, of course, and the information was readily understood that the company wasn’t faring as well as it might have in years past.

So if I publish something like that the question is: In your experience, when you publish that, you have something now that is very visual. That they can see that we’re either up or down on a monthly basis, or an annual basis. That information can either be demotivating, or it can be stimulating. So tell me how it’s been for you, and if it has been demotivating, how you’ve dealt with it.

TOM: Well we try, obviously, not to have it demotivating. Normally it is stimulating, but it’s

always one of these self-fulfilling phenomena. If you’ve got a team of winners, they don’t want to be involved in something that is not winning. So if it’s a behavior problem, they are encouraged, with our help, to change their behavior to have more impact on the marketplace. If it’s a marketplace problem, then we look – do we want to be in this marketplace, where we’ve merged this into? If it is a product problem, that puts a lot of heat on us to work with the editor, or writer, or whomever is helping us create this product, to make it meet the needs of the marketplace. And then eventually what it does, is after too many months or years of it being negative, if it isn’t losing money already –

I’ll put it this way: it helps you shoot the bad products, or kill the bad products. I’m not very good at that, because I fall in love with my products. I confess. A weakness of mine. I told you not to do it. It’s



a deadly sin, which unfortunately, I do. I love these little products that are going to be the next multi-million dollar winner. It just is going to take too long, and too much money. So some of the people who have better business training than I, and more discipline than I remind me that we should be continuing forever, if something is a lost cause.

JAY: Good. Thank you. Jeff Mavis: Hi Tom, I’m Jeff Mavis. TOM: Hi Jeff. Jeff Mavis: I’m a freight forwarder. As you know, probably most new businesses don’t make it.

And I was wondering if there was a milestone in your business where you came to the conclusion, “My business is viable – it’s for real now.”

TOM: Well, I’ll put it this way. I never was worried about making it, because I wasn’t smart

enough to know that I couldn’t do what I did. I was fortunate enough not to go to business school or have an MBA, because I would have spent my time on the wrong things, because they don’t teach, as my son was saying, “entrepreneurial stuff”. They may teach accounting, and finance, and marketing, and so forth, but it’s not, sort of the real world. But it’s a wonderful foundation, a great framework. But then you have to go beyond that. So I probably would have been bogged down in the wrong stuff.

I guess it was a gradual thing. The way you end up having enough money in the bank every time to meet payroll. You end up the first year with money in the bank, and we didn’t start with any money in the bank. When you can attract and retain employees. When somebody says, “Hey, you’re quite an entrepreneur yourself.” You get so close to your business you don’t know whether you’re successful or not sometimes, until somebody else sort of validates what you’re – “Hey, you’re doing pretty well.” “Oh, I am? Oh yeah, I guess we are.”

So it was no one point, that, you know, on April 12 of 1982 I said, “We’re a success.” And in fact, one of the points – that you never can rest on your laurels. You’re never a permanent success. We’ve been successful so far, and if you get overconfident, you get arrogant. If you become arrogant, you are ready for a fall, and the marketplace is going to teach you a very expensive lesson.

JAY: Good, OK, next. Jeff Brandt: Hi Tom. Jeff Brandt with Summit Limousine up in Detroit, MI. TOM: You’re from Detroit? Jeff Brandt: Detroit, mmm hmm. JAY: What’s the business? Jeff Brandt: Summit Limousine. You and I spoke – Jay and I spoke last September on the

phone, and some of you may have seen me in the November newsletter. JAY: How are you doing? Jeff Brandt: Doing very well, thank you. JAY: Did our conversation help? Jeff Brandt: Yes, yes. One of the things that we did is, again, we’re in the limousine business, so

luxury and upscale is pretty much what we’re all about. One of the things that Jay and I discussed was possibly cross-selling our clients. Case example, here – one of our clients had gone out and purchased, after our conversation, Jay, a private jet. Long story short, I started cross-selling time on his jet to all the



other clients. Now I’m literally making money sitting at home watch – well, not watching TV, but…sitting at home reading the massive bulk of my pre-attendance materials.

JAY: Is it working? Jeff Brandt: Making money, sure. While these guys are flying my clients around town. JAY: That’s great, that’s great. What’s your question? Jeff Brandt: My question is specifically about newsletters. If I’ve learned anything here, and

from Jay’s newsletters, that is – and from talking to all of you, I think we’re all convinced that our core service is nice, but I’ve got a real big feeling that there’s a lot better ways to make money, based on my core service. And Tom, my question specifically is about newsletters. Let me give you an example.

Right now in Detroit, the Detroit Metropolitan Airport, which my company visits on a daily basis, dozens of times, is undergoing a massive, $1.6 million expansion. I have spotted a need not only to my clients, but to everybody who travels in and out of that airport in the Detroit area: To put together a newsletter which is really designed to have me go and do all the legwork, gather all the information as to what’s going on at the airport; which parking lots are going to be open, closed; what the rates are; when this part of the airport is closing; when the new terminal’s going to be underway, and whatnot. So I’m going to be the man who’s doing all the legwork, and I’m going to put that in the newsletter. My very strong feeling is that for myself, and for perhaps everybody in this room, to put it in Jay’s terms, this newsletter for me is a very strong pillar to my parthenon.

Am I on target there, A; and B, if I am, do you have some tips for what produces a productive newsletter?

TOM: Wow, this is a whole course, but let me give you several principles… Jeff Brandt: I’ve got the time. JAY: That’s gracious of you! TOM: Number one: There are three types of newsletters: subscription-driven newsletters, which

all of you subscribe to, such as Jay’s, which a publisher creates, solicits subscriptions, gets them in, and fulfills a product. It’s a one-on-one relationship between the subscriber and the editor or publisher, or whatever.

Secondly, there are free newsletters that, you know, your church passes out, the PTA passes out – all those things. Entirely different category. Charitable things, free internal PR newsletters for companies…we even have a newsletter ourselves within our company. That’s a second category.

And then a third, our contract newsletters. I would suggest that your area – it might be neat for you to try to do a contract newsletter, where you would do all of this work and then you would have a contract with the Detroit Metropolitan Airport Authority, or whatever it is…to produce this on a monthly basis, or whatever, and distribute it to all of their constituencies that need to know what’s going on. And that could probably be funded through the PR budget of the Airport Authority, or the advertising budget, or the chairman’s slush fund, or whatever. Because you’d be providing a service to their customer, and most organizations like that aren’t good at gathering information, reporting, and taking it to the printer.

You don’t want to fall into the trap of being just a printer. JAY: Last question. Ted Pulitz: Hi, Ted Pulitz from Toronto. My company is Ingenious Growth Strategies, and I’ve

been positively taken by your talk, because I recognize the essence in you, in business, which is an enthusiasm to enjoy what you do. I would attribute that to probably your success.

I’d like to know what you do on a daily basis to – what you feel, on a daily basis. TOM: What do I what on a daily basis?



JAY: He’s trying to run a model of your mindset, other than what you’ve said. He’s saying on a daily basis, how do you think, other than what you’ve said. He’s trying to think – he’d like to mirror you…he’d like to grasp…

Ted Pulitz: Yeah, I’m intrigued as to, what is it that you derive on a daily basis that you come

away with, that’s positive to you? That continues to go on, that continues you to grow the company? TOM: Well, the very people that I spend my day with. I love the people I work with. I mean,

it’s exhilarating to interact with them. I want more time with each of them. I just run out of time to be with people, and exchange ideas, and I like to walk around the office. I enjoy the recognition day. I like to meet all new employees. We now have a Monday morning training and orientation session, and I’m disappointed when I’m away from the office, because I can’t meet the new employees and welcome them.

Now also, what I am doing during my whole life, and what is going on in my mind, is I am dreaming. I’m dreaming what we can become, because this is all just starting.

Ted Pulitz: Are you living your dream? TOM: I’m living – sure, I dream my dream, and then I make my dream come true. Ted Pulitz: Can I make one mention, Jay, if you wouldn’t mind? I’ll just take a second. I found

your talk very interesting, and I think the business about going the extra mile and really enjoying what you do, and so I’d like to act as a mild catalyst to your $5 million endeavor. And I would imagine there’s quite a few people in this room that could assist you in reducing that $5 million expense this year, in ’96, to perhaps 2 or 3. So therefore, I’m just acting as a catalyst, and if you could put your business card perhaps up on the stage, and offer your product or service at no cost - or for no profit - to Tom, in helping him grow his company, because he’s trying to help us grow ours, and there’s a substantial savings.

JAY: And then, you know, if enough people do it, you can bid on how much you will pay him to

take your product. TOM: Well, let me thank you for your thoughts, and your goodwill, but I will say this. I would

love to work with a lot of the people in this room when we have products and services that we can exchange. We have exchanged products and services for this conference, because we helped Jay organize it. But they’ll be products and services you have that we can profit from. But I want you to make a profit on our relationship.

JAY: He has to. And tell him why. TOM: Exactly. You have to, not only to survive, but I want you to do more business with us. I

want you and your team to think of us as the most important client; the most profitable client; the first client you call. And so, if it happens to be by reducing our cost, that’s great, but I don’t want it to come out of your hide. I want it to be a win-win.

JAY: Thank you very much. Ted Pullets: Thank you. TOM: And thank you, very much. And if I may say, I want it to be a win-win for all of you.

END

encounter! with jay abraham and tom...

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