Dear Bean Counter,
I’m on to you. If it weren’t for your darling stagnant economy, you’d still be the one nobody really listens to, the one who eats lunch alone. Just you and your abacus, gnawing away at a very smartly priced generic PB & J sandwich. On white bread...
It’s time for today’s visionaries to step up and be heard. As business leaders, we can’t control the global situation, the economy, or take out the bad guys. All we can do is prepare our companies for the future. As great business leaders, we can do a little bit more – prepare our companies to be legendary in the future. As an owner of an advertising agency, I see precious few companies doing that of late. Instead, with the slowing of the economy there’s been a cumulative screeching halt in innovative thinking.
Our marketplace is (still...always) pregnant with possibilities and, frankly, if you don’t ferret them out, your competition will. Yes, this is no time to be brazenly, arrogantly fearless. But, neither is it the time to crawl under a rock and hide until the sun comes back out. True, if you do nothing new, you can’t make a mistake. But if you do nothing new for too long, you make the biggest mistake of all. You disappear.
Even in this economy, you have to look beyond next quarter’s financials if you want to still be around a decade from now. Easier said than done? Sure. But risk doesn’t have to be, well, so risky, if it’s backed with intelligence. Know your audience and the trends it will surely follow. Offer them something amazing. Go forward and connect, connect, connect. In spite of the economy. That’s intelligent risk.
“The
only way you’re going to get out of this funk is to
out-innovate and out-compete
everyone else.”
Jeffrey Pfeiffer, Coauthor of The Knowing-Doing Gap:
How Smart Companies Turn Knowledge Into Action
(Harvard Business School
Press, 2000)
Take Kohl’s. At a time when department stores were losing market share, they launched a department store. Risky? Intelligently so. You see, somewhere between Wal-Mart and Macy’s was a need that even retail consultants said didn’t exist. The need to get in and get out without wasting a bunch of time. And money. Today Kohl’s has half the stores of Sears or J.C. Penney and more than twice the market value of either.
Coming out ahead when everyone else is seeking fiscal safety during a recession is the difference between existing and living out loud. Plenty of bold companies are proof of just that. Think about the beginnings of Fed Ex or Microsoft. Look to Xerox and Henry Ford. Remember Fidelity and Boeing.
Another good example is John Deere, who became the leaders of mass customization at a time when everyone else was simply cutting costs. It was the mid 70’s and one way to cut back was to offer fewer choices of tractors. It didn’t take long to hear from commercial farmers that variety was important no matter what shape the economy was in. A problem? Nope, an opportunity to innovate. They got busy and found a way to give their customers variety without building a new facility. With the help of bio-mathematics and a healthy dose of innovation, they found a way to do this from one assembly line.
“Wall
Street won’t pay any more for raising profit margins on a stagnant sales
base. The crucial issue has become how far does a company stretch for
growth.”
Pankaj Ghemawat, Harvard Business School
Strategy and
Business Landscape: Core Concepts (Prentice Hall, January 2001)
In my business, much of what we try to do is apply intelligent risk in how we communicate messages to our intended audience. Advertising legend Hal Riney is a hero on this front. In 1985, he took on the task of rolling out a new product in a relatively unknown category. First, he deliberately omitted the fact that Bartles & Jaymes premium wine coolers were from Ernest & Julio Gallo in his TV spots. The conventional wisdom wondered who wouldn’t want to claim that they come from the world’s largest wine producer? Then, Riney used two hayseeds sitting on a front porch for spokesmen at a time when the competition was showing good looking young people partying on a beach. All told, Riney violated several cardinal rules of advertising and in doing so, proved the fact that soft does indeed sell. The Mutt & Jeff strategy appealed to its sophisticated audience and instead of telling them a joke, it allowed them to be in on it. The resulting statistics boggle the mind. In just a couple years, a category that didn’t exist before had sales of $700 million. I say, the risk here would’ve been to roll out the product in a tried ‘n true way. But Mr. Riney’s inherent knowledge, and gut, prevailed to everyone’s advantage.
Look back as long as it takes to become sufficiently inspired that even in bad times, good things are born. (Dare we suggest that it could’ve been because of the bad times? Consider for a moment that it’s easier to make strides when you’re the only one walking.) Then, go nowhere but forward. In whatever direction your business needs in order to become the leader. Not just to create headlines. Not just to add to the clanging of messages. But to make sure that you are the one to offer customers what they need, whatever that may be. No hype, no buzz and rhetoric doesn’t cut it anymore. What you need is momentum and innovation. Lack of it, especially today, shows itself quickly.
“Whatever
made you successful in the past, won’t, in the future.”
Lew Platt, Chairman and CEO, Hewlett-Packard,
Business 2.0, March 1999
In the past few years, this country’s gone from "the sky’s the limit" to "the sky is falling". It’s only natural to feel the urge to cut back and buy some time. Just make very sure that you haven’t downsized your future in the process. In order to stay on the move when the world is slowing down, remember one thing: don’t scale back on your aspirations. Conserve resources; rethink strategies/ tactics/ timetables. Just don’t stop taking risks. A circle-the-wagon mentality might be a natural impulse when you see everyone else doing it, but if your innovation wheel comes to a grinding stop now, what will you have to offer when the economic growth gets started again? Better yet, what can you be ready to offer before the next economic boom?
“The
key word is velocity. It’s not just speed, but speed with direction.”
Steve Saxe, 3M Project Manager
Fast Company, May 2003
Whereas "lean and mean" might seem like the goal today, don’t forget "agile". Last year 3M launched "Acceleration", a wide-reaching initiative to take good ideas and put them on the fast track. It’s their method of evaluating concepts and going forward only with the ones that will make a material difference.
One way to keep your level of innovation going is empowering your top performers to keep on doing what they do best. Give them the same latitude in bad times that you do in good. Reeling them in is the kiss of death. Take away the free Cokes, if you must. But don’t make your best resources feel afraid. Ever tried to innovate with your knees shaking?
The acid test of strategy, especially today, is originality. You can’t do anything "a little better" than your competition. Southwest Airlines enjoys profitability in an industry that barely recognizes the ‘p’ word anymore. Dell dominates. Washington Mutual continues to rise in an industry in which most of the big players are cutting back. How is this possible? They challenge the status quo. IBM and Microsoft continue to reshape strategy, offerings and prioritize R&D at a time when dismantling organizations might feel more like the thing to do.
Challenge. Change. Cha-ching.
“Create
Like a God. Command Like a King. Work Like a Slave.”
Constantin Brancusi, Sculptor
Fifteen years from now, do you want to ask yourself what you did back in the 2000’s when interest rates were low, talented people were looking for job opportunities, and the competition was paralyzed? I know I don’t. For some of us, this is a great time in business. Reebok has launched Travel Trainers, a lightweight sneaker for travelers. They’re selling out in Japan right now, from airport vending machines. (Innovation.) Honda isn’t whining about gas prices and bad PR about SUV’s, they got busy and built the SUV twin that gets twice the gas mileage. The result? Waiting lists for Honda Pilots. (Intelligent risk.)
So, instead of thinking how crazy this time is, why not think about what this crazy time demands?
“You
miss 100% of the shots you don’t take.”
Wayne Gretzky, Hockey great
...The word’s out, Bean Counter. Bold companies realize that there’s prudence, and then there’s paralysis. And we all know where you fall in. Your five minutes are over.
Sincerely,
Mark Goren
President, Point to Point