Insights On Success From Greg Alexander A CEO Who Has Disrupted Three Industries
After interviewing about 1,000 CEOs, I recognized immediately that Greg Alexander was a true visionary who in fact has reinvented three industries. I thought his insights on sales, growth, and disruption would prompt ideas for CEOs to leapfrog competition by actually disrupting an industry. And on disruption, Terry Jones, who founded both Travelocity and Kayak once told me, “disruption and innovation are the same thing; disruption just happens when they are doing it to you.”
Robert Reiss: At Sales Benchmark Index you were able to average $1 million per employee; what are the specifics of how you accomplished this type of highly successful revenue model?
Greg Alexander: We did three things different in comparison to other professional services firms. 1- We “productized” our service offering. Our engagements with clients were no unique snowflakes but rather were standardized solutions. This increased revenue per head by allowing employees to complete work faster by moving rapidly along the learning curve. 2- We automated many manual tasks with technology solutions. This reduced task completion time from hours to microseconds. This increased revenue per head by replacing people with machines. 3- We leveraged the gig economy by tapping into talent marketplaces. This increased revenue per head by leveraging fractional headcount on demand when needing to flex up or flex down capacity.
Reiss: What lessons did you learn about acquisitions after selling SBI a decade later for $162 million?
Alexander: The primary lesson I learned about acquisitions post exit is to ignore the experts. For example, most experts told me that a people driven service business with no assets would never be able to exit, or if it did exit, it would be for a low price and on unattractive returns. I sold SBI for $162 million, at ~10x EBITDA and got paid upfront with no earnout nor equity roll. This is the largest exit of its kind in the history of the industry (sales consulting) so clearly the experts where wrong. The moral of the story is build a great business and there will always be a market for it.
Reiss: Describe the model of Collective 54 and how it is different than any other business?
Alexander: The business model of Collective 54 is a membership. This means we do not have customers, nor do we have clients. Rather we have members. What is the difference? A company who sells a product has a customer. The customer spends money to acquire the utility of a product and the best product wins. A firm who provides a service has a client. The client spends money to acquire a service to be performed and the best service wins. An organization who provides a membership has a member. The member spends money to belong to a community of peers and the best membership wins. Therefore, it is the nature of the relationship between provider and consumer that distinguishes Collective 54 from others. Collective 54 is not selling a product nor providing a service. It is curating a network of similar people, with similar wants/needs/desires, and facilitating the exchange of ideas between and amongst the network of peers. It is peer-to-peer knowledge exchange at scale. This business model has been around for ~75 years with wonderful examples of success, such as YPO, Vistage, EO, World 50 etc. Collective 54’s application of this business model is unique. Collective 54 has applied it uniquely in 3 ways: 1- specialized to the professional services industry. We believe peers learn best from peers from the same industry. 2- specialized to the boutique segment of the industry (less than 250 employees). We believe peers learn best from peers from firms of similar size and scope. 2- specialized to the founder. We believe peers learn best from peers in the same role.
Reiss: Lumini is the only model of its type reaching the 7 million Executive Assistant’s. Discuss why there is a void, and the importance of elevating Executive Assistants to the CEO. Also share some of the specifics EAs will learn …
Alexander: CEOs invest heavily in the professional development of their direct reports, such as their CFO, chief product officer, head of marketing, etc., The executive assistant is a direct report to the CEO and a member of his/her team, yet, he does not invest in her professional development. Why not? Historically, the CEO was supported by a secretary, or as they were referred to as an admin. The task these admins performed were not strategic in anyway so professional development was not needed. As time went on, the always on digital empowered CEO began to rely more heavily on the executive assistant as his life got more and more complicated. This created a need for a next generation of executive assistants with superpowers. Yet, the CEO had nowhere to send his EA to get developed professionally. Into this void, Lumini Network was born. It is the first membership organization designed to elevate the 7 million executive assistants by professionally developing them. The benefit a company realizes by becoming a member of Lumini Network is a more productive CEO and a more engaged executive assistant. A use case might help to understand how it works. Here goes: Cyber security risk is a top priority for CEO’s today. Most have a company wide initiative to reduce business disruption caused by a hack. The executive assistant is not included in the cyber security program yet, she has the CEO’s credit card information and log in credentials to all the mission critical systems. Leaving her out of the cyber security program is an unnecessary risk. Lumini Network eliminates this risk by training the executive assistant on cyber security best practices.
Reiss: As you’ve disrupted several industries already, what advice do you have to CEOs about disrupting an industry?
Alexander: We (me and team) have disrupted 3 industries- the sales consulting industry, the boutique professional services industry, and the executive assistant industry. And we plan to disrupt several more. The one thing that is common amongst these examples is an under served customer. For example, in the case of SBI, the client was being served by generalist which resulted in poor outcomes. SBI served the client by being hyperspecialized delivering superior outcomes. In the case of Collective 54, the founder of a boutique looking for help had to spend unproductive time curating his own network on general platforms such as LinkedIn. He did not have the time, as he operates on the billable hour and spending time on LinkedIn literally cost him money. Collective 54 does it for him, and because of the highly specialized network, he gets superior outcomes. In the case of Lumini Network, the Executive Assistant was just flat out neglected. We proved to the CEO that the he depends heavily on his executive assistant, she was on his team of direct reports, and therefore, deserves the same professional development opportunities.
There are lots of underserved customers out there. If you want to be a disruptor, locate and serve them.