I’ve received an enormous amount of feedback to my post this weekend that innovation is what happens when you combine bravery and strategy.
Particularly the bravery part.
We talk about this a lot with clients. And we’ve become more sensitive to the fact that many times the real reason a business is struggling is because the owners have lost confidence, and so are clinging to what they know.
We learned when building our own business that it’s easy to be brave when things are going well. But much, much harder when your backs are to the wall. Pressure of every kind makes acting instinctively fraught with anxiety and restricted by second guessing.
This year I’ve started to work with a remarkable woman who specializes in helping people find their voice. Jennifer Hamady is a singing coach, but her expertise extends far beyond the auditory manifestation of notes and lyrics. Her genius lies in helping people understand how to release their talent. To coin Sir Ken Robinson’s definition, she helps people find their Element.
There is greatness in all of us. And if for now that seems unlikely, history suggests that those who are willing to look for it, will find it.
Bravery + Strategy = Innovation
In late November a client of ours came back from a meeting with one of his biggest customers. He was visibly shaken. Hardly surprising given that they’d just told him their 2009 projections were based on a forty percent drop in revenue. They’d need a lot less from him. Forty percent less.
It was about then that we were all beginning to realize the world had changed. That the futures we had all expected weren’t going to happen. That this wasn’t a recession, or a downturn. That this was life changing.
The auto industry is living through its life change in public. And the debate about whether we should or should not be bailing out the big three will continue until someone asks better questions. ‘What do customers want?’ seems like an obvious one. In an industry experiencing a forty percent decline in sales, the answer apparently is, ‘not this’.
With one exception. Hyundai.
At the beginning of this year, the company launched a program that guarantees they will take back any car bought in 2009 if the customer loses their job.
At a time when cutting costs was everyone else’s strategy, Hyundai made theirs reducing risk. At a time when their competitors were asking for government money to survive until the upturn, Hyundai believed they could create an upturn themselves. At a time when customers wanted confidence, Hyundai made a simple, human statement. ‘We believe in you.’
Hyundai’s sales compared to a year ago? Up 4.9 percent. Number of cars returned? Zero.Cost to Hyundai? Zero.
When all around you are losing their heads, you need both courage and clear thinking.
The result is almost always compelling.
I Cannot Tell a Lie - This Is A Revolution
In revolutions, old stuff gets broken before the new stuff is put in its place. And that frightens people.
This - from Clay Shirky’s remarkable essay strikes me as an absolute truth. His conclusion is that people are so frightened by revolution they demand to be told that what’s happening isn’t really happening. They demand to be lied to.
Which, in my experience, is exactly what happens.
Most business owners argue - with their greatest passion - for their view of the present and the future. Because that’s where they feel safest. They tell themselves a story based on how they want the world to be, and then post-rationalize every piece of information to fit that view.
By the time reality is standing, arms crossed, in front of them tapping its foot, they’re backed in the corner like the heroine in a bad science fiction film. All that’s left is the scream.
It’s time to stop the lie. And to celebrate the unknown. Because that is where the future has always been.
Dream Big
Now is the time for big dreams. We are living in what will seen to be an Epoch. A time so distinctive that history will be measured by what happened before and after it.
So if you were ever going to change the world, this is the moment.
I had dinner last night with two people who are.
Sir Ken Robinson is passionate about transforming the education system so that instead of measuring our ability to conform, it provides an environment in which our individual talents are encouraged and applied. He says it far better than I can here and here .
The other person is Barbara Royal, DVM who will revolutionize how we take care of animals. I have never met anyone more in their element than Barb, who combines Eastern and Western philosophies to treat animals holistically and, crucially, respectfully.
Ken and Barb - you will not be surprised to learn - have a lot in common. First, they have incredible energy and razor sharp wit. Second, their entire lives have been devoted to the causes they now articulate.
And lastly, and I think most importantly they are willing to see the world entirely differently from the one we live in today. They want to transform - not reform. And they do not fear the process or the outcome or the change itself.
To quote Michelangelo, “The greatest danger for most of us is not that we aim too high and we miss it, but we aim too low and reach it.”
Now, Are You Small Enough to Innovate?
Every business owner is worried about the damage the economy is doing to their business. Sales, profits, opportunities are all down. And whether you prefer ‘downsizing’ or ‘right-sizing’ as part of your personal lexicon, the trends are all in the same direction. Your business is getting smaller.
But is it small enough? Or at the very least, can it act like a small business?
Today’s Intuit report on the Future of Small Business ( http://tinyurl.com/5td9f ) gives six reasons why small businesses innovate faster and more effectively:
1. Personal passion: small business owners are willing to try new approaches
2. Experimentation and improvisation: many small business owners and managers are willing to experiment and improvise, and accept failure as part of the process
3. Customer connections: typically small businesses have more direct and meaningful relationships with their customers so they understand their issues better
4. Agility and adaptation: their size lets them adapt faster to changing market conditions and to implement new business practices
5. Resource efficiency: Small businesses do more with less. And they problem solve more effortlessly
6. Information sharing and collaboration: Small businesses often share information more easily which inspires innovative thinking
Generally, I think these are true. Though the first two speak more to the emotional capacity of entrepreneurs that makes them, well, entrepreneurs. The others rely more on how well an organization is structured and managed, and less on the courage with which it's run.
The bigger question, however, is now that your business is smaller, are you taking advantage of these benefits to innovate faster?
If not, you need to ask yourself why. And then start.
Being Wrong is Right
We need new answers like never before. ‘Original thoughts that have value.’
That description is not mine. It belongs to Sir Ken Robinson who believes that we are all born with immense capacity for originality. In his TED talk ( http://tinyurl.com/5gsyph ) he makes this case powerfully and memorably. If you haven’t seen it you should, because he provides many of the principles by which we can begin to construct a new future from the ashes of the old one.
New answers from old. Innovation. A much over-used and mis-understood term but one we need to come face to face with.
At the core of innovation is the ability to be original - to be creative. Without that fuel, innovation disappears. Repetition is its enemy. Fear is its foe. And the tighter we cling to the past, the more we eliminate its possibility.
Ken describes one of the conditions for originality as a willingness to be wrong. I agree. An environment in which ‘right is good’ and ‘wrong is bad’ over-simplifies every proposition and reduces the chance of achieving anything great - however you define ‘great’. Ideas themselves are not right or wrong. What do you do with them is what matters.
Whatever business you’re in, it will be improved if you think again about what you mean by being ‘wrong’.
And about why being ‘right’ is so important to you.
Hope is Not a Strategy
Remember when buying a home was a guaranteed return on investment?
Until some time early last year, the rule was that you bought a home as soon as you could, and as long as you kept it at least three years, you would sell it for more than you paid. In London, you only had to hold it for three months - and in some parts of town three days would do it. The possibility that a house or an apartment might one day be less than the loan we took out to pay for it was literally inconceivable. It just never occurred to us
When the real estate market headed south, we reacted too late because it couldn’t be happening. We had no tools to deal with it. So we waited for the ‘bounce’ and hoped. I think we all know now it’s going to be a long wait.
In this economy, owning a business has a lot of similarities. Most business owners have stock answers to dealing with downturns. And if you owned your own business in the post 9-11 trauma, you learned something about getting through tough times.
But these days the question is not how did you deal with the post 9-11 economy? The better question is what did you do in the aftermath of ’29. As in 1929. The only historical reference we have. These are once in a lifetime conditions and a lot of people are unprepared for that. Like the value of their home, they’re still trying to use an emotional model to deal with it.
Hope. Supported by luck.
But hope is not enough. Nor is it a strategy. To survive in an economy where breaking-even is the new win, you have to get past the emotional barrier that this can’t be happening. For many businesses, that means going back to the days when our first focus was on how to cover payroll. And if you’re not at that point, then here’s what you’re hoping.
That you get work. That it’s profitable. That you get paid on time. That you get paid at all. That you get paid often enough to cover your overhead. That your bank will lend you money if things get tight. That the job you’ve been waiting 6 weeks to come through will come through. That the check is in the mail. That things aren’t as bad as they seem. That things will be fine.
You might be okay with one of those. But beyond that, you need a plan that deals with bad and worst-case scenarios. And does so before you get to that point. Because a plan made calmly is always a better plan.
As Andy Dufresne said, “Hope is a good thing. Perhaps even the best of things.”
But even he didn’t think it was a strategy.
Lay Off the Lay-Offs
The news this morning is that more people lost their jobs in February than in any month since 1949. Which makes 4.4 million since December 2007. Staggering numbers. We’re on our way to ten percent unemployment.
But why? Aren’t these the very people that companies need to buy their products and use their services? Without a job they’re not likely to be consuming much of anything.
Companies that are choosing lay-offs over salary reductions - and it is a choice - are only looking at one side of the problem. Cutting costs. They’re hoping someone else figures out how to encourage people to spend.
I was in a meeting yesterday in which we heard that a highly paid employee had been told he was being let go last week. He asked if he could take a thirty percent pay cut instead. The company instantly agreed.
I’m sure he and his family are spending less than they were. But they are still spending. And more than if he had lost his job entirely. Which doesn’t take into account the fact that he’s not depleting his investment funds to pay for his lifestyle, or putting his house on the market. That’s a model that will create a natural bottom to all this built on real value.
If every company faced with the need to cut overhead had looked at the problem holistically, the answer would have been pretty clear. Companywide salary cuts give you: better cost saving results faster; more ability to keep your customers happy; a belief among your staff that you’re trying to protect them; a shared willingness to innovate and take responsibility for finding answers and flexibility if things get worse or improve. It also keeps the economy moving forward, albeit at a slower pace.
As a species, we do best when we’re moving forward. And generally we’re pretty good at being able to keep one eye on where we’re going while navigating the broken pavement along the way.
Running a business is the same thing. But if you’re only worrying about avoiding the broken pavement, who knows where you’ll end up?
Mirror, Mirror on the wall, what the #*@* is going on?
When chaos reigns, it's easy to look for the nearest answer.
But if you're the sole owner of a business or a member of a long established partnership, the voices you hear are probably too familiar at a time like this.
Look for someone you trust, but who doesn't always see things the same way you do, and ask them to challenge your thinking. Then you can do the same for them, which will also help you work on your listening skills. Sounds like the subject for another post.
Freezing In Place Only Makes Your Teeth Chatter
In tough times, it's become standard advice that companies shouldn’t freeze in place. That's true. Problems that were obvious even in good times become infinitely worse if you do nothing when your market is shrinking. The challenge now is to find a way to move forward without adding risk.
The first step is to leverage your best assets. Your people.
Start at the top and make sure your stars are doing things that only they can do. Have them delegate everything else, then go through the same process with every level of staff. You'll eliminate the 15-20% of busy work that no one at the company should be doing and immediately foster higher job satisfaction. People who like what they do also start to innovate better ways to do it.
When the economy comes back, your business and your people will be ready to take advantage of this new-found focus.
