I realized something scary a couple of years ago: There is no way I could ever act on all the ideas I've scribbled in notebooks, even if I live to be 100. That's why I decided to freely give away ideas for new products, marketing strategies and businesses. Well, almost freely. I like to invest, you see, and I own stock in dozens of companies; some may benefit from my ideas. So, I mapped my ideas to my investments and drafted letters to their CEOs when I felt like I had enough to say.
Writing to a CEO is a curious thing. Executives travel a lot and many of them have assistants who screen their mail. Would my letters even be seen? Yes, it turns out.
Ian Cook, CEO of Colgate-Palmolive, wrote me a two-page letter that addressed my ideas point by point. Garry Ridge, CEO of The WD-40 Company sent me a handwritten letter and an autographed copy of his book. Gerald Shreiber, CEO of J&J Snack Foods (the maker of SuperPretzels) forwarded my ideas to his marketing leaders. Chris Killingstad, CEO of Tennant Company, sent me a cordial reply. I even received a letter back from Warren Buffett (yes, that one).
As thrilling as it was to find these letters in the mailbox, the real thrill is to discover the lessons in the responses that I received:
You Don't Know Everything
I'm grateful that Ian Cook debunked many of my ideas by citing market research and Colgate-Palmolive's alternative strategies. (He did so in a kind and informative way.) It's no surprise that great companies often test and disprove ideas that sound good on paper. Thankfully, the letter that I wrote was friendly, not cocky. I would have looked foolish if I had acted as a know-it-all.
Good Ideas Aren't Always Good Opportunities
"If we were to do that, it would be at the expense of this, and we think this is the better opportunity." That's the gist of what opportunity cost means. Two executives sent me responses that were like this (but not in those exact words). It's refreshing to see leaders who are focused and committed to pursuing what they believe are the best opportunities. I've worked for companies where the leaders were seduced by any smooth pitch or shiny thing. It never ended well.
Make Time for People
It's amazing that the leaders of multi-billion dollar companies responded to my letters. I'm not proud enough to believe that my letters were particularly special. Rather, I think the executives who responded are special leaders. In fact, the book that WD-40 CEO Garry Ridge sent me is about investing in people and making time for them. It's appropriately titled Helping People Win at Work.
Consider Investing in Responsive Companies
For every CEO who wrote me back, two did not (even so, that's a great response rate!). Let's split these companies into two groups: respondents and non-respondents. From the time that I mailed my letters, the compound annual return of the respondent group is 8.97% greater than the non-respondent companies.
That's a huge difference that could mean millions of dollars in additional gains for an investor if projected over a lifetime! The sample size of this data is too small to be statistically valid, but I believe I witnessed something meaningful. Now, I look for companies whose leaders communicate well. Writing is thinking, so it is said, and executives who are clear in their words are likely to be clear in their thoughts.