Thinking big

Love this quote, via Daring Fireball:

“Make no little plans. They have no magic to stir men’s blood and probably themselves will not be realized. Make big plans; aim high in hope and work, remembering that a noble, logical diagram once recorded will never die, but long after we are gone will be a living thing, asserting itself with ever-growing insistency. Remember that our sons and grandsons are going to do things that would stagger us. Let your watchword be order and your beacon beauty. Think big.”
—DANIEL BURNHAM, CHICAGO ARCHITECT. (1846-1912)

Inteview with Brad Bird

I’m a big fan of Brad Bird’s work. Iron Giant and The Incredibles are a few of my favorite animated films. In a recent interview with him on fostering innovation, the following comment caught my eye:

Walt Disney’s mantra was, “I don’t make movies to make money—I make money to make movies.” That’s a good way to sum up the difference between Disney at its height and Disney when it was lost. It’s also true of Pixar and a lot of other companies. It seems counterintuitive, but for imagination-based companies to succeed in the long run, making money can’t be the focus.

I love the notion of working for passion not dollars. There’s too much dollar chasing in high tech. There’s got to be more to life than making a buck.

A trailer for a book

A career advice book, in manga no less, promoted via a trailer. Cool idea.

Johnny Bunko trailer from Daniel Pink on Vimeo.

Alone time

One of my favorite sections from the Getting Real mantra from 37signals is the idea of alone time. Working for any sized organization, your day is usually filled with interruptions. Getting Real put it best as follows:

When you have a long stretch when you aren’t bothered, you can get in the zone. The zone is when you are most productive. It’s when you don’t have to mindshift between various tasks.

Getting in the zone takes time. And that’s why interruption is your enemy. It’s like rem sleep — you don’t just go to rem sleep, you go to sleep first and you make your way to rem. Any interruptions force you to start over. rem is where the real sleep magic happens. The alone time zone is where the real development magic happens.

Rem sleep is a beautiful analogy for the benefits of alone time.

Fast Company on Gore

<a href=”http://www.fastcompany.com/magazine/117/features-gore.html”
Just finished an interesting read in Fast Company on Al Gore. The man was worth about $1M after the 2000 election. Today his net worth is around $100M. Not too bad. The more I learn about Gore, the more I like him. Wish we all could have got to know him better in 2000. It would be a different country today. A few excerpts…

On Current TV:

They would give viewers from 18 to 34 the means to create and control what went on the air–a user-generated model now familiar thanks to the likes of YouTube and MySpace, but a shot in the dark for TV back in 2002.

Today, less than two years in, at least 30% of the network’s content is viewer generated, called VC2. Amateur filmmakers, some in their teens, upload three- to eight-minute documentary-style nonfiction segments, called “pods,” to the Current Web site.

Current TV is now in 38 million U.S. homes via DirecTV, Comcast, Dish Network, AT&T U-Verse, and Time Warner Cable. Its expansion this year to the UK and Ireland on BSkyB and Virgin Media will put it in another 8.2 million homes.

Current TV is making money, about a 10% margin on cash flow, after less than two years, according to analyst estimates; new cable networks typically take four to six years to go into the black.

On Generation Investment Management (investment fund):

Rather than rely on short-term earnings projections, they thought long-term investment potential–and good management–could be better gauged by looking at factors such as whether a company was preparing for a carbon-neutral future. Environmental stewardship, though, is just part of how Generation defines sustainability.

…a pool of about $100 million from himself, Gore, Knight (whom Gore brought in from Met West), and three other founding partners…[turned into]…nearly $1 billion under management, from 15 institutions, plus a few individuals.

There’s a lot more in the article. From an entrepreneurial perspective, an inspiring read.

Letting builders build

DMAIC is a Six Sigma acronym which stands for: Define, measure, analyze, improve and control. Business Week’s cover story this week covers how Six Sigma may not be all it’s cracked up to be. Using 3M as a case study, they take a look at what happened to one of the most innovative companies in the world after their GE superstar CEO came on board and Six Sigma-ized the company. While profits went up initially (due to cost cutting on better efficiency in established businesses), most recently they started missing earnings targets.

One insight I had recently is that there’s two ways for companies to continue to grow: by building new things or by being more efficient with what they already have. Any fancy manager type would tell you that both are critical. But if you were a betting person, eg. betting where you had a better chance of getting a bonus, would you build something new or squeeze more efficiency out of an existing business? The far less risky approach is clearly the latter. Go with what you know already works, squeeze out more profits by cutting costs and increasing efficiency and you’re on your way to a nice bonus.

As a casual observer of corporate operations, Six Sigma type programs seem to be what new fancy CEO types bring to companies they join. Look for a bunch of inefficient operations, cut some cost and money losing programs and see the stock rise. What you don’t see as often from mega corp leaders is bringing big new innovations to their businesses. For Apple, the iPod is a great example of a huge new innovation that is financially propelling the company forward. The iPhone will probably be another big driver. But you don’t see CEOs driving big new innovations like these products often.

Why not? Why do most large companies with huge resource pools fail to innovate in the same way companies like Apple and 3M of the past? The Business Week article suggests that part of the problem may be the incompatibility of applying Six Sigma to make innovation happen:

Indeed, the very factors that make Six Sigma effective in one context can make it ineffective in another. Traditionally, it uses rigorous statistical analysis to produce unambiguous data that help produce better quality, lower costs, and more efficiency. That all sounds great when you know what outcomes you’d like to control. But what about when there are few facts to go on—or you don’t even know the nature of the problem you’re trying to define?

“The more you hardwire a company on total quality management, [the more] it is going to hurt breakthrough innovation,” adds Vijay Govindarajan, a management professor at Dartmouth’s Tuck School of Business. “The mindset that is needed, the capabilities that are needed, the metrics that are needed, the whole culture that is needed for discontinuous innovation, are fundamentally different.”

This reinforces my own thinking of late that there are two basic employee mind sets at a company: builders and operators. Builders like to build new products or services and are motivated by coming up with ideas no has thought of before. Operators are great at taking something that’s been built and adding incremental improvements to increase efficiency or reduce costs. They get a charge out of seeing year-over-year improvements in existing metrics.

Neither type of employee type is fundamentally better than the other. Companies clearly need both to flourish. But which ones get to the boardroom faster and more predictably? I believe the operators do and hence the over focus on operations over innovation in most companies. Why? It’s easier to take an existing business and squeeze more profits from process improvements than build new businesses.

Back to the Apple example, Steve Jobs clearly has a classic builder mind set. He loves building new things that transform people’s lives. But he was fired by Apple for essentially being a pain in the butt for the professional managers who were trying to squeeze as much profit out of Apple’s existing Macintosh business at the time. Apple’s managers couldn’t figure out how to allow the builder and operator mindset to cohabit the executive suit. After Jobs left, you can see what staying on a path focused on efficiency and costs did for Apple. It nearly bankrupted the company and in an ironic twist, it took Jobs’ return (a builder) to turn the company around.

So, what’s my meta point? All the talk from corporations about innovation is wasted air if they don’t set up an org for builders to flurish. That means a separate incentive structure and even work environment. Managing creative orgs is tough because their output is so unpredictable. Applying a control process of reducing variation to eliminate defects (or bad ideas) in creative focused endeavors kills the random events that are required (in my opinion) for new ideas to be developed. Six Sigma type programs can’t motivate builders to do the right thing. I think a better method would be using a investment approach where a company manages new initiatives like a funds manager manages a stock fund. This means having a diversified portfolio of initiatives and new businesses. Kill ideas that aren’t going anywhere and when new ideas take off, migrate them to operators who can build new businesses by cutting the fat and making incremental improvements to keep things growing. In both scenarios (success or failure), cut builders loose early and move them back to new idea development. That’ll keep both mindsets happy.

Seems one big problem in this model is how to incent builders. Is it by number of new ideas? Is it by number of new products/business deployed? Is it shared revenue/returns over the lifetime of a new business? Also, there’s the big problem of taking the brainchild of some innovators and losing the vision when the business is transfered to new operations minded people run. But I think those are solvable problems.

The key for companies is to acknowledge its two different employee mindsets and set up the right orgs for them. Creating startups or skunk works within large companies might be a good place to start experimenting. I’d suggest that they be off campus and have their own orgs but I’m sure other models could work too. Given builders usually go to startups when they get bogged down by operations over focus in large companies, creating a startup world within a large company could retain a lot of talent–especially for folks that aren’t interested in the working hours and risk many newly funded startups require. Jeff Hawkins, creator of the Palm Pilot has said “use entrepreneurialism only as a last resort” in starting up a company. If you can fund your idea within a company with resources, that’s the way to go according to him.

Startups within large corporations may not be for every entrepreneur, due to the upside limitations if a concept takes off. But there’s a lot of people out there that work for the fun of it and want to do other things with their time versus just work. The reduced risk and work hours for startups within large companies could be very attractive to some percentage of employees. Google uses very large grants for big innovations bubbling up from their 20% innovation time allocated to all engineers. I’m sure other similar financial awards could work really well for compensating big new (iPod type) ideas.

Let’s hope for some more builders added to corporate executive suites. With the right advocates at the top of companies, I think innovation is possible from large organizations. But it won’t happen if the primary conversations for growth are around Six Sigma principles.

Say what again

<a href=”http://www.jarrattmoody.com/intonation.html”

Having watched a million boring PowerPoint type presentations, I’m always on the lookout for interesting presentation styles to learn from. I caught a piece linked from Presentation Zen using some Samuel Jackson dialog from (I believe) Pulp Fiction. While this is more of a video, the use of type and font sizes is brilliant. Check it out. (Warning, there’s some strong language)

All you need is innovation

<a href=”http://chir.ag/tech/download/tagline/”
Caught this post on O’Reilly Radar this morning on someone who fed 20 years worth of documents relating to Microsoft through Tagline Generator. This gave him a tag cloud of key phrases that appeared in Microsoft lexicon over the years.

What was interesting, as I slid the tag cloud slider bar all the way back to April 1975 (founding of the company) and worked forward, I noticed the term “innovation” turned up only a few times until about 1990. Then the term started picking up steam over the 90′s and really took off after 2000. Innovation showed up roughly 20 times in the last 16 years of the companies life. Yes, this is far from scientific but it is still noteworthy.

Innovation is certainly a big buzz word these days. I know when I was working in the small company world, I never heard the term innovation used around the office. It was just assumed that was what we were doing. But I hear it all the time working for a large company. I also read about it a fair amount in the press, just last week catching an article from Fortune reporting on Google’s org structure for fostering innovation.

What is it about big companies that lose the edge in innovating? My theory is two fold. First, most successful companies that turn into mega corps are lightening strikes. They’re complete accidents–success due to being at the right place, at the right time. Don’t get me wrong. There are many very smart talented people that have built these companies. But there are lots of smart talented people in the world. What makes one more successful than another? Has to be luck.

The second part of my theory is over focus on cash cows that makes mega corps huge in the first place. Search made Google huge. Overnight delivery made FedEx huge. Fancy coffee made Starbucks huge. So, what do you do with a cash cow and become more huge? You try to milk it for all it’s worth. That means keeping close tabs on metrics and looking for small efficiency gains which, if you’re big, could mean big dollars to the bottom of the line. The problem with focusing on looking for tiny efficiency gains, you aren’t spending energy looking for new things. So, eventually the cash cow stops moving the stock forward, so panic ensues and it’s time to start innovating.

Surely, it can’t be difficult for mega corp to come out with new big businesses? A quick wave of the wand and resources will scurry forth and innovate. Well, for the most part, that very seldom happens. Why? Because, as said earlier, mega corps are accidental empires and usually lightening doesn’t strike twice in the same place. Or in the case of recourse reallocation, operations pros think different than innovators. That’s why you often see innovators leave big companies to go work in startups and fancy pedegree types go work for mega corps. They are two different mindsets for most employees and managers.

There are certainly examples of multiple successes for mega corps. Microsoft come up with a second lightening strike with Office. Apple did it with the iPod. I’m sure there are other examples. For the most part, I think most companies slowly decline away with their single big success (think railroads versus airplanes for travel) which is maybe just the natural order of things.

I’m keeping a close eye on the Google experiment. Their 20% free innovation time for all engineers is interesting. But there are still no second lightening strikes for Google with all the innovation time spent in the company. I have my doubts whether it’s possible to legistlate innovation top down in an organization.

Bozo explosion

<a href=”http://blog.guykawasaki.com/”Great article from Guy Kawasaki on how to prevent a bozo explosion at your company. My favorite excerpt:

Diversify. Some companies look like the corporate version of the Stepford Wives: people are too similar. For example, everyone has a PhD. Everyone grew up in a white, upper-middleclass family. Everyone went to an Ivy League school. It’s a bunch of Me and Mini-Mes. When this happens, it means that form is overruling function, and the way people succeed is by representing the right form, not excelling at the right function. That’s back asswards.

Lots more great insights. Definitely recommended reading.