I need this in 8 hours

just do part 4 and keep it short like 150 words . I will provide the case and another file that explains what is the part 4

© Copyright Dileep Rao 2010 (for additional profiles: www.uEntrepreneurs.com) 1

Glen Taylor
Taylor Corporation
Mankato, Minn

From the farm to the Forbes 400

This profile is excerpted from Bootstrap to Billions: Proven
Rules from Entrepreneurs who Built Great Companies from Scratch
by Dr. Dileep Rao. Copying or reproduction in any format or medium
without the prior express, written consent of the author is strictly
prohibited. For additional profiles or information: InterFinance Corp.
Phone: 763-588-6067; www.uEntrepreneurs.com; www.infinancing.
com

“Printers like presses. I like customers” … Glen Taylor

Summary: When Glen Taylor was 16, he was a father, husband, manager of a farm, and a 4.0 GPA (if
you don’t count typing) high-school student. When he finished high school, his teachers persuaded him to
enter college rather than go into farming. With scholarships, loans, and a part-time (32 hours a week) job
in a printing company, Taylor pursued a degree in math, which he completed in three years. At the printing
company, he implemented so many profitable, “common-sense” improvements, that, upon graduation,
the owner asked him to join the company as the #2 guy for an annual salary of under $5,000. Taylor
listened to his advisers at the college and agreed to join the printing company, even though he would have
made more as a teacher and would have had his summers off. His professors told him that challenging
opportunities in business do not show up every day, and he could always go into teaching later. Within a
few years, he had made so many improvements to the company (and asked for a piece of the larger pie)
that he was making in excess of $35,000, and had bought 13 percent of the company with his savings (he
could live on the original $5,000 salary). That is when the owner of the printing company announced that
he was ready to sell and gave Taylor a year to put together an offer. Initially, Taylor planned to buy the
company with two of his colleagues. However, he soon found that they had differing goals. Taylor wanted
to expand, and expand, and expand. The others did not. So Taylor bought the company on his own. Today
his company is a colossus in the printing industry with operations throughout the world, putting Taylor
on the Forbes 400 list of richest Americans. On the side, he owns the Minnesota Timberwolves NBA
franchise and was the Minority Leader of the Minnesota State Senate. Who knows, one day he might even
become one of the best schoolteachers on the planet. This is how he did it.

Before the Startup

1. Connect the dots between results and rewards. Glen Taylor was raised on a farm. His parents
did not have much money. Each year they borrowed money to farm and then paid off the loan from the
results of their efforts. They did not get too far ahead, but life was good. They had a large garden, an
orchard, chickens, cows, and pigs, and they sold the produce, eggs, milk, etc., to buy other items. This gave
Taylor a basic understanding of business: the more you produced, the more money you made. Although
his dad was a farmer, he did not like farming. His father liked people and sports, and so did Taylor. The

© Copyright Dileep Rao 2010 (for additional profiles: www.uEntrepreneurs.com)2

rules of his house were fairly simple. Taylor could play sports, which he enjoyed, if he got good grades;
treated others, including his siblings, well; and did his chores. He learned the direct connection between
results and rewards (or lack of same).

Lesson: Build a very clear connection between effort, values, results, and rewards. This lesson
helped Taylor join the Forbes 400.

2. How you see affects what you do. When Taylor was a junior in high school, his girlfriend became
pregnant, and they got married. Taylor was 16. At this time, his dad had another job and his older brother
started college. So Taylor had to manage the farm. His routine started at 6 A.M. with his chores. Then he
went to school, after which he had more chores, and then field work until midnight (except in the winter).
He learned time management and to set priorities. He found out that he had to get his school work done
at school. While the teacher was explaining problems to the class, Taylor was doing his homework. The
hard work and long hours could have encouraged Taylor to drop out of school like many others had. But
he stayed. In his senior year, his family decided to sell the farm and Taylor ended up working at another
farm to earn money. When he finished high school with all A’s except a B+ in typing, his teachers strongly
suggested that he should go to college and not into farming. Taylor saw how difficult it was for his father
to get a promotion in his job because he did not have a college degree, even when he was qualified for the
job. This convinced Taylor. He went to Mankato State University (MSU).

Lesson: Your lens affects your vision and your vision affects your behavior. If you focus on problems,
you will see hurdles. If you focus on opportunities, problems become stepping stones to growth.
It’s your choice.

3. Multi-tasking before the term was invented. Taylor was awarded an academic scholarship
to attend MSU and he obtained a National Defense Loan that he did not have to repay if he became a
teacher. And to support his family, he also got a part-time job working 30-32 hours a week at Bill Carlson’s
company, Carlson Letter Service (subsequently Carlson Craft), where his wife also worked. In addition,
his brother moved back to MSU and they worked together as laborers doing anything from mopping
floors to handyman jobs. He never had to use the money from the National Defense Loan program. He
majored in math, and minored in physics and social sciences. He was sharp enough to excel at all of them.
His goal was to become a math teacher since that would give him the flexibility to teach anywhere in the
country, and he also found that he liked to work with people and motivate kids. Even with the job and
family responsibilities, Taylor got his degree in three years due to the “setup in high school” where he had
to develop good habits, value time, and prioritize his life to survive and excel.

Lesson: Brains help. What’s important is what you do with it. Mix good habits, a strong work
ethic, and clear direction, and you can do wonders. To quote an old cliché, Taylor excelled at making
lemonade from lemons.

4. How many jobs can one man have? As a student at MSU, Taylor joined Carlson Craft (at that time
called Carlson Letter Service). The company’s owner, Bill Carlson, hired a number of college students,
and there were about 20 others from MSU who worked there alongside Taylor. Taylor’s first job was
running a press, which was considered to be an entry-level position. When another student who was
in charge of inventory took a summer vacation (amazing the other students, since summers were for
working), Taylor offered to do his own job and also that of the vacationing student. Carlson agreed. Taylor
did both jobs and offered a variety of suggestions to change inventory practices to save money, such as
reusing cartons and envelopes. Carlson appreciated the additional savings and offered the job to Taylor
on a permanent basis. When the other student returned from his vacation, he learned that he had been
assigned to the press and quit. Taylor then asked if he could help in ordering and saw how they could save
money there. He noticed that he could get better prices by combining orders and he negotiated for them.
He also examined freight bills and noticed that they could qualify for lower freight charges by combining

© Copyright Dileep Rao 2010 (for additional profiles: www.uEntrepreneurs.com) 3

freight. When Taylor graduated from college at the age of 21, Carlson asked him to stay on with the
company as the #2 person.

Lesson: If you have a summer job and a “Glen Taylor” wants it, don’t go on vacation. When bureaucratic
corporations ask you to think outside the box, they do not tell you that they want you to stay inside
a larger box that is outside your inner box. Entrepreneurial firms place no such limits. They want to
save money and make money. Take advantage of your opportunities. Great ones are rare and they
come in disguise.

5. Could have, would have, should have… decisions that alter your life. When Carlson asked
Taylor to join the company on a full-time basis after graduation, Taylor asked him about his salary. Carlson
suggested that Taylor check out his other options to see what he was offered. Taylor was planning on
becoming a math teacher. This is when “modern math” was being introduced into schools. As part of his
undergrad education, his professor had asked Taylor to evaluate an eighth-grade class in the local district,
which wanted to test this new concept. Taylor was asked to be the student teacher, and teach modern
math to the top eighth-grade students and the bottom ninth-grade students in the school. His report’s
conclusion was that the top students got it easily, but that the schools should teach the bottom students
more basic math skills, such as percentages, that they would need in life. This experience and report
made Taylor a hot commodity as a teacher recruit. When he graduated, top schools in the country, such
as Edina in Minnesota and schools in California, called to have him teach modern math in their schools.
Taylor asked his professors for advice, fully expecting them to suggest the teaching career. Instead they
suggested that he join Carlson, pointing out that he could always go back to teaching (and be a better
teacher with the practical experience), but that an opportunity like the one at Carlson did not come along
every day, and it could reflect Taylor’s special talents. Taylor accepted Carlson’s offer.

Lesson: When making life-altering decisions, select mentors wisely and know your passion. Some
options expand your horizons and help you reach your goal. Others restrict your choices, as Cortez
did when he scuttled his ships and forced his conquistadors to win or die. Key is what you do after
you make your choice.

6. Your word. Taylor still had to arrive at a mutually agreeable pay-scale arrangement with
Carlson. Since Carlson had never had a #2 guy, he was unsure what he should pay. Taylor knew what
he could get from the school districts who were trying to recruit him. But he was not sure what to ask
for (especially since he wanted the job and did not want to blow it by asking for too much), and so he
went and told Carlson, “whatever you decide, I will take.” Carlson offered $4,250, which was below the
market (compared with salaries of $5,000–6,000 that Taylor was offered as a teacher and that, too, with
free summers). While Taylor thought that perhaps he should have asked for more, he agreed to the pay
offered by Carlson. As he puts it, “I said I would, so I did.”

Lesson: Don’t give your word casually. When you do, live up to it. Years later Taylor found out that
Carlson offered him $4,250 because he was paying himself only $4,500. If he had asked for $6,000, he
might not have been offered the job.

From Entry to Ownership

7. Why are you in business? Carlson Craft was primarily a printer of wedding invitations. The
company offered its products as pamphlets in a catalog with a hard cover. These catalogs were distributed
without charge to drug stores in the region, and customers examined catalogs from various printers to
select the printer and type of invitation. After he joined the firm on a full-time basis, one of the first things
Taylor did was to compare the company’s catalog with those of the leaders in the wedding-invitation
printing industry, which were primarily from New York and Chicago. He believed that if they were to
succeed, he had to “go against the best and be better than them.” Their catalogs were big, well-done,

© Copyright Dileep Rao 2010 (for additional profiles: www.uEntrepreneurs.com)4

attractive, and looked very professional. Taylor laid these catalogs next to his firm’s own to compare them,
and to understand customers and competitors by looking for similar products, features, and strategies
in each of the catalogs. And he asked himself a simple, billion-dollar question: “Why would people buy
from Carlson?” He could not see an obvious advantage, and concluded that many of their customers were
buying from them because they were local and slightly lower-priced. He came up with a new strategy
that included the following:

• Develop a fancy, rich-looking catalog that copied (also called “fast follower” in business school-
speak) the competitors’ designs.

• Include all the products that were most commonly featured in the various catalogs, assuming
that the more frequent the occurrence of a product, the higher its popularity.

• On items that were easy to compare, set prices slightly below (around $1) the competitors,
giving customers a reason to buy from him rather than from his competitors. But have higher prices on
accompanying items and customized options. As an example, the standard wedding invitation price was
at 11 lines with a higher price for more lines (but the cost to add more lines was minimal). The invitation
shown in the catalog had more than 11 lines, with the hope that customers would choose to add more
lines and increase the package price. His total package was comparable to that of his competitors, but he
was thought of as very competitively priced.

He printed 500 catalogs compared with the previous run of 300 and widened the distribution. Sales
started to increase.

Lesson: The fundamental question in business should be “why would anyone buy from me rather
than from my competitors?” Taylor calls this common sense, which is actually not very common. To
answer this question, know your customers and their choices.

8. Customize to satisfy customers’ unique needs. The new catalog got Carlson noticed. Customers
and retailers started paying more attention to the company. Brides were impressed with the catalog,
which placed Carlson in the same league as the leading companies in Chicago and New York. But Taylor
found that, very frequently, they were not ordering the products in the catalog but calling in because
they wanted custom designs, wording, and colors. They wanted their wedding invitations to reflect
their personalities on their special day. Previously, when this happened, the company’s (and industry’s)
response had been to tell them that “you can get what we have.” Taylor, however, noticed that the brides
were not asking about price when they wanted to satisfy their unique wishes. He decided to try to
satisfy these customers. Whereas previously, Carlson was the low-price vendor, now they started selling
customized products at a higher price. Taylor realized that this could be a unique competitive advantage
for Carlson and started to focus on answering the broader question, “what does the bride want?” He hired
a designer to design new types of invitations. The innovations and new designs were taken to groups
of local female college students, employees, and young women for feedback. Taylor specially organized
these groups to make sure that his company’s innovations were in sync with the market. Although these
initial groups were very homogenous, and did not include many ethnic and religious groups, he appealed
to a large segment of the country. In later years, he broadened the scope and composition of the test
groups. When he noticed that these groups and customers wanted unique colors beyond the ones in the
catalog, he asked the mills to make his paper in those colors. Since he had to buy minimum orders, he had
to make sure that he offered colors that were in demand. To know which colors would be in demand, he
started going to the New York bridal shows to examine the latest fashions and colors. He pointed out to
his customers that they could coordinate all the colors in their wedding, including the paper products,
invitations, bridal dresses, etc. He could not keep up with demand. Bill Carlson was looking for minimum
of 5 percent gross margins. By differentiating his company’s offerings to satisfy the unique needs of his
customers, Taylor could increase the size of his typical order by 5 percent and increase his profits by over
60 percent. The company started to take off.

© Copyright Dileep Rao 2010 (for additional profiles: www.uEntrepreneurs.com) 5

Lesson: Henry Ford said that customers could get “any color – so long as it’s black.” That’s why GM
overtook Ford. Companies that satisfy customers’ needs better than their competitors nearly
always do better than those that satisfy their own needs. Taylor developed a structure for getting
good ideas and for testing them. Ego or the “not-invented-here” syndrome was not a factor in his
selection. The result showed up in company sales and profits. Why did Taylor test and not use his
own instincts like many do? As he puts it, “what did I know?” When customers ask you for something,
listen.

9. Innovate for more customers. About the same time, Taylor helped an entrepreneur start a
business to supply school proms. His concept was to offer products based on the hit songs and movies
of the day to replace his competitors’ tired themes, such as Hawaiian hula proms. He needed a variety of
paper-based items for his business, and Taylor offered to supply him. When this business took off, Taylor
used the concept in wedding invitations. The industry had been built on standard themes and wording
based on religious affiliations, such as a Catholic wording and a Protestant wording. Taylor noted that
brides were not much older than the high school graduates who attended proms, and that they would
be listening to the same songs. Taylor and his team came up with new wording and themes based on hit
songs and movies. Brides liked these themes, and they further customized their invitations with their
own words at a slightly higher cost.

Lesson: Innovation often means applying an idea that works in one place to others. Ideas can come
from competitors, customers, and vendors. Keep your eyes and ears open to catch the latest trends
and capitalize on them.

10. Who/what comes first… customers or machinery? Since machinery is the most expensive
investment in a printing business, Taylor knew that if he did not worry about press utilization, efficiency,
and cost, his company would not be in business for long. They needed to modify operations, improve
press utilization, and reduce initial setup costs to be profitable. They did so by modifying machinery and
adjusting business practices. Most of Carlson’s competitors were printers and emphasized operations
and machinery utilization (due to the investment), and asked customers to adjust by not offering smaller
order quantities. Taylor looked at business from his customers’ perspectives and adjusted his operations
to make a profit. With a printer’s perspective, machinery issues ran the business. With Taylor, customer
needs ran the business. This was a key difference. His competitors liked large orders due to the savings
in press utilization. Taylor liked small orders because there was less competition and offered higher
margins, and the huge number of customers with smaller orders meant potentially large markets and
volumes.

Lesson: You can manage your business to make your machinery efficient or your customers
happy. Put customers first. They will make you rich. Why didn’t the other printers do it? As Taylor
notes, “They liked machinery. I liked customers.”

11. But cut costs to become competitive and make money. Lower prices on standard, easily
comparable items, and customization for higher margins, were only part of Taylor’s strategy. He knew
that this would grow the top line, i.e., revenues. Taylor wanted to grow the bottom line, i.e., profits and
cash flow. This meant that he had to make the operation more efficient and effective to cut costs while
satisfying customers. In addition to charging more for smaller orders, Taylor started looking at every
aspect of the business. As examples:

• Carlson was buying raw materials for envelopes and invitations in packages, which were then
unpackaged, printed, repackaged, and sold. He streamlined this process and bought in bulk to reduce
raw-material costs and the cost of labor to open the packages.

• They scheduled all orders of a certain color at the same time to minimize press-setup time.
• He started to develop standards for labor and machinery so as to be able to measure and improve

© Copyright Dileep Rao 2010 (for additional profiles: www.uEntrepreneurs.com)6

individual and company productivity and drive down costs.
• He developed stronger controls to know the cost and proportion of raw materials that were

wasted, and then he cut the waste.
Lesson: It is easy to cut prices – until you fail. Taylor cut prices selectively on easily comparable
products. To succeed with lower prices, cut costs. And offer other products and services, such as
customized products, that have higher margins.

12. Expanding with UPS. As Carlson started to grow, Taylor started to expand the distribution
network. In addition to drug stores, Taylor started expanding geographically and also adding florists,
printing shops, and dress shops. At the time, UPS was expanding into rural America. Previously, Carlson
could only ship via the Postal Service, which resulted in a high level of damage. He had always been
happy with UPS, so he decided to expand his geography based on UPS expansion plans. He obtained free
Yellow Page directories for cities and towns with more than 1,000 residents in the states where UPS was
expanding its reach to get the names of retailers who advertised wedding services. He then calculated
the number of dealers he wanted to have based on the population of the town and the estimated number
of weddings they were likely to have. If there was more than one advertiser in the Yellow Pages, he first
selected the one with the bigger advertisement. He sent the selected retailers a card inviting them to
order the catalog for free. When he did receive a card back, he checked their Dun’s profile to make sure
that they would be a strong customer. He also started offering faster service. Chicago and New York
printers normally shipped in 14 days. In contrast, Carlson shipped products on the same day for rush
orders (at a slightly higher price, of course). On others, the order was shipped within one to four days.
No one was faster. With customization and speed, sales shot up and so did margins. As UPS expanded its
geographic reach one state at a time, so did Taylor.

Lesson: Grow with the trends (also known as “go with the flow”). The expansion of UPS to rural
areas allowed Carlson to expand its territory, offer faster service, and increase the number of
distributors. Customization, speed, and efficiency allowed Carlson and the retailers to earn higher
revenues and profits. Give customers what they want, and price becomes secondary.

From Ownership to the Moon

13. Get the means to acquire the company. Carlson Craft had never made over $50,000 in annual
profits. Taylor’s customization program had the potential to increase profits, and Taylor wanted a piece
of this increased pie. So he asked Carlson if the managers could have a bonus based on profits over
$50,000. Since the company had never made profits above that in any year, Bill Carlson was skeptical
about the potential to make this meaningful to the managers. Taylor added that this may end up being a
theoretical discussion, but it would be a great incentive. So Carlson agreed. The company made $150,000
in net income the next year and Taylor was convinced that they could sell more invitations at even higher
markups. At the end of the year, Bill Carlson had the books audited and then invited the three managers
to dinner at a fancy restaurant (Taylor’s salary was still $5,000 so this was special) and gave them their
bonus checks. He also informed them that he wanted to change the agreement with the three managers.
He increased their base salaries, with Taylor’s salary growing from $5,000 to $26,000. Taylor and his
family could live on $5,000. He saved the rest.

Lesson: Negotiate for bonuses to build your nest-egg based on growth. Offer the same to your
employees. They will work harder. Taylor noted that he would not have done what Carlson did by
increasing the base and eliminating the bonuses. His philosophy was to increase the base salaries
by a small amount, but increase the level at which bonuses were calculated so that managers always
got rewarded for increasing profits. After the first year, future years’ profits at that level belonged to
Taylor. Managers had to keep the business growing and raising profits.

© Copyright Dileep Rao 2010 (for additional profiles: www.uEntrepreneurs.com) 7

14. Bulls make money. Bears make money. Hogs don’t. Taylor’s success had not gone unnoticed
outside the walls of Carlson and he had other options. He had been approached by investors who offered
to invest in a new company at which he would receive a handsome salary of $100,000 – but no stock.
Taylor did not trust the offer because he thought that he may be out of a job after he had set up the
investors in the new business.

Lesson: If you want to recruit superstars with a proven track record, make it worth their while but
make them share the risk. One assumes that these superstars are not stupid. Why should they accept
an offer where the gains can be temporary but the losses permanent?

15. Become a shareholder. When Taylor started with Bill Carlson in 1959, Carlson Craft’s sales were
in the neighborhood of $180,000. By 1974, sales had reached $7 million, and the company had no bank
debt. Taylor had started “pestering” Carlson about buying stock in the company by 1965 and continued
to ask him about the possibility of becoming a partner. Ultimately, Carlson had relented and sold Taylor
and two of his colleagues in the company’s management team one share each out of the 100 shares he
owned. As soon as Carlson agreed to sell one share, (the proverbial “camel’s nose in the tent”) Taylor
asked for more. He used his savings to buy more shares in the company. Soon Taylor and the other two
managers had accumulated 13 percent each, with Carlson owning 61 percent. Taylor asked Carlson not
to sell any more shares to others.

Lesson: Once you sell shares to others, even if it is one share, remember that they are your partners.
Make sure you want them as partners. So think about whom you want to own equity in your business
and offer it for results or cash. In this case, obviously, it was a very profitable arrangement for both
Bill Carlson and Glen Taylor.

16. Partners with the same vision. In January of 1974, Carlson approached his partners, the three
managers, and told them that he wanted to sell his shares by December. Taylor negotiated the price on
behalf of the team (he was the #2 guy in the company) and went to the bank and asked for a loan in excess
of $1 million to buy Bill Carlson’s shares. His assumption was that the three managers would each own
a third. While Taylor was arranging the package, his friends and advisers suggested that Taylor buy the
company on his own because partnerships do not always work, especially if the partners have different
visions of how the company should operate. Taylor’s response was that he knew his partners and had
worked with them. After he had lined up the financing, he informed his partners and suggested that Taylor
and the others would have salaries in the same ratio as in the past (Taylor’s was higher), and that Taylor
would be CEO while the others would be vice-presidents (their titles at the time). He also wanted to give
a few shares to up-and-coming hires he had made: five to six MSU graduates who had joined the company
at Taylor’s invitation to make their fortune. He wanted to offer them, and other future employees, the
opportunities to grow that Taylor had enjoyed. To Taylor’s surprise, his potential partners rejected the
structure because they did not agree with Taylor on his growth plans and sharing of equity. While both
perspectives are justifiable (people and their goals can differ), this is not what Taylor wanted. He wanted
to grow the company to make it a giant in the industry and to bring in new shareholders who could help
him to reach this goal. The others did not agree. Since they had differing goals, they decided to alter
the arrangement. Taylor agreed to buy all the shares and own the company by himself. The other two
managers wanted to be treated fairly and to maintain their salaries, titles, responsibilities, and perks,
which was fine with Taylor. One of the two managers decided to leave the company within a couple of
years, and the other stayed on and had a very productive ongoing relationship with Taylor.

Lesson: Aim high to achieve much. But make sure that your partners agree on the vision before
you get on the ship. Otherwise, you will end up having many internal fights and business divorce can
be as painful as the other kind.

17. Structure the right deal. Taylor bought the company on January of 1975. He went to all three

© Copyright Dileep Rao 2010 (for additional profiles: www.uEntrepreneurs.com)8

sellers and asked them if he could borrow the acquisition financing that he needed from them rather than
from the bank. He structured the loan with a 10-year term, with the option of extending it to 12 years if
he needed to do so due to unforeseen adverse situations. He paid off the loan in less than 10 years.

Lesson: When buying a company, seller financing is usually the most flexible and lowest-cost
financing you can get. It is highly recommended, especially for your initial acquisitions. Structure
the terms realistically, and give yourself a cushion in case there is a hiccup and your projections are
overly optimistic.

18. Track the numbers. Taylor hired his first accountant in 1975 as soon as he bought the company.
He hired someone he already knew, and according to Taylor, “his accountant was surprised at the
amount of information I was collecting.” Taylor recorded everything he needed to know to keep track
of the company and to know “what was out of whack.” He knew all his raw material costs, labor costs,
labor productivity, raw-material waste (even some of what was not being reported to him), overhead,
equipment usage, etc. His accounting team added to that base knowledge and implemented systems to
allow Taylor to be able to control costs and predict performance as he continued to grow.

Lesson: Know your numbers. You cannot drive your company if you don’t know where you are going. If
you cannot predict your performance, and are unable to adjust your costs as your sales change, you
are not running a tight ship. You are living on hopes. Sometimes this works. Usually it does not.

19. Grow or be left behind. After acquiring Carlson Craft, and before he started to acquire companies
around the country, Taylor attended an executive workshop at Harvard’s Graduate School of Business. He
wanted to answer the question, “Why should I succeed when others don’t?” According to Taylor, what
he learned was that there were a number of key reasons for failure. In addition to poor financing, they
included the following:

• Business grows but managers do not. Poor managers want to run every detail of the company and
do not learn how to delegate responsibly. Taylor realized that he would reach the limits of his company
quickly if he ran everything himself. This meant that Taylor had to develop great managers, and direct
them according to each manager’s unique personality, needs, and skills

• Trends change but managers do not. Taylor realized that computers were becoming an increasingly
important part of business, and he did not know enough about them. So he went to IBM’s school for
executives to know more about computers and learned how to apply them to his business.

• Scope grows but controls do not. As the business grew, Taylor needed to track all the important
numbers of his business, which included the accounting and financial numbers, and the operations and
marketing numbers, on a regular basis so he and his managers could identify problems before they
became threatening. Taylor was a math major, so using numbers came naturally. He developed control
systems to monitor performance by identifying key numbers and tracking them before they became
major issues.

• Managers win but workers do not. When Taylor first heard of “win-win” at the session, he wondered
“what kind of pinkie idea is this?” But he realized that when he worked with his managers, employees,
customers, and vendors as teams, all did well when compared with deals where one did well and the
others did not. Taylor realized that he could be more successful by getting a smaller share of a larger pie
than hogging a larger share of a smaller pie. People work for their self-interest. The key is to blend yours
with theirs.

Lesson: Answer the question: Why should you succeed when others don’t? Become a better manager.
Find the right people, train them and “incentivize” them. Share the profits and develop control
mechanisms to delegate responsibly. Help people reach their goals, add meaning to their lives, and
they will help you reach yours.

20. Expand beyond the footprint. Now that Taylor had a company that was selling in the Midwest,

© Copyright Dileep Rao 2010 (for additional profiles: www.uEntrepreneurs.com) 9

he put out the word in the industry that he was in the market to buy other companies and asked his
industry peers to call him if they were planning to sell. One day, Taylor heard from a competitor in
Indiana who was in trouble. He knew this entrepreneur from industry conferences and had even helped
him in the past. Taylor immediately took off to see the potential seller and knocked on his door at 2 A.M.
Taylor already knew enough about the company to make an offer. He knew that the company was smaller
and the catalog was not up to Taylor’s standards. He knew that the company was not making a profit
because it had too many employees, poor productivity, high levels of waste, and poor employee morale.
The company could also suffer if there were a paper shortage, as feared (see next paragraph). He knew he
could fix these problems. The seller wanted $1 million for the business (so his wife would be taken care
of if he died). Although Taylor thought that the price for the business was a little high, when he quizzed
the man, the man replied that “that’s the figure I want.” Taylor figured out that he could pay $900,000 for
the business with seller financing, but that he could pay an additional $200,000 for the building because
he could have it financed at a lower rate with amortization over a longer-term. Both parties got what they
wanted and the deal was done.

Lesson: Understand the seller’s real needs when structuring an acquisition. Make sure you know the
company’s problems, how to value the company, and how to structure the deal so it does not put you
under. Taylor had made it a point to know other, similar companies in the industry and their problems.
He knew he was ahead of all of them in the improvements he was making and the results he was
achieving. When they started to show up on his doorstep, he started buying them out.

21. Distance management. Since the Indiana acquisition was Taylor’s first business outside his home
base, he wanted to make sure that he did not make any mistakes. He selected a manager who had worked
for him while going to college, and then had gone to work for an insurance company after graduation.
Taylor had recruited him back, and he picked this young manager to run the new Indiana business. They
went over the business plan and laid out the formula based on what had worked at Mankato. Taylor had
trained this manager and had high expectations. He also offered him a share of the new company to
reward him if he performed. He never worried. Taylor knew that he could quickly increase the company’s
sales and pay off the debt in about three years. He ended up paying off the $900,000 loan to the seller in
two years.

Lesson: Managing at a “distance” is a very important step if you want to grow, and it is a difficult one.
At a distance, you cannot do everything or keep on eye on everything. You need to be able to track
progress, monitor problems, and assist without being there to observe the situation. You need to
know how to train managers, set expectations, and monitor for results. Many entrepreneurs never
make it to, or past, this stage.

22. Increase delegation with growing trust. Taylor realized that he would have to develop great
managers and delegate effectively to manage his growing business. He decided to run each company
as its own profit center, and he told his managers that they should run the company as if they owned it.
However, before he gave them this authority, he developed some rules. He would only hire people from
within his company or people he knew. He found them in his college classmates who had joined large
companies and had developed corporate discipline from these companies. He recruited them and gave
them an opportunity to grow with him. Initially, he would delegate in small steps and make sure that they
developed the plan together, and he would monitor it very closely. Taylor always heard, “Don’t you trust
me?” from every one of his managers because he checked everything in the early stages of the manager’s
tenure. Taylor’s response was, “Yes, I trust you, but I want to check for the first few years because I want
you running this business for a lifetime.” He believed in “over-managing for the first few years and under-
managing later.” After he developed a degree of comfort with the managers, he would ‘under-manage’
and would receive monthly financial statements, a report of whatever they wanted to tell him, and an
annual budget. He got the background before the budget, so he was aware of the situation before he saw

© Copyright Dileep Rao 2010 (for additional profiles: www.uEntrepreneurs.com)10

the numbers. Taylor called them only if there were surprises.
Lesson: Your own limits become your business’s limits. If you want to grow beyond your own
capacity, learn to find good managers, train them well, and delegate effectively. Practice variable
delegation to keep control at the optimum level, more at first and less later.

23. “We” screwed up, not “you” screwed up. On major decisions, Taylor would go over all the details
involving the situation with his managers. Once they made a decision, he would tell them, “I back you and
support you. We are in this together.” If something went wrong, he would tell them that “we made this
decision together, so I am equally responsible. Now let’s find a solution.” He wanted his managers to
know that he would never say, “I told you so.” This gave them the comfort to admit any mistakes fast and
find a solution before the mistake became a cancer.

Lesson: Everyone makes mistakes. The insecure don’t admit it. “I told you so” can be four very
destructive words in a business relationship. People will try to find ways to avoid hearing it because
they think they will be blamed, and they will not tell you when problems arise. You need to decide
whether you want to score political points or make money.

24. Plan for the downside. Soon after Taylor bought Carlson and the Indiana operation, there was
a scare about a potential paper shortage. The expectation was that all printers would get a reduced but
proportionate share of paper. This would mean that his core invitation-printing business would have
to shrink. To prevent this, Taylor found an envelope company that was in trouble and purchased it at a
very reasonable price. His plan was to shut it down and use its paper quota to protect his core invitation-
printing business. But the shortage never materialized, and the scare was unfounded. Taylor had obtained
seller financing for the envelope-company purchase with a small down payment, and he found that he
had another profitable business.

Lesson: Understand the risks and protect yourself. Rather than just accept the potential for a shortage
of raw materials, Taylor bought a company at a reasonable price to protect his overall business. Know
the risks and develop a strategy to overcome them.

25. Be loyal to build loyalty. When Taylor bought the envelope company, he had to find the right
manager for the company. One of his key employees had an autistic baby, and Taylor knew that the baby
could get more resources in the larger Twin Cities metro area, where the plant was located, than in
Mankato. So Taylor offered the employee the opportunity to move to the Twin Cities suburbs to manage
this company, so he and his wife could find more resources and greater opportunities for their child. This
employee was not the most experienced manager among Taylor’s options, but because Taylor had helped
him, he turned out to be one of the best managers in the company.

Lesson: Loyalty is a two-way street. Don’t expect it if you don’t practice it.

26. Raise productivity. To increase productivity, Taylor set about developing standards for employees
and machines, and then set about increasing it, as Andrew Carnegie did when he was developing U.S.
Steel in the mid-19th century (Carnegie and his operations chief listed the level of production of each shift
as an indication to the others and created an internal competition among the various shifts). He analyzed
all his operations and then simplified them to gain efficiencies. He monitored all his divisions and their
key components every day. This included orders, shipments, and production. He instituted information
systems even before the prevalence of computers by developing a card system to keep track of the key
data he needed. All supervisors had to know the productivity for each of the people they managed at
the end of each day. There were four pay scales (A/B/C/D) based on production. Employees started at
the lowest scale, and were promoted to higher pay scales as their productivity improved. In essence,
Taylor was basing pay scales on productivity, rather than on time served. This was the result of his farm
upbringing, where he learned to connect the dots between production and results. If employees could

© Copyright Dileep Rao 2010 (for additional profiles: www.uEntrepreneurs.com) 11

not maintain their productivity, the supervisor would assist them. If they needed a slower pace, they
were moved to another job at a lower scale. Production employees were also offered a profit-sharing
system tied to their individual companies (not to the parent Taylor Corporation), along with a pension
fund and a 401(k).

Lesson: To improve productivity, you need to know what to expect, and then organize to make your
operations more efficient. Take action when your standards are not met and reward employees
based on their productivity and contribution to the company. Make sure you are fair. The word gets
around.

27. Reward managers. Managers are paid bonuses based on their performance on a variety of
criteria such as cash flow, net income, productivity, etc. Taylor believes that “you get what you incent” and
so makes sure that there are systems to motivate and also to prevent abuse. He provides motivation for
generating new profits by offering a giant share of first- year profits to the managers. Taylor’s philosophy
is that managers significantly benefit from an increase in profits in the first year, but he gets to keep a
large share of the profits from subsequent years at that level. Managers get a percentage of their salary as
bonuses, and this percentage can go as high as 200 percent of salary. The normal range is between 50-75
percent. They get 100 percent of the goal if they meet their budget, and can get up to 200 percent if they
find a really unique way to make money. This offers a huge incentive to meet budget and do better. The
next year they get a base bonus based on the higher platform. Each company’s bonuses are based on their
own reality. If company A is in a bad economy, the base is reduced. If company B can get a competitor’s
business, then the managers are paid a higher bonus. Taylor finds that some do try to “sandbag” (seek
lower performance targets because they claim that “business conditions are worse this year” and then
try to get bonuses based on this lowered base), and his observation is that the same people try it year
after year. He believes that you have to know the people with whom you work. If he knows someone
is sandbagging, Taylor raises the stakes – they need to reach a higher proportion of the budget before
they qualify for bonuses. In addition, if at the end of the year, the managers have done “non-normal”
things to meet their thresholds for bonuses, Taylor reserves the right to adjust. As an example, if they cut
advertising budgets to get bonuses, then their threshold is adjusted, since the following year could suffer.
Taylor also has found that some employees (the “dreamers”) set goals higher than they should. Taylor lets
them set dream goals since he does not want to de-motivate them. In this case, he sets the bonus at under
100 percent of budget.

Lesson: As a leader, your goal is to get the best possible performance from your team. To do this,
standards and measurement are necessary. But you need to have experienced judgment to implement
these standards and measurements to be fair and realistic and adjust for each individual’s unique
perspectives. Incentive systems need to be customized with judgment. This was one of the key areas of
Taylor’s attention.

28. Use the proven formula to grow. As Taylor’s company grew, more opportunities came his way.
Now he could add size to his customer-focused, operationally-efficient business. The result was a super-
competitive juggernaut. He kept buying competitors, placing strong managers from his team at the
helm of the new business, making their marketing more customer-focused, improving their operations
and repeating the formula that made him successful. This became the virtuous spiral. He managed by
exception, i.e., those managers who needed extra help, or were not performing well, or had not built a
successful track record with Taylor, got his attention.

Lesson: When something works, repeat it. Keep an eye out for the exceptions and for changes in the
trends.

29. Cross the seas and the borders… there are always issues. Taylor owns a number of operations
in foreign countries. He has found that the foreign operations, and even those on the East and West coasts,

© Copyright Dileep Rao 2010 (for additional profiles: www.uEntrepreneurs.com)12

are not as profitable as those in the Midwest. His first expansion to the coast was to a community in New
Jersey that had a 13 percent unemployment rate, compared with 4 percent in Minnesota. Taylor needed
young, part-time students for employees, and he assumed that he would have no problems with their skill
levels and productivity. However, he found that the quality of the workforce was lower and that fewer
people had the educational levels to fill the positions demanding high skills. So he moved his operations
to another school district, where he was told that the district would be responsible for the hiring of part-
time students, and that it would only offer students who were disciplined and maintained good grades. If
their grades suffered, the school district would ask them to drop out of the program. He did much better
in this school district, but it was still not as good as Minnesota.

Lesson: Different areas have different cultures. Understand the culture of the place where you plan
to expand. Try it out if you can before putting down roots. Site selection is not as easy as it sounds,
and local economic-development officials will not always give you the true facts – after all, their job
is to sell the area.

30. When should subsidiaries compete with each other? When Taylor started buying up
companies around the country, consumers did not always know that the different companies they
were comparing for the best products and prices were owned by the same parent. And Taylor let the
companies compete against each other. The presidents of each of the companies ran their companies as
their own, and Taylor let them keep their share of the profits without having to disclose unique strategies
and advances. As an example, he bought a company in California that was competing in a slightly lower
niche than the Minnesota parent. The company had the benefit of the parent’s resources and expertise,
but it maintained its unique niche in the marketplace. Taylor supported this uniqueness in his companies
until he dominated the competition, after which he did not have to maintain the differentiation. They all
made money and dominated their specific markets, and it also allowed more creativity. Taylor found that
when headquarters came up with new strategies and ideas, they tended to go to the same, favorite people
rather than to people who could make best use of it, and these people were not as successful due to their
distance from the customer. This prompted him to encourage innovations from the bottom up, rather
than imposing them from the top down. He also kept the information-technology department local to
serve customers’ needs and dominate the market. The corporate IT department focused on long-term
corporate needs.

Lesson: Understand what it takes to win, and don’t think that corporate control is always the best
strategy. Often the people closer to the customer may have a better perspective. Push decision making
to the appropriate level and don’t discourage bottom-up innovation. All the brains don’t reside at
headquarters, even if you hire MBAs.

31. Enjoy the potential, but watch the risks, with large customers. As Taylor’s companies grew,
they were able to satisfy the needs of corporate customers who were seeking larger vendors with
total capabilities. Taylor’s goal with these large customers was to “do everything for the customer” to
make it difficult for customers to switch vendors due to the huge array of benefits Taylor’s companies
offered. As an example, Taylor’s services include design, manufacturing, warehousing, marketing, and
fulfillment, so that he can control how to market products and how orders are handled. Taylor also is
open to take the upfront risk of starting these companies’ programs, so long as he sees a way of recouping
his investment from the customer or by adding other customers, and he offers total confidentiality so
that customer information is never shared with anyone else, which enhances trust. He keeps his prices
competitive while simultaneously driving efficiencies in his operations so as to increase profitability. In
addition, a key Taylor advantage is that he can offer management stability and continuity, while larger
companies have high turnover of staff and management. This allows him to minimize the risks of change
and discontinuity in the customer’s program, obtain increased efficiencies from experience, and to make
long-term commitments. However, Taylor is always prepared to walk if the customer demands become

© Copyright Dileep Rao 2010 (for additional profiles: www.uEntrepreneurs.com) 13

unprofitable. He hedges his risks by having backup strategies for his major investments. On occasion,
Taylor has found himself facing a lower bid from a competitor with lower margins to take away a key
Taylor account. When this happens, Taylor has not hesitated to approach some of the competitor’s key
customers and offer rock-bottom prices to take away the competitor’s cushion. The competitor gets the
message in a hurry.

Lesson: Large customers can mean large orders, but large orders with huge investments also mean
giant risks. That’s why elephants dance with other elephants.

PostScript: The Timberwolves

32. Buying the Timberwolves. Taylor owns the Minnesota Timberwolves, the NBA franchise in
Minneapolis. He believes that it was his “win-win” philosophy that helped him buy the team. Because
Taylor had been the Minority Leader of the Minnesota State Senate, Minnesota Governor Arne Carlson
asked him to meet with the two partners of the team to see what could be done to keep them in Minnesota.
These meetings with the owners of the team had given Taylor a deep understanding of their needs and
goals. When the opportunity came to buy the team, he drafted a contract that satisfied their needs and
was a good arrangement for both. They were concerned about a number of issues, including the types of
payments, the amounts, and how public relations was handled. Taylor was able to satisfy them.

Lesson: Understand the other party’s needs and structure your offer creatively so that all parties
win.

Rules for Entrepreneurs from Glen Taylor of Taylor Corporation

• Risk is a part of entrepreneurial life. But to minimize risk, you need an experienced, trained,
and motivated team.

• Customers are more important than machinery. Machinery exists to serve people, not the
other way around.

• Everyone makes mistakes. Good leaders recognize mistakes fast; bad leaders justify them.
Acknowledge mistakes fast, cut losses, learn, don’t repeat them, and advance.

• Don’t say “I told you so.” Support your employees. Get in the boat with them and row in the same
direction. Tell them, “We made a mistake, so what are we going to do to fix it?”

• Remember the Golden Rule. Treat your employees the way you want to be treated.
• Ask your managers about what motivates them. To develop the best incentive system, ask

your managers. They will tell you what motivates them. If it is sales, base it on sales, but have control
systems to deliver profits. Everyone is different. Customize your plan.

• Never stop learning. Maintain the humility to know that you don’t know everything and keep
learning. This will help you improve yourself, your business, and also to see the world and your customers
as they are rather than through your ego-filled filter.