BATS stands for Better Alternative Trading System. It’s a registered securities exchange that started up about 4 1/2 years ago in Lenexa, a Kansas City area suburb. The exchange competes directly with the New York Stock Exchange (NYSE) and Nasdaq (which used to be an acronym that used to stand for National Association of Securities Dealers Automated Quotation).

BATS was founded to increase competition in the market. It’s succeeded. BATS is the third-largest exchange in the world. BATS now accounts for about 10 to 11 percent of the trading volume, while the Giant NYSE has about 11 to 12 percent.

All from a humble Midwestern location — NOT Wall Street.

Ratterman, soft-spoken and precise, carefully laid out the company’s amazing story:

• Speed is the differentiator. Trades are executed in millionths of a second, incomprehensible speeds. The human eye can register a 250,000/1,000,000th of a second, these trades occur faster than that, he said.
• Customers are broker/dealers, and include all the big names: Morgan Stanley, Goldman Sach, Credit Suisse, eTrade, Deutche Bank, etc.
• BATS is on a path to achieve 18 to 20 percent market share in the next several years.

He gave an overview of the company strategy (Go big or go home), investment approach (Venture capital? No thanks), marketing approach (big customers are equity partners who draw other big customers), and growth opportunities (options market, Europe, maybe Asia).

Then he spoke about their hiring strategy, and I nearly fell out of my chair.

“We never recruit outside Kansas City,” he said.

An extraordinarily successful company that willfully, purposefully, hires only local talent?

I’ve lived here for about 25 years, and that’s the first time I’d ever heard a CEO or any corporate executive break with the conventional wisdom: The best talent comes from the coasts, you can’t get smart people here. I can’t tell you how many smart people believe that you just can’t get smart people to live in the Midwest, and how many others believe that to be successful, you have be in the center of action — Silicon Valley for technology innovation, New York for marketing, Wall Street for finance.

BATS slayed that convention. Ratterman gave some insight to the company’s hiring approach:

• Hires have to fit with the company’s ethic and, first and foremost, be willing to do the right thing.
• The company looks for “deep discipline”, deep expertise in the selected field, whether it’s accounting or hardware or communication.
• Passion for the markets is required. An example: a software engineer makes a point of reading SEC filings and competitors’press releases. Not for his job, but for his passion. He cares about the markets and wants to know everything he can.
• The hiring process is strenuous and can take up to 15 interviews. And every interviewer, from the receptionist to the hiring manager, peers, and leadership has to give an unqualified two thumbs up on a candidate before they’ll hire. Any hesitation from any one, and they’ll pass. “We spend a lot of time not hiring the wrong people,” Ratterman said.

The process pays off. Ratterman notes that all of the original 13 employees are still there.

“The best and brightest like to be around the best and brightest,” he noted. “The people who are here like to stay here.”

Ratterman said BATS has brought in some employees who had a compelling reason, a need, to be here, and he admits they’ll entertain a candidate who wants to be here. But they don’t seek them out.

A lesson might be: You can find good talent, if you’re willing to look for it. Note that it’s not just hiring a recruiter with East or West Coast connections — you have invest the time to be sure that your next hire is the right one.  Like the BATS approach.

A second lesson might be a bit more subtle. Candidates have got to WANT to work at BATS to get in there. They’re not hiring just for a “job,” they’re hiring for the long term, for those who can help the BATS team — already at the top of their game — go on to the next level. Depth of knowledge, passion for the business, willingness to do the right thing wins out.

BATS is proving that it pays off to be unconventional, in more ways that one.

Shocked, truly, to find myself sprawled and wet and suddenly aching. I couldn’t speak for a minute, I was so jarred.

And then I slowly understood — I’d slipped on the ceramic street tiles embedded in the sidewalk under the leaves. My cowboy boots were no match for all that slick stuff. I was bruised and shaken, but not broken and certainly not going to stop and linger.

Change hits us like that. And it takes time to absorb; sometimes you just have to let the bruise form to take stock of what happened, and what didn’t happen.

It’s a new year, which prompts taking stock and getting ready. Taking stock is a way of counting up the inventory you possess — customers, opportunities, friends, ideas, gratitude. Getting ready for the new year is preparing yourself for change — building up the flexibility and resilience to anticipate what might happen, or at least be strong enough and open enough to adapt.

I’m grateful to all the businesses who have entrusted me with their stories; I’m honored to be working with you. I’m grateful to the many friends who’ve given me support in this first year of business. I’m touched by your willingness to connect, to share, to listen, to guide me. I appreciate my generous colleagues and fellow entrepreneurs in the Kansas City chapter of the International Association of Business Communicators, who welcomed me so warmly. The National Association of Women Business Owners offered a bounty of smart and fun women; and I’m glad to be part of it, too.

And in the coming year, I want to do my part to give back the kindness and support that I received. I’m planning on expanding my horizons — video! audio podcast! art! bird-watching! — and other delights as I find them. I’m open to adventure, I’m willing to experiment and take a few chances.

Even if I fall.

Here’s to a grand new year!

Credit: SALADELLES, an extraordinarily talented photographer with beautiful images from nature — go visit: http://saladelles.over-blog.com/

I had the good fortune to hear Dr. William Duncan, president and chief executive of the Kansas City Area Life Sciences Institute, speaking at a meeting yesterday. He was talking to job seekers, professionals who were interested in learning more about the growing life sciences industry here.

The institute is the focal point in the region’s goal to attract and develop the area as a bioscience and biotechnology center of excellence, developing on the natural strengths of the region, which include the clinical research firms based here, the depth and breadth of animal health firms here (five of the top 10 companies have headquarters here, 31 percent of global revenues come from this region).

My favorite part of the discussion was his recollection of the development of the institute, which was founded in 1999, a result of engagement between the Stowers Institute, the Civic Council and the Kansas City Area Development Council (and others).

Early on, the group noted that despite the available assets, the region lacked a major top-tier biomedical life sciences university. The answer, it turned out, was to fill the gap with a collaborative effort between the existing players: the KU Med Center, St. Luke’s Hospital, UMKC, Midwest Research Institute and others.

Dr. Duncan described how the various leaders were not accustomed to working together.

“In the early days, it was difficult to get them to come to meetings,” he said. “But now, the culture has changed and there is a willingness to collaborate.”

So powerful, this collaboration.

In this case, Duncan attributed the collaboration success to a couple of key factors:

• It developed with an empowered board of leaders who set the tone. It wasn’t driven by a single institute, but by many who saw the power in building something greater than could be developed independently.
• It engaged the entire community — both sides of the state line, regional agencies and groups, government, civic groups, business leaders, academia and interested members of the community.  People were able to set aside differences (yes, border wars and deep university allegiances) and focus on building something together.

It was inclusive and that crowning philosophy was a key to the collaboration and to the early success of the region’s development — now home to more than 300 life sciences companies.

But Dr. Duncan had a caution — an additional culture change is needed here.  He described an attitude common on the East and West coasts, where a failed entrepreneur is hailed as a hero. In places like San Francisco and Boston, these types are respected and encouraged, he noted, but here, there’s a tendency to just look at the label: failure.

“We need a culture change in KC,” he said. “We need to accept failure and embrace risk.”

He is not talking about admitting defeat or taking wild risks — he’s talking about driving a change in the prevailing business attitudes here, one that would make us more open to learning from mis-steps and supporting measured risk.  Collectively. Inclusively.

Although Dr. Duncan also spoke with passion about challenges of  technical bioresearch, complex investment/profitability strategies and difficult political scenarios — this was my favorite part of the discussion.   He was just talking about how people deal with each other.

So much of our success with any initiative comes down to how folks can best work together: collaborate, look beyond a label, work toward something bigger than yourself.

I can’t help but wonder if these culture changes might be the most difficult part of Dr. Duncan’s job.

I can’t help but believe that embracing these culture changes might be more even valuable to our region than the life sciences initiative that launched them.

Mike Russell was the first entrepreneur I ever met. He shaped my perspectives on entrepreneurship and business.

Mike was the founder and CEO of the Kansas City Business Journal, which ultimately grew into the newspaper group American City Business Journals Inc.  He died last week.

When I met Mike, I was a 20-something reporter, struggling yet full of ambition and can-do fearlessness — but I’d never been around someone who dreamed as big as Mike did. It was liberating and infectious, and it was from Mike’s example that I came to a  desire to become an entrepreneur. I admired Mike, and I learned a lot from him, including principles that I continue to hold.

The first thing you would notice about Mike was his confidence and charm. He was always self-assured, self-reliant. The next trait was his curiosity and his ability to come up with ideas — he always had a dozen ideas in motion, in various stages of fruition. His longtime business partner Doc Worley used to say that it was his job to help Mike toss out the bad ideas and focus on the good ones. (In fairness to Doc, I think the original quote was a lot more colorful.)

Then there was his business acumen. Mike would talk with reporters about their stories and always be full of  questions: what’s their strategy? why would they do this? what will happen next? who will benefit from this? He led us to become better reporters and editors by always pushing for more insight, using all the information we had at hand and working hard to develop the instincts to anticipate what might be unfolding — and then ask about it.

But perhaps the best trait I saw in Mike was his willingness to give people a chance. He believed in people — all kinds of people, but underdogs especially. I think he liked seeing how people respond to opportunity and I think he delighted in seeing others grow and benefit, sometimes in intangible ways. I wonder if he saw an underdog in me? I like to believe that he did.

For example, in those ACBJ days, Mike and Doc and Don Keough, the editorial mastermind, would hire folks based on attitude they displayed. If you were smart and willing to work and willing to learn, they would be willing to teach you how to do the job. It was a stroke of genius that instilled incredible loyalty in the young reporters and editors, like me.

There was one more example of Mike’s respect for people. He had a simple rule that was inviolate throughout the chain: Always return phone calls. No exceptions. Mike believed that if someone took the effort to call, it was our obligation to listen. No matter if it was a sales pitch or a wacko — you never know where the next idea or connection or valuable information might come from, besides the simple matter of showing respect.

Respect for others. What a powerful idea — no wonder Mike Russell was such a brilliant entrepreneur and successful leader.