LU 321: Why Victor Cheng Believes in the 10X Test and Firing 10% of Your Staff for Growth (podcast) With Victor Cheng

Victor Cheng

Hey everyone! Today, I share the mic with Victor Cheng, an Executive Coach who advises startups and Inc. 500-caliber companies on how to exploit growth opportunities.

Tune in to hear why Victor only works with CEOs who are also founders, how a “growth engine” functions, and when laying off 10% of your staff may be necessary.

Time-Stamped Show Notes:

  • [00:41] Before we jump into today’s interview, please rate review and subscribe to the Leveling Up Podcast!
  • [01:35] Victor graduated from Stanford and went on to work in the national consulting field.
  • [01:50] He was also involved in the dotcom boom during the late 90’s.
  • [02:54] Most of the companies Victor works with are privately held.
  • [03:10] They are generally service and software businesses.
  • [03:22] He thinks people find him through his book and referrals.
  • [04:15] Many years, he doesn’t work with any clients at all.
  • [04:30] The company has to be a good fit for his skills.
  • [06:45] He generally works with founders who are also CEO’s.
  • [07:37] The big insight people take away from his book about growing your company, is that growth is a cross-functional process.
  • [07:51] The book isn’t about sales, it’s about managing your business cross-functionally to enable sales growth.
  • [10:06] Victor likes service businesses, because the value is in the intellectual property.
  • [10:17] He finds it is easier to implement changes in service businesses.
  • [12:37] A growth engine is just a way to grow the business.
  • [12:47] There are many ways to grow a business, you just have to find the right thing for your company.
  • [13:15] A revenue growth engine is a combination of a target customer with a particular problem that matches a product you have in mind, through a specific distribution channel.
  • [15:41] Cash in the bank is an interesting concept that usually comes from venture-backed businesses.
  • [16:35] One of Victor’s concepts involves firing 10% of your staff (your worst performers).
  • [19:00] Consider if you were in a recession, who you would need to cut from your staff. Use this as a metric for culling the herd.
  • [22:40] Victor says anger comes from being treated unfairly. It is important to be transparent with your employees, especially during the layoff process.
  • [24:02] If you tell employees they are doing a great job, but then you fire them, they will be mad.
  • [26:14] Victor’s 10x Test is to question what would happen if sales grew 10x overnight. Think about what aspect of your business would cease to function properly.
  • [29:30] Always considering reconfiguring your team when things aren’t working.
  • [30:33] Tools that Victor thinks has added value to his life are health tracking devices and apps.
  • [31:20] Victor wears a Garmin watch.
  • [31:49]  One book Victor recommends is Seven Habits of Highly Effective People.

 

Resources From The Interview:

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