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The D Series: Tools to succeed at innovation

Does The Wizard of Oz hold the secret to your business success?

Originally published on June 5, 2015 as a Guest Column in The Globe and Mail:

My son popped in the other day and told me that he had signed up for his first ‘group’ at university: The Graduating Class of 2020.

Impressive,” I said, “since you just received your acceptance yesterday.” He then reminded me of my own words over the years: “You’ve got to have a goal.”

Any parent reading this will recognize what a monumental moment this was for me. Not that my son was off to university, but that he had actually remembered one thing that I had said to him during his first 18 years! Actually, he went on to tell me his sub-goals. Having joined a co-op program that offers opportunities for international placements, he has mapped out the places where he hopes to visit for both work and study terms during each year of his program.

How many of you have a five-year vision for your business that includes not only strategic goals but also sub-goals – those small steps that will lead you to where you want to go?

I can honestly say that at my company, we have such a plan. As our horizon spans the next five years, I call it our 2020 Vision. But it’s not a perfect, sealed document preserved under glass for people to marvel at for the next five years.

Quite the opposite: It’s a working document, clearly and succinctly articulated on a whiteboard in plain sight. It includes the over-arching vision for the company, and highlights our five key strategic pillars which range from the high level (the refinement of corporate vision and values) to the pragmatic (revisiting the eight steps that we follow to acquire and delight customers), as well as the purely practical (upgrading our technology infrastructure).

Running an emerging boutique-sized organization, I can fully empathize with the pain you may feel when you hear the phrase ‘strategic plan.’ Sure, planning requires work. But it doesn’t have to be overwhelming. And it doesn’t have to be a static, hold-your ground plan. There will be many unpredictable elements that affect your businesses in the next week or month, let alone five years. So, your plan needs to be flexible.

This is why I break the strategy process into planning and discovery. To (over)simplify, think of it as six steps:

1. Engage in a free-flowing discussion with your senior team about your organization’s five-year goals.

2. Identify and articulate your company’s strategic pillars (exploring five top-level areas of focus is a common outcome).

3. On a board, summarize those five (or so) pillars, each in about 100 words. Have bullet-point steps under each heading, along with anticipated delivery dates and the name of the person charged with getting these things done.

4. The person-in-charge should put together a top-level plan for his or her project. Again, this doesn’t have to get cumbersome. A couple of pages can usually summarize the project’s goals, objectives, milestones, timelines, resources and desired outcomes.

5. Meet monthly with each of the project leaders – individually and as a group – to monitor progress and see where you or the full team can help out if a project starts to flounder.

6. Allow for changes, refinements and updates. How? Read on about the second element of our planning process, which we call Discovery.

Discovery acknowledges from the get-go that things are going to change. And that your organization, team and plan have to be elastic.

John Cardoso, the founder of Spyder Works, likens this part of the process to the epic journey that takes place in the 1939 film, “The Wizard of Oz.” Pushing your organization in a long-term strategic direction is akin to the film’s storyline of Dorothy embarking on an epic journey towards a defined goal: going home. During the journey, team members join her and eventually learn a lot about themselves, their potential, and their ability to cope with problems along the way.

Working together, thinking beyond tomorrow morning, galvanizes us as business teams. Learning to recognize, adapt and adopt to changes around us makes us hardy travelers and formidable competitors.

Dorothy’s journey in the movie also reminds us that we must rediscover and embrace the sense of wonder and curiosity that most of us gave up in grade school. Encourage ongoing questioning and refinements to surface organically as new evidence and opportunities arise.

This is why we double-back and add in the sixth step to the process.

6. Allow for changes, refinements and updates. To encourage creative input, I place Post-it notes and a pen beside our strategy board so that anyone can add their future-forward ideas (be they high-level or project-specific). This may sound like a minor part of the process, but it isn’t. It reminds the team that these (and all) projects are not static, but fluid. They are not perfect plans, but opportunities we have shared that we think about regularly and build on continuously.

Throughout your strategic journey, you will encounter unforeseen situations and daunting challenges, (e.g., competitors, social change, new technologies), just as Dorothy did. But the strength they gained in travelling together helped Dorothy and her unlikely leadership team discover the tools and talents they needed to reach their strategic goal. For Team Dorothy, those tools and talents included perseverance, intelligence, empathy and courage – probably the same characteristics you want to see in your own teams.

What colour is your company’s yellow brick road? Where is it going to take you? Plans can change, yes. But that is no excuse for not making them. You never know when your business will encounter lions or tigers or bears – but with a plan, you’ll see them coming a lot sooner.

When did entrepreneurs become so incurious?

Originally published on May 8, 2015 as a Guest Column in The Globe and Mail:

Entrepreneurs are supposed to be the mavericks of the business world. They’re the idea generators. The marchers to different drummers. The innovators who drive the economy forward, by starting businesses and launching new products and services. They redefine technology and change the world around us.

At least, that’s how I’ve always thought of them.

Lately, I’m starting to wonder if some entrepreneurs are losing their sense of curiosity, along with that distinctive maverick swagger that makes them such crucial builders in the business ecosystem.

My clues? At the seminars, workshops and business events that I’ve been attending recently, more of the attendees seem to come from big companies – and fewer and fewer come from small and medium-sized businesses. It’s disappointing really.

Personally, I’m happy to learn from companies large or small. And I’m sure that event organizers don’t really care who buys their tickets. But from the perspective of learning and sharing of ideas, I believe that everybody loses. Large companies appreciate the candid, fresh voices of true entrepreneurs. Entrepreneurs can always learn something new from one another, as well from the attendees of the national and international organizations that we all hope to grow up to be.

In my column last month, I noted the stunning reality that 80 per cent of new businesses fail. While there are a host of reasons for all these fatalities, I believe that one of the very real answers is that, at the slightest taste of success, many entrepreneurs become complacent and incurious.

We allow ourselves to get lost in our little business bubbles, relying on today’s products and services to drive future success. Let’s be honest, we can get so focused and myopic that we often neglect to do the things that earned us our success in the first place – getting out of the office, meeting people and asking as many big-picture questions of ‘the crowd’ as we can.

It is a lovely notion to think that we can hole ourselves up in our new business and bide our time till the big ‘cash-out’ at the end of the road. But this tactic isn’t practical in an economy that demands continuous improvement, refinement and even replacement of our products and services as a matter of course.

Consider the digital picture frame. Ten years ago, these electronic photo albums were all the rage. Today they’ve been replaced by smart phones and tablets. And how about those Bluetooth headsets? Just a few years ago when the laws began to restrict drivers’ cellphone use, we couldn’t buy these items fast enough. Today, it’s hard to find a new car that doesn’t have hands-free built into it, complete with voice-assist and even access to intelligent personal assistants such as Apple’s Siri – rendering the headset embarrassingly passé.

Bottom-line: today, everything moves from ‘the rage’ to ‘remember when’ before you can say “Trivial Pursuit!”

You need to top up your product and service offerings just like you change the oil in your car. When we neglect to change the oil, our engines stutter, seize and ultimately die.

It’s no different in business. No business succeeds without revenue and, ultimately, profit to reinvest in the future. Revenue is generated by satisfied and engaged customers. If you neglect to constantly re-engage your customers with the new and different, they will quickly find a competitor who does.

If you want to think about it as a continuum, then understand that innovation drives marketing, which drives sales. If you take innovation out of the equation, your funnel loses the raw material that drives growth.

Sorry if this sounds doomsday-ish, but, unfortunately, innovation is no longer a nice to have. It’s a very real need. As our markets evolve faster and faster we have to ramp up our innovations and improvement, not cut back. Innovation isn’t an occasional remedy, like a cough drop, but an everyday necessity, like water.

All this means that innovation – sparked by curiosity and fuelled by constant communication with customer – has become a core competency of today’s successful businesses.

If you’re not ready to give your customers what they want, keep in mind that innovation is also an engagement tool for your team. Today’s employees want to be involved in exciting and meaningful improvement projects.

When I went into business I was taught that to succeed, I had to join a company, put one foot in front of the other, keep my head down and shut my mouth. Today we know that management has no monopoly on creativity. Everyone in the organization deserves and expects to have a voice, to engage in ideation and add value beyond the day-to-day.

If your company culture has moved from thinking, questioning and dreaming to just doing, watch out. Your best team members will gradually disengage, and likely revert to one of the first skills they ever learned: walking.

Revenue, profits, engaged customers and motivated teams are all crucial to your business. Keeping them strong takes constant feeding and renewal. That’s why it’s so important to hold your head up, sniff the air for new ideas, and keep questioning. Only the curious can change the world.

Is crowdfunding the new tech bubble? Or just a good old-fashioned junk bond?

Originally published on April 10, 2015 as a Guest Column in The Globe and Mail:

Despite the headline, I’m a proponent of crowdfunding and believe it can bring innovative ideas to market. Fundamentally, I feel that new forms of financing provide additional access to much-needed capital and bring healthy competition to the lender market, benefits that all entrepreneurs and inventors can appreciate.

So why the negative headline? It’s not meant to be sensational. I have real worries about the mania that seems to strike the markets with every shiny new opportunity. Some would call it systemic greed. Others may be more forgiving, and call it the cost of innovation. Whichever camp you choose, it’ impossible to deny that there’s extreme pressure on everyone in business to return continuous, increasing profits to shareholders – whether the shareholders are ourselves, our families or the public markets.

Crowdfunding, of course, is the rapidly growing practice of funding creative projects or startup ventures by raising small amounts of money from a large number of people, usually via specialty websites like Kickstarter and Indiegogo. Maybe the early days of crowdfunding were the best, when early adopters and other hipsters invested in new projects to receive finished products, T-shirts and other promotional, non-financial “perks.” But that’s the past, not the future.

My fears started to heighten at a recent panel discussion I attended on the emergence of equity crowdfunding – the practice of “mass” funding of opportunities in return for equity. One panelist urged the quick adoption of this new financing frontier because he didn’t want Canadian businesses and investors to fall behind or lose out on this incredible opportunity.

While the parallels are not exact, this rhetoric struck me as reminiscent of the rise of junk bonds, the 1999 Tech Bubble, and yes, the subprime mortgage scandals that drove us into the Great Recession, the economic slough from which many individuals, companies and countries are still just emerging.

I want to remind would-be investors that, on average, about 80 per cent of business startups fail. Even successful companies have a success rate of about 15 per cent on new product ideas. More often than not, new business initiatives just don’t work out the way that we want them to.

If you’re taking fun money from your cookie jar to support a cause you believe in or a new product you love, then crowdfunding provides you a new way to back your convictions that has never existed before. But you should understand the odds.

As securities regulators approve equity crowdfunding – probably by restricting how much investors can invest per year, and how much companies can raise – it seems likely that today’s low-stakes “pin money” culture is going to change. Investors, by definition, want a return on their money. If crowdfunding truly expands beyond the hobbyist market, it will only be because a consistent percentage of issuers actually create incredible value for their shareholders. But how likely is that to happen?

You can say this for “old-school” backers. The professionals, whether they’re banks, venture capitalists or experienced angel investors, push you to truly understand and articulate your project and its potential market. They pressure you to justify the risk and return involved. Without that initial and ongoing demand for due diligence, crowdfunding will likely create a less disciplined marketplace in which success becomes even harder to attain, and failures increase in number.

On the other side of the deal, if you are successful in seeking capital, understand that you will now have to report to “the many.” You’re the custodian of the hopes and dreams and expectations of people whose motivations you don’t know. You have an obligation to keep them in the loop – and can only hope to keep them happy.

Never underestimate the impact of the mob, the Web or social media on your company and its reputation if something goes wrong. Face-to-face funding may have been harder to get, but that was not necessarily a bad thing – for you or the markets.

Bottom-line: Crowdfunding is an exciting new wrinkle in innovation funding. But it won’t change the rules of the marketplace: investors expect value for their money. Nothing comes free. The more expectations you create, the more your crowds will expect you to deliver.

I am a huge proponent of new financing mechanisms, including crowdfunding. I simply don’t believe in the tooth fairy.

I do believe in the notion of ‘buyer beware, seller take care.’ With a little more common sense, and less frenzy, I believe crowdfunding will help to bring a lot of remarkable innovation to market. Without that discipline, I fear we’ll see a speedy series of failures, losses and resentment that will burst crowdfunding’s balloon faster than you can say “count me in”.