| Teaching Notes
& Study Guide
with Neal Patterson |
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| Key Ideas.
Key Idea #1: Be aware of trends. Neal is a CPA, and his first job out of college was with a big six firm. He was hired to help the firm's clients develop the software they needed to manage information. Instead of merely "doing his job," Neal began to notice that most businesses could benefit from special application software if it was available. Believing this to be a future trend, Neal searched for the "right" industry to launch his idea -- an industry dependent on information. He chose health care. You think back: What is a trend and how is it identified? Answer: A trend is current style, what's "cool," or what many people are doing at the moment. Demographics can predict many trends. For example, Baby Boomers are aging, so they are saving more money for retirement. Medical advances help people live longer which means that more long-term care facilities are needed. What do you think? How did Neal identify the need for special application software? Possible answer: He was working with many companies who wanted customized software. He took action on his idea which is why he has a business today. Many see trends and even know what to do, but they don't do it. Big
Idea #2: To grow your company, the best money to
use is your own profits . What do you think? Why was it better for Neal to use his own money to grow? Answer: It guides his every decision about what to include in his catalog and what the catalog should look like and how his salespeople handle calls. Because this country was and is being built by new wealth, Bob is helping this growing sector acquire the trappings of the fine life. He also knows that we need to be taught. If you borrow from a bank, you pay interest.
If you raise money publicly, many people own a piece of your business, and you
are obliged to produce annual reports, hold stockholder meetings, etc. If you
use venture capital, you will likely give up an even greater amount of
ownership. Key Idea #3: Owning a business takes courage because you put yourself at risk.. Neal had a good job, made a nice living, and enjoyed a comfortable lifestyle before he started Cerner. The word "lifestyle" includes the kind of car you drive, the kind of house you live in, the people with whom you associate, the hours you actually work and your status in the community. Neal was willing to risk his lifestyle to try his idea. As the company has grown, the risks have increased, rather than decreased, because growth requires capital investment. For example, when this story was taped, he had just spent $30 million dollars to buy a building complex for Cerner. You think back: When have you taken a risk to act on an idea? Answer: Example: You think that it might be fun to learn how to ice skate, but you've never tried it and you're already 20 years old. You assume that everyone your age knows how to skate already; therefore, you'll look stupid. If you go skating, you "risk" embarrassment. The good news is that the more risks you take, the easier it becomes. Many founders of companies took great risk to start companies because they always knew they could pick themselves up and start over if they failed. Others find ways to minimize risk: Geoff Allen started so young, he was living at home with his parents and was still single. Since no one else was dependent upon him, his risk was easier to assume. Yvonne LaFleur advises women to get their businesses started before they have children. Key Idea #4: The sociology of business is the most difficult part . Neal now employs over 1,000 people whom he calls associates. He believes in people and trusts them to do what they say they will do. Of course, some people have disappointed him, but they have not changed his fundamental belief. You think back: How will a basic belief in people affect the way in you hire and manage? Answer: You give people the benefit of the doubt. You offer people the chance to do their work without close supervision. You will be able to attract talented people who enjoy a challenge. Key Idea #5: Don't make yourself the center of your thinking . Some people start a business to get rich. They take the profits out of the business to buy homes, to travel, to drive expensive cars, to live the life of luxury. According to Neal, this kind of thinking stunts the growth of the business. Instead, think of ways all the people who work with you can benefit. When other people benefit, they contribute ideas and increase the results of the whole. By including others, you leverage your efforts which can result in larger personal profits. What do you think? Why is it difficult to think of others first? Answer:You are taking the risk and sometimes you feel you're the only one really working. However, if your vision is large, you know that you cannot do it alone. Big
Idea #6: Visualize the company 5-10 years What do you think? Why don't we all take time to imagine our future? Answer:We're too busy dealing with the day-to-day problems of life. You can practice visualizing the future by writing a description of your life 10 years from now. Close your eyes for a few minutes and imagine what you look like, where you live, what kind of work you are doing. Key Idea #7: Discounting can be dangerous. |
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