Creative Reaction

A pair of recent articles show how conglomerates are obsessed with piracy, and yet, ironically, are blind to their own roles in creating the impetus for it.

The first, from techdirt, where Comcast’s COO blames consumers for piracy and hopes to educate them “to respect subscription revenue”.

The second, a more detailed and analytic account from Ars Technica, is about Paramount seemingly blaming everybody on the Internet for piracy.

A big part of the issue is that conglomerates are so big and have so many business units, that they cannot innovate without hurting one of their own companies. And so they go crying to the government and ask for more regulation. It’s really kind of sad. They are limiting their own innovation and revenue streams, while alienating their audience.

Their audience is what drives business, and simply wants more control over what content it buys and how & when it buys it. It’s time for a shake-up.

Harvard Business Publishing analyzes the surge in the value of Britannica’s brand over the last year, as it leapt ahead of Nike, Virgin Atlantic, and Sony. Not bad for a company whose demise has been predicted for years.

Britannica knew its purpose, and that purpose is what brought perspective on how to innovate; and not simply to survive, but to thrive.

So if some expert is predicting the death of your product or service, think  hard about  your purpose. Perhaps this perspective will help you find a way to differentiate yourself and continue to succeed.

Braden Kelly of Blogging Innovation puts to rest the notion that innovation is “expensive” and is therefore something to be avoided in a tough economy.

“I can’t afford” is a cop-out; a Dead End. The question to ask is “how can I afford?”, which then causes you to prioritize and think creatively about your resources. So it’s great the see Kelly guide readers through exactly such a process, as he divides various innovation activities into categories in terms of resources needed, then proposes a mix of how and when each should be done in a strategic manner.

It seems management, capitalism, and frugality have received a bit of bad press lately. Here’s an inspirational story posted at Harvard Business Review that shows redeeming aspects of all three.

The Boss Who Laid Himself Off tells of the selfless acts of a manager who no doubt impacted the lives of two talented, younger managers and their families, which of itself offers an important example. What many may not also see in this story is the idea of mentoring, then stepping aside to allow the next generation to energize and continue a company’s mission.

And the frugality angle? Well, do you think “Bob” could have done what he did had he been up to his eyeballs in debt? Living frugally and saving allows us the freedom to do the right thing.

I’m not a Dunkin’ Donuts fan, for a number of reasons which I won’t elaborate. I will readily admit, however, that I’m a fan of their marketing, which from their storefronts to their broadcast work, is completely consistent and beautifully executed.

I came across their Dunkin’ Run web site via Idea Sandbox, and once again I’m blown away. This is so perfect in every way, it resonates.

First of all it’s simple. It’s immediately recognizable. It adds three new icons consistent with their “America runs on Dunkin” “vocabulary”.

But here are the most brilliant parts: It simplifies large orders, both for DD and the customers. I repeat, large orders. It makes the “Runner” a hero. (By the way, is there a way for everyone to treat the runner?) Most importantly, it makes a return trip to Dunkin’ Donuts, not merely an event for the office or group, which in and of itself is admirable, but into a ritual, with all the emotional connections and memories that come with it.

(Plus, there’s an iPhone App with the same functions as the web site.)

So, the question for today is: how can we apply this love and care to our own products and services, entrenching our brands and our relationships with our customers? In this day and age, it’s survival.

When I came across this recent ChangeThis Manifesto, I just had to smile, as it dovetails so neatly with this week’s other posts.

Ending the Illusion of Control notes “the dismal historical track record of much, if not most, economic forecasting”. 

Planning and forecasting have their place. Unfortunately, they are wrought with uncertainty. Making matters worse is the fact that “humans, driven by over-optimism and wishful thinking, often underestimate uncertainty even more than statistical models do”.

The authors assert that forecasts can be as addicting and dangerous as cigarettes and, therefore, should have warning labels. 

Nice.

Download it now.

Just yesterday, I posted about the fallacy of trying to control the future by predicting it, and now I’ve come across this. Matt at Signal vs. Noise  summarizes a long book-launching interview, in three simple points:

1. Conventional approaches and planning don’t work when you’re trying to get into new spaces
2. Assumptions are what get most companies into trouble, and
3. It’s not failure that companies need to avoid, but rather “failing expensively”

If I could add a fourth point it would be this:

4. A company’s best ideas will fall through the cracks unless there is a way to capture and process them 

So harness the collective insights of your employees. Move ahead quickly and get new products or services in front of people. Plan in such a way that when things do not go exactly as planned, you can quickly recover and move in a better direction.

Small businesses, you can take these cutting-edge insights which some of the more innovative corporations are implementing, and use them to your advantage within days, not months!

A really interesting piece on Mavericks at Work contrasts the differences in thinking between MBAs and Entreprenuers, and declares that Entrepreneurs are better suited to survive tough times. (Life is too short for spoiler alerts.)

The post focuses on the fascinating research of Saras D. Sarasvathy, which focuses on “the ‘causal’ reasoning used by MBAs versus the ‘effectual’ reasoning used by entrepreneurs.”

Lifting an entire section from the post:

Causal reasoning, she explains, “begins with a pre-determined goal and a given set of means, and seeks to identify the optimal—fastest, cheapest, most efficient, etc.—alternative to achieve that goal.” This is the world of exhaustive business plans, microscopic ROI calculations, and portfolio diversification.

Effectual reasoning, on the other hand, “does not begin with a specific goal. Instead, it begins with a given set of means and allows goals to emerge contingently over time from the varied imagination and diverse aspirations of the founders and the people they interact with.” This is the world of bootstrapping, rapid prototyping, and guerilla marketing.

The MBAs’ fallacy is that they try to predict and thereby control the future. Entrepreneurs forge ahead using the resources at hand and nimbly adjust to surprises.

Worth reading. Check it out.

So much for my “getting an MBA for the fun of it” plans. Unless there’s such a thing as a strictly entrepreneurial MBA. Hmmm…

The more I read about George Gilder, the more I love this guy. In an article he wrote last month for Forbes Magazine, he states, “The crucial conflict in every economy… is not between rich and poor, Main Street and Wall Street, or even government and the private sector. It is between the established system and the new forms of wealth rising up to displace it”. (Italics mine)

“The real source of all growth is human creativity and entrepreneurship, which always comes as a surprise to us, especially in the worst of times”.

It’s not so much that difficulties lead to creativity, but that those who persevere (as opposed to those who scale back and hunker down) are the ones who think all the more creatively until they have a breakthrough.

“Because the U.S. remains the world’s largest economy and still leads the world in business and technological creativity, the current crisis is mostly confined to boondoggles of finance. It will pass rapidly and evolve into a new boom”.

(The remainder of the article will only be of interest to Tech investors.)

I share in this outlook and in Gilder’s optimism. During the last bubble-burst, while its competitors were cutting back and laying people off, Apple (then “Apple Computer”) publicly stated that its strategy would be to innovate to carry itself through difficult times. Think about where they are now.

In an NYT article entitled Even the Giants Can Learn to Think Small (free subscription required – don’t bother) we see another nail in the coffin of the “if you’re not growing, you’re dying” mantra.

Part of the “thinking smaller” movement is a desire to provide better service through personalization, and part of it is the need to be leaner in an increasingly global marketplace. In the Times article, Professor Thomas W. Malone of MIT’s Sloan School of Management offers another reason – employees’ “noneconomic goals” like freedom, personal satisfaction and fulfillment. “How much energy and creativity might be unlocked if all the members of an organization felt in control?” he asks. Thinking back, this ties in perfectly to other times we’ve mentioned globalization making good talent harder to attract and keep.

Being smaller and agile has competitive advantages as well; companies as a whole tend to be more entrepreneurial. Philip Rosedale, founder and chairman of Linden Lab (Second Life), says optimizing a company for creativity involves helping all employees regardless of position develop an entrepreneurial spirit. “Most companies erroneously focus on competition and on differentiation from their competitors…the business opportunity lies in turning creativity into productivity.” And as most entrepreneurs know, ideas are worthless unless they are executed.

(If you do read the article, you may pick up on some similarities between Linden Lab’s and Pixar’s philosophies. And if have a really good memory, you’ll remember some similar posts on company and team size here, here, and here)

So, focus on fostering a collaborative, entrepreneurial spirit company-wide, and not growth for the sake of growth, for your business’ success.

In  The Perfectly-Designed Office, we contrasted offices that foster creativity and those which portray the idea of creativity. The pristine, image-conscious agencies want to look creative, yet what better way is there to woo new clients than to let them see your (often messy) creative process at work?

From Leland Maschmeyer (in this morning’s linked-to post), “Imagine being a prospective client walking into an agency… As you tour the office you’re inundated with ideas wherever you look. The energy of the agency being so vibrant and intoxicating that you feel the need to jump in on a project. And as you marvel at the prolific thinking swirling around you, you can’t shake the notion that maybe – just maybe – you are standing in the womb of creativity… Wow – what a great feeling to leave a prospective client with.”

Which brings us to our segue quote from earlier, “Clients who value your designs are good. Clients who also value your design process are better”.

The essay from which the above quote comes, details how Tupperware choose Frog Design to create Tupperware’s FlatOut! line of storage containers. “Tupperware liked what Frog had created for other clients (in other industries), but they also recognized that Frog’s design process was at the core of all those great designs. And most important, Tupperware understood how that process would benefit them.”

“Many clients don’t fully understand how designers create. And if your clients don’t understand it, or even know about it, then they won’t value it.”

Likewise, many clients do not fully understand how advertising agencies and production companies create.

Those who don’t, need to be taught. Those who do are more likely to trust agencies with their business without rounds of reviews and business pitches.

*if you are to deliver a breakthrough product or service.

I am not talking about a culture of sloppiness or irresponsibility, but one of difference, change, and creativity. Our society, our educational systems and our workplaces stress rewarding what we do correctly, yet it is experience, and, yes, making mistakes, which allow for the biggest opportunities for personal growth and innovation.

Two items I recently read support the above statements. The first is a ChangeThis manifesto, Turning Learning Right Side Up, a free .pdf report and an excellent read for “students” of any age. The second is an NYT article (free subscription required) explaining the importance of being “growth-minded”; the mindset of lifelong learners and entrepreneurs. If You’re Open to Growth, You Tend to Grow, talks of managers who hire the “best & brightest”, only to hamstring them by placing them in an environment of high expectations and fear (of failure).

The best part of the article details how Scott Forstall, an SVP at Apple, put together the team which developed the iPhone’s software. First, Forstall “identified a number of superstars within various departments at Apple and asked them in for a chat.” During the subsequent interview he explained that though he could not reveal the details of the project, he said to each recruit, “(we may) make mistakes and struggle, but eventually we may do something that we’ll remember the rest of our lives”. It is important to note that these people would be walking away from their previous successes and positions. Those who jumped at the opportunity made the team; Forstall was looking for people willing to stretch themselves, rather than rest on previous successes.

A post I wrote about Google back in September ‘06 also addresses this way of thinking. And 10 Ways to Foster Innovation in Your Company ties the room together.

So… Be great! Encourage greatness!

A book I’ve been meaning to mention has been burning up the blogosphere. I haven’t seen a post about it befitting Creative Reaction until a revolutionary business think tank reviewed the book, putting the book’s premise into perspective.

The book is Why Work Sucks and How to Fix It.

The review is written by Verasage Institute founder Ron Baker.

The way to fix work is to establish a “Results-Only Work Environment” or “ROWE” (both coined by the Why Work Sucks authors), which is an environment where employees have complete autonomy to work wherever and whenever they want, as long as their work gets done.

Ron Baker frames this perfectly; “Firms are struggling with work/life balance, flextime, time management, etc.  But all these are a joke… Work/life balance is not up to firms to define, but rather their team members… they need control over their time.  They need to be trusted to do their work.  They need to be judged on results, not putting in time… After all, if a team member isn’t performing, working longer hours is not going to make a difference.”

Baker asks, “Isn’t this how we all worked in college?  We were responsible for our own schedules, getting our work done, studying for exams, etc.  What makes firms think they need to treat knowledge workers like children after they graduate?” What an apt analogy!

Baker’s own mission, banishing the Marxian “time equals money” fallacy, dovetails perfectly with the premise of ROWE. Again quoting Baker, “Work is what you do, not where you go, or where you are.” Spending hours and hours at work is not the same thing as producing results. (Creative Reaction has touched upon this here and here and here.)

So, read the full review, consider buying the book, reward those who are engaged in their work and show results, let the slackers go, and enable your business to be more creative and more focused on its customers.

Australian online business magazine Smart Company has a great article on company-wide innovation, based on the research of RMIT University in Melbourne. The researchers studied 92 fast growing companies, finding 10 common characteristics which promote innovative business cultures.

The first finding: innovation starts with the leadership qualities of the CEOs or founders. “They were passionate about their work, had a positive and optimistic outlook, do not allow setbacks to hinder their drive and vision, are forward thinkers, determined, thrive on difference and change; surround themselves with like-minded individuals, concentrate on team culture, learn from their mistakes, and aim to resolve problems quickly.”

Not surprisingly, many of the other characteristics had to do with the work environments, made possible by savvy management; an emphasis on training and learning, collaboration, and open communication.

A few other things we’ve recently mentioned include investing in technology and recruiting (and rewarding) innovative people; it’s good to see some common themes here within Creative Reaction’s pages.

One characteristic I found interesting was making sure that vendors, suppliers, and even bankers understand the company’s vision, which makes sense as they all play supporting roles.

The article covers a lot of ground in four pages. Worth reading.

Following up on an earlier post on Business Productivity, taking into consideration the often unmeasured and therefore under-accounted benefits of productivity. The first point was to buy Macs. The next was buying employees larger monitors or second monitors.

In the post that eventually led to this post, Jason Calacanis, CEO of Mahalo.com does some math for us:

“(each employee) will save at least 30 minutes a day, which is 100 hours a year… which is at least $2,000 a year…. which is $6,000 over three years. A second monitor cost $300-500 depending on which one you get. That means you’re getting 10-20x return on your investment… and you’ve got a happy team member”

Also worth mentioning are studies by monitor manufacturer NEC (.pdf summary here) and Pfeiffer Consulting for Apple (.pdf summary here) which indicate even larger returns on investment.

NEC’s study has two findings which I find very interesting. First, if your employees are using a single 19″  (or smaller) monitor, you are adversely affecting productivity and “worker well-being”. Second, equipping employees who are less technically savvy with second or larger monitors, gives them an ever greater productivity boost than their co-workers.

As for the “best” size, it varies slightly according to the tasks, though for most, a single monitor of 24″ – 26″, or a dual monitor set-up with a pair of 20″ monitors is what the study finds offering the greatest productivity gains for typical office tasks; word processing and spreadsheets.

In my experience, for video editors and SFX artists, two 23″ monitors is assumed to be the bare minimum, and it’s clear that for other creative tasks, this would be a good starting point as well. So the next time your creatives ask for 30″ Apple Cinema HD Displays, buy them with barely an afterthought; the $1,799 monitors will pay for themselves many times over. In fact, the Pfeiffer Consulting report calculates a ROI of $5,875 – $23,500  within a year (!) depending on the salary of the creative professional.