Speed Freaks

Fast food. Fastball. Fast lane. Fast track. The world moves fast. Ken Libman knows that.

Libman, 41, owns Libman Wolf Couples (LWC), an interior architectural firm in New York City. Even with the economy booming and new businesses popping up left and right, he's had no problem keeping up. "We've doubled our growth every year," he says. And so in the five years since LWC's founding, he's built a company with an expected revenue of $50 million for 1999.

Libman moves fast. He talks fast; he thinks fast; he works fast. His customers expect it. "They say `If you can move me in two months earlier, that's a lot of money to me,' " he says. Libman has architects, engineers and contractors all working for him under one roof, which means his firm is self-contained, and that helps his speed. When the company's work load is heavy, employees occasionally work in three eight-hour shifts that go around-the-clock. Saturdays and Sundays are not off-limits if a deadline is fast approaching.

But Libman's speed goes beyond that. He uses his money liberally; he says he hires the best talent ("steal them and overpay") and can often get his vendors to work more quickly by promising to pay them half of their fee upfront. This way he can often make the end cost less. (If a vendor wants $100,000, for instance, offer to pay $80,000 but fork out half of that upfront.) But maybe his smartest decision has been to not fear technology.

"Technology is moving very quickly," says Libman. (Yeah, tell us something we don't know.) So Libman encourages his workers to attend seminars and classes, and to stay on top of things. But because even business owners can't dictate what people do in their free time, Libman brings the seminars to his workers. "We're dealing with so many vendors here--whether it's telecommunication vendors or furniture vendors--twice each week, we have seminars, and they come in and educate us." Since the vendors are eager for LWC's business, they do it for free--and what's more, Libman has his vendors bring his staff lunch!

And should employees decide to pick up a job-related course or two after hours, Libman foots the bill. Score an "A" in such a college course, and Libman picks up the entire tab. "B" and "C" marks earn financial reimbursement of 75 and 50 percent coverage, respectively.

Don't forget to treat your workers right, Libman stresses. "Treat your people like gold to get them motivated and to keep the synergy high, so they all move in one direction."

The strategies have worked for Libman, who says a recent self-conducted study shows his company is 28 percent faster than its competition. As McKenna says, "You don't have to be the fastest business. You just have to be faster than your competitors." Has Libman put any thought into how fast the business world will move five years from now? "I haven't," he admits, "because if I did think about it right now, I just might fall out of my chair."

It's probably just as well that Libman hasn't considered it. After all, flying too fast can burn even the best of us. O'Reilly notes that People's Express was once the model of a firm that was fast on its feet. Between 1981 and 1986, the commuter airline went from a staff of zero to 4,000, and had a revenue of almost $1 billion. But during the next two years, they tried to do too much, too fast. "They lost it all," says O'Reilly. "They imploded."

Even Wyatt Earp knew a fast draw could be too fast, says Darby. Earp, the legendary lawman who blazed his way through the O.K. Corral, would routinely sacrifice some speed for accuracy. He must have known what he was doing. He died in 1929, shortly before his 81st birthday.

5 Ways To Be Faster

1. "If you want to be slow, develop a lot of rules," warns Stanford professor Charles O'Reilly--so don't have too many rules. O'Reilly gives the example of PSS World Medical, which provides medical supplies to physicians' offices (to the tune of more than $1 billion since 1993). "Part of their success is that they've guaranteed same-day delivery of supplies, so if a doctor needs tongue depressors, he or she will get them that day." The competitors haven't matched that, says O'Reilly, because PSS has less bureaucracy. Each "store," or distribution center, has enough autonomy to do whatever it has to do to get the job done. Meanwhile, the competitors' stores have to go through headquarters before filling their orders--wasting valuable time.

2. Share data with everybody--realize your employees are smarter than you think. O'Reilly says British Petroleum (BP) has been a huge hit around the world because if a gas station in Borneo has some pertinent information, it has the resources to quickly let everybody in BP know of its ideas, and suddenly the BPs in the North Sea are benefiting as well.

3. Understand that diversity in senior management teams is bad. O'Reilly isn't talking about ethnic or gender issues. He means people work better with others who've been in a group equally as long as they have, whether that's 10 minutes or 10 years, as opposed to a staff with mixed levels of seniority.

4. Be willing to make quick decisions at the risk of being ineffective. Implementing the second-best idea now is a better strategy than doing the best idea a week from now. It's a bigger risk to delay making a decision than to make a marginal one.

5. Don't have a desk. What does a desk really do but collect stuff?

Slow Drip: 3 Things Worth Doing Slowly

1. Creating your product or service. You can only build a better mousetrap by taking your time. Once it's built, sell it as quickly as you like.

2. Building trust with your customers, partners and colleagues. It's difficult to speed up the development of trust.

3. Changing your core values. Your firm might change from manufacturing to distribution, but if your entire foundation is based on the former and you rush to do the latter, you may someday be on a park bench with a bottle of Ripple, telling people how you used to own a manufacturing firm.

The Fastest Hall Of Fame

If there were such a thing, these companies would surely belong, according to Regis McKenna, author of Real Time: Preparing for the Age of the Never Satisfied Customer (Harvard Business School Press).

• Amazon.com. Part of the reason for their success was that unlike, say, Barnes & Noble, they had no legacy. "There was nothing to hold them back," says McKenna. "They had a blank path."

• FedEx. It's not just that they deliver quickly and on time--the customer is generally doing half the paperwork.

• Cisco Systems. High marks for online sales, support and service.

• Intel. Great customer service and Internet protocol.

• Wal-Mart and Procter & Gamble. "They're close alliance partners, and the alliance [works] because they share information with each other," says McKenna. "Procter & Gamble knows exactly what happens at Wal-Mart stores at the end of the day, and that's why other retail stores have trouble keeping up."

• AOL. "They didn't invent the Internet, they didn't invent computers, and they didn't invent the proper network; they invented the idea of linking people to an existing infrastructure. AOL got that idea before anyone else, and it enabled them to operate faster."

• Nasdaq. "They now handle billions of trades a day on the Internet. They've built back-end systems to manage that. As that market continues to explode, they've managed to handle the new companies that have come in, the volatility of the marketplace and the huge number of transactions that are going on." Easily more impressive, Internet-wise, than the New York Stock Exchange.

This article was originally published in the September 1999 print edition of Entrepreneur with the headline: Speed Freaks.