Mavericks At Work: Lessons - Questions

Mavericks at Work is a great book that profiles 32 remarkable US entrepreneurs who have battled bureaucracy and challenged the status quo, and won, while redefining success in their industries. The authors William Taylor, founding editor of Fast Company, and Polly LaBarre, a former writer for Fast Company, uncover some remarkable examples of how businesses are succeeding in hypercompetitive industries by being distinctively different.

Their findings are centered on 4 key themes and they sum up each of these key themes with some probing questions that will challenge any business owner:

1. Be different and pursue more than just money: Successful mavericks are fearless about breaking with outdated traditions and confining standards. Making money is only a small part of a bigger mission which they are deeply passionate about. Examples include Southwest Airlines, the company that pioneered low cost air travel and democratized the skies. The book highlights how Southwest saw it as their mission to make air travel accessible to all and by going after this wholeheartedly they innovated on different ways to save cost such as using second tier airports, not serving food and seating people on a first come first serve basis. Keeping this mission at the centre of the organisation has differentiated them from the competition and enabled them to consistently make profits is a loss making industry.
Key questions:
- Do you have a distinctive disruptive sense of purpose that sets you apart from your rivals?
- Do you have a vocabulary of competition that is unique and compelling to your employees and customers?
- Are you prepared to reject opportunities that offer short term benefits but distract your organisation from its long term mission?
- If you went out of business tomorrow, who would really miss you and why?

2. Tap other people's brains: The innovators of today rely on more than just their own insight and intelligence. They create systems to enable and encourage others to help them solve problems and come up with ingenious solutions. Examples include TopCoder Inc., a software development house for many large multinational organisations. They create competitions for technology geeks from all over the world to come up with solutions for software problems in return for lucrative prizes and prestigious ranking points. In this way they are able to use the wisdom of many to solve very specific software development challenges.
Key questions:
- Are you tapping other peoples brains and broadening your range of participants for solving problems and coming up with new products and services?
- Are you having fun?
- Do you share the benefits with those that offer you solutions and ideas for new products and services?
- Do you focus people on the key issues and challenges that face your business and incentivise them to come up with solutions?

3. Connect deeply with customers: Connecting with customers is about a lot more than just traditional advertising, it is about really understanding what customers’ value and connecting with that value system in a deep and meaningful way. Jones Soda asks customers to contribute photographs to be used on the labels of their cool drink bottles. Customers submit photos plus the story attached to each photo. Many photos are selected and placed on the bottles to be distributed in the region in which that customer lives. This creates a massive interest in the community as they discover “who is on the label?” and “what their story is?”
Key questions:
- Do you know which customers are most valuable to your organisation?
- Are you enhancing the brand through the culture and the culture through the brand?
- Are you doing more than just advertising to connect with customers?
- Have you moved past counting the dollars and cents in creating brand value?

4. Partner with your employees: Maverick business enable employees to really understand what drives the business. They are given the opportunity to freely contribute to the overall mission of the business and be rewarded for doing so. At Cranium, a fast growing, innovative board game manufacturer in Seattle, the Chief Financial Officer holds companywide meetings on the company's numbers. He tutors the staff on cash flow and financial ratios, and every employee then assesses his or her own productivity. He recognizes that this helps keep the whole company focused on the right priorities.
Key questions:
- Why should people join your organisation?
- Do you know a great person when you see one?
- Can you find great people who are not looking for you?
- Are you great at teaching your people how your organisation works and wins?

Check the books website and blog at http://www.mavericksatwork.com/

Greatness?

How To Be Great: Research has shown that the lack of talent is irrelevant to great success. The secret lies in hard work, focus and extreme dedication. I have a feature article in the April edition of Entrepreneur Magazine (SA Edition) in which I define greatness, propose greatness criteria and unpack how you can take yourself and your company to greatness.

I followed this article up with some profiles of a number of local and international business icons who have gone beyond good to great. They personify the greatness criteria and we can learn a great deal from them.

Greatness profiles include:
Howard Schultz (Starbucks)
Warren Buffet (Berkshire Hathaway)
Mark Lamberti (Massmart)
Adrian Gore (Discovery)
Anita Roddick (Body Shop)
Herman Mashaba (Black Like Me)
Richard Branson (Virgin)

Buy the April issue of Entrepreneur Mag in South Africa to check out these articles.

Riding the Wave: Global Trends

Success in the business world can be compared to surfing: A surfer sits on their surf board behind the breaking waves staring out at the horizon watching for the next big wave. When they see a big wave building up they turn their board toward the shore, lie down and begin paddling to build some forward momentum so that when the wave reaches them, they can catch it and ride it towards the shore. The bigger and more powerful the wave the better the ride. To be successful in business one also needs to ride waves, these waves are called trends. As an entrepreneur one needs to be “looking over the horizon” for the next big trend and positioning oneself to ride the trend when it arrives. The bigger and more powerful the trend the more successful the ride.

Trends are directional tendencies in lifestyle, commerce or demographics. They may be obvious or imperceptible.

Here are some of the trends shaping the world around us:

West to East Power Shift: Economic power is shifting to Asia in terms of investment and output, with a growing “middle class” globally, but consumption remains driven by developed markets.
The Nub:
The percentage of manufacturing imports of high-income countries from developing countries had risen from under 15% in the 1970s to nearly 40% in 2003 and is projected to reach 65% in 2030.
Global output, on current trends, will double from 2005 to 2030; developing countries’ share will rise from 23% to 31%.
By 2030 over a billion people will form a new global middle class, around 16% of the world’s population versus 8% in 2000.

New Consumer Groups Emerging: Globally the population is becoming older, more urban and Asian, with increasing diversity as more people are on the move - new consumer groups are emerging, demanding more involvement in and customization of consumption experiences.
The Nub:
By 2015, there will be at least 750 million more people in the world, 97% of the increase will be in developing countries.
By 2050, 1 in 3 people in developed countries will be aged 60+, with 2 older people for every child (13).
A new generation of content-creating and publishing communities, e.g. YouTube, is driving new business models, as well as technical and environmental headaches.
In 2006, approx 161 billion gigabytes of digital information was created, captured and replicated – that’s more than 3 million times the information in all the books ever written.
Between 2006 and 2010 the amount of information added to the digital universe each year will increase sixfold.

War for Talent: A raging global war for talent for both skilled and “low cost” jobs is increasing. Asia continues to become increasingly important and outsourcing is on the rise within and across borders.
The Nub
By 2020 there will be 600 million more people active in the economy, mainly in the developing world – where labor costs will continue to be low, although increasing fast along with productivity.
Labor supply will generally shrink in the developed economies.
Low skilled workers will come under increasing pressure globally – the nature of work is shifting to require higher skills as businesses become more knowledge and service intensive.

Changing Geopolitical & Security Landscape: The networked global economy is being driven by rapid and largely unrestricted flows of information, ideas, cultural values, capital, goods and services, and people. Globalisation is enabling new dimensions of power beyond military might, including economics, resources and technology, but the new global landscape is not yet stable: risks and uncertainty are rising with the unrestricted flow of information. Regions, countries, and groups feeling left out and left behind will face deepening economic stagnation, political instability, and cultural alienation. This will foster political, ethnic, ideological, and religious extremism, along with the violence that often accompanies it.
The Nub:
Geopolitical instability is increasing – at the same time as trust in international institutions and the US is decreasing.
There are existing tensions between “old” and “new” powers e.g. between China and Japan, the US and Russia, India and Pakistan, based on history – and new ones emerging as the global economy shifts east, e.g. isolationist sentiment in the US.

Serious Resource Strain: Basic resources are under threat, including water, energy, food and habitats/climate as consumption rises faster than the planet can sustain it – public and institutional activism is rising. Al Gore and many others are raising awareness of the grave threat of global warming and slowly the response to these threats is gaining momentum in political, social and economic spheres.
The Nub:
Researchers estimate that in 2002 humanity was consuming ecological resources 23% faster than the Earth can replenish them.
The cost of climate-related events is growing: financial losses from weather-related disasters in 2005 were estimated as the largest ever at US$ 200 billion.

Changing Technology Landscape: A global technology revolution continues to evolve, crossing national borders and scientific disciplines – biotechnology, nanotechnology, media technology, mobile technology and information technology will continue to reshape industries and our daily lives.
The Nub:
By 2020, feasible technology applications include: widespread cheap solar energy using nanotechnology breakthroughs and mass-producible organic electronics, targeted drug delivery through molecular recognition and wearable computers
In just 12 years since the first GSM digital mobile network, telephones have been transformed into small but powerful multipurpose terminals. The future will bring further, revolutionary changes in this market.
Media technology will make everything personal, customized - it will transform the way we access, store and retrieve information.
In 2006, BAe announced the creation of an artificial surface that grips incredibly tightly without glue or pressure – inspired by the gecko’s ability to run up vertical surfaces.

Accountable or Nothing: Non state actors ranging from business firms to nonprofit organizations are playing increasingly larger roles in society. The stakeholders of such institutions are actively demanding transparency and accountability. The quality of governance will substantially determine how well organisation and societies cope with global forces and challenges. Corporations with ineffective governance will not only fail to benefit from globalisation, but may be vulnerable to major failures and financial downfall, ensuring an even wider gap between the eventual winners and losers.
The Nub:
The number of international NGOs with membership doubled from 1990 to 2003, to almost 300000.
Overall 67% of consumers in the US and Europe claim to have boycotted a food, drinks or personal care company's goods on ethical grounds.
Trust in global companies has fallen faster than for other institutions such as the UN from 2001 to 2005.

Open-sourcing Innovation and Knowledge Generation: Exploding connectivity and channels for information are making open-source innovation a global imperative – networking and linking in with broader knowledge and idea sources is critical, but gaining an edge and protecting knowledge is tough.
The Nub:
Surveys suggest R&D spending levels had no apparent impact on sales growth, gross profit, operating profit or market capitalization. The only relationship was to gross margin, but once non-operating costs were added in the link between spend and performance disappeared – “the R&D silo is succeeding in the traditional role of making “better mousetraps”… But these…aren’t catching more mice.” Only 10% of companies produce significantly better performance per R&D dollar compared to others in their industry.
P&G has succeeded by shifting from a R&D Strategy to a Connect and Develop Strategy i.e. a strategy in which they look outside the organisation for solutions and ideas as oppose to relying on just the R&D Dept.

Business Model Shifts: Business models are becoming global AND local, as shifting power along the value chain and the emergence of BRIC multinationals means more intense competition – innovation is critical to avoid being “stuck in the middle.” Companies are being forced to decide what they do and more importantly what they don’t do so as to create competitive advantage in relation to a much wider array of players.
The Nub:
In Europe by 2011 74% of adults will shop online versus 58% in 2006 – 176 million shoppers, up from 100 million.
Record levels of M&A are radically restructuring industries, with outbound deals from BRIC countries accelerating dramatically.
Fluid, extended network business models are taking over from “straight-line” value chain configurations – increasing complexity and pressure on margins.

References
These ideas are gleaned from:
1. Forty Key Trends for the Next Decade: 20 Key Global Trends and 20 Key Consumer Trends 2005-2015, Published: November 2005 Published By: Euromonitor International
2. World Bank Reports
3. IDC White Paper, The Expanding Digital Universe, March 2007
4. IMD Summary on Global Trends

Learning from South African Entrepreneurs

One of the most exciting assignments that I get MBA students to do in the MBA course on entrepreneurship is a “Case Study of a South African Entrepreneur”. Each student is required to interview a South African entrepreneur and write a 6 – 8 page case study highlighting the person’s journey of starting and running a new business in South Africa. The entrepreneur should be person who has launched a new venture in the past 12 years and has achieved annual revenues of at least R3m.

The last part of the assignment requires students to identify their key learning’s from this exercise. Here are some of the things that have been identified as key learnings.

Passion Counts
The most common learning across the group was that passion is an essential ingredient to entrepreneurial success. Passion is the fuel that drive the new venture creation process so do something that you are passionate about and get excited and energized by your business or you are doomed to failure.

Making the Leap – Individual to the Business
There is a distinct difference between being a “self employed individual” and an “entrepreneur”. An entrepreneur builds a business that is able to exist independently of the person building the business i.e. the business has value even if the entrepreneur is not there. A self employed individual is the business and if they leave there is no value. The real challenge is making the leap from being a self employed individual to being a entrepreneur that has a business independent of oneself

Perseverance and Hard Work are Part of the Deal
The journey is almost never easy. Entrepreneurial success is dependant on lots and lots of hard work and the ability to persevere in the face of adversity. Don’t bother embarking on this journey if you not willing to endure through some tough times and challenging moments.

Managing Growth = Staying Cash Flush
Growth is what so many entrepreneurs hunt. They go after more and more sales to increase revenue from one month to the next. Growth is good if the company can afford it i.e. they have the cash flow to fund the growth but not all growth is beneficial for the business. Growth costs money and therefore the successful entrepreneur needs to ensure that they grow at a rate that they can afford to grow. If you are growing ensure that you have the cash to pay for new inventory and to pay staff at the end of the month. Few businesses are liquidated for slow growth and no profits; most businesses are liquidated because they run out of cash.

The Power of a Network
To make it in starting your own business you need to rely on a broad range of connections. A strong network can pay huge dividends in opening doors for new sales, providing links to suppliers, enabling one to hire good people and to connecting with financiers. A good entrepreneur fosters their network all the time, even when it appears not to matter they are building relationships that will help them in the long run.

Be Motivated by the Bigger Picture
Successful entrepreneurs are motivated by what could be, by what they imagine their business will become. Even if the business is small now, they have a plan for how it will be bigger, more successful and more influential. This is the vision that drives them to keep moving forward and making things happen

Understand what You Want
Different people want different things from a business. Some want the business to provide a sustainable income for them and their family and enable them to lead a particular lifestyle while others dream of being a revolutionary, of changing an industry and building an enterprise with global reach. Understanding what it is that one wants facilitates decision making and strategic planning to achieve the kind of growth and outcome that you want.